Stone, C.J:— This appeal raises a point of some importance under the Central Provinces Tenancy Act. Other questions also arise. The relevant facts can be shortly stated. There are five plaintiffs and three defendants. Plaintiff 1 is the next friend of plaintiffs 2 to 5. Plaintiffs 2 and 3 are the minor sons and plaintiff 1 is a major son of defendant 2; plaintiffs 4 and 5 are the minor sons of defendant 3. Plaintiffs and defendants 2 and 3 form a joint Hindu family. That family was indebted and had numerous decrees against them in favour of defendant 1. Those decrees were satisfied by the transaction impugned in this Page: 338action, and as further consideration defend, ant 1 expended money in obtaining a lease of land in favour of the minors. The action is to set aside the resulting transfer and surrender on the ground of illegality without in any way restoring to defendant 1 his rights under the decree or his money. The illegality is said, in argument, to consist in a manœuvre 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. It is the sort of case which bears all the signs of collusion between the adult members of the family who are accused of being parties to the illegality and the minor members who appear as innocent plaintiffs not in pari delicto either with the vendors or the purchaser. Such a case calls for careful scrutiny: see, 56 All 123 (1934) 21 AIR PC 55 , 147 IC 903 , 56 All 123 , 61 IA 150 (PC) at pp. 130 and 131. On the other hand it is the policy of the law to prevent the land-working classes being driven into the state of landless proletariat so far as may be, and accordingly it is provided by Section 49 of the Central Provinces Tenancy Act that alienations of sir land, that is home farm land in cultivation, shall be ineffective unless the sanction of the appropriate official has first been obtained. As this section is the one under consideration, it is desirable to reproduce it in extenso. It runs 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 sir 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 reservation of the right of occupancy specified in sub-s. (1), or to grant tenancy rights in sir land for a period exceeding five years, or to be an agreement for such transfer or grant, unless sanction to such transfer or grant has been endorsed on the document in such manner and by such authority as may be prescribed by rules made under S. 109.
(3) Nothing in this section shall affect rights under any document duly registered before 21st October 1898, and on any transfer being made, decreed, or ordered in pursuance of such document, the rights of the transferee to occupy and cultivate such sir land shall accrue.
(4) Nothing in this section shall apply 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, Article 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 is said, because of Section 104 of the Tenancy Act, which provides as follows:
(1) The suits and applications specified in Sch. 2 annexed to this Act shall be instituted and made within the time prescribed in that Schedule for them respectively; and every such salt instituted Page: 339and application made after the period of limitation so prescribed shall be dismissed.
(2) Any suit which would be barred under sub-s. (1) may be instituted within one year next after the commencement of this Act, or within the period of limitation previously in force, which-ever period expires first.
(3) If the payment of any rent has been suspended under S. 65, the period of suspension shall be excluded in the computation of the period of limitation prescribed for a suit for the recovery of such rent.
(4) Subject to the provisions of sub-s. (1), the provisions of the Limitation Act, 1908 with the exception of Ss. 6, 7, 19 and 20 thereof shall apply to suits and applications under this Act.
5. That excludes Section 6 of the Lim. Act which is the section extending the time in case of persons under a legal disability. But it is said, that is a section which ought very strictly to be construed and one which relates only to “suits and applications under this Act.” It is added that this is not a suit under the Tenancy Act but is a suit seeking to set aside two alienations, (1) a sale deed and (2) a surrender on the ground that they are illegal and “contrary to law.” On the other hand, Section 29 of the Lim. Act has to be borne in mind. In considering whether a particular remedy is barred, one looks not at the relief given but at the cause of action, that is at the necessary allegations which have to be made and found before the relief sought can be given. In very many cases each falling under a different Article in the Schedule to the Limitation Act, the same remedy is obtained, e.g a decree for a sum of money. All the attacks expressly pleaded failed, but in the course of the case an infraction of Section 49 of the Tenancy Act emerged. Whether pleaded or not the Court has to take notice of that illegality. The result is that defendant 1 has to be declared a quasi trustee. Are we to stop there leaving the parties to start a new litigation on that basis, or can we settle the matter once and for all in this litigation? I think that we can dispose of the matter fairly in this suit. Illegality being established, even 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. 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. 1, Central Provinces Tenancy Act is apparent from a perusal of Section 84 of the Trusts Act. That section justifies the Court's treating the surrenderees in this case as burdened with an obligation in the nature of a trust (S. 80). The surrenderees have therefore in the eye of the law ever since the illegal surrender, been holding this property for the benefit of the surrenderors as quasi trustees. But the Court does not stop at declaring them quasi trustees. It can and should make all necessary orders that will place the parties in the position they ought to be in, viz. the plaintiffs' families through their respective managers will be in possession as occupancy tenants.
6. The next question is as to the maintainability of the suit. This branch of the argument rests upon Sections 12, 13, 49 and 105 of the Tenancy Act. It is said that S. 12 states the powers of transfers, S. 49 imposes restrictions upon transfer, Sec. 13 gives the remedy if the provisions imposing restrictions are violated and this remedy is by S. 105, one which lies before a Revenue Officer and not before a Civil Court whose jurisdiction is excluded. This argument proceeds on the assumption that a surrender under Section 89 of the Tenancy Act is a transfer within S. 12, for, it is only the surrender that falls within the powers conferred by S. 12 or the provisions of S. 13 both sections being concerned with transfer by an “occupancy tenant.” Here the alienations were two (1) a sale deed by proprietors, and (2) a surrender by occupancy tenants. The sale transfer does not come under S. 12, for that limits the power of an occupancy tenant. It does not confer rights; it restricts rights of transfer. These restrictions are imposed where the transferor is an occupancy tenant. It does not apply where the transferor is a proprietor.
7. It makes it impossible to give any fair construction to S. 89 if one holds that “transfer” in S. 12 includes the “surrender” Page: 340referred to in S. 89. It is not of course sufficient, in order to take a case out of S. 12, to call the transaction a surrender, if in point of fact it is a transfer, and this we understand to be the ratio decidendi of 31 NLR Sup 96. (1936) 23 AIR Nag 18 , 159 IC 862 , 31 NLR Sup 96 There the transaction resulted in the tenancy right being alienated to a co-sharer who was not the lambardar. The alienation was called a surrender but in fact it was a transfer; the tenant did not surrender to the person standing in the position of his landlord, but transferred to a co-sharer. In the present 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 consideration, the decrees paid off being, it is said, in respect of suits in which the minors were not parties and in respect of debts not binding on the minors. These are points not now in dispute. Issue (10) raises the questions:
(a) Whether the lauds described in para. 10 of the plaint were sir and khudkasht at the time when defendants 2 and 3 executed and registered a surrender deed in respect of it? (b) Whether they executed the surrender deed before or after the sale deed of the same date?
8. It is now important to note how the rest of the issue is framed. It will make for clearness to express the sense. Alternative attacks are made according as it is found that it was (a) before or (b) after. If “before,” then the issue is raised: “Is the transfer by surrender of sir and khudkasht land valid and approved by the Tenancy Act?” If “after”, then the issue is: “is the plaintiff's claim within two years from the time defendant 1 entered into possession of these lands in pursuance of the surrender deed?” Issue 11 raises a question whether defendants 2 and 3 had not become occupancy tenants under an earlier alienation. That earlier alienation has been held to be nominal and of no effect and that conclusion is not contested. It does not carry the matter any further though it shows the kind of persons defendants 2 and 3 are. The materiality of that issue is to be found in the fact that it was clearly perceived that there is a vast difference between purporting to surrender before you have become a tenant and surrendering after you have become a tenant. What the plaintiffs were here saying was that the surrender was before the sale and so 39 All 173 (1916) 3 AIR PC 59 , 39 IC 454 , 39 All 173 , 44 IA 54 (PC) applies. The answer that was being made to that was: even before the sale by defendants 2 and 3 to defendant 1, defendants 2 and 3 were occupancy tenants because they had sold to a third party before. No say defendants 2 and 3, through the mouths of their children, that was a feigned transaction; it had no effect therefore, we were not, before the sale, occupancy tenants, and therefore, as we say the surrender was before the sale, the surrender is void. The only allegation of illegality (apart from allegations that the mortgages which resulted in decrees which were satisfied by the transfers were illegal) touching the sale transaction 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.
