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Case Number

Second Appeal No. 86 of 1955

Advocates

For the Appellant: J. Rama Chandra Rao, J. Virabhadraya, P. Ramachandra, Advocates.

Judges

P. Chandra Reddy, C.J
Kumarayya, J.

Acts

Section 65 and Section 72 of the Indian Contract Act. Section 65
Sections 65 and 72 of the Indian Contract Act
SECTION 65 CONTRACT ACT
Section 72 of the Indian Contract Act.
SECTION 21 CONTRACT ACT
SECTION 71 CONTRACT ACT
provisions of Act, VI of 1949
Madras Act VI of 1949

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Smart Summary

Case Summary — Extracted from the Provided Opinion

Factual and Procedural Background

The appellant married in 1941. His first wife deserted him; he obtained a decree for restitution of conjugal rights but did not execute it. On 19-6-1949 he married again (the "third defendant"), who was then about fourteen years old. The marriage was consummated and the parties lived together for some months. Subsequently the appellant filed a petition under the Guardians and Wards Act seeking custody of the minor wife; this petition was opposed on the ground that the second marriage took place after the coming into force of Madras Act VI of 1949 (which prohibited such marriages), and the District Judge dismissed the petition.

Separately, the present suit (which gave rise to this second appeal) was for recovery of jewels and Rs. 2,000 said to have been deposited with a defendant. The defendants pleaded that the jewels and money were not recoverable because the plaintiff had induced the marriage on the false representation that he was a bachelor and had consummated the marriage. The courts below dismissed the suit, holding that the plaintiff was not entitled to restitution of the presents because he knowingly entered into a contract prohibited by statute. The plaintiff appealed to this Court; the appeal turns on the applicability and construction of Sections 65 and 72 of the Indian Contract Act.

Legal Issues Presented

Whether Section 72 of the Indian Contract Act applies to this case (i.e., whether money or things given by mistake or under coercion must be returned where the giver was mistaken about the law).
Whether Section 65 of the Indian Contract Act (restoration where an agreement is discovered to be void or when a contract becomes void) applies to a contract of marriage that is prohibited by statute and was entered into after the prohibition came into force.
Whether Section 65 can be invoked where the contract was performed (the marriage was consummated and both parties received advantages) and restitutio in integrum is impossible.
Whether the appellant successfully rebutted the presumption that he knew the law (Madras Act VI of 1949) prohibiting bigamous marriages.

Arguments of the Parties

Appellant's Arguments

The appellant contended (through counsel Sri Veerabhadrayya) that there was no evidence on record to show he knew of Madras Act VI of 1949 and that the courts below were therefore wrong to find that he was aware of the prohibition.
Implicitly, the appellant sought restitution (recovery of jewels and money) and relied on provisions of the Contract Act (notably Section 65) as relevant to his claim for return of presents given at the marriage.

Respondents' Arguments

The respondents (including the parents of the third defendant and other defendants) argued that the marriage was void because it took place after Madras Act VI of 1949 came into force; therefore petitions based on that marriage were not maintainable.
In the suit for recovery of jewels and money they pleaded that the plaintiff had induced the marriage on a false representation that he was a bachelor and that he had consummated the marriage; further, knowing that the marriage was prohibited, the plaintiff could not recover the presents he had given.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Shina Prasad Singh v. Srish Chandra Nandi, 1949-2 Mad LJ 657 : AIR 1949 PC 297	Consideration of Section 72 and whether mistake of law or factual mistake allowed recovery; context involved a payer who thought he was bound to pay sums under a lease clause.	The court held that the cited decision had no bearing on the present enquiry because the present case involves a mistake of law (ignorance of the statute prohibiting the marriage) rather than a mistake that Section 72 addresses. Section 72 was found inapplicable here.
Thakurain Harnath Kuar v. Indar Bahadur Singh, AIR 1922 PC 403	Recovery of consideration paid where what was transferred was only an expectancy prohibited by law; addresses circumstances where a contract was ab initio void but the price might be recoverable.	The Privy Council allowed recovery of the price paid where the parties did not know the nature of the contract at the time and the invalidity was discovered later. The court cited this principle but distinguished it from the present facts where the appellant was found to have known or was presumed to know the law.
Budhulal … v. Deccan Banking Company Ltd., AIR 1955 Hyd. 69 (FB)	Principle that restitution (under Section 65) may be available where parties did not know the nature of the contract at inception and discovered it only subsequently.	The court found this decision consistent with the principle that Section 65 applies where ignorance of the contract's true nature exists at the time of contract formation; it was used to explain that Section 65 is applicable only where the claimant was not aware of the void nature at inception — a fact not established by the appellant here.

