P L D 1956 Lahore 521 (PLP)

Ghulam Abbas Jafri for Appellant. Muhammad Amin Khan for Respondent. KAIKAUS, J.‑‑This is a second appeal against the decree of the Additional District Judge, Multan at Muzaffargar confirming a decree of the Senior Sub‑Judge, Multan, dismiss ing the plaintiff‑appellant's suit for a sum of Rs. 1,500 alleged to have been advanced to the defendant as a loan. The plaintiff and the defendant are kurams, the daughter of the defendant being the wife of the plaintiff's son. The plaintiff alleged that the defendant had approached him for grant of a loan of Rs. 1,500 and in compliance with the defen dant's request the plaintiff issued in his favour cheque No. 15324 dated the 1st of April 1948, on the Central Co operative Bank Multan, which 'the defendant got cashed, but the defendant had failed to re‑pay the loan. The defendant pleaded in reply that the cheque had been issued not as loan but as re‑payment of a sum already owing to the defendant. He alleged that he was a Meat Inspector in the Multan Muni cipal Committee, and having been served with a notice that his services were to be terminated had purchased gram, khal, etc. for the purposes of running a shop. The Municipal Com mittee ultimately decided not to terminate his services and he was let with the L, etc., that he had purchased. He approached his officers in the committee and they advised him to sell the goods to the committee on a nominal profit. The committee did stand in need of purchasing the commodities that were with him. Tenders were invited by the committee and he also submitted a tender in the name of the plaintiff, as he, being a servant of the committee, could not do so in his own name. The tender was accepted, the goods were supplied and the plaintiff received a sum of Rs. 1,632 from the committee in connection with the contract. Rupees 132 had been received by the defendant in cash and for the balance the plaintiff had given the cheque which he had made the basis of the suit. The only issue framed in the case was:‑ (1) Whether Rs. 1,500 were advanced by the plaintiff to the defendant as a loan? The learned Senior Sub‑Judge who tried the suit came to the conclusion that the story put forward by the defendant was correct. On appeal the learned Additional District judge agreed with this finding. The case seems apparently concluded by a finding of fact. Learned counsel for the appellant has argued two questions of law (1) that the onus of the issue was wrongly placed on the plaintiff and (2) that the defendant could not be allowed to base his defence on a transaction that was illegal. The first contention was raised before the learned Addi tional District judge, but he rejected it on the ground that under section 118 of the Negotiable Instruments Act every negotiable instrument was presumed to be drawn for consi deration. I have no doubt that the reason which the learned Judge has advanced for casting the onus of the issue on the. plaintiff is not correct though the onus is in fact correctly placed. The argument of the learned judge is based on a misapprehension of the nature of consideration. 'Considera tion' is defined in section 2 of the Contract Act as follows:‑ "When, at the desire of the promisor, the promisee or any other person has done or abstained from doing or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise". To constitute consideration it is nut necessary that some thing should already have been done. It is sufficient if there is a promise to do an act. When a person advances a cash loan to another it cannot be said that the payment is made without consideration and the same is the case‑when money is advanced by means of a cheque. The consideration for the issue of the cheque, or rather the payment of money by means of the cheque, is the promise of the debtor to re‑pay the loan If we were to accept the argument which the learned Addi tional District judge gave effect to, all loans of money would be agreements without consideration. Not much argument is needed to show that it is not so. When a person sues for a loan which did not carry any interest he is not claiming a decree on the ground that he paid the money without consi deration. He is suing on the basis of a valid contract. In the present case the plaintiff is not alleging that he had issued the cheque without consideration as the argument accepted by the learned Additional District Judge necessarily assumes. He paid money for consideration and he is claiming that the defendant should make good his promise. While the argument on which the conclusion of the learned judge is based is not correct, the onus of the issue is in fact correctly placed. From the mere fact that one person paid money to another there does not arise any presumption that he did so as a loan though, coupled with other facts, the inference may be justified. A payment may have been made either in discharge of an existing obligation or as a loan and before a Court passes a decree it must come to a positive conclusion that the payment was a loan. Really the basis of the present suit is a contract of loan and the mere fact that money was paid is not proof presumptive of the contract. It is for the plaintiff to prove the contract. In Bihari Lai v. L. Chandu Lai (41 P L R 650) it was held by Bhide, J. in a very similar case that if payment of money is admitted there is no presumption that it was intended to be repaid and it is for the person who comes into Court for recovery of the money to prove that it was intended to be repaid. The English Courts seem to have gone a step further. On page 491 of Broom's Legal Maxims (1939 Edition) are quoted three English cases wherein it has been held "until the contrary be shown, there is a presumption that when money is paid it is paid in discharge of an antecedent debt or liability." There is another reason why the argument as to the onus of the issue has no force. Both Courts have come to a positive conclusion that the story put forward by the defendant is correct. When a positive finding is recorded the question of onus loses its importance. The second contention of the learned counsel is that the defendant could not base his defence on a transaction that is illegal. The alleged contract of the defendant with the Municipal Committee is prohibited by section 68 of the Punjab Municipal Act and