9. 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 Page: 341substance 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 that the quasi trust should be determined. This result however follows as a matter of law from facts that have been proved by evidence admissible under the allegations and issues in the case. It is to be noted that the subject-matter of the surrender is said to be sir and khudkast land and from the order dated 28th January 1929 this khudkast, after surrender, is stated to have “ripened into sir land”. Nothing was made of this in argument before us. In the written statement para. 8(a), it is stated that the subject-matter of the surrender was neither sir nor khudkasht land but was occupancy land and accordingly the surrender was not illegal. In the plaintiffs' reply (which, as so often happens, is not a reply so much as a re-statement of old and a statement of new allegations) the attack on the sale deed is restricted to an attack upon the consideration given for the transfer (see paras. 9 and 10) and upon the allegation that if there was consideration “it was not for the benefit of the minors or for legal necessity”. There is no further attack on the surrender.
10. In a suit of this kind and one bearing the marks of collusion, and consequently one in which the allegations and the evidence tendered by the plaintiffs have to be scrutinized somewhat closely, it has been found that there is some illegality which vitiates the surrender. If the judgment appealed from is upheld, it follows that the plaintiffs (as originally constituted) get back the subject-matter of the surrender, and the transferee is left without the land and without his debts which have long since been time, barred. That is not a satisfactory result. The question is: Does the law compel not merely the avoidance but the avoidance for an illegality of a nature which prevents any order of restitution of the whole or the part? A Court can and must take notice of an illegality which emerges in the course of a case although not pleaded. But a Court should be very slow to do so and should not go out of its way to assume facts or draw inferences from facts capable of another construction to tend to the conclusion that there has been illegality of so grave a nature neither pleaded nor raised by the issues. It should be still more hesitant if the suit appears collusive. In this case, pursuant to 39 All 173, (1916) 3 AIR PC 59 , 39 IC 454 , 39 All 173 , 44 IA 54 (PC) I find it impossible to uphold the surrender. There have here emerged facts indistinguishable from those present in 39 All 173, (1916) 3 AIR 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 Section 49 of the 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.
11. 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, (1907) 1 Ch 300. (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 been no surrender. That can best be done if defendants 2 and 3 are transposed as plaintiffs. They are transposed accordingly. The remedy must be given on terms, viz. that the plaintiffs (i.e the plaintiffs who sued together with the transposed plaintiffs) must return what they got under the surrender. The surrender is declared void and defendant 1 is declared a quasi trustee of the subject, matter. The quasi trust is determined and it is directed that the surrenderors be placed in possession of the sir land on the following payment being made by the plaintiffs. There shall be paid to defendant 1 the sum of Rs. 7267-3-10. Neither interest nor damages are fairly due in the circumstances. The plaintiffs' claim, so far as the subject-matter of the sale deed is concerned, is dismissed; so far as the subject-matter of the surrender is concerned, subject to the payment of the sum of Page: 342Rs. 7267-3-10, possession in occupancy right is decreed. Each side will bear its own costs throughout including appeal and cross-objections.
Bose, J.:— I have had the advantage of reading the judgment of my learned brother Digby, J. I regret I am unable to accept his conclusions and so am writing a separate judgment. I agree that the two deeds of sale and surrender must be regarded as colourable and that when one looks behind them to the real transaction which the parties intended to effect we find that they tried (1) to effect a sale of the entire rights which the transferor possessed in the property transferred, that is to say, of both the proprietary rights as well as the ex-proprietary tenancy rights in the sir, or, to use colloquial language, the cultivating rights in the sir, and (2) that they deliberately separated the considerations for these two different objects. It was argued that the Court is powerless to look behind a transaction which has been reduced to writing and determine its real nature. It was said that Section 92 of the Evidence Act, bars the way and a number of Privy Council decisions were cited which are supposed to support this proposition. 53 Bom 230 (1929) AIR PC 34 , 114 IC 1 , 53 Bom 230 , 56 IA 51 (PC) is typical of that group. It is enough to say that their Lordships of the Privy Council decided otherwise in 39 All 173, (1916) 3 AIR PC 59 , 39 IC 454 , 39 All 173 , 44 IA 54 (PC) a case which I find it impossible 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 I 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: 47 Mad 729 (1924) 11 AIR PC 226 , 82 IC 993 , 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 39 All 173 (1916) 3 AIR 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 “after getting the mortgage rights in mauza Dongargaon relinquished.” This village was not sold nor had the amount of the decree obtained against it anything to do with the sale consideration. It related exclusively to the deed of surrender. The only possible explanation then is that the deeds were colourable and that the real transaction was what I have stated above.
12. Of course whether the writing was the real agreement between the parties or was only colourable is naturally a question of fact which must be decided afresh each time it arises. In the case before us there is a concurrent finding by two Courts that the two documents here are colourable and that the real transaction between the parties was what I have just described: at least that is the substance of the decisions though the learned Judges have not used quite the same language. I am not impressed with the objection that this matter was not pleaded. The plaintiffs did say that the two transactions offended against the provisions of the Tenancy Act and so were illegal. It is true that they advanced other grounds as well but none of them are covered by the provisions of the Tenancy Act. On the facts alleged this is the only ground on which the matter could fall within the purview of that Act. It was so understood by both the lower Courts and I have no doubt was similarly interpreted by the parties themselves. It is significant that this objection to the sufficiency of the plea is not to be found in the voluminous grounds of appeal which have been filed here. It has repeatedly been held that pleadings in the mofussil are not to be construed too strictly and while I am not prepared to allow unlimited license, if a point has been taken in substance and has been properly understood and properly tried, then I do not think an Appellate Court would be warranted in throwing out an otherwise good claim on that ground alone: see, 9 Luck 178 (1934) 21 AIR PC 130 , 149 IC 480 , 61 IA 224 , 9 Luck 178 (PC) at p. 184, 20 CWN 297 (1915) 2 AIR PC 89 , 34 IC 268 , 20 CWN 297 (PC) at p. 303 and 12 NLR 90 (1916) 3 AIR Nag 84 , 34 IC 704 , 12 NLR 90 at p. 93.
13. I am satisfied that no injustice is being done to the contesting defendant here because the lower Courts have virtually accepted his own version of the incident. When examined as D.W 9 he stated in examination in chief that the agreements to sell and surrender had both been enter, ed 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 39 All 173. (1916) 3 AIR 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? Section 49(1) of the 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 the date of such loss become an occupancy tenant of such sir land.
14. This clearly means that there is no prohibition on transfer; it is perfectly lawful, but the effect of it is that the proprietor becomes an occupancy tenant of the sir at the date of the transfer and that this can not be prevented by any contract to the contrary. Their Lordships of the Privy Council go further and state that “the policy of the Act is not to be defeated by any ingenious devices, arrangements or agreements” and that “all such devices, arrangements and agreements are in contravention of the policy of the Act and are contrary to law and are illegal and void.” The anxiety of the Legislature to protect this class is so great that S. 49(2) of the Act prohibits registration of any document, which does not reserve “the right of occupancy specified in sub-s. (1).” The object of this prohibition is clearly to bring to the notice of the parties exactly what their bargain amounts to under the law and if they have understood the position a right to enable them to amend their document so as to make their meaning clear beyond all possibility of doubt, and if not, then to let them realize that they have entered into a transaction one of whose objects is prohibited by law. Their Lordships of the Privy Council make it clear that the illegal part of the transaction is not the sale of the sir but the arrangement or device which attempts to evade the provisions of the Act: in their case the relinquishment or surrender, which happens to be the case here as well. What then is the effect of that? As I have said the Act nowhere prohibits a transfer as such; all it says is that the proprietor becomes at that moment an occupancy tenant of the sir despite any contract to the contrary. Therefore it clearly contemplates cases in which such a transfer can be upheld in spite of a contract to the contrary. Exactly when this can be done and when not, is determinable not under the Act but under the general law of the land. Section 24 of the Contract Act states that:
If any part of a single consideration for one or more objects or any one or any part of any one of several considerations for a single object is unlawful the agreement is void.
