P.R. Srinivasa Aiyar vs A. Sesha Iyer and Another

Oldfield, J.—Plaintiff, here appellant, sued defendants for Rs. 400, alleged to have been advanced to them out of Rs. 1,100, payable under

an agreement as consideration for the marriage of his minor sister with Raman, 1st defendant''s son and 2nd defendant''s brother. There were three

defences, that 29 Ind. Cas. 625. there was no cause of action, because 1st defendant entered into the agreement only on behalf of Raman and 2nd

defendant was not a party to it at all; 9 Ind. Cas. 161. the agreement was not broken by defendants; 10 Ind. Cas. 1004. it was invalid, as being

against public policy, and the money, advanced under it, was, therefore, irrecoverable.

Of these defences, the first was not dealt with either at the trial or by the learned Judge in this Court, though one would have supposed that a

decision regarding the existence of a cause of action would have been reached, before enquiry began into the validity of the agreement set up as

constituting it or the responsibility for breaking that agreement. It is said that the plea was abandoned. But the trial was under Small Cause

Procedure and no issues were framed. Raman was, according to plaintiff''s 2nd witness and 1st defendant, of age at the date of the agreement. The

latter said that he took away the Rs. 400 paid under it. It is not the case that no evidence to support the defendants pleas was adduced; and it was

admitted before us that they were relied on in this Court, although the learned Judge did not mention them. It is not possible in three circumstances

to hold that they were abandoned or that defendants cannot support the learned Judge''s decision with reference to them, if they can be established

and if it is not sustainable on other grounds.

The learned Subordinate Judge''s finding on the second defence, that plaintiff, not defendants, broke the agreement, is one of fact and must be

accepted. It is, however, to be observed that, coupled as it was with a plea that the agreement was unlawful and, therefore, unenforceable, it could

justify no legal conclusion. For the plea in effect that defendants were absolved by plaintiff''s refusal to perform his part from any duty under the

agreement was irreconcilable with the contention that such performance would have been in conflict with public policy. Shortly, they could not

complain of plaintiff''s refusal to do what they alleged would have been wrong.

On the remaining question, there is no doubt that the agreement was unlawful and, therefore, void. As set up in the plaint, it involved no

suggestion that the money to be paid was for settlement on the bride or her issue or was anything but remuneration to defendants for bringing about

the marriage; and, as plaintiff''s grounds of appeal Nos. 5 and 6 and 1st defendants'' written statement paragraph 8 and 2nd defendant''s paragraph

13 show, both sides are agreed that such an agreement would be unlawful, Kalanagunta Venkata Kristnayya v. Kalanagunta Lakshmi Narayana 8

Ind. Cas. 554. and Devarayan Chetty v. Muthuraman Chetty 18 Ind. Cas. 515 The question is then whether plaintiff is entitled to recover what he

paid under such an agreement and whether defendants can retain an advantage received under it. This question was not raised in the plaint, the

Subordinate Judge refusing to deal with defendants allegation that the agreement was unlawful, because he had found in their favour as to

responsibility for its breach. On this account the learned Judge held that plaintiff could not raise that contention here also expressing the opinion that

his claim was unsustainable with reference to Section 65 of the Indian Contract Act. That section, however, is not applicable. Dayabhai

Tribhovandas v. Lakhmichund Panachand 5 Ind. Dec. 238.; Gulabchand Parachand v. Fulbai Harichand 3 Ind. Cas 748 and Ledu; Coachman v.

Hira Lai Bose 29 Ind. Cas. 625. The Indian Contract Act affording no direct guidance, the conclusions of the learned Judge must be tested with

reference to authority.

He has supported his conclusion against the existence of any right to recover what has passed in connection with an unlawful agreement by

citation of three cases. But in one of them Girdhari Singh v. Neeladhar Singh 10 Ind. Cas. 1004 it was conceded that, if the contract was contrary

to public policy, the plaintiff was not entitled to recover; and the case is, therefore, no authority against the contention, advanced before us, that the

general Rule is subject to an exception in the plaintiff''s favour when no portion or when no substantial portion of the unlawful purpose has been

carried out. So also the next case of Nathu Khan v. Sewak Koeri 15 C. W. N. 408. since it was one of completed performance. The third case of

Ledu, Coachman v. Hira Lal Bose 19 C. W. N. 919. cannot be dismissed so shortly, since it directly negatives the contention just referred to by

the statement, ''It is plain that, although where money has been paid under an unlawful agreement, but nothing else is done in performance of it, the

money may be recovered back, yet this exception will not be allowed, if the agreement is actually criminal or immoral; where the contract is illegal,

because contrary to private law or against public policy, an action cannot be maintained to enforce it directly or to recover the value of services

rendered or money paid on it"". The distinction drawn would appear to be between agreements contrary to law or public policy and others, which

would merely have an unlawful object and would also, therefore, be void u/s 23 of the Indian Contract Act. But there is no warrant for it in that

section, since all alike are made unlawful, or (with all respect) in the cases referred to by the learned Judges, who moreover, take no account of

other cases, in which the exception was applied without reference to the distinction proposed.

