- Bookmark
- Share
- CaseIQ
P.R. Srinivasa Aiyar v. A. Sesha Iyer
Factual and Procedural Background
The plaintiff (appellant) sued the defendants for Rs. 400, said to have been advanced out of Rs. 1,100 payable under an agreement as consideration for the marriage of his minor sister with Raman (identified as the 1st defendant's son and the 2nd defendant's brother). The defendants pleaded three defences: (1) that there was no cause of action because the 1st defendant entered into the agreement only on behalf of Raman and the 2nd defendant was not a party; (2) that the agreement was not broken by defendants (it was alleged the plaintiff broke it); and (3) that the agreement was invalid as being against public policy and therefore the money advanced was irrecoverable.
The trial proceeded under Small Cause Procedure where no issues were framed. The Subordinate Judge found as a matter of fact that the plaintiff, not the defendants, broke the agreement. On appeal (Letters Patent Appeal) the Appellate Court considered whether the agreement was unlawful and whether the plaintiff could recover money paid under it. The Appellate Court allowed the Letters Patent Appeal, set aside the Subordinate Judge's decision and directed restoration of the Small Cause suit to file for re-hearing and admission of any additional evidence. Costs to date were made costs in the cause.
Legal Issues Presented
- Whether the plaint agreement was entered into with the defendants or with Raman (with or without the 1st defendant acting as his agent).
- Whether, with reference to the authorities cited, the agreement or a substantial part of it was performed.
- Whether the plaintiff is entitled to recover amounts paid under the agreement (and whether the defendants can retain any advantage received) given the agreement's unlawfulness or voidness.
Arguments of the Parties
Appellant's (Plaintiff's) Arguments
- The plaintiff maintained a claim for Rs. 400 advanced under the agreement and sought recovery despite the parties' later admissions about unlawfulness; he relied on the contention that the general rule disallowing recovery for illegal agreements is subject to an exception where no portion or no substantial portion of the unlawful purpose has been carried out.
- The plaintiff argued that he did not need to rely on the illegal transaction to establish his case and that defendants' admission of unlawfulness could be relied upon by him even though he did not plead illegality in the plaint.
Respondents' (Defendants') Arguments
- Defendants pleaded three principal defences: (a) no cause of action because the agreement was made only on behalf of Raman and the 2nd defendant was not a party; (b) that the agreement was not broken by defendants (the Subordinate Judge accepted as a factual finding that plaintiff broke the agreement); and (c) that the agreement was invalid as against public policy, rendering monies advanced irrecoverable.
- On appeal defendants argued that the exception permitting recovery when there has been no substantial performance depends on whether any transfer of advantage was merely ostensible or intended to be real — recovery should be allowed only where the transfer was merely ostensible.
- Defendants relied on authority (Kearley v. Thomson) for the proposition that where a substantial part of an unlawful agreement has been performed the plaintiff cannot recover; they also proposed to rely on a counter-claim for damages for loss of reputation arising from the breach.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Kalanagunta Venkata Kristnayya v. Kalanagunta Lakshmi Narayana | Cited as authority that the type of agreement here (payment as remuneration for bringing about a marriage rather than settlement on the bride) would be unlawful. | Used to support the conclusion that the agreement, as pleaded, was unlawful and void. |
| Devarayan Chetty v. Muthuraman Chetty | Also cited in support of the proposition that such marriage-brokage agreements are unlawful. | Relied on together with Kalanagunta to conclude unlawfulness of the agreement. |
| Section 65, Indian Contract Act (referenced) | Referenced by the Subordinate Judge as a basis to sustain the claim; the appellate court stated Section 65 was not applicable. | The Court rejected the applicability of Section 65 to the present case and turned to authority instead. |
| Dayabhai Tribhovandas v. Lakhmichund Panachand | Mentioned among authorities in the discussion of restitution/recovery and Section 65. | Noted in the catalogue of authorities; used in the Court's survey that the Contract Act affords no direct guidance. |
| Gulabchand Parachand v. Fulbai Harichand | Cited in relation to rules about recovery where contract illegal; also discussed as a case relied upon by the learned Judge. | The Court examined it among other Indian cases and considered conflicting authorities when assessing the exception permitting recovery in certain unlawful contract situations. |
| Coachman v. Hira Lal Bose (Ledu) | Stated proposition that where contract is illegal (contrary to private law or public policy) an action cannot be maintained to recover money paid on it, even if nothing else was done in performance; characterized as negating the exception. | The appellate Court declined to follow this decision and held it could not be treated as authoritative in the present matter. |