15. Therefore if this transaction had consisted of a single consideration for the two objects contemplated, namely the sale of the proprietary rights (as distinguished from 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 Sections 57 and 58 of the Contract Act. This rule was applied and in my opinion rightly, to this very class of cases in 27 NLR 113 (1931) 18 AIR Nag 6 , 130 IC 91 , 27 NLR 113 at p. 115 and 22 NLR 136 (1925) 12 AIR Nag 302 , 86 IC 515 , 22 NLR 136 at p. 141. As I have said the whole transaction in this case is not prohibited by statute; on the Page: 344contrary the part of it relating to the transfer of the proprietary rights is expressly allowed. Therefore under this rale since the considerations are separable that portion can, in my opinion, be enforced and it is only the surrender which is of no effect and that brings me to the next question: can the parties be placed upon terms? Can a refund of that portion of the consideration which was apportioned to the surrender be ordered? As I view the law it can. There is no doubt that when a contract is void for illegality as opposed to being merely nugatory, money paid or goods delivered in pursuance of it cannot ordinarily be recovered unless it is still executory because of the maxim ex turpi causa non oritur actio; in fact the test of illegality is the applicability of the maxim. But there are several exceptions to this rule one of which is where the contract is made illegal by statute with the object of protecting a particular class of persons to which the plaintiff belongs. See 7 Halsbury's Laws of England, 175-176 and (1890) 24 QBD 742 (1890) 24 QBD 742 , 59 LJ QB 288 , 63 LT 150 , 38 WR 614 , 54 JP 804 and (1893) 2 Ch 154. (1893) 2 Ch 154 , 62 LJ Ch 636 , 3 R 388 , 68 LT 709 , 42 WR 74
16. A little reflection will show that this must be so, for otherwise, the maxims ex turpi causa non oritur actio and in pari delicto would put the plaintiffs out of Court and thus perpetuate the very mischief which these Acts are designed to avoid, namely to save certain classes of persons from the consequences of their own folly. In all such cases the Courts have power to place the plaintiff upon terms. See 1 Smith's Leading Cases, Edn. 13, p. 442. This was done in (1907) 1 Ch 300, (1907) 1 Ch 300 , 76 LJ Ch 187 , 96 LT 301 , 23 TLR 187 and restitution was allowed by the House of Lords in a case where persons had deposited money in an ultra vires banking concern (ultra vires because it had been prohibited by statute) on general equitable grounds for which there was no direct authority, even though the depositors knew and the bank knew that their actions were legally invalid. These principles were applied in India in 43 Cal 790. (1916) 3 AIR Cal 136 , 35 IC 305 , 43 Cal 790 , 23 CLJ 26 , 20 CWN 370 I am therefore of opinion that the plaintiffs can be placed upon terms and respectfully dissent from the view in 22 NLR 136. (1925) 12 AIR Nag 302 , 86 IC 515 , 22 NLR 136
17. It was argued that no such order can be passed because Section 65 of the 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 23 NLR 8 (1927) 14 AIR 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 45 All 179. (1922) 9 AIR PC 403 , 71 IC 629 , 45 All 179 , 50 IA 69 , 26 OC 223 (PC) Their Lordships point out that S. 65 applies to agreements which have been void from their inception as well as to contracts which became void subsequent to their making. As regards the objection about limitation in respect of this question, it was urged that the defendants should really have made a counter claim under S. 65 and that the limitation for this would run from the date of the void agreement: 50 Cal 929. (1923) 10 AIR PC 189 , 74 IC 499 , 50 Cal 929 , 50 IA 239 (PC) If the transferee having lost his property had been suing for a refund of consideration, then assuming that such a suit would lie (and about that I say nothing), I have no doubt that this would be so. But so long as the transferee is in possession I am unable to see how a right to counterclaim can arise. In my opinion the power rests in the Court and is discretionary with it. When the contract is void for the reasons which obtain here the Court has power to work out the equities and place the parties upon terms. No question of limitation arises, that is to say, in connexion with the Court's powers to place the parties upon terms if the plaintiffs' suit is otherwise good, nor does any question of court-fees.
18. Before passing on to the next point I will dispose of another objection in connexion with this matter. It was urged that the lower Courts have both found that there was a single consideration for the two deeds, and that though it has been divided into two parts the division was purely arbitrary and nominal and was not intended to represent a real apportionment of consideration. In my opinion the findings are exactly the opposite. Both the Courts hold that though the two deeds represent one transaction they are separable, being for distinct considerations, and they apply the law laid down in 22 NLR 136, (1925) 12 AIR Nag 302 , 86 IC 515 , 22 NLR 136 to those facts. The first Court says so distinctly in para. 20 of its judgment and the lower Appellate Court distinguishes AIR 1928 Nag 232 (1928) 15 AIR Nag 232 , 110 IC 351 at page 236 on this very ground in para. 19, and follows the reported ruling which I have just cited. It then concludes “I therefore agree with the lower Court that the whole transaction should not be set aside.” It is true there are earlier passages in both judgments which if read by themselves 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 to them to conclude on this evidence coupled with the documents and other circumstances that though there was only one set of negotiations, they concluded lin the manner indicated above.
19. 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 21 All 204, (1899) 21 All 204 , 1899 AWN 36 although a different view was taken in 8 All 256. (1886) 8 All 256 Of course if the special law of limitation prescribed in the Tenancy Act applies then there can be no doubt that this remedy is barred, but in my opinion it does not. Article 1, Sch. 2 is confined to persons who seek possession of a holding from which they have been “dispossessed or excluded from possession.” It was suggested that this cannot apply when the tenant voluntarily surrenders the land as here, but as at present advised I am not prepared to go as far as that. I prefer to base my decision on another ground and leave this question open. In my opinion there is a quasi trust in such cases under Section 84 of the Trusts Act by virtue of which the transferee holds the property for the benefit of the transferor, and if he does that, then as I view the law there is neither dispossession nor exclusion from possession in the sense in which those words are used in the schedule. Under Section 95 of the Trusts Act he holds as if he were a trustee for the transferor and under Section 14 he is prohibited from setting up any adverse interest. I cannot regard this as constituting either dispossession or exclusion from possession within the meaning of Sch. 2, Tenancy Act of the Tenancy Actenancy Act Act and I respectfully differ from my learned brother.
20. It is true that S. 84 appears at first sight to differentiate between an illegal purpose and one whose effect would be to defeat the provisions of any law, but in my opinion the latter clause, which appears as the last clause in the section, is designed to cover the exceptions to the rules about illegality which I have pointed out above. It is to be observed that the clauses are disjunctive. Therefore in my opinion this case is not covered by the schedule to the Tenancy Act. But it was argued that wrong-doers are expressly excluded from the definition of trustee for the purposes of limitation and reference was made to Section 2(11) of the Lim. Act. The obvious answer is that the defendants are not trustees, they only hold as if they were trustees, and also that Section 2 of the Lim. Act does not apply to suits under the Tenancy Act, which, of course, includes the suits referred to in the schedule, because S. 104(4) expressly excludes it, and once this special bar is removed then a suit against a wrong-doer would be governed by the 12 years' rule, but I prefer to found on a broader basis. The word wrong-doer has not been defined but it can certainly not mean a person who has entered into possession as a trustee and Page: 346who has committed a breach of trust, for otherwise much of the usefulness of S. 10 would disappear and Article 98 would be rendered meaningless; also such an interpretation would be contrary to the decision of the Judicial Committee in 34 Mad 257 (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.
