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CASE NO.: Appeal (civil)  4262 of 2001

PETITIONER: India Financial Assn., Seventh Day Adventists

RESPONDENT: M.A. Unneerikutty & Anr.

DATE OF JUDGMENT: 20/07/2006

BENCH: ARIJIT PASAYAT & TARUN CHATTERJEE

JUDGMENT: J U D G M E N T

ARIJIT PASAYAT, J.  

       Challenge in this appeal is to the judgment rendered by a  Division Bench of the Kerala High Court allowing the appeal  by the respondent who was the plaintiff.  It is to be noted that  the suit was dismissed by the trial court.

       Background facts in a nutshell are as follows :         The plaint schedule property belonged to the appellant  No.1 i.e. Indian Financial Association of Seventh Day  Adventists, a Company incorporated under the Companies  Act, 1956.  The Company was impleaded as defendant No.1 in  the suit and the defendant No.2 was its Power of Attorney.  A  school was being run in the property and there were also two  other buildings in the property used by the Company.  On  15.4.1985, the defendant No.1 Company passed a resolution  deciding to sell the property. A Power of Attorney was executed  in favour of defendant No.2 conferring on him the right to  negotiate, enter into an agreement to sell, and sell and dispose  of the property for a price acceptable to the Power of Attorney.   It may be noted that this Power of Attorney, defendant No.2,  was the Chairman of the North Kerala Section of the defendant  No.1 Company and he had control and management over 70  churches.  Thus, defendant No.2, who was constituted the  Power of Attorney, was a prominent person in the defendant  No.1 company and in the Association for whose welfare the  company had been incorporated.  Defendant No.2 negotiated  with the plaintiff for the sale of the property.  Negotiations  were done with the help of Mr. P.V. George, who was attached  to the school run by defendant No.1 and who was a member of  the Association. Defendant No.2, for and on behalf of  defendant No.1, agreed to sell the property to the plaintiff for a  price of rupees eight lakhs. On 17.5.1985 a sum of  Rs.10,000/- was paid as a token of the coming into existence  of the agreement and  receipt was issued.  The receipt was  admittedly signed by defendant No.2 and the witnesses to it  are one Sarathchandra and P.V. George referred to earlier.   The receipt reads as follows:-

       "Received a sum of Rupees ten thousand  (Rs.10,000/-)as earnest money from Mr. M.A.  Uneerikutty, Calicut towards the advance of  the sale of land bearing R.S. No. 27/1 having  30 cents of extent which costs 8 lakhs of  rupees."

