Judgment U.N.Sinha, J. 1. This appeal has been filed by the defendant, it arises out of a suit for money filed by the plaintiff for realisation of a sum of Rs. 1790-11-6, as the price of iron goods supplied to the defendant on the 28th of October, 1949, under a permit, dated the 24th of September 1949. The suit was dismissed by the learned Munsif who tried the suit, but on appeal by the plaintiff, the suit has succeeded in part. It has been decreed for a sum of Rs. 1326-/-6, that is to say, the plaintiffs claim for interest which has accrued due before the institution of the suit has been negatived, 2. The facts are as follows: It was alleged by the plaintiff that he was carrying on his business of iron materials in the name of Monghyr Business Syndicate in the town of Monghyr. The defendant had obtained a permit from the Director of Industries, Bihar, No. 1989, issued on the 24th of September, 1949. The permit had directed the Monghyr Business Syndicate to supply the materials mentioned in that permit to the defendant. In pursuance of that permit, the plaintiff had supplied those materials to the defendant on the 28th of October, 1949. a credit memo for a sum of Rs. 1326-7-5 was issued to the defendant, being credit memo No. 522. As the defendant had not paid the value of the materials supplied, the plaintiff had sent a notice of demand through his lawyer, but in spite of service of notice, the defendant had not paid. Thus the plaintiff was compelled to institute tne present suit for realisation of the price of the materials supplied. 3. The substance of the defendants case was -as follows: It was alleged that so far as the defendant remembered, no permit upon which the plaintiff had based his case was issued to the defendant and it was contended that the plaintiff had not supplied the materials, said to have been supplied to the defendant on credit nor could the controlled commodities have been supplied on credit at that time. According to the defendant, the plaintiff had instituted this suit due to some ill-feeling and private dispute, to cause harassment to the defendant. 4.
According to the defendant, the plaintiff had instituted this suit due to some ill-feeling and private dispute, to cause harassment to the defendant. 4. On the allegations of the parties several issues were framed by the,learned Munsif, of which the principal issue was whether there was any transaction between the parties under the permit in question, as alleged by tne plaintiff. On the materials on record, the learned Munsit answered this issue in favour of the defendant. It was held the plaintiff had failed to prove that the permit in question was really issued to the defendant on his application to the Director of Industries, Bihar. It was held that on the question of supply of the materials on the 28th of October, 1949, the plaintiff had made out a new case in Court, in putting forward a case that the materials had been supplied to one B. R. Sharma on behalf of the defendant. According to the learned Munsif, the plaintiff had introduced the name of a fictitious person in this context. It was held that the plaintiffs case that he had supplied the materials to the defendant on credit was not acceptable. In conclusion the learned Munsif held that there was no transaction between the plaintiff and the defendant as was alleged by the plaintiff. Thus, the suit failed completely. It appears that on appeal the learned Additional District Judge has accepted the plaintiffs case to the eftect that he had supplied the materials in question, under the permit dated the 24th of September, 1949, to an agent of the defendant. The learned Judge has stated that although the materials on record were not sufficient for a conclusion that B. R. Sharma was the servant of the defendant, there was no doubt that he had obtained the materials from the plaintiff as a person representing the defendant, upon the permit issued in the name of the defendant. Thus the transaction relied upon by the plaintiff has been accepted by the learned Additional District Judge, and the present suit has been decreed to the extent mentioned above. 5. Learned Counsel for the appellant has urged a question of law based on the terms of the permit in question and upon the law as it stood on the day that the materials are said to have been supplied by the plain-tiff of the defendant.
5. Learned Counsel for the appellant has urged a question of law based on the terms of the permit in question and upon the law as it stood on the day that the materials are said to have been supplied by the plain-tiff of the defendant. This contention is based on the following facts. Permit No. 1989 had been issued on the 24th of September, 1949, and there was a direction to Monghyr Business Syndicate to supply iron and steel of the quoted specification and quantity to the defendant on cash payment. The permit also mentioned, in a note, that delivery under the permit must be taken within the valid period, which was 30 days from the date of issue. It was further mentioned that in default a fresh application would have to be made. Learned Counsel for tne appellant has contended that assuming that the piaintm had supplied the materials under the permit, on credit, on the 28th of October, 1949 as alleged, he had contravened the terms of the written order of the Controller, within the meaning of Iron and Steel (Control of Production and Distribution) Order, 1941. According to teamen Counsel for the appellant, there was a breach of the control order in two respects. First, the supply had been made beyond the valid period of the permit, and secondly, the supply had been made on credit, whereas under tne permit the supply had to be made on cash payment, thus it is argued on behalf of the appellant that the piaintm cannot obtain any relief from a court of law, having supplied the materials in question to the defendant, assuming that the materials had been supplied, in breach of the prevailing law. Learned Counsel for the respondent has, on the other hand, contended that once it is proved that the plaintiff had supplied the materials in question to the defendant, the plaintiff is entitled to be reimbursed on the principle enunciated in Sec. 70 of the Indian Contract Act; that is to say, according to learned Counsel tor the respondent, the defendant is bound to make compensation to the plaintiff in respect of the materials supplied to the defendant.
