CHAUBE RAM LAL Vs. RAM DIN KILEDAR

JUDGEMENT

(1.) This is a plaintiffs appeal arising out of a suit brought for foreclosure of a mortgage by conditional sale dated 2 July, 1928 executed by Earn Din defendant 1 in favour of the plaintiffs, who are station-masters on the G.I.P. Railway. The Courts below dismissed the suit on the ground that the plaintiffs being railway servants were forbidden by law to enter into money lending business and accordingly under Section 23, Contract Act, the mortgage in suit was not enforceable. The main question that falls to be decided is, whether the Courts below have correctly interpreted the relevant sections of the Railways Act and Section 23, Contract Act. Section 137(3)(b), Railways Act, provides: A railway servant shall not in contravention of any direction of the Railway Administration in this behalf engage in trade.

(2.) The plaintiffs, who are own brothers, had to sign an agreement which embodies the terms of their service. Clause (5) of the agreement says: A railway servant will not, without permission in writing to be first obtained of the agent of the Great Peninsular Railway, carry on or be interested in any lending business or any other business or trade of any kind whatsoever, either directly or indirectly.

(3.) It is obvious that under the statutory provision applicable to the plaintiffs and under the terms of the agreement executed by them the plaintiffs could not engage in a trade or business. Learned Counsel for the appellants has contended that the Court below has not recorded a finding to the effect that the plaintiffs are engaged in a trade or business. It is urged that an isolated investment made on the security of property does not amount to business or trade. Before considering the law on the subject I would like to refer to the relevant portion of the pleading raised by the defendant in his written statement on this point. Para. 10 of the written statement says: The plaintiffs are public servants and as such they are legally not authorized to advance money. That being so, the plaintiffs are not legally entitled to maintain the present suit and in any event the contract sought to be enforced is opposed to public policy and therefore the suit is not maintainable.