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       This was followed by another agreement dated 21.5.1985,  executed by defendant No.2, in his capacity as the Power of  Attorney Holder of the defendant No.1, and the plaintiff. In  that agreement, after reciting the title of the defendant No.1-  Company represented by its Power of Attorney, it was stated  that it had been decided to sell the property to the plaintiff for  a consideration of Rupees Eight Lakhs and the plaintiff had  agreed to purchase the same.  The document also recites that  on that day, the defendant No.1 acting through its Power of  Attorney, had received a sum of Rupees Three Lakhs as  advance towards the sale price. The document was to be  registered on or before 30.9.1985. The Company was to hand  over all the title deeds relating to the property, including the  encumbrance certificate, within one month before registration  of the sale deed.  All expenses for registration had to be met by  the plaintiff and if the Company failed to complete the  registration of the sale deed within the agreed period, the  plaintiff had the power to take the necessary legal steps for  getting the sale deed registered and in that event, the  Company would be liable for the expenses and loss incurred in  that behalf.  The sum of Rupees Three Lakhs paid as advance  was liable to be recovered as charge on the property.  If the  plaintiff fails to pay the balance consideration of Rupees Five  Lakhs to the Company within the agreed period, the plaintiff  was liable to the Company for all the losses incurred and the  company had the full power to recover all the losses from the  plaintiff.  As noticed supra, the Power of Attorney signed this  agreement on behalf of the defendant No.1 company and the  witnesses to this agreement were also the same two witnesses  who had signed as witnesses in the receipt. On the same day,  another agreement was also executed by the parties.  This  agreement indicated that the company would sell and the  plaintiff would purchase the property for a price of Rupees  Five Lakhs or the price to be adjusted as per the approved  survey of the property.  The sale was subject to clear title and  free from all encumbrances.  The agreement recites that the  purchaser, the plaintiff, had paid a sum of Rs.10,000/- by  cash and a sum of Rs.40,000/- by way of cheque dated  31.5.1985 as advance, the receipt of which the Company and  the Power of Attorney acknowledged.  The balance sale price  was to be paid on or before 30.9.1985.  The agreement stated  that time was of the essence of the contract.  Clause 5 of this  agreement stated that the Company and its Power of Attorney  were to demolish the existing buildings in the schedule  property, salvage the same and deliver possession of the land  only to the plaintiff at the time of registration of the sale deed.   The company was to obtain the Clearance Certificate in terms  of Section 230A of the Income Tax Act, 1961.  The cost of  registration was to be borne by the plaintiff and in the event of  default on the part of the company to sell the schedule  property after complying with the conditions, the company was  liable to return the advance of Rs.50,000/- as liquidated  damages to the plaintiff.  In the event of default on the part of  the plaintiff to buy the schedule property as per the conditions  set out, the plaintiff was to forfeit the advance of Rs.50,000/-  to the company.  Thereafter, the company was free to deal with  the property as it pleased.  It was also provided that either  party was entitled to enforce specific performance of the  contract.  It is seen that on the same day, there is a letter said  to have been signed by defendant No.2.  In that letter, it was  stated, after referring to Clause 5 of  the other agreement that  the Power of Attorney, defendant No. 2 agrees to demolish only  the church building and the school building and retain  building No.6/64A.  There is no dispute that pursuant to the  agreement for sale entered into with the plaintiff, the prior

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documents of title of the Company were handed over to the  plaintiff.

       Complaining that the defendants were attempting to sell  the property to another, the plaintiff filed a suit, O.S. 102 of  1985, in the Court of Subordinate Judge, Calicut for perpetual  injunction restraining the defendant No.1 Company from  alienating the said property to any other person. It may be  noted that the last day for performance of the agreement was  30.9.1985. It was after the filing of the earlier suit for  injunction, that the plaintiff filed the present suit O.S. 188 of  1985 on 16.11.1985 in the Court of Subordinate Judge,  Kozhikode for specifically enforcing the agreement for sale.   The prayer in the plaint was to direct the defendants to  specifically perform the contract sued on by executing and  duly registering a sale deed in respect the plaint schedule  property in favour of the plaintiff after receiving the balance  sale consideration due to them and for possession pursuant to  such conveyance. Conveyance was sought of the kanom,  improvement and possessory rights of the defendants.  There  is no specific reference to any building in the plaint schedule.

       In the plaint, after setting out details of the agreement  between the parties, payment and receipt of Rs.10,000/- as  advance, it was stated that on 21.5.1985 a formal agreement  for sale was entered into showing the consideration as Rupees  Eight Lakhs including the sum of Rs.3,10,000/- already paid  towards the sale price. The plaint further stated that the total  price of Rupees Eight Lakhs was for 30 cents of property and  all the improvements thereon, including a Church building, a  school building and another building.  It was stated that the  church and the school were being shifted by the defendant  No.1 from those buildings to some other premises.  The plaint  further proceeded to state that for reasons best known to  them, the defendants wanted modification of the deed by re- fixing the sale consideration to Rupees Five Lakhs and giving  liberty to the defendants to pull down and remove the  buildings existing in the property, so that the material could  be used to build, at another site proposed to be purchased by  the defendant No.1 Company.  This agreement was also  entered into on the same day and this was the latter  agreement and the second agreement.  It was asserted that the  total consideration paid by the plaintiff to the first defendant  as advance came to Rs.3,50,000/-.  If the defendants were to  be permitted to remove the buildings and take away the  materials, the balance amount payable by the plaintiff to the  first defendant company would be Rs.1,50,000/-.  If on the  other hand, the defendants did not want to remove the school  building and the church building and would have them  retained in the property, the plaintiff was ready and willing to  pay a further sum of Rs.4,50,000/- to make the total  consideration of Rupees Eight Lakhs for sale of the entire  property including all the improvements.  It was pleaded that  while drafting the second agreement, it was mistakenly stated  in Clause 5 that the vendor shall demolish the existing  buildings in the schedule property, salvage the same and  deliver possession of the land to the vendee.  According to the  plaint, if this is understood to imply that the land only had  been agreed to be sold by the defendants to the plaintiff, that  was not correct and to clarify the position arising out of the  unclear clause, defendant No.2 wrote a letter to the plaintiff on  the same day. According to the plaint, that letter was intended  to make it clear that building No. 6/64A was included in the  sale and that the church building and the school building  were to be demolished and removed by the defendants.  

