An agreement for withdrawal of a tender is not necessarily opposed to public policy and may be enforceable under the Contract Act.

Rajamannar, J.

1. The only question that falls for decision in this second appeal is whether the agreement on which the suit has been brought by the respondent is opposed to public policy and therefore unenforceable. The facts in so far as they are relevant for disposal of this issue are these: The plaintiff and the defendant are owners of motor buses. Both the plaintiff and the defendant made tenders to the postal authorities to secure the licence for carrying mails between Ellore and Chintalapudi. The defendant who desired to secure the licence himself entered into the agreement now in suit, Ex. p-1. Under the agreement the defendant was to secure the licence and the plaintiff, was to withdraw his tender. In consideration of the withdrawal by the plaintiff the defendant had to pay to the plaintiff, Rs. 15 per month for a certain period and Rs. 20 per month in a certain contingency. It is not necessary to go into more detail as to the other terms, as they are not material for the second appeal. The defendant after the withdrawal by the plaintiff of his tender obtained a licence from the postal authorities but failed to pay the amount according to the agreement. The plaintiff was, therefore, compelled to file the suit out of which this second appeal has arisen.

2. There were two main defences, one on the ground that the contract was unenforceable being opposed to public policy and the other, that the contract was not supported by consideration. The learned District Munsif of Ellore dismissed the suit holding that the contract was opposed to public policy. He, however, held that the agreement was supported by consideration, the consideration being the withdrawal by the plaintiff of the tender submitted by him to the postal authorities. The learned Subordinate Judge on appeal disagreed with the finding of the learned District Munsif that the contract was opposed to public policy and apparently, as the plea of absence of consideration was not pressed before him, he did not consider it and proceeded to grant a decree in favour of the plaintiff as prayed for. In the second appeal the learned advocate for the appellant desired to raise the question of consideration, but I do not think that he should be allowed to do so. Not only was this point evidently not pressed before the learned Subordinate Judge in appeal but the point was not even taken in the memorandum of grounds of second appeal. The only question, therefore, is whether the agreement is opposed to public policy or is otherwise void and unenforceable. The appellants counsel sought to bring the agreement within the mischief of Section 27, Contract Act, which is in these terms:

Every agreement by which anyone is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void.

3. The other section which might possibly be pressed into service is Section 23 of the Act which inter alia declares The consideration or object of an agreement is lawful, unless... the Court regards it as immoral, or opposed to public policy.

4. He strongly relied on the decision of Wallis J, sitting on the original side reported in Thangavelu Chetti v. Mukunda Naidu A.I.R. 1914 Mad. 673. In that case the agreement was between two landing, contractors. Their profession was to supply labour for unloading cargo from steamers. The agreement in that case provided that-the plaintiff should refrain from supplying coolies to one Chockalinga Naicker so long. as they carried on business of landing agents for coal steamers at Madras and in consideration of the plaintiff so abstaining from-supplying coolies, the defendant should pay to the plaintiff a sum of Rs. 50 for every coal steamer for which they become landing contractors. The learned Judge held that the agreement was void under Section 27, Contract Act, as being in restraint of the exercise of a lawful possession. At page 111 he says This, it seems to me, is clearly an agreement by which the plaintiff is restrained