Patna High Court
Charu Chandra Mitra vs Sambhu Nath Pandey And Ors. on 14 February, 1918
Equivalent citations: 46IND. CAS.358, AIR 1918 PATNA 507
JUDGMENT Atkinson, J.
1. By a lease dated the 19th April 1895 granted by the Pandeys as lessors in favour of Nagendra Chandra Mitter as lessee, 175 bighas of coal land situate in Mouza Tetulia were leased for a term of years. The lease provided for the payment of a royalty and commission under the terms embodied in paragraphs Nos. 10 and 11 of the lease. Substantially the terms are as follows:
2. That a minimum royalty of Rs. 1,750 annually shall be paid by the lessee; that the rate of royalty was to be assessed upon the basis of 6 annas per ton over and above a certain quantity of coal taken from the mine in each year; and that in default the minimum royalty was to be measured at Rs. 1,750 and payable in four equal kists.
3. Clause 14 of the lease also contains an important provision enabling the lessee to absolve himself from liability for the royalty and commission payable in the event of the mine proving unworkable either through accident or on account of a fall in the market price of coal. This provision expressly provides that if the conditions specified arise, then the lessee shall not be liable to pay any royalty or commission or even the minimum royalty or commission fixed by the lease for the period during which the mine should be closed.
4. The present three suits, namely, First Appeal No. 230 of 1915, First Appeal No. 292 of 1915 and First Appeal No. 293 of 1915, are brought by the successors-in-title of the original lessors claiming to recover, each according to their respective shares, an aliquot part of the royalty and commission payable under the lease of the 19th April 1895. Many of the original lessors are dead and they have been substituted on the record by their heirs. Likewise the original lessee is also dead, and the defendant is his successor-in-title under the lease of 1895. There is an important provision contained in Clause 24 of the lease, which stipulates that the royalty and commission payable shall be payable to each of the co-sharer lessors according to their respective shares; and that in respect of the share of each co-sharer he shall be entitled to recover the same by suit from the lessee; and the lessee also covenants with the lessors that he will pay to each of the co-sharers according to their shares specified in the lease the royalty and commission due from time to time. Therefore the rent payable under the lease of the 19th April 1895 was, by common consent of the contracting parties, partitioned between them according to their respective interests.
5. The present suit was instituted on the 13th July 1913 to recover royalty and commission for the years 1314 to 1319. The action in form was in the nature of an action for rent. The written statement filed by the defendant states that he is not liable to pay the rent sued for, inasmuch as by virtue of a compromise made and entered into in a former suit, the rent or royalty payable under the lease of 1895 was, by agreement, reduced in accordance with the terms specified in that compromise. 1 shall consider in detail the terms of the compromise at a later stage. One issue in this case involves the determination of the validity of the compromise which was effected in Suit No. 8 of 1901 instituted by the lessors on the one hand against the original lessee on the other, parties to the lease of the 19th April 1895. The suit in 1901 was brought on behalf of all the existing co-sharers as a body; four of whom were minors at the time that the suit was instituted; and they were properly brought upon the record by their guardians. The suit instituted in 1301 sought to recover rent on the basis of the terms provided by the lease of 1895. The plaint in that suit was filed in March 1901. The defendant subsequently filed his written statement and in that written statement the defendant pleaded that under the terms of the lease be was not liable for the rent then sued for, inasmuch as the mine had ceased to be workable within the meaning of Clause 14 of the lease. The defendant apparently suggested in his written statement that he was willing that the plaintiffs should accept a surrender of the lease, take over the property and discharge him, the defendant, from all further liability under the original lease. The suit did not proceed to a final hearing, but, with this defence upon the record, the parties agreed to a compromise of the disputes then pending between them on the basis suggested by the defendant; that he would be willing to retain the colliery as lessee thereof provided the commission and the royalty payable under the original lease were reduced. Thereupon the lessors on the one hand and the lessee on the other accepted this position and a compromise was accordingly drafted embodying the details upon which Suit No. 8 of 1901 was compromised.
6. The compromise itself bears date the 10th of March 1902; and was subsequently filed as a part of the record in the proceedings then pending in that suit before the Court and was recorded by the learned Judge. The rent sued for in the Suit No. 8 of 1901 was for the rent due up to Chaitra 1308. Immediately before that suit was instituted the plaintiffs, and their representatives as lessors, having got into certain financial difficulties, granted to Harshamal Marwari a perpetual lease of Mouza Tetulia under a pattah dated the 15th August 1900. That lease has since been surrendered but in referring to it, it is only necessary to state that the suit of 1901 was conversant with the arrears of rent due prior to the granting of this perpetual lease of the 15th August 1900.
7. The compromise entered into in Suit No. 8 of 1901 is set out fully in Exhibit I at page 41 of the paper-book. A reference for the purposes of this case need only be made to paragraph 2 thereof, whereby the terms of the pattah and kabuliyat that existed and controlled the rights of the plaintiffs and defendants respectively were altered in the following manner:
8. By Clause (ka) it was stipulated that the defendant is at present bound to pay Rs. 1,750 as minimum royalty. In place of that from 1309 the defendant shall have to pay to the plaintiffs annually Rs. 1,300 as minimum royalty, and by Clause (ga) it was provided that the rate of commission was changed from 6 annas to 5 annas; and in the event of over 7,000 tons of coal being raised from the mine within every six months that then the commission was to be reduced from the sum of 5 annas to 4 annas.