Of the cases referred to by them Taylor v. Chester (1869) 4 Q B. 109. was a case of completed performance and Howson v. Hancock (1800)

8 T. R. 575 one of a claim to recover money paid on a wager, in which no further performance was possible. Tappenden v. Randall (1801) 2 Bos.

& P. 467 is relied on only for a dictum, which apparently has not affected later decisions. So also the learned Judge''s quotation from Collins v.

Blantern (1765) 2 Wilson 341. though it is reproduced in Kearley v. Thomson (1890) 24. Q. B. D. 742 and Barclay y. Pearson (1893) 2 Ch.

154, to be referred to later. Of the Indian cases cited Bai Vijli v. Nansa Nagar 5 Ind. Doc. 487 is not of importance, since this point and the

authorities regarding it were not considered. The learned Judge''s reason for rejecting two decisions in the opposite sense Bakshi Das v. Nadu Das

1 C. L. J. 261 and Gulabchand Paramchand v. Fulbai Harichand 3 Ind. Cas 748 that they relate to marriage brokage contracts, is in any case riot

available to us in the present connection.

On the other hand the exception to the general rule, based on the absence of any or of any substantial performance, is clearly recognized without

reference to the distinction proposed in a case later than the majority of those relied on by the learned Judges, Taylor v. Bowers (1876) 1 Q. B.

291 in which the object of the agreement, a fraud on creditors, would, if persisted in, have resulted in the frustration of the Insolvency Law.

Distrust of the decision in Taylor v. Bowers (1876) 1 Q. B. 291. was, no doubt, expressed in Kearley v. Thomson (1890) 24. Q. B. D. 742 but

not on the ground that it overlooked the distinction drawn by the learned Judges, which was not in fact referred to, although the object of the

agreement was described as to defeat justice. The principle of Taylor v. Bowers (1876) 1 Q. B. 291. was, moreover, adopted fully in Barclay v.

Pearson (1893) 2 Ch. 154, already referred to, though the agreement related to what was regarded as a lottery, the opinion being expressed that

those who had paid money under it could recover. Of the Indian oases those must be distinguished, in which the, title sued on could be established

only on the foundation of the validity of the unlawful agreement; as for instance in Yaramati Krishnayya v. Chundru Papayya 7 Ind. Dec. 231. In

benami cases, however, for example Banka Behary Diss v. Raj Kumar Dass 4 C. W. N. 289. and Govinda Kuar v. Lala Kishun Prasad 28 C.j

the decision has always turned not on the extent to which the agreement, if it were performed, would conflict with law or public policy, but on

whether it was performed and the unlawful purpose was affected wholly or substantially or not. The decision of the Privy Council in Petherpermal

Chetty v. Muniandy Servai 10 Bom. L. R. 590 may in particular be mentioned, firstly, because it refers to the weight of the decision in Taylor v.

Powers (1876) 1 Q. B. 291 as unimpaired by Kearley v. Thomson (1890) 24. Q. B. D. 742 and secondly, because the contention that there had

been a fraudulent arrangement to defeat creditors and a step taken to carry it out, ""which would on the trial of an indictment for conspiracy have

amounted to a good overt act of conspiracy"", was brushed aside as irrelevant and the effecting of the contemplated fraud alone was regarded as

material. Authority standing thus, it is (with all due deference) not possible to follow the decision in Ledu Coachman v. Hira Lal Bose 29 Ind. Cas.

625 : 19 C. W. N. 919. or to confirm the decision, which is under appeal.

It is, however, argued by Mr. Venkatarama Sastri for defendants, firstly, that the exception above referred to, to the general Rule depends, not

on whether there has been performance of the unlawful agreement, but on whether the transfer of an advantage under it was merely ostensible or

was intended to be real, recovery of the advantage being allowed only in the former class of cases. That is not the test recognized in the authorities

already referred to or in Great Berlin Steamboat Company, In re (1884) 26 Ch. D. 616., in which the transfer was treated as irrevocable, though it

was clearly ostensible. It is then urged with reference to Kearley v. Thomson (1890) 24. Q. B. D. 742 that plaintiff cannot recover, because

though the whole of the unlawful agreement has not been performed, a substantial portion has been; and on the view already expressed, a remand

on this point may, no doubt, be fairly claimed.

