TMI Blog1985 (3) TMI 312X X X X Extracts X X X X X X X X Extracts X X X X ..... s by way of signing all paper/documents applications appeals or such other papers as may be required in connection therewith. However, obtaining all the permissions will be entirely your responsibility. By his letter of the same date (Ex. P-2) the defendant sent a cheque for ₹ 10,000.00 to the plaintiff towards part payment of the price of the aforesaid 4,200 worsted spindles and other accessories. The description of the spindles and accessories is given in the bill dated 5th July, 1973, which was raised by the plaintiff and was in the name of M/s. Gupta Hosiery Mills, proprietor Mr. S. K. Gupta, the defendant herein. The defendant did not make payment of the balance amount and the plaintiff, therefore, instituted the present suit for recovery of ₹ 1,29,8391- which includes the amount of ₹ 92,440.18, being the balance of the agreed purchase price and interest at the rate of 15 per cent per annum from 1st October, 1973. The defendant in his written statement denied that there was any delivery of the spindles to him. He stated that, in fact, the spindles could not have been transferred to him and deli- very made to him without the permission in writing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .00 and within one week of the exercise of option the parties hereto of the First Part shall pay for and take delivery of the said old spindles from the company and in that event the parties hereto of the first part will be entitled to all rights entitlements benefits and quotas attached and/or relating to the said old spindles. On 9th January, 1973, (Ex. D-l) the plaintiff wrote to the defendant that the plaintiff was not interested in 4,200 old spindles and as agreed between the parties , defendant was requested to take over the said spindles at the book value and make payment to the plaintiff within one week from the date of the letter. Then there is a resolution of the plaintiff which shows that these spindles with motors and accessories were installed at 236, Industrial Area (A), Ludhiana and were being looked after by the defendant and his wife Mrs. Urmil Gapta and as the new management-of the plaintiff did not take the possession of these spindles with motors and accessories, these continued to remain in possession of the defendant and his wife. This premises being No. 236, Industrial Area (A), Ludhiana, admittedly belonged to the defendant and his wife. Thus. this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r sell or otherwise dispose of (or change the location of) any spindle worked by power and use it for the purpose of manufacturing wool- len yarn. (6) It is not disputed that the provisions of this Control Order are applicable to the spindles which are the subject matter of the present suit and also the fact that no permission has been obtained from the Textile Commissioner, either to acquire or c sell these spindles. The statement of the defendant that the Spindles could not be delivered with the permission of the Textile Commissioner and that the plaintiff did not infom the defendant that it had ever obtained the permission of the Textile Commissioner for the transfer of these spindles, has gone unchallenged. Mr. Lalit Khaitan (Public Witness -3), who is Director of the plaintiff, admitted that transfer or sale of the spindles required permission of the Textile Commissioner. He, however, stated that he did not know whether any permission was taken by the plaintiff, though he added with reference to letter (Ex. P-4) that it was the responsibility of the defendant to secure such permission as might be necessary for the transfer of the spindles. It could also not be disput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It means that it was void. It may be that the parties or one of the parties to the agreement may not have, when they entered into the agreement, known that the 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 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, Section 65 of the Contract Act did not apply. The Supreme Court also held : SO there was no occasion for the plaintiff to have been under any kind of igno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso transferred and, therefore, the partnership deed was illegal and suit not maintainable. The Court found that there was failure to comply with Section 59 of the Motor Vehicles Act before transferring the route permit and as such the partnership in question was an illegal contract and was void in its entirety. The suit of the plaintiff was. therefore, dismissed. Section 59 of the Motor Vehicles Act is as under :- SAVE as provided in Section 61, a permit shall not be transferable from one person to another except with the permission of the transport authority which granted the permit and shall not without such permission operate to confer on any person to whom a vehicle covered by the permit is transferred any right to use that vehicle in the manner authorised by the permit. (9) Mr. Saharya on the other hand submitted that there was no absolute bar under the law for transfer of the spindles and that this could be done with the permission of the Textile Commisioner. He said that it was the responsibility of the defendant to apply for permission and that the plaintiff was absolved of any such responsibility. He submitted that since the defendant failed to discharge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onward Contracts and were void and unenforceable because they were made in contravention of the prohibition contained in the Travencore-Cochin Vegetable Oils and Oilcakes (Forward Contract prohibition) Order, 1950. There was another order called the Vegetable Oils and Oilcakes (Forward Contracts Prohibition) Order, 1119. There was some controversy as to which particular order was applicable. But the Supreme Court held as follows :- ..........Under either of those Orders, the transactions entered into between the appellant and the respondent were prohibited and. having been entered into against the provisions of law. no parly can claim any rights in respect of the three contracts in suit. The claim for damages for breach of those contracts by the respondent against the appellant was there fore, not maintainable. (12) In Waman Shriniwas Kini v. Ratilal Bhagwandas and Co. the Supreme Court with reference to Section 15 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 which prohibited sub-letting observed that an agreement entered into after the Act has come into force, contrary to the provisions of Section 15 would be unenforceable as being i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement. If on the other hand, it is part of a mechanism meant to defeat what the law has actually prohibited, the Courts will not countenance a claim based upon the agreement because it will be trained with an illegality of the object sought to be achieved which is hit by Section 23 of the Contract Act. It is well established that the object of an agreement cannot be said to be forbidden or unlawful merely because the agreement results in what is known as a void contract . void agreement, when coupled with other facts, may become part of a transaction which creates legal rights, but this is not so if the object is prohibited or mala in se. Therefore, the real question before us is : Is the agreement between the parties in each case, which was to be carried out in Bombay, so connected with the execution of an object prohibited by either a law applicable in Bombay or a law more widely applicable so as to be hit by Section 23 of the Contract Act ? After discussion the Supreme Court gave answer to the question posted in para 19 of the judgment as under:- THE result is that we think that the objects of contracts set up the plaintiff cannot be carried out by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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