9. The amount of rent claimed in Suit No. 8 of 1901 (when I speak of rent I for brevity refer to royalty and commission) was Rs. 8,000 odd, and the compromise provided that in respect of that claim the plaintiffs would accept, in full payment on behalf of the entire- body of co-sharers, a sum of Rs. 2,500 and that the original pattah was to be altered and varied in one single respect only with regard to the quantum of the royalty and the quantum of the commission that should henceforth be payable; and in all other respects the original lease was to subsist and be the governing contract between the parties. Clause 3 of the compromise provided that if the parties desired that there should be a formal agreement embodying the terms agreed on, that then a supplementary pattah or kabuliyat would be executed on or before the month of Baisakh 1309. No supplemental agreement or lease was in fact executed, but it would appear from the subsequent history of the case that the compromise effected was acted upon by both the parties to the litigation in which it was made. Perhaps I had better at this stage dispose of one contention submitted by Mr. Pugh in the course of his very clear and forcible argument; because it lies on the threshold of the case. It was the last argument, that he addressed to us, namely, that this compromise Exhibit I was not a bona fide compromise, but was a compromise procured fraudulently by one of the co-sharer plaintiffs behind the backs of the other co-sharers and that these co-sharers, other than Girish Pandya and Narhari Pandya, were not really or effectively bound by this compromise at all. The learned Judge in the course of his judgment, without finding expressly that the compromise was not binding on all the plaintiffs, seems to suggest that the compromise was lacking in bona fides. With regard to the co sharers other than the minors Girish and Narhari, in our view, on the evidence, this compromise was a fair and honest compromise arrived at between the parties to settle and adjust the differences then prevailing between them and which formed the subject-matter of the then pending litigation.
10. We have had our attention directed to the evidence adduced by the plaintiffs and by the defendants. The evidence given by the plaintiffs seems to us artificial, unreliable and untrue, while, on the other hand, the evidence given by the (defendant's witnesses seems more natural and more probable; and certainly, in my judgment, bears upon its face the appearance of candour and of truth. Therefore, so far as it is open to us as a question of fact in these appeals to find, we do find as a fact that this compromise was an honest compromise fairly and deliberately made between the parties to it and binding upon them accordingly. As I have said, four of the parties to that compromise were minors at the time when it was entered into, namely, Girish, Narhari, Harihar, Pandya and Khageswar. It is contended very forcibly by Mr. Pugh that by virtue of the provisions of the Order XXXII, Rule 7 of the Code of Civil Procedure, the compromise, even though it was accepted by the Court, is not binding on the minors, inasmuch as the Court never expressly recorded its sanction to the compromise on behalf of the minors as a compromise beneficial to the interests of the minors; and that thus as against all the parties to the compromise the same is voidable. This argument has been supported by Mr. Pugh by reference to two cases, namely, one reported as Virupakshappa v. Shidappa 26 B. 109 : 3 Bom. L.R. 565 and another as Lakshmana Chetti v. Chinnathambi Chetti 24 M. 326. Mr. Pugh contends that the rent payable under the lease is indivisible; and that being indivisible the whole contract must go and that it cannot be said to be void in part and not in its entirety. With that submission we do not agree because the parties themselves, by virtue of the contract, made in April 1895, agreed that the rent was to be apportioned as between the respective co-sharers and that each co-sharer was to be entitled to recover his apportioned and separate share. None of the adult co-sharers who were parties to the compromise of 1901 have ever sought to avoid it; and it is too late to do so now, and by that compromise they are conclusively bound.
11. With regard to the minors Girish and Narhari Pandya we are of opinion that they are not bound by the terms of this compromise. The Court did not give its sanction to the compromise on their behalf, and therefore to this extent qua these minors only, the compromise lacks the necessary legal essential to make it binding upon them. Thus we must hold that in this -litigation the minors Girish and Nahari Pandya are not bound by the terms of the compromise. Different considerations apply with regard to the former minors Harihar Prasad and Khageswar Lal. Girish has since attained his majority but it must be borne in mind that in the year 1903 he was an adult and in the litigation that was pending in that year, viz. Suit No. 39 of 1906, Girish filed a written statement and expressly challenged the validity of the compromise, contending that as a minor at the time it was made it was not binding on him. Suit No. 39 of 1906 was subsequently compromised, but in no sense could it be held having regard to the written statement filed by Girish that he ratified or adopted the compromise effected in Suit No. 8 of 1901. In the litigation that was pending, viz., Suit No. 39 of 1906, between practically the same parties with reference to the same subject-matter as is now in issue before us, Khageswar, a minor when the compromise was made, was added as an adult party to that suit and he never in any way sought to impeach the validity of the former compromise entered into in the antecedent litigation in 1901. Therefore we must hold that in this case he subsequently ratified and adopted the compromise that was made and entered into on the 10th March 1902, and that accordingly he is bound thereby now. Harihar Prasad stands on a different footing. He prior to Suit No. 39 of 1906 disposed of his entire interest in the leasehold property as follows: One-third of his share was purchased by Shambhu Nath, one of the plaintiffs in Appeal No. 230, and another one third share was purchased by Jagneswar, one of the plaintiffs in Appeal No. 292; and the remaining one-third of his share was purchased by Khageswar, one of the plaintiffs in Appeal No. 293 of 1915. These persons, who purchased the interest of Harihar, were all then adults and being themselves bound in respect of their own individual shares are also bound, in our opinion, in respect of whatever share or shares they may have acquired by purchase of the property that formerly belonged to the minor Harihar at the time when the compromise was executed. Therefore in disposing of this question of infancy and minority it is sufficient for us to say that we yield to the argument of Mr. Pugh so far as the two plaintiffs in Appeal No. 230 of 1915, namely, Girish and Narhari, are concerned. That disposes of two important matters raised in the course of the argument for our determination.
12. As I have indicated, the main contention put forward by the plaintiffs in this suit is that the compromise that was executed on the 10th March 1902 was not admissible in evidence, and could not be relied upon by the defendant in exoneration of his liability for the payment of the rent contracted to be paid under the lease of 1895. Therefore it becomes necessary to trace the subsequent history of this compromise as between the parties to this suit.
13. On the 26th February 1902 the parties in Suit No. 8 of 1901 appeared before the learned Subordinate Judge of Manbhum and applied for an adjournment of the trial of that suit, on the ground that the parties were desirous of settling the disputes that existed between them as disclosed by the pleadings, and intimating that a petition of compromise would be filed immediately. Accordingly time was given and on the 18th March 1902 a compromise petition was submitted to the Court duly executed by all the parties to the suit and the learned Judge in the order-sheet recorded the following order:
Parties filed a solenama. Suit decreed in terms of the solenama.