21. In my opinion these remarks apply with even greater force when the law makes him 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 so far as may be as if he were a trustee. I cannot see that there is any difficulty in so holding. As I see it, the definition refers to a person who enters into possession of property without any semblance of right and thereafter endeavours to resist a suit for possession against a trespasser whom he has dispossessed. In such circumstances the possessory title of the prior trespasser is deemed superior to that of the later wrong, doer and the latter cannot be allowed to set up a jus tertii, cannot be heard to say that he is a trustee on behalf of the rightful owner. It is the type of case I had occasion to deal with recently in Second Appeal No. 279-B of 1935. Reported in (1937) 24 AIR Nag 281 , 173 IC 680 I am clear then that the special law of limitation prescribed in Article 1 to Sch. 2, C.P Tenancy Act does not apply and so we are thrown back on the Limitation Act.
22. We have next to determine which Article of that Act applies. It was suggested that the suit is really under Section 38 of the Specific Relief Act for cancellation of an instrument. I do not think it is. It has certainly not been framed as such and even if it had been, the addition of a relief to that effect could not have altered its real character so far as the relief for possession is concerned. One has to look beyond the mere verbiage of the plaint to the real relief claimed, that is to say to the real relief which according to the law the plaintiff is bound to seek before he can succeed: 23 NLR 73, (1927) 14 AIR Nag 248 , 101 IC 770 , 23 NLR 73 ILR 1937 Nag 254 (1937) 24 AIR Nag 129 , 171 IC 271 , ILR 1937 Nag 254 at p. 258 and 57 All 278 (1934) 21 AIR All 993 , 152 IC 1 , 1934 ALJ 973 , 57 All 278 (FB) at p. 285. There is in my opinion a wide difference, between an instrument which is voidable and one which is void from the beginning. In the former the right under the contract continues until it is avoided and therefore restoration of property handed over in pursuance of it cannot be claimed until the instrument is avoided either by the act of parties or through the Court. In the latter no legal contract ever came into being and so the rights of the parties are determined independently of the deed. There is no need to avoid or cancel that which never existed in the eye of the law and so the substantial relief claimed would not be governed by Article 91; 35 Cal 551 (1908) 35 Cal 551 , 35 IA 98 , 12 CWN 562 , 7 CLJ 528 (PC) at pp. 559-560 and 10 NLR 133 (1914) 1 AIR Nag 75 , 26 IC 813 , 10 NLR 133 at p. 136; nor can the mere addition of an ancillary relief for cancellation which need never have been claimed make any difference: 50 All 510, (1928) 15 AIR All 267 , 109 IC 54 , 50 All 510 , 26 ALJ 289 16 Mad 311 (1893) 16 Mad 311 , 3 MLJ 144 at p. 314: see also 6 CLR 12 (1881) 6 IA 110 , 6 CLR 12 , 4 Sar 15 (PC) at p. 15, 25 All 1 (1903) 25 All 1 , 29 IA 203 , 8 Sar 340 (PC) at p. 16 and 25 Bom 337 (1901) 25 Bom 337 , 27 IA 216 , 2 Bom LR 927 , 7 Sar 739 (PC) at p. 350.
23. 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 had is not governed by Article 91. If they cannot, even then Article 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 had and keep the good without altering the consideration make any difference. That is a privilege which the Page: 347promisee can always claim except when the maxims ex turpi causa and in pari delicto apply without reservation. The general principle is to be found in Section 63 of the Contract Act. It relates, of course, to a time when the contract, or at any rate, a part of it, is still executory, but it means that in these circumstances performance will be compelled with that variation. How much more then must the rule apply when the contract though illegal, has been wholly performed on both sides, provided, of course, that no injury results to the promiser; and in order to prevent that the Courts have ample power to place the parties upon terms, such for instance, as compelling the promisor to account for mesne profits. But all this is a matter of defence and the defence to an action can not modify or alter the substance of the plaintiffs' right of suit though it may sometimes help to explain it: ILR 1937 Nag 254 (1937) 24 AIR Nag 129 , 171 IC 271 , ILR 1937 Nag 254 at p. 259.
24. In my opinion Article 142, Limitation Act applies to such a case. I confess that at first upon a somewhat cursory reading of 10 Pat 851, (1931) 18 AIR PC 196 , 10 Pat 851 , 58 IA 279 (PC) I thought that Article 120 would apply but I am obliged to my learned brother Digby, J. for saving me from error. I now find that at p. 868 their Lordships observe that if the title had resided in the plaintiff and he had been the owner of the property claimed, the 12 years' rule would have applied, but inasmuch as he was not the owner the claim fell within Article 120. The question then is whether Article 142 applies or Article 144. I am clear that Article 144 does not. In 10 Pat 851, (1931) 18 AIR PC 196 , 10 Pat 851 , 58 IA 279 (PC) their Lordships state at p. 863 that it applies only when the person sued in holding adversely to the plaintiff and without title, and at page 868 they say:
This would, in their Lordships' opinion, depend upon whether he could rightfully assert that he was the owner of the properties and that the appellant's possession was that of a trespasser.
25. As I have said Section 95 of the Trusts Act states that a person governed by S. 84 must perform so far as may be the same duties as a trustee and that he is subject so far, as may be to the same liabilities and disabilities (with two exceptions) “as if he were a trustee”. One of 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; therefore as I see it Article 144 cannot apply. I do not feel the difficulty which my learned brother experiences about Section 14 of the 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 he cannot use Article 144. The two are not the same. But of course the defendants here are not trustees. Section 4 of the 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 Article 142. Lim. Act? In my opinion it is this. Article 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. Article 1 to Sch. 2 has no corresponding clause. It speaks of dispossession and ‘exclusion from possession’. I cannot regard a person who is compelled by law to hold property for the benefit of another in the same way as a trustee, and who is not permitted to set up an adverse right as excluding the other from possession. An agent for example or a co-sharer cannot be regarded in that light unless and until he openly sets up an adverse right to the knowledge of the owner whom he seeks to exclude. But if the law says he may not in any circumstances set up such a right then it follows he can in no circumstances exclude the rightful owner from possession.
26. But the Privy Council decision in 35 Cal 551 (1908) 35 Cal 551 , 35 IA 98 , 12 CWN 562 , 7 CLJ 528 (PC) raises a real difficulty. The position there was much the same in that the case there formed one of the exceptions to the rule in pari delicto. An illegal transfer was made with object of defrauding creditors but as the purpose of the fraud was not effected their Lordships held that the plaintiff could recover possession and they applied Article 144. If it had not been for their later ruling, of course, I would have had to follow it but as in my opinion 10 Pat 851 (1931) 18 AIR PC 196 , 10 Pat 851 , 58 IA 279 (PC) holds that Article 144 does not apply I find myself in a difficulty, especially as their Lordships did not refer to their earlier ruling in the later one. However there is this to be noticed. In 35 Cal 551 (1908) 35 Cal 551 , 35 IA 98 , 12 CWN 562 , 7 CLJ 528 (PC) the question of Section 84 of the Trusts Act was not raised nor was a possible conflict between Articles 142 and 144 considered, probably because it was unnecessary to do Page: 348so. The cause of action accrued on 11th June 1895 and the suit was instituted on 24th July 1901. The only question under the head of limitation raised at the bar was whether Article 91 applied or Article 144. Their Lordships held that Article 91 could not apply because as the sale was an illegal transaction it was void from the beginning and so it was not necessary for the plaintiff to ask for cancellation before seeking possession. Once that was clear it became immaterial whether Article 142 applied or Article 144. As I say the questions which we find discussed in the later ruling were not raised and their Lordships disposed of the matter in a single sentence without discussion by saying:
The 141th and not the 91st Article in the second schedule to the Act is therefore that which applies to the case, and the suit has consequently been instituted in time.
