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Pothi Ram v. Islam Fatima

Allahabad High Court

Jan 12, 1915

Judgment

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Case Information

CITATION CODES

citation codes

CASE NO.

First Appeal No. 176 of 1914, from an order of Guru Prasad Dube, Additional Subordinate Judge of Bareilly

Advocates

The Hon'ble Dr. Tej Bahadur Sapru, for the appellants:—

The agreement being in restraint of business is void under the provisions of section 27 of the Indian Contract Act. Any restriction, however partial it may be, is void unless the case falls within the three exceptions mentioned in section 27. If the agreement does not come within those exceptions then no considerations of reasonableness or mutual benefit can make the restraint valid. Whether the restraint be general or partial, unqualified or qualified, if it is in the nature of a restraint of trade or business, it is void; Madhub Chunder Poramanick v. Raj Coomar Doss (1), Shaikh Kalu v. Ram Saran Bhagat (2). The business which the agreement is in restraint of is the business of deriving gain or profit from allowing a market to be held on the defendant's land. He derives gain in the shape of rent or tolls for the use and occupation of his land. The word “business” is one of very general import. The use of the word “business of any kind” in section 27 is intended to give the term “business” its widest possible scope. Anything which occupies the time and attention and labour of a man for the purpose of profit is business. Any act having for its object the acquisition of gain comes within the term; Smith v. Anderson, .

The appeal was summarily dismissed.

JUDGES

Hon'ble Sir Edward Maynard Des Chamier

Hon'ble Mr. Theodore Caro Pigott

ACTS

section 27 of the Indian Contract Act (IX of 1872)

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Smart Summary (Beta)

Factual and Procedural Background

The plaintiffs sued for enforcement of an alleged contract and for damages. It was alleged that the defendants, who are land-holders, had entered into an agreement with neighbouring land-holders concerning the holding of cattle-markets on their respective lands (specifically, that markets would not be held on the same day on both lands). The trial court found the agreement void as restraining the defendants from exercising a lawful profession, trade or business under section 27 of the Indian Contract Act (IX of 1872) and dismissed the plaintiffs' case. The lower appellate court reversed that decision and remanded the matter for trial on the merits. The present appeal raises the question whether section 27 applies to the circumstances of this agreement.

Legal Issues Presented

Whether an agreement between neighbouring land-owners that a cattle-market shall not be held on the same day on both lands is void under section 27 of the Indian Contract Act (IX of 1872).
Whether a land-owner who permits a cattle-market on his land in return for tolls or fees is exercising the trade or business of selling cattle such that the agreement would amount to a restraint on a lawful profession, trade or business.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court considered the scope of section 27 of the Indian Contract Act in relation to the agreement between land-owners. It reasoned that a landlord who permits a cattle-market on his land in return for market tolls or fees is not thereby exercising the trade or business of selling cattle. At most, such activity is the business of a land-holder. Consequently, an agreement by a land-owner not to allow his land to be used for a particular purpose on a particular day does not constitute an agreement restraining him from exercising a lawful profession, trade or business within the meaning of section 27. On that basis the court concluded that the agreement was not void under section 27.

Holding and Implications

Appeal dismissed.

Direct effect: the dismissal leaves in place the lower appellate court's reversal and remand for trial on the merits. The opinion does not purport to establish a broader precedent beyond the case's resolution.

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Chamier and Piggott, JJ.:— The question raised by this appeal is the applicability of the principle laid down in section 27 of the Indian Contract Act (IX of 1872) to the circumstances of this particular case. It is alleged that the defendants, who are land-holders, had entered into a contract with certain neighbouring land-holders, as to the holding of markets on their respective lands. The plaintiffs sued for enforcement of this contract and for damages. The first court threw out the case on the finding that the agreement was void, in that it was an agreement restraining the defendants from exercising a lawful profession, trade or business, and that, consequently, it was not necessary to go into any of the other questions raised by the pleadings. The lower appellate court has reversed this decision and remanded the case for trial on the merits. The question is whether the owner of land entering into an agreement with the owner of neighbouring land, to the effect that a market for sale of cattle shall not be held on the same day on the lands of both of them is entering into an agreement which is void under section 27 aforesaid. It seems to us that a landlord who, in return for market tolls or fees, allows a cattle-market to be conducted on his land is not thereby exercising the, trade or business of selling cattle. If he is exercising any business it all, he is exercising the business of a land-holder, and the agreement on his part not to allow his land to be used for some articular purpose on some particular day is not an agreement restraining him from exercising his lawful profession, trade or business. These considerations are sufficient to dispose of this appeal. It is accordingly dismissed.

Appeal dismissed.