GOVIND KESHAV DANDAVATE Vs. YESHWANT PANDHARINATH SHETE

JUDGEMENT

(1.) THE plaintiff in the suit, which has given rise to this second appeal, was the sarpanch of the village panchayat of Rahuri in the Ahmednagar district. Under the Village Panchayats Act of 1920 the panchayat has the right of levying certain taxes, and in particular, under the rules made by the District Local Board in accordance with Section 27 of the Act, it is entitled to recover ground rent in respect of sites occupied in the village market. By an agreement made on April 22, 1933, between the plaintiff representing the village panchayat on the one hand and appellant No.1 on the other the right to collect these dues was leased to appellant No.1 for a period of one year. THE consideration for the agreement was the sum of Rs. 2,300 which was to be paid in quarterly instalments. THEre were two sureties who undertook to pay in case of default by appellant No.1. Default was made in the payment of the third instalment which was only paid in part. THE fourth instalment was not paid at all, and the plaintiff, suing on behalf of the village panchayat, claimed to recover from appellant No.1 and the two sureties the sum of Rs. 974-10-2.

(2.) THE trial Court dismissed the suit. THE learned Subordinate Judge overruled an objection made by the defendants that the agreement sued on was void on the ground that the village panchayat had no power to farm out the right to levy the dues in question. But he thought that the agreement was illegal because it contravened one of the rules made by the District Local Board requiring that sums collected should be paid in daily at the panchayat office.

(3.) THE position he has taken up is that granting that the agreement is ultra vires and void, the village panchayat is entitled to recover the money claimed by it in the suit under the terms of Section 65 of the Indian Contract Act which provides as follows:- When an agreement is discovered to be void, or when a contract becomes void,. any person who has received any advantage under such agreement or contract is bound to restore it, or to make compensation for it, to the person from whom he received it.