- Bookmark
- Share
- CaseIQ
Jai Gobind Singh And Another v. Bagal Lal Singh Opposite Party.
Case Summary — Ramaswami, J. (Revision dismissed)
Factual and Procedural Background
The plaintiff instituted a suit to declare his title and recover possession of certain Sardari Jagir land, claiming that the rule of primogeniture governed succession and that, as the eldest son, he was entitled to the land in preference to his younger brothers, the defendants. One defendant contested the suit on the basis that the ordinary rule of succession applied and that the land belonged in equal shares to the plaintiff and the two defendants. The other defendant asserted that the Sardari Jagir land belonged to the holder of the office of the Sardar and that he (that defendant) was the Sardar.
On 21 January 1948 the parties filed a petition (the compromise petition, Ex. A) stating terms of a purported compromise under which the plaintiff agreed to give 10 bighas of certain classes of paddy land to each defendant (20 bighas in total) and the parties agreed to be bound by the decision of five named gentlemen (arbitrators) who were to decide plot numbers and "all matters relating to our movable and immovable property and the said 20 bighas of land." An award by the five arbitrators was filed on 24 January 1948 describing demarcation/allotment of land and stating that movables were partitioned and praying that the suit be finally disposed of.
On 19 February 1948 the defendants filed a petition before the Subordinate Judge that the suit had been compromised and should be decreed accordingly. The lower Courts refused to record the compromise under Order 23, Rule 3, Civil Procedure Code (CPC), on the ground that there was no adjustment of the suit. The defendants obtained a rule (a revision application) to this Court challenging that refusal. The central question presented to the High Court was whether the lower Courts committed any error of jurisdiction in refusing to record the alleged compromise under O. 23, R. 3 CPC.
Legal Issues Presented
- Whether the lower Courts committed any error of jurisdiction in refusing to record the alleged compromise under the provisions of Order 23, Rule 3 of the Civil Procedure Code.
- Whether the parties' agreement to abide by the decision of named arbitrators, together with the subsequent award, amounted to a complete adjustment of the suit within the meaning of Order 23, Rule 3 (i.e., whether the award converted the earlier contract to abide by the arbitrators into an adjustment permitting the Court to record and decree the compromise).
Arguments of the Parties
Defendants' (as represented by Mr. B.C. De)
- Asserted that by virtue of the compromise and the award of the arbitrators (filed 24 January 1948) there was a complete adjustment of the suit.
- Contended that the lower Courts improperly exercised jurisdiction in refusing to record the compromise under O. 23, R. 3 CPC once the arbitrators had made their award.
The opinion does not contain a detailed account of the plaintiff's specific legal arguments in response to these contentions.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Bishambhar v. Shrt Thakurji Maharaj, 53 All. 673 : (A.I.R. 1931 All. 657) | Agreement to abide by the statement of a third person (a referee) is not an adjustment of a suit under O. 23, R. 3 until the referee has made his statement; until that event the agreement is a mere contract or procedure. | Applied to support the proposition that an agreement to abide by arbitrators is a contract only and that there is no adjustment of the suit until the arbitrators' award is made; the Court relied on this to explain why a mere antecedent agreement could not be recorded as a compromise. |
| Akbari Begum v. Rahmat Hussain, 56 All. 39 : (A.I.R. 1933 All. 861) (Full Bench) | Reiterated the principle that an agreement to abide by a third person's statement is a contract and does not effect an adjustment under O. 23, R. 3 until the third person's statement (award) has been made; once the statement is made and the agreement carried out, it eventuates into an adjustment. | Relied upon to explain that an award, once made and acted upon, can convert the prior agreement into an adjustment — but only if the agreement has been carried out; used as authority for the temporal distinction between agreement and adjustment. |
| Scammell and Nephew Ltd. v. H.G. and J.G. Ouston, 1941 A.C. 251; (110 L.J. K.B. 197) | A clause so vague that no precise meaning can be attributed to it will render the related contract unenforceable (example: vague hire-purchase terms). | Applied analogically to hold that clause (2) of the compromise petition ("all matters relating to our movable and immovable property") was so vague and ambiguous that no precise meaning could be attributed to it and thus that part of the agreement could not be enforced. |
Court's Reasoning and Analysis
The Court began with the well-established legal requirement under Order 23, Rule 3, CPC that before a Court can record an agreement or compromise and pass a decree in accordance with it, the Court must be satisfied that the suit has been adjusted wholly or in part by such agreement or compromise.
