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1957 DIGILAW 149 (KER)

K. Appu v. K. Sevyar

1957-07-01

VAIDIALINGAM

body1957
Judgment :- 1. This is a revision by the defendant in small cause suit No. 242 of 1955 on the file of the Subordinate Judge's Court at Kozhikode decreeing the said suit against him with costs. 2. The respondents filed the suit for recovery of a sum of Rs. 1900 with costs. Their case was that the second plaintiff as agent of the first plaintiff entered into a contract with the defendant on 16-11-1951 for the purchase of certain properties noted in the plaint schedule for Rs. 2000/- on the terms mentioned therein. In respect of the said contract a sum of Rs. 200/- was also paid by the second plaintiff on behalf of the first plaintiff to the defendant as advance. The document also was got ready for, being executed by the defendant but the defendant has not complied with the demands of the plaintiffs. The said unregistered and unsigned document prepared by the plaintiffs is marked as Ext. A2 in the suit. While matters stood thus, the properties were brought to sale by the decree-holder in O. S.180 of 1951 on the file of the District Munsiff's Court, Kozhikode in execution of the decree obtained against the present petitioner. As the properties were being brought to sale, the first plaintiff deposited the decree amount and thus saved the properties from being sold. Subsequently this suit has been filed for recovery of the said amount from the defendant. 3. The main contention of the defendant was that the contract entered into by him on 16-11-1951 was not with the first plaintiff but with the second plaintiff and that the first plaintiff has no right to bring the suit. Secondly the defendant also contended that the payment made by the first plaintiff in discharge of the decree in O.S.180 of 1951 was a voluntary-payment and as such the plaintiffs are not entitled to claim the amount. He also contended that even when the first plaintiff wanted to get himself impleaded as a party in the execution proceedings in the said suit he had objected to his being brought on record and, therefore, the plaintiff had no right to pay the decree amount nor claim back the said amount under these proceedings. 4. He also contended that even when the first plaintiff wanted to get himself impleaded as a party in the execution proceedings in the said suit he had objected to his being brought on record and, therefore, the plaintiff had no right to pay the decree amount nor claim back the said amount under these proceedings. 4. The learned Subordinate Judge came to the conclusion that the plaintiffs were entitled to be reimbursed in the amount that the first plaintiff had deposited in the execution proceedings to avoid a sale of the properties and he also held that they are persons who will come under either S.69 or S.70 of the Contract Act and as such can claim the amount spent by them. In this view the learned Subordinate Judge granted a decree as prayed for. 5. In the revision before me, the learned counsel for the petitioner Mr. K. P. Ramunny Menon raised two main contentions; (1) that it has not been proved that the second plaintiff was the agent of the first plaintiff and as such entitled to claim the benefit of the contract dated 16-11-1951; and (2) that the payment by the plaintiff is purely a voluntary payment as it was paid notwithstanding the protests of the defendant and as such the plaintiff is not entitled to claim back the amount either under S.69 or S.70 of the Indian Contract Act. 6. Taking the first contention I find that in the plaint especially, in Para.2, it has been stated that the agreement was entered into by the second plaintiff on behalf of the first plaintiff as agent and that this fact is very well known to the defendant. Further this position is continued in the subsequent portions of the plaint. 7. No doubt, in the written statement, in dealing with this contention the defendant has denied knowledge of the agency of the second plaintiff. But evidently this position was not pressed during the trial of the suit as is evident from, the learned judge's remarks in Para.6. The learned judge says that "the parties did not adduce any oral evidence in the case on the basis of an understanding that Ext. Al evidences a valid contract and that the defendant did not fulfil his part of the contract. The learned judge says that "the parties did not adduce any oral evidence in the case on the basis of an understanding that Ext. Al evidences a valid contract and that the defendant did not fulfil his part of the contract. So it has to be stated at the outset that there was a subsisting contract between the second plaintiff and the defendant on the strength of Ext. Al and that the defendant was at fault in not complying with the terms of that contract. The plaintiffs are, therefore entitled to get back the advance amount of Rs. 200/2. It will be seen that the case of the defendant was that the first plaintiff had no locus standi to file the suit and in very clear terms he had admitted in the written statement this contract'with the second plaintiff. Therefore, to prove a contract with the second plaintiff on the basis of Ext. Al dated 16-11-1951 it did not require any understanding or concession, on the part of the defendant or his counsel. In fact, such a position has not been taken up by him anywhere in his written statement. Therefore, the only possible inference that could be drawn from the learned judge's observation is that the contention of the defendant based