| Girdhari Singh v. Neeladhar Singh | Case where it was conceded that if a contract was contrary to public policy the plaintiff was not entitled to recover. | The Court noted this concession and observed it was not authority against the exception the plaintiff advanced where no or no substantial performance had occurred. |
| Nathu Khan v. Sewak Koeri | Characterized as a case of completed performance. | Distinguished by the Court as not supporting recovery where the illegal purpose had been substantially carried out. |
| Taylor v. Chester | Noted as a case of completed performance (cited among older authorities). | Recognized as not bearing on the exception for non-performance in the same way as other authorities. |
| Howson v. Hancock | Case concerning recovery of money paid on a wager where no further performance was possible. | Identified as historically relevant but not determinative of the exception applied in the present context. |
| Tappenden v. Randall | Relied on only for a dictum. | The Court noted it had little effect on later decisions. |
| Collins v. Blantern | Quoted by the learned Judge below; historically cited authority. | Noted but not treated as controlling in the Court's analysis of the exception to the general rule. |
| Kearley v. Thomson | Expressed distrust of Taylor v. Bowers and used in argument that substantial performance precludes recovery. | The Court acknowledged Kearley but observed the distrust was not on the ground of the distinction now relied upon; the case was discussed in the context of whether substantial performance defeated recovery and raised the possibility of remand on that point. |
| Barclay v. Pearson | Adopted the principle of Taylor v. Bowers and held those who paid money under what was regarded as a lottery could recover. | Used by the Court to support the exception permitting recovery where the unlawful purpose had not been effected or substantially effected. |
| Bai Vijli v. Nansa Nagar | Mentioned but the Court stated the point and authorities regarding it were not considered in that case. | Regarded as not important for the present decision. |
| Bakshi Das v. Nadu Das | Cited as a decision in the opposite sense (relating to marriage-brokage contracts) that the learned Judge rejected below. | The appellate court observed the lower Judge's reason for rejecting it was not available to them in the present context. |
| Yaramati Krishnayya v. Chundru Papayya | Distinguished as a case where the title sued on could only be established on the foundation of the unlawful agreement. | Distinguished from the present case to show where recovery would be barred because the claim depends on enforcing the illegal agreement itself. |
| Banka Behary Diss v. Raj Kumar Dass | Benami case illustrating that the decision turns on whether the unlawful purpose was wholly or substantially affected (i.e., on extent of performance). | Used to support the view that the crucial question is whether the unlawful purpose has been carried out wholly or substantially. |
| Govinda Kuar v. Lala Kishun Prasad | Another benami case turning on extent of performance of the unlawful purpose. | Referred to as supporting the same approach as Banka Behary Diss. |
| Petherpermal Chetty v. Muniandy Servai (Privy Council) | Privy Council decision that refers to the weight of Taylor v. Bowers and treats effecting the contemplated fraud as material rather than mere preparatory acts. | Specifically relied upon by the Court to reinforce the exception permitting recovery where the unlawful purpose has not been effected; influenced the Court's refusal to follow Coachman v. Hira Lal Bose. |
| Taylor v. Bowers | Recognized an exception to the general rule: money paid under an unlawful agreement may be recoverable where the unlawful purpose was not carried out; particularly where the object was a fraud on creditors. | The Court treated Taylor v. Bowers as an important authority supporting recovery in cases of non-performance or non-substantial performance of the unlawful purpose. |
| Great Berlin Steamboat Company, In re | Cited on the question whether an ostensible transfer could be treated as irrevocable; transfer treated as irrevocable even though ostensible. | Used to reject defendants' submission that recovery depends on whether the transfer was merely ostensible. |
| Simpson v. Bloss | Quoted for the principle that plaintiff does not require aid from an illegal transaction to establish his case in certain circumstances. | Applied by the Court to support that plaintiff may recover where he is not relying on the illegal transaction to make his case and the defendants are required to show the unlawful transaction (or substantial performance) as their defence. |
Court's Reasoning and Analysis
The Court proceeded in stages:
- The Court observed that the first defence (no cause of action because the agreement was made only on behalf of Raman) was not expressly dealt with at trial or by the learned Judge in the appellate Court, although evidence relevant to it was before the trial Court and it had been relied upon before the Appellate Court. The Court held that the defence could still be relied on if established on re-hearing.
