A party who is not in pari delicto with the other party to an illegal contract may recover the value of the goods or services provided under the contract under Section 65 of the Indian Contract Act.

( 1 ) THIS Second Appeal has been referred to Division Bench by our learned brother Bhimasankaram, J. , as he felt that an important question of law is involved in it.

( 2 ) THE 1st respondent, who is the plaintiff, laid an action in the Court of the District Munsif, Gudivada, for recovery of 106 hags of paddy or their value Rs. 1,493. The claim arose under the following circumstances. The plaintiff sold some paddy, the subject-matter of the suit, to the 1st defendant at the price agreed between the parties. Defendants 2 and 3, who are not respondents here, are stated to have delivered the bags to the 1st defendant. As the 1st defendant failed to pay the price, the plaintiff was obliged to file the suit.

( 3 ) THE suit was resisted, inter alia, on the defence that at the time of the transaction, there were Ordinances in force known as Madras Food-grains Procurement Order, 1947 and Madras Food-grains (Intensive) Procurement Order 1948, which permitted sale of foodgrains only to persons holding a licence and that, as the 1st defendant was not a licensed dealer the contract was unenforceable against him and consequently the plaintiff could not recover the money claimed by him. By way of rejoinder, the plaintiff asserted that he was not aware that the 1st defendant had no licence to purchase paddy, that in fact the latter represented to him that he had a licence and that he acted upon his representations.

( 4 ) THE trial Court found that the 1st defendant had no licence at the time the plaintiff sold the paddy to him and that the latter was unaware of his disability. On this finding, the trial Court thought that the plaintiff could recover the value of the paddy. This was affirmed on appeal by the Subordinate Judge. The aggrieved 1st defendant has carried this matter in second appeal to this Court.

( 5 ) WE have first to consider the effect of the relevant Ordinances on the transaction in question. The orders referred to above were promulgated by the Government of Madras in exercise of the powers conferred upon them by the Essential Supplies (Temporary Powers) Act (Act XXIV of 1946) (hereinafter referred to as the Act ). Under Clause 8 of the Madras Foodgrains Procurement Order, a sale by a landholder of any notified foodgrains (of which paddy is one), or entering into a contract for the sale by him of any notified foodgrain with any person other than the Grain Purchase Officer or a person authorised by him under Sub-clause (2) of Clause 3 of the said Order was expressly prohibited. There was a similar prohibition imposed by Clause 6 of the said order on persons other than those authorised by the District Collector in that behalf from purchasing any quantity of foodgrain from any person referred to in Clause 3. Contra-vention of these Orders is made punishable under Section 7 (2) of the Act. Section 7 (2) is in these words :"7. (2) If any person contravenes any order under Section 3 relating to foodstuffs : (a) he shall be punishable with imprisonment for a term which may extend to three years and shall also be liable to fine, unless for reasons to be recorded the Court is of opinion that a sentence of fine only will meet the ends of justice; and (b) any property in respect of which the order has been contravened or such part thereof as to the Court may seem fit shall be forfeited to the Government, unless for reasons to be recorded the Court is of opinion that it is not necessary to direct forfeiture in respect of the whole or us the case may be, any part of the property. "

( 6 ) TO like effect is Clause 9 of the Madras Foodgrains Procurement Order, 1947.

( 7 ) THE Ordinances were issued under Section 3 read with Section 4 of the Act and, therefore, they attract the penal consequences contemplated by Section 7, when those orders are infringed. These orders prohibit either the sale of foodgrains or contracts for the sale thereof except in the manner specified therein and any transaction entered into in derogation of th