14. Now on the same day after the petition of compromise had been filed and recorded by the learned Judge, the learned Judge gave judgment in the suit and in his judgment, which will be found at page 106 of the paper-book, he distinctly embodies by reference the entire compromise. The judgment delivered was very short and very concise. It is as follows:
The plaintiffs and defendant have compromised and filed a solenama. It appears from the solenama that the plaintiffs received Rs. 2,000 out of the sum of Rs. 2,500 for minimum royalty. The terms of the lease have also been changed; but this is no part of the subject-matter of the suit. The suit is decreed for Rs. 500 in terms of the solenama.
15. Consequential upon this judgment, the learned Judge passed a decree which will be found on page 51 of the paper-book. Much importance must be attached to the form and phraseology of that decree, The learned Judge in the declaratory part of the decree expressly provides as follows:
It is ordered that the suit be decreed in terms of the compromise filed by both parties; and further that within three weeks from this day the defendant shall pay Rs. 500 only to the plaintiffs. If the money be not paid to the plaintiffs within that time, then the said money will be realised by executing the decree against the defendant.
16. It is contended that this compromise in terms dealt with matters which were within the scope of the suit and also with matters which were outside the scope of the suit, having regard to the cause of action pleaded in the plaint. The learned Judge's duty with regard to the acceptance of the compromise and his obligations relative thereto are provided for by what is now Order XXIII, Rule 3 of the Code of Civil Procedure, formerly Section 375 of the Civil Procedure Code of 1882. Except for some verbal alterations the old section and the present rule are substantially the same. In the present rule the words "shall order the agreement to be recorded" have been substituted for the words "shall record." This really is the substantial difference which seems to me to be of any importance so far as this case is concerned. What is the obligation which is cast upon a Subordinate Judge or upon any Subordinate Judicial Officer in dealing with a compromise such as we have to consider in this suit? If the compromise deals with matters directly within the scope of the suit, then his duty is clear; he must accept the compromise and record it, and having so accepted and recorded it, he must prepare and draw up a decree in accordance with it, so that the same may be executed in the due and ordinary course of procedure. If the compromise contains matters outside the scope of the suit, what then is the obligation cast upon the learned Subordinate Judicial Officer? It appears to us that such officer must make an order recording the entire compromise and when he has done this, he must draw up a decree giving the parties the right to execute the decree in respect of the matters which properly fall within the scope of the action; leaving it to the parties to enforce by whatever means they like that portion of the compromise which refers to the matters outside the scope of the suit. The entire compromise must be recorded, and be embodied by an order in the record of the suit or proceeding. Each case must depend upon its own facts, as to whether or not the compromise does in fact include within its terms matters outside the scope of the original suit. The learned Judges in a case reported as Joti Kuruvetappa v. Izari Sirusappa 30 M. 478 : 16 M.L.J. 354, in construing this section, say that the language of the section is wide and general and does not preclude parties from settling their disputes on such lawful terms as they might agree to without being restricted to such relief as one only of the parties had chosen to claim in the plaint". It is necessary for us to consider whether the compromise that was arrived at in Suit No. 8 of 1901 did in fact include within its terms matters outside the scope of the suit; or, to use the words in Section 375 itself, matters which did not relate to the suit. I have indicated as clearly as I can the issues which were raised for determination on the pleadings in Suit No. 8 of 1901 and I have stated already what plea was taken by way of defence in exoneration of the defendant's liability for rent under the lease of 1895, and under the provisions of Clause 14 thereof. And it would appear to us that the compromise was really an adjustment of the rights and differences in respect of all matters in dispute between them, whether as framed in the plaint or set up by way of defence in the written statement; and that the compromise purported to be a final settlement and adjustment of these disputes on a fair and satisfactory basis acceptable to all, and, therefore, in our opinion, viewing the compromise of the 10th March 1902 as a whole, it was referable to the matters properly relating to the issues then in suit between the parties. The decision reported as Joti Kuruvetappa v. Izari Sirusappa 30 M. 478 : 16 M.L.J. 354 seems to us to apply, and the words relates to the suit" must receive a more extended meaning than has been contended for in the argument before us, and they must be deemed in effect to mean referable to the claim put forward. Therefore, in our opinion, Exhibit I merely dealt with matters referable to and relating to the claim in Suit No. 8 of 1901 and as such the learned Judge might have given effect thereto by his decree passed in that suit. Mr. Pugh argued that though that may be the correct legal view now to adopt of the case, yet the learned Judge, whether rightly or wrongly, did not think fit in 1901 to enforce that portion of the decree which was conversant with the alteration of the terms of the lease as to royalty and commission henceforth to be payable. I think myself the learned Judge might very easily have drawn up a decree in the form of a declaration embodying the altered terms of the lease agreed upon by the compromise. He did not do so but merely ordered that the suit be decreed in terms of the compromise and that the decree be executed for Rs. 500, the balance due in respect of the money provided to be paid by the compromise. But did the learned Judge's failure to make provision by his decree for the carrying out of the compromise, so far as the altered terms of the lease are concerned, really affect the validity of the compromise as a binding agreement between the parties? It had been accepted by the Court on the 18th March 1902 expressly by an order made on that date. The learned Judge in his judgment referred to the solenama in its entirety; his attention was directed to all its terms and he stated that in his opinion a portion of the compromise was outside the scope of the suit; but he drew up a decree expressly incorporating the entire compromise by reference. We think that, although the learned Judge did not expressly give effect to the entire compromise as an executable decree, nevertheless he did record the compromise and by reference necessarily and impliedly incorporated and made it part of his decree. The learned Judge did not expressly narrate in extenso in the decree the several terms of the compromise. When I say that the compromise was impliedly incorporated in the decree I mean to convey that it would be impossible to construe the decree of the 25th March 1902 without reference to the compromise and that the compromise and the decree, must necessarily be read and construed together, and, therefore, I take it on the authorities, which appear to me to be reasonably clear, that such reference must of necessity incorporate in the decree the entire compromise upon which that decree is founded.
