Jijibhai Laldas vs Nagji Gulab on 9 March, 1909

Bombay High Court
Jijibhai Laldas vs Nagji Gulab on 9 March, 1909
Equivalent citations: 3 Ind Cas 761
Bench: B Scott, Batchelor


1. On the 23rd of May 1904, the plaintiff who was in possession of certain Bhagdari land entered into an agreement with the defendant that the defendant should hold the land for 199 years on lease in consideration of a lump sum of Rs. 299 paid in advance and agreed that should any obstruction or hindrance be caused to the defendant’s enjoyment of the land or should the same be taken away from his possession, then he had authority to recover his money, from the plaintiff personally.

2. The defendant in pursuance of the agreement entered into possession of the land. After two years the plaintiff changed his mind and coming to the conclusion that he Would like to take his land back again, sued the defendant for possession on the ground that the so-called lease was an unlawful alienation prohibited by the terms of Section 3 of the Bhagdari Act (Bombay Act) V of 1862.

3. It has been held by the lower appellate Court that the lease is an unlawful alienation prohibited by the Act, and in that conclusion we agree.

4. The question, however, is whether the defendant should be ordered to give up the land without receiving his money back in terms of the agreement in that behalf which we have referred to or according to the terms of Section 65 of the Contract Act.

5. The fact that the agreement by which the alienation was attempted was unlawful under the terms of the Act does not, we think, render the agreement for restitution also unlawful. It is an agreement which provides for what shall be done in the event of the consideration for the payment failing; and it is an agreement, based upon the same principle which underlies Section 65 of the Contract Act. It is to be observed that Section 65 deals with, two cases : First, an agreement which is discovered to be void, and, secondly, a contract which becomes void. There is clearly a distinction between the agreement in the first case and the contract in the second case. The first deals with agreements void ab initio, the second with contracts which become void after they have become contracts. Among agreements void ab intio are agreements based upon an unlawful consideration, see Section 24; and under that section would fall the agreement which we have under consideration in the present case which is unlawful by reason of the provisions of the Bhagdari Act. Yet as provided by the legislature in Section 65 there is nothing improper in the person, who has paid the money in pursuance of such agreement, recovering it back on the discovery of the failure of the consideration.

6. Section 65 provides that compensation should be made by the person who has received any advantage under such an agreement and we think that it is on the basis of fair compensation that the defendant is entitled to be paid money by the plaintiff, whether we treat the case as falling under the collateral agreement contained in the document of the 23rd of May, 1904, or under Section 65 of the Contract Act.

7. Fortunately we have the material ready at hand for assessing that compensation in the judgment of the first Court; for, the Subordinate Judge who first tried the case treated the lease as not void under the Bhagdari Act, but as being in effect a mortgage which the plaintiff was entitled to redeem on the footing of its being one to which the Dekkhan Agricultures’ Relief Act was applicable; and he has taken the accounts between the parties on the equitable basis provided by that Act.

8. The accounts so taken show that a sum of Rs. 261-4-0, was due by the plaintiff to the defendant if the plaintiff obtained possession on 1st of April 1907. It was decreed that he should obtain possession on that day, and we assume that he did obtain such possession. Upon that footing we affirm the decision of the lower Court awarding possession to the plaintiff with this variation that the plaintiff do pay-to the defendant Rs. 261-4-0.

9. Each party must bear his own costs throughout.

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