TMI Blog1937 (10) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... ity is said, in argument, to consist in a manoeuvre whereby defendants 2 and 3 agreed with defendant 1 to evade the law by alienating sir land without obtaining the requisite sanction. The mode whereby this was to be achieved was to sell the family share (a four annas share) in a village wherein the family had sir rights excepting the sir rights and then, the vendors being thus, it is said, put in the position of occupancy tenants, to surrender the occupancy tenancy. The whole, it is said, was one transaction, agreement, sale deed, and surrender deed all being approximately of the same date and the transfers of exactly the same date, namely 14th April 1923. 2. It will be observed that this is a suit brought by sons impugning the acts of their fathers, as it is now said in argument, on the ground of illegality. The fathers have not gone into the box to give the Court the benefit of their evidence; the transaction attacked had as one result the release of the family from a load of debt and the gain by the family of a valuable lease in another village. The result, if the suit succeeds, will be that the family will gain all these advantages and still retain their property as before. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to land in the Sambalpur territory recorded as bhogra in the Record of Rights of the current settlement. (5) Nothing in this section shall apply to a lease, for a term not exceeding the term of settlement, of a village of any estate to which the Commissioner may declare this sub-section applicable. (6) Nothing in this section shall affect any loss of possession of any sir land in the course of a partition. 3. I regard it of the utmost importance that this safeguard should be maintained in full force and effect. I regard it as desirable that collusive actions having as their real object to defraud alienees who have given consideration should fail. The difficulty lies in achieving both ends in this case. Before coming to the main point it is desirable to put on one side the question raised as to limitation. It is said that here Sch. 2, Art. 1, Tenancy Act, applies. That provides as follows: For possession of a holding by a person claiming to be a tenant from which he has been dispossessed or excluded from possession by any person- Two years from the date of dispossession or exclusion. 4. Though plaintiffs 2 to 5 are minors, that does not extend the time, it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... though not pleaded, it follows that the surrenderees have to be placed in the position of quasi trustees. The position being reached, the Court must declare that the surrender being illegal, the persons in possession under it hold as quasi trustees, that such quasi trust should be determined and that defendants do relinquish possession on terms that are equitable and that have the effect of restoring as nearly as may be the status quo. 6. Though that result is similar in effect to that which a tenant would obtain if he sued a landlord who had wrongly dispossessed him in that in both cases the plaintiff gets possession, the two causes of action are entirely different. The decree which results in the plaintiff getting possession is not directed against the defendant as a person dispossessing but as a person in the position of a trustee holding for his cestui que trust which trust is being determined. I have deliberately put the matter as broadly as possible. How different such a cause of action is from the kind envisaged by Sch. I, Central Provinces Tenancy Act is apparent from a perusal of S. 81, Trusts Act. That section justifies the Court's treating the surrenderees in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt case the tenants purported to surrender to their landlord and the transaction must be treated as a surrender under the provisions of S. 89, not as a transfer under the provisions of S. 12. It follows that S. 13 does not apply and the jurisdiction of a Civil Court is not ousted. That leaves the main question outstanding. It should be noted that there is here an appeal and a cross-appeal. The lower Appellate Court has held that the sale is valid and binding and that the surrender is not. The only fragment of the cross-appeal pressed is that found in paras 13 and 14 of the cross-objections. It is said not only the surrender but also the sale should have been set aside, both being part of one transaction. It is to be observed that the ground on which it is said, in the cross-objections, that the sale should be set aside is that the sale was a void, not an illegal, transaction: see page 164 of the Paper Book. If the issues are referred to, it will be found that the only issue which raises the question whether the sale deed is binding is Issue (9); the only issues which challenge the surrender are Issues (10) as read with (11). Issue (9) challenges the sale on the ground of lack of co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion is to be found in para. 9 of the plaint in the following terms: The debt mentioned in this sale deed was not genuine. Due to the said same, this sale deed being against the law is illegal. 