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According to the plaintiff since he found that defendant No.2  and the other representatives of defendant No.1, namely  Sarathchandra and P.V. George who were witnesses to the  agreement, were highly educated respectable persons, he did  not think it necessary to have a formal agreement drawn up.  The plaintiff had no reason to believe that the defendants  would go back on their promise.  The plaintiff came to know  that the defendants have the intention to retract from the  agreement.  It was in this context that he filed the suit O.S.  102 of 1985 seeking to restrain the defendants from alienating  the property.  The plaintiff was ready and willing to pay the  balance amount due for execution of the sale deed.  The  plaintiff was always ready and willing to perform his part of  the contract.  In case the defendants do not agree to demolish  and remove the church building and the school building, the  plaintiff was ready and willing to pay the further sum of  Rupees three lakhs to make the total consideration of Rupees  Eight Lakhs for the entire property including all the  improvements.  Thus, the plaintiff was entitled to a specific  performance of the agreement for sale.  He valued the suit at  Rupees Five Lakhs under Section 42 of the Kerala Court Fees  and Suits Valuation Act (in short the ’Valuation Act’) being the  consideration for the sale.

       In its written statement the defendant No.1 admitted the  receipt and the two agreements for sale.  It also admitted that  defendant no.2 had been constituted as the Power of Attorney  of the company.  It was, however, pleaded that Power of  Attorney was void as contrary and opposed to the  Memorandum and Articles of Association of the Company.   The conditions of Article 19A(i) of the Articles and  Memorandum of Association had not been complied with.  All  actions pursuant to the resolution of the Company dated  15.4.1985 deciding to sell the property were invalid in law and  were otherwise ineffective and void.  The agreements referred  to in the plaint were thus void ab initio and were not  enforceable under law.  It transpires that the sale agreements  referred to in the plaint were drawn up at the same time and  place as parts of the same transaction with the plaintiff  conspiring with Mr. P.V. George, who was at that time  attached to the school of the defendant No.1. There was a  conspiracy to commit fraud and to cheat the defendant No.1  and deprive the State Government of the legitimate stamp duty  payable.  The sale agreements were set up and devised by the  plaintiff with objects which were opposed to public policy and  were prohibited by statutes like Kerala Stamp Act and Income  Tax Act, 1961 and were void under Section 24 of the Indian  Contract Act, 1872 (in short the ’Contract Act’). The three  buildings in the property were solid constructions. The  demolition of the buildings was inconceivable and defendant  No.2 was never authorized to demolish or consent to  demolition of the buildings.  The alleged agreements to take  the property after demolition of the buildings was a  transaction devised by the plaintiff for infringing law and  hence could not be enforced.  The two agreements referred to  in the plaint were brought into existence on account of the  undue influence, coercion and fraud played by the plaintiff  and George.  The truth as gathered from defendant No.2 was  that at the time of the two agreements. Rupees Three lakhs  was made over in cash by the plaintiff to George, who  managed to obtain three demand drafts, each for a sum of  Rupees one Lakh, from the Malabar Gramin Bank, Kozhikode,  where the school run by the first defendant company had its  accounts. The paying of Rupees Three Lakhs in cash violated  the provisions of the Income Tax Act, 1961. The clause about