- The Court accepted the Subordinate Judge's factual finding that the plaintiff (not defendants) broke the agreement, but noted that this factual finding could not support a legal conclusion absolving defendants if the defendants also relied on the illegality of the agreement; those positions were inconsistent (defendants could not both rely on the agreement being unlawful and complain of plaintiff's refusal to perform it).
- On the question of unlawfulness, the Court accepted that the agreement as pleaded involved payment as remuneration to the defendants for bringing about the marriage (and not as a settlement for the bride) and that both sides agreed such an agreement would be unlawful. The central legal question became whether the plaintiff could recover money paid under such an unlawful agreement and whether the defendants could retain the benefit.
- The Court held that Section 65 of the Indian Contract Act did not directly resolve the matter and therefore turned to precedent. It surveyed English and Indian authorities and identified a general rule that money paid under an illegal agreement is not recoverable, but it also recognized a well-established exception: where nothing or no substantial part of the unlawful purpose has been performed, recovery may be permitted.
- The Court analyzed conflicting cases: one line (exemplified by Coachman v. Hira Lal Bose) appeared to deny the exception categorically; the Court declined to follow that approach, preferring authorities (Taylor v. Bowers; Barclay v. Pearson; Petherpermal Chetty v. Muniandy Servai) which recognized that payment could be recovered if the unlawful purpose had not been carried out or substantially effected.
- The defendants' alternative test — that recovery depends on whether the transfer of advantage was merely ostensible or intended to be real — was rejected by the Court as not supported by the authorities cited (the Court pointed to In re Great Berlin Steamboat Company where an ostensible transfer was treated as irrevocable).
- The Court addressed whether the plaintiff could rely on the defendants' admission of unlawfulness even though plaintiff had not pleaded illegality. The Court applied the principle (as expressed in Taylor v. Bowers and Simpson v. Bloss) that the plaintiff need not found his case on the illegal transaction; he can recover where the defendant must rely on the illegal transaction as a defence, provided the defendant can show the unlawful agreement (or substantial performance) — which the defendants failed to plead or prove here.
- Because defendants' written statements did not allege or prove that the unlawful agreement or a substantial part of it had been performed, the Court found their pleading defective on this point and concluded that the Subordinate Judge's decision could not stand without further enquiry on two identified factual/legal questions: (a) with which party the agreement was made, and (b) whether the agreement or a substantial part of it had been performed.
- The Court therefore allowed the appeal, set aside the Subordinate Judge's judgment and directed restoration of the Small Cause suit to file for re-hearing and admission of additional evidence on the specified points.
Holding and Implications
Holding: The Letters Patent Appeal was allowed and the Subordinate Judge's decision was set aside. The Court directed that the Small Cause suit be restored to file and re-heard, admitting any additional evidence tendered. Costs to date in both Courts were ordered to be costs in the cause and to be provided for in the decree to be passed. The core ruling is:
Letters Patent Appeal allowed; Subordinate Judge's decision set aside; Small Cause suit to be restored to file and re-heard.
Implications:
- Direct effect on the parties: the lower Court's judgment in favour of defendants is vacated and the suit will be re-heard on two specific questions — (1) whether the agreement was entered into with the defendants or with Raman (with or without the 1st defendant as agent), and (2) whether the agreement or a substantial part of it was performed. The parties may tender additional evidence on these points.
- Costs already incurred in both Courts were made costs in the cause and are to be addressed in the eventual decree.
- The Court engaged in a critical survey of authorities on recovery of money paid under unlawful agreements and adopted the position that an exception allowing recovery exists where the unlawful purpose has not been effected or substantially effected. While the Court declined to follow certain earlier authority that denied this exception, the immediate practical consequence in this matter is remand for determination of fact (extent of performance and identity of parties). The opinion does not state that it is creating a categorical new legal precedent beyond its application to the facts and authorities considered; it primarily resolves the case by remanding for proper factual determination in light of the legal principles discussed.
