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1958 DIGILAW 307 (KER)

Madhavan Nair v. Kunju Nair

1958-12-21

KUMARA PILLAI

body1958
Judgment :- 1. The suit out of which this civil revision petition arises was for recovery of arrears of subscription payable by a prized subscriber in an unregistered Kuri, which has been dismissed by the lower court on the ground that the kuri, being unregistered, was a void transaction and no suit for recovery of amounts due in respect of it was maintainable. Against the decree dismissing the suit the plaintiff has filed this civil revision petition. 2. The case arises from the area included in the erstwhile Cochin State and is governed by the Cochin Kuries Act, VII of 1107. S.5 of that Act provides: "Every kuri shall be registered in accordance with the provisions of this Act, and if not so registered, it shall be void and the foreman shall be liable to a fine not exceeding Rs. 500." It is not disputed that the kuri in this case was not registered. 3. The plaintiff's counsel first relied upon S.43 of the Kuries Act and contended, that in as much as the foreman has compounded the offence under S.5 the kuri transaction cannot be held to be void. S.43 reads: "43 (1) Notwithstanding anything contained in S.262 of the Code of Criminal Procedure, 1086, any officer empowered by Government in this behalf may, at any time, on receipt of such compensation as may be fixed by such officer compound any offence punishable under the foregoing provisions of this Act. (2) Such composition shall have the effect of an acquittal of the accused". I am unable to accept the contention of the plaintiff's counsel for the reason that, whereas two consequences are provided for in S.5 for the non-registration of the kuri, namely, (1) the kuri being treated as void and (2) the foreman being liable to a fine, S.43 provides only for the removal of one alone of these consequences by the compounding. It is only the liability of the foreman to pay the fine that is taken away as the result of the compounding under S.43 (1). The compounding does not at all take away the consequence which attaches to the kuri itself by its non-registration. 4. It is only the liability of the foreman to pay the fine that is taken away as the result of the compounding under S.43 (1). The compounding does not at all take away the consequence which attaches to the kuri itself by its non-registration. 4. The second contention of the plaintiff's counsel before me was that the suit itself was only for recovery of money due under the security bond and that the consideration for the agreement to pay the future subscriptions being the receipt of a lump amount by the subscriber from the foreman that consideration cannot be aid to be illegal or void. According to him, the Kuri transaction and the transaction between the foreman and the prized subscriber, whereunder the foreman paid the prize amount to the subscriber and the latter agreed to pay the future subscriptions, were two independent transactions. The transaction between the foreman and the subscriber under the security bond, it was contended, has to be viewed more or less like a debt advanced by the foreman to the prized subscriber repayable in instalments. In respect of this contention he cited Kochu Velu v. Cherikkal, 6. D. L. R. T-C. 301. That was a case in which the licencee of a toddy shop had entered into an agreement with another person for the working of the toddy shop, under which the licencee received some amount from that person in consideration of his also being associated in the business. For paying the licencee the other person had taken a loan, and for repayment of the loan he borrowed some amount from a second person. That second person brought the suit for recovery of the amount advanced by him. It was contended in that case that the consideration for the transaction was illegal and therefore the suit was not maintainable. That contention was negatived by the High Court which observed : "The nexus between the loan and the illegal contract is too remote. "A contract may be so closely connected with an illegal contract or transaction as to be itself invalid. That contention was negatived by the High Court which observed : "The nexus between the loan and the illegal contract is too remote. "A contract may be so closely connected with an illegal contract or transaction as to be itself invalid. On the other hand, though entered into by one party at least for the object of promoting some unlawful object indirectly or collaterally, it may be so far removed from the unlawful object as to be itself, legal" (See Page on Contracts, page 819)." On the facts of that case there can be no doubt that the nexus between the second loan and the illegal contract was too remote. In the first place, the creditor who advanced the first loan might not have been aware for what purpose he was advancing the loan, and in the second place, the second loan was advanced only for repaying the first loan. The facts are entirely different in the present case. The rights and liabilities of the parties in the present case spring directly out of the kuri transaction. On prizing the kuri the prize amount becomes money belonging to the prized subscriber subject to certain obligations, namely, the obligation to pay the future subscriptions. (See Raman v. Cathrina Rodrigoes, XXV Cochin Law Reports 101). It was for the due performance of those obligations that a security bond was executed by him and not for the purpose of repaying to the foreman a debt which the latter had advanced to him. The kuri agreement itself was illegal, in that the kuri had not been registered, and so, all rights and liabilities springing directly out of it cannot be enforced. S.23 of the Indian Contract Act provides inter alia, that the consideration or object for an agreement is unlawful when it is of such a nature that, if permitted, it would defeat the provisions of any law or the court regards it as opposed to public policy. It cannot be disputed that if transactions under kuri security bonds in kuries not registered are allowed to be enforced it would defeat the provision of law which requires the registration of kuries. The consideration in this case is also opposed to public policy in as much as the policy of the State underlying the Kuries Act was that kuries of over certain value should be registered. 5. The consideration in this case is also opposed to public policy in as much as the policy of the State underlying the Kuries Act was that kuries of over certain value should be registered. 5. For the reasons stated above, I hold that the lower court was right in dismissing the suit on the ground that the suit was for enforcement of a transaction in respect of a kuri, which was void. The civil revision petition is, therefore, dismissed with costs. Dismissed.