SITA RAM versus RADHABAI AND ORS.

Citation: [1968] 1 S.C.R. 805 · Decided: 16-10-1967 · Supreme Court of India · Bench: J.C. SHAH · Disposal: Dismissed

Judgment (excerpt)

SITARAM 
y, 
RADHABAI AND ORS. 
October 16, 1967 
[J. C. SHAH; S. M. Soou AND 1. M. SHELAT, JJ.] 
Contract-Principle of in pari delicto--When applicable--' 
Parties not in pari delict<>--Right of ·less guilty party when arises. 
Hindu Law-Avyavaharika debt-Burden. of proof. 
A 
The plaintiff-respondent liled a suit demanding that certain 
jewellery which she had entrusted to her deceased brother-appel- C 
!ant's father-for safe custody be returned to her. The. appellant 
replied that his father during his life-time had returned the jewel-
lery to the plaintiff. The trial Court dismissed the suit, but on appeal 
the. High Court decreed the suit. In appeal to this Court, the appel-
lant contended, that (iJ the suit was not maintainable, because the 
jewellery was left with his father with the object of defrauding a 
third party, who had filed a suit claiming share in the ornaments; 
and (ii) the appellant was not liable to pay out of joint family D 
property the debt of his father which was avyavaharika or illegal. 
Held: The appeal must be dismissed. 
(i) The principle' that .the Courts will refuse to enforce an 
illegal agreement at the instance of a person who is himself a party 
to an illegality or fraud is expressed in the maxim in pari delicto, 
portior est conditio defend.enti.o. But there nre exceptional cases in E 
which a man w>ll be relieved of the cvonsequences of an illegal 
contract into which he has entered. To those cases the maxim does 
not : apply·. They fall int<i three classes (a) where the illegal pur• 
pose has not yet been substantially carried into effect before it is 
sought to recover money paid or goods delivered in. furtherance: of 
it (b) where the plaintiff is not in pari de!icto with the defendant, 
(c) where the plaintiff does not have to rely on the illegality to F 
make out his claim. (811 F-G]. 
It .is settled law that where the parties are not in pari delicto, 
che less guilty party may be able to recover money paid, or p'ro-
perty transferred, under an unlawful contract. This possibility may 
arise in three situations. First, the contract may be of a kind made 
illegal by statut~ i':1 t!te interests of a particular class of persons 
?f whom the plamt1ff 1s one. Secondly, the plaintiff may have been G 
m~uced to enter mto. the contract by fraud or strong pressure. 
Thirdly, a person who is under a fiduciary duty to the plaintiff wfil 
not be allow_ed to retain Pl'Opel'ty, or to refuse to ace<>unt for 
money,s rece_1ved o_n the •ground that the. property or the money~ 
~#!ze A~bJ~ mto his hands as proceeds of an illegal transaction. 
' 
The p,!aintiff's case was that at the pursuat'ion of appellant's 
father the jewellery was entrusrt!d to him. On the plaintiff's case a 
the appellant's father was undet a fiduciary duty to the plaintiff 
'Ind he could not w~thhold t~e property entrusted to him on the 
plea th~t 1t was delivered with· the object of defeating the claim 
of a third party. (812 D-E]. 
sos 
l../P(N)7SCI-12 (a) 
806 
StlPllllllB OOURT REPORTS 
[1968) 1 s.o.R. 
A 
(ii) The burden of proving that there was a debt and that the 
debt was avyavaharika or illegal lay upon the appellant. Granting 
that the defendant was after the death of his father, unable to 
trace the jewellery entrusted, it could not be inferred that the 
jewellery was misappropriated by his father. There was no evidence 
in this case to prove that the debt was avvavaharika or illegal. 
(813 A-CJ. 
B 
Toshanpal Singh v. District Judge of Agra, L.R. 61 I.A. 350, dis• 
tinguished. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 961 of 
1964. 
Appeal from the judgment and decree dated July 18, 1961 of 
C the Allahabad High Court in First Appeal No. 162 of 1947. 
J. P. Goyal and Sobhag Mal Jain, for the appellant. 
W. S. Barlingay and A. G. Ratnaparkhi, for respondent No. I. 
D 
The Judgment of the Court was delivered by-
Shab, J.-Lachhmi Narain father of Sitaram appellant in this 
appeal-was the brother of Radhabai-respondent herein. On 
' 
April 15, 1942, Radhabai-who will hereinafter be called 'the 
plaintiff' entrusted gold, pearl and diamond jewellery of the value 
E of Rs. 32,379/6/- to Lachhmi Narain for safe custody. After the 
death of Lachhmi Narain in July 1943, the appellant was called 
upon by the plaintiff to return that jewellery. The appellant replied 
that Lachhmi Narain had during his life time returned the jewel-
lery to the plaintiff. The plainbiff then instituted an action against 
Sita Ram, h

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