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TMI Blog1961 (9) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... ties after partitioning them with Rayudu, the brother of respondent 2. In October, 1938, however, the appellants and respondent 2 trespassed on the said properties and so respondent 1 had to file the present suit claiming a declaration of his title in regard to the said properties, and asking for their possession and for past and future mesne profits. That in brief is the nature of the suit from which the present appeal arises. The claim thus made by respondents 1 was resisted by respondent 2 and the appellants on several grounds. It was urged by respondent 2 that the transfer in favour of respondent 1 was benami and that respondent 1 was not the real owner of the properties. In support of this case respondent 2 gave, what according to him, was the antecedent history of the sale in favour of respondent 1. He alleged that he had sustained heavy losses in business conducted by him with the result that he was indebted to the extent of ₹ 25,000. Apprehending that the suit properties would be lost to the family at the instance of his creditors he and his junior mother-in-law Kanthamani Seshamma approached respondent 1's father-in-law Suryaprakasa Sastrulu for advice and on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trial judge answered this issue in favour of the appellants purporting to follow the Full Bench decision of the Madras High Court in Ramasastrulu v. Balakrishna Rao (I.L.R. 1943 Mad. 83). According to the said decision the right of respondent 2 as the father of the appellants and manager of the undivided Hindu family to sell the shares of his sons for purposes binding on the family did not vest in the Official Receiver on his insolvency, and so the sale effected by the Official Receiver in favour of respondent 1 did not, and could not, in law bind the shares of the appellants in the properties conveyed. After these findings were recorded respondent 1 applied for the amendment of his plaint and the said amendment was allowed. By this amendment respondent 1 alleged that the suit properties were the self-acquired properties of respondent 2 and so the appellants had no interest therein. On this alternative plea it was urged by respondent 1 that the properties sold by the Official Receiver to respondent 1 conveyed the entire properties which belonged to respondent 2 alone. In addition to this alternative claim made by an amendment respondent 1 also made an alternative prayer that he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d judge also directed that future mesne profits should be determined under O. 20, r. 12(c) of the Code of Civil Procedure. Against this decree respondent 1 preferred an appeal, No. 288 of 1943, in the Court of the Subordinate Judge,, West Godavari at Ellore. In this appeal he claimed that a decree should be passed in his favour in respect of the whole of the properties sold to him by the Official Receiver. The appellants filed cross-objections and urged that the learned trial judge was in the error in framing issue 1 (a) suo motu and challenged his conclusion on it. The appellate Court agreed with the conclusions of the trial judge and so dismissed both the appeal and the cross objections. Against this appellate decree respondent I filed a Second Appeal, No. 1656 of 1947, and the appellants filed cross- objections. This appeal came on for hearing before Mr. Justice Raghava Rao and it was urged before him that since the Provincial Insolvency (Amendment) Act No. 25 of 1948 which introduced s. 28A had come into operation in the meanwhile retrospectively the decision of the Courts below that the Official Receiver could not in law have sold the appellant's shares in the family prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants to plead that fraud against respondent 1 in respect of his claim for possession of the suit properties in the present suit. The High Court considered the conflicting decisions on this point and adhered to the view which has prevailed in the said High Court since the decision in Vodiana Kamayya v. Gudisa. Mamayya (1) and held that the appellants and respondent 2 were estopped from setting up the fraud against respondent 1 in his present suit. In the result respondent 1's claim in respect of the whole of the properties conveyed to him by the Official Receiver has been decreed. It is against this decree that the appellants have come to this Court with a certificate granted by the High Court and the principal point which has been argued before us on their behalf by Mr. Tatachari is that the High Court was in error in coming to the conclusion that in a case where both the transferor and the transferee' were equal in fraud and where the fraud contemplated has been carried out it is not, open to the appellants to plead that fraud in defence against the claim made by respondent 1 to obtain possession of the properties conveyed to him benami by the Official Receive Mr. Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the doctrine which is preeminently applicable to the present case is ex dolo malo non oritur action or ex turpi causa non oritur actio. In other words, they contended that the right of action cannot arise out of fraud or out of transgression of law; and according to them it is necessary in such a case that possession should rest where it lies in pari delicto potior est conditio possidenties; where each party is equally in fraud the law favors him who is actually in possession, or where both parties are equally guilty the estate will lie where it falls. On the other hand, respondent 1 argues that the proper maxim to apply is nemo allegans suam turpitudinum audiendumest, whoever has first to plead turpitudinum should fail; that party fails who first has to allege fraud in which he participated. In other words, the principle invoked by respondent 1 is that a man cannot plead his own fraud. In deciding the question as to which maxim should govern the present case it is necessary to recall what Lord Wright, M.' R. observed about these maxims in Berg v. Sadler and Moore (1). Referring to the maxim ex turpi causa non oritur actio Lord Wright observed that this maxim, though veiled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilty and that the fraud intended by them has been carried out 'the position would be that the party raising the defence is not asking the Court's assistance in any active manner; all that the defence suggests is that a confederate in fraud should not be permitted to obtain a decree from the Court because the document of title on which the claim is based really conveys no title at all It is true that as a result of permitting respondent 2 and the' appellants to prove their plea they would incidentally be. assisted in retaining their possession; but this assistance is of a purely passive character and all that the Court is doing in effect is that on the facts proved it proposes to allow possession to rest where it lies. It appears to us that this latter course is less injurious to public interest than the-former. There can be no question of estoppel in such a case for the obvious reason that the fraud in question was agreed by both the parties and both parties have assisted 'each other' in carrying out the fraud. When it is said that a person cannot plead his own fraud it really means that a person cannot be permitted to go to a Court of Law to seek for its assist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shazid(3). Emperor v. Abdul Sheikh(A. I. R. 1920 Cal. 90), Vilayat Husain v. Misran ((1923) I. L. R. 45 All. 396), Nawab Singh v. Daljit Singh ((1936) 1. L. R. 58 All. 842), Qader Baksh v. Hakim ((1932) 1. L. R. 13 Lab. 713), Bishwanath g/o Karunashanker Shukla v. Surat Singh alias Chhuttu Singh s/o Bhabhut Singh (s), and J. C. Field Electric Supply v. K. Agarwala (9) (Case of illegal contract)]. In Madras the earlier decisions of the High Court appear to have, taken the same view [Vide: Venkataramana v. Viramma (10), Yaramati Krish. nayya v. Chundru Papayya (11) and Ragha. valu Chetty v. Adinarayana Chetty (12)]. In the case of Vodiana Kamayya v. Gudisa Mamayya (13), however, a Division Bench of the Madras High Court upheld the view that a person who has conveyed property benami to another for the purpose of effecting a fraud on his creditors cannot, where the fraud has been effected, set up the benami character of the transaction by way of defence in a suit by the transferee for possession under the conveyance. Since then this view has prevailed in the Madras High Court [vide : Keppula Kotayyar Naidu v. Chitrapu Mahalak8hmamma (14) and Muthu K. R. A. R. P. L. Arunarhalam Chet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and, therefore, where a deed of conveyance of an estate from one brother to another was executed, to give the latter a colorable qualification to kill game. The document was as against the parties to it valid and so sufficient to support an ejectment for the premises . In dealing with the question raised. Bayley, J. observed by the production of the deed, the plaintiff established a prima facie title; and we cannot allow the defendent to be heard in a Court of Justice to say that his own deed is to be avoided by his own fraud; and Holroyd, J., added that 'a deed may be avoided on the ground of fraud, but then the objection must come from a person neither party nor privy to it, for no man can allege his own fraud in order to invalidate his own deed . This decision has, however, been commented on by Taylor in his Law of Evidence . According to Taylor it seems now clearly settled that a party is not estopped by his deed from avoiding it by proving that it was executed for a fraudulent, illegal or immoral purpose (2) . The learned Author then refers to the case of Roberts (1) and adds in the subsequent case of Prole v. Wiggins (3) Sir Nicholas Tindal observed that this decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the judgment of Lord Mansfield, C. J., in Holman v. Johnson (1) is often quoted. If we may say so with respect the said passage very succinctly and eloquently brings out the true principles which should govern the decision of such cases. Said Lord Mansfield, C. J., the objection that a contract is immoral or illegal as between plaintiff and defendant sounds at all times very ill in the mouth of the defendant. It is not for his sake, however, that the objection is ever allowed; but it is founded in general principles of policy which the defendant has the advantage of, contrary to the real justice, as between him and the plaintiff, by accident, if I may say so. The principle of public policy is this- ex dolo malo non oritur actio. No Court will lend its aid to a man who founds his cause of action upon an immoral or an illegal act. If, from the plaintiff's own stating or otherwise the cause of action appears to arise ex turpi causa or the transgression of a positive law of this country, there the court says he has no right to be assisted. It is upon that ground the Court goes; not for the sake of the defendant, but because they will not lend their aid to such a plaintiff . ..... X X X X Extracts X X X X X X X X Extracts X X X X
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