SETH KANHAYA LAL v. THE NATIONAL BANK OF INDIA, LIMITED
1913-02-25
AMEER ALI, LORD MOULTON, LORD SHAW OF DUNFERMLINE, SIR JOHN EDGE
body1913
DigiLaw.ai
Judgement Appeal from a judgment and order of the Chief Court (January 27, 1911) affirming an order of the District Judge, Delhi (November 18, 1902), dismissing the appellants suit. On August 28, 1902, the appellant, as plaintiff, commenced a suit against the respondents. By his plaint the appellant alleged that he had since June 25, 1902, been the sole proprietor of certain mills at Sabzi Mandi, Delhi, and of the machinery and other property therein, and that the respondents having obtained a money decree against the Delhi Cotton Mills Company, Limited, obtained warrants of attachment against his said mills, premises, and the property therein, and on August 20, 1902, wrongfully took possession of them thereunder, to obtain satisfaction for a sum of Rs. 83,005, the balance then unpaid under the said decree. By paragraphs (4.), (5.), and (7.) of his plaint the appellant alleged substantially as follows—That on August 20, 1902, the respondents manager, accompanied by the bailiff of the Court and several peons, forcibly entered the said premises and dis possessed the appellants servants, and professed to attach all the movable effects and placed the same under lock and key, leaving certain peons in charge thereof; that subsequently the respondents had by their servants forcibly entered the premises; that the appellant was, by reason of these acts of the respondents, practically ousted from his mills and could not work them; that the continuing damage to the appellant was very great, and that, as it was probable that by objection to the attachment under the Civil Procedure Code a considerable period would elapse before he could obtain an order setting aside the attachment, the appellant was compelled on August 27, 1902, to pay to the respondents, under protest, the sum of Rs. 83,005, being the balance due to the respondents under their decree against the said company. The appellant claimed by his plaint to recover the said Rs. 83,005, and he further claimed Rs. 10,000 as damages. The respondents in reply to this plaint filed preliminary pleas by way of demurrer relating to the claim for the return of the money paid under protest. The first of these pleas was that "the suit as framed will not lie." They also traversed all the facts alleged in relation to the claim for damages.
10,000 as damages. The respondents in reply to this plaint filed preliminary pleas by way of demurrer relating to the claim for the return of the money paid under protest. The first of these pleas was that "the suit as framed will not lie." They also traversed all the facts alleged in relation to the claim for damages. On these pleadings the District Judge framed certain preliminary issues, which in substance amounted to this question Did the appellants plaint shew any cause of action for the return of the money paid? These issues were argued before the District Judge upon the hypothesis that the facts alleged by the appellant in his plaint were true. The District Judge on November 18, 1902, delivered judgment upon the preliminary issues. He held that no action could lie under s. 72 of the Indian Contract Act unless the facts alleged amounted to " coercion " within the definition in s. 15 of that Act, and that they did not do so. He was, however, of opinion that the Contract Act was not exhaustive, and that the plaintiff (appellant) could claim for money had and received, if the facts shewed such a cause of action apart from that Act, but he held that the payment was in law a voluntary payment and not recoverable. The appellants suit for recovery of the money paid was accordingly dismissed, the District Judge directing that the case should proceed upon the question of damages only. After certain proceedings, including an appeal to His Majesty in Council, which proceedings have no direct bearing upon the question raised by the present appeal, and which are referred to in the judgment, the order of the District Judge dismissing the claim for the return of the money paid came before the Chief Court upon appeal. The Chief Court (Johnstone and Rattigan JJ.) on January 27, 1911, gave judgment dismissing the appeal. In the course of their judgment they said as follows — "In our opinion s. 72 of the Indian Contract Act, which specifically deals with the question as to when money must be repaid or a thing returned, must be regarded as exhaustive, apart, of course, from other specific provisions of the law such as s. 86 of the Indian Trusts Act.
