BHURMAL RAMHARAN Vs. GODURAM MANGALCHAND JAT

JUDGEMENT

(1.) THIS is an appeal from the decision of the Additional District Judge, Khandwa, who has held that a contract which we set forth in extenso below is against public policy and that the plaintiff's suit for breach of the contract, decreed in part by the trial Court, must therefore fail. The learned Judge of the first appellate Court has not decided the facts, and we consider it desirable to set forth certain facts which are either undisputed or appear to us to be clear from a consideration of the evidence. The defendant respondent Goduram obtained a contract from the Secretary of State for India in Council to convey the postal articles and mail bags once a day from Khandwa R.M.S. to Khargon in Indor State and vice versa. It was provided in the contract that all motor vehicles used for performance of the contract should be subject to the approval of some person deputed for the purpose by the Postmaster. General of the Central Circle, and it was also provided that no part of the contract or interest of the contract should be transferred to any other person without the previous consent in writing of the Director. General, Posts and Telegraphs, or Postmaster-General. The contractor Goduram entered, however, into a partnership with the plaintiff Bhurmal, and it is clear from the evidence that three motor lorries were employed on this contract, one of which belonged to the contractor alone and two of which were partnership property. Then the plaintiff and the defendant decided to wind up the partnership and entered into the following contract: Exhibit P-16, Deed of Agreement, dated 14th July 1934: Deed of agreement executed in favour of Bhurmalji son of Ramkaranji Brahmin, resident of Basim, occupation a contractor at present at Khandwa, by Goduram son of Mangalchand, by caste a Jath and by occupation a Halwai (seller of; sweetmeats), resident of Khandwa, Budhwara Bazar, Tahsil Khandwa, to the following effect: Two motor lorries-Royal Mail No. 4049 and another No. 7601, C.P. used to ply (in partnership) between yourself and myself and the said motor (lorries) used to run between Khandwa and Khargon, passengers, mail and the like were carried therein. And in the said partnership business one-half share was yours and one-half share was mine. And the said partnership commenced from 17th April 1933. And in the Punji (capital) that was invested at the time when the said partnership commenced, for the purchase of motor (lorries) and the like and for doing other arrangements, the amount of one-half the capital was mine and the amount of (the other) half share was yours. You and I were the owners of the said entire property to the extent of one-half share (each). (But) the Government licenses, orders, permits and the other entire papers for plying the said motor lorries were in my name alone. And the contract in respect of the Government mail, that is sent from Khandwa Post Office to Khargon, is also in my name alone. The entire accounts of the said partnership business were made between yourself and myself and a settlement was arrived at completely in respect of the same. And the partnership between yourself and myself has also been dissolved on 13th July 1934. But in respect of the joint capital invested for the purchase of partnership motor lorries, it has been decided between yourself and myself that you should pay to me a total sum of Rs. 2650 on account of the price of both the motor lorries, made up of Rs. 2000 in respect of motor lorry No. 4049 and a sum of Rs. 650 in respect of motor lorry No. 7601; that I should get my name removed (struck off) from against the said motor lorries and get your name entered, that with effect from this day you alone shall remain the absolute owner of the said motor lorries Nos. 4049 and 7601 C.P. and that you shall remain the full 16 annas owner of the income that accrues from plying the said motor lorries in future and from sending Dak (Mail) and the like and of the expenses and the like that are incurred. You shall remain liable and responsible for all sums to be taken or paid. You alone shall remain liable and responsible for the entire loss, risk and the like that there may be in the said business. I will have no connexion with the said business. It shall be incumbent upon me to get both the motor lorries (recorded) in your name in the Central Provinces and in Indore State, after taking due steps, and I will also have the contract in respect of Dak (Mail) transferred in your name. And it has also been agreed between yourself and myself that if due to any reason both the motor lorries are not transferred to your name from that of mine and if the contract in respect of Dak also is not transferred in your name, the business of all the said motor lorries and the business of the contract in respect of Dak shall nominally continue in my name. My name will (be allowed to) remain in the Government papers. (But) you alone shall remain liable and responsible for the entire profits and loss in respect of the same. I will have no connexion therewith. And in respect of the said motor lorries and the contract of Dak which will nominally remain in my name, if I am summoned to any place by the Government, that is, by the Police Department or by the Indore Darbar or to Nagpur and the like, and if it is necessary for me to go, I will go there conduct (the proceedings) and give replies. I will exert myself with heart and soul. I will render help in every way. I will maintain the continuance of the said contract and the running of the motor lorries. But in respect of the above you shall have to pay all the expenses on account of railway fare for going and coming, travelling expenses and the like, that may be incurred. The said contract of Dak has been sanctioned in my name for three years with effect from the 17th of April of the year 1983 to the 17th of April 1936 A.D. Out of the same, 15 months have already passed in partnership between yourself and myself. 21 months are remaining further. So, I will make arrangements, so that the said contract lasts for 21 months more that is, it is continued till 16th April 1936. On the expiry of the term of the said contract on the 17th of April of the year 1936 A.D., even if the said contract continues in future, its responsibility shall not be on me. You alone shall remain responsible for the continuance or non-continuance of the theka in future. Between myself and yourself the terms mentioned above have been agreed upon. You and I will remain bound by the said terms and will abide by them. If I act against the terms of this deed of agreement, derive benefit from the karobar that is in my name nominally, allow my right and ownership to continue over all the motor lorries, and the contract of Dak, show evil intention and do acts of dishonesty, I will pay to you a total sum of Rs. 4000 in words four thousand rupees, made up of Rs. 2000 in respect of motor lorry No. 4049 on account of its price, Rs. 500 on account of damages in respect thereof, and in respect of motor lorry No. 7601, Rs. 650 on account of its price and Rs. 850 on account of damages in respect thereof. I will not raise any kind of objection thereto. You shall remain entitled to recover the said amount of four thousand rupees from me in every way. If I act according to the provisions of this deed of agreement, if I allow you to take the full income of 16 annas property, maintaining my name nominally, and if I do not put forth any kind of obstruction in your karobar, I will not remain liable to pay the aforesaid amount, and you also shall not have any right to recover any amount from me. You should pay to me within one month Rs. 2650 on account of the price of motor lorries. And when according to the agreement you pay to me Rs. 2650 in cash, the amount of the price of motor lorries, I will execute a receipt therefor in your favour. I will not raise any kind of objection thereto. Hence I have executed this deed of agreement with my free will and pleasure and in full possession of my senses. Both yourself and myself shall remain bound by this deed of agreement and shall act according to it. Hence you and I both have made signatures on this deed of agreement. The original agreement deed, which is executed on a stamp of Rs. 10 shall remain with you-Bhurmalji. A copy thereof has been made on a stamp of Be. 1. It is also signed by you and me. It is also like the original. It shall remain with me. This deed of agreement is executed and it is genuine. May it remain on record and be useful at the time of necessity. Finis. Miti Asad Sudi 3, Sam-vat 1991, dated the 14th of July 1934 A.D. Signatures; Sd./- Goduram, in the hand of self. Sd./- Bhurmal Ramkaran, Mail Contractor, in the hand of self. Witnesses: Sd./- Chunnilal Harbhagat Marwadi, resident of Basim at present at Khandwa. Both the persons made their signatures in my presence. Sd./- Narayan, son of Sitaram Tamoli of Khandwa. Both Goduram and Bhurmal made their signatures in my presence. By the pen of Hiralal Ramji resident of Khandwa. The signatures were made in my presence, Re. Bi. 291.