The Court analysed the nature of the parties' contracts to abide by arbitrators. It noted that an agreement to abide by an arbitrator is, in form, a contract; until the arbitrator has made an award the contract is not carried out and there is no adjustment of the suit. While Mr. B.C. De conceded that principle, he argued that once the arbitrators made their award on 24 January 1948, the suit had been completely adjusted.
The Court scrutinized the terms of the compromise petition (Ex. A) to determine whether the allotment of 20 bighas was severable from the wider settlement of disputes in relation to other movable and immovable properties. The District Judge had held the compromise ambiguous and admitted oral evidence as to the parties' conduct and intention. After reviewing that evidence, the District Judge concluded, and this Court accepted, that the parties intended a single, interdependent settlement: the plaintiff agreed to give the 10 bighas to each brother only in consideration of a comprehensive settlement of all outstanding disputes (i.e., the clauses were "interdependent and interwoven").
Because the clause providing for settlement of disputes by arbitrators (clause (2) of Ex. A) had not been acted upon so as to effectuate a full settlement of those disputes, the Court found there had been no complete adjustment of the suit within the meaning of O. 23, R. 3. The Court thus rejected the contention that the arbitrators' award alone converted the prior agreement into an adjustment sufficiently complete to permit recording the compromise.
The Court also identified a separate difficulty: clause (2)'s language that the five gentlemen "shall decide (all matters) relating to our movable and immovable property and the said 20 bighas of land" was held to be so vague and ambiguous that it could not amount to an enforceable agreement. Relying on the House of Lords decision in Scammell and Nephew Ltd., the Court observed that when a contractual clause is so uncertain that no precise meaning can be attributed to it, the contract (or that part of it) is unenforceable. By parity of reasoning, clause (2) could not be given precise, enforceable effect.
On these combined bases — (a) the interdependence of the settlement provisions meaning the arbitration clause had not produced a carried-out adjustment, and (b) clause (2)'s patent vagueness making part of the contract unenforceable — the Court concluded that the lower Courts did not err in refusing to record the compromise under O. 23, R. 3.
Justice Sarjoo Prasad concurred and added that contingencies in the compromise had not been fulfilled and that the lower Courts had properly gone into the evidence to determine the parties' real intention; that factual finding could not properly be assailed in revision.
Holding and Implications
Holding: The High Court dismissed the revision application and held that the lower Courts committed no error of jurisdiction in refusing to record the alleged compromise under Order 23, Rule 3, Civil Procedure Code. The Court ordered that, in the special circumstances of the case, no order as to costs would be made.
Implications:
- Direct effect on the parties: The refusal of the lower Courts to record the compromise stands; the compromise was not recorded and the suit was not decreed on the basis of that compromise. The revision is dismissed and no costs are imposed on the parties by the High Court.
- Doctrine and practice: The opinion applies established principles that (i) an agreement to abide by a third party's determination is a contract and does not constitute an adjustment under O. 23, R. 3 until and unless that determination is made and carried out; and (ii) a contract or clause that is so vague that no precise meaning can be attributed to it is unenforceable. The Court relied on prior authorities for these principles. The opinion itself does not purport to create a new rule beyond applying these existing principles to the facts of the case.
Disposition: Revision dismissed.
Ramaswami, J.:— The question for decision in this case is whether the lower Courts committed any error of jurisdiction in refusing to record an alleged compromise under the provisions of O. 23, R. 3 of the CPC.
2. The plaintiff opposite party instituted a suit declaring his title and for recovery of possession of certain Sardari Jagir land alleging that the rule of primogeniture governed and that he being the eldest son was entitled to it in preference to the defendants who are his younger brothers. Defendant 1 contested the suit on the ground that the ordinary rule of succession applied and the land belonged in equal shares to the plaintiff and two defendants. Defendant 2, however, alleged that the land in dispute being Sardari Jagir belonged to the holder of the office of the Sardar and since defendant's was the Sardar, the land belonged to him. On 19th February 1948 the defendants filed a petition before the Subordinate Judge to the effect that the suit had been compromised and that it should be decreed in terms thereof. The lower Courts refused to record the com-promise on the ground that there was no adjustment of the suit. Against this order the defendants have obtained a rule from this Court.
