M MOHAMMED Vs. A NARAYANA RAO

JUDGEMENT

(1.) DEFENDANT is the appellant. The plaintiff's suit was for recovery of Rs. 1,000/ -borrowed by the defendant in the last week of April 1967 undertaking to repay within a month. Instead of parting with cash the defendant bad issued a cheque to the plaintiff for Rs. 1,000/ -. The plaintiff presented the cheque for payment, but it was dishonoured by the bank. Hence the suit was filed for recovery of the amount. The transaction was denied in toto by the defendant. The plaintiff and defendant are PWD. contractors. DEFENDANT had tendered for a contract work along with the plaintiff and two others. The defendant's tender was at first accepted, and the work was started by him. But later, the work was re-tendered, and on that occasion to dissuade the plaintiff from tendering, the cheque in question was issued to him by the defendant. But quite against the agreement the plaintiff tendered for the work and so, the defendant was forced to instruct the bank not to honour the cheque. The cheque in effect is an escrow, and the agreement is opposed to public policy and hence unsustainable in law. These contentions were repelled and the suit was decreed. The decree of the trial court stands confirmed by the appellate court.

(2.) THE plea that the transaction is opposed to public, policy, I do not think, is available to the defendant. It has been held in a series of decisions that such agreements are valid, and not opposed to public policy. Rajamannar J. (as be then was) of the Madras High Court had to deal with a similar case in Md. lsack v. Sreeramalu (AIR. 33-1946 Madras 289) where a and B made tender-to postal authorities to secure a licence to carry mails between certain places. THEre was an agreement between A and B by which A was to withdraw his tender and in consideration of the withdrawal, B agreed to pay a a certain monthly sum. A withdrew his tender and the licence was given to B. In a suit by A to recover the sum on the basis of the agreement the Court held that the agreement for the withdrawal of the tender which was in the nature of an offer or bid, was like an agreement between intending bidders that one should keep off from bidding and was not unlawful or opposed to public policy under S. 23 of the Contract Act.

(3.) THUS, where in a suit for specific performance of a contract, in part performance of which the plaintiff alleges to have paid the defendant some money, the defendant denies the contract and pleads that the money was taken by him as a loan, the Court can pass a decree for recovery of the loan in favour of the plaintiff on his failure to prove the contract even though the plaintiff had failed to plead and claim relief, on this alternative case". THUS, the defendant has no contention worth placing before the Court. After having been benefitted by the abstention of the plaintiff from tendering, the defendant now wants to wriggle out and befool the plaintiff. The suit in the circumstances has rightly been decreed by the courts below. The decrees of the courts below are hence confirmed, and this Second appeal is dismissed with costs. . .