(2.) IN pursuance of this contract the defendant endeavoured to get the postal contract transferred to the plaintiff, but this was not allowed. For sometime the partnership appears to have continued. All three lorries were employed (i.e., the defendant's lorry and the two lorries for which the plaintiff paid according to the contract so as to be the sole owner of them). The plaintiff apparently took charge, and it is clear that the plaintiff was paying one-third of the profits to the defendant and retaining two-thirds. On 1st October 1934 the licenses of the plaintiff's two lorries were renewed for a year in the name of the defendant, but the lorries were, according to the plaintiff's evidence in the plaintiff's control from 1st July 1934 to 1st October 1934 and when the licences were renewed the licences were given to the plaintiff's driver.

(3.) THE question arises whether the learned Judge of the first appellate Court is correct in holding that the contract, for the breach of which the plaintiff sues, is void as being against public policy. The appellant has relied on several cases which at first sight appear to go strongly in his favour. In Nazaralli Sayad Imam v. Babamiya Dureyatimsha there was a contract made with the Divisional Forest Officer in respect of grass in forest coups. One term was that the contract as a whole or any part or any interest in it should not be sub-let or assigned to anyone without previously obtaining the permission of the Divisional Forest Officer. It was held that a partnership agreement in respect of the transaction was not unlawful on the ground that it was forbidden by law. The question whether the contract was opposed to public policy was not discussed. A similar decision was made in Abdulla v. Allah Diya A.I.R. 1927 Lah. 333 in respect of a partnership relating to forest produce. Reference was made to Bhikanbhai v. Hiralal (1900) 24 Bom. 622 In the latter case, it was contended that the contract, which was a breach of a condition that the plaintiff should not sub-let without the permission of the Collector, was opposed to public policy, but it was held that the Act imposing tolls was merely an Act passed for the benefit of the revenue and not for the protection of public, such as the Opium Act or the licensing Acts in England. Abdulla v. Mammod (1903) 26 Mad. 156, was a similar case relating to a ferry and the decision there was that a prohibition by the executive was not a prohibition by law, and therefore the contract was not forbidden by law. One of the oldest reported cases is the Full Bench decision in Gauri Shankar v. Mumtaz Ali Khan (1979) 2 All. 411 , which was a case of a lease of a Government ferry. The unsuccessful contention in this case was that the sub-contract was forbidden by law.