1. Plaintiff, here appellant, sued defendants for Rs. 400, alleged to have been advanced to them out of Rs. 1,100, payable under an agreement as consideration for the marriage of his minor sister with Raman, 1st defendant's son and 2nd defendant's brother. There were three defences, that 29 Ind. Cas. 625 : 43 C. 115 : 21 C. L. J. 537 : 19 C. W. N. 919. there was no cause of action, because 1st defendant entered into the agreement only on behalf of Raman and 2nd defendant was not a party to it at all; 9 Ind. Cas. 161 : 15 C. W. N. 408. the agreement was not broken by defendants; 10 Ind. Cas. 1004 : 10 A. L. J. 159. it was invalid, as being against public policy, and the money, advanced under it, was, therefore, irrecoverable.
2. Of these defences, the first was not dealt with either at the trial or by the learned Judge in this Court, though one would have supposed that a decision regarding the existence of a cause of action would have been reached, before enquiry began into the validity of the agreement set up as constituting it or the responsibility for breaking that agreement. It is said that the plea was abandoned. But the trial was under Small Cause Procedure and no issues were framed. Raman was, according to plaintiff's 2nd witness and 1st defendant, of age at the date of the agreement. The latter said that he took away the Rs. 400 paid under it. It is not the case that no evidence to support the defendants pleas was adduced; and it was admitted before us that they were relied on in this Court, although the learned Judge did not mention them. It is not possible in three circumstances to hold that they were abandoned or that defendants cannot support the learned Judge's decision with reference to them, if they can be established and if it is not sustainable on other grounds.
3. The learned Subordinate Judge's finding on the second defence, that plaintiff, not defendants, broke the agreement, is one of fact and must be accepted. It is, however, to be observed that, coupled as it was with a plea that the agreement was unlawful and, therefore, unenforceable, it could justify no legal conclusion. For the plea in effect that defendants were absolved by plaintiff's refusal to perform his part from any duty under the agreement was irreconcilable with the contention that such performance would have been in conflict with public policy. Shortly, they could not complain of plaintiff's refusal to do what they alleged would have been wrong.
4. On the remaining question, there is no doubt that the agreement was unlawful and, therefore, void. As set up in the plaint, it involved no suggestion that the money to be paid was for settlement on the bride or her issue or was anything but remuneration to defendants for bringing about the marriage; and, as plaintiff's grounds of appeal Nos. 5 and 6 and 1st defendants' written statement paragraph 8 and 2nd defendant's paragraph 13 show, both sides are agreed that such an agreement would be unlawful, Kalanagunta Venkata Kristnayya v. Kalanagunta Lakshmi Narayana 8 Ind. Cas. 554 : 32 M. 185 : 18 M. L. J. 408 : 4 M. L. T. 1. and Devarayan Chetty v. Muthuraman Chetty 18 Ind. Cas. 515 : 37 M. 393 : 24 M. L. J. 310 : (1913) M. W. N. 200. The question is then whether plaintiff is entitled to recover what he paid under such an agreement and whether defendants can retain an advantage received under it. This question was not raised in the plaint, the Subordinate Judge refusing to deal with defendants allegation that the agreement was unlawful, because he had found in their favour as to responsibility for its breach. On this account the learned Judge held that plaintiff could not raise that contention here also expressing the opinion that his claim was unsustainable with reference to Section 65 of the Indian Contract Act. That section, however, is not applicable. Dayabhai Tribhovandas v. Lakhmichund Panachand 9 B. 358 : 5 Ind. Dec. (N.S) 238.; Gulabchand Parachand v. Fulbai Harichand 3 Ind. Cas 748 : 33 B. 411 : 11 Pom. L. R. 649. and Ledu; Coachman v. Hira Lai Bose 29 Ind. Cas. 625 : 43 C. 115 : 21 C. L. J. 537 : 19 C. W. N. 919. The Indian Contract Act affording no direct guidance, the conclusions of the learned Judge must be tested with reference to authority.
