KEDAR NATH MOTANI AND OTHERS versus PRAHLAD RAI AND OTHERS

Citation: [1960] 1 S.C.R. 861 · Decided: 25-09-1959 · Supreme Court of India · Bench: SUDHI RANJAN DAS · Disposal: Appeal(s) allowed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

S.C.R. 
SUPREME COURT REPORTS 
KEDAR NATH MOTANI AND OTHERS 
v. 
PRAHLAD RAI AND OTHERS 
(S. R. DAs, C.J., M. HIDAYATULLAH and 
K. c. DAS GUPTA, JJ.) 
861 
Fraud ani illegality-Benami transaction-Frau.a intended 
but not effected-Person to be defrauded aware of the fraud but elects 
not to cancel transaction-Illegality committed in the course of 
transaction-Cause of action not based on illegality-" Exturpi 
causa non oritur actio "-Exception to the rule. 
In 1922 the Manager of the Court of Wards granted a lease 
of a villal?'e to R for a term of years. By cl. 4 of the lease the 
lessee undertook not to make any settlement of land with a 
raiyat or other tenant without the consent of the Manager, and 
disclose the fact to the Manager if it was proposed to make a 
settlement with a relative or servant of the lessee. Under cl. 16 
ryoti lands taken in the names of the lessee or his relatives or 
his servants were liable to be resumed by the Court of Wards 
after the termination of the lease. 
Between the years 1920 to 1925 R acquired the lands in 
question but they were settled benami in the names of P, G and 
N by the Court of Wards at the instance of R. 
After the death 
of R in 1934 disputes arose as to the title to the lands, and his 
legal representatives, the appellants, instituted a suit against P 
and the legal representatives of G and N, the respondents, for a 
declaration of their title to the lands and for possession, on the 
footing that the respondents were in possession of the suit lands 
as benamidars. It was found (r) that the· consideration for the 
acquisition of these lands had proceeded from R who had them 
settled in the names of his relatives, but did not inform the Court 
of Wards that they ,were his relatives, in order to avoid the 
operation of els. 4 and 16 of the lease, (2) that the application 
forms for the settlement of the lands were not signed by P, G 
and N, but that !heir names had been written by some one else, 
and (3) that before the expiry of the period of the lease R 
informed the Court of Warr.s the benami nature of the tran~ac­
tion, but the Court of Wards.did not enforce cl. 16. The respond-
ents contended inter alia (r) that as on the ap1·ellants' own 
showing the lands harl been settled benami to effectuate a fraud 
upon th!' Court of Wards the appellants were not entitled to a 
judgment, and (2) that the acquisition of these lands having been 
achieved by means of forging the signatures of P, G and N, the 
appellants were not, in any case, entitled to succred, dn the 
application of the maxim, ex turpi causa non oritur actio, 
109 
I9$9 
862 
SUPREME COURT REPORTS [1960(1}] 
'959 
Held: (r) that on the facts of the case, fraud, though it 
-
might have been intended, was not perpetrated, ,because it could 
Ktdar Nath Motani only be effected at the end of the term of the lease and the locus 
v. 
poenitentiae which the lessee possessed was duly used long before 
P.ahlad Rai 
the expiry of the lease. The appellants were not, . therefore, dis-
enti,lled to recover the lands from the respondents who were 
found to be only benamidars ; 
(2) that the correct position in law is that what one has to 
see is whether the illegality goes so much to the root of the 
matter that the plaintiff cannot bring his action without relying 
upon the illegal transaction into which he had entered. If the 
illegality be trivial or venial and the plaintiff is not required to 
rest his case upon that illegality, then, public policy demands 
that the defendant should not be allowed to take advantage of 
the position. A strict view, of course, must be taken of the 
plaintiff's conduct, and he should not be allowed to circumvent 
the illegality by resorting to some subterfuge or by mis-stating 
the facts 
If, however. the matter is clear and the illegality is 
not required to be ple•<led or proved as part of the cause of action 
and the plaintiff recanted before the illegal purpose was achieved, 
then, unless it be of such a gross nature as to outrage the 
conscience of the Court, the plea of the defendant should riot 
prevail. 
In the present case the illegality was of a trivial character, 
inasmuch as the signatures of P and others were made on. the 
faith of the appellants' close friendship and relationship and 
under the assumption that-no objection from them would proceed 
to the making of the application on their behalf and to the 
signing of the forms in their names. The appellants were not 
requi

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