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Birendra Nath Basu Thakur v. Basanta Kumar Basu Thakur

Calcutta High Court
May 28, 1925
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Factual and Procedural Background

The plaintiffs are members of the Malkhanagar Basu family (Birendra Nath and Surendra Nath, Basu Thakur). The principal defendants and many proforma defendants are members of the same family. The dispute concerns the Taltola hat and bazaar (an established market) which had to be relocated in late 1916 because of river action; the only available site was land belonging to a Mussalman family held as chiragi lakhiraj. Within a few weeks various members of the Mussalman family executed transfer documents (kobalas and nadabipatras) in favour of competing members of the Basu family: plaintiffs and defendants each secured documents. The aggregate of shares sold and relinquished exceeded sixteen annas.

A particular Mussalman, Abdul Aziz, was claimed as vendor by both sides; he admitted executing a kobala in favour of the plaintiffs on November 9, later denied execution of a kobala in favour of the defendants, then before the Sub-Registrar admitted execution, and later repudiated that admission as coerced. Shortly before that repudiation, a servant of the plaintiffs, Rohimi, lodged a criminal complaint before the Magistrate accusing thirteen persons (including several principal defendants) of forging the kobala produced by the defendants. The Magistrate called for evidence and expressed doubts about the complaint; the complaint was ultimately dismissed under Section 203 of the Criminal Procedure Code when the complainant said his witnesses had been gained over.

Meanwhile the defendants pursued registration remedies and instituted a suit against Aziz under Section 77 of the Registration Act, which was decreed ex parte on 21 March 1917. In December 1916 the quarrel was referred to arbitration before Aswini Kumar Basu (a retired subordinate judge and family member). An award was made and an ekrarnama followed, signed by some (but not all) principal defendants. The learned trial Judge held the submission to arbitration inoperative on the ground that the consideration was contrary to public policy, that the five executants of the ekrarnama lacked authority to bind other family members, that valid purchases by the plaintiffs only amounted to 1 anna 4 gandas, and that the plaintiffs should bring a suit for partition to obtain possession.

The plaintiffs appealed. The appellate opinion (Walmsley, J., concurred by Ghose, J.) considered whether the arbitration was void as amounting to stifling a prosecution, whether the ekrarnama bound the family and the extent of the plaintiffs' entitlement. The appeal was allowed in a modified form: the lower court's judgment and decree were set aside as to certain defendants; the plaintiffs' title was declared to the extent of 3 annas 12 gandas against specified defendants; mesne profits and costs were awarded as described in the opinion; cross-objections were dismissed.

Legal Issues Presented

  1. Whether the agreement to refer the dispute to arbitration was void as an agreement to stifle a prosecution, and thus unlawful under Section 23 of the Indian Contract Act.
  2. Whether the ekrarnama and the arbitrator's award bound all members of the Basu family or only those who submitted to arbitration and executed the ekrarnama.
  3. Whether the plaintiffs are entitled to a declaration of title and to possession (joint possession) to the extent of 3 annas 12 gandas in accordance with the award and the ekrarnama.
  4. What form of relief should be granted (mere declaration of title or a decree directing possession), and the consequential claims for mesne profits and costs.

Arguments of the Parties

Plaintiffs' Arguments (Appellants)

  • The plaintiffs claimed entitlement to the share specified in the arbitrator's award (3 annas 12 gandas) and to possession in accordance with that award and the ekrarnama.
  • If they could not establish the award against all defendants, they contended they were at least entitled to that share against those who made the reference to the arbitrator and those who executed the ekrarnama.
  • As an alternative, plaintiffs asked for a declaration of title to a share of 6 annas based on purchases from different members of the Mussalman family, and in any event they sought a decree for joint possession corresponding to whatever share was established.

