1 2026:CGHC:6504-DB NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR FA No. 208 of 2023 Reserved on 23/01/2026 Pronounced on 05/02/2026 Nayan Dutta S/o Late Tappan Dutta, Aged About 42 Years, R/o Near Station Pond Manendragarh, District : Koriya, Chhattisgarh ... Appellant/Defendant versus Dr. K.K. Agrawal S/o Late Pardesi Lal Agrawal, Aged About 65 Years, R/o Dr. K. K Agrawal Heart Centre Ameri Road, Nehru Nagar Bilaspur, Tehsil And District Bilaspur, Chhattisgarh. ... Respondent For Appellant : Mr. Shakti Raj Sinha, Advocate For Respondent : Mr. H.B. Agrawal, learned Senior Counsel appears along with Ms. A. Sandhya Rao, Advocate DB: Hon'ble Shri Justice Sanjay S. Agrawal & Hon'ble Shri Justice Amitendra Kishore Prasad C A V Judgment Per Sanjay S. Agrawal, J 1) This appeal has been preferred by the appellant/defendant under Section 96 of the Code of Civil Procedure, 1908, questioning the legality and propriety of the judgment and decree dated 20.10.2023 SUNITA GOSWAMI Digitally signed by SUNITA GOSWAMI Date: 2026.02.05 14:58:12 +0530 2 passed by the First Additional District Judge, Bilaspur (C.G.) in Civil Suit No.5-B/2017, whereby, the plaintiff’s claim, has been decreed entitling him to a sum of Rs.56,00,000/- (Rs. Fifty six lacs only) payable by the defendant along with the interest @ 6% per annum from the date of institution of the suit, i.e. 24.01.2017, till the delivery of the judgment, within a period of two months, else it shall carry interest @ 7.5 % per annum till its realization. Parties shall be referred hereinafter as per their description before the concerned trial Court. 2) Briefly stated the facts of the case are that the plaintiff instituted a suit claiming refund of Rs.56,00,000/- along with the interest, alleging inter alia, that the defendant- Nayan Dutta assured him to get the admission of his son, namely, Hemang Agrawal, who has passed his M.B.B.S. (Bachelor of Medicine, Bachelor of Surgery) course, for pursuing P.G. (Post Graduate) course in Government Medical College at Kolkata, as he had linked with Hon’ble the Chief Minister and, based upon the alleged assurance, he got a sum of Rs.56,00,000/- from him on different dates. It is pleaded by him that in pursuance to the alleged assurance, he obtained a sum of Rs.1,00,000/- on 10.05.2012 and thereafter, paid him Rs. 25,00,000/- on 06.10.2012 in presence of Dr. Badri Jaiswal and Bhagwati Prasad Saraf and, has given him further a sum of Rs.13,70,000/- on 29.08.2013 from his locker of Bank of Maharashtra, which was counted by its employee, namely, Lalchand Soni. It is pleaded further by the plaintiff that based upon his alleged assurance, he again paid him Rs.3,00,000/- and Rs.1,50,000/- on 31.08.2013 and 01.10.2013, respectively through the Cheque bearing No.0744215 and 0744216 drawn from the State Bank of India and 3 thereafter, paid him Rs.4,70,000/- through the Cheque bearing No.042380 drawn from the Union Bank of India from his wife’s account on 03.09.2013 and on the same day, he again paid him Rs.2,10,000/- through the Cheque bearing No.0149973 drawn from the Axis Bank, which was issued by his son- Hemang Agrawal. The alleged Cheques were given to the defendant in the name of his proprietorship firm, known as “Abhay Chhattisgarh”. It is pleaded further that the defendant, later on, informed him that, despite the instructions of Hon’ble the Chief Minister, the D.M.E. is not providing the admission to his son and has demanded additional sum of Rs.5,00,000/- and, therefore, he again gave him a sum of Rs.5,00,000/- from his locker, on 18.10.2013 in presence of Dr. Badri Jaiswal. It is pleaded further that the defendant while assuring him to get his son’s admission in Government Medical College for pursuing his P.G. course, has obtained a total sum of Rs.56,00,000/- on different dates, therefore, upon knowing that he was defrauded by him, a Criminal Case was filed by him for the offence punishable under Sections 420, 467, 468 and 471 of IPC in connection with Crime No.75/2016 and has constrained to institute the suit in the instant nature for the recovery of the alleged amount of Rs.56,00,000/- along with the interest from the date of institution of the suit, till its realization. 