10. As regards the surrender, referred to in the plaint as a rajinama, the allegation of illegality is contained in para. 10. The substance of that allegation is that the surrender was registered before the sale deed was registered and therefore was contrary to the Tenancy Act. This allegation was evidently founded on the view, now decided by their Lordships of the Privy Council to be wrong, that a transfer dates from registration. Thus the allegation raised in substance the same point as the issue, namely that the surrender being before the sale, it was by persons not tenants and therefore inoperative. The prayer is simply for possession; there is no claim for a declaration that the transfer or surrender was illegal or void; there is no prayer that they or either of them should be delivered up to be cancelled; there is no allegation that they sprang out of an illegal scheme to circumvent the Tenancy Act. Possession is not sought on the ground that defendant 1 is a quasi trustee or th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to uphold the surrender. There have here emerged facts indistinguishable from those present in Moti Chand v. Ikram-Ullah Khan, AIR (1916) 3 PC 59=39 IC 454=39 All 173=44 IA 54 (PC), from which the Court must infer that the transaction falls within the mischief struck at by S. 49, C.P. Tenancy Act. The result will not be to make the whole transaction void or illegal. Applying S. 49 has the result of making the surrender inoperative making the surrenderees quasi trustees, and making it just and equitable now to direct that the quasi trust shall determine, the family be restored to possession on the terms that they repay to defendant 1 the amount they have gained. 12. This is a case of illegality created by a statute for the protection of a particular class to which the plaintiffs belong. In such a case the member of the class when relying on the statute can be put upon terms to give up all benefit obtained under the-impugned transaction: see Lodge v. National Union Investment Co. Ltd. (1907) 1 Ch 300=76 LJ Ch 187=96 LT 301=23 TLR 187. The effect of applying the appropriate remedy is to restore these families to the position they would have been in, so far as possible, had there b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sible to distinguish from, the present. All that S. 92 excludes is oral evidence to contradict, vary, add to or subtract from the terms of a contract which has been reduced to writing. It does not preclude a party from showing that the writing was not really the contract between the parties but was only a fictitious or colourable device which cloaked something else. Benami transactions which have been upheld by the Judicial Committee on numerous occasions afford a common illustration of this rule. In any case it is always permissible to look to the surrounding circumstances to see in what manner the language of a document was related to existing facts: Narasingerji v. Parthasaradhi Rayanim Garu, AIR (1924) 11 PC 226=82 IC 293=47 Mad 729=51 IA 305 (PC) at p. 738. When we do that, we find that before the sale there was already an agreement to surrender the occupancy rights soon after the sale had been effected, which is exactly what Moti Chand v. Ikram-Ullah Khan, AIR (1916) 3 PC 59=39 IC 454=39 All 173=44 IA 54 (PC) strikes at. The documents themselves afford intrinsic indication of this. The sale deed, which it is said, was executed first, speaks of the sale having been effected af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he stated in examination-in-chief that the agreements to sell and surrender had both been entered into before the actual documents were executed and that though the original intention was to execute them on separate days they eventually decided to carry them through on one day. This is not just a stray sentence in the deposition finding a place there because of a slip of the tongue, for the witness spoke about it at length in his examination-in-chief and when cross-examined about it adhered to that story. The facts given by him bring the transaction within the four corners of Moti Chand v. Ikram-Ullah Khan, AIR(1916) 3 PC 59=39 IC 454=39 All 173=44 IA 54 (PC). In any case I agree with my learned brother that Courts are bound to take notice of any illegality to which their attention is drawn whether it was pleaded or not. Accepting then that the two deeds were colourable and that the real transaction between the parties was as I have stated above, what was its legal effect? S. 49(1), Tenancy Act enacts that: Notwithstanding any contract to the contrary....a proprietor who....loses....under...a transfer......his right to occupy any portion of his sir