Madras High Court
T.Vijaya Raghavan vs Sethu Ramapandiyan(Died) .. 1St on 13 October, 2022
Author: J.Nisha Banu
Bench: J. Nisha Banu, N. Anand Venkatesh
A.S(MD)No.30 of 2007
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED : 13.10.2022
CORAM :
THE HONOURABLE MRS.JUSTICE J. NISHA BANU
and
THE HONOURABLE MR.JUSTICE N. ANAND VENKATESH
A.S(MD)No.30 of 2007
and
M.P(MD)Nos.1 and 2 of 2007
T.Vijaya Raghavan ... Appellant / 1st Defendant
-Vs-
1.Sethu Ramapandiyan(died) .. 1st Respondent/ Plaintiff
2.Syndicate Bank,
malakpettai Branch,
Through its Branch Manager,
Malakpettai, Hydrabad.
_______________
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A.S(MD)No.30 of 2007
3.Syndicate Bank,
Basheer Bagh Branch,
Hydrabad,
Through its Branch Manager,
Through its Branch Manager,
Basheer Bagh, Hydrabad.
4.Syndicate Bank,
Tirunelveli Town Branch,
Through its Branch Manager,
Tirunelveli Town.
5.Indian Bank,
Veeraraghavarpuram Branch,
Through its Branch Manager,
Office, Tirunelveli Junction,
Tirunelveli. .. Respondents 2 to5 / Defendants 2 to 5
6.Chandra
7.Shanthi
_______________
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8.Revathi
9.Subha
10.Pankajam .. Respondents
[R6 to R10 are brought on records
as LRs of the deceased R1 vide
Court order dated 08.11.2017 made
in CMP(MD)Nos.1476 to 1478 of
2017 in A.S.(MD)No.30/2007 by
MKKSJ & VBSJ]
PRAYER: Appeal is filed under Section 96 of the Civil Procedure Code,
against the judgement and decree dated 19.09.2006 made in O.S.No.45
of 2006, on the file of the Additional District Court (Fast Track Court
No.II), Tirunelveli.
For Appellant : Ms.N.Krishnaveni
Senior Counsel
for Mr.M.P.Senthil
_______________
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A.S(MD)No.30 of 2007
For Respondents : Mr.K.R.Laxman
for R2 to R4
R1-died
R5 to R10-No appearance
JUDGMENT
J.NISHA BANU,J.
and N.ANAND VENKATESH, J.
The first defendant is the appellant in this Appeal Suit. This appeal has been filed against the Judgment and Decree passed by the learned Additional District Judge (Fast Track Court No.II), Tirunelveli, made in O.S.No.45 of 2006.
2. The 1st respondent/plaintiff filed the suit seeking for the relief of recovery of a sum of Rs.25,00,000/- with interest @ 12% per annum against the appellant. The case of the plaintiff is that he is well _______________ Page No.4 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 known to the appellant and the appellant was running a Medical College at Secunderabad, Andhra Pradesh. The further case of the plaintiff is that the appellant promised to get medical seats to nearly 13 persons, who were introduced to the appellant by the plaintiff. In the guise of getting medical seats, the appellant received a sum of Rs.25,00,000/- in total from all the persons introduced by the plaintiff. It is stated that the appellant went back on the promise and he did not return back the money immediately. Hence, the plaintiff settled the entire amount and the appellant promised that the entire amount will be settled in favour of the plaintiff within a month.
3. The appellant, pursuant to the promise given to the plaintiff, gave four demand drafts totalling a sum of Rs.25,00,000/-. The plaintiff deposited three of the demand drafts totalling a sum of Rs.20,00,000/- before the 5th defendant bank. When the same was sent _______________ Page No.5 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 for collection to the 4th defendant bank, the demand drafts were returned with an endorsement “demand draft reported lost”. The plaintiff attempted to get in touch with the appellant, but the appellant was not reachable and hence left with no other option, the suit was filed seeking for the recovery of money along with interest.