17. The argument then advanced is that under the provisions of Section 17 of the Registration Act (Act XVI of 1908) this compromise is not admissible in evidence because it is not registered under the provisions of Section 17, Sub-section (1) of that Act. The plaintiffs contend that the document creates an interest in immoveable property of more than Rs. 100 in value, and that therefore it must be registered as such and that by reason of non-registration it is not admissible in evidence and cannot now be relied upon by the defendant as a party to it. Sub Clause (2) of Section 17 expressly provides that Clauses (b) and (c) of Sub-section (1) of Section 17 shall not apply in certain cases; and in all twelve exceptions are stated to which the provisions of Clauses (b) and (c) of Sub-section (1) of Section 17 shall not apply; and by Clause (vi) of Sub-section (2) it is expressly enacted that nothing in Clauses (b) and (c) of Sub-section (1) applies to any decree or order of a Court or any award. It is contended on behalf of the defendant that the compromise entered into in Suit No. 8 of 1901 was embodied in the decree of the Court or in its order, and that thus it has become a matter of record in that legal proceeding which was a properly constituted legal proceeding, and, therefore, it is now admissible in evidence in support of the defendant's case. Mr. Pugh replies to that argument by saying no, it does not come within Clause (b) at all of Section 17; it comes within the provision of Clause (d) and that Sub-section (2) has no application to leases which require registration". Under the provisions of Sub-section (1), Sub-clause (d) of Section 17 of the Registration Act, read in conjunction with Section 107 of the Transfer of Property Act, it becomes necessary to consider whether the compromise dated the 10th March 1902 was a lease; bearing in mind that what the compromise purported to effect was to alter only one single provision contained in that lease of 1895, namely, to regulate the amount of rent which was to be paid henceforth during the continuation of the lease. It did not deal with anything else and reading the compromise alone, as my learned brother pointed out to-day, could it be contended that, taking the compromise as it stands, it constituted a lease in all of the essential elements of a lease contemplated by Section 105 of the Transfer of Property Act. To ask the question is to answer it; this compromise obviously per se could not constitute a lease. Mr. Pugh relies upon a Full Bench ruling reported as Lalit Mohan Ghose v. Gopali Chauk Coal Co. Ltd. 12 Ind Cas. 723 : 39 C. 284 : 14 C.L.J. 411 : 16 C.W.N. 55 (F. B) and he contends on the authority of that decision that the present case is analogous to that and that the two documents together constitute a lease and that, therefore, this compromise must be deemed a lease within the meaning of Section 107 of the Transfer of Property Act and requires registration under Section 17, Sub-section (1), Sub-clause (d) of the Registration Act. It would appear to us that the facts of this case are wholly and entirely distinguishable from the case referred to in the Full Bench ruling reported as Lalit Mohan Ghose v. Gopali Chauk Coal Co., Ltd. 12 Ind Cas. 723 : 39 C. 284 : 14 C.L.J. 411 : 16 C.W.N. 55 (F.B), The learned Chief Justice in giving judgment in that case did say "that the document that was relied upon in that case varied the amount of rent to be paid under the then existing lease and provided the time and method for the payment of the altered rent, coupled with the consequences that would ensue in the event of default of payment of the rent as it fell due". These considerations and facts, the learned Chief Justice considered, constituted the essential element of a lease and that the letter relied on in that case was in itself a lease and thus required registration. The elements which the learned Chief Justice in that case considered to be the essential elements, which constituted a lease, are entirely absent in the present case; but apart from this fact there are other reasons why we think that the case cited is also distinguishable having regard to the judgment reported as Durga Prosad Singh v. Rajendra Narain Bagchi 4 Ind. Cas. 713: 37 C. 293 : 10 C.L.J. 570. In that case the learned Judges held that if a lease is registered as it must be according to law, that then its terms can only be varied by a registered document, and that the document that is contemplated by way of variation is a registered document of a non-testamentary character, such as is provided for by Clauses (6) and (c) of Sub-section (1) of Section 17 of the Registration Act, and that such a document does not necessarily constitute a lease within the meaning of the provisions of Clause (d) of that Sub-section (1) of Section 17. That view, I think, must be taken to have been approved of by their Lordships of the Privy Council in the case reported as Durga Prasad Singh v. Rajendra Narayan Bagchi 21 Ind. Cas. 750 : 41 C. 493 : 18 C.W.N. 66 : (1914) M.W.N. 1: 15 M.L.T. 68 : 19 C.L.J. 95 : 26 M.L.J. 25 : 16 Bom. L.R. 42 : 40 I.A. 223 (P.C). Their Lordships of the Privy Council say that they concur in the expression of opinion by the High Court of Calcutta when they say that the document was not admissible in evidence by reason of the want of registration and also by reason of the fact that there was no consideration to support the validity of the compromise, I take these general words and observations to mean that their Lordships of the Privy Council approved of the decision of the High Court, so far as that decision decided that a registered lease must be varied by a registered document; but that such a document varying a written registered instrument is a non-testamentary document of the class provided for within the purview of Clause (b) of Sub-section (1) of Section 17 of the Registration Act. That being the true legal position, this document, the compromise of 1901, if it required registration, would be registrable under Clause (b), Sub-section (2) of Section 17 of the Registration Act. Now the proviso contained in sub Section (2) of Section 17 expressly provides that nothing in Clauses (b) and (c) shall apply to any decree or order of a Court or any award. Thus the net issue that remains to be decided is, was this compromise embodied in the decree or order of the court If it was then it is conceded on the authorities cited that it is exempt from liability to registration, and without being registered would be admissible in evidence. This point has been twice considered and decided in two cases before their Lordships of the Privy Council; and these two decisions lay down the law which applies to cases such as the present one in this country. There has been a great deal of conflict of judicial opinion concerning the true meaning and interpretation of these decisions; but to my mind their interpretation and conclusions are reasonably clear and free from any real ambiguity. The first case is reported as Bindesri Naik v. Ganga Saran Sahu 20 A. 171 : 2 C.W.N. 129 : 26 I.A. 9 : 7 Sar. P.C.J. 273 : 9 Ind. Dec. (N.S.) 471 (P.C.). That was a case in which a suit was instituted for foreclosure of a property under a mortgage-deed coupled with a claim to recover interest due on the money advanced under the mortgage. The suit was much protracted and from time to time various applications by way of petitions were made to the Court for adjournment, the defendants in that case always