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demolition of the building was fraudulently introduced into the  agreement where the consideration for sale was fixed at  Rupees Five Lakhs. The agreements were vitiated by fraud and  were void and unenforceable.  The case of the plaintiff that the  earlier agreement was modified by the subsequent agreement  was not supported by the recitals in the subsequent  agreement.  Defendant No.1 did not intend to sell the property  and did not take any steps to sell the property and the filing of  O.S. 102 of 1985 was wholly ill-conceived. The plaintiff has  come to court with unclean hands.  Defendant No.1 had no  intention to retain the monies received.  Defendant No.1 was  willing to refund all the monies received in conformity with any  condition that may be imposed by the Court.  The suit was  speculative.  The frame of the suit was not proper.

       Defendant No.2, in addition to adopting the written  statement filed on behalf of defendant No.1 stated that he  bonafide believed that the conditions prescribed in the Articles  and Memorandum of Association of the defendant No.1  Company for sale of the property had been duly complied with.   He was completely misled by P.V. George to enter into two  agreements on the same day as part of the same transaction.   He had already requested defendant No.1 to refund to the  plaintiff all the amounts received from the plaintiff.  The suit  was liable to be dismissed.

       The High Court held that the view of the trial court that  Exhibit A-5 was executed to defraud payment of Stamp duty  and the Income Tax and it was opposed to public policy in the  background of Section 23 of the Contract Act, is not tenable. It  was noted that the suit was one for specific performance of  contract and there was full disclosure of both Exhibits A-4 and  A-5 in the plaint.  It was noted that there was no case of  inadequacy of price, on the facts, Section 20 of the Specific  Relief Act, 1963 (in short ’Specific Relief Act’) was not  applicable. The agreement was for sale of the property for a  price of Rs.8 lakh and the substantial portion of the amount  has been paid as advance. The evidence clearly established  that the plaintiff was already ready and willing to pay the  balance. The suit for specific performance of contract was  decreed. Direction was also given for payment of the balance  court fee on the plaint as well as in the appeal on the basis  that the consideration for sale is Rs.8 lakh and not Rs.5 lakhs.

       Learned counsel for the appellant questioned correctness  of the judgment rendered by the Division Bench on the ground  that the agreements were pre-planned and executed  simultaneously as one integrated inseverable transaction.  Stamp papers were purchased on the same day. The  defendant No. 2 though an employee of the appellant No.1\026 Institution was a party to the illegal transaction. Obvious  intention was to declare only the reduced amount of Rs.5  lakhs as the apparent sale price and to pay Rs.3 lakhs as  uncounted money.  In the meantime to have hold on each  other another agreement was prepared declaring the actual  price of Rs.8 lakhs.  It was further urged that Section 23 read  with Section 24 of the Contract Act rendered the agreements  void. The High Court should have noted that the agreements  were immoral or opposed to public policy.  This is the essence  of Section 23 of the Contract Act. Similarly, Section 24  postulates that the agreement would be void if the  considerations and the object are unlawful in part.  Closing  down a well-running school managed by dedicated  missionaries and closing a functional church would cause  comparatively more hardships as against the specific

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performance of a tainted transaction.  Same cannot be  enforced in a suit for specific performance of contract.   

In reply learned counsel submitted that the trial court  proceeded for three reasons to dismiss the suit; first was that  the plaintiff was not ready and willing and, therefore,  requirements of Section 16 of the Specific Relief Act were not  complied with.  This was a case where greater hardship would  be caused to the defendants if the suit is decreed and in any  event the agreement was opposed to public policy. On the  other hand the High Court had noted that there was full and  frank disclosure and the payment of Rs.3 lakhs was accounted  for in books of account and the payments were made by  demand drafts. There was no question of agreement being  opposed to public policy in view of the aforesaid fact. There  was really no evidence regarding the shifting of the building  and, therefore, two agreements were entered into.  The draft  deed was not required to be prepared by the plaintiff as was  wrongly noted by the trial court.  There was a resolution for  sale of the land and the defendant No.2 purchased the stamp  papers of the proposed agreements.  As is evident from the  materials on record, there was no dispute that the plaintiff  had the capacity to pay and in the written statement filed in  the suit the stand taken was not disputed. Therefore the trial  court should not have concluded any undue hardship on the  same being executed.  It was clearly stated in the plaint about  the statement in the earlier written statement.  If there was  any dispute amongst the members of the Association, the  plaintiff is not a party to the same and that cannot be a  ground to deny the decree for specific performance of the  contract.  Trial Court disbelieved the evidence of DW1 who was  the defendant No. 2 and if that evidence is kept out of  consideration, nothing further was brought on record by the  defendants.  