4. The case of the appellant is that he is a resident of Andhra Pradesh and he is a Chartered Accountant by profession. He used to be the captain of the Indian basketball team and was also an Arjuna Award recipient in the year 1978. The appellant was the chairman of a Medical College. The further case of the appellant is that the Government of Andhra Pradesh wanted to develop a wind farm to generate electricity through windmills near a place that was available adjacent to the college and hospital. The college took interest in this venture and hence, to start with, they wanted to invest in an existing windmill company located at _______________ Page No.6 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 Kanyakumari District and Tirunelveli District. Pursuant to the same, the appellant was introduced by one Loganathan from Chennai to the plaintiff and one Balu Devar. The appellant was taken to Tirunelveli and a site inspection was made and the appellant was informed that an initial investment around Rs. 25,00,000/- has to be made. The appellant therefore took four demand drafts in Hyderabad and came to Kanyakumari. Two or three sites were shown to the appellant and it was not to his satisfaction. Hence, the appellant was returning back to the Syndicate bank, Tirunelveli to deposit the demand drafts. During the travel, the pouch in which the demand drafts and all important certificates were kept, went missing. Inspite of the best efforts of the appellant, the demand drafts and other important documents were not able to be traced. Hence, the appellant gave a stop payment instruction on 28.08.2003 at the Syndicate bank, Tirunelveli branch. _______________ Page No.7 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007
5. In view of the above facts, the appellant has taken a stand that the plaintiff has misused the demand drafts and has concocted a story and there was no liability on the part of the appellant on the cause of action as pleaded by the plaintiff. Accordingly, the appellant had sought for the dismissal of the suit.
6. The Trial Court, based on the pleadings, framed the following issues:
1.kUj;Jtf; fy;Yhhpapy; ,lk; th';fpj; jUtjhf 1tJ gpujpthjp brhy;yp mjd; nghpy; ,e;j gz tiunthiyfs; bfhLf;fg;gl;lbjd;gJ cz;ikah> 2/thjp nkw;fz;lj; bjhifia rk;ge;jg;gl;lth;fSf;Fj; jpUg;gpf; bfhLj;J cs;shuh>
3.mt;thW gzk; bfhLj;jth;fisj; jug;gpduhf nrh;f;fhjJ tHf;fpw;F ghjfkh> _______________ Page No.8 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 4/1tJ gpujpthjp mth; TWtJ nghd;W tiunthiyfis bjhiyj;J tpl;ljhff; TWtJ cz;ikah> 5/ 1tJ gpujpthjp. thjpf;F bjhif vJt[k;
bfhLf;f ntz;Lk; vd;gJ cz;ikah> 6/ thjpf;Ff; fpilf;ff; Toa ,jug; ghpfhu';fs; vd;bdd;d>”
7. The appellant had also sought for the framing of an additional issue on the ground that the very basis of the claim made by the plaintiff is hit by Section 23 of the Indian Contract Act, since it is opposed to the principles of public policy. However, the Court below refused to frame the additional issue on the ground that the same did not arise on the pleadings available on record. _______________ Page No.9 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007
8. The plaintiff examined himself as P.W-1 and two more witnesses were examined on the side of the plaintiff. Exhibits A1 to A5 were marked on the side of the plaintiff. The defendant examined himself as D.W-1 and one more witness was examined on the side of the defendant. Exhibits B1 to B6 were marked on the side of the defendant.
9. The Trial Court, on consideration of the facts and circumstances of the case and on appreciation of evidence, decreed the suit as prayed for and aggrieved by the same, the 1st defendant has filed this appeal.
10. Heard Ms.N.Krishnaveni, learned Senior Counsel for Mr.M.P.Senthil, learned counsel appearing for the appellant and Mr.K.R.Laxman, learned counsel appearing for the respondents 2 to 4. The first respondent/plaintiff died during the pendency of this appeal and _______________ Page No.10 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 the respondents 6 to 10 were added as legal representatives of R1/plaintiff. All of them were served notice and their names were also printed in the cause list and they neither appeared in person or through their counsel.
11. This Court has carefully considered the submissions made on either side and the materials available on record.
12. The following points arise for consideration in this appeal:
I. Whether the plaintiff has established the liability and has discharged his burden of proof under Section 101 of the Indian Evidence Act ?
II. Whether the claim made by the plaintiff is hit by Section 23 of the Indian Contract Act since the claim _______________ Page No.11 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 is opposed to public policy?
III. Whether the Court below properly appreciated the evidence available on record and whether the findings rendered suffer from infirmity warranting the interference of this Court ?