27. In 10 Pat 851 (1931) 18 AIR PC 196 , 10 Pat 851 , 58 IA 279 (PC) however their Lordships are emphatic that Article 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 Section 84 of the Trusts Act cannot set up an adverse interest. It follows that Article 144 cannot apply. In the circumstances I feel that we have no option but to apply Article 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 Article 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 Article 1 to Sch. 2, Tenancy Act. If Article 144 applies, or rather would apply apart from the special law in the Tenancy Act, then according to 10 Pat 851, (1931) 18 AIR PC 196 , 10 Pat 851 , 58 IA 279 (PC) it must mean that the defendant is in a position to set up an adverse title and that he has done so. Once that is accepted then in my view it would be impossible to escape the conclusion that the plaintiffs have been excluded from possession which in its turn would mean that the special local law of limitation must apply. If Article 142 applies then the suit is well within time. The cause of action accrued on 14th April 1923 which is the date of the surrender and the suit was filed on 25th October 1928 which is well within 12 years.
28. I turn now to a difficulty of another sort. The actual transferors were not the plaintiffs but their fathers. Who then became the occupancy tenants under S. 49? In my opinion it would be the whole family. The findings are that the family was joint and that this was a part of its property. The debts for the satisfaction of which the sale was made were all for legal necessity and so bound the entire family. In the circumstances the benefits which accrued by reason of S. 49 from the sale must be taken to have enured for the family as a whole. It is the family who should have sued. In the circumstances I feel the ends of justice will best be met by transposing defendants 2 and 3 to the category of plaintiffs under O. 41, R. 33 of the CPC, read with O. 1, R. 10 and passing a decree in favour of the entire family. Our power to do so is undoubted: see, 59 Cal 80 (1931) 18 AIR PC 162 , 132 IC 610 , 59 Cal 80 , 58 IA 228 (PC) at page 91 and 44 Cal 759 (1916) 3 AIR PC 182 , 39 IC 156 , 44 Cal 759 , 44 IA 65 (PC) at page 769. The only question is whether we should exercise it in this case. No question of limitation arises because the twelve years required by Article 142 have not yet elapsed and since the sons would be entitled to a decree for possession of the whole, in any case that seems to be the most reasonable course to pursue: see, 25 NLR 28 (1929) 16 AIR Nag 60 , 116 IC 648 , 25 NLR 28 and 9 NLR 18. (1913) 9 NLR 18 , 18 IC 826
29. That brings me to the last point: upon what terms should possession be granted. As I have said the Courts have ample powers to place the plaintiffs upon terms. The consideration for the surrender consisted of Rs. 7267-3-10 made up as follows:
Rs. 950 due to Government on account of taccavi loan and interest.
Rs. 2425-5-4 due on foreclosure decree obtained by the transferee against 1 anna 8 pies share of Mauza Dongargaon.
Rs. 2192-0-6 due on three decrees also apparently in the transferee's favour.
Rs. 300 paid in cash to meet the expenses of the sale deed Ex. P-1.
Rs. 1400 paid in cash to enable the minors to obtain leases of certain lands in this village.
30. 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. Page: 349It 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 Rs. 1400 in cash the plaintiffs are actually in possession of property which they would not have obtained without it. The sale deed Ex. P-1 has already been upheld so the Rs. 300 for meeting its expenses had to come from somewhere. The transferee would here have consented to all this if he had known that he was eventually to lose the property without compensation and it would be inequitable to allow the plaintiffs to retain all these benefits and get the property as well. Though the consequences of the rule in pari delicto do not apply there can be no question that both parties are equally in fault (the plaintiffs must of course stand in their fathers' shoes for these purposes) and so it would be inequitable to assist the plaintiffs without restoring the other side so far as may be to the status quo.
31. The only other material consideration is the question of mesne profits. Normally the transferee would have to account for these but as against this is the interest due on the moneys he paid or could have recovered. I think it right that the one should be set off against the other as was done by their Lordships of the Privy Council in 48 All 443 (1926) 13 AIR PC 68 , 95 IC 898 , 48 All 443 , 53 IA 142 (PC) at p. 455. I observe in passing that three of the fields surrendered were khudkasht and not sir. If the deed had been confined to them then of course none of these difficulties would have arisen. But as there was a single consideration in this deed for the surrender of the sir and these three khudkasht fields it is impossible to separate them from the others and so the transaction has to be set aside as a whole. This was not challenged but I think it right to refer to the matter in passing to show that this fact has not been overlooked. The only equitable solution is that occupancy rights should be given in respect of the lot, as indeed was assumed during the course of the arguments. In the result I agree with the decree proposed by my Lord the Chief Justice.
Digby, J.:— This appeal arises out of a suit brought by the sons of Prayagnath and Shivnath of whom the eldest is 20 years of age and the others minors. The defendants are Bairagisao and the fathers of the plaintiffs. On 14th April 1923 the two fathers and those of the plaintiffs who were then born through their fathers sold to the defendant-appellant Bairagisao a four annas share in mauza Suplipar reserving cultivating rights in sir land. On the same day the sir lands were surrendered. The consideration for the sale was Rs. 7367-5-11½ (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 Rs. 7267-3-10 is composed of money decrees due to the defendant-appellant and a sum of Rs. 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 balance amount. Thus in each document the consideration is first stated and then reference is made to the relinquishment of the mortgage of Dongargaon and the lease of occupancy land to be obtained by the transferee for the minors. In the second document the cost of obtaining the lease forms part of the consideration itself.
32. It has been found that the plaintiffs then alive had a vested interest by birth in two annas eight pies out of the four annas proprietary share of mauza Suplipar, whereas one anna four pies belonged to their fathers alone. To this two annas eight pie share it appears that all the sir belonged (vide 1 D. 66). The suit was a suit to recover possession of all the land transferred. The trial Court held that the Page: 350sale and surrender were part of the same transaction and on the authority of 22 NLR 136, (1925) 12 AIR Nag 302 , 86 IC 515 , 22 NLR 136 a Bench decision, the surrender of the land except three fields which turned out to be khudkasht was held to be void as being in contravention of the provisions of the Tenancy Act. The trial Court on the same authority upheld the sale as valid. It dismissed the suit so far as it was brought for the possession of the surrendered sir land on the ground of limitation applying Article 1 of Sch. 2, C.P Tenancy Act. The first Appellate Court supported the decision of the trial Court, except that it held that the suit was in time as regards the recovery of the tenancy lands and directed that the defendant should place the plaintiffs in possession of the sir lands surrendered.
33. The defendant Bairagisao has appealed from the decision of the first Appellate Court contending that the suit should have been dismissed. The plaintiffs-respondents have filed a cross-objection in which they contend that the whole transfer both of proprietary rights in the village and of cultivating rights in sir should have been adjudged void and possession of the whole decreed to the plaintiffs. The questions for determination in this case are as follows: (1) Whether the surrender deed dated 14th April 1923 is (a) void or (b) also illegal. (2) Whether the sale of the proprietary share is (a) void or (b) void and illegal. (3) Whether if the sale stands but the surrender does not, the suit is within time. (4) Whether the defendant can and should receive refund of consideration in this suit if possession is decreed. The 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.
34. 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 the sale the land could not become occupancy even by reason of the sale dated 14th April 1923, and that the surrender was therefore a fraud, void and inoperative. Although the position is now clear that at the time of the transactions the sir land was proprietary land of the transferrers, the sir fields were, as a matter of fact, at the time recorded as occupancy fields because there had been a fictitious transfer of the proprietary share in favour of a third party, and it would appear that the pleading that they were occupancy tenants at the time of the surrender made by the defendants covered this point. The only issues framed as regards the invalidity of the surrender deed were as follows:
Issue 9(b): Whether they executed the surrender deed before or after the sale deed of the same date. If before, is the transfer by surrender of sir and khudkasht land valid and approved by the Tenancy Act? If after, is the plaintiffs' claim within two years from the time defendant 1 entered into possession of these lands in pursuance of the surrender deed?