Principles relating to enforcement of a tainted transaction  have been dealt with by this Court in various cases. In A.C. Arulappan v. Ahalya Naik (Smt.) [2001(6) SCC  600] it was noted as follows : "In Parakunnan Veetill Joseph’s Son Mathew v.  Nedumbara Kuruvila’s Son & Ors. [1987 Supp. SCC  340] this Court cautioned and observed as under: "Section 20 of the Specific Relief Act, 1963  preserves judicial discretion to Courts as to  decreeing specific performance. The Court  should meticulously consider all facts and  circumstances of the case. The Court is not  bound to grant specific performance merely  because it is lawful to do so. The motive  behind the litigation should also enter in the  judicial verdict. The Court should take care to  see that it is not used as an instrument of  oppression to have an unfair advantage to the  plaintiff".

In Gobind Ram vs. Gian Chand  [(2000)7 SCC 548],  it was observed in paragraph 7 of the judgment that  grant of a decree for specific performance of  contract is not automatic and is one of the  discretions of the court and the court has consider  whether it would be fair, just and equitable. The  court is guided by the principles of justice, equity  and good conscience. Granting of specific performance is an equitable  relief, though the same is now governed by the

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statutory provisions of the Specific Relief Act, 1963.  These equitable principles are nicely incorporated in  Section 20 of the Act. While granting a decree for  specific performance, these salutary guidelines shall  be in the forefront of the mind of the court. The trial  court which had the added advantage of recording  the evidence and seeing the demeanour of the  witnesses considered the relevant facts and reached  a conclusion. The appellate court should not have  reversed that decision disregarding these facts and,  in our view, the appellate court seriously flawed in  its decision. Therefore, we hold that the respondent  is not entitled to a decree of specific performance of  the contract."

       Earlier in K. Narendra v.  Riviera Apartments (P) Ltd.   [(1999) 5 SCC 77] it was noted as follows :

"In our opinion, there has been a default on the part  of the respondents in performing their obligations  under the contract. The period lost between  25.7.1972 (the date of the agreement) and the years  1979 and 1980 when the litigation commenced,  cannot be termed a reasonable period for which the  appellant could have waited awaiting performance  by the respondents though there was not a defined  time limit for performance laid down by the  agreement. The agreement contemplated several  sanctions and clearances which were certainly not  within the power of the parties and both the parties  knew it well that they were the respondents who  were being depended on for securing such  sanctions/clearances. Part of the land forming  subject matter of the agreement was an excess land  within the meaning of ULCRA and hence could not  have been sold. Part of the land has been acquired  by the State and to that extent the agreement has  been rendered incapable of performance. The  feasibility of a multi-storeyed complex as is  proposed and planned by the respondents appears  to be an impracticality. If the respondents would not  be able to construct and deliver to the appellant  some of the flats as contemplated by the novated  agreement how and in what manner the remaining  part of consideration shall be offered/paid by the  respondents to the appellant is a question that  defies answer on the material available on record.  Added to all this is the factum of astronomical rise  in the value of the land which none of the parties  would have fore contemplated at the time of  entering into the agreement. We are not in the least  holding that the consideration agreed upon between  the parties was inadequate on the date of the  agreement. We are only noticing the subsequent  event. Possession over a meagre part of the property  was delivered by the appellant to the respondents,  not simultaneously with the agreement but  subsequently at some point of time. To that extent,  the recital in the agreement and the averments  made in the plaint filed by the respondents are  false. On a major part of the property, the appellant  has continued to remain in possession. As opposed  to this, the respondents have neither pleaded nor  brought material on record to hold that they have  acted in such a way as to render inequitable the