The law as it obtains in England probably goes much beyond s. 72 of the Indian Contract Act, which makes no express provision for cases where fraud has induced the payment of money or where money has been paid through such extortion, oppression, or undue influence as do not amount to i coercion within the moaning of s. 15 of the Act. .... It seems to us, therefore, that the plaintiff in order to succeed in the present case must shew that he paid the money as the result of ‘coercion within the meaning of s. 15." They agreed with the District Judge that the allegations in the plaint did not disclose any case of "coercion" within that section. They also held, differing on this point from the judgment of the District Judge, that the action could not succeed unless it came within the provision of s. 72 of the Act, and they said further— "But even if this is not so we are nevertheless of opinion that in the case before us the payment made by the plaintiff was voluntary. He was certainly not obliged to pay the money into Court, nor, at the time when the money was so paid, were the circumstances such that the plaintiff, if he wished to save his property, had no alternative to making the payment. The property, no doubt, was attached, but there was no order for sale and the plaintiff was entitled, if he thought fit, to object to the attachment or to institute a suit for a decree declaratory of his rights thereto. In either case he would have had no difficulty in securing from the Court an order staying all further proceedings in execution until his claim had been considered." The Chief Court accordingly dismissed the appeal. De Gruyther, K.C., and O’Gorman (Palat with them), for the appellant. The Chief Court was wrong in holding that the appellant could only succeed if the facts alleged came within s. 72 of the Indian Contract Act, and that the meaning of "coercion" in that section is limited by the definition in s. 15 of that Act. The Indian Contract Act is not intended to be exhaustive; by its preamble the object of the Act is stated to be "to define and amend certain parts of the law relating to contracts." Sect.
The Indian Contract Act is not intended to be exhaustive; by its preamble the object of the Act is stated to be "to define and amend certain parts of the law relating to contracts." Sect. 72 does not affect the principle that where a defendant has received money in circumstances which render the receipt of it, in justice and equity, a receipt to the use of the plaintiff an action will lie to recover it Jugdeo Narain Singh v. Rajah Singh (( 1888) I. L. R. 15 Calc. 656.); Narayansami Reddi v. Osuru Reddi. (( 1901) I. L. R. 25 Madr. 548.) The facts alleged in the plaint give rise to a good cause of action Dooli Chand v. Ram Kishen Singh. (( 1881) L. R. 8 Ind. Ap. 93.) If s. 72 is exhaustive of the cases in which an action lies to recover money paid the present facts come within that section, for " coercion " is there used in its ordinary meaning and is not limited by the definition in s. 15. The definition in s. 15 is introduced merely for the purpose of Chap. II., of which it forms part, and which deals with void and voidable contracts. This is shewn from the wording of s. 14, which refers to "coercion, as defined in s. 15." Sect. 72 deals with an entirely different matter, and does not in terms refer to s. 15. Illustration (b) to s. 72 is not consistent with "coercion" in that section being limited by the definition in s. 15. The Chief Court in holding that the payment was voluntary did not give full effect to the facts alleged in the plaint. It is true that the appellant, instead of paying out the attachment, might have proceeded under s. 278 of the Civil Procedure Code, 1882. This, however, would have caused delay and further loss. But whether such proceedings would or would not have been a convenient remedy is not material, for it is not for the wrongdoer to say which of the available remedies the appellant should have pursued. Astbury, K.C., and Arthur Gray, for the respondents. The payment made by the appellant was a voluntary payment and is not recoerable.
But whether such proceedings would or would not have been a convenient remedy is not material, for it is not for the wrongdoer to say which of the available remedies the appellant should have pursued. Astbury, K.C., and Arthur Gray, for the respondents. The payment made by the appellant was a voluntary payment and is not recoerable. The authorities shew that where a person having a choice either of resisting legal proceedings or of paying money adopts the latter alternative as a course more convenient to himself, he cannot afterwards recover the money Mariot v. Hampton (2 Sm. L. C. 11th ed. 491.); Moore v. Vestry of Fulham. ([ 1895] 1 Q. B. 399, 403.) This is clearly so where the payment is by a person against whom an action is brought, and the principle, as laid down by Lord Lindley in the last-named case, is equally applicable to a case where, as here, the payer could by taking the proper proceedings become a litigating party and subject the claim to judicial decision. The Indian Contract Act is exhaustive, at all events except with regard to certain classes of contracts, such as those relating to carriers, as to which the law is definite Mohori Bibee v. Dhurmodas Ghose. (( 1903) L. R. 30 Ind. Ap. 114, 125.) The definition in s. 15 applies to "coercion" as used in s. 72, the object of the Legislature being to define clearly a class of action of which under English law the limits are vague. Unless s. 72 is so limited it is useless and redundant. Dooli Chand v. Ram Kishen Singh (L. R. 8 Ind. Ap. 93.) is distinguishable, because in that case the mortgage debt in respect of which the decree had been obtained was satisfied at the time of the attachment. Jugdeo Narain Singh v. Rajah Singh (I. L. R. 15 Calc. 656.) is also distinguishable, for there the plaintiff had exhausted his remedies and a sale was imminent and inevitable. It would be inequitable in the present case to allow the appellant to recover, since the course which he has elected to pursue has prevented the respondents from obtaining satisfaction for their decree obtained in 1902 against the Delhi Cotton Mills Company, Limited. The Court will not assist a plaintiff to recover where it would be inequitable so to do Freeman v. Jeffries. (( 1869) L. R. 4 Ex.