Issue 13: Could plaintiff be permitted to set aside the whole sale deed and surrender deed or only to the extent of their specific shares only and they should be held good as far as defendants 2 and 3 are concerned?
Issue 18: Is rajinama dated 14th April 1923 a fraudulent transaction as alleged?
35. The plaintiffs' oral evidence was mainly concentrated on the immoral habits of the fathers, but the defendants led evidence regarding the transactions which are now in suit. As a result of the consideration of their evidence the trial Court came to the conclusion that their story of separate negotiations prior to the execution of the documents was false and that the two transactions were arranged in advance as one contract and not as two separate contracts. The first Appellate Court interpreted the pleading of the plaintiffs which I have quoted as meaning that the sale of the village share and surrender of occupancy rights were in fact a single transaction and in contravention of the provisions of the Tenancy Act. The first Appellate Court in para. 18 of its judgment held that there was a single set of negotiations in which it was agreed that the whole village would be transferred by the method of sale and surrender for one consideration.
36. Now it is strenuously urged by the learned advocate for the appellant that neither the trial nor the Appellate Court had any right to go into any fact in this connexion 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 Section 49 of the C.P Tenancy Act. It appears to me that the pleading “according to the Tenancy Act these proceedings and the rajinama 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 22 NLR 136 (1925) 12 AIR Nag 302 , 86 IC 515 , 22 NLR 136 had been published and a surrender executed on the same date as a sale deed would naturally be thought to be part of the same transaction unless the Court was satisfied that it was not. The evidence of the defendants given in order to show that two separate negotiations took place prior to the execution of either deed is obviously designed to avoid such presumption being drawn against them. That is why the trial Court and the Appellate Court both regard the evidence adduced by the appellants as evidence given by way of explanation of an awkward fact.
37. In these circumstances I do not think that it would be in any way improper for this Court to take notice of the fact which has fallen from the defendant's own mouth that prior to execution of the documents there had been an executory agreement that both should be executed. When we see that the sale of proprietary rights and the surrender of sir are made on the same day there is the strongest suspicion that both transactions have been arranged in advance. It would indeed be curious if the parties to the sale proceeded after the sale to start negotiations regarding the surrender of the new occupancy right just received and managed to bring their negotiations to an end and to execute the second document on the same day as the sale deed. Moreover, in this case the documents themselves afford internal evidence that the executory contract preceded the execution of either. It is therefore not surprising that the-defendants gave evidence to show that the executed contracts were the result of separate executory contracts. My conclusion therefore is that the form of the pleadings will not prevent the Court from arriving at the conclusion that the surrender was void or illegal because it was intended to contravene the provisions of the Tenancy Act.
38. There have been a considerable number of cases either in the Allahabad High Court or in the Judicial Commissioner's Court regarding such sales of proprietary rights followed by a surrender of sir land in pursuance of previous executory contracts, and the basis of all these decisions is the decision of the Privy Council in 39 All 173 (1916) 3 AIR PC 59 , 39 IC 454 , 39 All 173 , 44 IA 54 (PC) upholding the decision in 33 All 695. (1911) 33 All 695 , 11 IC 17 , 8 ALJ 826 That was a case in which the provisions of the Agra Tenancy Act which are similar on all material points in this connexion with the provisions of the C.P Tenancy Act were involved. 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. Section 49 of the 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 sir 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 reservation of the right of occupancy specified in sub-s. (1), or to grant tenancy rights in sir land for a period exceeding five years, or to be an agreement for such transfer or grant, unless sanction to such transfer or grant has been, endorsed on the document in such manner and by such authority as may be prescribed by rules made under S. 109.
(3) Nothing in this section shall affect rights under any document duly registered before 21st October 1898, and on any transfer being made, decreed, or ordered in pursuance of such document, the rights of the transferee to occupy and cultivate such sir land shall accrue.
(4) Nothing in this section shall apply 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.
39. Apart from cases where sanction has been obtained, sub-s. (1) provides that when the proprietor temporarily or permanently loses his right to occupy any portion of his sir land as proprietor he shall at the date of such loss become an occupancy tenant of such sir land. Sub-s. (2) prohibits registration of a document which purports to transfer the rights of a proprietor in sir land without reservation of the rights of occupancy specified in the previous sub-section. The result is that if the proprietor wishes to transfer his cultivating rights in sir the only method by which he can apparently do it is first, to execute a sale deed and then to execute a surrender deed. If the sale covers the whole, it will be ineffective and therefore the form of sale and surrender has to be adopted in order to secure valid registration and ostensible effectiveness. If this is arranged before hand the result is that the provision by which a proprietor who loses the right to occupy the land as a proprietor becomes an occupancy tenant is really defeated and by a curious paradox the very drafting of sub-s. (1) is utilized to defeat its object. The intention is to avoid the operation of law, to avoid being an occupancy tenant by the simple process of becoming an occupancy tenant in name for a period which 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 40 All 449 (1918) 5 AIR 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 protecting a reckless and imprudent man against the consequence of his own act.
40. Then there is the case in 54 IC 794 (1920) 7 AIR Nag 157 , 54 IC 794 where the above words were quoted with approval. In that case there was “admittedly a design to evade the requirements of the Act.” In 22 NLR 136 (1925) 12 AIR Nag 302 , 86 IC 515 , 22 NLR 136 the further material portion of the headnote which quotes the above passage is as follows:
The mere fact that nine months Intervened between the sale deed and the relinquishment of the occupancy land does not become legal if it is manifest that the arrangement by which the occupancy rights were to be surrendered dates back to the date of the sale.
Where the legal and illegal objects or the legal and illegal transactions cannot be separated, the whole transaction is void under Section 24 of the Contract Act, but it is otherwise when the legal and illegal portions can be separated.
41. In 27 NLR 113 (1931) 18 AIR Nag 6 , 130 IC 91 , 27 NLR 113 occurs the following passage:
It is admitted before me that the sale and surrender formed a single transaction. In view of the decision in 22 NLR 136 (1925) 12 AIR Nag 302 , 86 IC 515 , 22 NLR 136 this could not well be disputed.
42. In 30 NLR 306 (1934) 21 AIR Nag 153 , 149 IC 992 , 30 NLR 306 at p. 310 appears the following passage:
In any case however I would hold that the surrender would be void as laid down in Bhagwant v. Anandrao (1925) 12 AIR Nag 302 , 86 IC 515 , 22 NLR 136 as being part and parcel of the transaction of the sale deed. As noted above the sale deed was executed on 22nd April, and on 22nd Ahiman executed the deed of surrender with regard to the occupancy rights in all the sir sold by the sale deed. There can be no doubt that the surrender was a clear evasion of Section 45 of the Tenancy Act then in force and as such is void.
43. In AIR 1928 Nag 232 (1928) 15 AIR Nag 232 , 110 IC 351 a surrender was made three days after the sale deed. The following passage occurs:
The real nature of this transaction is, of course, that without the sanction of the revenue officer the village was sold without reservation of the right to occupy the sir land. The sale and the surrender taken by itself was perfectly valid, but the two things combined in one transaction do certainly constitute a void agreement under Section 23 of the Contract Act.
44. 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 1 and illegal”. It is argued by the learned advocate for the appellant that oral evidence is not 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 to as 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.
45. This passage is quoted in 27 All 266. (1905) 27 All 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 intention of preventing the operation of Section 49 of the Tenancy Act, and that it was a void and illegal device. Although there are certain remarks in 52 All 338 (1930) 17 AIR All 1 , 122 IC 872 , 52 All 338 , 1930 ALJ 45 (FB) which in distinguishing between the executed and executory contract support the appellant's argument, I am unable to come to the conclusion that when the executory agreement is illegal the executed surrender is not illegal.