land as a proprietor shall at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the occupancy rights) together with the occupancy rights (which we usually somewhat inaccurately call cultivating rights in these Provinces), then the whole would have fallen to the ground under this section unless the transferee had been content to accept the proprietary rights alone for the entire consideration and forgo the occupancy rights. But since the transaction consists of two separate considerations for two severable objects we are left with a contract consisting of legal and illegal parts in which the lawful is separable from the unlawful. In such a case it is always possible to give effect to the lawful and reject the unlawful; in fact that is what the Courts are bound to do unless the whole transaction is prohibited by statute or unless it involves serious moral turpitude or is otherwise against public policy. See Ss. 57 and 58, Contract Act. This rule was applied and in my opinion rightly, to this very class of cases in Dharamchand v. Jhamsa, AIR (1931) 18 Nag 6=130 IC 9=37 NLR 113 at p. 115 and Bhagwant v. Anandrao, AIR (1925) 12 Nag 302=86 IC 615=22 NLR 136 at p. 141. As I have said the whole transaction in this case is not prohibited by statute; on the contrary t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spectfully dissent from the view in Bhagwant v. Anandrao, AIR (1925) 12 Nag 302=86 IC 615=22 NLR 136. 19. It was argued that no such order can be passed because S. 65, Contract Act relates only to void and not illegal agreements. This overlooks S. 23 which states that all agreements of which the object is unlawful are void, and among the unlawful objects enumerated are those forbidden by law and those whose nature is such that if permitted would defeat the provisions of any law. The refusal to direct restitution is not founded on any section of the Contract Act but is because of the matters with which I have dealt: public policy, ex turpi causa, in pari delicto and the like. If they do not apply then this section at any rate is not a bar. To this extent I agree with my learned brother. I may also observe in passing that Janardhan v. Vishwanath, AIR (1927) 14 Nag 116=98 IC 650=23 NLR 8 upon, which the learned trial Judge relies is no longer good law in so far as it holds that S. 65 is applicable when there is not and could not have been any contract at all, because of the Privy Council decision in Harnath Kunwar v. Indar Bahadur Singh, AIR (1922) 9 PC 403=71 IC 629=45 All 179=60 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... might suggest a contrary conclusion, but, on reading the judgments as a whole, I agree with my learned brother that the lower Court's findings are as above. In any case neither side has pleaded this and not only does the plaintiffs' evidence not disclose it but defendant 1's evidence which though disbelieved stands unrebutted shows exactly the opposite. He swears that the agreements were not only quite distinct but were separated by an interval of several days. As I say he has been disbelieved about this. The lower Courts consider that there was no separation in point of time, but it was nevertheless open t6 them to conclude on this evidence coupled with the documents and other circumstances that though there was only one set of negotiations, they concluded Jin the manner indicated above. 21. I now turn to the question of limitation as against the plaintiffs' right of suit. It was argued on behalf of the defendants that the plaintiffs became occupancy tenants the moment the transfer was effected and so their right to recover possession is barred by Article 1 to Sch. 2, Tenancy Act. Authority for this is to be found in Dalip Rai v. Deoki Rai, (1899) 21 All 204=189 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wrong-doer has not been defined but it can certainly not mean a person who has entered into possession as a trustee and who has committed a breach of trust, for otherwise much of the usefulness of S. 10 would disappear and Art. 98 would be rendered meaningless; also such an interpretation would be contrary to the decision of the Judicial Committee in Srinivasa Moorthy v, Venkata Varada Aiyangar, (1911) 34 Mad 257=11 IC 447=38 IA 129= (1911) 2 MWN 375=21 MLJ 669 (PC) at p. 265 where their Lordships say: To such a contention advanced under such circumstances it would be a sufficient answer to say that no person who has accepted the position of trustee and has acquired property in that capacity can be permitted to assert an adverse title on his own behalf until he has obtained a proper discharge from the trust with which he has clothed himself. 