Sita Ram v. Radha Bai AIR 1968 SC 534

SITA RAM V. RADHA BAI

ISSUE:

Whether the suit was maintainable despite the alleged illegal purpose behind the entrustment of jewellery to Lachhmi Narain?
Whether the jewellery was returned to the plaintiff, and if not, whether the appellant was liable to return it or its value?
Whether the liability arising from the alleged misappropriation of the jewellery by Lachhmi Narain was enforceable against the joint family property in the hands of the appellant?

RULE:

The principle of in pari delicto does not apply where the parties are not equally at fault. A person who entrusts property to another, even in furtherance of an improper purpose, may still recover it if the illegal purpose was not carried into effect, if they were less guilty, or if their claim does not require reliance on the illegality. A fiduciary cannot refuse to return entrusted property on the ground that it was given to defeat another’s claim.
A debt is not avyavaharika merely because it arises from a fiduciary obligation. The burden of proving that a debt is avyavaharika (illegal or immoral) rests on the person contesting liability. A son is liable for his father’s debts unless they are illegal. Mere inability to trace entrusted property does not establish misappropriation or illegality, and therefore, the liability remains enforceable against the joint family property.

FACTS:

The plaintiff (Radhabai) entrusted gold, pearl, and diamond jewellery worth ₹32,379/6/- to her brother Lachhmi Narain on April 15, 1942, for safe custody.
Lachhmi Narain passed away in July 1943. After his death, the plaintiff demanded the return of the jewellery from the defendant (Sita Ram, Lachhmi Narain’s son and legal heir).
The defendant claimed that his father had already returned the jewellery to the plaintiff during his lifetime.
The plaintiff then filed a suit in the Court of the First Civil Judge, Kanpur, seeking a decree for the return of the jewellery or its equivalent value.
The Trial Court dismissed the suit, holding that the jewellery had been returned to the plaintiff on April 23, 1942.
On appeal, the Allahabad High Court reversed the Trial Court’s decision, decreeing that the jewellery be returned within a month, and if not, the defendant must pay ₹32,379/6/- from Lachhmi Narain’s estate.
The defendant appealed to the Supreme Court under its civil appellate jurisdiction with a certificate granted by the High Court.

HELD:

The Supreme Court held that the principle of in pari delicto does not apply where the parties are not equally at fault. A person who entrusts property to another, even for an improper purpose, may recover it if the illegal purpose was not carried out, if they were less guilty, or if their claim does not rely on the illegality.
The court ruled that a fiduciary cannot refuse to return entrusted property on the ground that it was delivered to defeat another’s claim. The plaintiff had a right to recover the jewellery from the defendant, as the defendant’s father was in a position of trust.
The burden of proving that the jewellery was returned lay on the defendant, and no conclusive evidence established that the jewellery was handed back to the plaintiff. Mere circumstantial indications, such as the plaintiff’s presence in Kanpur on the alleged date of return, were insufficient.
The Supreme Court rejected the argument that the liability arising from the entrustment of jewellery was avyavaharika (illegal or immoral). The burden of proving that a debt is avyavaharika lies on the person contesting liability, and there was no evidence that the defendant’s father misappropriated the jewellery.
The court ruled that under Hindu law, a son is liable for his father’s debts unless they are avyavaharika. Since no misappropriation or illegality was established, the liability for the jewellery remained enforceable against the joint family property in the hands of the defendant.
The Supreme Court dismissed the appeal with costs, affirming the High Court’s decision.