3) While contesting the aforesaid claim, it was pleaded by the defendant that he never received the alleged amount of Rs.56,00,000/- from the plaintiff while assuring him to get his son admitted into the Government Medical College at Kolkata for his P.G. course. According to him, he received Rs.3,00,000/- on 31.08.2013 from the plaintiff, while 4 Rs.1,50,000/-, Rs.4,70,000/- and Rs.2,10,000/- on 01.10.2013, 03.09.2013 and 03.09.2013, respectively, as shown in plaint para 8 and 9, but the same was, in fact, borrowed by him for the construction of his house and, not for the alleged assurance, as alleged by him and it was pleaded further that the said amount, so received, has already been refunded to him. 4) After considering the evidence led by the parties, it was held by the trial Court that the defendant while alluring the plaintiff to get his son admitted into the Government Medical College at Kolkata for pursuing his P.G. course has obtained the alleged amount of Rs.56,00,000/-, on different dates. It held further that since the defendant has denied to receive the alleged amount while assuring him to get his son’s admission in Government Medical College for pursing his P.G. course, therefore, it cannot be said that, it was paid contrary to any unlawful agreement. In consequence, the plaintiff’s claim has been decreed. 5) Mr. Sinha, learned counsel appearing for the appellant submits that the finding of the trial Court holding that the defendant has taken an amount of Rs.56,00,000/- from the plaintiff even in absence of any cogent and reliable evidence to this effect, is apparently contrary to the materials available on record. While referring to paras 4 and 5 of the plaint, it is contended further that since the claim is made based upon the alleged assurance which is unlawful, therefore, claim as made ought to have been dismissed. In support, he placed his reliance upon the decisions rendered by the Supreme Court in the matter of Kuju Collieries Ltd. Vs. Jharkhand Mines Ltd. and Ors., reported in 5 (1974) 2 SCC 533 and N.V.P. Pandian, Vs. M.M. Roy, reported in AIR 1979 Madras 42. 6) On the other hand, learned counsel appearing for the plaintiff has supported the impugned judgment and decree as passed by the trial Court. 7) We have heard learned counsel appearing for the parties and perused the entire record. 8) From perusal of the evidence of the plaintiff- Dr. K.K. Agrawal (PW-1), it appears that though, it was stated by him that the alleged amount was given to the defendant, but neither any receipt to this effect was obtained from him, nor even has shown the said facts in his Income Tax Return. It, however, reveals from the written statement, as well as, the evidence of the defendant- Nayan Dutta, wherein, it was admitted by him regarding the receiving of an amount of Rs.11,30,000/-, that it was received as a loan for the construction of the house. The burden is, therefore, shifted upon him to establish the fact that this much of amount, i.e. Rs.11,30,000/-, was received by him as a loan from the plaintiff on different dates as pleaded by him in his written statement, but no evidence to this effect has, however, been placed on record, so as to hold that the alleged amount of Rs.11,30,000/- was taken by him as a loan for the construction of his house. It, thus, appears that neither the plaintiff has placed any material evidence on record in order to prove that he paid Rs.56,00,000/- to the defendant, nor the defendant has led any evidence that he received the alleged amount of 6 Rs.11,30,000/- from the plaintiff as a loan for the construction of his house. 9) Be that as it may, it, however, appears from a bare perusal of the pleadings made at paras 4 and 5 that, the entire case of the plaintiff is based upon the fact that he was assured by the defendant- Nayan Dutta to obtain a ‘seat’ for his son’s admission in Government Medical College at Kolkata for pursuing his P.G. course, if he would lend him the alleged amount of Rs.56,00,000/-, as he was a strong link with Hon’ble the Chief Minister of the State. It, however, appears from the record that since he could not get the ‘seat’ in the Government Medical College at Kolkata for pursuing the P.G. course of his son, despite the alleged assurance given by the defendant, an FIR (Ex.P-11) in connection with Crime No.75/2016 was registered against him for the offence punishable under Sections 420, 467, 468 and 471 of IPC and, simultaneously, a suit in the instant nature for recovery of the alleged amount of Rs.56,00,000/-, has been instituted on 24.01.2017. 