High Court Of Madhya Pradesh
P. V. Dixit, A. H. Khan and T. C. Shrivastava, JJ.
GULABCHAND GAMBHIRMAL - Appellant
Versus
KUDILAL GOVINDRAM - Respondents
Civil Special Appeal 5 Of 1949
Decided On : 11/24/1958
The plaintiff and the defendant entered into an agreement whereby the defendant agreed to sell to the plaintiff two and a half annas share out of the four-anna share given to him by an award. The plaintiff filed a suit for specific performance of the agreement. The trial court decreed the suit, but the Division Bench of the High Court dismissed the suit. On appeal to the Supreme Court, it was held that the agreement was void for uncertainty as to the price to be paid by the plaintiff for the purchase of two and a half annas share and was also void as it was entered into with corrupt motives and the consideration for it was of an immoral character and was also against the public policy in view of its tendency to create a conflict between the plaintiff's duty and interest.
Fact of the Case:
The plaintiff and the defendant entered into an agreement whereby the defendant agreed to sell to the plaintiff two and a half annas share out of the four-anna share given to him by an award. The plaintiff filed a suit for specific performance of the agreement. The trial court decreed the suit, but the Division Bench of the High Court dismissed the suit.
Finding of the Court:
The Supreme Court held that the agreement was void for uncertainty as to the price to be paid by the plaintiff for the purchase of two and a half annas share and was also void as it was entered into with corrupt motives and the consideration for it was of an immoral character and was also against the public policy in view of its tendency to create a conflict between the plaintiff's duty and interest.
Issues: Whether the agreement was void for uncertainty as to the price to be paid by the plaintiff for the purchase of two and a half annas share? Whether the agreement was void as it was entered into with corrupt motives and the consideration for it was of an immoral character? Whether the agreement was void as it was against the public policy in view of its tendency to create a conflict between the plaintiff's duty and interest?
Ratio Decidendi: The agreement was void for uncertainty as to the price to be paid by the plaintiff for the purchase of two and a half annas share. The agreement was void as it was entered into with corrupt motives and the consideration for it was of an immoral character. The agreement was void as it was against the public policy in view of its tendency to create a conflict between the plaintiff's duty and interest.
Final Decision: The appeal was dismissed.
( 1 ) THIS appeal by the plaintiff is from a judgment and decree of a Division Bench of the Madhya Bharat High Court dated 2nd December 1948. It was filed in the madhya Bharat High Court under Section 25 of the Madhya Bharat High Court of judicature Act 1949 as it stood before it was amended by Madhaya Bharat Act No. 3 of 1950.
( 2 ) THE suit out of which this appeal arises was instituted on 6th November 1947 by gulabchand Tongya against the heirs and legal representatives of Govindram seksaria on the Original Side of the High Court of the former Indore State for specific performance of an agreement whereby, it is said, Govindram Seksaria agreed to sell to the appellant his share in a firm the business of which was to act as managing agents of the Indore Malwa United Mills Ltd. , Indore. The suit was tried by Sanghi J. , who on 11th June 1948 made a decree in favour of the plaintiff directing that on payment by the plaintiff to the defendant of 5/32 of the capital deed of assigning a two and a half anna share in a rupee out of their share in the aforesaid partnership and declaring that
"by virtue thereof the plaintiff shall become entitled to the rights and be subject to the liabilities as against the defendants of sleeping partners in the aforesaid Managing and Selling Agency with effect from 5th November 1947".
Against this decision, the defendants filed an appeal to a Division Bench of the madhya Bharat High Court on 24th August 1948. The plaintiff also preferred on 7th september 1948 a cross-appeal against the decision ok the trial Judge claiming that he was entitled to 3 share in the profits of the partnership since 8th March 1941. The Division Bench of the Madhya Bharat High Court, accepting the defendants' appeal reversed the judgment and decree of Sanghi J. , and dismissed the plaintiff's suit as well as his cross-appeal. Thereafter the plaintiff filed this appeal. When the appeal came up for hearing before a Full Bench of the Madhya Bharat high Court, a preliminary objection as to the competency of the appeal was raised on behalf of the defendant-respondents. The objection was that as the judgment and decree appealed from were passed by a Division Bench of the Madhya Bharat High Court on 2nd December 1948, that is before the Madhya Bharat High Court of Judicature Act 1949 came into force, and as Section 25 of the Act was not retrospective, the appeal was incompetent. This objection was upheld and the appeal was dismissed by the Full Bench. The plaintiff then appealed to the Supreme Court after obtaining leave. On 28th march 1958 the Supreme Court allowed the plaintiff's appeal holding that the plaintiff's appeal from the Division Bench of the Madhya Bharat High Court was competent under Section 25 of the Madhya Bharat High Court of Judicature Act 1949 and remitting the case to this Court for decision on merits. ( 3 ) THE facts giving rise to this appeal are these. Govindram Seksaria, Brijlal ramjidas, Balasari Ju-harmal and four other persons entered into a deed of partnership (Ex. No. 1, Part-I, Page-23 of the printed Paper-Book) on 17th July 1935 for carrying on the business of "acting as managing agents and selling agents of the Indore Malwa United Mills, Ltd. ," a company owning a textile mill in indore. Towards the end of 1940 serious disputes arose between two groups of partners one headed by Govindram Seksaria and another by Brijlal and Bi-lasrai, which it appears became a subject-matter of public discussion, leaflets, pamphlets, propaganda and counter-propaganda. On 21-11-1940, the Board of Directors of the Malwa Mills appointed a committee to enquire into certain allegations against govindram Seksaria, Brijlal and Bilasrai. The committee consisted of Mr. R. C. Jail as Chairman, and Seth Hiralal and the plaintiff Gulabchand as members. The disputes between the part-ners continued and came to a head. The groups continued and it became apparent that nothing short of retirement of one of the groups
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