Court's Reasoning and Analysis

The Court analyzed the matter primarily under Sections 65 and 72 of the Indian Contract Act.

1. Section 72: The Court found S.72 inapplicable. The statutory text requires repayment where money or things have been paid or delivered "by mistake or under coercion." The Court emphasized that the appellant did not claim he had made the presents under a belief that he was legally obliged to do so; rather his conduct resulted from a mistake of law (ignorance of Madras Act VI of 1949). Thus Section 72, which addresses repayments for mistakes of fact concerning legal obligation, could not be invoked. The Court expressly noted that the decision in Shina Prasad Singh was not relevant to the present facts.

2. Section 65: The Court examined S.65 (which requires restoration where an agreement is discovered to be void or when a contract becomes void). The Court explained the essential elements:

S.65 applies where an agreement is discovered to be void or where a contract becomes void; it is concerned with situations where the parties were not aware of the void nature at the time of entering into the contract.
A claimant seeking restitution under S.65 must establish that he was not aware of the true nature of the contract at inception; S.65 does not apply where the contract was entered into for an unlawful object with knowledge that it was void or where the parties are in pari delicto.

3. Presumption of knowledge of law and factual findings: The Court applied the legal presumption that everyone is presumed to know the law. The appellant failed to rebut that presumption. Further, the Court relied on the appellant's own previous assertion in O.P. No. 178 of 1949 that the second marriage was valid because the first wife’s whereabouts were unknown and she should be deemed dead — a stance inconsistent with a claim of ignorance of the statute. Both courts below had found that the appellant did not show ignorance of the prohibition. On that ground alone the Court held the appeal must fail.

4. Restitutio in integrum and performance of the contract: The Court further reasoned that Section 65 presupposes the possibility of restoring the parties to their original position (restitutio in integrum). In the present case the marriage had been consummated and the parties had lived as man and wife for months; both sides had received advantages. The Court found it impossible to restore the parties to their pre-marital status, and therefore S.65 could not operate. The plaintiff had also received the principal advantage (the consummation and cohabitation), which meant he could not claim simple return of the presents.

5. Additional points: The Court observed it was unnecessary to decide whether S.65 applies to contracts that would amount to an offence if performed because the appeal failed for the other reasons given. The Court further noted doubt whether any decree could be obtained against the third defendant because she was about 14 years of age and might lack capacity to contract.

Holding and Implications

Holding: The Second Appeal is DISMISSED with costs. The appellant must pay the court-fee payable to the Government; costs (one set) to be divided amongst the various respondents.

Implications:

Direct effect on the parties: The appellant's claim for recovery of jewels and Rs. 2,000/- (and related relief grounded on restitution under the Contract Act) was rejected. The lower-court findings that the marriage was void under Madras Act VI of 1949 and that the appellant could not recover the presents were affirmed.
No new broad precedent was established on unresolved questions: the Court expressly avoided deciding whether S.65 applies to contracts that are prohibited by law and would amount to an offence if performed. Instead, the dismissal rests on (a) the presumption of knowledge of the statutory prohibition and the failure to rebut it, and (b) the impossibility of restitutio in integrum because the marriage had been consummated.

Disposition

Appeal dismissed. Costs and court-fee directed as stated by the Court.

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Tavva Venkata Gurunadha Rao v. Badam Rosaiah

P. Chandra Reddy, C.J:— The applicability of Sections 65 and 72 of the Indian Contract Act is involved in the 2nd appeal.

