AKELLA SURYANARAYANAMURTY Vs. AKELLA AYAPPA SASTRY

JUDGEMENT

(1.) The short question that arises in this Revision Petition is whether Section 70 of the Indian Contract Act is applicable to the facts of this case. The plaintiff is the petitioner and his son, the defendant, is the respondent. By a "Kararnama" (Ex. A-15) dated 14-3-1948 father and son effected a partition of their properties and as part of the arrangement the father agreed to transfer to the son 50 shares in the Godavari Sugars and Refineries Ltd., of the value of Rs. 5,000.00. The shares stood in the name of the father, and half the value of the shares had been paid up and the other half remained unpaid. It was agreed that the necessary steps for the transfer of the shares had to be taken by the father while the necessary expenses had to be borne by the son. However, for a period of four years, for one reason or another, the transfer was not effected and the shares continued to stand in the name of the father.

(2.) The Godavari Sugars and Refineries Ltd. went into liquidation in 1952, and the Liquidator called upon the father to pay up Rs. 2,500.00 being the balance of the share amount, failing which a suit would be filed to recover the amount from him. The father filed an application (Application No. 4392 of 1953 in O. P. No. 112 of 1952) before the High Court of Madras to have his name removed from the register of share-holders and to substitute the name of his son, who was made a respondent in the application. It was also stated in the application that it was through the default of the son that the registration of the transfer tad not been effected. Ramaswami Gounder J., who heard the application, agreed to a suggestion made on behalf of the father that he would pay one half of the amount due namely, Rs. 1250.00, and the learned Judge, considering the offer to be reasonable in the circumstances of the case, directed that on payment of Rs. 1250.00 by the father, his name should be removed from the register of share-holders and that of his son be substituted. The amount was accordingly paid by the father. It is this amount that the petitioner sought to recover from the respondent in Small Cause Suit No. 3 of 1955 in the Court of the Subordinate Judge, Amalapuram.

(3.) The learned Subordinate Judge dismissed: the suit, holding that the plaintiff had not lawfully made the payment on behalf of the defendant and the latter had not derived any benefit out of it. The learned Judge found on the contrary that the plaintiff had made the payment in his own interest with- a view to escape paying a larger amount, and