After hearing learned counsel for the parties, upon the question of law raised on behalf of the appellant, it appears to me that there is a substantial obstacle in the way of the plaintiff in obtaining a decree for the supply of the materials under the permit . In question. I will consider this aspect of the matter on the assumption that the materials had been delivered on the 28th October 1949. There is no dispute that at the relevant time, Iron and Steel (Control af Production and Distribu-tion) Order, 1941, was in force, and Sections, 3, 4, and 5 of the Order ran thus : "3. Application of order. -- The provisions of tnis Order shall apply to all iron or steel of the categones specificed in the Second Schedule to this Order. 4. Acquisition.-- No person shall acquire or agree to acquire any iron or steel from a Producer or a Stockholder except under the authority of and in accordance with the conditions contained or incorporated in a general or special written order of the Controller. 5. Disposal.-- No producer or Stockholder shall dispose of or agree to dispose of or export or agree to export from British India any Iron or Steel, except, in accordance with the conditions contained or incorporated in a special or general written order of the Controller." The second schedule to this Order shows that joists, angles and barbed wire, covered by the permit, were included in that schedule. Sec. 4 of the Order mentioned that no person could acquire such article except in accordance with the conditions incorporated in a genera! or special written order of the Controller. Under Sec. 5, no stockholder (the plaintiff in this case was a stocknomerl was permitted to dispose of such articles except in accordance with the conditions incorporated in a general or general written order of the Controller. The permit under which the supply was made in this case was the written order of the Controller issued on the 24th of September 1949, to the stockholder, specifying the conditions under which the sale to the permit-holder was permissible.
The permit under which the supply was made in this case was the written order of the Controller issued on the 24th of September 1949, to the stockholder, specifying the conditions under which the sale to the permit-holder was permissible. The consequences of contraventions of this Order are indicated in Sec.13 of the Order which ran thus : "Any Court trying a contravention of this Order may, without prejudice to any other sentence which it may pass, direct that any iron and Steel in respect of which the Court is satisfied that this Order has been contravened shall be forfeited to His Majesty." Thus, under the permit, the plaintiff could supply to the permit-holder, the materials mentioned in the permit, within 30 days from the 24th of September 1949, and on cash payment. So far as the question of delivery on the 28th October 1949, is concerned, the plaintiffs documents indicated delivery on that date. Learned counsel for the respondent has submitted, in this connection, that although the plaintiffs agent had actually removed the goods on the 28th October 1949, the delivery must be held to have taken place within 30 days from the 24th September, as it has been elicited from the plaintiff that the defendant had gone to the plaintiffs establishment 5 or 7 days before the 28th October, and had requested the plaintiff to hand over the materials to the defendants servant when he would come to the stockholders establishment with the permit. It is, thus, argued that the transaction between the plaintiff and the defendant upon the permit had taken place within 30 days from the 24th of September, although the defendant himself chose to remove the goods on the 28th October, through his agent. Attractive as the argument is, I am not inclined to accept this argument as valid, on the face of the note made on the permit itself. The note stated thus : "Delivery must be taken within the valid period." At the top of the permit, it is mentioned that the permit was valid for 30 days only. The actual delivery was bound to be given under the permit only within 30 days from the 24th of September, and the plaintiff could have objected to the delivery being taken by the defendants agent on the 28th October 1949.
The actual delivery was bound to be given under the permit only within 30 days from the 24th of September, and the plaintiff could have objected to the delivery being taken by the defendants agent on the 28th October 1949. Even assuming, therefore, that the plaintiffs evidence is true to the effect that 5 or 7 days before the date of actual delivery, the defendant had asked the plaintiff to deliver the materials to his servant when he wouid come with the permit, the delivery to the defendants servant or agent on the 28th October 1949, was a delivery in breach of the conditions laid tiown in the permit. Secondly, according to the permit itself, the supply to the defendant, named as the permit-holder, had to be made on cash payment. Actually all the documents brought on the record by the plaintiff mention that the supply to the defendant had been made on casn payment. The learned Additional District Judge has dealt with these documents which are Exts. 2, 3, 5, 6 and 7. Ext. 2 is the plaintiffs Rokar Bahi, Ext. 3 is his khata Bahi, Ext. 5 is his stock register, Ext. 6 is his summary book of iron business, and Ext. 7 consists of office copies of the return of supply of goods, sent to the Deputy Director of Industries. All these documents show that the supplies in General and the supply to the defendant in particular had been made on cash payment. According to the learned Judge, in spite of all these documents showing sale on cash payment to the defendant, nothing unusual had occurred, if the plaintiff as a business man had consented to accommodate the defendant and to supply materials to him on credit at his request. It may be that nothing unusual had taken place in such a transaction, but the question for determination is whether such a transaction, in breach of the law prevailing at that time, can be the basis for a decree to be passed in a Court of law. In my opinion, it will be against public policy to accept the plaintiffs case of supply to the defendant, on. credit, on the permit in question, for the purpose of passing a decree against the defendant.