13. The specific case of the plaintiff is that the appellant received a sum of Rs.25,00,000/- from nearly 13 persons introduced by the plaintiff for securing a medical seat in a college at Secunderabad, Andhra Pradesh. The plaintiff has given a list of 13 names at paragraph no.3 of the plaint. A careful reading of paragraph 3 of the plaint shows that there are absolutely no details as to when the amount was given by those persons to the appellant, how and in what mode it was given and where this amount was given to the appellant. Order VI Rule 2 of CPC makes it very clear that pleadings shall contain a statement in a concise _______________ Page No.12 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 form of material facts on which the party pleading relies for his claim. The material facts are those upon which the plaintiff’s cause of action depends and those facts must necessarily be proved in order to establish the existence of a cause of action.
14. The pleadings are completely bereft of the material facts which forms the basis of the claim made by the plaintiff. Even insofar as the evidence tendered on the side of the plaintiff, P.W-1 was not able to produce before the Court or satisfactorily answer before the Court as to whether the particulars of the Medical College was obtained or to which University the College is affiliated or any document that was collected from the appellant to show that a discussion actually took place for securing admission for nearly 13 students. P.W-1 was not even able to tell before the Court as to when and where this amount was given and what are the particulars of the educational qualifications of the 13 _______________ Page No.13 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 students, whose names are mentioned at paragraph 3 of the plaint. The only evidence that was tendered before the Court was the returned demand drafts marked as Exhibits A1 to A3, the challans presented before the collection of the demand drafts marked as Ex.A4 and the return memos marked as Ex.A5. There was nothing more than these documents to establish the actual liability towards which these demand drafts were made ready by the appellant.
15. The plaintiff also examined P.W-2, who claimed that he is the relative of one of the girl Damayanthi, who had given the money and the name of this girl is not even found at paragraph 3 of the plaint. Similarly, PW-3 talks about the name of a girl Jamuna and the name of this girl is also not found at paragraph no.3 of the plaint. Both these witnesses were not able to provide details on the educational qualifications of these two girls and they never had any direct contact _______________ Page No.14 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 with the appellant. Hence, PW-2 and PW-3 do not in any way help the plaintiff in proving his case.
16. Section 101 of the Evidence Act is based on the principle “he who affirms must prove”. This provision requires that whoever wants a judgment in his favour, must prove his case and it is a legal burden from which there is no escape.
17. Since demand drafts have been drawn in the name of the plaintiff, this Court wants to ascertain as to whether the appellant has given a proper reason as to why these demand drafts went into the hands of the plaintiff. The appellant in the written statement has given a detailed explanation as to why demand drafts were drawn in the name of the plaintiff. The case of the appellant is that their organisation was looking for investment in the existing windmill company and was shown _______________ Page No.15 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 certain sites and was also asked to pay an initial investment of Rs. 25,00,000/-. The dealing was not completed and in the meantime, the demand drafts were lost by the appellant. Hence, police complaint was given before the Crime branch, Tirunelveli on 28.08.2003 and the said complaint has been marked as Ex.B1. Ex.B2 was the CSR given by the concerned police after receiving the complaint. Ex.B3 is the telegram that was sent to the Inspector of Police, Central Crime branch, informing the police about the deposit of the four demand drafts and for taking necessary action. Ex.B4 and Ex.B5 are the correspondence with the Syndicate bank and the stop payment made by the bank.
18. A combined reading of the pleadings and the evidence available on record probabilizes the defence taken by the appellant as to how the demand drafts came to be drawn in the name of the plaintiff. To that extent, the burden shifted on the plaintiff and the plaintiff has not _______________ Page No.16 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 come up with any explanation nor has been able to prove the material facts to justify the cause of action, to make the claim against the appellant in the suit.
19. In view of the above discussion, this Court holds that the plaintiff has not established the liability and has not discharged his burden of proof under Section 101 of the Evidence Act.
20. The plaintiff while being examined as P.W-1 has categorically made the following statement:
“me;j U:/2.00.000-? buhf;fkhfj;jhd; bfhLf;fg;gl;lJ/ ehd; mt;thW 13 khzth;fsplk; th';fpf;bfhLj;njd;/ xU khztid nrh;g;gjw;F y";rk; bfhLf;fntz;Lk; vd;w tifapy; me;j gzj;ij th';fpdhnu xHpa mjw;F urPJ vJt[k; bfhLf;ftpy;iy/” _______________ Page No.17 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007
21. The very basis of claim made by the plaintiff is opposed to public policy. The plaintiff in no uncertain terms states that what was given to the appellant was a bribe and that is the reason why there was no receipt given. The instant case clearly falls under the maxim in pari delicto potior est conditio defendentis. If really the money was paid as a bribe to the appellant, the plaintiff ought to have realised that the payment was made for an illegal object or an object opposed to public policy. Section 23 of the Indian Contract Act makes it very clear that an agreement which is forbidden by law or is opposed to public policy, the very agreement is unlawful and void, which can never be enforced.