10) According to the averments made at para 4 of the plaint, it appears that the plaintiff wanted to get the admission of his son in Government Medical College at Kolkata for pursuing his P.G. course based upon the alleged assurance given by the defendant. The plaintiff and defendant, both are, thus, involved in unlawful activities for the admission of plaintiff’s son in Government Medical College at Kolkata for pursuing his P.G. course, though, were aware that it was not possible to be done according to the law. Therefore, such an assurance made by the defendant for the alleged purpose cannot be held to be lawful or any action could even be made for its breach being contrary to the public 7 policy, as held by the Supreme Court in the matter of Kuju Collieries Ltd. Vs. Jharkhand Mines Ltd. and Ors., reported in (1974) 2 SCC 533, wherein, it has been held at para 8 as under :- “8. A Full Bench of five Judges of the Hyderabad High Court in Budhulal v. Deccan Banking Company (AIR 1955 Hyd. 69 (FB)) speaking through our brother, Jaganmohan Reddy J., as he then was, referred with approval to these observations of the Privy Council. They then went on to refer to the observations of Pollock and Mullah in their treatise on Indian Contract and Specific Relief Acts, 7th Edn. to the effect that Section 65, Indian Contract Act does not apply to agreements which are void under Section 24 by reason of an unlawful consideration or object and there being no other provision in the Act under which money paid for an unlawful purpose may be recovered back, an analogy of English Law will be the best guide. They then referred to the reasoning of the learned authors that if the view of the Privy Council is right namely that “agreements discovered to be void” apply to all agreements which are ab-initio void including agreements based on unlawful consideration, it follows that the person who has paid money or transferred property to another for an illegal purpose can recover it back from the transferee under this section even if the illegal purpose is carried into execution and both the transferor and transferee are in pari delicto. The Bench then proceeded to observe: "In our opinion, the view of the learned authors is neither supported by any of the subsequent Privy 8 Council decisions nor is it consistent with the natural meaning to be given to the provisions of Section 65. The section by using the words 'when an agreement is discovered to be void' means nothing more nor less than: when the plaintiff comes to know or finds out that the agreement is void. The word 'discovery' would imply the pre- existence of something which is subsequently found out and it may be observed that Section 66, Hyderabad Contract Act makes the knowledge (11m) of the agreement being void as one of the pre-requisites for restitution and is used in the sense of an agreement being discovered to be void. If knowledge is an essential requisite even an agreement ab-initio void can be discovered to be void subsequently. There may be cases where parties enter into an agreement honestly thinking that it is a perfectly legal agreement and where one of them sues the other or wants the other to act on it, it is their that he may discover it to be void. There is nothing specific in Section 65 Indian Contract Act or its corresponding section of the Hyderabad Contract Act to make it inapplicable to such cases”. “A person who, however, gives money for an unlawful purpose knowing it to be so, or in such circumstances that knowledge of illegality or unlawfulness can as a finding of fact be imputed to him, the agreement under which the payment is made cannot on his part be said to be discovered to be void. The criticism that if the aforesaid view is right then a person who has paid money or transferred property to another for illegal purpose can recover it back from the transferee under this section even if the illegal purpose is carried into 9 execution, notwithstanding the fact that both the transferor and transferee are in pari delicto, in our view, overlooks the fact that the courts do not assist a person who comes with unclean hands. In such cases, the defendant possesses an advantage over the plaintiff- in pari delicto potior est conditio defendentio”. Section 84, Indian Trust Act, however, has made an exception in a case - where the owner of property transfers it to another for illegal purpose and such purposes is not carried it into execution or the transferor is not as guilty as the transferee or the effect of permitting the transferee to retain the property might be to defeat the provisions