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Judgment
Jaswant Singh, C.J.—This reference arises out of a suit brought on the original side of this court by the respondent for recovery of Rs.
29014/- alleged to have been wrongfully obtained by the appellant herein.
The case of the respondent is that the appellants had no proprietary interest in 58 kanals of land comprised in survey Nos. 935 min, 493 min
and 1144 min situate in Zahinpura Tehsil Uri. that during the proceedings taken for acquisition of 654 kanals and 14 marlas of land required for the
Lower Jhelum Hydel project the appellants falsely represented on the basis of fictitious and fraudulent entries which they got effected in the revenue
record in collusion with the concerned Patwari that the aforesaid area of 58 kanals belonged to them, that acting on that representation the
Collector, Land Acquisition Officer (Flood & Irrigation) inadvertently awarded Rs. 20010/- to the appellants jointly and Rs. 9004.50 to appellant
No. 1 individually, that during the course of the inquiry launched on the basis of a complaint in respect of the aforesaid compensation it was
revealed that the aforesaid area of 58 kanals was Shamilat and did not belong to the defendants and that acting in collusion with the concerned
patwari the appellants manoeuvred to obtain the aforesaid compensation which was not at all due to them.
While resisting the suit the appellants raised a number of pleas, preliminary and otherwise. Amongst other pleas raised by them, the appellants
also contended that they being agriculturists the suit was not cognizable by the court.
Mian Jalal-ud-Din J. to whom the suit was assigned for trial and disposal struck four preliminary issues vide his order dated Sept. 17, 1972, but
it is only the following preliminary issue with which we are concerned:-
Are the defendants agriculturists and therefore the suit is triable under the provisions of the Agriculturists' Relief Act? OPD.
On a consideration of the evidence adduced in the case, the learned single judge by his order dated May, 5, 1972, held that the appellants were
no doubt agriculturists as conceived by the Agriculturists' Relief Act (hereinafter referred to as the Act) but there being no contractual obligation on
their part to pay back the compensation money and the claims sought to be enforced being found on tort, the suit did not fall within the purview of
the first part of the last clause of S. 3 of the Act, as contended by the appellants. In coming to this conclusion the learned judge relied upon my
judgment in Ghulam Mohd. v. Abdul Aziz, 1970 Kash LJ 5 wherein it was held that for a suit to come within the purview of the Act the claim for
money must be based on a contract or a promise to pay back the money. Dissatisfied with this order, the appellants preferred a letters patent
appeal which came to be heard by a Division Bench of this court consisting of Mufti Baha-ud-Din and S. Wasiuddin JJ. The learned Judges
constituting the Bench differed in their opinion. Whereas S. Wasiuddin J. supporting the conclusions arrived at by Mian Jalal-ud-Din held that the
suit was not of the nature which was triable under the Act, Mufti Baha-ud-Din Farooqi J. took a contrary view. The learned judge while relying
upon the observations made by me in the Full Bench judgment of this court in Mohd. Abdullah Dar v. Mohd. Akbar, 1972 Kash LJ 338 = (AIR
1973 J & K 4 (FB)) and conceding that the first part of the last clause of Section 3 of the Agriculturists' Relief Act was meant to cover a claim
arising from a contract held that an obligation resembling that created by a contract also fell within the purview of the last clause of Section 3 of the
Act and that the respondent's action for money based on the alleged misrepresentation of the appellants could not be held to be an action based on
tort. The learned judge further held that the suit for refund was really a suit under S. 70 of the Contract Act, for the enforcement of an obligation
resembling that created by a contract and being covered by Section 3 of the Agriculturists' Relief Act was triable under that Act. It is in view of this
difference of opinion that the case has been referred to me.
I have heard the learned counsel for the parties and given my careful consideration to the question involved in this case, viz. whether the suit as
brought is triable under the Agriculturists' Relief Act or not. For a proper determination of the question it is necessary to refer to S. 3 of the Act
which runs as follows:
Except as may hereinafter be otherwise provided, the provisions of this Act apply to-
(a) Suits for an account instituted by an agriculturist under the provisions hereinafter contained; and
(b) Suits in which the defendant or any one of the defendants, is an agriculturist, for the recovery of money alleged to be due to the plaintiff;
On account of money lent or advanced to, or paid for, the defendant, or as the price of goods sold, or
On an account stated between the plaintiff and the defendant, or,
On a written or unwritten engagement for the payment of money not hereinbefore provided for.