22. It will be beneficial to take note of the judgment of this Court in N.V.P. Pandian v. M.M. Roy reported in (1978) 91LW490: AIR 1979 Mad 42. This case pertained to similar set of facts where money _______________ Page No.18 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 was paid for getting a seat in a medical college. While considering the said claim, this Court held as follows :
“9.The next question for consideration is whether in such circumstances the respondent would be entitled to maintain an action to refund of the money. The learned trial Judge has granted a decree for refund of the money in favour of the respondent on the ground that she was a less guilty party. There is absolutely no evidence at all available in the case for this finding of the lower court. There is no evidence except the ipse dixit of P. W. 1 that the appellant volunteered to procure a seat for the respondent's son in the Madras Medical College provided the latter would pay him Rs. 15,000/-. It is the specific case of the respondent _______________ Page No.19 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 that she was trying for a seat for her son in the Madras Medical College and that it was in that connection that she paid Rs. 15,000/- to the appellant on the latter promising to get a seat. In the circumstances, it could only be concluded that only the respondent must have approached the appellant for necessary help in the matter of securing the seat for her son in the Medical College. Therefore, both the appellant and the respondent must be considered to be in pari delicto. Where each party is equally in fault the law favours him who is actually in possession. The maxim in pari delicto potior est conditio possidentis is founded on the principles of public policy, which will not assist a plaintiff who has paid over money or handed over _______________ Page No.20 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 property in pursuance of an illegal or immoral contract, to recover it back, for the Courts will not assist an illegal transaction in any respect.
In Sita Ram v. Radha Bai MANU/SC/0012/1967 : [1968]1SCR805 it has been held thus : (at p. 537) "The principle that the courts will refuse to enforce an illegal agreement at the instance of a person who is himself a party to an illegality or fraud is expressed in the maxim 'in pari delicto potior est conditio possidentis'... But there are exceptional cases in which a man will be relieved of the consequences of an illegal contract into which he has entered-cases to which the maxim does not apply. They fall into three classes : (a) where the illegal purpose has _______________ Page No.21 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 not yet been substantially carried into effect before it is sought to recover money paid or goods delivered in furtherance of it; (b) where the plaintiff is not in pari delicto with the defendant; (c) where the plaintiff does not have to rely on the illegality to make out his claim... Where the parities are not in pari delicto, the less guilty party may be able to recover money paid or property transferred, under the contract. This possibility may arise in three situations:Firstly, the contract may be of a kind made illegal by statute in the interests of a particular class of persons of whom the plaintiff is one. Secondly, the plaintiff must have been induced to enter into the contract by fraud or strong pressure. Thirdly, a person who is under _______________ Page No.22 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 a fiduciary duty to the plaintiff will not be allowed to retain property, or to refuse to account for moneys received, on the ground that the property or the moneys have come into his hands as the proceeds of an illegal transaction."
The present case does not fall in any of the exceptional cases referred to above.
10. In Kuju Collieries v. Jharkhand Mines MANU/SC/0030/1974 : [1975]1SCR703 a mining lease was given in favour of the plaintiff contrary to the provisions of Mines and Minerals (Regulation and Development) Act, 1948 and the Mineral Concession Rules, 1949.
There was proof to shoe that the plaintiff could _______________ Page No.23 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 not have been in ignorance of the legal position. On the basis of the lease, the plaintiff did not get possession of the leased property and, therefore the plaintiff instituted the suit for recovery of possession of the leased property along with mesne profits or in the alternative for refund of the sum of Rs. 80,000/- and certain other sums. After the institution of the suit the relief in respect of possession of the mines became unenforceable in view of the Bihar Land Reforms Act. Therefore, the only relief which was pressed by the plaintiff was his claim for the refund of Rs. 80,000/-. Alagiriswami, J., on behalf of the court held that the lease in favour of the plaintiff was contrary to the provisions of the Mines and Minerals _______________ Page No.24 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 (Regulation and Development) Act, 1948 and the Mineral Concession Rules, 1949 and as such void from its inception. Consequently, payment of the sum of Rs. 80,000/- was not made lawfully, nor was it done under a mistake or under coercion and it could not be recovered. An attempt was made before the Supreme Court to bring the case within Section 65, 70, or 72 of the Contract Act. In dealing with this contention it was observed that S. 65 makes a distinction between an agreement and a contract.
