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TMI Blog1959 (9) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... the benamidars were related to Radhumal by marriage, and that Radhumal found it convenient to use their names. These findings were accepted by the present respondents in the High Court. They, however, raised before the High Court certain contentions found against them by the trial Judge. In the plaint, the appellants had given their reasons for acquiring the property benami in the names of Prahlad Rai, Gulraj Rai and Nawrang Rai. They had stated that, according to the terms of the lease, ryoti lands taken in the names of the lessee or his relatives and servants were liable to be resumed by the Bettiah Raj after the termination of the lease, and that the benami transaction was entered into to avoid this contingency. The answering respondents, therefore, contended in the Court of First Instance that the predecessor of the appellants had caused these lands to be settled by the Bettiah Raj benami in their names to effectuate a fraud upon the Bettiah Raj, and the fraud having succeeded, the plaintiffs-appellants were not entitled to a judgment. They also contended that after the termination of the lease of the appellants with the Bettiah Raj these lands were settled or deemed to be sett ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny such settlement to require that an amount to be assessed by him shall be charged as a salami on any such settlement. 16. Not to retain possession after the expiry of lease of any raiyati holdings or other interest in the leased property, acquired during the term of the lease whether by private purchase, purchase at auction sale, mortgage, sub-lease, surrender or otherwise, and any such holding or interest thus acquired will pass to the lessor, provided that the lessee will be entitled to receive from the lessor a sum equivalent to any loss he may have suffered by purchasing holdings at auction sales for arrears of rent, the loss to be calculated by setting against the purchase price the profits made by the lessee from the land since the date of purchase subject to any general instructions which may be issued by the Board of Revenue, the Manager will determine the amount to be received by the lessee under this clause, and his decisions will be final." 6. Between the years 1920 to 1925 Radhumal acquired 136 odd bighas of lands, now the subject of dispute, in various ways. 94 odd bighas were purchased at Court sale, 7 odd bighas by private sales and 6 odd bighas were acquir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, however, reversed by the District Magistrate, Champaran, and on revision to the High Court, the finding of the District Magistrate was reversed in its turn, though the rule itself was discharged. The High Court recommended the commencement of proceedings under s. 145 of the Code of Criminal Procedure, if there was any apprehension of breach of peace. These proceedings were commenced and finally terminated on May 18, 1942, by an order against the appellants, who were therefore compelled to bring this suit inasmuch as, according to them, the decision in the criminal courts cast a cloud upon their title. 8. The main issue around which the controversy in the present case has revolved in the trial Court is the fifth, framed by the Subordinate Judge. It reads as follows : "Are the defendants farzidars of the plaintiffs in respect of the suit lands ?" 9. As we have already stated above, this issue has now been finally decided in favour of the appellants. The High Court has held that they are not entitled to a judgment in spite of this finding, on the ground that they had perpetrated a fraud upon the Bettiah Raj, and this fraud disentitles them to a judgment. The High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res, the respondents claim that Radhumal had nothing whatever to do with the acquisition of these lands and had merely recommended them to the Bettiah Raj in his capacity as the lessee. Where both parties do not show that there was any conspiracy to defraud a third person or to commit any other illegal act, the maxim, in pari delicto etc., can hardly be made applicable. The appellants and the answering respondents were not in pari delicto. The respondents claimed to be innocent parties, who had acquired the lands themselves, and the appellants, on the other hand, stated that the respondents knew nothing about the matter and were not even consulted. In our opinion, the application of the maxim was erroneous. 12. This leaves over for consideration firstly whether a fraud was effected upon the Bettiah Raj, and whether it was successful. The appellants contend that the Bettiah Raj was in full possession of the information that this was a benami transaction and salami was obtained to the tune of ₹ 1,680 and was waived only in respect of lands considered not worthy of demanding a salami. It is stated by the appellants in the evidence that the Bettiah Raj was informed about the ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king the application to the Bettiah Raj the signatures of Prahlad Rai and others were made by Radhumal or some one under his instructions, because the relationship between Radhumal, Prahlad Rai and others was so intimate that it was considered unnecessary to trouble them. Inasmuch, as the matter was brought to the notice of the Assistant Manager of the Court of Wards, all these facts were capable of being investigated, including the making of the signatures by Radhumal. No doubt, the making of the signatures of another person without his consent, express or implied, is an offence under the ordinary law, but the intention was not so much to forge the signatures but to present the application in the names of those persons. However it be, we proceed on the assumption that there was some illegality committed by Radhumal in approaching the Bettiah Raj and also in the execution of the B.H. forms, which were also signed with the names of these persons. The question is whether this illegality is sufficient to non-suit the plaintiffs on the application of the maxim. 14. The law was stated as far back as 1775 by Lord Mansfield in Holman v. Johnson (1775) 1 Cowp. 341; 98 E.R. 1120, in the fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w the plaintiff to gain the benefit of an illegal transaction." 17. Even in India, certain exceptions to the rule of turpi causa have been accepted. Examples of those cases are found in Palaniyappa Chettiar v. Chockalingam Chettiar I.L.R. (1920) Mad. 334 and Bhola Nath v. Mul Chand I.L.R. (1903) All. 639. 18. The respondents rely upon Farmers' Mart Limited v. Milne [1915] A.C. 106, Alexander v. Rayson [1936] 1 K.B. 169, and Berg v. Sadler & Moore [1937] 2 K.B. 158F, to show that this case falls within the rule accepted and applied in those cases. The application of the rule is, however, conditioned by one thing, namely, that a plaintiff who is not allowed to succeed must be unable to sustain an action except upon the plea of the illegality committed by him. In Lord Dunedin's speech in Farmers' Mart Limited v. Milne [1915] A.C. 106, reference has been made to three cases, Simpson v. Bloss (1816) 7 Taunt. 246; 129 E.R. 99F, Fivaz v. Nicholls (1846) 2 C.B. 501; 135 E.R. 1042 and Taylor v. Chester I.L.R. (1869) Q.B. 309. In the first case, it was laid down that the test was whether a demand connected with an illegal transaction was capable of being enforced in law, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon that illegality, then public policy demands that the defendant should not be allowed to take advantage of the position. A strict view, of course, must be taken of the plaintiff's conduct, and he should not be allowed to circumvent the illegality by resorting to some subterfuge or by mis-stating the facts. If, however, the matters is clear and the illegality is not required to be pleaded or proved as part of the cause of action and the plaintiff recanted before the illegal purpose was achieved, then, unless it be of such a gross nature as to outrage the conscience of the Court, the plea of the defendant should not prevail. 23. We must remember that benami transactions are common in India, and have always been recognised. They are entered into for a variety of reasons, and the benamidar holds the property in trust for his principal. In the present case, the object of the benami transaction was merely to keep the property from being resumed by the Bettiah Raj on the expiry of the lease in favour of Radhumal, which undoubtedly the Bettiah Raj could have done, if it had been so minded. The information about the benami transaction was, however, not withheld from the Bettiah Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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