The Court will not assist a plaintiff to recover where it would be inequitable so to do Freeman v. Jeffries. (( 1869) L. R. 4 Ex. 189, 199.) No reply was called for. The judgment of their Lordships was delivered by LORD MOULTON. In order to render plain the nature of the question involved in the present appeal it will be necessary to make a short reference to the history of the litigation between the parties. It furnishes abundant matter for regret. The suit was brought on August 28, 1902, and owing to the procedure adopted it will be found that at the present date the matter is but little more advanced than it was ten years ago, in spite of the fact that large sums must have been expended in the costs of the proceedings in the meantime. The facts of the case, so far as they are relevant to the question involved in the appeal, are very simple. On August 15, 1902, the defendant bank, which had obtained a decree against the Delhi Cotton Mills Company, Limited, obtained an attachment against certain mills at Sabzi Mandi, and on August 20, 1902, took possession of them to obtain satisfaction for a sum of Rs. 83,005, the balance then unpaid under such decree. In his plaint the plaintiff states that he was the sole proprietor of such mills and of their contents. On thus being ousted from his property he took the course of paying under protest the sum claimed. Having thus freed his property from the attachment, he at once brought the present action claiming the return of the money so paid and damages for the alleged, illegal acts of the defendants.
On thus being ousted from his property he took the course of paying under protest the sum claimed. Having thus freed his property from the attachment, he at once brought the present action claiming the return of the money so paid and damages for the alleged, illegal acts of the defendants. In reply to the above plaint the respondent bank filed certain preliminary pleas relating to the claim for the return of the money paid under protest, of which it is only necessary to cite the first, which was that "the suit as framed will not lie." It is admitted that this plea is in substance identical with the more usual form of plea, namely, that "the plaint discloses no cause of action." The District Judge—no doubt with the laudable intention of shortening the proceedings and thereby lessening the costs— heard an argument on these preliminary pleas before requiring anything further to be done by the defendants, and on November 18, 1902, he gave judgment to the effect that so far as the recovery of the money was concerned the plaint disclosed no cause of action. He therefore dismissed with costs the claim for the recovery of the money and directed that the action should proceed on the question of damages for illegal attachment. The plaintiff, having in vain applied for the drawing up of an order embodying this decision, decided not to proceed with that part of the case which related to damages, and consequently did not appear on the further hearing, whereupon the District Judge dismissed the whole case for default under s. 102 of the Civil Procedure Code, 1882. The plaintiff appealed to the Chief Court against this decision, and that Court dismissed the appeal on the ground that no appeal lay against an order dismissing a suit under s. 102. From this decision the plaintiff appealed to His Majesty in Council, and their Lordships held that the order of November 18, 1902, was a final decision on the case as to the recovery of the money paid, and that therefore it was not competent to the judge to dismiss that part of the case under the powers contained in s. 102.