In my opinion, it will be against public policy to accept the plaintiffs case of supply to the defendant, on. credit, on the permit in question, for the purpose of passing a decree against the defendant. Reference may be made to a decision of their Lordships of the Supreme Court, in the case of Kedar Natn Motani V/s. Prahlad Rai, AIR 1960 SC 213 . The principle that no Court will lend its aid to a man who founds his cause of action upon an illegal act, was considered by their Lordships of the Supreme Court, referring to the decision in Holman V/s. Johnson, (1775) 98 ER 1120 at p. 1121. The principle was laid down by their Lordsmps in paragraph 15 of the judgment thus : "the correct position in law, in our opinion, is that what one has to see is whether the illegality goes so much to the root of the matter that the plaintiff cannot bring his action without relying upon the illegal transaction into which he had entered. H the illegality be trivial or venial, as stated by with ston and the plaintiff is not required to rest his case upon that illegality, then public policy demands thai the defendant should not be allowed to take advantage of the position. A strict view, of course, must be taken of the plaintiffs conduct, and he should not be allowed to circumvent the illegality by resorting to some subterfuge or by mis-stating the facts. If however, the matter is clear and the illegality is not required to be pleaded or proved as part of the cause of action and the plaintiff recanted before the illegal purpose was achieved, then, unless it be at such a gross nature as to outrage the conscience or the Court, the plea of the defendant should not prevail". It is clear from the facts and circumstances of the instant case, that the plaintiff has got to prove as a part of his cause of action, the illegality committed by him, in order to obtain a decree on the transaction in question.
It is clear from the facts and circumstances of the instant case, that the plaintiff has got to prove as a part of his cause of action, the illegality committed by him, in order to obtain a decree on the transaction in question. As a matter of fact, the plaintiffs case is based on the fact that as the permit in question indf-cated that the sale had to be on cash basis, he had, in fact, shown in all his books of account that the sale to the defendant had been made on cash payment, and that he had even informed the authorities in question that he had sold the materials to the defendant under Permit No. 1989 on cash payment. To allow a decree to be passed in favour of the plaintiff, in the circumstances, would be to permit a stock holder to inform the authorities under the Iron and Steel Control Order that he had been conducting his business in accordance with law, whereas he is approaching a Court of law on the basis that he had not done so. In my opinion, the principle of ex dolo malo non oritur actio must be held to be applicable to the facts of this case. Reference may also be made in this con-text to a decision of this Court, in the case of Sewsagar Avasty V/s. Satyanarain Sah, AIR 1960 Pat 145 . There, the piaintitl of that suit, who had a licence under the Bihar Cotton Cloth and Yarn Dealers (Licensing and Control) Order, 1944, had supplied the defendant standard cloth for being sold in his shop. It was held that the amount due as the price of standard cloth could not be held to be a lawful claim made by the plaintiff. It was held by this Coun that it is well settled that if the illegality of a transaction is duly brought to the notice of the Court, and if the person invoking the, aid of the Court is himself implicated in the illegality, then the Court will not allow itself to be made an instrument to enforce an obligation arising out of that illegal contract. It was held that it did noi matter whether the defendant had pleaded illegality or whether he had not.
It was held that it did noi matter whether the defendant had pleaded illegality or whether he had not. in Sewsagars case, AIR 1960 Pat 145 , their Lordships stated thus : "This view is borne out by the decision of this High Court in the Dominion of India V/s. Bhikraj Jaipuria, 1957 Pat LR 198 : ((S) AIR 1957 Pat 586 ). A similar argument advanced there was rejected by the High Court. This view is also supported by English authorities which are (1775) 1 Cowp 341 and Scott V/s. Brown, Doering, McNab and Co., [1892) 2 Q B 724 and which were quoted by Ark-nan, J. in Alice Mary Hills V/s. William Clarke, ILR 27 All 266 at p. 273. In (1/75) 1 Cowu 341, Mansfield, LJ. said : If from the plaintiffs own stating or otherwise the cause of action appears to arise ex turpi causa or the transgression of a positive law of this country then the Court says he has no right to be assisted. In the case of 1892-2 QB 724 Lindley L. J. says : No Court ought to enforce an illegal contract or allow itself to be made the instrument of enforcing obligations alleged to arise out of a contract or transaction which is illegal, if the illegality is duly brought to the notice of the Court, and if the person invoking the aid of the Court is himself implicated in the illegality. It matters not whether the defen-dant has pleaded the illegality or whether he has not. If the evidence adduced by the plaintiff proves the illegality, the Court will not assist him;" The principles laid down in the two decisions mentioned above, to my mind, apply in the present case, and it must be held that the plaintiff is not entitled to obtain a decree against the defendant for the materials supplied to him. Learned Counsel for the appellant has drawn my attention to another decision of this Court, in the case of Ramekbal Singh V/s. Harihar Singh, AIR 1962 Pat 343 , where the abovementioned decision of their Lordsnips or the Supreme Court and the case of Sewsagar Avasty, AIR 1960 Pat 145 were referred to. I may mention here that in Kedarnath Motanis case, AIR 1960 SC 213 , their Lordships of the Supreme Court mentioned some exceptions or "supposed exceptions" to the rule of turpi causa.
