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1973 Supreme(Raj) 95

Rajasthan High Court
Beri, C.J. & Joshi, J.
Kusumchand - Appellant
Versus
Kanhaiyalal - Respondents
S.B. Civil Special Appeal No. 30 of 1963
Decided On : April 26, 1973

Advocates Appeared:
M.B.L. Bhargava and A. K. Bhandari, for Appellants; D.P. Gupta, for Respondents

Headnote:(a) Limitation Act, Sec. 5—Delay due to wrong advise by counsel—Wrong being bona fide and after consultation of a published book, delay was condoned.(b) Pleadings—Variation between pleading and proof—Claim founded on goodwill but in proof plaintiff basing his claim on Aadat—Suit dismissed.(c) Goodwill—Amount to be paid for subletting premises not goodwill.(d) Contract Act, Sec. 23—Against public policy—Plaintiff subletting premises to defendant on condition that he will pay to plaintiff a certain sum over and above rent—Contract unlawful being opposed to public policy.

Judgement Key Points

Key Points: - The case discusses that mistaken advice given by a legal practitioner may constitute sufficient cause for condoning delay under Sec. 5 of the Limitation Act, if bonafide and after consultation of sources. [17019730860004] (!) (!) - The court distinguishes goodwill from Aadat, concluding that the plaintiff’s claim was not for goodwill but for Aadat, and that the evidence did not support a goodwill claim. [17019730860005] (!) (!) (!) - The agreement purportedly involving a payment for goodwill (over standard rent) was found to be opposed to public policy and void under Contract Act Sec. 23, leading to dismissal of the goodwill claim. [17019730860007][17019730860008]

What is the effect of wrong legal advice on delay under Sec. 5 of the Limitation Act as discussed in this case?

What is the court’s view on the difference between goodwill and Aadat in the context of a subletting arrangement and its enforceability?

What are the grounds on which the suit for goodwill was dismissed or upheld, particularly in relation to public policy under Sec. 23 of the Contract Act?


BERI, C.J.—This is a defendants special appeal directed against the judgment of a learned Single Judge of this Court dated July 25, 1967, whereby he accepted the plain-tiffs case and granted a decree.

2. The brief facts which deserve to be recalled for the disposal of this appeal are that Gulabchand carried on business in the name and style of Gulabchand Malpani at Mumbadevi, Bombay, which locality is reputed as a business centre for jewellery. Gulabchand was a tenant of two rooms owned by Amba Laxmi Narain Gundeli on a monthly rent of Rs. 35/- apart from municipal tax of Rs. 6/5/- for every half year. In Smt. year 2001, Gulabchand says, he sublet these rooms to the defendants firm carrying business in the name of Chhaganlal Kantilal. It was agreed that besides the payment of rent to the landlord Chhaganlal would pay a sum of Rs. 700/- per annum to the plaintiff on account of goodwill. Up to the year 2004 and a part of Smt. year 2055 Chhaganlal kept his promise and paid the amount but thereafter the neglected to do so. The plaintiff, therefore, instituted a suit in the court of the Civil Judge, Jaipur District on May 28, 1953 against Kantilal, proprietor of Firm Chhaganlal Kantilal for the recovery of a sum of Rs. 2100/- by way of good-will and Rs. 543/15/- by way of rent and municipal tax and -/13/6 as notice expenses. The defendants admitted that they had obtained two rooms from the plaintiff on the monthly rent stated by him in Smt. year 2001 but added that no agreement had been reached with regard to the payment of any good-will money. It was also urged that the landlord stopped charging rent from 15-7.1951 and further that a suit in regard to that property did not lie in Rajasthan courts. The trial court decreed the plaintiffs suit on 23-5-1956. An appeal was taken in the Court of the District Judge, Jaipur District, who found that the Civil Judge had no jurisdiction account of S. 28 of the Bombay Rent Control Act, 1947. The matter came to this Court and it was held that the Bombay Rent Control Act, 1947 had a limited applicability and could not oust the jurisdiction of the Rajasthan Courts. The case was remanded to the appellate court. The District Judge, Jaipur District heard the parties and dismissed the plaintiffs suit on August 29, 1961 for the payment of Rs. 2,100/-on account of goodwill but passed a decree for Rs. 544/12/6. There is no dispute regarding the decree passed by the learned District Judge for the rent in the sum of Rs. 544/12/6. In the appeal, which was preferred to this Court by the plaintiffs legal representatives, because the plaintiff had died by then, against the rejection of claim in the sum of Rs. 2,100/-, the learned Single Judge held that because the defendants had not produced their books of account and because the concept of goodwill included the premises the plaintiffs were entitled to the decree claimed by them. He, however, granted leave to the defendant for appeal. Dissatisfied, the defendants have preferred this appeal.

3. Mr. D.P. Gupta, learned counsel for the respondents, raised a preliminary objection that the appeal is barred by time having been presented four days later than the time allowed for such an appeal. He further urged that if the learned counsel had cared to consult correct and authoritative sources, such as the Rajasthan Law Times, he would have been able to ascertain what was the precise period of limitation. Having failed to exercise due care and caution the counsels action cannot in law be considered as bonafide entitling the defendant the condonation of delay. He placed reliance on Kasim Khan vs. Chand Ratan(l) and Municipal Board, Lucknow vs. Kali Krishna Narain(2).

4. Mr. Bhargava urged that originally the period of limitation for special appeals was 60 days and it was altered to 30 days on June 17, 1965. Learned counsel appearing for the defendant was under an impression that it was two months. When he received the copy of the judgment on August 12, 1967 he informed














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