According to S. 2 of the Contract Act an agreement which is enforceable by law is a contract and an agreement which is not enforceable by law is said to be void. Therefore, when the earlier part of the section speaks of an _______________ Page No.25 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 agreement being discovered to be void it means that the agreement is not enforceable and is therefore not a contract. It means that it was void. It may be that the parties or one of the parties to the agreement, knows that agreement was in law not enforceable. They might have come to know later that the agreement was not enforceable. The second part of the section refers to a contract becoming void. That refers to a case where an agreement which was originally enforceable and was therefore a contract becomes void due to subsequent happenings. In both these cases any person who has received any advantage under such agreement or contract is bound to restore such advantage, or to make compensation for it to _______________ Page No.26 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 the person from whom he received it. But where even at the time when the agreement is entered into both the parties knew that it was not lawful and, therefore, void, there was no contract but only an agreement and it is not a case where it is discovered to be void subsequently. Nor is it a case of the contract becoming void due to subsequent happenings. Therefore, S. 65 of the Contract Act did not apply." It also ruled out the applicability of Sections 70 and 72 of the Contract Act on the ground that the payment of the money was not made lawfully, nor was it done under a mistake or under coercion. In coming to this conclusion, the Supreme Court approved the decision of the Hyderabad High Court in Budhulal v. Deccan Banking Co. AIR _______________ Page No.27 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 1955 Hyd. 69.
11. Following these decisions, it has to be held that the instant case falls clearly under the maxim pari delicto potior est conditio possidentis. The respondent must have known when she paid Rs. 15,000, that she was paying the money for an illegal object or an object opposed to public policy. She cannot in any way be considered to be less guilty party as none of the situations contemplated in Sitaram v. Radha Bai MANU/SC/0012/1967 : [1968]1SCR805 is present. I therefore follow the decisions in Kunju Collieries v. Jharkhand Mines MANU/SC/0030/1974 : [1975]1SCR703 and in Ratanchand v. Askar MANU/AP/0125/1976 :
AIR1976AP112 , and hold that the respondent is _______________ Page No.28 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 not entitled to a refund of the money from the appellant. The respondent herself could not get the relief she wanted without setting up and proving the illegal object for which she had paid the money. I therefore set aside the judgment and decree of the trial court, dismiss the suit and allow the appeal with costs.”
23. A recent judgment of the Apex Court in G.T.Girish v. Y. Subba Raju (D) by Lrs and Another reported in 2022 SCC Online 60, also dealt with a case where the agreement was found to be unlawful and opposed to public policy and the Apex Court considered the scope of Section 23 of the Indian Contract Act and it was held as follows:
“48. The principle of in pari delicto potior est conditio defendentis is a maxim which we must bear in mind. We _______________ Page No.29 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 need only notice the following discussion by this Court. The decision of this Court in Kedar Nath Motani (supra) comes to mind:
“9. … Where both parties do not show that there was any conspiracy to defraud a third person ought to commit any other illegal act, the maxim, in paridelito etc., can hardly be made applicable. …”
49. This Court in Kedar Nath Motani (supra) also referred to the following statement by Lord Mansfield in Holman v. Johnson3, wherein it was held as follows:
“12. The law was stated as far back as 1775 by Lord Mansfield in Holman v. Johnson [(1775) 1 Cowp 341 :
98 ER 1120, 1121] in the following words:
“The principle of public policy is this; ex dolomalo non _______________ Page No.30 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 orituractio. No Court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act. If, from the plaintiff's own stating or otherwise, the cause of action appears to arise ex turpi causa, or the transgression of a positive law of this country, there the Court says he has no right to be assisted. It is upon that ground the Court goes; not for the sake of the defendant, but because they will not lend their aid to such a plaintiff. So if the plaintiff and defendant were to change sides, and the defendant was to bring his action against the plaintiff, the latter would then have the advantage of it; for where both are equally in fault, potiorestconditiodefendentis.” There are, however, some exceptions or “supposed exceptions” to the rule of turpi causa. In Salmond and _______________ Page No.31 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 William on Contracts, four such exceptions have been mentioned, and the fourth of these exceptions is based on the right of restitutio in integrum, where the relationship of trustee and beneficiary is involved. Salmond stated the law in these words at p. 352 of his Book (2nd Edn.):
