Research › Browse › Judgment

Calcutta High Court · body

1946 DIGILAW 43 (CAL)

Ranjit Singh Nahar v. Gobardhan Chandra Chandra

1946-02-08

body1946
JUDGMENT Gentle, J. - This is the Plaintiffs' (decree-holders') appeal against the dismissal by Sen, J., of their application in execution for an order for sale by this Court of immovable property situated outside the territorial limits of its jurisdiction. The relevant facts can shortly be stated. The members of a family named De were the owners of a plot of vacant land, No. 13, Ganga Prosad Mukherjee Road, Calcutta, which lies outside the Court's territorial jurisdiction. They let the land to the Defendant Respondent in the appeal; he erected a brick structure upon the site which he mortgaged to a lady; further reference to the mortgage is unnecessary. The Defendant fell into arrears with the rent and the landlords assigned their right to receive those arrears to Plaintiffs who instituted a suit on the Original Side of this Court claiming Rs. 1,493-11-0 from the Defendant. The jurisdiction of the Court to receive, try and determine the suit is not questioned. On 29th March, 1944, the parties adjusted the claim in the suit by an agreement of which the following terms are material. 2 There would be a decree for Rs. 1,500 including costs carrying interest at the rate of 6 per cent. per annum, payable by 30 monthly instalments of Rs. 50 each. 3. The sum of Rs. 1.500 should form a charge on the brick structures standing on the land at No. 3, Ganga Prosad Mukherjee Road. 4. In default of payment of any two instalments, the balance remaining should immediately become due and payable and the Plaintiffs should be at liberty to execute the decree for enforcement of the charge under the provisions of Or. 34. C. P. C., without recourse to a fresh suit and treating the solenama decree as a final decree. 5. Upon application by the parties under Or. 23, r. 3 of the Code, the Court recorded the agreement and passed a decree in accordance with its terms. The Defendant failed to pay two monthly instalments and thereupon, the Plaintiffs made an application in execution of the decree for an order for sale of the structures. Sen, J., dismissed the application holding that since the structures over which the charge was created are outside the Court's territorial jurisdiction, the decree, in so far as it directs the sale of this property, it is a nullity and the Court cannot enforce it. 6. Mr. Sen, J., dismissed the application holding that since the structures over which the charge was created are outside the Court's territorial jurisdiction, the decree, in so far as it directs the sale of this property, it is a nullity and the Court cannot enforce it. 6. Mr. Sircar, for the Defendant, conceded that, if the structures had been situated within the limits of the Court's territorial jurisdiction (a) the agreement would have been perfectly lawful; (b) the consent decree would have been valid; and (c) upon default by the Defendant, the Plaintiffs would not have been obliged to take the usual proceedings under the rules of Or. 34 of the Code but the Court could have directed execution of the decree by an order for sale of the structures. Mr. Sircar, however, contended that since the agreement purports to create a charge over immovable property situated outside the Court's territorial limits and to empower the Court to make an order for its sale in execution, the agreement is unlawful and the decree passed in accordance with it is a nullity, at any rate, with respect to the charge upon the structures and the provision regarding their sale in execution. 7. The first point for decision is whether parties can include in an agreement to adjust a claim in a suit in this High Court, a charge over immovable property situated outside the limits of the Court's territory. 8. The Ordinary Original Civil jurisdiction of the Court is derived from clause 12 of the Letters Patent by which it . . . shall be empowered to receive, try and determine suits of every description, if, in the case of suits for land or other immovable property such land or property shall be situated, or in all other cases if the cause of action shall have arisen, either wholly or in case the leave of the Court shall have been first obtained, in part within the local limits of the ordinary original jurisdiction of the said High Court or if the Defendant, at the time of the commencement of the suit shall dwell or carry on business or personally work for gain within such limits . . . . 9. . . . 9. In the present suit making a simple money claim, part of the cause of action arose within the local limits, leave to institute the suit was obtained by the Plaintiffs and upon its institution the Court had jurisdiction to try and determine the suit. This was the position from its inception and it so remained up to the time when the panics made the agreement to settle the claim. 10. It was argued for the Defendant that the terms of the agreement are subject to the provisions of clause 12; since the structures are outside the Court's territory, the creation of the charge over them makes the agreement an unlawful one and, in consequence, the decree passed in accordance with the agreement is a nullity. 