of any law the transferee must hold the property for the benefit of the transferor. “This specific provision made by the legislature cannot be taken advantage of in derogation of the principle that Section 65, Contract Act, is in applicable where the object of the agreement was illegal to the knowledge of both the parties at the time it was made. In such a case the agreement would be void ab initio and there would be no room for the subsequent discovery of that fact”. “We consider that this criticism as well as the view taken by the Bench is justified. It has rightly pointed out that if both the transferor and transferee are in pari delicto the courts do not assist them”. 11) While placing reliance upon the aforesaid decision, the Madras High Court in the matter of N.V.P. Pandian, Vs. M.M. Roy, reported in AIR 10 1979 Madras 42, while dealing with the similar question, as arises herein, held at paras 10 to 12 as under :- “10. The next question for consideration is whether in such circumstances the respondent would be entitled to maintain an action to refund of the money. The learned trial Judge has granted a decree for refund of the money in favour of the respondent on the ground that she was a less guilty party. There is absolutely no evidence at all available in the case for this finding of the lower court. There is no evidence except the ipse dixit of P. W. 1 that the appellant volunteered to procure a seat for the respondent's son in the Madras Medical College provided the latter would pay him Rs.15,000/-. It is the specific case of the respondent that she was trying for a seat for her son in the Madras Medical College and that it was in that connection that she paid Rs. 15,000/- to the appellant on the latter promising to get a seat. In the circumstances, it could only be concluded that only the respondent must have approached the appellant for necessary help in the matter of securing the seat for her son in the Medical College. Therefore, both the appellant and the respondent must be considered to be in pari delicto. Where each party is equally in fault the law favours him who is actually in possession. The maxim in pari delicto potior est conditio possidentis is founded on the principles of public policy, which will not assist a plaintiff who has paid over money or handed over property in pursuance of an illegal or immoral contract, to recover it back, for the Courts will not assist an illegal transaction in any 11 respect. In Sita Ram v. Radha Bai (AIR 1968 SC 534) it has been held thus : (at p. 537) "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 potior est conditio possidentis'.......... But there are exceptional cases in which a man will be relieved of the consequences of an illegal contract into which he has entered-cases to which the maxim does not apply. They fall into three classes : (a) where the illegal purpose 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 delicto with the defendant; (c) where the plaintiff does not have to rely on the illegality to make out his claim........... Where the parities are not in pari delicto, the less guilty party may be able to recover money paid or property transferred, under the contract. This possibility may arise in three situations: Firstly, the contract may be of a kind made illegal by statute in the interests of a particular class of persons of whom the plaintiff is one. Secondly, the plaintiff must have been induced to enter into the contract by fraud or strong pressure. Thirdly, a person who is under a fiduciary duty to the plaintiff will not be allowed to retain property, or to refuse to account for moneys received, on the ground that the property or the moneys have come into his hands as the proceeds of an illegal transaction." The present case does not fall in any of the exceptional cases referred to above. 