“So if A employs B to commit a robbery, A cannot sue B for the proceeds. And the position would be the same if A were to vest property in B upon trust to carry out some fraudulent scheme : A could not sue B for an account of the profits. But if B, who is A's agent or trustee, receives on A's account money paid by C pursuant to an illegal contract between A and C the position is otherwise and A can recover the property from B, although he could not have claimed it from C. _______________ Page No.32 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 In such cases public policy requires that the rule of turpis causa shall be excluded by the more important and imperative rule that agents and trustees must faithfully perform the duties of their office.” Williston in his Book on Contracts (Revised Edn.), Vol. VI, has discussed this matter at p. 5069, para 1785 and in paras 1771 to 1774, he has noted certain exceptional cases, and has observed as follows:
“If recovery is to be allowed by either partner or principal in any case, it must be where the illegality is of so light or venial a character that it is deemed more opposed to public policy to allow the defendant to violate his fiduciary relation with the plaintiff than to allow the plaintiff to gain the benefit of an illegal transaction.” _______________ Page No.33 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 Even in India, certain exceptions to the rule of turpi causa have been accepted. Examples of those cases are found in PalaniyappaChettiar v. ChockalingamChettiar[ILR (1920) 44 Mad 334] and Bhola Nath v. Mul Chand [ILR (1903) 25 All 639].”
50. We may also notice the following statement by this Court in Kedar Nath Motani(supra):
“15. The correct position in law, in our opinion, is that what one has to see is whether the illegality goes so much to the root of the matter that the plaintiff cannot bring his action without relying upon the illegal transaction into which he had entered. If the illegality be trivial or venial, as stated by Williston and the plaintiff is not required to rest his case upon that _______________ Page No.34 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 illegality, then public policy demands that the defendant should not be allowed to take advantage of the position. A strict view, of course, must be taken of the plaintiff's conduct, and he should not be allowed to circumvent the illegality by resorting to some subterfuge or by mis-stating the facts. If, however, the matter is clear and the illegality is not required to be pleaded or proved as part of the cause of action and the plaintiff recanted before the illegal purpose was achieved, then, unless it be of such a gross nature as to outrage the conscience of the Court, the plea of the defendant should not prevail.”
51. In Sita Ram v. Radhabai4, this Court observed as follows:
“11. The principle that the Courts will refuse to enforce _______________ Page No.35 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 an illegal agreement at the instance of a person who is himself a party to an illegality or fraud is expressed in the maxim in parideuctoportiorestconditiodefendentis. But as stated in Anson's Principles of the English Law of Contracts, 22nd Edn., p. 343 : there are exceptional cases in which a man will be relieved of the consequences of an illegal contract into which he has entered — cases to which the maxim does not apply. They fall into three classes : (a) where the illegal purpose has not yet been substantially carried into effect before it is sought to recover money paid or goods delivered in furtherance of it; (b) where the plaintiff is not in pari delicto with the defendant; (c) where the plaintiff does not have to rely on the illegality to make out his claim’.
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52. In Narayanamma (supra), this Court was considering a Suit for specific performance, which was resisted on the ground that the agreement to sell was contrary to the provisions of the Statute. Section 61 of the Karnataka Land Reforms Act, 1961 provided that no land for which occupancy was granted, shall within 15 years of the order of the Tribunal, be transferred by sale, inter alia. A partition was permitted. Equally, a mortgage could be effected to secure a loan. Drawing support from Judgment of this Court in Kedar Nath (supra), this Court, inter alia, as follows:
“15. The three-Judge Bench of this Court, after referring to the aforesaid judgments, speaking through M. Hidayatullah, J. (as his Lordship then was), observes thus : (Kedar Nath Motani case [Kedar Nath _______________ Page No.37 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 Motani v. Prahlad Rai, (1960) 1 SCR 861 : AIR 1960 SC 213], AIR pp. 218-19, para 15) “15. The correct position in law, in our opinion, is that what one has to see is whether the illegality goes so much to the root of the matter that the plaintiff cannot bring his action without relying upon the illegal transaction into which he had entered. If the illegality be trivial or venial, as stated by Williston and the plaintiff is not required to rest his case upon that illegality, then public policy demands that the defendant should not be allowed to take advantage of the position. A strict view, of course, must be taken of the plaintiff's conduct, and he should not be allowed to circumvent the illegality by resorting to some subterfuge or by misstating the facts. If, however, the _______________ Page No.38 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 matter is clear and the illegality is not required to be pleaded or proved as part of the cause of action and the plaintiff recanted before the illegal purpose was achieved, then, unless it be of such a gross nature as to outrage the conscience of the Court, the plea of the defendant should not prevail.”