Defendants' Arguments (Respondents)

  • The defendants contended that the reference to arbitration was void because it amounted to an agreement to stifle a prosecution and was therefore contrary to public policy (relying on the principle embodied in Section 23 of the Contract Act).
  • They argued that the ekrarnama and the arbitrator's award could not bind other family members: the five executants lacked authority to bind the rest of the joint family.
  • The defendants maintained that possession remained unchanged after the arbitration and that the plaintiffs had not acquired possession to the extent claimed; accordingly, the plaintiffs should bring a suit for partition to obtain their share.
  • They also raised coercion/pressure arguments, suggesting the criminal complaint exerted pressure and invalidated the arbitration consent.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court considered each legal issue in turn and applied statutory principles and the factual record:

  1. On the contention that the arbitration was an agreement to stifle a prosecution (and so void under Section 23 of the Contract Act): the court adopted the essential test that stifling a prosecution involves tampering with the administration of justice by a private individual. The court found that the Magistrate had not issued process, had expressed grave doubts about the complaint, had required a prima facie case, and ultimately dismissed the complaint under Section 203 CrPC when the complainant stated his witnesses had been gained over. Given these facts, the court concluded that there was no prosecution that had been dropped by the parties, and there was no evidence of tampering with the administration of justice or usurpation of judicial functions by the complainant. Accordingly, the reference to arbitration could not be treated as void on that ground.
  2. On the coercion argument (that the complaint put pressure on the defendants to consent to arbitration): the court found that the defendants had reasons to act freely. They knew of Aziz's admissions, knew the Magistrate's skepticism, and knew the forgery was attributed mainly to an unknown stranger; additionally one defendant admitted Ananta (the chief man on defendants' side) intended to repudiate the compromise later. Taking these facts together, the court held the defendants acted with freedom of will and were not coerced into arbitration.
  3. On whether the arbitration and award bound all defendants: the court examined the formal requirements of submission to arbitration and found that assurances by Ananta, Benoy, Paresh and Krishna that they represented absent defendants were insufficient. Apart from the ekrarnama (which was executed by five specific defendants), there was no evidence that other defendants agreed to refer the dispute to arbitration. Therefore, the award could not be enforced against defendants who had not validly submitted to arbitration.
  4. On the ekrarnama and its effect: the ekrarnama was a formal instrument executed by Ananta Kumar Basu (deceased), Joyanto Kumar Basu, Debendra Kumar Basu, Sanat Kumar Basu and Surendra Kumar Basu. The executants declared they were satisfied that Birendra and Surendra had no title to 3 annas 12 gandas, promised to execute appropriate deeds for themselves and their cosharers, and undertook, if they failed to persuade cosharers, to make up the 3 annas 12 gandas share from their own shares. The court held that while the ekrarnama could not bind those who were not parties to it, it did bind the executants in respect of the undertaking they gave for themselves.
  5. On actual possession: the plaintiffs relied on evidence that they were put in possession to the extent of 3 annas 12 gandas. The arbitrator reported that Benoy told him so (a statement Benoy denied), but more probative evidence was a letter from Birendra to Ananta (Chaitra 21, 1823) asserting possession and proposing letting the hat to a single ijaradar, and an answer on the back said to be in Bipin's writing and signed by Ananta. A witness testified to seeing Ananta dictate, Bipin write and Ananta sign. The court accepted the endorsement as genuine and interpreted it as recognition by Ananta that possession had been given to the plaintiffs to the extent claimed.
  6. On relief: the learned trial Judge had confined himself to declaring title. The appellate court, however, found that on the ekrarnama undertaking, supplemented by the fact of actual possession for a time, plaintiffs were entitled to a decree directing they be put in possession to the extent of 3 annas 12 gandas jointly with the defendants (but only as against those who were bound by the award/ekrarnama or had submitted to arbitration).

Holding and Implications

APPEAL ALLOWED IN A MODIFIED FORM.

