MOHAFAZUL RAHIM Vs. BABULAL

JUDGEMENT

(1.) THIS is a revision by the defendant against the decision of the Small Cause Court, Nagpur, decreeing the plaintiff's claim.

(2.) THE plaintiff-non-applicant filed a suit for recovery of Rs. 500 alleged to be due on a receipt (EX. P.1) dated 18th March 1943. The plaintiff's case was that Rs. 500 were advanced in cash to the defendant on 18th March 1943 and that the same have not been returned by him as agreed. The defence in the case was that the receipt was not for cash consideration and in fact no amount was advanced by the plaintiff to the defendant on 18th March 1943. The plaintiff and the defendant both wanted to bid at an auction held by the District Council Nagpur regarding the right to recover market dues from the Sonegaon market. With a view to stifle the competition between the plaintiff and the defendant, the defendant persuaded the plaintiff not to compete and it was in consideration for that agreement that Rs. 500 were agreed to be paid to the plaintiff. The defendant's contention consequently was that this agreement and the consideration for the agreement were against public policy, and could not therefore be enforced in a Court of law.

(3.) A right to bid at an auction is a valuable right and unless there is any law which prevents persons from entering into agreements not to bid, such agreements prima facie are legal, and the consideration of the agreement could be enforced in a Court of law. It was however contended by the learned Counsel for the applicant that such an agreement implies fraud, either on the owner of the property or the right which is the subject-matter of the auction, or on some other person who is entitled to a rateable distribution in the auction price and therefore such agreement and the consideration for the same should be held to be illegal.