23. In my opinion these remarks apply with even greater force when the law makes aim a qausi trustee whether he will or no and states that he must hold the property for the benefit of the persons in whom the real interest lies, and that he must hold it 30 far as may be as if he were a trustee. I cannot see that there is any difficulty i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 59-560 and Husen v. Rajaram, AIR (1914) 1 Nag 75=26 IC 813=10 NLR 133 at p. 136; nor can the mere addition of an ancillary relief for cancellation which need neveri have been claimed make any difference: Muhammad Nazir v. Mt. Zalaikha Bibi. AIR (1928) 16 All 267=109 IC 54=50 All 510=26 ALJ 289, Sundaram v. Sithammal, (1893) 16 Mad 311=3 MLJ 144 at p. 314: see also Raj Bahadoor Sing v. Aehumbit Lall, (1881) 6 IA 110=CLR 12=4 Sar 15 (PC) at p. 15, Rampal Singh v. Balbhaddar Singh, (1903) 25 All 1=9 IA 203=8 Sar 340 (PC) at p. 16 and Malkarjun v. Narhari, (1901) 25 Bom 337=27 IA 216=2 Bom LR 927=7 Sar 739 (PC) at p. 350. 25. I think these observations apply equally whether the transaction is embodied in one instrument or two. If the legal parts can be separated from the illegal then the relief of restitution in respect of the bad is not governed by Art. 91. If they cannot, even then Art. 91 would not apply, for the only difference is that the whole would be had and so void ab initio instead of only a part. Nor can the fact that the other side can elect in such a case to make restitution in respect of the bad and keep the good without altering the consideration make any difference. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the disabilities of trustees is that they cannot set up an adverse title (S. 14). There is no difficulty in applying such a provision here; there, fore as I see it Art. 144 cannot apply. I do not feel the difficulty which my learned brother experiences about S. 14, Trusts Act. The fact that a trustee or a quasi trustee may never set up an adverse title does not mean that he cannot in a suitable case set up the bar of limitation; all that it means is that be cannot use Art. 144. The two are not the same. But of course the defendants here are not trustees. S. 4, Trusts Act, expressly prohibits a trust in such cases. They are subject to the same disabilities, but they cannot claim the same rights and privileges nor will the title reside in them; that has been with the plaintiffs all along. What then is the difference between Article 1 to Schedule 2, Tenancy Act, and Art. 142. Lim Act? In my opinion it is this. Art. 142 speaks of a person who, while in possession has been dispossessed, or while in possession has discontinued the possession . In my opinion there has been no dispossession here but a discontinuance from possession. Art. 1 to Sch. 2 has no corresponding clause. It speaks ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore that which applies to the case, and the suit has consequently been instituted in time. 29. In Chhatra Kumari v. Mohan Bikram, AIR (1931) 18 PC 196=10 Pat 851=68 IA 279 (PC) however their Lordships are emphatic that Art. 144 cannot apply unless the defendant is in a position to set up an adverse title and has done so. The Legislature is equally emphatic that a person falling within the purview of S. 84, Trusts Act cannot set up an adverse interest. It follows that Art. 144 cannot apply. In the circumstances I feel that we have no option but to apply Art. 142. I have dealt with this at length because it is important to decide whether the deed of surrender requires cancellation before the relief of possession can be granted. If it does then Art. 91 applies and the limitation is three years. As I have said I consider that the Privy Council have set this controversy at rest. The question is also important because of its indirect bearing on the construction of Art. 1 to Sch. 2, Tenancy Act. If Art. 144 applies, or rather would apply apart from the special law in the Tenancy Act, then according to Chhatra Kumari v. Mohan Bikram, AIR (1931) 18 PC 196=10 Pat 851=68 IA 279 (PC), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest. ₹ 2425-5-4 due on foreclosure decree obtained by the transferee against 1 anna 8 pies Bhare of Mauza Dongargaon. ₹ 2192-0-6 due on three decrees also apparently in the transferee's favour. ₹ 300 paid in cash to meet the expenses of the sale deed Ex. P-1. ₹ 1400 paid in cash to enable the minors to obtain leases of certain lands in this village. 32. There can be no doubt that the plaintiffs have received the benefit of this consideration in full. So far as the first and third items are concerned, the plaintiffs were exonerated from liabilities which would otherwise have been enforced against them. It is true the exproprietary rights in the fields covered by the surrender could not have been touched but there was other property and notably this share in Mauza Dongargaon which was evidently not mortgaged for anything like its full value. Then so far as the foreclosure decree is concerned the whole share would have been lost but for this or some similar arrangement, and as regards the ₹ 1400 in cash the plain. tiffs are actually in possession of property which they would not have obtained with, out it. The sale deed