admitting that a certain rate of interest was payable on the mortgage debt and practically admitting the substance of the plaintiffs' claim. Eventually that suit was disposed of. In order to enforce the claim for interest the plaintiffs in that suit, viz., the mortgagees, were obliged to bring a subsequent suit and in the subsequent suit they relied upon the petitions that were filed by the defendants admitting the rate of interest that was payable, and in fact that the interest was payable. It was contended in that suit that these petitions were admissible in evidence for the purpose of establishing the liability of the defendants for the payment of the interest. The argument that was advanced before the Privy Council was "no, these petitions are not admissible in evidence because they are not registered". The learned Lords of the Privy Council came to the conclusion on the construction of the mortgage-deed itself that the interest was payable, but they went out of their way, having regard to the argument that had been addressed to them, to lay down what they conceived to be the law with regard to the necessity of registration. I quote from the passage in the judgment of Lord Watson of the Privy Council, which is reported as Bindesri Naik v. Ganga Saran Sahu 20 A. 171 : 2 C.W.N. 129 : 26 I.A. 9 : 7 Sar. P.C.J. 273 : 9 Ind. Dec. (N.S.) 471 (P.C.), as follows:
Although in the view which their Lordships take the question whether those proceedings can be founded on, without their having been registered in terms of the Act of 1877, does not necessarily arise in this appeal, they think it right to add that, having heard Counsel fully upon the point, they are satisfied that the provisions of Section 17 of the Act do not apply to proper judicial proceedings, whether consisting of pleadings filed by the parties, or of orders made by the Court.
18. Now we seek to give that decision no wider interpretation than this, that in respect of documents of the nature of affidavits, petitions or pleadings which are filed in the course of a proper judicial proceeding that the same are admissible in evidence without the necessity of registration; and that they are protected from registration by virtue of the pro-visions contained in Sub-section (2) of Section 17 of the Registration Act. I am aware that a more extended interpretation has been given to this decision by the learned Judges who decided the case reported as Natesan Chetty v. Vengu Nachiar 3 Ind. Cas. 701 : 33 M. 102 : 6 M.L.T. 313 : 20 M.L.J. 20. So wide is the interpretation which their Lordships attributed in that case to the decision of the Privy Council case reported as Bindesri Naik v. Ganga Saran Sahu 20 A. 171 : 2 C.W.N. 129 : 26 I.A. 9 : 7 Sar. P.C.J. 273 : 9 Ind. Dec. (N.S.) 471 (P.C.), already cited, that practically it would apply so as to cover the case of the grant of a lease as a matter of compromise in a judicial proceeding in a pending litigation which would apparently be within the provisions of Clause (d) of Section 17 of the Registration Act. We wish it to be clearly understood for the purposes of our decision in this case that we do not consider that the decision of their Lordships of the Privy Council is wide enough to cover the case of a document constituting a lease arising out of a compromise in a judicial proceeding within the provisions of Clause (d) of Sub-section (1) of Section 17 of the Registration Act. We think it applies to documents coming within the class of documents contemplated in Clauses (b) and (c), which are protected under the provisions of Clause (vi) of sub Section (2) of Section 17 of the Registration Act from registration.
19. The next case that I must refer to is the case reported as Pranal Anni v. Lakshmi Anni 22 M. 508 : 1 Bom. L.R. 394 : 3 C.W.N. 485 : 26 I.A. 101 : 9 M.L.J. 147 : 7 Sar. P.C.J. 516 : 8 Ind. Dec. (N.S.) 363 (P. C). The report is at page 508 Page of 22 M.--Ed. In order to understand the quotation it is necessary to state some of the facts.
20. A suit referable to immoveable property was instituted between certain persons. They also were entitled to certain other property not conversant with the suit; and the reason why it was not so referable was because that other property was subject to a mortgage, which for the time being did not involve any dispute between the respective persons entitled thereto. But in the course of the previous suit which was instituted in 1885, a compromise was arrived at and the compromise purported to deal expressly with the property that was then in suit in the year 1885 and also with the other property which was on mortgage and was not the subject-matter of that suit. The consent was carried out by two documents, one called the union of agreement and the other called the razinamah. The razinamah did not contain any express reference to the union of agreement further than by a remark in the last schedule to the razinamah. It was not incorporated in it nor did it form part of it.
21. The learned Judge in that suit (viz., the suit of 1885) by consent of the parties decreed the suit in the terms of the razinamah but in the decree he made no reference whatever to the provisions contained in the union of agreement. A subsequent suit was brought and it was contended that having regard to the terms of the razinamah the union of agreement must be deemed to have been incorporated as part of the Court's order and, therefore, exempt from registration. Their Lordships of the Privy Council held in effect "no, you never brought the union of agreement at all to the notice of the Court; it was dealing with property outside the scope of the suit as originally framed, and, therefore, if you wanted to have an order recognising the union of agreement so as to make it exempt from registration, you should have brought it to the notice of the Court". In that view their Lordships laid down a general principle applicable to all cases. And their Lordships say "that if the parties, after agreeing to settle the suit of 1885 on the footing that they were each to take a half share of the lands involved in that suit and also a half share of the lands now in dispute, had informed the learned Judge that these were the terms of the compromise, and had invited him, by reason of such compromise, to dispose of the conclusions of the suit of 1885, their Lordships see no reason to doubt that the order of the learned Judge, if it had referred to or narrated these terms of compromise, would have been judicial evidence, available to the appellant, that the respondents had agreed to transfer to her the moiety of land now in dispute. But their Lordships are unable to find that any such course was taken either in the razinamah or in the judicial order which gave effect to it." I take it that their Lordships meant that there was no express incorporation of the union of agreement in the razinamah, nor was there any express incorporation of it in the decree of the Court, for the simple reason that it was never brought to the mind or knowledge of the Court to enable it to make any order with regard to it. However, the decision of their Lordships certainly suggests that if the union of agreement had been incorporated in the decree of the Court, as it might well have been, then even though it dealt with matters outside the scope of the original suit in 1885, it would have been admissible in evidence without registration by reason of the union of agreement having been incorporated in the Court's order or decree.