5. He has supported his conclusion against the existence of any right to recover what has passed in connection with an unlawful agreement by citation of three cases. But in one of them Girdhari Singh v. Neeladhar Singh 10 Ind. Cas. 1004 : 10 A. L. J. 159. it was conceded that, if the contract was contrary to public policy, the plaintiff was not entitled to recover; and the case is, therefore, no authority against the contention, advanced before us, that the general Rule is subject to an exception in the plaintiff's favour when no portion or when no substantial portion of the unlawful purpose has been carried out. So also the next case of Nathu Khan v. Sewak Koeri 9 Ind. Cas. 161 : 15 C. W. N. 408. since it was one of completed performance. The third case of Ledu, Coachman v. Hira Lal Bose 29 Ind. Cas. 625 : 43 C. 115 : 21 C. L. J. 537 : 19 C. W. N. 919. cannot be dismissed so shortly, since it directly negatives the contention just referred to by the statement, 'It is plain that, although where money has been paid under an unlawful agreement, but nothing else is done in performance of it, the money may be recovered back, yet this exception will not be allowed, if the agreement is actually criminal or immoral; where the contract is illegal, because contrary to private law or against public policy, an action cannot be maintained to enforce it directly or to recover the value of services rendered or money paid on it". The distinction drawn would appear to be between agreements contrary to law or public policy and others, which would merely have an unlawful object and would also, therefore, be void under Section 23 of the Indian Contract Act. But there is no warrant for it in that section, since all alike are made unlawful, or (with all respect) in the cases referred to by the learned Judges, who moreover, take no account of other cases, in which the exception was applied without reference to the distinction proposed.
6. Of the cases referred to by them Taylor v. Chester (1869) 4 Q B. 109 : 10 B. & S. 237 : 38 L. J. Q. B. 225 : 21 L. T. 359. was a case of completed performance and Howson v. Hancock (1800) 8 T. R. 575 : 101 E. R. 1555 one of a claim to recover money paid on a wager, in which no further performance was possible. Tappenden v. Randall (1801) 2 Bos. & P. 467 : 5 R. R. (sic)662 : 126 E R. 1388. is relied on only for a dictum, which apparently has not affected later decisions. So also the learned Judge's quotation from Collins v. Blantern (1765) 2 Wilson 341 : 1 Sm. L. C. 369 : 95 E. R. 847. though it is reproduced in Kearley v. Thomson (1890) 24. Q. B. D. 742 : 59 L. J. Q. B. 288 : 63 L. T. 150 : 38 W. R. 614 : 54 J. P. 804. and Barclay y. Pearson (1893) 2 Ch. 154 : 62 L. J. Ch 636 : 3 R. 388 : 68 L. T. 709 : 42 W. R. 74, to be referred to later. Of the Indian cases cited Bai Vijli v. Nansa Nagar 10 B. 152 : 5 Ind. Doc. (N.S) 487 is not of importance, since this point and the authorities regarding it were not considered. The learned Judge's reason for rejecting two decisions in the opposite sense Bakshi Das v. Nadu Das 1 C. L. J. 261 and Gulabchand Paramchand v. Fulbai Harichand 3 Ind. Cas 748 : 33 B. 411 : 11 Pom. L. R. 649. that they relate to marriage brokage contracts, is in any case riot available to us in the present connection.