It is upon the interpretation of the word 'engagement' occurring in the first portion of the last clause of the above-quoted section that the upshot
of the reference depends. The word 'engage' has been defined in the Concise Oxford Dictionary and the Readers 'Digest Great Encylopaedic
Dictionary as meaning 'bind by contract or promise, pledge oneself to do anything or to guarantee or promise'. In the Webster's Third New
International Dictionary the word 'engage' has been defined as meaning to commit (as a person) as surety (as for the payment of a debt or
performance of an obligation), to bind (as oneself), to do or to forbear doing something by or as if by a formal promise or contract. In the context
with which we are concerned, the word 'engagement' means some sort of undertaking or contractual obligation. It is not the case of any party that
any indemnity bond was furnished by the appellants for the compensation money drawn by them. In the facts and circumstances of the present
case it cannot therefore be said with any show of force that there was any written or unwritten engagement for payment of money on the part of the
appellants so as to bring the suit within the purview of the first, part of the last clause of Section 3 of the Act. In the Full Bench judgment (Supra),
to which reference has been made by my brother, Mufti Baha-ud-Din Farooqi, J. I unequivocally observed that for a suit to fall within the last
portion of Section 3 of the Act, an undertaking to pay the money must be spelt out from the instrument of partnership or other relevant material.
As according to the allegations made by the respondent, the appellants got the compensation money on a false representation in collusion with
the Patwari, they cannot be said to have promised or given an undertaking to pay back the money. The suit therefore clearly falls outside the
purview of S. 3 of the Act and the learned single Judge was perfectly right in expressing that opinion.
Before concluding I must also advert to the observations made by Mufti Baha-ud-Din Farooqi J. that if a person prefers a claim which is tainted
with misrepresentation, his act does not constitute a breach of a duty and that the respondent's action for money based on the alleged
misrepresentation of the appellants could not be held to be an action based on tort. With due deference to the learned Judge I find myself unable to
agree with these observations. C. Harles Collatt, esq. has to say the following in Section 331 of his ""Manual of the Law of Torts and the Measure
of Damages"" with regard to the action for deceit and false representation:
If a falsehood be knowingly told, with an intention that another person should believe it to be true, and act upon it, and that person has acted upon
it, and thereby suffered damage, the party telling the falsehood is responsible in damages in an action for deceit, there being a conjunction of wrong
and loss, entitling the injured party to compensation.
x x x x x x x x
It is not necessary, in all cases, to show that the defendant knew the representation to be untrue for if he made the statement for a fraudulent
purpose, and without believing it to be true, and with the intention of inducing the plaintiff to do an act, and the act is done to the prejudice of the
plaintiff, the defendant is liable. The representation need not be made directly to the plaintiff: it is sufficient if it be made for communication to him or
to the class of persons to which he belongs, or to the public generally with a view of its being acted on. It is not necessary to prove that the false
representation was made from a corrupt motive of gain to the defendant, or a wicked motive of injury to the plaintiff, whether the defendant has
any interest in the assertion he makes, or in the matter respecting which it is made, is perfectly immaterial, the general rule being, that if any man
makes a fraudulent representation for another to act upon it, either directly or indirectly, and it is calculated to induce that person to act on it, and
he does act on it, the person who makes the representation is responsible in damages.