16. It could thus be seen, that this Court has held that the correct position of law is that, what one has to see is whether the illegality goes so much to the root of the matter that the plaintiff cannot bring his action without relying upon the illegal transaction into which he had entered. This Court further held, that if the illegality is trivial or venial and the plaintiff is not required to rest his case upon that illegality, then public policy demands that the defendant should not be allowed to _______________ Page No.39 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 take advantage of the position. It has further been held, that a strict view must be taken of the plaintiff's conduct and he should not be allowed to circumvent the illegality by resorting to some subterfuge or by misstating the facts. However, if the matter is clear and the illegality is not required to be pleaded or proved as part of the cause of action and the plaintiff recanted before the illegal purpose is achieved, then, unless it be of such a gross nature as to outrage the conscience of the Court, the plea of the defendant should not prevail.”
53. In Narayanamma (supra), this Court further held as follows:
“24. The transaction between the late Bale Venkataramanappa and the plaintiff is not disputed. _______________ Page No.40 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 Initially the said Bale Venkataramanappa had executed a registered mortgage deed in favour of the plaintiff. Within a month, he entered into an agreement to sell wherein, the entire consideration for the transfer as well as handing over of the possession was acknowledged. It could thus be seen, that the transaction was nothing short of a transfer of property. Under Section 61 of the Reforms Act, there is a complete prohibition on such mortgage or transfer for a period of 15 years from the date of grant. Sub-section (1) of Section 61 of the Reforms Act begins with a non-
obstante clause. It is thus clear that, the unambiguous legislative intent is that no such mortgage, transfer, sale, etc. would be permitted for a period of 15 years from the date of grant. Undisputedly, even according to the plaintiff, the grant is of the year 1983, as such, the _______________ Page No.41 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 transfer in question in the year 1990 is beyond any doubt within the prohibited period of 15 years. Sub- section (3) of Section 61 of the Reforms Act makes the legislative intent very clear. It provides, that any transfer in violation of sub-section (1) shall be invalid and it also provides for the consequence for such invalid transaction.
25. Undisputedly, both, the predecessor-in-title of the defendant(s) as well as the plaintiff, are confederates in this illegality. Both, the plaintiff and the predecessor- in-title of the defendant(s) can be said to be equally responsible for violation of law.
26. However, the ticklish question that arises in such a situation is:“the decision of this Court would weigh in side of which party”? As held by Hidayatullah, J. _______________ Page No.42 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 in Kedar Nath Motani [Kedar Nath Motani v. Prahlad Rai, (1960) 1 SCR 861 : AIR 1960 SC 213], the question that would arise for consideration is as to whether the plaintiff can rest his claim without relying upon the illegal transaction or as to whether the plaintiff can rest his claim on something else without relying on the illegal transaction. Undisputedly, in the present case, the claim of the plaintiff is entirely based upon the agreement to sell dated 15-5-1990, which is clearly hit by Section 61 of the Reforms Act. There is no other foundation for the claim of the plaintiff except the one based on the agreement to sell, which is hit by Section 61 of the Act. In such a case, as observed by Taylor, in his “Law of Evidence” which has been approved by Gajendragadkar, J. in Immani Appa Rao [ImmaniAppa Rao v. Gollapalli _______________ Page No.43 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 Ramalingamurthi, (1962) 3 SCR 739 : AIR 1962 SC 370], although illegality is not pleaded by the defendant nor sought to be relied upon him by way of defence, yet the Court itself, upon the illegality appearing upon the evidence, will take notice of it, and will dismiss the action ex turpi causa non orituractio i.e. no polluted hand shall touch the pure fountain of justice. Equally, as observed in Story's Equity Jurisprudence, which again is approved in ImmaniAppa Rao [Immani Appa Rao v. Gollapalli Ramalingamurthi, (1962) 3 SCR 739 : AIR 1962 SC 370], where the parties are concerned with illegal agreements or other transactions, courts of equity following the rule of law as to participators in a common crime will not interpose to grant any relief, acting upon the maxim in pari delicto potior est _______________ Page No.44 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 conditio defendentis et possidentis.”