7. On the other hand the exception to the general rule, based on the absence of any or of any substantial performance, is clearly recognized without reference to the distinction proposed in a case later than the majority of those relied on by the learned Judges, Taylor v. Bowers (1876) 1 Q. B. 291 : 45 L. J. Q. B. 163 : 34 L. T. 938 : 24 W. R. 499 in which the object of the agreement, a fraud on creditors, would, if persisted in, have resulted in the frustration of the Insolvency Law. Distrust of the decision in Taylor v. Bowers (1876) 1 Q. B. 291 : 45 L. J. Q. B. 163 : 34 L. T. 938 : 24 W. R. 499. was, no doubt, expressed in Kearley v. Thomson (1890) 24. Q. B. D. 742 : 59 L. J. Q. B. 288 : 63 L. T. 150 : 38 W. R. 614 : 54 J. P. 804. but not on the ground that it overlooked the distinction drawn by the learned Judges, which was not in fact referred to, although the object of the agreement was described as to defeat justice. The principle of Taylor v. Bowers (1876) 1 Q. B. 291 : 45 L. J. Q. B. 163 : 34 L. T. 938 : 24 W. R. 499. was, moreover, adopted fully in Barclay v. Pearson (1893) 2 Ch. 154 : 62 L. J. Ch 636 : 3 R. 388 : 68 L. T. 709 : 42 W. R. 74, already referred to, though the agreement related to what was regarded as a lottery, the opinion being expressed that those who had paid money under it could recover. Of the Indian oases those must be distinguished, in which the, title sued on could be established only on the foundation of the validity of the unlawful agreement; as for instance in Yaramati Krishnayya v. Chundru Papayya 20 M. 326 at p. 329 : 7 Ind. Dec. (N.S) 231. In benami cases, however, for example Banka Behary Diss v. Raj Kumar Dass 27 C. 231 : 4 C. W. N. 289 : 14 Ind. Dec. (N.S) 153. and Govinda Kuar v. Lala Kishun Prasad 28 C. 370. the decision has always turned not on the extent to which the agreement, if it were performed, would conflict with law or public policy, but on whether it was performed and the unlawful purpose was affected wholly or substantially or not. The decision of the Privy Council in Petherpermal Chetty v. Muniandy Servai 35 C. 551 : 10 Bom. L. R. 590: 12 C. W. N. 562 : 5 A. L. J. 290 : 7 C. L. J. 528 : 14 Bur. L. R. 108 : 15 M. L. J. 277 : 35 I. A. 98 : 4 M. L. T. 12 : 4 L. B. R. 266 (P. C.) may in particular be mentioned, firstly, because it refers to the weight of the decision in Taylor v. Powers (1876) 1 Q. B. 291 : 45 L. J. Q. B. 163 : 34 L. T. 938 : 24 W. R. 499. as unimpaired by Kearley v. Thomson (1890) 24. Q. B. D. 742 : 59 L. J. Q. B. 288 : 63 L. T. 150 : 38 W. R. 614 : 54 J. P. 804 and secondly, because the contention that there had been a fraudulent arrangement to defeat creditors and a step taken to carry it out,
"which would on the trial of an indictment for conspiracy have amounted to a good overt act of conspiracy", was brushed aside as irrelevant and the effecting of the contemplated fraud alone was regarded as material. Authority standing thus, it is (with all due deference) not possible to follow the decision in Ledu Coachman v. Hira Lal Bose 29 Ind. Cas. 625 : 43 C. 115 : 21 C. L. J. 537 : 19 C. W. N. 919. or to confirm the decision, which is under appeal.
8. It is, however, argued by Mr. Venkatarama Sastri for defendants, firstly, that the exception above referred to, to the general Rule depends, not on whether there has been performance of the unlawful agreement, but on whether the transfer of an advantage under it was merely ostensible or was intended to be real, recovery of the advantage being allowed only in the former class of cases. That is not the test recognized in the authorities already referred to or in Great Berlin Steamboat Company, In re (1884) 26 Ch. D. 616 : 54 L. J. Ch. 68 : 51 L. T. 445., in which the transfer was treated as irrevocable, though it was clearly ostensible. It is then urged with reference to Kearley v. Thomson (1890) 24. Q. B. D. 742 : 59 L. J. Q. B. 288 : 63 L. T. 150 : 38 W. R. 614 : 54 J. P. 804, that plaintiff cannot recover, because though the whole of the unlawful agreement has not been performed, a substantial portion has been; and on the view already expressed, a remand on this point may, no doubt, be fairly claimed.
9. The last question raised is whether plaintiff can rely on defendant's admission that the agreement was unlawful either generally or when, as in this case, he did not refer to its unlawfulness in his plaint. The answer, however, to the question in both forms is the same, that in the words of Mellish, L. J. in Taylor v. Bowers (1876) 1 Q. B. 291 : 45 L. J. Q. B. 163 : 34 L. T. 938 : 24 W. R. 499 plaintiff does not "as the Rule is laid down in Simpson v. Bloss (1816) 7 Taunt. 246 : 2 Marsh 542 : Holt N. P. 273 : 129 E. R. 99 17 R. R. 509 require any aid from the illegal transaction to establish his case. He is not bringing the action for the purpose of enforcing the illegal transaction. . . . . . . . To hold that plaintiff is enabled to recover does not carry out the illegal transaction, but the effect is to put every body in the same situation as they were before it was determined on". Or, as the point was put by James, L. J., "it is the defendant, who has got really to show the fraud", the element vitiating the agreement in the case under consideration. . . . . . . . . . "It is the defendant, who has got to make out his title to the goods from the transaction, which is a fraud sand which it seems he was a party . . . . . and there would be no title in the defendant independently of that". To adapt these principles to the present case, the plea that the agreement is unlawful is not plaintiff's but defendants'. Defendants, as already pointed out, can-not, relying on it, also complain of plaintiff's default. They can (and this is the point at present material) rely on it, only if they further allege and prove that the unlawful agreement or a substantial part of it has been performed. Oh this point their written statements contained nothing; and it was, therefore, not plaintiff's but their pleading, which was defective. If the Subordinate Judge had considered the unlawfulness of the contract, plaintiff would (for all that appears) have pointed this out. The contention on his side is one purely of law and in the circumstances there is no adequate reason for depriving him of the benefit of it.