The following passage occurring at page 463 of the English & Indian Law of Torts by Ratanlal Ranchhoddas and Dhirajlal Kesholal Thakore
may also be perused with advantage:
The making of a representation which a party knows to be untrue, and which is intended, or is calculated, to induce another to act on the faith of it,
so that he may incur damage, is a fraud in law. (See. Polhill v. Walter (1832) 3 B & Ad. 114). Fraud implies a wilful act on the part of one,
whereby another is sought to be deprived, by unjustifiable means of what he is entitled to (See Green v. Nixon (1857) 23 Bev 530, 535). A false
affirmation made by the defendant with intent to defraud the plaintiff whereby the plaintiff suffers damage, is the ground of an action for deceit. In
such an action, it is not necessary that the defendant should be benefited by the deceit or that he should collude with the person who is (See Pasley
v. Freeman, (1789) 3 TR 51 = 2 Sm LC (13th Edn). 59) or that the false representation should have been made from a corrupt motive of gain to
the defendant or a wicked motive of injury to the plaintiff.
(See Polhill v. Walter Supra).
Again the following passages occurring at pp. 217 and 218 in Winfield and Jolowicz on Tort (ninth edition) are worth perusing:-
Since the famous case of Pasley v. Freeman (1789) 3 TR 51 in 1789, it has been the rule that A is liable in tort to B if he knowingly or recklessly
(i.e., not caring whether it is true or false) makes a false statement to B with intent that it shall be acted upon by B, who does act upon it and
thereby suffers damage. This is the tort of deceit, and for liability in deceit the defendant must make the statement with knowledge of its falsity or at
least reckless whether it is true or false. It was for long thought that this meant that there could be no liability in tort for a false statement honestly
made, however negligent its maker may have been and however disastrous its consequences; a careless man is not a dishonest one. Now,
however, the House of Lords has held that there may in certain circumstances be a duty of care upon the maker of a statement, (See Hedley Byrne
& Co. Ltd. v. Heller & Partners Ltd. 1964 AC 465 and thus that a person may be liable for a false statement honestly but negligently made. Such
liability cannot be brought under the tort of deceit-it is liability for negligence and not for fraud-but its existence has a profound bearing on liability
for statements as a whole. As we have seen, the plaintiff in an action for damages does not have to specify the particular tort on which he wishes to
rely and all that is necessary is that he should prove the facts required for liability under at least one tort. If, therefore, there may be liability in
negligence it is of little more than academic interest that absence of fraudulent intent is fatal to a claim founded on deceit.
x x x x x x x x
A false statement of fact may, of course, be oral or written. It may also be implied from conduct. If the defendant deliberately acts in a manner
calculated to deceive the plaintiff and the other elements of the tort are present, the defendant is as such liable for deceit as if he had expressly
made a false statement of fact.
Thus I am of the opinion that misrepresentation or false representation, if made, would amount to a breach of duty and would constitute tort.
I cannot also persuade myself to agree with the observations of Mufti Baha-ud-Din Farooqi J. that the suit for refund of the money in the
instant case was really a suit under S. 70 of the Contract Act for the enforcement of an obligation resembling that created by a contract and
covered by S. 3 of the Act The reference to Section 70 of the Contract Act seems to be inappropriate as that section does not contemplate the
case of payment of money. I am fortified in this view by a Full Bench decision of the Madras High Court in Perumal Chettiar Vs. Kamakshi
Ammal, where Sir S. Varadachariar observed:
It only remains to add that S. 70, Contract Act, which has sometimes been appealed to, is scarcely appropriate to a case of money lent to the
defendant. There is no possibility in such a case or even a contemplation of the 'thing delivered' being restored which obviously means in specie
and lending money to the defendant cannot be described as something done for the defendant.
Relying upon this decision Mathur J. in Sheo Nath Prasad Vs. Sarjoo Nonia and Another, said as follows:
I must hold that S. 70 does not contemplate the case of payment of money and it will be doing violence to the language of the section to hold that
the words 'lawfully does anything' mean 'payment of money.'
In the result agreeing with the opinion of S. Wasiuddin J. and disagreeing with the opinion of Mufti Baha-ud-Din J. I would dismiss the appeal
but without any orders as to costs.
In accordance with the opinion of the majority, the appeal preferred by Saif-ud-Din and Abdul Rashid is dismissed, but without any order as
to costs, as envisaged by Cl. 21 of the Letters Patent.
The case shall now go back to the learned trial judge for further proceedings and disposal according to law.