Decided on June 18,1971


Cited Judgements :-



- (1.)The plaintiff in O.S. No.58 of 1966 on the file of the District Munsifs Court, Amalapuram is the appellant in this Second appeal. He entered into a contract with the defendant for the sale of 64 bags of paddy at the rate of Rs. 34.25 per bag. The agreement was oral. It was also agreed that Re. 1/- should be paid towards transportation charges. In pursuance of the agreement the plaintiff delivered the paddy to the defendant. The defendant requested time for payment and subsequently failed to pay the price of the paddy. The plaintiff, therefore, filed the suit for recovery of the price of the paddy at the contract rate. The defendant raised several pleas with which we are not concerned now. He also pleaded that the contract was illegal and opposed to public policy as it was contrary to the Andhra Pradesh Paddy Maximum Price Control Order of 1965 and, therefore, the plaintiff was not entitled to enforce the contract and recover the money. The trial Court held that the contract was true and that the defendant took delivery of the 64 bags of paddy from the plaintiff. The trial Court was of the view that if the price stipulated under the contract was above the maximum price fixed by the Maximum Price Control Order it was a matter for the Government to take action against the plaintiff. According to the trial Court the defendant who had taken delivery of the paddy was bound to pay the price at least at the control rate of Rs. 18.00 per bag. On that basis the trial Court granted a decree in favour of the plaintiff. On appeal by the defendant the learned subordinate Judge held that the contract was unlawful and therefore the plaintiff could not recover from the defendant the price to be paid to be paid for the paddy supplied by him. The suit was dismissed and the plaintiff has referred this Second Appeal.
(2.)In this Second Appeal Miss. Maruti, learned counsel for the plaintiff-appellant submitted that the contract was not unlawful or void because the Andhra Pradesh Maximum Price Control Order did not prohibit the sale of paddy above the maximum price fixed by the Control Order. According to Miss Maruthi the Control Order did not contain any provision expressly prohibiting the sale of paddy above the maximum price but merely stated that the maximum price at which paddy may be sold by any person was as specified in the schedule . There is no substance in this submission. The Maximum Price Control Order prescribes the maximum price at which paddy may be sold and any contravention of the order is punishable under S. 7 of the Essential Commodities Act, 1955. An agreement to sell paddy above the maximum price fixed under the Maximum Price Control Order is undoubtedly unlawful and void.
(3.)Miss Maruthi then urged that assuming that the contract was void the plaintiff was nonetheless entitled to be compensated in respect of paddy actually delivered by him to the defendant. She relied on S. 70 of the Indian Contract Act and on the decisions of their Lordships of the Supreme Court in State of West Bengal v. B. K. Mondal & Sons. AIR 1962 SC 779. News Marine Coal Co. v. Union of India, AIR 1964 SC 152, Mulamchand v. State of M. P., AIR 1968 SC 1218 and P. Dhunji Shaw v. Poona Municipality, AIR 1970 SC 1201 , Section 70 of the Contract Act is as follows:
"Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered."
In the four cases cited by Miss Maruthi their Lordships of the Supreme Court held that notwithstanding the fact that a contract was invalid because of non-compliance with the mandatory provisions of Section 175 (3) of the Government of India Act, 1935 or other analogous provisions, a claim for compensation based on Section 70 of the Contract Act would still be maintainable. In the first case Gajendragadkar, J., observed:
"Therefore, in cases falling under Section 70 the person doing something for another or delivering something to another cannot sue for the specific performance of the contract nor ask for damages for the breach of the contract for the simple reason that there is no contract between him and the other person for whom he does something or to whom he delivers something. All that Section 70 provides is that if the goods delivered are accepted or the work done is voluntarily enjoyed then the liability to pay compensation for the enjoyment of the said goods or the acceptance of the said work arises. Thus, where a claim for compensation is made by one person against another under Section 70, it is not a on the basis of any subsisting contract between the parties, it is on the basis of the fact that something was done by the party for another and the said work so done has been voluntarily accepted by the other party. That broadly stated is the effect of the conditions prescribed by Section 70."


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