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1978 Supreme(MP) 156

High Court Of Madhya Pradesh
C. P. Sen and B. C. Verma, JJ.
GURUBAX SINGH GOROWARA - Appellant
Versus
SMT.BEGUM RAFIYA KHURSHID - Respondents
First Appeal 107 Of 1973
Decided On : 09/22/1978

Advocates Appeared:
FAKHRUDDIN, K.L.ISSRANI

An agreement that violates a statutory provision is void ab initio and cannot be enforced. A party cannot claim damages for breach of an agreement if the agreement is void and no legal injury has been suffered.

Headnote:

CONTRACT - BREACH OF AGREEMENT - DAMAGES - STIPULATED DAMAGES - PENALTY - VOID AGREEMENT - SECTION 180 OF THE M. P. LAND REVENUE CODE, 1959 - SECTION 74 OF THE CONTRACT ACT, 1872 - VOID AGREEMENT - NO LEGAL INJURY - NO DAMAGES.

Fact of the Case:

Plaintiff filed a suit for damages for breach of agreement against the defendants for failing to deliver possession of agricultural lands for the purpose of clearing and removing timber, firewood, and other produce. The defendants had executed an agreement to sell the standing jungle, including all timber and firewood, to the plaintiff for a sum of Rs. 60,000/-. The agreement stipulated that the defendants would deliver possession of the lands after a dispute with the government was settled, and the plaintiff would have 2 years to cut, clear, and remove all timber, firewood, etc. The plaintiff paid an advance of Rs. 3500/-. However, the defendants did not deliver possession, and the plaintiff took back the advance payment. Subsequently, the defendants entered into a similar agreement with another person for Rs. 1,51,000/- and sold all the jungle, timber, and firewood.

Finding of the Court:

The trial court dismissed the plaintiff's suit, holding that the agreement was void ab initio being in contravention of Section 180 and other provisions of the M. P. Land Revenue Code, 1959. The court also held that the plaintiff was not entitled to damages as stipulated in the agreement because the sum of Rs. 50,000/- was by way of penalty and the plaintiff had not suffered any legal injury.

Issues: 1. Whether the agreement in question is void ab initio being in contravention of Section 180 and other provisions of the M. P. Land Revenue Code, 1959? 2. Whether the plaintiff is entitled to Rs. 50,000/- as damages as stipulated in the agreement?

Ratio Decidendi: 1. The agreement was void ab initio as it violated Section 180 (1) of the M. P. Land Revenue Code, 1959, which prohibits the transfer of any trees standing in a holding except the produce of such trees unless the land itself is transferred. The agreement transferred all the interest of the defendants in all the standing trees on the suit lands to the plaintiff, but the land itself was not sold. This was a clear violation of the statute. 2. The sum of Rs. 50,000/- stipulated in the agreement was by way of penalty and not liquidated damages. The plaintiff had not suffered any legal injury as he had not invested any money in pursuance of the agreement and had taken back the advance payment. Therefore, he was not entitled to any damages.

Final Decision: The appeal was dismissed with costs.

SEN, J.

( 1 ) THE plaintiff has filed this appeal against the dismissal of his claim by the trial Court for damages on account of breach of agreement by the defendants.

( 2 ) THE facts not in dispute are that the defendants along with 3 others are the joint owners of agricultural lands measuring 587. 01 acres situated in village khandabarh Tahsil, Budni, District Sehore. They had inherited these lands from their predecessor-ill-interest Khur-sheed Ahmad. After his death, the government of Madhya Pradesh disputed their title resulting in litigation which ultimately ended in their favour. During pendency of the dispute, the defendants executed an agreement Ex. P. 1 on 5-8-1964. It was agreed that the defendants would sell all the standing jungle including all the timber and firewood etc. to the plaintiff for a sum of Rs. 60,000/- and the defendants would deliver possession of the aforesaid lands for the purpose of clearing and removing all timber, firewood and other pro- duce after the dispute with the government of M. P. was settled and the defendants obtained possession. The plaintiff was entitled under the agreement to cut, clear and remove all the timer, fire-wood etc. and prepare charcoal from the jungle within 2 years from the date of delivery of possession by the defendants. It was also stipulated in the agreement that if any party failed to perform his part of the agreement, the other party would be entitled to claim Rs. 50,000/- from the defaulter. On the same day, the plaintiff paid Rs. 3500/-to the defendants as advance payment. It was further stipulated that if the dispute of the defendants with the government was not settled by the end of Jan. 1965 the advance amount of Rs. 3500/- would be refunded to the plaintiff. As the defendants did not deliver possession of the lands by 31-1-1965 the amount of Rs. 3500/- was returned to the plaintiff on 29-10-1966. Subsequently, the defendants received possession of the lands on 20-12-1969 from the State of M. P. but did not deliver possession to the plaintiff. Therefore, the present suit was filed by the plaintiff claiming damage of Rs. 50,000/-as stipulated in the agreement. During pendency of the suit, the defendants entered into similar agreement with one jagdish Chandra on 31-7-1970 for the sale of standing jungle, timber and firewood in consideration of a sum of Rs. 1,51,000/- and the said Jagdish chandra in pursuance of that agreement had cut and removed the entire timber, fire-wood and jungle produce from the jungle.

( 3 ) THE plaintiff's case is that on settlement of dispute and getting delivery of possession of their lands, the defendants were bound to put the plaintiff in possession of all jungles including all timber, fire-wood etc. after 20-12-1969 though the plaintiff took back advance payment of Rs. 3500/- on 29-10-1966 as per the terms of the agreement, the agreement stipulated that in spite of the refund, the agreement would subsist and the refund would be without prejudice to the plaintiff's right under the agreement. This was also the endorsement made by the defendant Salim Ahmad Khan on the receipt passed by him. In spite of this subsisting agreement, the defendants entered into another agreement on 31-7-1970 with one Jagdish Chandra for Rs. 1,51,000/- and thereby they committed breach of the agreement. Though the defendants are profited by a sum of Rs. 91,000/- the plaintiff claims only Rs. 50,000/- as damages which have been stipulated in the agreement.

( 4 ) THE defendants resisted the suit and denied all the allegations. According to them the suit agreement was in contravention of Section 180 of the M. P. Land revenue Code, 1959, and. therefore, illegal and void. The defendant Firoz ahmad Khan was a minor at the time of the agreement and his mother defendant Begum Rafiya Khursheed could not act as the guardian of the minor's property and, therefore, so far as Firoz Ahmad Khan was concerned the agreement was inoperative. As the plaintiff had taken back t











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