12 11. In Kuju Collieries v. Jharkhand Mines (AIR 1974 SC 1892) a mining lease was given in favour of the plaintiff contrary to the provisions of Mines and Minerals (Regulation and Development) Act, 1948 and the Mineral Concession Rules, 1949. There was proof to show that the plaintiff could not have been in ignorance of the legal position. On the basis of the lease, the plaintiff did not get possession of the leased property and, therefore the plaintiff instituted the suit for recovery of possession of the leased property along with mesne profits or in the alternative for refund of the sum of Rs. 80,000/- and certain other sums. After the institution of the suit the relief in respect of possession of the mines became unenforceable in view of the Bihar Land Reforms Act. Therefore, the only relief which was pressed by the plaintiff was his claim for the refund of Rs. 80,000/- Alagiriswami, J. on behalf of the Court held that the lease in favour of the plaintiff was contrary to the provisions of the Mines and Minerals (Regulation and Development) Act, 1948 and the Mineral Concession Rules, 1949 and as such void from its inception. Consequently, payment of the sum of Rs. 80,000/- was not made lawfully, nor was it done under a mistake or under coercion and it could not be recovered. An attempt was made before the Supreme Court to bring the case within Section 65, 70, or 72 of the Contract Act. In dealing with this contention, it was observed that S. 65 makes a distinction between an agreement and a contract. According to S. 2 of the Contract Act an agreement which is enforceable by law is a contract and an agreement which is not enforceable by law is said to be void. 13 Therefore, when the earlier part of the section speaks of an agreement being discovered to be void it means that the agreement is not enforceable and is therefore not a contract. It means that it was void. It may be that the parties or one of the parties to the agreement, knows that agreement was in law not enforceable. They might have come to know later that the agreement was not enforceable. The second part of the section refers to a contract becoming void. That refers to a case where an agreement which was originally enforceable and was therefore a contract becomes void due to subsequent happenings. In both these cases any person who has received any advantage under such agreement or contract is bound to restore such advantage, or to make compensation for it to the person from whom he received it. But where even at the time when the agreement is entered into both the parties knew that it was not lawful and, therefore, void, there was no contract but only an agreement and it is not a case where it is discovered to be void subsequently. Nor is it a case of the contract becoming void due to subsequent happenings. Therefore, S. 65 of the Contract Act did not apply." It also ruled out the applicability of Sections 70 and 72 of the Contract Act on the ground that the payment of the money was not made lawfully, nor was it done under a mistake or under coercion. In coming to this conclusion, the Supreme Court approved the decision of the Hyderabad High Court in Budhulal v. Deccan Banking Co. (AIR 1955 Hyd. 69) (FB). 14 12. Following these decisions, it has to be held that the instant case falls clearly under the maxim pari delicto potior est conditio possidentis. The respondent must have known when she paid Rs. 15,000, that she was paying the money for an illegal object or an object opposed to public policy. She cannot in any way be considered to be less guilty party as none of the situations contemplated in Sitaram v. Radha Bai AIR 1968 SC 534 is present. I therefore follow the decisions in Kunju Collieries v. Jharkhand Mines AIR 1974 SC 1892 and in Ratanchand v. Askar AIR 1976 An. Pra112, and hold that the respondent is not entitled to a refund of the money from the appellant. The respondent herself could not get the relief she wanted without setting up and proving the illegal object for which she had paid the money. I therefore set aside the judgment and decree of the trial court, dismiss the suit and allow the appeal with costs”. 12) The principles laid down in the the matter of Kuju Collieries Ltd. (supra) has further been reiterated recently by the Supreme Court in the matter of Loop Telecom And Trading Ltd. Vs. Union of India and Anr., reported in (2022) 6 SCC 762, and, in the light of the principles laid down in the above referred matters, the plaintiff would, therefore, not be entitled to maintain the claim based upon the alleged assurance given by the defendant for fulfillment of his unlawful purpose for obtaining the admission of his son in the Government Medical College at Kolkata for pursing P.G. course of his son. 15 13) Consequently, the appeal is allowed and the impugned judgment and decree dated 20.10.2023 passed by the First Additional District Judge, Bilaspur in Civil Suit No.5-B/2017, is hereby dismissed. No order as to cost(s). A decree be drawn accordingly. Sd/- (Sanjay S. Agrawal) Judge Sd/- (Amitendra Kishore Prasad) Judge sunita