10. Defendants have further proposed to support the lower Court's judgment with reference to the counter-claim made in their written statements to damages on account of loss of reputation. It has not, however, been shown how this claim can be sustainable as arising out of the breach of an admittedly unlawful agreement or how it can be reconcilable with defendants' denial that they were parties to that agreement. The questions for consideration are, therefore, only:
(1) Whether the plaint agreement was entered into with defendants or either of them or with Raman with or without 1st defendant as his agent?
(2) Whether with reference to the authorities above referred to the agreement or a substantial part of it was performed?
11. The Letters Patent Appeal must be allowed and the Subordinate Judge's decision set aside with a direction to restore the Small Cause suit to file and re-hear it, admitting any additional evidence tendered, in the light of the foregoing. Costs to date in both Courts will be costs in the cause and will be provided for in the decree to be passed.
Bakewell, J.
12. In India marriage is not generally matter of contract between the parties thereto but is a status or condition imposed upon them by persons who are under a social duty to do so. The authorities which have been cited support, I think, the proposition that they who undertake this duty must have regard solely to the interest of their wards and must not stipulate for a profit for themselves.
13. The pleadings in this case are not clear but I think that the plaint alleges an arrangement between the parties that a marriage portion should be paid out of the estate of the deceased father of the prospective bride and that certain jewels should be presented to her by the relations of the prospective bridegroom; and, apart from other averments in the written statement of the 1st defendant, it might be inferred that his ease was that the marriage portion was to be paid to the bridegroom, the sum of Rs. 400 now claimed, being portion thereof, had been in fact paid to him and that the defendants gained no benefit from this payment because the bridegroom had been adopted into another family. I fail to see anything contrary to public policy or morality in an agreement between third parties, which is intended solely for the benefit of the married couple, or either of them. Having regard, however, to the defendants admission that the agreement was illegal, and that they had some interest in the sum now claimed, I do not think that it is open to the defendants at this stage to maintain that the agreement was valid.
14. The words 'discovered to be void' in Section 65 of the Contract Act are more apt to describe an agreement which was void ab initio but not then known by the parties to be so, than an agreement of which the illegality must be taken to have been always known to them, and agree that in this ease it is safer to rely upon the authorities cited by my learned brother. These authorities show, I think, that in a suit for money had and received to the use of the plaintiff, the defendant may plead that it has been applied in accordance with their agreement, and the plaintiff cannot reply that the agreement was illegal because he is particeps criminis. If the agreement is still wholly executory and no material part of the illegal purpose has been accomplished, defendant cannot plead that he holds the money for that purpose. See Barclay v. Pearson (1893) 2 Ch. 154 : 62 L. J. Ch 636 : 3 R. 388 : 68 L. T. 709 : 42 W. R. 74; Petherpermal Chetty v. Muniandy Servai 35 C. 551 : 10 Bom. L. R. 590: 12 C. W. N. 562 : 5 A. L. J. 290 : 7 C. L. J. 528 : 14 Bur. L. R. 108 : 15 M. L. J. 277 : 35 I. A. 98 : 4 M. L. T. 12 : 4 L. B. R. 266 (P. C.) and the cases there cited]. These propositions apply when the parties are in pari delicto and to agreements void under Civil Law; different considerations may arise in the case of an agreement to commit an offence against the Crown. I agree to the order proposed by my learned brother.
Alert