1955 Supreme(Mad) 159
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Mr. P.V. Rajamannar, Chief Justice and Mr. Justice Somasundaram
Lakshman Prasad and Sons
Versus
A. Achuthan Nair
L.P. Appeal No. 218 of 1952.
Decided On : 02 May 1955
Advocates:
P.V. Subrahmanyam for Appellant.
K.P. Raman Menon for Respondent.
Applicability of provisions of Section 72 of the Act.
Headnote:Contract Act, 1872-Section 72-Applicablity-Provisions of the section not applicable in the case of agreement under honest belief by both parties regarding controlled price of chattel.
Rajamannar, C.J.-The facts of this case are simple. The appellants are a firm of dealers in automobiles carrying on business in Madras. The Respondent purchased from them a Hindusthan-10 motor car, fixed head type, for a sum of Rs. 9,350 (vide Exhibit B-3), on 22nd January, 1948. That was at a time when the Madras Civil Motor Cars Control Order, 1947, was in force, and no type of car could be sold for a price exceeding that fixed by the Government under that Order. On the evidence, it is clear that at the time when the contract was entered into, both the plaintiff and the defendants thought that Rs. 9,350 was the price fixed under the order for the type of Hindusthan-10 purchased by the plaintiff. This was evidently because of the impression created by a circular submitted to the Provincial Motor Transport Controller by Messrs. Hindusthan Motors, Ltd., fixing the price of Hindus-tan-10 at Rs. 9,350 which price was apparently approved and confirmed by the Provincial Motor Transport Controller. In a letter, dated 2nd December, 1947, the Provincial Motor Transport Controller wrote to the Hindusthan Motors, Limited, Calcutta, to say that he had informed the Appellant firm that the prices contained in, circulars Nos. 60 and 61 were the ruling prices and that they will render themselves liable for prosecution if they exceeded the price indicated in the said circulars Nos. 60 and 61. Exhibit B-4 is the circular No. 61, which specifies the maximum retail price of Rs. 9,350 for the fixed head type of Hindusthan-10. The Respondent paid the said price and obtained delivery of the car. It was subsequently discovered that the Provincial Transport Controller had no authority to fix the price and that it was only the Provincial Government that could fix the maximum retail price under the Control Order. From the relevant notifications, it appears that during the period of the contract, the maximum price that was fixed by the Government was Rs. 8,195. The respondent thereupon filed a suit in the City Civil Court, O.S. No. 635 of 1948 for the recovery of a sum of Rs. 1,155 being the difference between the price which he paid for the car, namely Rs. 9,350 and the maximum price fixed by the Government, namely, Rs. 8,195 together with interest on the said sum. In the plaint, it was alleged that the defendants had collected illegally and on false representations the said sum of Rs. 1,155 more than what was lawfully payable. The defendants denied that they made any false representation. They stated that the price charged by them, namely, Rs. 9,350 was the price in the circular letter above referred to, and that even assuming that there was any misrepresentation, the plaintiff not having rescinded the contract and having kept the car, making rescission impossible, he was not entitled to claim refund of Rs. 1,155 as damages or otherwise. The learned City Civil Judge held that the defendants had collected Rs. 1,155 over and above the control price from the plaintiff by misrepresentation and that the plaintiff’s suit was one for refund of the excess amount collected and not for avoiding the contract and that the plaintiff was entitled to the relief sought. He decreed the suit as prayed for. The defendants filed an appeal to this Court against the decree and judgment of the learned City Civil Judge (C.C.C.A. No. 10 of 1950). Basheer Ahmed Sayeed, J., dismissed the appeal.1 The learned Judge held that the authorised price for which the vehicle could have’ been sold was only Rs. 8,195. He, however, found that the appellants were not guilty of any fraud or mirepresentation and that both parties were under a bona fide impression and belief that the price at which the car could be sold was Rs. 9,350 and therefore the excess money must be deemed to have been paid under a mistake-of fact. The learned Judge was of opinion that the case came directly under section 72 of the Indian Contract Act. The reasoning of the learned Judge was as follows:-
"Money having been
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