learned counsel argues that the defence being based on an illegal transaction should be excluded from consideration altogether. Reliance is placed on Sundrabai v. Manohar (A I R 1933 Bom. 262 ). The facts of that case bear no similarity to the present case but the principle stated therein is no doubt of general application. In that case a police officer had, in contravention of section 33 of the Bombay District Police Act, which debars a police officer from purchase of land in the district in which he is employed, purchased certain land in the name of his mother. After his death his mother sold 'the land to her own daughter and the son of the police officer filed a suit for setting aside the sale and for possession of the land. The learned Judges held that the purchase by the police officer was hit by section 23 of the Contract Act and was void. The learned Judges stated the general principle on which reliance is, placed by learned counsel thus: "The effect of illegality in the matter or purpose of an agreement is to render it wholly void of legal effect , and no claim or defence can be maintained which requires to be supported by allegations or proof of illegal agreement. The learned judges then went on to quote the following observations of Lord Mansfield, C. J., in Holman v. johnson ((1775) 1 Cowp 341). "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, If, from the plaintiff's own stating or otherwise, the cause of action appears to arise ex turpi caus or the transgression of a positive law of this country, there the Court says he has no right to be assisted." This is no more than a statement of the principle contained in the well known maxim ex turpi causa non oritur actio according to which, as observed by Lindly L J. in Scott v. Brown ((1892) 2 Q B 724 ), no Court will allow itself to be made the instru ment of enforcing an obligation arising out of a contract or transaction that is illegal". If a party "requires aid from the illegal transaction to establish his case" the Court will not entertain the claim vide Simpson v. Bloss (7 Taunt 246 ). With respect to such maxims it should be understood in the first place that they are not rules of law and Courts are not bound by them. They represent considerations of justice and public policy which may in the circumstances of a case be overridden by other similar considerations and their c applicability is always subject to what appears to the Court to be the equities of a case. Taking this very maxim for example it will be observed that even in England it is not invariably applied to cases which would fall within its purview. For instance it is not applied to marriage brokage contracts as will appear from the following passage in Anson's Law of Contract:‑ "Thus it appears that the true rule is that at least where a part‑performance of the illegal purpose has taken place money paid or goods delivered in pursuance of it cannot be recovered back. But we must note that marriage brokage contracts (though it is not easy to see why it should be so) constitute an exception to the rule.". Lord Hardwicke had pointed out in Cole v. Gibson (1 Ves Sen 503) that equity reserves to itself the right to intervene and to grant a decree for money which had been paid under an illegal contract of marriage brokage even though the contract had been partially performed. This I regard, with great respect, the correct attitude towards such a maxim. Courts need not apply them if in the circumstances of a particular case their application would lead to injustice or to a situation that public policy does not approve of. Secondly, even if we were to debar the defendant from referring to the illegal transaction in his written statement he could not be debarred from denying that the transaction was a loan and then with respect to the issue as to the existence of a loan he could not be debarred from proving all those facts which would negative the existence of a loan, for it is the party's right under the Evidence Act to prove all facts that are relevant. The effort of the plaintiff in the present case is to convert what was payment of an existing obligation into a loan by preventing the reference to the illegal E transaction with which the payment is connected. I do not see how the plaintiff can achieve this object. I must refer to the Full Bench judgment in Qadir Bakhsh v. Hakam (A I R 1932 Lah. 503) the principle stated wherein would apply to the facts of the present case. In that case an agriculturist benamidar in whose name a non‑agriculturist had purchases land in order to defeat the provisions of the Punjab Alienation of Land Act sued the non‑agriculturist for possession of land. The non‑agriculturist pleaded the true facts and the question arose as to whether he could be allowed to pleas his own fraud. It was held that be could bring the true facts to the notice of the Court and that the parties being in pari delicto the maxim in pari delicto potior est conditio possidentis will apply and the Court will let the estate lie where it falls. The judgment goes on to hold that the non‑agriculturist gets in such cases a good title to the land as usufructuary mortgagee, a conclusion which is hardly reconcilable with what gocs before, for if the transaction was a fraud upon the law, and an attempt to defeat the law, it could not create any right as has been held by a Division Bench of this Court in Daulat Ali v. Abdullah and others (L P A 33 of 1950 (Not approved for reporting)). Also if the non agriculturist had legal title in the land and the agriculturist had none, the alleged principle of "letting the estate lie where it falls" as the parties were in pari delicto was hardly called for. With respect to the maxim in pari delicto potion est conditio possidentis, it may be stated that as explained in Bowmakers Ltd. v. Barnet Instruments Ltd. ((1944) 2 A E R 579) it is not a principle at all to be applied by the Courts but merely states the result of applying the maxim ex turpi causa non oritur actio. However, although I do not agree, with all respect, with all that is stated in Qadir Bakhsh v. Hakam, I am bound by the judgment and the principle stated therein that the defendant can in such a case plead the true facts would also cover the objection taken by the appellant's counsel. This appeal is dismissed with costs. A.H. Appeal dismissed.