22. In this case before us the facts are otherwise. The whole compromise was brought to the knowledge of the Court; the Court recorded the entire compromise on the file, and made a decree in terms of the compromise without any limitation and so far as it could; if the Court believed that the compromise did deal with matters outside the scope of the suit, it performed its duty as provided by Section 375 of the old Code of Civil Procedure, leaving it to the parties, if necessary, to enforce that agreement either by a separate suit or by any other way they might be advised.
23. But is this compromise inadmissible in evidence in this suit? In support of the plaintiffs' case Mr. Pugh contends that it is. To our mind it clearly is admissible in evidence because the document is duly incorporated in the decree of the Court, and by reason of such incorporation it is a matter of judicial evidence, being a document embodied in the decree or order of the Court in a properly constituted judicial proceeding. There are many authorities dealing with the point which arises for our determination in this respect and the preponderating weight of judicial authority strongly supports the conclusion at which we have unanimously arrived. The strongest case that can be obtained in favour of Mr. Pugh's argument is the case reported as Ravula Parti Chelamanna v. Ravula Parti Rama Row 12 Ind. Cas. 317 : 36 M. 46 : 10 M.L.T. 232 : 21 M.L.J. 870 : (1911) 2 M.W.N. 265. 24. That case was decided in the year 1911. But that decision has gone further than any other decision that has been reported since the case (sic) as Bindesri Naik v. Ganga Saran Sahu 20 A. 171 : 2 C.W.N. 129 : 26 I.A. 9 : 7 Sar. P.C.J. 273 : 9 Ind. Dec. (N.S.) 471 (P.C.) was decided, and that decision is to this effect. That unless the decree or order of the Court expressly incorporates verbatim the entire provisions of the compromise, it becomes inadmissible in evidence unless registered. The whole current of authority both in the Madras High Court, in which Court the case cited was decided, and in the Punjab and recently in Calcutta has all tended in one direction viz., to give these two decisions of the Privy Council a fair and liberal construction; and where the compromise is referred to and is incorporated in the order of the Court or is filed by way of petition in the proceedings then it is within the protection provided by Clause (c) of Sub-section (2) of Section 17 of the Registration Act. There are two cases reported in this Court, one in Bisseswar Ram v. Mahadeo Pahan 36 Ind. Cas. 290 : 1 P.L.J. 208 : (1917) Pat. 161, the decision of Mr. Justice Mullick, and the other a more recent case of Karu Mian v. Tejo Mian 43 Ind. Cas. 282 : 3 P.L.J. 43 : 3 P.L.W. 141. The latter was a decision of my learned colleague Chapman, J., sitting with Jwala Prasad, J. Both Judges there held that it was necessary to give the two decisions of the Privy Council cited above a fair and liberal interpretation. But viewing the authorities as a whole they may be arranged as follows: Those upon the side of admitting this compromise in evidence without being registered, number about 16, while on the other hand as against the admission of such a document in evidence these, are only four. The cases which tend to support, and which do in fact support the admission in evidence of such a compromise without registration are to be found reported as Bindesri Naik v. Ganga Saran Sahu 20 A. 171 : 2 C.W.N. 129 : 26 I.A. 9 : 7 Sar. P.C.J. 273 : 9 Ind. Dec. (N.S.) 471 (P.C.), Pranal Anni v. Lakshmi Anni 22 M. 508 : 1 Bom. L.R. 394 : 3 C.W.N. 485 : 26 I.A. 101 : 9 M.L.J. 147 : 7 Sar. P.C.J. 516 : 8 Ind. Dec. (N.S.) 363 (P. C), Raghubans Mani Singh v. Mahabir Singh 28 A. 78; A.W.N. (1905) 195 : 2 A.L.J. 564, Bisseswar Ram v. Mahadeo Pahan 36 Ind. Cas. 290 : 1 P.L.J. 208 : (1917) Pat. 161, Karu Mian v. Tejo Mian 43 Ind. Cas. 282 : 3 P.L.J. 43 : 3 P.L.W. 141, Natesan Chetty v. Vengu Nachiar 3 Ind. Cas. 701 : 33 M. 102 : 6 M.L.T. 313 : 20 M.L.J. 20, Rustam Ali Khan v. Gaura 12 Ind. Cas. 109 : 33 A. 728 : 8 A.L.J. 918, Janardan Missir v. Janki Koer 22 Ind. Cas. 687 Ambica Charan Sher Kaibarta v. Srinath Dutta 19 Ind. Cas. 551, Sellappa Koundan v. Gurumoorti 26 Ind. Cas. 790 : 27 M.L.J. 396, Sankaravelu Pillai v. Muthusami Pillai 31 Ind. Cas. 260 : 18 M.L.T. 497 : (1915) M.W.N. 956 : 29 M.L.J. 779, Manickammal v. Rathnamal 22 Ind. Cas. 85, Robert Skinner v. James Skinner 31 Ind. Cas. 537 : 91 P.R. 1915 : 211 P.W.R. 1915, Murli Dhar v. Gobind Ram 20 Ind. Cas. 817 : 20 P.R. 1914 : 306 P.L.R. 1913 : 205 P.W.R. 1913 and Jeo v. Jaimal Singh 29 Ind. Cas. 311 : 90 P.W.R. 1915 : 1 P.L.R. 1916.