The last question raised is whether plaintiff can rely on defendant''s admission that the agreement was unlawful either generally or when, as in this

case, he did not refer to its unlawfulness in his plaint. The answer, however, to the question in both forms is the same, that in the words of Mellish,

L. J. in Taylor v. Bowers (1876) 1 Q. B. 291 plaintiff does not ""as the Rule is laid down in Simpson v. Bloss (1816) 7 Taunt. 246 require any aid

from the illegal transaction to establish his case. He is not bringing the action for the purpose of enforcing the illegal transaction. . . . . . . . To hold

that plaintiff is enabled to recover does not carry out the illegal transaction, but the effect is to put every body in the same situation as they were

before it was determined on"". Or, as the point was put by James, L. J., ""it is the defendant, who has got really to show the fraud"", the element

vitiating the agreement in the case under consideration. . . . . . . . . . ""It is the defendant, who has got to make out his title to the goods from the

transaction, which is a fraud sand which it seems he was a party . . . . . and there would be no title in the defendant independently of that"". To

adapt these principles to the present case, the plea that the agreement is unlawful is not plaintiff''s but defendants''. Defendants, as already pointed

out, can-not, relying on it, also complain of plaintiff''s default. They can (and this is the point at present material) rely on it, only if they further allege

and prove that the unlawful agreement or a substantial part of it has been performed. Oh this point their written statements contained nothing; and it

was, therefore, not plaintiff''s but their pleading, which was defective. If the Subordinate Judge had considered the unlawfulness of the contract,

plaintiff would (for all that appears) have pointed this out. The contention on his side is one purely of law and in the circumstances there is no

adequate reason for depriving him of the benefit of it.

Defendants have further proposed to support the lower Court''s judgment with reference to the counter-claim made in their written statements

to damages on account of loss of reputation. It has not, however, been shown how this claim can be sustainable as arising out of the breach of an

admittedly unlawful agreement or how it can be reconcilable with defendants'' denial that they were parties to that agreement. The questions for

consideration are, therefore, only:

(1) Whether the plaint agreement was entered into with defendants or either of them or with Raman with or without 1st defendant as his agent?

(2) Whether with reference to the authorities above referred to the agreement or a substantial part of it was performed?

The Letters Patent Appeal must be allowed and the Subordinate Judge''s decision set aside with a direction to restore the Small Cause suit to

file and re-hear it, admitting any additional evidence tendered, in the light of the foregoing. Costs to date in both Courts will be costs in the cause

and will be provided for in the decree to be passed.

Bakewell, J.

In India marriage is not generally matter of contract between the parties thereto but is a status or condition imposed upon them by persons who

are under a social duty to do so. The authorities which have been cited support, I think, the proposition that they who undertake this duty must

have regard solely to the interest of their wards and must not stipulate for a profit for themselves.

The pleadings in this case are not clear but I think that the plaint alleges an arrangement between the parties that a marriage portion should be

paid out of the estate of the deceased father of the prospective bride and that certain jewels should be presented to her by the relations of the

prospective bridegroom; and, apart from other averments in the written statement of the 1st defendant, it might be inferred that his ease was that

the marriage portion was to be paid to the bridegroom, the sum of Rs. 400 now claimed, being portion thereof, had been in fact paid to him and

that the defendants gained no benefit from this payment because the bridegroom had been adopted into another family. I fail to see anything

contrary to public policy or morality in an agreement between third parties, which is intended solely for the benefit of the married couple, or either

of them. Having regard, however, to the defendants admission that the agreement was illegal, and that they had some interest in the sum now

claimed, I do not think that it is open to the defendants at this stage to maintain that the agreement was valid.

The words ''discovered to be void'' in Section 65 of the Contract Act are more apt to describe an agreement which was void ab initio but not

then known by the parties to be so, than an agreement of which the illegality must be taken to have been always known to them, and agree that in

this ease it is safer to rely upon the authorities cited by my learned brother. These authorities show, I think, that in a suit for money had and

received to the use of the plaintiff, the defendant may plead that it has been applied in accordance with their agreement, and the plaintiff cannot

reply that the agreement was illegal because he is particeps criminis. If the agreement is still wholly executory and no material part of the illegal

purpose has been accomplished, defendant cannot plead that he holds the money for that purpose. See Barclay v. Pearson (1893) 2 Ch. 154

Petherpermal Chetty v. Muniandy Servai 10 Bom. L. R. 590 and the cases there cited]. These propositions apply when the parties are in pari

delicto and to agreements void under Civil Law; different considerations may arise in the case of an agreement to commit an offence against the

Crown. I agree to the order proposed by my learned brother.