on the ground that the second plaintiff did not act as agent of the first plaintiff must be deemed to have been given up during the trial of the suit. The further observation of the learned judge that the plaintiffs are, therefore, entitled to get back the advance amount of Rs. 2001- makes this position further clear. If really the contention of the defendant has been pursued the first plaintiff would certainly not be entitled to get back the advance of Rs. 200/- paid by the second plaintiff as he should be considered to be a stranger. It is really because of the understanding that Ext. Al evidences a valid contract on which both the plaintiffs could file a suit, that the learned judge has really held that both the plaintiffs are entitled to recover the advance of Rs. 200/-. This -would be quite correct because the payment by the second plaintiff agent will certainly enure to the benefit of the first plaintiff. Al evidences a valid contract on which both the plaintiffs could file a suit, that the learned judge has really held that both the plaintiffs are entitled to recover the advance of Rs. 200/-. This -would be quite correct because the payment by the second plaintiff agent will certainly enure to the benefit of the first plaintiff. This position further gains ground by the fact that in the grounds of revision before me no point has been taken as to what exactly the understanding otherwise was before the learned judge. 8. In this view, I am net inclined to accept the first contention of Mr. Ramunny Menon. Coming to the second and more substantial point in the revision, the contention of the learned counsel is that the payment by the plaintiff of the decree amount in O.S. 180 of 1951, District Munsiffs Court, Kozhikode was purely as a voluntary one and the payment having been made in spite of the protests by his client the first plaintiff is not entitled to claim back the amount-In order to deal with this contention it is necessary to state a few facts. It appears that one Imbichamina Umma had obtained a decree against the defendant herein O. S. No. 180 of 1951, District Munsiff's Court, Kozhikode, and the suit properties along with other properties were being brought to sale in execution of the said decree. The properties had been advertised for sale. The first plaintiff had a contract entered into by the defendant with the second plaintiff as his agent on 16-11-1951 for sale of the said items and the defendant had also received Rs. 200 as advance. On 17-12-1951 a document (Ext. A2) appears to have been prepared for being executed by the defendant in favour of first plaintiff but the defendant has not done so. This will show that the first plaintiff had a subsisting contract in his favour, which he could enforce by way of specific performance. The period of limitation for enforcing this contract had not yet come to an end. While so, when the first plaintiff finds the properties which are the subject-matter of the contract in his favour being brought to sale and the defendant himself not trying to avert the sale by taking the necessary steps, the first plaintiff steps in and filed an application, Ext. While so, when the first plaintiff finds the properties which are the subject-matter of the contract in his favour being brought to sale and the defendant himself not trying to avert the sale by taking the necessary steps, the first plaintiff steps in and filed an application, Ext. BI on 7-4-1952 for getting himself impleaded as a party in the execution proceedings and for permission to pay the decree amount. Ext. B3 is the affidavit filed by the first plaintiff in support of the said application. In the affidavit, the first plaintiff has categorically stated the circumstances under which he has interest in averting the sale. No doubt, the said application was opposed both by the decree-holder therein and also the present defendant who was the judgment debtor. Ext. B2 is the counter affidavit filed by the present defendant in the said proceedings. It will be seen that he was merely denying the contract and the agency of the second plaintiff in relation to the first plaintiff. Ultimately the learned District Munsiff by order dated 4-8-1952 allowed the application of the present first plaintiff and permitted him to deposit the decree amount. No doubt it has been mentioned in the said order that it is passed without going into the contentions raised by the present defendant who was the Judgment-debtor. Ultimately, the full amount of the decree was deposited by the present first plaintiff and it was also drawn by the decree holder in the said suit as is seen from the order passed on Ext. A4. From the-above facts it will be clear that except protesting about the agency of the second plaintiff to the first plaintiff and contending that the first plaintiff as such has no right to deposit any amount towards the decree the defendant did not himself, take any steps to avert the sale or deposit the amount though he had ample opportunity and time. 9. The contention of Mr. Ramunny Menon is that the first plaintiff is not "a person who is interested in the payment of money which another is bound by law to pay" within the meaning of S.69 of the Indian Contract Act. He contends that the first, plaintiff is not a person interested in the payment of money because the defendant's contract was realty with the second plaintiff and the first plaintiff had no right or interest in the transaction. He contends that the first, plaintiff is not a person interested in the payment of money because the defendant's contract was realty with the second plaintiff and the first plaintiff had no right or interest in the transaction. This aspect of the case will not hold ground in view of my observations earlier in this judgment that the parties have proceeded to trial on the basis that the contract was entered into by the second plaintiff as agent of the first plaintiff. He has also contended that the payment by the first plaintiff is not the payment of money which another is bound by law to pay. The argument of the learned counsel is that the expression "bound by law to pay" in S.69 of the Contract Act will take in only one of the well known statutory or legal obligations attached to a property by virtue of some rule or statute and in this case the payment in respect of a decree debt will not come under this expression. 