A under actual user's licence issued by the Government. The consignment of chicory in question was a consignment of 24~- tons495 cases which arrived at Madras port by "S. S. Alwaki" in December, 1955. Exhibit B-9 was the licence under which the consignment was imported. The goods were cleared by the appellant on December 20, 1955. The case of the respondent wa.s that the appellant agreed to sell the consignment to him under B Ex. A-l dated November 26, 1955 after ·taking an advance of Rs. 7,500/-. The contract was, however, entered into in the name of the first defendant and. P.W. 2 acted as a broker in the transaction. The respondent paid another sum of Rs. 20,000/on December 23, 1955 after the goods arrived and were cleared on the representation that the delivery would be given in one c month. Defendant No. 1 executed a letter, Ex. A-2 in this connection but thereafter owing to rise in prices the appellant committed a default. The suit was contested by the first defendant on the ground that the contract was illegal and therefore void. The case of the second defendant was that he had nothing to do with the contract entered into between the plaintiff and the first D defendant and, in any case, the contract for sale of chicory was illegal and void ab initio as contravening the provisions of the licence granted to him for the import of chicory. The trial court held, upon examination of the evidence, that both defendants 1 and 2 undertook with the plaintiff to fulfil the terms of the contract. On the question of legality of the contract the trial court held that as the contravention of the terms of the licence by the E sale of the imported goods would entail only an administrative penalty, the sale cannot be held to be prohibited. by law and the contract was therefore a legal contract binding on j:Joth the parties. The trial court found that the date of the breach of the contract was February 14, 1956 and granted a decree in favour of the plaintiff ngainst both the defendants for a sum of Rs. 35,640/-. F Two appeals were filed in the Madras High Court against the judgment of the trial court-A.S. No. 3.67 of 1958 by the second defendant and A.S. No. 363 of 1959 by the first defendant The appeals were heard together by the H1gh Court which by its judgment dated March 16, 1962 allowed the appeal of the first defendant-AS. No. 363 of 1959 and dismissed the G suit as against him. As regards the appeal filed by the 2nd defendant the High Court reduced the amount of damages to the sum of Rs. 23,265 /-. The High Court agreed with the finding of the trial Judge that the contract for the sale of imported chicory was entered into by the respondent directly with the second defendant and the second defendant was liable for its breach. As regards the legality of the contract, the High Court took the view H that it could not be regarded as a contract prohibited by any law and so it was valid and binding between tJte parties and the plaintiff could properly sustain an action for damages for its breach .