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denial of specific performance and to hold that  theirs would be a case of greater hardship over the  hardship of the appellant. Upon an evaluation of the  totality of the circumstances, we are of the opinion  that the performance of the contract would involve  such hardship on the appellant as he did not  foresee while the non performance would not involve  such hardship on the respondents. The contract  though valid at the time when it was entered, is  engrossed into such circumstances that the  performance thereof cannot be secured with  precision. The present one is a case where the  discretionary jurisdiction to decree the specific  performance ought not to be exercised in favour of  the respondents. During the course of hearing the  learned senior counsel for the respondents time and  again emphasized and appealed to the court that  respondents were builders of repute and in the  event of the specific performance being denied, they  run a grave risk of losing their reputation as their  proposed building plan "Girnar" would not  materialise and they will not be able to show their  face to their prospective flat buyers. This is hardly a  consideration which can weigh against the several  circumstances which we have set out herein above.  If a multi-storeyed complex cannot come up on the  suit property, the respondents’ plans are going to  fail in any case.

       In Mannalal Khetan and Others v. Kedar Nath Khetan  and Others. [(1977) 2 SCC 424] it was noted as follows: "In Raza Buland Sugar Co. Ltd. v. Municipal Board,  Rampur [(1965) 1 SCR 1970] this Court referred to  various tests for finding out when a provision is  mandatory or directory. The purpose for which the  provision has been made, its                                                                                                                                            rom reading the provision one way or the other, the  relation of the particular provision to other  provisions dealing with the same subject and the  language of the provision are all to be considered.  Prohibition and negative words can rarely be  directory. It has been aptly stated that there it is  one way to obey the command and that it is  completely to refrain from doing the forbidden act.  Therefore, native, prohibitory and exclusive words  are indicative of the legislative intent when the  statute is mandatory (See Maxwell on Interpretation  of Statutes, 11th Ed., p. 362 seq.; Crawford  Statutory Construction, Interpretation of Laws, p.  523 and Seth Bikhraj Jaipuria v. Union of India   [AIR 1962 SC 113]  The High Court said that the provisions contained  in Section 108 of the Act are directory because non- compliance with Section 108 of the Act is not  declared an offence. The reason given by the High  Court is that when the law does not prescribe the  consequences or does not lay down penalty for non- compliance with the provision contained in Section  108 of the Act the provision is to be considered as  directory. The High Court failed to consider the  provision contained in Section 629(A) of the Act.  Section 629(A) of the Act prescribes the penalty  where no specific penalty is provided elsewhere in

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the Act. It is a question of construction in each case  whether the legislature intended to prohibit the  doing of the act altogether, or merely to make the  person who did it liable to pay the penalty.  Where a contract, express or implied, is expressly or  by implication forbidden by statute, no court will  lend its assistance to give it effect. (See Mellis v.  Shirley L. B. ([1885] 16 QBD 446 : 55 LJQB 143 : 2  TLR 360)). A contract is void if prohibited by a  statute, under a penalty, even without express  declaration that the contract is void, because such a  penalty implies a prohibition. The penalty may be  imposed with intent merely to deter persons from  entering into the contract or for the purposes of  revenue or so that the contract shall not be entered  into so as to be valid at law. A distinction is  sometimes made between contracts entered into  with the object of committing an illegal act and  contracts expressly or impliedly prohibited by  statute. The distinction is that in the former class  one has only to look and see what acts the statute  prohibits; it does not matter whether or not it  prohibits a contract; if a contract is made to do a  prohibited act, that contract will be unenforceable.  In the latter class, one has to consider not what act  the statute prohibits, but what contracts it  prohibits. One is not concerned at all with the  intent of the parties, if the parties enter into a  prohibited contract, that contract is unenforceable.  (See St. John Shipping Corporation v. Joseph Rank.  ([1957] 1 QB 267)) (See also Halsbury’s Laws of  England, Third Edition, Vol. 8, p. 141.)  It is well established that a contract which involves  in its fulfillment the doing of an act prohibited by  statute is void.  The legal maxim A pactis  privatorum publico juri non derogatur means that  private agreements cannot alter the general law.   Where a contract, express or implied, is expressly or  by implication forbidden by statute, no court can  lend its assistance to give it effect.  What is done in  contravention of the provisions of an Act of the  legislature cannot be made the subject of an  action."