46. The next question is whether the sale of the proprietary share expressed to be sold in the sale deed is also void by reason of illegality. It is urged by the learned advocate for the appellant that it is perfectly valid, while the respondents through their learned advocate rest themselves on the findings of fact of the lower Appellate Court that there was one executory contract for transfer of the whole village, to be carried out by two documents, one of which (the sale) was contractually interdependent with the other (the surrender), and was not intended to be made at all, unless the surrender were made as well. Further it is argued forcibly that if the surrender deed is considered void because it is part of the sale, how can there possibly be two transactions and not one only? I regard the surrender as void and illegal because it is the execution of an executory agreement which appears to me a device indistinguishable from the devices stigmatized as void and illegal by their Lordships of the Privy Council. But it does not follow that the sale evidenced by the sale deed is itself an illegal device. The finding of the lower Appellate Court, as I understand it, is that there was in reality one single executory agreement, as the whole transaction was really arranged at one sitting, and not by two separate negotiations, one for the sale and the other for the surrender. But in this matter I consider that the argument of the learned advocate for the appellant is sound. There is not a word in the pleadings to suggest what would be a material question of fact, namely whether there was one consideration for the whole sale, instead of two considerations one for each part of it, or to suggest that the sale of one part was contractually interdependent with the transfer of the other part in the sense that the sale alone would never have taken place. No doubt there is something in the documents to suggest interdependence, 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 (1892) 2 QBD 724, (1892) 2 QBD 724 , 61 LJ QB 738 , 4 R 42 , 67 LT 782 , 41 WR 116 , 57 JP 213 which are quoted in 27 All 266 (1905) 27 All 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 him-self implicated in the illegality. It matters not whether the defendant has pleaded the illegality or whether he has not.
47. Again I quote the further 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.
48. In the present case it was never alleged by the plaintiffs that they wished to avoid the sale itself on the ground of illegality; the expression in connexion with the surrender as regards “these proceedings” cannot I think be taken as a plea that something which is in no way forbidden by the Page: 354Tenancy Act at all, a sale of a proprietary share, was to be considered illegal. There was no plea regarding a single consideration or interdependence of the executory agreement to sell with the agreement to surrender. In 27 NLR 113, (1931) 18 AIR Nag 6 , 130 IC 91 , 27 NLR 113 this very matter was considered and I quote again the following passage:
It is admitted before me that the sale and surrender formed a single transaction. But it is urged that the legal and illegal positions can be separated and only the part which relates to surrender of the occupancy rights is void.
49. It was then held that:
In the absence of a pleading that the money paid for the share did not represent what was paid for the share the sums mentioned in the consideration for the sale of the proprietary share must be deemed to be the consideration for the share.
50. On this ground the sale was held valid and the surrender void. I think therefore that it would be beyond the scope of the pleadings in the case to conclude that the transactions were inseparable and relying on this reported ruling I hold that the sale in so far as it conveyed the proprietary right in the village is valid. This decision might be justified on another ground namely that the matter had passed from the sphere of contract to the sphere of conveyance, by a sale deed which conveys title. The Allahabad High Court in a Full Bench riding refuses to apply Section 24 of the Contract Act, to executed conveyances: 52 All 338. (1930) 17 AIR All 1 , 122 IC 872 , 52 All 338 , 1930 ALJ 45 (FB) The following passage occurs at p. 343:
In cases of inherent illegality it is sometimes impossible to say whether the legal or illegal portion of the consideration affected the mind of the promisor most. But if we take the case of a contract only partly beyond the competence of the promisor there is no good ground why the promisee who has paid good consideration should not be allowed to enforce that part of the promise which the promisor was competent to make.
51. Mukherji, J. at p. 352 quotes the following remarks with approval from 38 All 232, (1916) 3 AIR 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.
52. 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.
53. 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 into the question as to whether the antecedent executory contract as regards the sale of the proprietary share is tainted with illegality. The sale was prima facie legal, the consideration for the sale was legal, the sale would presumably have no illegal purpose, the law presumes in favour of legality, the fact that it is contemporaneous with the surrender is insufficient to vitiate it, and there is no pleading that the consideration therefore was part of a larger consideration for one transaction, which included the transfer of sir. The simultaneous execution of the surrender deed bears strongly on the point that it was intended to defeat the law as regards occupancy right, the simultaneous execution of the sale deed carries with it no such implications of illegality as regards a sale which is prima facie a perfectly legal transaction, unlike a surrender of even date. The next question is regarding the refund of the consideration. Section 41 of the Specific Belief Act, cannot be invoked, for this is not a suit for specific relief; and the surrender need not be first set aside (vide, 35 Cal 551 (1908) 35 Cal 551 , 35 IA 98 , 12 CWN 562 , 7 CLJ 528 (PC)). Section 65 of the Contract Act, is then relied on. This section is as follows:
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 make compensation for it to the person from whom he received it.
54. Under S. 23 of the same Act “every agreement of which the object or consideration is unlawful is void.” The section lays down a legal right and does not deal with the procedure for enforcing it. It may be noticed that the date of discovery of voidness is the date of the agreement, except in unusual circumstances, 50 Cal 929, (1923) 10 AIR PC 189 , 74 IC 499 , 50 Cal 929 , 50 IA 239 (PC) that a right to money or compensation is not extinguished by efflux of limitation, that the limitation for a suit is governed by Article 62 of the Limitation Schedule for money had and received, though if an existing consideration can legally be said to have failed afterwards, Page: 355Article 97 will apply: cf., 5 Rang 283. (1927) 14 AIR PC 99 , 101 IC 414 , 5 Rang 283 , 54 IA 145 (PC) The Contract Act passed in 1872 “defines and amends certain parts of the law relating to contracts” and 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.
55. 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 33 Bom 411. (1909) 33 Bom 411 , 3 IC 748 , 11 Bom LR 649 This reasoning is not referred to (perhaps as it is obiter) in 42 All 449, (1920) 7 AIR All 167 , 55 IC 966 , 42 All 449 , 18 ALJ 513 which is based on an earlier Bombay case, 11 Bom LR 335; (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 41 Mad 197. (1918) 5 AIR Mad 444 , 41 IC 783 , 41 Mad 197 , 34 MLJ 282 In this Madras case the old Bombay case is also referred to in support of the contrary proposition and two previous Madras cases, 37 Mad 393 (1914) 1 AIR Mad 551 , 18 IC 515 , 37 Mad 393 , 24 MLJ 310 and 32 Mad 185. (1909) 32 Mad 185 , 3 IC 554 , 18 MLJ 403 But in those two cases S. 65 was not discussed. It may be noted that in the Madras case Bakewell, J. rests himself partly on the meaning of “discovered to be void” in the sense in which that phrase was then understood, while in 43 Cal 115, (1916) 3 AIR Cal 266 , 29 IC 625 , 43 Cal 115 , 21 CLR 537 , 19 CWN 919 the reasoning to be found at pages 122 and 123 clearly is that an agreement void ab initio is not an agreement subsequently found to be void or a contract made void by supervening circumstances. It is settled by the Privy Council that the section presupposes a competency in the parties to contract, and hence it does not apply to an agreement with a minor: 30 Cal 539 (1903) 30 Cal 539 , 30 IA 114 , 7 CWN 441 , 8 Sar 374 (PC) at p. 548. As regards this aspect the section has been discussed in connexion with a municipal agreement in 58 Mad 65. Municipal Council, (1934) 21 AIR Mad 480 , 151 IC 46 , 58 Mad 65 , 67 MLJ 38 On perusing such authorities as I have been able to find, I incline to the view that the matter is much more open than might be thought, for the reason that S. 65 is now held by the Privy Council to apply to agreements void ab initio and for the reason that the date of the discovery is also held by the Privy Council to be the date of the agreement, and although Courts have constantly applied the English law of illegality to attempts to recover money paid on illegal agreements, I do not think that the reasoning by which S. 65 has been considered inapplicable is sound. I therefore hold that Section 65 of the Contract Act does apply to agreements which are void by reason of illegality.