Holding (direct effect on the parties):

  • The judgment and decree of the lower Court were set aside to the extent indicated.
  • The plaintiffs' title to the extent of 3 annas 12 gandas is declared as against the following defendants: Benoy Chandra Basu (No. 14), Paresh Chandra Basu (No. 16), Krishna Kumar Basu (No. 18), the two representatives of the late Ananta Kumar Basu (Nos. 2 and 2 ka), Joyanta Kumar Basu (No. 3), Debendra Kumar Basu (No. 5), Surendra Kumar Basu (No. 6), and Sanat Kunur Basu (No. 10).
  • The plaintiffs' suit is dismissed as against the other defendants except to the extent that the plaintiffs will receive joint possession with them (i.e., joint possession is granted to the plaintiffs even where title was not declared against those defendants).
  • The plaintiffs are entitled to recover mesne profits (to be ascertained by the lower Court) from the named defendants for the period claimed in the plaint: from 31 August 1917 up to delivery of possession or until the expiry of three years from that date, whichever occurs first.
  • The plaintiffs are entitled to recover their costs in both Courts from the named defendants; the defendants will bear their own costs in both Courts. The cross-objections are dismissed but without costs.

Implications: The decision resolves the specific dispute between the parties by enforcing the ekrarnama undertaking and the award so far as they bound particular defendants and by granting consequential possession, mesne profits and costs. The court expressly rejected the contention that the arbitration was void as an agreement to stifle prosecution and declined to treat the criminal complaint as having fatally tainted the arbitration. The opinion does not announce any broader judicial principle beyond applying Section 23 of the Contract Act and standard principles on arbitration submission and authority; no new precedent beyond the resolution of the present dispute is indicated in the opinion.

Show all summary ...

Walmsley, J.:— This appeal is preferred by the plaintiffs. They are Birendra Nath and Surendra Nath, Basu Thakur, members of the Malkhanagar Basu family. The principal defendants, and most of the proforma defendants belong to the same family.

2. The bone of contention is the Taltola ??? and bazaar, an old established hat of considerable repute. It was held on land belonging to the Basu family, on the bank of the Dhaleswari River. Its site had to be changed from time to time owing to the action of the river; but all went well until the only available site was on land not in the possession of any members of the Basu family. This untoward event happened in the latter part of 1916. The site to which the hat had to be removed was on some land belonging to a Mussalman family, and held by it as chiragi lakhiraj. Relations were at the time strained between the plaintiffs and the principal defendants, and each side endeavored to defeat the other. Various members of the Mussalman family executed eight kobalas in favour of the plaintiffs and others executed nadabipatras, while the principal defendants secured five documents of each kind. All this, activity took place within the space of a few weeks. The aggregate of the shares sold and relinquished exceeds sixteen annas. One member of the Mussalman family, Abdul Aziz, is claimed as a vendor by both parties. He admitted execution of the kobala in favour of the plaintiffs on November 9, a few days later, he denied execution of a kobala in favour of the defendants. On December 9th, however, he appeared before the Sub-Registrar and admitted execution; a few days later he declared that the admission was untrue and had been wrung from him by improper means. Just before he did so, however, one Rohimi, a servant of the plaintiffs presented a complaint before the Magistrate in which he accused thirteen persons of forging the kobala produced by the defendants. Among the accused were several of the principal defendants—Paresh, Gopal, Krishra and Benoy; also Kamini, son of Ananta Kumar Bose; deceased. The substance of the charge was that Paresh, Gopal, Krishna and Beroy, with the assistance of a stranger named Harerdra Chandra De, had forged the kobala, and that the others had acted as attesting witnesses. The Magistrate called for evidence before issuing process. Meanwhile the defendants had taken steps before the Register for registration of the document executed in their favour by Aziz, and they afterwords instituted a suit against Aziz under Section 77 of the Registration Act. It does not appear when the suit was instituted, but it was decreed ex-parte on March 21st, 1917. The criminal charge served to bring matters to a head, and in December it was decided that the quarrel should be referred to the arbitration of one Aswini Kumar Basu, a member of the family, and a retired Sub-ordinate Judge. This gentleman did make an award. There is no dispute about the fact that he did so, or about the terms. The award was followed by an ekrarnama which was signed by some but not all of the principal defendants. The plaintiffs say that they were put in possession under the terms of the award and of the ekrarnama and that they shared in the bastu puja which was celebrated a few weeks later at the beginning of the Bengali year. This, however, is denied by the defendants. They say that after the arbitration possession remained unchanged, although the criminal proceedings were dropped, and that they lost no time in taking up the position, which they have taken up in defending the suit, that an arbitration made under such conditions is void.