24. There is one other case, namely, Palavalasa Appalaswamy v. Dantaluri Narayana 31 Ind. Cas. 446 : (1916) 1 M.W.N. 276. This case seems to have gone further than any other case, because in that case the particular compromise was not recorded in any proceeding in the Court. The parties intended that it should have been recorded, and because that was the governing intention, the High Court of Madras held that it was admissible in evidence without registration. Without committing ourselves to the accuracy of that decision, we only desire to refer to it for the purpose of showing that the trend of the modern decisions even in the Madras High Court has been consistently and persistently opposed to the authority and accuracy of the decision reported as Ravula Parti Chelamanna v. Ravula Parti Rama Row 12 Ind. Cas. 317 : 36 M. 46 : 10 M.L.T. 232 : 21 M.L.J. 870 : (1911) 2 M.W.N. 265. 24 and that case can, having regard to the recent current of authority which has prevailed in all High Courts since 1911, no longer be regarded as subsisting law. It is unnecessary for me to go through all these cases in detail. We have read them and analysed them and we have applied their principle as a guide for our determination with regard to the facts of this case. These authorities have been cited at the Bar at length, and it could serve no useful purpose to refer to them in detail.
25. On the other hand the cases which support the argument put forward by Mr. Pugh are to be found reported as Gurdeo Singh v. Chandrika Singh 1 Ind. Cas. 913 : 36 C. 193 : 5 C.L.J. 611, Ravula Parti Chelamanna v. Ravula Parti Rama Row 12 Ind. Cas. 317 : 36 M. 46 : 10 M.L.T. 232 : 21 M.L.J. 870 : (1911) 2 M.W.N. 265. 24, Kashi Kunbi v. Sumet Kunbi 5 Ind. Cas. 234 : 32 A. 206 : 7 A.L.J. 206 and Janardan Missir v. Janki Koer 22 Ind. Cas. 687. With regard to the decision in Gurdeo Singh v. Chandrika Singh 1 Ind. Cas. 913 : 36 C. 193 : 5 C.L.J. 611, we desire to say with profound respect to the learned Judges who decided that case that in our opinion having regard to the line of recent authority already cited that the decision in that case can no longer be regarded as a correct interpretation of the law touching the question arising for our determination in this appeal. There is, however, just one case which I think it necessary to refer to, and that is the case reported as Ambica Charan Sher Kaibarta v. Srinath Dutta 19 Ind. Cas. 551. The decision in that case was the decision of the Chief Justice Sir Lawrence Jenkins and it is of importance, because that distinguished Judge did not follow the authority of the decision reported as Gurdeo Singh v. Chandrika Singh 1 Ind. Cas. 913 : 36 C. 193 : 5 C.L.J. 611, but adopted the line of authority established by Natesan Chetty v. Vengu Nachiar 3 Ind. Cas. 701 : 33 M. 102 : 6 M.L.T. 313 : 20 M.L.J. 20, following the two decisions of the Privy Council referred to and thereby receding from the uncertain and varying law previously laid down in some antecedent decisions in the Calcutta High Court. The learned Chief Justice in that case distinctly laid down that where a compromise which deals with matters within the scope of the suit and outside the scope of the suit in which the compromise was effected, and the compromise is recorded on a petition duly filed, it is evidence in a judicial proceeding and, therefore, admissible in evidence in a subsequent suit and is exempt from liability to registration.
26. That disposes of the question of registration and the admissibility of the compromise in, evidence in this Court. There is only one other matter to be considered relative to the conduct of the parties subsequent to the compromise being effected, for the purpose of showing that the plaintiffs have consistently recognised the compromise, and are thereby estopped now from denying its validity.
27. The defendant in the Suit No. 8 of 1901 failed to pay the balance of the decretal amount of Rs. 500 that was due to the plaintiffs; and the plaintiffs in that suit, who were the lessors of the lease of 1895, immediately proceeded to issue execution on foot of the decree, thereby adopting the decree. But when the execution came to be levied the defendant paid up the amount due and finding that there was an error in, the petition for leave to issue execution, the defendant wisely asked the plaintiffs to have the form of the petition corrected or amended so that it might provide that the rent as stated therein should be amended so as to conform with the terms of the compromise. Accordingly by Exhibit L the necessary amendment was made in the application of the plaintiffs. This was an act done by the plaintiffs openly and notoriously recognizing the validity and operative effect of the compromise that was made between the parties. As I have said, in 1900 a permanent lease was granted by the plaintiffs to one Hansamal. It became necessary for him to sue the defendant in the year 1906 for the rent due under the lease of 1895 as assignee of the original lessors; and accordingly this person as plaintiff instituted a suit against the defendant joining as co-defendants in that suit all the co-sharer proprietors or their representatives who granted the lease of 1895. The suit was framed upon the basis that the rent was payable as provided by the lease of 1895. The defendants came forward and by way of defence said "no, the rent is not payable under the lease but is payable under the terms of a compromise that was effected in Suit No. 8 of 1901." The defendant in that suit with the other pro forma defendants, who were the co-sharer proprietors under whom he derived his title and who were parties to that suit, consented that judgment should be given" for the rent not as sued for but as provided by the terms of the compromise; and accordingly the antecedent compromise of 1901 was set out in the decree in that suit and was acted on, and which decree is referred to as Exhibit N in this case. Thus the plaintiffs' assignee in suing the defendant sought to establish his liability in the presence of the present plaintiffs for rent under the lease of 1895 and in the year 1906 the claim in that suit was filed and by common consent of all the parties to that suit the compromise effected in 1901 was unequivocally recognised and established.
28. The defendant having succeeded in that suit proceeded to deal with the property in the colliery as he thought fit; and he accordingly sub-leased the lands to one Mr. Ghose, setting out in express terms in the lease to Mr. Ghose the fact that the rent as provided by the original lease had been altered and that henceforth he was liable to pay only the rent agreed on by the compromise. When the defendant was subletting to Mr. Ghose he intended to exact from him a higher rent than the defendant himself had to pay. The lease to Mr. Ghose is to be found at page 35 of the paper-book (Exhibit D), and that document sets out concisely the terms of settlement which were conclusively established by the suit of 1901. Therefore the defendant relying in good faith on this compromise, acted upon it as a binding agreement between himself and the plaintiffs in this suit who were parties to it. In our opinion beyond a shadow of doubt the plaintiffs, so far as the adult plaintiffs are concerned other than Girish and Narhari, are conclusively estopped and barred from disputing now the validity of that compromise.
