LAWS(PVC)-1909-1-40

SHEIKH KALLU Vs. RAMSARAN BHAGAT

Decided On January 29, 1909
SHEIKH KALLU Appellant
V/S
RAMSARAN BHAGAT Respondents

JUDGEMENT

(1.) The petitioner be are this Court is a manufacturer of combs in the city of Patna. The opposite party is a merchant resident in the same city, who makes it a part of his business to supply traders in Calcutta with combs. On the 28 March 1908, the opposite party took an agreement from the petitioner as well as 28 other manufacturers of combs in the city of Patna, by which the latter agreed to supply him with combs and not to sell the same to any one else. The material portion of the agreement, which further provided that the petitioner would be liable to damages for contravention thereof, was as follows "where as we, the declarants. Nos. 1 to 29, do hereby agree that whatever combs will be made by us and by our comb-makers the same will be sold to Ramsaran Bhagat and to his heirs during our lifetime and we will not sell the same to any one else. If we do sell to the other men, and if the fact be found true, then the men who will be found guilty of such act, will be bound to pay Rs. 100 as damages to Ramsaran and if in the payment of such sum as damage, any objection be made, Ramsaran shall have power to recover Rs. 100 as damage money from the persons by the sale of any moveable and immoveable properties of such men who will be found out to have sold combs to other men. In this matter, we and our heirs have, nor shall have any objection. If on account of non-despatch of combs to places where they are sent for disposal, Ramsaran does not purchase combs from us, we shall not have the least objection, but if for other reasons, he does not buy our combs, he will be bound to pay Rs. 100 to each of us. Be it noted that if the despatch of combs to Calcutta be wholly stopped and combs be not sold in Patna, we will give up selling combs to Ramsaran, and the comb-makers will make no objection. We will make combs according to the selection of Ramsaran Bhagat."

(2.) On the 7 July 1908, Ramsaran, commenced the action out of which the present Rule arises, in the Small Cause Court of Patna, against the defendant who is one of the executants of the agreement for recovery of the stipulated damages upon the allegation that the defendant had refused to supply him with combs and had sold the combs to another man, by name Elahi Mea. The defendant resisted the claim on the merits, ho denied the allegations of the plaintiff and contended that the agreement was in restraint of trade and consequently was unenforceable. The learned Small Cause Court Judge held that the facts as alleged were established by the evidence, and, as, in his opinion the contract was perfectly valid he made a decree for damages for Its. 25. The defendant now invites this Court to reverse this decision on the ground that the agreement on which the claim is founded is void, as being one in unlawful restraint of trade.

(3.) The learned Vakil, who appears in support of the rule, has placed reliance upon Section 27 of the Indian Contract Act, 1872, and upon the decisions of this Court in Madhub Chunder v. Raj Coomar Doss 14 B.L.R. 76; 22 W.R. 370 and Nur Ali Dubash V/s. Abdul Ali 19 C. 765:The learned Vakil, who appeared to show cause, has contended, on the other hand, that the agreement is valid and in support of this view, has referred to the dictum of Sir Richard Garth, C.J. in Carlisles Nephews & Co. V/s. Ricknauth 8 C. 809 as also to the decisions in Mackenzi v. Striramiah 13 M. 472 and Donell V/s. Benett 22 Ch. Div. 835. After a careful examination of the arguments addressed to us on both sides and the authorities to which we shall presently refer, we are of opinion that the agreement upon which the claim of the plaintiff is founded is void.