3. The learned Judge has held that the submission to arbitration was inoperative because the consideration of the agreement was contrary to public policy, that the five executant of the ekrarnama had not authority to bind other members of the family, that the valid purchases by the plaintiffs only amounted to 1 anna 4 gandas share of the whole and that the plaintiffs must bring a suit for partition to get possession of that share.

4. For the plaintiffs it is urged that they are entitled to the share mentioned in the arbitrator's award; that if they are not entitled to that share as against all the defendants, they are at any rate, entitled to that share as against those who made the reference to the arbitrator and those who executed the ekrarnama; that if their claim on the award or the ekrarnama is disallowed, they should have their title to a share of 6 annas declared by virtue of purchases from different members of the Musalman family; and that, whatever their share may be found to be they should be given a decree for joint possession.

5. The first question is whether the reference to arbitration amounts to an agreement for stifling a prosecution. The Statute Law of this country on that subject is contained in Section 23 of the Contract Act, and is as follows: “The consideration or subject of an agreement is lawful, unless…. the Court regards it as immoral or opposed to public policy. In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful is void,” and the illustration bearing on this sub-clause is this: “A promises B to drop a prosecution which he has instituted against B for robbery, and B promises to restore the value of the things taken. The agreement is void as its object is unlawful.”

6. The essential element in what is described by English lawyers as stifling a prosecution is the tampering with the administration of justice by a private individual. It is quite true that in this case, a complaint of criminal, offence was laid by the plaintiffs' servant against several of the defendants, and that after the award had been made, no steps were taken to produce the evidence for which the Magistrate had called. The defendants, however, were never brought before the Court as accused persons: on the contrary the learned Magistrate expressed grave doubts about the truth of the complaint, and directed the complainant to establish a prima facie case before he issued process; and he dismissed the complaint under Section 203 of the Cr PC, when the complainant said that his witnesses had been gained over. In these circumstances, I do not think it can be said that a prosecution was dropped; still less do I think that there was any tampering with the administration of justice by the complainant, or that the complainant usurped the functions of the Judge.

7. Again, looking at the broader features of the case I should be very reluctant to hold that the institution of the complaint rendered void the reference to arbitration. On the one side the defendants had recourse to the summary provisions of the Registration Act, and afterwords to a suit under S. 77 of that Act, while the plaintiffs filed ??? complaint about the truth which the Magistrate was not satisfied. It would be carrying the doctrine of public policy to an absurd length to hold that the presentation of the complaint debarred the parties from resorting to the sensible method of arbitration.

8. As for the argument that the complaint put pressure upon the defendants, and that in consenting to arbitration they were acting upon coercion, it is abundantly clear that the complaint had no such effect. The defendants knew that Abdul Aziz had expressly admitted execution of the document which was alleged to have been forged, and they had no reason to think that his later repudiation could wipe out the effect of that admission; they knew that the Magistrate had received the complaint with skepticism, and they knew that the actual forgery was attributed to a stranger of unknown parentage without an address, while the accusations against the others were of the vaguest description. Lastly, one of the defendants admits that Ananta Babu, now dead, but at the time the chief man on defendants' side, entered into the compromise with the avowed intention of repudiating it afterwords on this very ground. It is impossible to hold that the defendants were not acting with complete freedom of will.

9. In my opinion, therefore, the agreement to refer the dispute to arbitration cannot be treated as void.

10. The plaintiffs ask for a declaration of their right to a share of 3 annas 12 gandas in accordance with the award and the ekrarnama that followed it. It appears, however, that there was no proper submission to arbitration, such as would bind all the defendants. Ananta, Benoy, Paresh and Krishna Kumar pressed Aswini Babu to settle the dispute, and they said that they represented the absent defendants. In spite of his legal experience the arbitrator accepted these assurances, but, of course, they were not sufficient. Apart from the ekrarnama, and that was executed only by five of the defendants, there is no evidence on which it can be held that the defendants other than the four mentioned agreed to refer the dispute to arbitration. The plaintiffs, therefore, cannot succeed on the basis of the award against more than four of the defendants.

