V.D. Kumarappan vs L. Suppiah and Another

Anantanarayanan, J.—This appeal by the plaintiff in the court below, in a suit for recovery of Rs. 13,406-26 nP being his share of the sale

proceeds of a property owned in common between him and defendants 1 and 2, together with a direction to the first defendant to pay the amount

in India, and for recovery of Rs. 5087-50 nP towards damages, involves only restricted aspect or the suit. As will be clear from the issues framed

at the trial, there was also a question of the jurisdiction of the learned Subordinate Judge of Padukottai to try this suit for recovery of a share of sale

proceeds of property situate in Ceylon, and sold in Ceylon. There was a further question of the bar of limitation. We are not now concerned with

these questions, since the court held that it had jurisdiction, and that the suit was not barred. If we turn, for a moment, to the reliefs sought by the

plaintiff (appellant) we see that they are enumerated as, firstly, a direction to first defendant to pay plaintiff Rupees 13,406-25 nP in India, and

secondly, for Rupees 5087-50 nP as damages; the latter part is not now pressed. Hence, as we stated at the outset, what survives for our decision

is the narrow point whether, under the circumstances of this suit claim, the first defendant is bound to pay this amount claimed by the plaintiff as his

share of the sale proceeds, in India.

It is not in dispute that the first defendant, the plaintiff and the brother of the plaintiff the second defendant, entered into a mutual power of

attorney in 1952 (Ex. A. 1) which inter alia invested each of these parties with power to sell the Ceylon properties both on his own behalf, as a co-

owner, and on behalf of the other two, presumably in a capacity as agent. There is one term in this power which is of some importance, in the light

of the subsequent events. It is a term that each of the persons will apply to the Controller of Exchange or other authority for remittance to the

others or any one or more of them, to India, of the purchase price or prices, after the sale occurs, or of other moneys belonging to each of the

parties, from time to time. It is not in dispute between the parties that there is an Exchange Control Act in force in Ceylon, under Ss. 7 and 31 of

which enactment various disabilities are imposed upon persons bringing moneys out of Ceylon into India, or persons in India authorising other

persons to receive moneys in Ceylon on their own behalf.

It is not in dispute that the Colombo properties were ultimately sold by the first and second defendants, and that deducting brokerage and

charges for proctors etc Rs. 53000 and odd was made available for distribution of sale proceeds amongst the co-owners. The first defendant took

his half share, and, according to him, has throughout been prepared to pay the plaintiff the fourth share of the plaintiff in Ceylon, which is the

amount of Rs. 13406-25 nP. The subsequent correspondence between the parties does bear out the willingness of the first defendant to make this

payment in Ceylon, either to plaintiff or to any person duly authorised by plaintiff to receive the money on his behalf. Admittedly, at this moment,

the moneys belonging to the plaintiff are in deposit with a firm in Ceylon (Messrs. V.R.M.V.A. and Co., Colombo) and these persons of the firm

have been authorised to pay the mount either to plaintiff or to any one nominated on his behalf, in Ceylon, in accordance with the law prevailing

there.

There are certain other facts which are heavily against the contention of learned counsel for plaintiff (appellant) that we should somehow spell

out, from the history of the relationships and transactions in this case, a legal obligation of the part of the first defendant to pay the moneys in India

to plaintiff. One extraordinary feature of the case is that the sale was held on 24-6-1956, and that when plaintiff was duly intimated of the facts,

plaintiff actually repudiated the sale, and purported to cancel the power of attorney by a communication dated 9-8-1956. The sale itself was

challenged by the plaintiff (appellant). Later, it is true, the appellant found it convenient to accept the accomplished fact; he accepted that sake, and

his right to receive his share of the sale proceeds. He has subsequently affirmed that, throughout, he was willing to receive the payment, and that he

is not to be blamed or to suffer if, owing to the operation of law, the first defendant is unable to make the payment in India, which upon the

contention of the learned counsel for appellant, is the only practicable mode of payment. It is for these reasons that, in this suit the appellant prayed

for a decree for payment of the amount in India.

Assuming for a moment that we overlook this repudiation of the power by the appellant, which certainly terminated the obligation of the first

defendant to immediately transmit the sale proceeds to plaintiff, we find that, even after that plaintiff (appellant) has not been particularly co-

operative. There are several letters of first defendant to which our attention has been drawn, such as Ex. B. 7 dated 4-8-1956, Ex. B. 8 a letter of

the Proctor of the first defendant dated 1-11-156 and Ex. B. 9 dated 3-1-1957. We do not find that plaintiff (appellant) responded to these

communications by any serious or sincere effort on his part to receive payment in Colombo, after complying with the due formalities under the

Foreign Exchange Regulation.

