Agreement held opposed to public policy.

These two appeals arise out of two actions instituted by the villagers of Somasila and Kammavaripalli in Nellore district for recovery of Rs. 120 and Rs. 240 respectively, from the first defendant in both the actions. There is a tank by name Mallacheruvu which is situate at the junction of three villages, Samasila, Kambhempaud and Kammavaripalli. The right of catching fish in the tank for the year 1944 was leased out by revenue auction. At that auction the first defendant was the sole bidder for Rs. 11-4-0. His bid was accepted and he became the purchaser of the right. He appears to have granted a lease of this right to the third defendant for Rs. 600. There is evidence to show that in that year the fishery crop, if I may use the expression, was a good one, and was probably worth considerably more that Rs. 600 possibly Rs. 800 or Rs. 900. The case of the plaintiffs was that there was an arrangement amongst the villagers as a result of which there was an agreement not to bid against each other and to put up the first defendant as the sole bidder. His bid was really to be for and on behalf of all the villagers, the villagers to share the right in the proportion of 1/5th for Somasila, 2/5th each for the other two villages. The suit was defended by the first defendant who denied that he bid for the villagers under an agreement as stated in the plaint. He claimed that he was a purchaser in his own and individual right. The trial Court held that the agreement was made out, although it found that the custom pleaded by an agreement on those lands for all preceding years was not established. It decreed-the suit in favour of the plaintiffs. I may refer to a counter suit filed by the first defendant for recovery of Rs. 500 alleging that the villagers trespassed upon his rights illegally and forcibly and carried away the fish and thereby caused damage to him to the extent of Rs. 500. The learned Munsif found that the damage was not established, and he dismissed that suit. There were three appeals to the District Court. The learned Judge on appeal took a new point, namely, whether the agreements pleaded were not opposed to public policy and illegal. He was of opinion that a “knock-out” agreement like this amounted to stifling fair competition in the bid of property belonging to the State and was illegal as being opposed to public policy. In that view he dismissed all the appeals. The plaintiffs in the two suits filed by the villagers have filed these two second appeals. The first defendant whose appeal was dismissed has not filed any second appeal of his own.

In the appeals it is contended by Mr. Umamaheswaram that an agreement not to bid against each other is not illegal under the common law; nor is the auction sale invalidated because of such an agreement. He relies on the passage in Halsbury’s Laws of England, Volume I, page 708 and the two decisions of the English Courts in Rawlings v. General Trading Company1 and Cohen v. Roche2. He points out that the Judicial Committee have recognised a similar doctrine in Mahomed Meera Ravuthar v. Savvasi Vijaya Raghunadha Gopalar3 and all the Courts in India have practically taken the same view. He refers me to the decision in Mohamed Isack v. Sreeramulu4, where the learned Judge following Hari Balakrishna Jogikar v. Maro Moreshwar Joglekar5 held that such an agreement was not invalid.

Mr. Seshachalapathi the learned advocate for the respondent draws my attention to the dissenting judgment of Scrutton, L.J., in Rawlings v. General Trading Company1 and pointedly refers to the observations of the House of Lords which are found in the well-known case in Moghul Steamship Company v. McGregor Cow and Company6. He argued that this is a case where there was an implied misrepresentation by the villagers who practised deception upon the revenue official and caused detriment to the public exchequer by an unfair and illegal agreement amongst the villagers and created, as it were, a monopoly right and pr