Kuju Collieries Ltd. Vs. Jharkhand Mines Ltd. and Ors.

Kuju Collieries Ltd. vs. Jharkhand Mines Ltd. and Ors.

AIR 1974 SC 1892

Key Words: illegal purpose, agreement forbidden by law, subsequent discovery, mistake

FACTS

Plaintiff entered into a contract for lease of coal mines from the defendant in lieu of consideration money (which was paid there and then); however, the deed was hit with the illegality under the act passed before the contract was made; since the lease of property was never conveyed to the plaintiff and the deed was void by the operation of law, he instituted the suit u/s 65 claiming that the law was unknown to him before entering the contract and it was the case of “contract discovered to be void”.

ISSUE

Whether the case is governed by S.65 of Indian Contract Act?

HELD

As the plaintiff was already in the business of the mining operations and had the advantage of consulting solicitors evidenced by the fact that the deed was prepared by the solicitors, hence, there was no occasion for plaintiff to be in ignorance of law such that the deed was void ab initio and not subsequently discovered to be void. Since the plaintiff is to be imputed with the knowledge of law in present circumstances, hence the act of paying the consideration money could not be said to be induced by ‘mistake’ as to law in force under the realm of S.72 such that plaintiff could not recover anything.

Author: Vishrut Kansal

Editor: Vivek Verma