In a recent case in Aniglase Yohannan  v. Ramlatha and  Others. [(2005)7SCC 534] it was noted as follows:

"In order to appreciate the rival submissions  Section 16(c) needs to be quoted along with the  Explanations. The same reads as follows:

"16. Personal bars to relief: (a)     ......... (b)     ......... (c)     who fails to aver and prove that he has  performed or has always been ready and  willing to perform the essential terms of  the contract which are to be performed by  him, other than terms of the performance  of which has been prevented or waived by  the defendant.

Explanation- For the purpose of clause (c)- (i)     where a contract involves the

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payment of money, it is not essential  for the plaintiff to actually tender to  the defendant or to deposit in Court  any money except  when so directed  by the Court;

(ii)    the plaintiff must aver performance  of, or readiness and willingness to  perform, the contract accordingly to  its true construction."    

The basic principle behind Section 16(c) read  with Explanation (ii) is that any person seeking  benefit of the specific performance of contract must  manifest that his conduct has been blemishless  throughout entitling him to the specific relief. The  provision imposes a personal bar.  The Court is to  grant relief on the basis of the conduct of the person  seeking relief.  If the pleadings manifest that the  conduct of the plaintiff entitles him to get the relief  on perusal of the plaint he should not be denied the  relief."

Section 23 of the Contract Act lays down that the object  of an agreement becomes unlawful if it was of such a nature  that, if permitted, it would defeat the provisions of any law.

The term ’public policy has an entirely different and more  extensive meaning from the policy of the law. Winfield defined  it as a principle of judicial legislation or interpretation founded  on the current needs of the community. It does not remain  static in any given community and varies from generation to  generation. Judges, as trusted interpreters of the law, have to  interpret it. While doing so precedents will also guide them to  a substantial extent.

The following passage from Maxwell "Interpretation of  Statutes", may also be quoted to advantage here:-

       "Everyone has a right to waive and to agree  to waive the advantage of a law or rule made  solely for the benefit and protection of the  individual in his private capacity which may  be dispensed with without infringing any  public right or pubic policy. Where there is  no express prohibition against contracting  out of it, it is necessary to consider whether  the Act is one which is intended to deal with  private rights only or whether it is an Act  which is intended as a matter of public  policy\005.."  

The doctrine of public policy may be summarized thus:  Public policy or the policy of the law is an illusive concept: it  has been described as "untrustworthy guide". "variable  quality", "uncertain one", "unruly house", etc., the primary  duty of a Court of a law is to enforce a promise which the  parties have made and to uphold the sanctity of contract  which form the basis of society, but in certain cases, the Court  may relieve them of their duty on a rule founded on what is  called the public policy, but the doctrine is extended not only  to harmful cases but also to harmful tendencies. This doctrine  of public policy is only a branch of common law, and just like  any other branch of common law it is governed by precedents.

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The principles have been crystallized under different heads  and though it is permissible for Courts to expound and apply  them to different situations, it should only be invoked in clear  and incontestable cases of harm to the public.  

Section 24 provides that if any part of a single  consideration for one or more objects, or any one or any part  of any one of several considerations for a single object, is  unlawful, the agreement is void.     In view of the findings recorded by the High Court more  particularly mention of all the relevant details relating to  Exhibits A-4 and A-5 and the evidence clearly establishing  that plaintiff had capacity to pay and was ready and willing to  pay the balance amount and the absence of any material to  show that the defendant No.2 was not acting in unauthorized  manner in view of the clear resolution of the appellant No.1,  the judgment of the High Court cannot be faulted.  The appeal  is, therefore, dismissed without any order as to costs.