3. On their behalf Mr. B.C De submitted the argument that by virtue of the compromise there was a complete adjustment of the suit and the lower Courts improperly exercised their jurisdiction in refusing to record it under O. 23, R. 3 of the CPC. It is necessary to examine the terms of the alleged compromise in order to test the correctness of this argument. On 21st January 1948 the parties filed the petition (Ex. A) which is to the following effect:
“The plaintiff and the defendants of this suit are full brothers. We both the parties having come to an agreement have compromised the aforesaid suit in presence of ten gentlemen on the following terms;
1. I, Bagal Lal Singha, the plaintiff, give 10 bighas of 1st class, 2nd and 3rd class paddy lands, out of my Sardari Jagir property, to each of the defendants, in all 20 bighas. I remain bound to give (such) Plot Nos. etc. of this land as may be duly determined by five gentlemen. The following 5 gentlemen shall decide (all matters) relating to our movable and immovable property and the said 20 bighas of land, to which none of the parties shall be competent to make any plea or raise any objection. 21-1-48
1. Sri Dhananjoy Ghosh of Garia
2. Sri Narayan Chandra Mitra of Garia
3. Sri Shibkinkar Sarkar of Sitamuri
4. Sri Asuthosh Mitra of Dumdumi (?)
5. Sri Nibaran Chandra Ghosh of Garia.
Signed to-day
K. Prasad, B.C
Sub-Judge, Deoghar, 20-2-48
Sd. Joy Gobind Singha, 20-2-48.
We shall remain bound by whatever shall be done by the aforesaid arbitrators. No one shall be competent to make any plea or raise any objection.
Sd. Bagal Lal Singha
Sd. Atul Chanda Singha 21-1-48
Saribed by Narayan Chandra Mitra of Garia, 20-1-48.”
4. On 24th January 1948 an award was filed by the arbitrators to the following effect:
“The arbitrators mentioned below beg to state as follows:
That on 21st January 1948 the aforesaid plaintiff having definitely expressed his desire to amicably settle the said suit and filed a petition before the S.D.O Jamtara, we, the arbitrators, made both the defendants agree to it. We met together at Karaiya and demarcated 10 bighas of paddy land to each of the defendants as mentioned in schedules A and B given below with their revisional survey settlement plot numbers. The plaintiff and the defendants have partitioned their movable properties. Paddy lands mentioned below in the schedules are given (allotted) according to the arbitrators' award and it is prayed that the suit may be finally disposed of (accordingly). Be it stated that the parties shall not be competent to claim anything as costs of the suit.
Be it stated that the petition filed by the plaintiff and the defendants before the S.D.C is filed herewith.
Details of Schedule.
Mauza Kariya No. 15, Khewat No. 2, Jot. No. 109. (Ka) Jai Gobind Singha, defendant 1.
Plot No. A.D Class. 504 1‘88 1st 505/1564 ‘24 2nd 499 ‘98 2nd 395 ‘46 3rd 503 ‘69 3rd 4 acres 25 decimals.
(Kha) Atul Chandra Singh, defendant 2.
504 1‘89 1st 443 ‘18 2nd 499 1‘4 2nd 395 ‘46 3rd 503 ‘68 3rd 4 acres 25 decimals.
Arbitrators.
1. Narayan Chandra Mitra of Geria.
2. Dhananjoy Ghosh of Geria.
3. Ashutosh Mitra of Dumdumi.
4. Shib Kinkar Sarkar of Sitamuri.
5. Nibaran Chandra Ghosh of Geria, 24th January 1948.”
5. It cannot be disputed that under O. 23, R. 3 before a Court can order agreement or compromise to be recorded and pass a decree in accordance therewith it has to be satisfied that the suit has been adjusted wholly or in part by such agreement or compromise. Where the parties agree to abide by the award of such arbitrators the agreement is still in the nature of a contract and it is manifest that so long as arbitrators have not made the award the contract has not been carried out and there is yet no adjustment of the suit. In other words, the matter has not proceeded beyond the domain of an agreement and stage of the adjustment of the claim has not yet been reached. Mr. B.C De did not dispute this statement of the law but he contended that is soon as arbitrators made the award on 24th January, there was a complete adjustment of the suit between the parties. This argument would have been valid if upon the construction of the compromise of 21st January, it is held that the question of allotment of 20 bighas out of the Sardari Jagir was separate and severable from the question of settlement of the dispute with respect to the other movable and immovable properties which is mentioned in the petition of compromise. On this part of the case, the learned District Judge has, in my opinion, correctly held that the compromise was ambiguous and oral evidence of the conduct of the parties was admissible to prove what was the real intention. After examining the evidence he reached the conclusion that the parties intended that all the disputes relating to Sardari Jagir land, as also the other lands, ought to be finally settled and in consideration of this settlement the plaintiff agreed to give to each of his brothers 10 bighas-out of the Jagir lands. In other words, both the-clauses in the petition of compromise were interdependent and interwoven and the plaintiff had agreed to grant a portion of the Sardari Jagir to the defendants only in consideration of the settlement of all the outstanding disputes. Mr. B.C De contended that upon a proper construction of the terms and the oral evidence it ought to be held that the two clauses were independent. But