56. Now in cases of void agreements where S. 65 is applicable both parties are allowed (in a suit to enforce the supposed contract or for refund arising therefrom) the relief which can be given to them in view of the rights and duties created and imposed by the section. Obviously where A comes to Court asking for compensation or refund from B, he gives 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 Section 65 of the Contract Act would require the Court to condition the relief, which is not sought or given to the plaintiff under Section 65 of the 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 counter, claim 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 Page: 356Transfer 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 transferor would be sued before he had recovered the property would be extremely rare. If the transferee sued the transferor, the action would be brought on a right arising out of Section 65 of the Contract Act and the property be restored as a matter of course, no title in respect of what could not be transferred (Section 6 of the Transfer of Property Act) standing in the way of restoration. But if the transferor sued, the action was of a different kind, based on his title, and while he was restricted by the law of illegality from obtaining relief except where there was time for repentance, or he was not in pari delicto, or the object of the law would be defeated by refusing him relief, the guilty transferee could be left to seek such steps for refund as he might be advised to take. On the construction adopted of Article 97 in the Rangoon case, (1927) 14 AIR PC 99 , 101 IC 414 , 5 Rang 283 , 54 IA 145 (PC) he might, I consider, after being compelled to restore the property sue for the consideration.
57. The action as framed on the title of proprietors wholly fails when the sale deed of the proprietary share is upheld as valid and there comes into existence if the surrender is void as being an illegal device the special right of tenant conferred by Section 49 of the C.P Tenancy Act, and it seems to me that in so far as the Court is to give relief to the plaintiffs based on a tenancy brought into existence by the very law which it has been sought to defeat, the true position is that the relief arises out of a title brought into existence by the Legislature under a special Act.
58. The case in (1907) 1 Ch 300 (1907) 1 Ch 300 , 76 LJ Ch 187 , 96 LT 301 , 23 TLR 187 clearly settles that where an equitable relief is sought, then the plaintiff relying on an exception to the rule potior est conditio possidentis must refund the benefit he has received and in the same case the view is also clearly expressed, though the matter is not decided except hypothetically, that even in an action for legal as opposed to equitable relief the same rule should be enforced.
59. The reasoning at p. 311 is that in such a case the plaintiff relies on the illegality, for this claim would otherwise be defeated by the conveyance. It is however also possible to say as has indeed been said, though in a case where the merits were very different, that the defendant in this suit has been relying on a fraud and seeking to make a title to the lands through and by means of it: 35 Cal 551 (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 right cannot be seized or sold. In this case the plaintiffs escape the maxim in utr iusque delicto potior est conditio possidentis on the grounds that the provision sought to be evaded was made for their benefit, and that to apply the maxim would be to defeat an express provision of law.
60. They are not in pari delicto, (cf. the dictum of Mansfield L.C.J, quoted in 2 Ch 154 (1893) 2 Ch 154 , 62 LJ Ch 636 , 3 R 388 , 68 LT 709 , 42 WR 74). I consider that the fact that the claim as presented is a monstrous claim and that the sons are no doubt set up by their fathers as being of less relevance than that the object and intention of the law should be given full effect, and I therefore consider that this claim so far as the tenancy land is concerned should be regarded as a legal claim based on title not to be conditioned by terms, while as regards Section 65 of the Contract Act the appellant should be left to seek any relief he can get arising out of the rights thereby conferred. In 54 IC 794 (1920) 7 AIR Nag 157 , 54 IC 794 and in the Bench case quoted, 22 NLR 136, (1925) 12 AIR Nag 302 , 86 IC 515 , 22 NLR 136 refund was refused; it was given in AIR 1928 Nag 232, (1928) 15 AIR Nag 232 , 110 IC 351 but I base my view on somewhat different grounds than those on which it was refused in the first two cases above quoted. I would also remark that minors are not in control of Page: 357the family funds, that there are legal difficulties regarding the transfer of the tenancy lands which they received, and emphasize that their fathers had no right in Hindu law to make an attempted illegal transfer of their lands.
61. It remains to consider the question of limitation. I have referred to the ‘claim’ for the tenancy lands. The plaintiffs have claimed as proprietors, but their case as proprietors wholly fails as they cease to be proprietors, on the date when the sale held to be valid took place, and the illegal surrender (discovered on the same day to be void because the intention was to sell the whole village) does not affect their legal position. Their remedy which I consider should be unconditioned is to recover in the capacity of tenants by operation of law possession from the landlord. Where the proprietary right has been conveyed by an incompetent transfer, the limitation is governed by Article 144 of the Limitation Schedule: 35 Cal 551. (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 Section 14 of the 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 Rangoon 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.
62. The case in 10 Pat 851 (1931) 18 AIR PC 196 , 10 Pat 851 , 58 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 Article 120 of the Limitation Schedule and their Lordships said that Article 144 was only applicable to possessory suits by the owner of the property claimed against a person holding adversely to him without title.
63. In the present case, although there is a purported executed surrender in the name of the defendant, it cannot be said that title passed to the defendant, the more especially when an illegal surrender is wholly beyond the competence of a Hindu father purporting to act for his minor son. The question is whether in view of the provisions of Sections 84, 95 and 14 of the Trusts Act, the plaintiffs who have been excluded in point of fact can be said to have been excluded is point of law. The matter is by no means free from difficulty, but on the whole I regard the question of exclusion as a question of fact which will not be affected by the provision in the Trusts Act in virtue of which Section 14 of the Trusts Act should apply “so far as may be” to an obligation in the nature of a trust. If the Article applicable were Article 144 and S. 14 were to be applied it might be said that limitation could never run at all. Section 10 of the Limitation Act has, in course of judicial decisions which need not be enumerated, been held inapplicable to trusts which are not express and does not apply here. In my judgment, this is clear, case of exclusion from the holding, and as the land is tenancy land of which possession is claimed, and the plaintiffs have studiously refrained from claiming any equitable relief and thus inviting the discretion of the Court, I would hold that this Article should be applied. It is desirable to observe that the Bench decision of the Judicial Commissioner's Court was not decided under the present Tenancy Act, and that the term ‘ejectment’ used in the former Act then in force, is a very different term in reference to landlord and tenant than ‘dispossession’ or ‘exclusion.’ It was argued that Section 6 of the Limitation Act applied to this case, on the ground that S. 104(4) only applies to suits under the Tenancy Act and not to suits mentioned in Sch. 2 not brought under some section of the Tenancy Act. If this were so then Section 29 of the Limitation Act would itself preclude the application of S. 6. It thus seems clear that minority will not save limitation is this case. It is argued that the tenancy still subsists as the tenancy has not been abandoned, within the meaning of Section 35 of the Tenancy Act, but this argument seems to me merely an attempt to apply Section 35 of the Tenancy Act without regard to the law of limitation laid down by the Act itself. It is argued that the tenant right is not extinguished by limitation, Section 28 of the Limitation Act not being applicable, but that also is not the question here. It is argued that Article 1 of Sch. 2 does not apply to part of a holding, and that the defendant is a co-sharer in the holding and that the Article does not apply against co-sharers. It would however be wrong in this case to apply Page: 358the principles of co-ownership, and moreover the plaintiffs availing themselves of their position of members of a joint Hindu family, are seeking to recover and indeed would be entitled if they succeeded to be put in possession of the whole. The intention of the C.P Tenancy Act is evidently to secure freedom from the disputes regarding tenancy land, and set some short time limit to claims stirred up in villages, and to attain quick finality in the revenue records.
64. I would therefore restore the decision of the trial Court, allowing the appeal and dismissing the cross-objection with costs.
B.D/R.K
65. Order accordingly.