We might here add that, at a certain stage of the hearing if this appeal before a Bench of this Court of Jagadisan and Venkatadri JJ., the learned

Judges were pleased to adjourn the appeal for some time, so that the parties could come together, in any attempt to mutually co-operate and to

see that steps were taken for effective payment in Ceylon. Documents between the parties subsequent to this adjournment have also been made

available to us. They emphasise the main characteristic, that, entirely owing to the operation of causes beyond his control the first defendant is

unable to move the money form Colombo or to bring it into India, or to make any payment to any nominee of the plaintiff at Colombo, without the

plaintiff taking certain steps under the Foreign Exchange regulation to establish his claim to receive this amount at Colombo, after applying for the

requisite papers from the authorities. This is how the position stands today.

It is in this situation that learned counsel for appellant (Sri R. Gopalaswami Iyengar) argues before us that there is some principle of law under

which, in relation to the admitted facts, we can spell out a legal obligation of the part of the first defendant to make the payment in India. We are

totally unable to accept this argument, and we are unable to see how it can be spelt out of the facts in any conceivable sense, or in relation to any

established jural principles. Assuming, for a moment, that the first defendant is purely an agent for sale, of the plaintiff (appellant) which itself is not

strictly accurate since each was a co-owner, also, and assuming that, as agent for sale, the first defendant was bound to deliver to plaintiff the

plaintiff''s share of the sale proceeds, it is still impossible to see how that obligation can further expand as a duty to make that payment in rupees in

India. The property was situate in Ceylon, the agreement was for sale in Ceylon, the sale was effected in Ceylon and the sale proceeds were

realised and kept in Ceylon. Certainly, the first defendant was not in the position of an insurer for payment of the moneys in India.

Not merely this. A statute which was then in force, inhibited the transport of these moneys outside Ceylon by the terms of Sections 7 and 31 of

that statute; to do otherwise, or attempt to do otherwise, would have been an offense under the law, which the courts cannot certainly countenance

or encourage. Learned counsel for the appellant has drawn our attention to a passage in the deposition of the first defendant to the effect that he

was able to bring his own share of the moneys to India, sometime after the sale. Presumably, he did so under the Foreign Exchange Regulation, as

it was then administered. It must be remembered that the appellant revoked the power itself and repudiated the sale and thereby himself imposed

obstacles upon any immediate attempt of the first defendant to bring the plaintiff''s share of the sale proceeds into India. subsequently, it seems to

have been impossible to do so, because of the strict enforcement by the authorities of the Foreign Exchange Regulation.

Our attention has been drawn by learned counsel to S. 189 of the Indian Contract Act. We are totally unable to see how that principle applies to

the facts of the present suit. That is a liability of an agent in general, in an emergency, to do all works for protecting his principal from loss, as would

be done by a person of ordinary prudence, in regard to his own case. We are not confronted with any emergency here, nor can it be said that for

the purpose of protecting the appellant from losses, the first defendant was somehow bound to bring the appellant''s share into India, if necessary

by contravening the law. the broad principles of agency and the duties of an agent, are to be found in Ss. 211 and 212 of the Contract Act;

certainly no principle to which our attention has been drawn can, in relation to the present facts, justify our inference of a liability of first defendant

to pay the appellant''s share in rupees in India. The suit on this aspect was rightly dismissed. The appeal is totally devoid of merits, upon a strictly

legal basis, and it has also to be dismissed.

Before we part with the appeal, however, we would like to point out that the situation can still be retrieved by frank and sincere mutual co-

operation between the parties. On behalf of the first defendant, his learned counsel, Mr. V. Thyagarajan, undertakes to see that whatever can be

done by his client under the foreign Exchange Regulation, to make available to plaintiff or his nominee, the moneys of the plaintiff now lying with the

firm acting on behalf of the first defendant at Colombo, will be done by his client. In particular, learned counsel states that if plaintiff applies to the

authorities, and obtains the necessary permit or certificate, the first defendant will instruct the firm at Colombo, as authorised, or to any nominee on

his behalf. We record this undertaking, and we have no doubt that, with similar initiative and co-operation exercised by the appellant, this actual

claim can be fully and thoroughly satisfied.

The appeal is dismissed with cost.

Appeal dismissed.