in my opinion there is no good reason for differing from the construction placed by the District Judge upon the terms of his document. If that be so, it is obvious that cl. (2) with respect to the settlement of the disputes by the arbitrators was not acted upon and so had not proceeded beyond the domain of agreement and there was no complete adjustment of the suit within the meaning of O. 23, R. 3, Civil F.C In this context reference should be made to Bishambhar v. Shrt Thakurji Maharaj, 53 All. 673 : (A.I.R (18) 1931 All. 657), in which the parties to a suit had stated in Court that they agreed that a certain pleader might be appointed referee and that the case might be decided in accordance with the statement which he might make, without any oath being given to him. On the date on which the statement was-made in Court, but before it was made, the plaintiff intimated to the Court that he resiled from the agreement to abide by the referee's statement. The Court, however, dismissed the suit in accordance with the referee's statement. The plaintiff preferred an appeal to the High Court who held that the agreement did not amount to an adjustment of a suit under O. 23, R. 3 but only amounted to an agreement on a procedure which might eventuate in an adjustment, and until the referee had given his statement there could be no question of any adjustment. In a subsequent Full Bench case Akbari Begum v. Rahmat Hussain, 56 All. 39: (A.I.R (20) 1933 All. 861 (S.B)), Sulaiman, C.J reiterated the same principle:
“Strictly speaking, an agreement is not identical with a compromise of the suit and may amount to a mere contract. But as no decree can be passed forthwith in terms of a mere contract to abide by the statement of a third person, I am prepared to hold that there can be no adjustment of the suit by such a contract until the statement has been made. But as soon as the agreement has been fully carried out by the Court and the referee has made his statement in favour of one party or the other, it is too late for either party to go back upon the agreement; and at this stage the agreement must be deemed to have eventuated into an adjustment of the claim in accordance with the statement already made. A party cannot be allowed to retract his solemn promise for consideration made before the Court after he has come to know the nature of the statement by which he had agreed to abide. It is no longer a question of the carrying out of a promise or the specific performance of a contract. The compromise must be deemed to have been carried out and accordingly the claim already adjusted.”
6. There is also another difficulty in holding that there was any complete adjustment of the suit between the parties. Clause (2) of Ex. A, the comromise petition, states:
“The following five gentlemen shall decide (all matters) relating to our movable and immovable property and the said 20 bighas of land.”
In my opinion, the terms of this clause are so vague that it cannot amount to an enforceable agreement or a contract. The ambiguity is patent and the phrase “all matters relating to our movable and immovable property” cannot be properly construed and it is impossible to find out what was the real intention of the parties in putting this clause in the compromise. In a recent case Scammell and Nephew Ltd. v. H.G and J.G Ouston, 1941 A.C 251; (110 L.J.K.B 197), the respondents had agreed to purchase from the appellants a new motor van but stipulated that “this order is given on the understanding that the balance of purchase price can he had on hire-purchase terms over a period of two years.” The House of Lords held that this clause as to hire-purchase terms was so vague that no precise meaning could be attributed to it, and consequently there was no enforceable contract between the parties. For the same reasons cl. (2) of the compromise with respect to the matters relating to movable and immovable properties is so vague that no precise meaning can be attributed to it and the contract cannot be enforced between the parties.
7. For the reasons assigned I hold that the lower Courts have committed no error of jurisdiction and this application must be accordingly dismissed. But in the special circumstances of this case I do not propose to make any order as to costs.
8. Sarjoo Prasad, J.:— I agree. I would wish to add a few observations. As my learned brother has pointed out, before recording a com-promise under O. 23, R. 3 the Court had to find whether there was really an adjustment of the dispute between the parties. The terms of the compromise indicated that certain contingencies had to be fulfilled before the rights of the parties could be fiaally adjusted. Some of those contingencies had not been fulfilled and parties were at variance as to whether the intention was that these contingencies had to be fulfilled before the compromise could be recorded. The Courts below, therefore, had to go into the evidence in order to find out what the real intention of the parties-was and having gone into evidence the Courts below have come to a finding that it was not intended to be an adjustment between the parties be as to be capable of being recorded under O. 23, R. 3 and the contingencies which have not been fulfilled were an integral part of the compromise.
9. This finding cannot be assailed in revision before this Court.
V.R.B
10. Revision dismissed.
Alert