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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 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 of the contract becoming void due to subsequent happenings. Therefore, s. 65 of the Contract Act did not apply.

18 Coming now to Section 65 of the Contract Act, we feel that it also does not of recognise the distinction between a contract being illegal by reason of its being opposed to public policy or morality or a contract void for other reasons. The section is couched in wide language and talks of void contracts in general. There does not seem to be any ground for differentiating one contract from the Other in regard to the applicability of that section.

It was argued and rightly so by the learned counsel for the respondent that that section has no application to the faces of this case because when the parties entered into this contract it was a contract which they knew to be void to start with. This section deals with two matters : an agreement which is discovered to be void and a contract which becomes void. The first matter is concerned with an agreement which never amounted to a contract because it was void ab initio the fact of its being void being discovered at a later stage. The word 'discovered' in the first part of the section is used in contradistinction to the word 'becomes' in the second part. The word 'discovered' connotes the pre-existence of that which is discovered. The second matter deals with a contract (i. e., with an agreement enforceable at law) which was good at its inception and which becomes void at some later stage by reason of some supervening circumstance. (See Sanjiva Row's Indian Contract Act, Vol.1, 1959 edn page 882). The following authorities state the law on the subject : AIR 1959 S. C. 490 ; AIR 1959 All. 681 ; AIR Kerala 239 ; AIR 1959 J & K 10 ; AIR 1960 All. 72."

"10. The learned counsel for the respondent then contends that even if the agreement to pay commission is held to be void, the respondent is entitled to the benefit of Section 65 of the Contract Act and therefore, entitled to commission for the work done by him to the petitioner. Section 65 states that when an agreement is discovered to be void, or when a contracts becomes void, any person who has received any advantage under such agreement or contract is bound to restore it, or to make compensation for it, to the person from whom he received it. It is well established that the said Section 65 cannot be invoked when the agreement or contract was known to the parties to be void ab initio and that it applies to cases in which the contract is discovered to be void or becomes void after the agreement had been entered into. In this case both the parties were aware that the contract is prohibited by law or will defeat the statutory provisions of the Insurance Act. I therefore hold that Section 65 of the Contract Act cannot be invoked in this case. Taking all the facts and circumstances of the case, I hold that the decisions of the courts below are erroneous. They are therefore set aside and the respondent's suit will stand dismissed. There will, however, be no order as to .