Ex. P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation for the sale was ₹ 7367-5-11 1/2 (sic). The transferee undertook liability to pay various amounts due to R.B. Indrarajsingh, and in addition there was a foreclosure decree in respect of the four-annas share of mauza Suplipar in favour of the transferee. The transferee also had a foreclosure decree in respect of a one-anna eight pies share of Dongargaon, and the sale deed contains a provision that after the mortgage rights in respect of mauza Dongargaon are relinquished and after getting some occupancy land leased out for the benefit of the minors, the debts due to Indrarajsingh should be paid. In the surrender deed of even date the consideration of ₹ 7267-3-10 is composed of money decrees due to the defendant-appellant and a sum of ₹ 1400 for taking on lease land situated at mauza Dongargaon in the name of the minors, and it is stated that all rights in the foreclosure decree in the one-anna eight pies share of mauza Dongargaon have been relinquished and that the defendant-appellant has agreed to take occupancy land at mauza Dongargaon in the name of the minors. It is then said that the four-annas malguzari share of mauza Suplipar has been sold for the balan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plaintiffs' prayer is simply a prayer for possession of the entire property. In the plaint they attacked the sale on various grounds which have been found to have no substance. The first was that the debts which formed the consideration were immoral and illegal. The second was that they were not joined as parties in some previous litigation. The third was that the sale took place during the management of the Collector in execution without written permission. The fourth was that neither transaction was for legal necessity. 37. As regards the surrender it was stated that it was registered before the registration of the sale deed, and that according to the Tenancy Act these proceedings and the surrender were illegal and against the law. The pleading in reply to this was that at the time of the surrender the lands were the occupancy lands of defendants 2 and 3, and that after the sale of the village defendants 2 and 3 became occupancy tenants of the land described in para. 10 of the plaint, and that the plaintiffs could not sue for possession of them, and if they did their suit was out of time. In reply the plaintiffs said that as the surrender was registered previous to ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the appellant that neither the trial nor the Appellate Court had any right to go into any fact in this coanexion at all except the question whether the surrender or the sale deed was first registered. It is urged that there is no pleading on which any finding could be based that the transaction or transactions were designed to escape the provisions of S. 49, C.P. Tenancy Act. It appears to me that the pleading according to the Tenancy Act these proceedings and the raji-nama are illegal and against the law coupled with the insistence by the defendant on the position of the transferors as occupancy tenants at the time of the surrender indicates that the defendant-appellant was not being taken by surprise over the matter. The reference to the illegality according to the Tenancy Act raises the question as to whether the surrender of the occupancy land was illegal as being part and parcel of the sale. These cases are cropping up in the Courts with some frequency. They are dealt with in various rulings. Some years before the suit was filed the decision in Bhagwant v. Anandrao, AIR (1925) 12 Nag 302=86 IC 615=22 NLR 136 had been published and a surrender executed on the same date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvolved. In a sale deed by which a proprietary share was transferred the defendants agreed to surrender the occupancy rights in sir. It was held that the agreement was a device to evade the provisions of the Agra Tenancy Act, and that all such devices were void and illegal. The suit to enforce the agreement therefore failed. S. 49, Central Provinces Tenancy Act is as follows: (1) Notwithstanding any contract to the contrary, and, save where sanction has been given in accordance with the provisions of this Act, a proprietor, who temporarily or permanently loses, whether under a decree or order of a Civil Court or a transfer or otherwise, his right to occupy any portion of his air land as a proprietor, shall at the date of such loss, become an occupancy tenant of such sir land, and any tenancy right granted by him in such sir land for a period exceeding five years, without the sanction of a Revenue Officer, shall thereupon lapse. (2) Notwithstanding anything contained in the Registration Act, 1908, no officer empowered to register documents thereunder shall admit to registration any document which purports to transfer the rights of a proprietor in his sir land, without reser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may