I may mention here that in Kedarnath Motanis case, AIR 1960 SC 213 , their Lordships of the Supreme Court mentioned some exceptions or "supposed exceptions" to the rule of turpi causa. But In the instant case, the facts do not indicate that a can come within any of the exceptions to which reference has been made by their Lordships of the Supreme Court. The principle of Sec. 70 of the Indian Contract Act, upon which learned Counsel for the respondent has relied, cannot be of any avail in the present case. Section /U of the Contract Act pre-supposes that something has been done lawfully or something has been delivered by one person to another lawfully, not intending to have done so gratuitously. This principle was considered by their Lord-ships of the Supreme Court in State of West Bengal V/s. B. K. Mondal and Sons, AIR 1962 SC 779 . Gajendra-gadkar, J. stated thus in this case. "Turning to the facts of this case it is clear that both the Courts have found that the acts done by the respondent were done in. fact in pursuance of the requests invalidly made by the relevant officers of the appellant, and so. they must be deemed to have been done without a contract. It was not disputed in the Courts below that the acts done by the respondent have been accepted By the appellant and the buildings constructed have been used by it." On these conclusions, their Lordships of the Supreme Court held that the respondent of that case could invoke Section 70 of the Contract Act against the appellant, in my opinion, the decisions based on Section 70 of the Indian Contract Act are not of assistance in determining the question that falls for determination in this case. Here, tne supply could have been made only on the terms and con ditions laid down in the permit, under the Iron and Steel Control Order, and the plaintiff himself bases his case on the fact that he had supplied materials to the defendant, in breach of the principal term that he must supply on. casji payment.
Here, tne supply could have been made only on the terms and con ditions laid down in the permit, under the Iron and Steel Control Order, and the plaintiff himself bases his case on the fact that he had supplied materials to the defendant, in breach of the principal term that he must supply on. casji payment. At the relevant time, the sale of the materials mentioned in the second schedule of the Order was not permissible, except on the terms incorporated in a general or special written order of the Controller, it must be held that the plaintiff is bound to suffer the consequences of supplying on credit to the defendant but informing tn. authorities that the supply had been duly made in accordance with the terms of the permit granted to the defendant. In my opinion, on the very facts of the instant case the plaintiffs suit is bound to fail. 6. Learned Counsel for the appellant has furthermore contended that the plaintiffs case, accepted by the learned Additional District Judge, that the materials had been suppli-ed to a servant of the defendant, ought not to have been accepted, for the reason that it was a new case made out in Court by the plaintiff. My attention has been drawn to the judgment of the learned Munsif where he has stated that according to the plaint, the goods had been supplied to the defendant personally. It appears to me, however, that the learned Munsif was in error in coming to the conclusion that according to the plaintiffs pleading, the materials under the permit had been supplied to the defendant personally, whereas according to his case made out in court, the materials had been delivered to the defendants agent. The pleading merely states that the materials in question had been supplied to the defendant. It is not possible to hold that the plaintiffs case made in Court to the eftect that the materials had been delivered to the defendants agent, is a case different from that in the pleading, wnere it was stated that the materials had been supplied "to the defendant." It has also been urged by learned Counsel for the appellant that the authority of the defendants agent or servant, to whom the materials are said to have been supplied, has not been established.
This is a pure question of tact which can be determined on the materials on record, ana the learned Additional District Judge has held on the evt-dence of Raghunandan Pathak that the person to whom the materials had been delivered was a representative of the defendant. In my opinion, these conclusions of the learned Judge, on appeal, are based on the evidence on record, ana they cannot be interfered with in this second appeal. bUT for the reasons given upon the question of law raised on behalf of the defendant-appellant, it must be held that tne plaintiffs suit is liable to be dismissed. 7. The appeal is, therefore, allowed, the decree passed by the learned Additional District Judge is set aside, and the plaintiffs suit dismissed. Under the circumstances, tne parties are to bear their costs throughout.