11. The award, however, was succeeded by on ekrarnama, executed by Ananta Kumar Basu, now dead, Joyanto Kumar Basu, Debendra Kumar Basu, Sanat Kumar Basu and Surendra Kumar Basu (Defendants Nos. 3, 5, 10 and 6). This is a formal document: the executant declared that they were satisfied that Birendra and Surendra had no title to a share of 3 annas 12 gandas: they promised for themselves and their cosharers to execute an appropriate deed in regard thereto, and they also undertook, if they failed to persuade their coshartrs, to execute a deed “making up your 3 annas 12 gandas share * * * from our own shares alone.” Their shares amounted to 4 annas, as Ananta had 1 anna 5 gandas, Joyanta had 15 gindas and the other three 2 annas between them. The ekrarnama cannot bind those who were not paries to it, but there is no reason why the executant should not be bound by the undertaking made for themselves.

12. The case for the plaintiffs is that possession to the extent of 3 annas 12 gandas was actually given to them. The arbitrator says that Benoy, defendant No. 14 told him so, but Benoy says this is incorrect. More important evidence is a letter written by Birendra to Ananta on Chaitra 21, 1823: this letter contains an assertion of possession and a suggestion that both parties should let the hat to one ijaradar for the ensuing year. On the back is an answer said by the plaintiffs to be in the writing of Bipin and signed by Ananta. A witness deposes that he took the letter, heard Ananta dictate and saw Bipin write and Ananta sign. Against this evidence there is only Joyanta's half-hearted denial. I have no doubt that the endorsement is genuine, and the only interpretation that can be put upon it is that Ananta recognized that possession had been given to the plaintiffs to the extent of 3 annas 12 gandas.

13. As the plaintiffs have expressly asked for their share to be fixed on the basis of the award or the ekrarnama, I do not think it necessary, after the findings are recorded, to deal with their alternative prayer for a declaration of their title on the basis of their transfers from various members of the Mussalman family. On that point I only wish to say that as the case was put before us the claim was for a fraction over 6 annas and not for the 10 annas mentioned in the plaint.

14. The remaining question is as to the form of relief to be granted to the plaintiffs. The learned Judge has held that he cannot go beyond declaring their title. Whether that view was right or not on the findings recorded by him, I need not discuss, because my findings are different. On the undertaking set out in the ekrarnama, supplemented by the facts that the plaintiffs were actually put in possession and that they remained in possession for a time, I think it is clear that they are entitled to a decree directing that they be put in possession to the extent of 3 annas 12 gandas jointly with the defendants.

15. The result is that the appeal is allowed in a modified form. The judgment and decree of the lower Court are set aside the plaintiff's title to the extent of 3 annas 12 gandas is declared as against the defendants, Benoy Chandra Basu (No. 14), Paresh Chandra Basu (No. 16), Krishna Kumar Basu (No. 18), the two representatives of the late Ananta Kumar Basu (Nos. 2 and 2 ka), Joyanta Kumar Basu (No. 3), Debendra Kumar Basu (No. 5), Surendra Kumar Basu (No. 6), Sanat Kunur Basu (No. 10). Their suit is dismissed as against the other defendants except to the extent that the plaintiffs will get joint possession with them.

16. The plaintiffs are also entitled to recover mesne profits (to be ascertained by the lower Court hereafter) from the defendants named above for the period as claimed in the plaint, that is, for the period from the 31st August 1917 up to date of delivery of possession or until the expiry of three years from this date whichever event first occurs.

17. The plaintiffs will be entitled to recover their costs in both Courts from the defendants mentioned above. The defendants will bear their own costs in both Courts. The cross-objections are dismissed but without costs.

Ghose, J.:— I agree.

18. Decree modified: Cross-objections dismissed.