ABDUL LATIF ETC vs DISTRICT COUNCIL, BANNU
This matter concerns a petition for leave to appeal against a High Court judgment decreeing a suit for the recovery of outstanding lease money. The petitioner, having successfully bid for the right to collect taxes at a bus stand managed by the respondent District Council, subsequently defaulted on payments. When sued, the petitioner contested the suit by challenging the respondent's legal authority to levy such taxes and lease out collection rights. The core legal question was whether the petitioner, having entered into a written agreement and operated under it for over eleven months, could challenge the validity of the contract and the respondent's underlying authority. The Supreme Court held that the petitioner was barred from challenging the contract's validity. Relying on Section 92 of the Evidence Act, the Court ruled that the petitioner could not introduce evidence to contradict or vary the terms of the written agreement. Furthermore, the Court applied the principle of estoppel, holding that having accepted the benefits of the contract, the petitioner was precluded from impeaching the legality of the agreement or the respondent's authority.
- Can a party to a written contract challenge the authority of the other party to enter into that contract after having operated under it?
- Does Section 92 of the Evidence Act 1872 prevent a party from challenging the validity of a written agreement they have executed?
- Is a lessee who has collected taxes under a lease agreement estopped from questioning the lessor's authority to levy such taxes?
- Item 24, 4th Schedule, Basic Democracies Order 1959
- Item 12, 5th Schedule, Basic Democracies Order 1959
- Section 92, Evidence Act 1872
ORDER
1. MUHAMMAD YAQUB ALI, J.-At a public auction held on 5-8-1962 by the District Council, Bannu, respondent herein, the petitioner gave the highest bid of Rs. 6,350 for lease of the right to collect tax at specified rates on Motor vehicles using the Bus-stand at Peezu Darra for the period 5-8-1962 to 4-8-1963.
2. The petitioner took over management of the Bus-stand and collected tax on motor buses and motor cars recieved at specified rates for a period of 11 months and 15 days. He however did not pay the balance of the lease money whereupon the respondent cancelled the lease in his favour and the contract for the remaining 15 days was sold by auction in favour of a third person.
3. On 19-3-1964 the respondent filed the present suit against the petitioner for the recovery of Rs.
4. 4,760 as balance of the lease money doe from him under the written agreement executed by him on 14-9-1962. The petitioner admitted in the written statement having managed the bus stand for one month but denied liability to pay the amount claimed in the suit on the ground that the plaintiff neither owned any Bus-stand at Peezu Darra nor was it competent to levy tax on Motor vehicles using the Bus-stand located on the public highway.
5. After taking different turns in the Courts below the suit came up finally before the High Court in a second appeal preferred by the respondent. A great deal of argument raised before the learned Chief Justice who disposed of the appeal was addressed to the validity of the tax charged by the respon--dent on motor buses and cars using the Bus stand Peezu Darra and the authority of the respondent to lease out by public auction the right to collect tax. Item 24 of the 4th Schedule and item 12 of the 5th Schedule to the Basic Democracies Order, 1959, and the Regulations framed by the respondent under the Order came in for detailed examination and discussion. With reference to these instruments it was concluded that the respondent had the authority to levy tax and to lease out that right by public auction. In this view the suit was decreed leaving the parties to bear their own costs. The petitioner seeks leave to appeal from the judgment and decree passed by the High Court.
6. It appears to have escaped the attention of the learned Chief Justice and the Judges in the Courts below that the petitioner was in law bound by the terms of the written agreement he had executed in favour of the respon--dent on 14-9-:962 and could not impeach its validity. Section 92 of the Evidence Act provides "92. When the terms of any such contract, grant or other disposition of property, or any matter required by law to be reduced to the form of a document, have been proved according to the last section, no evidence of any oral agreement or statement shall be admitted, as between the parties to any such instrument or their representatives-in-- interest, for the purpose of contradicting, varying, adding to, or substracting, from, its terms."
7. The plea taken by the petitioner in the written statement was therefore' barred by section 92 of the Evidence Act and he should not have been allowed to impugned the authority of the respondent to levy tax or to lease it out by auction. In addition to the provisions of section 92 the petitioner was also in law estopped from challenging the authority of the respondent to charge tax and lease out that right by public auction. He had offered, the highest bid at the public auction, obtained the contract, managed the bus stand and collected tax for 11 months and 15 days on the basis of that contract. He was therefore precluded from challenging the legality and validity of the agreement to which he was a party. The defence raised by the petitioner to the suit was therefore liable to be struck off on this short ground.