29. I have dealt with all the matters which seem to me of importance in this case as submitted for our consideration, and accordingly we think that these appeals must succeed. We accordingly allow these appeals with costs in this Court. The result will be as follows:
30. That in Suit No. 243 of 1915 and Appeal No. 292 of 1915, the plaintiffs will have judgment for royalty and commission on the basis of the compromise dated the 10th March 1902 with proportionate costs in the Court of the Subordinate Judge. In Suit No. 235 of 1913 and Appeal No. 293 of 1915 the plaintiffs will have judgment for royalty and commission upon the basis of the compromise dated the 10th March 1902 with proportionate costs in the Court of the Subordinate Judge. In Suit No. 36 of 1913 and Appeal No. 230 of 1915, the plaintiff Shambu Nath will be entitled to judgment in respect of his share of the royalty and commission upon the basis of the compromise of the 10th March 1902, and the plaintiffs Girish and Narhari in that suit will be entitled to royalty and commission in respect of their three-annas share on the basis of the royalty and commission payable under the lease of the 19th April 1895 with proportionate costs in the Court of the Subordinate Judge.
31. These appeals are consequently allowed and the plaintiffs will pay the defendant his costs in this Court.
Chapman, J.
32. I agree. The novel feature of this case in respect of which there was no express authority is this. The Subordinate Judge in dealing with the compromise of 1902 remarked that the terms of the lease had also been changed but that that was no part of the subject-matter of the suit. The question raised is whether, where a Court excludes a portion of a compromise expressly from the decree, the compromise is nevertheless exempted from registration. It appears to me, having regard to the judgment of their Lordships of the Privy Council in the two cases reported as Bindesri Naik v. Ganga Saran Sahu 20 A. 171 : 2 C.W.N. 129 : 26 I.A. 9 : 7 Sar. P.C.J. 273 : 9 Ind. Dec. (N.S.) 471 (P.C.) and Pranal Anni v. Lakshmi Anni 22 M. 508 : 1 Bom. L.R. 394 : 3 C.W.N. 485 : 26 I.A. 101 : 9 M.L.J. 147 : 7 Sar. P.C.J. 516 : 8 Ind. Dec. (N.S.) 363 (P. C), that it makes no material difference whether the Court remarks that a portion of the compromise forms no part of the subject-matter of the suit or not. In the first case their Lordships were dealing with petitions for adjournment which had been filed in the course of an application for foreclosure made under the old Regulation of 1806. The High Court when dealing with the case had held that the mortgage bond did not provide for post diem interest, but they had held that by reason of the petitions for adjournment in which both parties joined, the registered mortgage bond had been varied. In replying to the contention that these petitions were not admissible for want of registration they had held that the practice of the Court was to receive statements of accounts for the purposes of making orders upon them, and that these statements were admissible in evidence although they created charges upon immoveable property and were not registered. In dealing with the appeal their Lordships held that the High Court was wrong in their interpretation of the registered bond. They held that the bond had provided for post diem interest but they went on to say in effect that they agreed with the Judges of the, High Court in holding that these petitions for adjournment read with the orders upon them were admissible in evidence, although they created or might have created charges on immoveable property and although they were not registered. It follows from this decision very clearly that in order to bring a case within the proviso to Section 17 of the Indian Registration Act, it is permissible to look not only to the order of the Court but also to look at the pleadings which resulted in that order. The orders passed in the course of the proceedings of the application for foreclosure were apparently orders merely adjourning the case and would by themselves give no intimation as to the contents of the petitions which resulted in the order, I read their Lordships' judgment to mean that in such a case it is permissible to look at the petitions which resulted in the order of the Court for adjournment and to draw the inference which naturally would follow from a perusal of those petitions; and if they afford proof of an agreement creating a charge, the agreement would be given effect to although ordinarily such agreements require to be registered. In the other case reported as Pranal Anni v. Lakshmi Anni 22 M. 508 : 1 Bom. L.R. 394 : 3 C.W.N. 485 : 26 I.A. 101 : 9 M.L.J. 147 : 7 Sar. P.C.J. 516 : 8 Ind. Dec. (N.S.) 363 (P. C) their Lordships of the Privy Council were dealing with a compromise relating partly to properties outside the scope of the suit in the course of which the compromise had taken place. They say that if the entire compromise had been placed before the Court and the Court had been invited by reason of the compromise to dispose of the suit and if the order so obtained had referred to or narrated the terms of the compromise, the order would have been evidence of the agreement, although not registered. It is manifest that their Lordships cannot have contemplated that the order would have actually given effect to matters outside the scope of the suit. They contemplate merely that the order would have referred to or narrated (not given effect to) the terms of the compromise and that the Court would have been invited to dispose of the conclusions of the suit and of those only. I infer from the judgments of Lord Watson in these two cases that where a suit is properly adjusted but the adjustment consists partly of an agreement relating to matters outside the scope of the suit, if the entire compromise is laid before the Court and the Court is invited in consequence to dispose of the suit and the Court does dispose of the suit accordingly, then the agreement is exempt from registration under the Registration Act, although the decree deals only with the subject-matter of the suit and does not deal with the portion of the compromise which lies outside the suit. In accordance with the view which I take of their Lordships' judgments in the two cases to which I have referred, it appears to me to make no material difference whether the Court notices that a portion of the compromise is outside the subject-matter of the suit or not. The only limitation of the rule laid down by Lord Watson appears from the words used by him in the case reported as Bindesri Naik v. Ganga Saran Sahu 20 A. 171 : 2 C.W.N. 129 : 26 I.A. 9 : 7 Sar. P.C.J. 273 : 9 Ind. Dec. (N.S.) 471 (P.C.). The proceedings must be proper and they must not be fictitious or collusive and they must be regular and in accordance with law. In so stating the rule I have not in my mind the question of leases or gifts of immoveable property. It is possible that the rule is not applicable to them. In my opinion the agreement with which we are dealing in the present case was not a lease.
33. I concur that the matter should be disposed of in accordance with the judgment of my learned brother.
Ali Imam, J.
34. I concur.