They therefore remitted the case to the Chief Court in order that the appeal to that Court, so far as it related to the recovery of the money paid, might be heard and decided on its merits. The case having been thus remitted, the Chief Court rightly treated the appeal as an appeal from the order of November 18, 1902, dismissing the case with regard to the recovery of the money on the ground that the plaint contained no valid cause of action with respect thereto. After argument the Court decided in favour of the defendants, and dismissed the plaintiffs appeal with costs. From this decision the present appeal is brought. The question raised by this appeal is therefore a pure point of law. Both the District Judge and the Chief Court have clearly stated that the decisions which they have given are based on the allegations in the plaint, and that for the purposes of such decisions these allegations must be taken to be true in fact. This is a necessary consequence of the nature of the plea, and the same understanding must apply to the present judgment. In asking the Court to decide an issue like the present (which is essentially a demurrer by whatever name it may be called) the defendants must be taken to admit for the sake of argument that the allegations of the plaintiff in his plaint are true modo et forma. In so doing they reserve to themselves the right to shew that these allegations are wholly or partially false in the further stages of the action should the preliminary point be overruled, but so far as the decision on the preliminary point is concerned every thing contained in the plaint must be taken to be true as stated. That being so, it is only necessary to look at the plaint to see that according to English law the contention of the defendants is unsustainable. A wrongful interference with the plaintiffs lawful enjoyment of his own property is alleged. The plaintiff was clearly entitled to rid himself of that unlawful interference by any lawful means without thereby affecting his right to hold the defendants liable for that which they have thus caused him to do. It is true that paying under protest the sum demanded was not the only course open to him.
The plaintiff was clearly entitled to rid himself of that unlawful interference by any lawful means without thereby affecting his right to hold the defendants liable for that which they have thus caused him to do. It is true that paying under protest the sum demanded was not the only course open to him. He might have taken legal proceedings, by which, sooner or later, he might have rid himself of the interference. But to do so would have involved his submitting to the wrong for all the period necessary for those proceedings to be effective, and that might have been a serious aggravation of the wrong. To this he was in nowise bound to submit. He was free to choose a course which did not involve any such prolongation of the trespass. Accordingly he paid under protest the sum demanded, and under English law he was unquestionably entitled to demand a repayment of that sum because it was an involuntary payment produced by coercion, namely, the wrongful interference of the defendants with his full and free enjoyment of his own property. By English law it is not open to the wrongdoer to prescribe by which of two lawful alternatives the injured man puts a stop to the wrong under which lie is suffering. His choice of any one alternative does not make it as between him and the wrongdoer a voluntary act or estop him from claiming that it was done under coercion. The argument before their Lordships accordingly turned chiefly on contentions that the Indian statute law precluded the application in India of these well-known principles of English common law. These contentions were two in number. In the first place the respondents contended that in case the property of a stranger is seized under an attachment, the Code of Civil Procedure requires him to proceed under the group of sections commencing with s. 278 and that this is his only remedy. Their Lordships have no doubt that the procedure referred to is merely permissive. It is analogous to the pro cedure by interpleader which in England would be open in similar cases to parties owning the goods seized. But the fact that such a procedure is open to him if he chooses to adopt it interferes in no way with his right to take any other lawful alternative.
It is analogous to the pro cedure by interpleader which in England would be open in similar cases to parties owning the goods seized. But the fact that such a procedure is open to him if he chooses to adopt it interferes in no way with his right to take any other lawful alternative. The main contention, however, was that the allegations in the plaint did not shew "coercion" according to Indian law. It was contended that nothing could be " coercion " under Indian law unless it satisfied the definition of " coercion " which is found in s. 15 of the Indian Contract Act, and that the allegations in the plaint failed so to do because they did not shew that the " unlawful detaining or threatening to detain " the property was "with the intention of causing any person to enter into an agreement." Their Lordships are of opinion that this argument is not sound and that it is based on a fundamental misunderstanding of the object and effect of s. 15 of the Indian Contract Act. Sect. 15 forms part of a chapter which specially deals with the requisites of a valid contract. This chapter commences with s. 10, which may be regarded as the fundamental section, and which reads as follows "All agreements are contracts if they are made by the free consent of parties competent to contract for a lawful consideration and with a lawful object and are not hereby expressly declared to be void." The sections immediately following proceed to define the terms used in this fundamental section. Sects. 11 and 12 are devoted to the interpretation of the phrase "competent to contract." Sect. IB deals with the term "consent." Sects. 14 to 18 deal with the phrase "free consent." In so doing s. 14 commences by defining when consent is said to be " free " and lays down that it is so when it is not caused by " coercion " as defined by s. 15, " or undue influence, fraud," &c. It will therefore be seen that s. 14 relates to "free consent" as an element in the making of contracts.
