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1951 Supreme(Raj) 203

Rajasthan High Court
Wanchoo C.J. & Bapna, J.
Himmat Ram - Appellant
Versus
Lalchand - Respondents
D.B. Civil R. First Appeal No. 70 of 1951
Decided On : November 18, 1951

Advocates Appeared:
Indernath, for Appellant; Hukamchand, for Respondent

Headnote:Defence of India Rules (former Marwar State), Rule 90(c)—Notification dated 3rd June 1943.Contract Act, sec, 65—Does not apply where parties knew contract to be illegal.

       The defendants executed a document in favour of the plaintiffs, reading, "This document is executed by L. and S. in favour of H. and D. We have agreed to take four bars of silver from you which we will take from you on Baisakh Sudi 15th and give you at the rate of Rs. 131/- (for 100 tolas), and we will give back to you four bars on Jeth Badi 5th Svt. 2002, and for the Badla we will give you every month at the rate of Rs. 200/- per month, and we will give you the bars on Jeth Badi 5th Svt. 2002 at the same rate at which we are taking from you, and we will take back from you the same amount of money as we will give you."

       Held that bereft of superfluities, the agreement could be divided into two parts. The first was a sale of four bars by the plaintiffs to the defendants and the second was an agreement by the plaintiffs to purchase four bars of silver on Jeth Badi 5th Svt. 2002 and as the second part of the contract, for the purchase of bullion by the plaintiffs from the defendants, was to be performed in Marwar at a date later than 12 days from the date of the contract it was clearly hit by the Notification of 3rd June 1943. (Paras 4, 7 and 8)

       Sec. 65 has no application where the parties are presumed to have known at the time of its inception, that the contract was void or illegal.

Bapna, J. —This is a first appeal by the plaintiff in a suit for recovery of damages for breach of contract.

2. The appellant sued the respondent in the court of Thikana Auwa on 19th July, 1946, on the allegations that, under a contract dated Baisakh Sudi 12 St. 2001, the defendant had taken four bars of silver Nos. 476, 462, 40, and 3023 weighing in all 11610 9/16 tolas on Baisakh Sudi 15th St. 2001, and deposited by way of security Rs. 15209/14/6 the price thereof at the rate of Rs. 131/- per hundred tolas, and it was stipulated between the parties that the defendant would redeliver the aforesaid four bars of silver on Jeth Badi 5th St. 2002, and in the meantime the defendant would pay to the plaintiff Rs. 200/- per month for the use of the silver bars. It was alleged that the defendant had paid Rs. 1200/- for the use of the bars for six months, but had stopped further payment and did not return the bars as stipulated. The plaintiff claimed Rs. 1600/- for the use of the bars for the period in excess of six months, and also Rs. 8000/- by way of damages at the rate of Rs. 69/- per hundred tolas for non-return of the bars on the due date.

3. The defendant pleaded inter alia that he had made a purchase of four bars from the plaintiff at a price of Rs. 131/- per hundred tolas, and the payment of Rs. 15,209/14/6 to the plaintiff was not by way of security, but as price of the bars and that the payment of Rs. 200/- per month was stipulated in connection with the dealing in option, and the option lay with the defendant to sell four bars of silver to the plaintiff at Rs. 131/-at any time up to Jeth Badi 5th St. 2002; but owing to various factors the defendant did not think it necessary to exercise that option. It was alleged that this purchase of option was mentioned in a document which the defendant had executed on receiving the four bars of silver. A further plea was raised that the contract relied upon by the plaintiff amounted to an agreement to sell bullion at a date beyond 12 days from the date of the contract, and was illegal according to Rule 90C of the Defence of India Rules as applied to Jodhpur State. The defendant claimed refund of Rs. 1200/- paid by him in pursuance of the illegal contract. The defendant paid court fees on the set-off claimed by him.

4. Owing to various administrative changes the case came for decision before the Civil Judge of Pali. As many as eleven issues were raised in the case; but it is unnecessary to consider all of them as the contract was held to be illegal in view of Notification of the Government of Jodhpur dated 3rd June, 1943, enacting Rule 90 C of the Defence of India Rules, as applied to Jodhpur. The claim for the plaintiff was dismissed; but he. was held liable to repay Rs. 1200/- in view of the interpretation put by that Court on sec. 65 of the Contract Act. The plaintiff has filed this appeal not only against the dismissal of his suit, but also as against the decree passed in favour of the defendant respondent for repayment of Rs. 1,200/-.

5. Learned counsel urged that the agreement dated Baisakh Sudi 12th St. 2001, which forms the basis"of the suit, did not fall within the mischief sought to be prevented by rule 90 C of the Defence of India Rules as applied to Jodhpur, and that the lower court had erred in coming to a contrary conclusion. As the case hinges upon the interpretation of the contract dated Baisakh Sudi 12th St. 2001, it is necessary to examine it closely. That document is Ex. P-l, and the relevant portion translated in simple English is as follows :—

"This document is executed by Lalchand Siremal in favour of Maharaj Himmat Ram Daulatram. We have agreed to take four bars of silver from you which we will take from you on Baisakh Sudi 15th, and will give you at the rate of Rs. 131/- (for 100 tolas), and we will give back to you four bars on Jeth Badi 5th S. 2002, and for the Badla we will give you every month at the rate of Rs. 200/- per month, and we will give you the bars on Je













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