2. The facts contributing to this litigations may be briefly stated. The appellant before us took a wife in 1941. She deserted him for reasons which are not quite explicable and which need not be gone into in this appeal. So, he instituted a suit for restitution of conjugal rights and also obtained a decree in that behalf. But she did not obey the decree and the plaintiff did not seek to execute it. Eight years thereafter, i.e, on 19-6-1949, he married again the third defendant, who was at that time about fourteen years old. The marriage was consummated and they lived as man and wife for some months. Later on, he filed a petition for the custody of his minor wife under the Guardians and Wards Act alleging that her parents took her away without his knowledge and consent.

3. This petition was opposed inter alia on the ground that as the marriage of the plaintiff with the third defendant took place after the coming into force of the Madras Act VI of 1949, it was void and consequently the petition was not maintainable. This objection, prevailed with the District Judge, Krishna, before whom the petition came up for hearing, with the result that the petition was dismissed.

4. The suit out of which this second appeal arises was instituted for recovery of jewels and a sum of Rs. 2,000 said to have been deposited with one of the defendants for purposes which need not be detailed here. The answer to the suit was that the jewels and the money were not recoverable for the reason that the plaintiff induced the first and second defendants to give theft daughter, the 3rd defendant, in marriage to him on the false representation that he was a bachelor and had the marriage consummated.

5. The courts below dismissed the suit, holding that the plaintiff was not entitled to get back either the jewels or the cash because knowing full well that the marriage was prohibited he entered into a contract of marriage with the third defendant and the plaintiff had no cause of action for the return of the jewels or the sarees or the sum of Rs. 2,000/- presented by him to the bride, the third defendant, and this is not a case where an agreement is discovered to be void or a contract becomes void, but is a case of a contract which is void as being contrary to and prohibited by statute. The aggrieved plaintiff has brought this second appeal.

6. The decision of this appeal turns upon the construction of Section 65 and Section 72 of the Indian Contract Act. Section 65 is in these words:

“When an agreement is discovered to be void, or when a contract 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.

ILLUSTRATIONS.

(a) A pays B Rs. 1000/- in consideration of B's promising to marry C, A's daughter. C is dead at the time of the promise. The agreement is void but B must repay A the Rs. 1,000/-.

(b) A contracts with B to deliver to him 250 maunds of rice before the first of May. A delivers 130 maunds only before that day, and none after. B retains the 130 maunds after the first of May. He is bound to pay for them.

(c) A, a singer, contracts with B. the manager of a theatre, to sing at his theatre for two nights in every week during the next two months, and B engages to pay her a hundred rupees for each night's performance. On the 6th night. A wilfully absents herself from the theatre, and B, in consequence, rescinds the contract. B must pay A for the five nights on which she had sung.

(d) A contracts to sing for B at a concert for one thousand rupees, which are paid in advance. A is too ill to sin s. A is not bound to make, compensation to B for the loss of profits which B would have made if A had been able to sing but must refund to B the thousand rupees paid in advance.

7. Section 72 reads:

“A person to whom money has been paid or anything delivered by mistake or under coercion must repay or return it.”

8. Obviously, S. 72 has no application to a case like this as it is not the appellant's case that he was under a mistaken belief that in law he was bound to give either the jewels or the money to the bride at the time of the marriage. All that was put forward on his behalf was that he was ignorant of the provisions of Act, VI of 1949 which prohibit a second marriage, and took the third defendant as a second wife.

9. In other words, it is the mistake of law that induced him to enter into a contract and not that he had believed that he was in law bound to make any presents to the bride at the time of the marriage. There is therefore, no scope to resort to Section 72 of the Indian Contract Act. The decision in Shina Prasad Singh v. Srish Chandra Nandi, 1949-2 Mad LJ 657 : (AIR 1949 PC 297) could have no bearing on this enquiry.

10. In the cited case, one of the parties made an excessive payment on a misinterpretation of one of the clauses of the lease. He thought he was bound to pay certain amounts under the terms of the lease. Later on, it was discovered that so much ??? was paid was not due to the lessor but something ??? than that: and the question arose whether Section 21 of the Contract Act was a bar to the recovery of the amount and whether S. 72 was applicable to a case of that type.

11. The Privy Council has laid down that Section 71 of the Contract Act governed that case, as this section makes no disinction between mistakes of ??? and mistakes of law but it must be read together with the rest of the Act and in particular with Ss. 2 and 22 which also deal with mistake.