It is natural, therefore, that when "coercion" comes to be defined in s. 15 for the purposes of s. 14 it is defined as follows " Coercion is the committing or threatening to commit any act forbidden by the Indian Penal Code or the unlawful detaining or threatening to detain any property to the prejudice of any person whatever with the intention of causing any person to enter into an agreement." It is clear, therefore, that this definition of "coercion" is solely a definition which applies to the consideration whether there has been "free consent "to an agreement so as to render it a contract under s. 10. This explains why in the definition of "coercion" it is limited to an unlawful act done "with the intention of causing the person to enter into an agreement." But it would be to make nonsense of the statute if it were to be taken to mean that "coercion" in a legal sense could only exist if the object was to bring about a contract. Indeed such an interpretation would render the Act inconsistent with itself. Sect. 72, which is in Chap. V., which deals with " certain relations resembling those created by contract," reads as follows " A person to whom money has been paid or anything delivered by mistake or under coercion must repay or return it," and Illustration (b) to that section reads as follows "A railway company refuses to deliver up certain goods to the consignee except upon the payment of an illegal charge for carriage. The consignee pays the sum charged in order to obtain the goods. He is entitled to recover so much of the charge as was illegally excessive." It is impossible to contend that the coercion referred to in this section or in the above illustration is "with the intention of causing any person to enter into an agreement." The word "coercion" must therefore be there used in its general and ordinary sense as an English word, and its meaning is not controlled by the definition in s. 15. That definition is expressly inserted for the special object of applying to s. 14, i.e., to define what is the criterion whether an agreement was made by means of a consent extorted by coercion and does not control the interpretation of "coercion" when the word is used in other surroundings.
That definition is expressly inserted for the special object of applying to s. 14, i.e., to define what is the criterion whether an agreement was made by means of a consent extorted by coercion and does not control the interpretation of "coercion" when the word is used in other surroundings. A further contention appears to have been put forward in the Court below to the effect that the plaintiffs only remedy was to proceed against the Delhi Cotton Mills Company, Limited, under ss. 69 and 70, in order to recover from them the money paid, seeing that they would have had the benefit of the payments in the satisfaction of the decree obtained against them. It is not a matter of surprise that this contention was not pressed before their Lordships. It is obviously unsustainable. Those clauses do not refer in any way to remedies against the wrongdoer and are therefore wholly irrelevant to the question in this appeal. Their Lordships have thought it proper to deal specifically with the arguments raised on the hearing on account of the importance of the questions raised. But they are also of opinion that the matter is covered by authority. In the case of Dooli Chand v. Ram Kishen Singh (L. R. 8 Ind. Ap. 93.) the circumstances were very similar to those in the present case, and on appeal to this Board their Lordships decided that money paid by the true owner to prevent the sale of his property under an execution could be recovered back. In their judgment their Lordships say "The objections taken to the action were that the payment was voluntary. It was made to prevent the sale which would otherwise inevitably have taken place of the mouzah which the respondents had purchased and was made therefore under compulsion of law; that is under force of these execution proceedings.
In their judgment their Lordships say "The objections taken to the action were that the payment was voluntary. It was made to prevent the sale which would otherwise inevitably have taken place of the mouzah which the respondents had purchased and was made therefore under compulsion of law; that is under force of these execution proceedings. In this country if the goods of a third person are seized by the sheriff and are about to be sold as the goods of the defendant and the true owner pays money to protect his goods and prevent the sale he may bring an action to recover back the money he has so paid; it is the compulsion under which they are about to be sold that makes the payment involuntary." The respondents sought to distinguish the present case from the case just cited by contending that the sale in the present case was not inevitable. But it is evident that the greater or less probability of a sale taking place does not affect the ratio decidendi of their Lordships in that case, which is that the payment was made under the force of the execution proceedings and that in India, as in England, such a payment is regarded by the law as being made under compulsion. In their Lordships opinion, therefore, the Chief Court ought to have given judgment in favour of the plaintiff in his appeal against the order of November 18, 1902. The consequence of such a decision would have been that the case would have gone back to the District Judge to be tried on the facts. As has already been stated, the decision of this Board does not affect or prejudice any contention of either party with regard to the facts or any other contention of law not covered by the present judgment. Their Lordships will therefore humbly advise His Majesty to allow the appeal and to remit the case to the Chief Court in order that the case may be sent to the District Judge to hear and determine. The respondents must pay all the costs of the second hearing before the Chief Court and the costs of this appeal.