1961 (1) TMI 87 - HC - Indian Laws

Appeal Dismissed: Void Agreement under Cochin Abkari Act, No Arrears or Damages.

Krishna Menon Versus Narayana Ayyar and Ors.

The appeal was dismissed, affirming the trial court's decision that the agreement was void due to the lack of necessary sanction under the Cochin Abkari ... - Issues Involved:1. Legality of the agreement under the Cochin Abkari Act.2. Enforceability of the agreement due to lack of license transfer.3. Claim for arrears under an illegal agreement.4. Validity of collateral agreements and claims for damages.5. Claim for return of properties.Detailed Analysis:1. Legality of the agreement under the Cochin Abkari Act:The appellant entered into an agreement on November 28, 1948, to transfer the license for the Foreign Liquor Tavern, Ernakulam, to the second defendant. The agreement stipulated the conduct of the tavern by four persons and payment of Rs. 11,655-13-2 in daily installments. However, the Cochin Abkari Act, No. 1 of 1077 (M.E.), specifically Section 15, prohibited the sale of liquor without a license, and Section 22 required the assignee to receive a license from the Commissioner. Rule 13 further prohibited the transfer of any license without prior sanction from the Commissioner. The trial court found the agreement illegal and void as the necessary sanction was not obtained, and thus, the suit was not maintainable.2. Enforceability of the agreement due to lack of license transfer:The trial court held that the contract transferring the plaintiff's interests in the Foreign Liquor Tavern without the Commissioner's sanction was illegal and void. The appellant's claim to recover the balance amount under the agreement was dismissed. The appellant argued that the transfer of the license would not be illegal under Section 22 of the Cochin Abkari Act and cited precedents where benefits under void transactions were still claimable. However, the court maintained that agreements allowing business in contravention of the Abkari Rules are unenforceable.3. Claim for arrears under an illegal agreement:The appellant sought to recover Rs. 7,334-10-1, claiming the defendants did not fully carry out the payment terms of the agreement. The defendants contended that the agreement was illegal and unenforceable due to the lack of license transfer. The court upheld the trial court's decision, stating that contracts permitting business without a license are void, and no money can be claimed under such agreements.4. Validity of collateral agreements and claims for damages:The appellant's advocate argued for the enforceability of a collateral agreement, citing the 2nd defendant's letter promising execution of contracts by other respondents. The court found no sufficient evidence to support this claim and noted that the promise by one defendant could only give rise to damages against that defendant. The court also highlighted that different averments would be necessary to support such a claim, and permission to amend the plaint could not be granted as the claim had become barred.5. Claim for return of properties:The appellant argued for the return of properties based on the invalidity of the agreement. The court referred to Sujan Singh v. Sardara Ali, stating that the appellant could not be treated as the owner of the properties and thus, could not claim their return. Consequently, the suit was rightly dismissed.Conclusion:The appeal was dismissed, affirming the trial court's decision that the agreement was void due to the lack of necessary sanction under the Cochin Abkari Act. The appellant could not claim arrears or damages under the void agreement, nor could he claim the return of properties. The court did not award costs to the appellant considering the circumstances of the case.