54. This Court in Narayanamma (supra) finally found as follows:
“28. Now, let us apply the other test laid down in ImmaniAppa Rao [Immani Appa Rao v. Gollapalli Ramalingamurthi, (1962) 3 SCR 739 : AIR 1962 SC 370]. At the cost of repetition, both the parties are common participator in the illegality. In such a situation, the balance of justice would tilt in whose favour is the question. As held in ImmaniAppa Rao [ImmaniAppa Rao v. GollapalliRamalingamurthi, (1962) 3 SCR 739 : AIR 1962 SC 370], if the decree is granted in favour of the plaintiff on the basis of an illegal agreement which is hit by a statute, it will be rendering an active assistance of the court in enforcing _______________ Page No.45 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 an agreement which is contrary to law. As against this, if the balance is tilted towards the defendants, no doubt that they would stand benefited even in spite of their predecessor-in-title committing an illegality. However, what the court would be doing is only rendering an assistance which is purely of a passive character. As held by Gajendragadkar, J. in ImmaniAppa Rao [ImmaniAppa Rao v. Gollapalli Ramalingamurthi, (1962) 3 SCR 739 : AIR 1962 SC 370], the first course would be clearly and patently inconsistent with the public interest whereas, the latter course is lesser injurious to public interest than the former.”
24. The ratio in the above judgments makes it abundantly clear that where there is an illegality which goes to the root of the matter _______________ Page No.46 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 and an agreement is opposed to public policy, the Court will not come to the aid to enforce such an illegal agreement particularly when the person who is knocking the doors of the Court was himself a party to the illegality.
25. In view of the above discussion, this Court holds that the claim made by the plaintiff is hit by Section 23 of the Indian Contract Act since the claim is opposed to public policy.
26. The Court below went wrong in not framing an additional issue on the scope of Section 23 of the Indian Contract Act and in a way, the Court below has allowed an unlawful agreement to be enforced. The Court below has gone on a tangent by taking into consideration capitation fees collected by Medical Colleges and has justified the claim made by the plaintiff,who specifically states that the _______________ Page No.47 of 52 https://www.mhc.tn.gov.in/judis A.S(MD)No.30 of 2007 amount was given as a bribe.
27. The Court below did not take into consideration the fact that the plaintiff did not plead the material facts and did not discharge the burden of proof and inspite of the same, a finding has been given as if the plaintiff has proved his case. Such a finding is based on mere assumption and it is unsustainable.
28. The Court below has virtually shifted the burden on the 1st defendant/appellant to prove the defence and such an approach goes against the fundamental principles of the rules of burden of proof under the Evidence Act. In view of the same, this Court holds that the Court below did not properly appreciate the evidence available on record and the findings rendered suffers from infirmity and illegality warranting the interference of this Court.
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29. The upshot of the above discussion leads to the only conclusion that the judgment and decree passed by the Court below in O.S.No.45 of 2006 is liable to be set aside by this Court and accordingly, the same is set aside and consequently, the suit stands dismissed.
30. It is brought to the notice of this Court that at the time of granting interim order in favour of the appellant, this Court imposed a condition to the appellant to deposit 25% of the decretal amount pending disposal of the appeal through Order dated 20.10.2016. Accordingly, the amount was also deposited by the appellant. In view of setting aside the Judgement and Decree of the Trial Court and allowing this appeal, the appellant is entitled to withdraw the amount deposited along with accrued interest, if any.
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31. In the result, this appeal suit stands allowed and considering the facts and circumstances of the case, there shall be no order as to costs. Consequently, connected miscellaneous petitions are closed.
[J.N.B, J.] & [N.A.V., J.]
13.10.2022
Index : Yes/No
Internet : Yes/No
PJL
To
The Additional District Judge,
(Fast Track Court No.II),
Tirunelveli.
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Page No.50 of 52
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A.S(MD)No.30 of 2007
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Page No.51 of 52
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A.S(MD)No.30 of 2007
J.NISHA BANU, J
AND
N.ANAND VENKATESH, J
PJL
Judgment made in
A.S(MD)No.30 of 2007
13.10.2022
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Page No.52 of 52
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