not exceed the time necessary to make one's signature on a document. It is this kind of device which has been characterized by their Lordships of the Privy Council as a void and illegal device. In this case the device which there was in the executory stage is carried out by execution. Consequent on this decision we have a course of rulings which have been reported. There is the decision in Mir Dad Khan v. Rangan Khan, AIR (1918) 5 All 86=44 IC 988=40 All 449=16 ALJ 329 where it was said: If a covenant to relinquish the sir lands is part of the transaction of sale or of mortgage, then the agreement to surrender will be void and unenforceable, no matter what ingenious devices may be employed to give colour to it. If the Court is satisfied that there was first of all a transfer by way of sale or mortgage and that the transferee, having obtained the status of an ex-proprietary tenant, with full knowledge of that fact and of the rights preserved to him by the statute, deliberately chooses, as a separate transaction, to relinquish his exproprietary tenancy into the hands of the new proprietor or of the mortgagee in possession, then the law cannot go further in the way of prot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. 47. There appears to me to be no doubt that where a surrender and a sale deed are both executed on the same date and it has been arranged to make the surrender before the sale deed is executed, the surrender deed is the execution of a device which is void and illegal . It is argued by the learned advocate for the appellant that oral evidence is net admissible to show that two executed documents were the result of previous negotiations and a previous illegal agreement. In reply to this I would quote from Leake on Contracts, Edn. 4, page 551: Though the contract is apparently valid in form or matter, extrinsic evidence is always admissible in variance of or in addition to the contract to show that the transaction is illegal and therefore void, even in the case of a covenant or contract under seal. 48. This passage is quoted in Alice Mary Hill v. William Clarke, (1905) 27All 266=1 ALJ 632. Moreover, it is the evidence which has fallen from the mouth of the defendant which fully justifies the conclusion of illegality. I therefore would hold that the surrender must be regarded as an attempted sale concealed in the guise of a surrender made by a proprietor with the inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdependence, but while Courts may take notice of illegality even when it is not pleaded, it is more especially in cases where the plaintiff is trying to enforce an illegal agreement that the Court takes notice of it to defeat the improper claim. I would quote the remarks of Lindley L.J. in Scott v. Brown, (1892) 2 QBD 724=61 LJQB 738=4 R 42=67 LT 782=11 WR 116=57 JP 213, which are quoted in Alice Mary Hill v. William Clarke, (1905) 27All 266=1 ALJ 632: No Court ought to enforce an illegal contract, or allow itself to be made the instrument of enforcing obligations alleged to arise out of a contract or transaction which is illegal if the illegality is duly brought to the notice of the Court and if the person invoking the aid of the Court is himself implicated in the illegality. It matters not whether the defendant has pleaded the illegality or whether he has not. 50. Again I quote the farther passage from Leake on Contracts: The facts showing illegality either by statute or Common law must be pleaded but when the illegality appears from the plaintiff's own evidence it is the duty of the Court to take judicial notice of the fact. 51. In the present case it was nev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bajrangi Lal v. Ghura Rai, AIR (1916) 3 All 346=32 IC 913=38 All 232=14 ALJ 270, a case where property capable of transfer had been conveyed with property incapable of transfer, and it was sought to set aside the whole sale: It thus appears that a contract for sale is one thing and a deed of transfer another and it does not necessarily follow that because the contract was unenforceable the transfer is void. 55. The title to the transferable property was held to be good; and again: In the present case we are not concerned with the validity or invalidity of the original contract... the transaction has long since passed the stage of contract. 56. I do not go as far as this, and indeed if the latter proposition were carried to a logical conclusion, it might be said that the surrender and sale deed were equally valid, as indeed the learned advocate for the appellant contends. I think that it is sufficient on this part of the case to say that while the surrender has been proved to be an illegal device, and the executed; document is outward and visible evidence thereof strengthened by the evidence of the defendant, there is on the pleadings no justification for entering in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I find it hard to place any other construction on Ss. 65 and 23 than that it amended the law relating to the remedies available in respect of agreements void by reason of illegality, and that the rule the loss will remain where it lies no longer applied. 