12. Turning to Section 65 of the Contract Act, the provisions make it abundantly clear that it ??? only to a case where the agreement is discovered to ??? be void or when a contract becomes void. It may be that cases of contracts which are ab initio void fall within the ambit of this section. But the essential ingredient of this Section is that the party claiming restitution should establish that he was no aware of the nature of the contract at the time when he entered into it.

13. It could not come into operation in a case where the contract was entered into for an unlawful object, i.e, with the knowledge that it was a void contract. If the parties are in pari delicto, the applicability of S. 65 cannot be attracted. That being the case, none of the decisions cited by Sri Veerabhadrayya, the learned counsel for the appellant, has any relevancy.

14. In Thakurain Harnath Kuar v. Indar Bahadur Singh, AIR 1922 PC 403, the next presumptive reversioner transferred an expectancy of an estate. After the death of the widow, the heir of the purchaser brought a suit for recovery of the lands in question against the transferor, or, in the alternative for return of the consideration paid to the transferor.

15. The Privy Council while upholding the objection that the properties could not be recovered as what was transferred was only expectancy which was prohibited by law, ruled that he could recover the price paid for the transfer notwithstanding that the contract was ab initio void, as it was only subsequently that it was discovered.

16. The principle of Budhulal… v. Deccan Banking Company Ltd.…) AIR 1955 Hyd. 69 (FB) is not in any way inconsistent with what we have stated above. There, it was found that the parties did not know the nature of the contract at its inception but discovered it only subsequently.

17. It is urged by Sri Veerabhadrayya that there is no evidence on record to warrant a finding that the plaintiff was aware of the existence of the Madras Act VI of 1949 prohibiting bigamous marriages and that this has vitiated the findings of the courts below. We cannot accede to this contention. Every man is presumed to know the law and unless it is established affirmatively that any man was not aware of the provisions of law, the presumption would take effect.

18. In this case, far from rebutting the presumption, the conduct of the plaintiff proves that he was not unaware of the prohibition enacted in Madras Act VI of 1949. As pointed out by the trial court, it was asserted by him in O.P No. 178 of 1949 that his second marriage with the present third defendant was valid since the whereabouts of his first wife were not known for some time, and she must be deemed to be dead. Both the courts found as a fact that the plaintiff had not succeeded in making out a case of his ignorance of law. On that ground alone this Second Appeal has to be dismissed.

19. There is another reason why his Second Appeal cannot meet with success. Admittedly, the marriage had been performed and the plaintiff and the 3rd defendant lived as man and wife for some months. In other words, the contract had been performed and both sides had received some advantage. The question is whether Section 65 of the Contract Act would come into play when the contract is performed.

20. That Section confers a right of restitution in cases where the contract is un-performed and has no application where the parties cannot be restored to their original position. There should be restitutio integrum in order to invoke S. 65. In this case, it is impossible to restore the parties to their original status for the reason that the marriage of the third defendant was consummated and she lived with the plaintiff as his wife for some months.

21. The fact that she could marry again would not put back the third defendant in the position in which she was before her marriage was consummated. This is not a case where only one party has received an advantage which could be directed to be returned to the other one who has not received any benefit.

22. The plaintiff also had an advantage in that he had the marriage consummated and had the third defendant living with him as his wife for some time. On this ground also the plaintiff has to be non-suited.

23. It is unnecessary for us to go into the question whether Section 65 of the Contract Act applies to cases where the contracts are not only prohibited by law but would amount, if performed, to an offence, in the view we have taken on the other two points.

24. It is also very doubtful, whether he could obtain any decree against the third defendant, who had no capacity to enter into a contract, being only 14 years of age at the relevant time.

25. In the result, the Second Appeal is dismissed with costs — one set to be divided amongst the various respondents.

26. The appellant will pay the court-fee payable to the Government.

G.M.J

27. Appeal dismissed.

Tavva Venkata Gurunadha Rao v. Badam Rosaiah

Case Summary — Extracted from the Provided Opinion

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellant's Arguments

Respondents' Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Disposition

Tavva Venkata Gurunadha Rao v. Badam Rosaiah

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