1950 Supreme(Pat) 178

PATNA HIGH COURT
Jha and Reuben JJ.
Jharia Coal-field Electric Supply Co.Ltd.
Versus
Kaluram Agarwala
Letter Patent Appeal No. 13 of 1949 ;
Decided On : DECEMBER 21, 1950

Money paid under an illegal agreement which has been carried into effect cannot be recovered back, if parties are in pari delicto and they had knowledge of the illegality of the agreement before payment.

Headnote:

ELECTRICITY - Supply of energy for battery charging - Control Order - Interpretation - Payment of charges under protest - Recovery - Legality of agreement.

Fact of the Case:

The plaintiff, a businessman, ran a flour mill and a business for charging batteries on a commercial basis. The defendant, a limited liability company, supplied electricity in the Jharia Coal-fields and other places under a license granted by the Government of Bihar in 1941, under the Electricity Act, 1910. The license laid down the rates at which electrical energy could be supplied by the Company to consumers for "domestic" purposes and for "power" purposes. In January 1943, the plaintiff filed three requisitions for the supply of electrical energy, (1) for domestic purposes (2) for a flour mill and (a) for battery charging, and though no supply for battery charging was sanctioned by the Provincial Authority, the Company provided the plaintiff with electricity for the three different purposes regulated by three different meters, for which he had to pay at three different rates. The Electrical Engineer and Electric Inspector to the Government of Bihar came to know that energy was being supplied to the plaintiff for battery charging, and he directed that the supply for battery charging be stopped. Interpreting the view of Mr. Sims to be that it was open to the Company to permit consumers to use for commercial purposes energy supplied for "domestic" purposes within the prescribed limits the Company published a general notification on 24-5-1943, in a local newspaper, stating inter alia: "consumers are hereby informed that on and from 1-7-1943, the following rates will be charged for energy consumed: (1) for battery charging, radios and other unessential purposes at annas seven per unit." On 29-5-1943, the Company also served a notice on the plaintiff that the charge for current used for battery charging would be increased from 3 annas to 7 annas per unit. The plaintiff thereupon wrote to the Company a protest letter objecting to the increase, but, in spite of the protest, he used the energy for battery charging and paid at the increased rate with the surcharges, which the Company purported to charge under Clause 10, Electricity Control Order. The present suit was brought, as already stated for recovery of Rs 646, as set out in the different schedules to the plaint. The case of the plaintiff is that he is entitled to claim the refund with interest inasmuch as the payments were made under protest.

Finding of the Court:

The Court held that the supply of energy for battery charging properly fell, and could only fall, under the heading power and was not domestic supply at all. To the knowledge of both parties and with the consent of the Company it continued to be drawn by the plaintiff in his capacity of the owner of an industrial undertaking from the special power plug and measured by the special meter supplied by the Company for that specific purpose. The Court further held that the agreement between the plaintiff and the defendant was illegal and void as it was entered into in contravention of the provisions of Clause 3 of the Control Order. The Court also held that the money paid by the plaintiff, though under protest, was irrecoverable with the aid of the Court as the parties were in pari delicto and the illegal purpose of the agreement had been carried out.

Issues: 1. Whether the supply of energy for battery charging fell under the heading "domestic" or "power" purposes as per the license granted to the defendant company? 2. Whether the agreement between the plaintiff and the defendant company was legal and valid? 3. Whether the money paid by the plaintiff under protest was recoverable with the aid of the Court?

Ratio Decidendi: 1. The Court held that the supply of energy for battery charging properly fell, and could only fall, under the heading power and was not domestic supply at all. To the knowledge of both parties and with the consent of the Company it continued to be drawn by the plaintiff in his capacity of the owner of an industrial undertaking from the special power plug and measured by the special meter supplied by the Company for that specific purpose. 2. The Court held that the agreement between the plaintiff and the defendant was illegal and void as it was entered into in contravention of the provisions of Clause 3 of the Control Order. The Court relied on the well-established principle that persons who have entered into an agreement forbidden by law or condemned by public policy are not entitled to seek the aid of a Court of law for any relief if they are in pari delicto and the illegal purpose of the agreement has been carried into effect. 3. The Court held that the money paid by the plaintiff, though under protest, was irrecoverable with the aid of the Court as the parties were in pari delicto and the illegal purpose of the agreement had been carried out.

Final Decision: The appeal was allowed and the decree was modified by disallowing the claim on account of the price received for energy supplied for battery charging and the surcharge thereon.