58. On the applicability of S, 65 to illegal agreements, the authorities against its application are far less convincing than might at first sight appear, and I have not succeeded in finding any reported case, which in the light of the law as now established that a void agreement is discovered to be void on the date when it is made and that S. 65 applies to agreements void ab initio, disposes of the simple and convincing reasoning of Batchelor J. at pages 416 and 417 of Gulabchand Paramchand v. Fulbai, (1909) 33 Bom 411=8 IC 749=11 Bom LR 649. This reasoning is not referred to (perhaps as it is obiter) in Chhanga Mal v. Sheo Prasad, AIR (1920) 7 All 167=55 IC 965=42 All 449=18 ALJ 513, which is based on an earlier Bombay case, P.R. Co. v. Bhagwandas, (1910) 34 Bom 192=2 IC 475=11 Bom LR 335; but the case is relied on by the Madras High Court for a contrary proposition in Srinivasa Ayyar v. Sesha Ayyar, AIR (1918) 5 Mad 444= ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to B in the same suit the compensation or refund due to B. Again if A sues to enforce the apparent contract which is really a void agreement, he may receive and give compensation in the same action. But if an, action for possession of land is to be regarded as based on title, there is room for doubt whether S. 65, Contract Act would require the Court to' condition the relief,.which is not sought or given to the plaintiff under S. 65, Contract Act with the enforcement of a right arising in favour of the defendant under that section. It might be said that the plaintiff sued for possession in view of his title, and that the defendant should sue or counterclaim for refund. Of course the moment that the plaintiff asks or sues for any equitable relief which is in the discretion of the Court, he, seeking equity, must do-equity, and the relief may be conditioned. It seems to me that when in 1882 the Transfer of Property Act and the Trusts Act were passed, and the law of illegality, applied since the days of the Suddar Adalat to transfer for illegal object, received inferential recognition, the rights of the transferee were left to be dealt with under their own head. Cases where the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on a fraud and seeking to make a title to the lands through and by means of it: Petherpermal Chetty v. Muniandy Chetty, (1908) 35 Cal 551=35 IA 98=12 CWN 562=7 CLJ 528 (PC) at pp. 551 559. In that case the plaintiffs were seeking to put everyone as far as possible in the position occupied prior to execution. It was a case of benami sale to cheat creditors, and no doubt no question of consideration was involved. Here the plaintiffs have been trying, no doubt with their fathers behind them, to recover everything without paying anything. In my judgment in this case the scale is turned by the consideration that the tenant right is a special right brought into operation by a local law, and I feel that to condition the relief to be granted on that basis would in the majority of cases render that law nugatory. The devices would continue, prompted by the necessities of the cultivating class and the desire of the creditor to obtain valuable land, and the devices would be successful if they could not be interfered with by the Courts except on condition of refund of the consideration. The consideration may as in the present case be largely composed of debts, for payment of which the tenant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndy Chetty, (1908) 35 Cal 551=35 IA 98=12 CWN 562=7 CLJ 528 (PC). Their Lordships do not enter into any question whether an adverse title can be asserted in view of S. 14, Trusts Act read with S. 84 and S. 95, and it seems that the Indian Trusts Act was not in force in Burma except in Ban-goon itself, and was not applicable in that case. This was a case of a benami transfer with illegal purpose. In the present case if the tenants who became tenants on the date of the sale can be said to have been dispossessed or excluded from possession by the defendant, and if they can be said to be claiming possession of the holding from which they have been so dispossessed or excluded, the provisions of the Sch. 2 to the C.P. Tenancy Act would, in virtue of S. 104(1) of that Act, apply. 65. The case in Chhatra Kumari v. Mohan Bikram, AIR (1931) 18 PC 196=10 Pat 851=68 IA 279 (PC) is of a somewhat different nature. This was a case where a trust was alleged to have come into existence under an oral contract and there was no ownership in the plaintiff. It was held that a suit to enforce the trust which was not express fell under Art. 120 of the Limitation Schedule and their Lordships said that A ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
