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1994 Supreme(Mad) 464
High Court of Judicature at Madras
THE HONOURABLE MR.JUSTICE GOVARDHAN
S. Suresh
Versus
Dr. M.S. Gopalakrishnan & Others
C.S. No. 222 of 1994, Original Application No. 176 of 1994 & Application Nos. 1194 & 2278 of 1994
Decided On :Decided on : 24-06-1994
For the Applicant:R. Thiagarajan, Advocate.
For the Respondent:M.K. Kabir, Ms. Anna Mathew, Ravi Raja, Advocates.
An agreement to obtain favorable orders from authorities by exercising influence or using influence is void as being opposed to public policy.
Headnote:
CONTRACT - PUBLIC POLICY - AGREEMENT TO OBTAIN FAVOURABLE ORDERS FROM AUTHORITIES - VOID - INJUNCTION - VACATED.
Fact of the Case:
Plaintiff, a real estate consultant, filed a suit against defendants for recovery of Rs. 12 lakhs for services rendered in evicting a tenant, obtaining NOCs, and processing applications with various authorities. The defendants contended that the agreement was void as it was opposed to public policy and that the plaintiff had not established a valid ground for the claim.
Finding of the Court:
The court held that the agreement between the plaintiff and the defendants was void as it was opposed to public policy. The court found that the plaintiff had not established a prima facie case in his favor and that the balance of convenience was not in his favor. The court also found that the relative hardship would be much more to the defendants if the injunction was made absolute.
Issues: 1. Whether the agreement between the plaintiff and the defendants was void as it was opposed to public policy? 2. Whether the plaintiff had established a prima facie case in his favor? 3. Whether the balance of convenience was in favor of the plaintiff? 4. Whether the relative hardship would be much more to the defendants if the injunction was made absolute?
Ratio Decidendi: The court held that the agreement between the plaintiff and the defendants was void as it was opposed to public policy. The court found that the plaintiff had not established a prima facie case in his favor and that the balance of convenience was not in his favor. The court also found that the relative hardship would be much more to the defendants if the injunction was made absolute. The court relied on Section 23 of the Contract Act, which states that an agreement is void if its consideration or object is unlawful.
Final Decision: The court dismissed the plaintiff's suit and vacated the interim injunction that had been granted.
1. The applicant in his affidavit contends briefly as follows: The applicant-plaintiff has filed the suit for recovery of Rs. 12 lakhs against respondents 1 to 3 jointly and severally. Against the respondents 1 and 2, the claim is for Rs. 4 lakhs and against the third respondent, it is Rs. 8 lakhs. The applicant is a Real Estate Consultant. The first respondent is the owner of the suit schedule property bearing Door No. 107, Harrington Road, Chetput. The first respondent was looking out for a Real Estate Consultant for vacating his tenant viz., Civil Supplies Limited a wing of the Civil Supplies Department and was also contemplating to promote the property with prospective builders-cum-promoters. The first respondent being a permanent resident of U.S.A., the second respondent was acting as Power of Attorney of the first respondent and he had negotiated with the applicant for evicting the tenant and for promoting a multi-storeyed complex in the property. The applicant with his efforts had evicted the tenant and had incurred substantial expenses for the same. The third respondent who is a reputed builder in the City, was recommended by the applicant for the joint venture of constructing a multi-storeyed complex in the suit property and an agreement was signed between the respondents 1 and 2 and the third respondent on 5- 5-1993 for the said purpose. The builder agreed to convey 50% of the constructed area in lieu of sale consideration payable to the first respondents property. The respondents 1 and 2 gave necessary authorisation to the applicant to appear on their behalf and process the application for N.O.C. with Appropriate Authorities, Income-tax Department and Reserve Bank of India for obtaining permission from them on behalf of the first respondent as required under Section 31(1) of the Foreign Exchange Regulation Act. The applicant made several trips to Bombay engaging the services of competent auditors and lawyers at Bombay and also at Madras with his own funds and obtained certificate of clearance from the Reserve Bank of India and also the permission as required by the Appropriate Authorities. After obtaining the N.O.C. and the permission from the Reserve Bank of India, the respondents 1 and 2 have entrusted the job of obtaining clearance from the Urban Land Ceiling Authorities and accordingly the applicant represented them in Urban Land Ceiling Proceedings by engaging necessary experts in the field and obtained all the clearances from the Urban Land Ceiling Authorities also. The respondents 1 and 2, in consideration of the services rendered by the applicant, agreed to pay a sum of Rs. 4 lakhs and the third respondent agreed to pay Rs. 9 lakhs for the efforts and services in organising the project and concluding the transaction in a manner they expected. A sum of Rupees One lakh was paid and the balance is yet to be paid. The respondents 1 to 3 have not kept up their promise and did not pay the amount due to the applicant in spite of repeated demands. It appears that the fourth respondent is trying to knock off monies from the respondents 1 to 3 without reference to the rights of the applicant. If he is allowed to do so, the applicant will suffer grave prejudice and hardship. Respondents 1 and 2 have no other properties excepting the suit property. If they are allowed to alienate their share without settling the amount due to the applicant, the applicant will have no other tangible property to proceed against them for realising the decree. Hence the application.
2. When this application was filed along With the suit, after hearing the learned counsel appearing for the applicant, interim injunction was granted and notice returnable by 23-3-1994 was also ordered.
3. In a similar application filed by the application for ordering attachment of the schedule-mentioned property, notice alone was ordered. The third respondent has filed an application in Application No. 2278/1994 for vacating the interim injunction gra
