Back
PATNA HIGH COURT
Bhuvaneshwar Prasad, J.
Raj Kishore Sahay
Versus
Binod Kumar
Appeal from Original Decree No. 16 of 1977 ;
Decided On : FEBRUARY 29, 1988
FOREIGN EXCHANGE REGULATION ACT, 1947 - SECTION 4, 5, 8, 21 - CONTRACT ACT, 1872 - SECTION 65 - LIMITATION ACT, 1963 - ARTICLE 47, 18 - VOID CONTRACT - RESTRICTION ON PAYMENTS - IMPLIED TERM - ACKNOWLEDGMENT - LIMITATION - MENTAL PAIN AND AGONY.
Fact of the Case:
Plaintiff paid money to Defendant 1 for the purchase of an American car, "IMPALA". Defendant 1 went to the United States and purchased the car. Plaintiff paid the remaining amount and freight charges. The car was brought to India but was auctioned sold by a State Trading Corporation. Plaintiff sued Defendant 1 for the amount paid along with damages for mental pain and agony.
Finding of the Court:
1. The payments made by the Plaintiff to Defendant 1 were accepted as such. 2. The contract between the parties was not void ab initio but was contingent on obtaining exemption from the Reserve Bank of India. 3. Plaintiff is entitled to get back the money advanced by him to Defendant 1 along with interest under Section 65 of the Contract Act. 4. The suit is not barred by limitation as the period of limitation starts from the date of acknowledgment of the payment (Ext.1/C) which is within three years of the date of the suit. 5. Plaintiff is entitled to a modest sum of Rs. 5,000/- as claimed by him on account of mental pain and agony suffered by him.
Issues: 1. Whether the amount was at all paid by the Plaintiff to the Defendants and whether the same is refundable? 2. Is the suit barred by limitation?
Ratio Decidendi: 1. Section 5 of the Foreign Exchange Regulation Act, 1947 does not completely prohibit the making of payments as per the provisions of the Act. The restrictions imposed are subject to any general or special exemption which may be granted conditionally or unconditionally by the Reserve Bank of India. 2. Section 21 of the Act engrafts an implied term upon the contract of the parties that anything agreed to be done by any term of that contract, which cannot be done except with the permission of the Reserve Bank, shall not be done, unless permission is granted. 3. Section 65 of the Contract Act applies to a case where an agreement is discovered to be void subsequently or when a contract becomes void, and not to a case in which the contract between the parties was void ab initio. 4. Article 47 of the Limitation Act applies to the facts of the present case as it is a case when the contract between the parties was void ab initio. 5. An acknowledgment in writing under Section 18 of the Limitation Act can be used to start a fresh period of limitation.
Final Decision: Appeal allowed. Judgment and decree of the lower court set aside. Suit decreed with costs. Plaintiff entitled to pendente lite and future interest till realization @ 9% per annum.
1. This appeal, by the sole original plaintiff, is directed against the judgment dated 6-1-1977 and the decree signed on 19-1-1977 passed in Money Suit No. 107/61 of 1973/76 Shri Hirday Narain. IInd Additional Subordinate Judge. Ranchi dismissing the suit with cost. On the death of the sole appellant during the pendency of this appeal his heirs have since been substituted.
2. The case of the original plaintiff in short is that he is the Bahnoi of the defendant 2 and Phupha of defendant 1. The relationship between the parties was very cordial and the plaintiff had absolute faith on the defendants. In the month of June July, 1969 defendant 1 who happens to be respondent 1 in the present appeal went to United States of America for higher studies on a scholarship. The plaintiff wanted to purchase an American car "IMPALA. For this purpose in August, 1969 he wrote a letter to defendant 1 enquiring from him about the rules regarding the purchase of such a vehicle from the United States of America. In reply defendant 1 assured the plaintiff that there would be no difficulty in the matter but he sent an incomplete copy of the rules (Ext.1) relating to the purchase and import of an American Car by an Indian Citizen. The plaintiff believed the representation of defendant 1 as true and asked him to proceed in the matter. In his letter of August, 1969 the plaintiff has enquired from defendant 1 whether it would be possible for him to bring the car to India for the use of the plaintiff after obtaining the necessary import licence and to get its ownership transferred to the plaintiff.
3. At the instance of defendant 1 plaintiff paid a sum of Rs. 7,500.00 equivalent to 1000 Dollars to defendant 2 for meeting the expenses over the sending of defendant No. 1s wife and son to America, on the understanding that the said amount would be adjusted towards the purchase price of the car. The plaintiff had another relation namely Dr. Shrivastava in United States of America. The plaintiff suggested to defendant 1 that in case of any difficulty in purchasing and bringing of the car to India he should handover this amount of 1000 dollars to Dr. Shrivastava for the same purpose. Defendant 1, however informed the plaintiff that since Dr. Shrivastava had already acquired American Citizenship it was not possible for him to leave behind the car in India. Accordingly the plaintiff got sum of 2000 dollars equivalent to Rs.15,000.00 paid to defendant 1 through Dr. Shrivastava for the purpose of enabling him to purchase the required car. By his letter dated 6-4-1971 (Ext.1/c) defendant 1 acknowledged the receipt of 1000 dollars and 2000 dollars mentioned above. Defendant 1 had represented that the car in question will cost 4275 dollars and 35 cents. Accordingly. through Ext.1/C defendant 1 asked the plaintiff to pay a sum of Rupees 9565/- being the rupee equivalent of the remaining 1275 dollars and 35 cents to defendant 2 which the plaintiff did. Whenever the plaintiff asked defendant 1 to speed up the matter defendant 1 assured him to remain absolutely carefree and need not worry in the least for the same.
4. Thereafter defendant 1 became irregular in correspondence and asked the plaintiff to obtain the necessary import licence from Delhi. Plaintiff obtained the necessary licence and informed the defendant 1 through a telegram. Defendant 1 came to India on 8-10-1972 and when approached by the plaintiff informed him that Rs.12,000.00 being the freight charges may be paid to him. He further demanded a sum of Rs. 1000.00 through his uncle on the same day. Accordingly the plaintiff paid Rs.13,000.00 as demanded by defendant 1. Thus a total sum of Rs. 45,065/- was paid by the plaintiff to defendant 1 towards the price of the IMPALA car including the freight charges. Plaintiff subsequently learned that the IMPALA car was brought to India but finally defendant 1 sent a telegram to the plaintiff for Rs. 75,000.00 for the custom clearance of the car. Ultimately th
AI
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