10. Learned counsel in this connection has cited the following cases in support of his contentions: Nand Kishore v. Paraoomian (42 Indian Cases 839), Saradamba v. Pattuabiramayya, (A. I. R.1931 Madras 207); Chengalroya Reddi V. Udai Kavoar (A.I. R.1936 Madras 752) and Gobind Ram v. Ram Kishore (A.I.R. 1953 Patna 145). The learned counsel for the respondent has contended that on the finding that the contract Ext. A I, entered into by the second plaintiff was as agent of the first plaintiff, the first plaintiff is certainly-a person who is interested in the properties and as such he is interested in the payment of money. He also contended that the defendant is a person who was bound by law to pay the decree amount and that the narrow interpretation sought to be placed by the counsel for the petitioner is not justified. 11. He has also relied upon the decisions of the Privy Council in Govindram Gordhandas Sekasria v. State of Gondal (1950 II M.L.J. 1) and also the decisions in Jagarnath Prasad v. Ghunni Lal (A. I. R.1940 All 416), and Bhagirathibai v. Digambar Ambadys (A. I. R.1945 Nag. 179). 12. In my view, the contentions of Mr. Ramunny Menon cannot also be accepted. 179). 12. In my view, the contentions of Mr. Ramunny Menon cannot also be accepted. The decision in Nand Kishore v: Paraoomian (42 Indian Cases 839) relied upon by him, should be considered in my view to have been overruled by the decision of the Privy Council in Govindram Gordhandas v. State of Gondal (1950) II M. L. J.1) as will be stated later on. The decision in the other three cases cited by him will not also support his contention. The decision in Saradamba v. Pattabirammaya (A. I. R.1931 Mad 207) related to a totally different set of circumstances. The emphasis laid in that decision was that the plaintiffs' utmost good faith in making the payment must be established before he can succeed in a claim based on S.69 or 70 of the Contract Act. 13. Similarly the decision in Chengalroya Reddi v. Udaya Kavoor (A.I.R.1936 Mad.752) will not assist Mr. Ramunny Menon in his contentions because the question that arose in that case was as to whether persons who are not parties to a contract cannot claim the benefit of S.69 of the Contract Act. That is not the case before me and it certainly does not arise, especially when it has been found that the first plaintiff is really the person interested in the contract under Ext. Al. The last case relied upon by Mr. Ramunny Menon is the one in Gobind Earn v. Ram Kishore A. I. R.1953 Pat 145. In that decision their Lordships held that a perron who has not acquired any title or interest in the property cannot claim hack any money paid by him and that S.69 applies only to payments made bona fide for the protection of one's own interest. With the actual decision one need not quarrel at all. But the question to be considered is whether the first plaintiff in this case has made the payment for the protection of his own interest. It cannot certainly be challenged that when he has got an agreement in his favour in respect of the properties and when the said properties are sought to be sold without the other party to the contract taking any steps to protect the same, the action of the first plaintiff in this case by stepping in and discharging the decree amount cannot be for any other purpose than for protection of his own interest. 14. 14. Thus, it will be seen that none of the decisions relied upon by Mr. Ramunny Menon is really of any assistance to support his contentions. 15. In regard to the decision in Nanda Kishore v. Paraoomian (42 Indian Cases 839), the facts were that A agreed to sell land to B. Subsequently in breach of the agreement A agrees to sell land to C. While a suit by B against A and C for specific performance was pending the suit property is sought to be sold in execution of a decree obtained against A by A's creditor. B deposited in court the amount required to be deposited under Order XXI, R.89, and the sale is set aside. It was held that B having no title in the property and no possession of it at the time of the payment was not interested in the payment and that as such he was not entitled to recovery from A or C. In Govindam Gordhandas Seksaria v. State of Gondal (1950 II M.L.J. 1) their Lordships had to consider the scope of S.69 of the Contract Act and their Lordships had also to construe the expression "interested in the payment of money" and "bound by law to pay". The Bombay High Court in that case had disallowed the claim for reimbursement of the party on the ground that at the date of payment the Company had no property interest in the mills in respect of which the taxes were paid and in this view they held that the company could not be held to be a party "interested" and they further held that the payment was a voluntary one. Their Lordships of the Privy Council differed from this interpretation of the Bombay High Court and their Lordships observe as follows at page 7 of the report. "The company had contracted to buy these mills, and they were imminently threatened with a forced sale which would, of course, defeat its purchase. Money had to be found for the taxes if the mills were to be saved. Neither the Maharaja nor the trustees showed any sign of paying the Municipality. So the appellant company paid. But to describe it in those circumstances as having made a voluntary payment appears to their Lordships to involve some misuse of language. Nor do they appreciate why it should not properly be described as interested in the payment. Neither the Maharaja nor the trustees showed any sign of paying the Municipality. So the appellant company paid. But to describe it in those circumstances as having made a voluntary payment appears to their Lordships to involve some misuse of language. Nor do they appreciate why it should not properly be described as interested in the payment. The words themselves do not require that a person to be interested in a payment should at the same time have a legal proprietory interest in the property in respect of which the payment is made. But the general purport of the section is reasonably clear: to afford to a person who pays money in furtherance of some existing interest an indemnity in respect of the payment against any other person who, rather than he, could have been made liable at law to make the payment. 16. In dealing with the expression "bound by law to pay" their Lordships at page 7 of the report observe as follows: "The Maharaja was bound to pay this money in the sense that he had made a legally enforceable Contract with Mr. Seksaria to pay it. Unless the words "bound by law to pay" where they occur in the section, exclude those obligations of law which arise inter paries, whether by contract or by tort, and embrace no more than those public duties which are imposed by statute or general law, the Maharaja was a person whom reimbursement could be claimed under the section Certainly too, there is authority in the Courts of India for the proposition that "bound by law" covers obligations of contract or tort. 17. The above observations of their Lordships clearly show that the first plaintiff in this case who had a contract of sale in his favour through his agent, the second plaintiff, was a person interested in the payment of money and that the money that he paid was money which the defendant was bound by law to pay. Further the decision of the Privy Council clearly shows that the decision in Nanda Kishore v. Paraoomian 42 Indian Cases 839 relied upon by the learned counsel for the petitioner is no longer good law because the decision in 42 Indian Cases declined to recognise the interestedness of a person who had a contract in his favour. Further the decision of the Privy Council clearly shows that the decision in Nanda Kishore v. Paraoomian 42 Indian Cases 839 relied upon by the learned counsel for the petitioner is no longer good law because the decision in 42 Indian Cases declined to recognise the interestedness of a person who had a contract in his favour. On the other hand, the Privy Council has held that a person who had a contract of sale in his favour is a person interested within the meaning of S.69 of the Contract Act. 18. In Jagarnath Prasad v. Chunni lal (A. I. R.1940 All. 416) their Lordships held that payment of a decree debt for a party is payment of money which another was bound in law to pay. In Bhagirathi v. Deyambar Ambadas (A.I.R.1945 Nagpur 179; the Nagpur High Court has held that all that the courts have to consider in arriving at a decision whether the payment was done lawfully or not is to see whether the person making the payment had any lawful interest in making it at the time when the payment was made. Applying the decision of the Privy Council and of the Allahabad and Nagpur High Courts I hold that the first plaintiff when he deposited the decree amount, in O. S.180 of 1951, District Munsiff's Court, Kozhikode was a person interested in the payment of money which another is bound by law to pay within the meaning of S.69 of the Contract Act and as such he is entitled to be reimbursed by the defendant herein. As the payment' will clearly come within the meaning and scope of S.69 of the Contract' Act it is unnecessary to consider whether S.70 of the Contract Act also will apply or not. 19. In the result, the decree and judgment of the learned Subordinate Judge are confirmed and this Civil Revision Petition is dismissed with costs. 20. It has been brought to my notice by Mr. Ramunny Menon that his client will be entitled to the benefit of Act I of 1955 (Malabar). This point has not been considered by the Subordinate Judge. The learned counsel for the respondent contends that this should be considered to be a case of breach of trust and as such Act I of 1955 (Malabar) will not apply. I am not inclined to agree with the contentions of the respondent. This point has not been considered by the Subordinate Judge. The learned counsel for the respondent contends that this should be considered to be a case of breach of trust and as such Act I of 1955 (Malabar) will not apply. I am not inclined to agree with the contentions of the respondent. It is open to the defendant petitioner to make the necessary application in the lower court for invoking the benefit of Act I of 1955 (Malabar).