11. In the agreement in suit the provisions creating the charge over the structures and enabling the Plaintiffs to execute the decree For enforcement of the charge were part of the Defendant's consideration; without them the adjustment would not have been effected and the Plaintiffs would not have been given time to pay by instalments; those provisions were an integral and necessary part of the adjustment, vide Gobinda Chandra Pal v. Dwarka Nath Pal I. L. R. 35 Cal. 837 at pp. 842--843: s. c. 12 C. W. N. 849 (1908). In Joti Kuruvatappa v. Izari Sirusappa I. L. R. 30 Mad. 478 (1906), it was held that, in a suit for money where the plaint prays for a simple money decree, an agreement by which the parties agreed that the amount decreed according to the compromise should be a charge upon certain properties related to the suit. This was cited with approval in Ramaswamy Nayada v. K. N. S. Subbaraya Thevar A. I. R. [1925] Mad. 1101. Sahu Shyam Lal v. Shyam Lal I. L. R. 55 All. 775 (1933) was a decision by a Full Bench; at p. 779 of the judgment it was observed that "It is certainly possible to conceive of matters which may not, strictly speaking, be the subject-matter of the suit itself as brought and yet they may relate to the suit. It therefore, follows that so long as the compromise relates to the suit the Court has full authority under this rule (Or. It therefore, follows that so long as the compromise relates to the suit the Court has full authority under this rule (Or. 23, r. 3) to pass a decree in terms of it even though it might not have, strictly speaking, formed the subject-matter of the suit." 12. From these authorities it emerges that an agreement of compromise can validly include matters which are not the subject-matter of a suit and, so long as the agreement relates to the suit, the Court has authority, or jurisdiction, under Or. 23, r. 3 to pass a decree in accordance with its terms. The agreement in this case undoubtedly related to the suit and it is conceded that, if the charge had been upon immovable property within the Court's territory, the agreement would have been valid. There is nothing unlawful for a debtor before suit to compromise his debt, or his creditor's claim, by agreeing to give a charge over immovable property, situated outside the territory of the Court which would have jurisdiction to entertain a suit by the creditor, if proceedings were instituted for the debt. The giving of a charge upon land outside that territory is not unlawful. Does it become unlawful if such agreement is made, after a suit for the debt has been instituted in that Court, to compromise the claim? 13. A suit for land wholly outside the territory cannot be brought in this Court, but that was not the nature of the present suit. It was for a simple money claim which, it is not disputed, the Court had jurisdiction to entertain. In order to see whether there is jurisdiction, the circumstances existing at the date of institution have to be ascertained. When one of the circumstances specified in clause 12, exists and when, if required, leave is obtained, then conditions precedent being fulfilled, the Court has jurisdiction to receive, try and determine the suit. When there is a lawful agreement to compromise the suit. Or. 23. r. 3 provides that: "The Court shall order such agreement, compromise . . . to be recorded and shall pass a decree in accordance therewith so far as it relates to the suit . . ." If the agreement had been made de hors the suit, it would haw been perfectly lawful. Or. 23. r. 3 provides that: "The Court shall order such agreement, compromise . . . to be recorded and shall pass a decree in accordance therewith so far as it relates to the suit . . ." If the agreement had been made de hors the suit, it would haw been perfectly lawful. The agreement relates to the suit, the circumstance that it was made for the purpose of compromising a suit for a simple money claim, which this Court had jurisdiction to entertain, does not in my view, make it an unlawful agreement or that it withdraws from the Court its jurisdiction to entertain the suit so as to prevent a valid decree being passed in accordance with its terms. 14. Now as to the provision in the agreement for enforcing the charge. As previously mentioned, it is conceded that it would have had full and have entitled the Plaintiffs to the order sought in the application if the property charged had been situated within the territorial limits. The Court is not without jurisdiction to the sale of immovable property lying outside its territory; it can entertain a mortgage suit where part of the hypothecata is situated within and part is outside the jurisdiction, and a sale of the outlying property can be ordered: similarly with regard to family immovable property in a partition suit. In that case, such property is respect to the suit; when, as in the present case, a charge upon such property is made in an a agreement to compromise a suit, which agreement relates to the suit, the property also must have similar relation. In Deenendra Mallik v. Pradyumna Mallik I. L. R. 62 Cal. 28 (1934). Costello, J., at p. 44, observed "it must he borne in mind, however, that it has been held on several occasions that parties by agreement can arrange their own procedure and give jurisdiction to the Court to adopt that procedure and when the parties have agreed that money shall be realised by execution, the Court has jurisdiction to proceed by way of execution." Those observations were cited with approval by Panckridge, J., at p. 1135 in Mannalal Srimal v. Nehalchand Samsukha 41 C. W. N. 1133 (1936). An agreement between parties to a suit with respect to procedure was recognised by the Judicial Committee in Pisani v. Attorney-General of Gibraltar 5 Privy Council Appeals 516 (1874), when there is not an attempt to give the Court a jurisdiction which it does not possess. In my opinion the provision for enforcement of the charge in the agreement in suit does not make any such attempt. 15. The only authority cited, in which the matters in this appeal have been considered, in Mannalal Srimal v. Nehalchand Samsukha 41 C. W. N. 1133 (1936) to which I have previously referred. In that case a decree by consent was passed upon an agreement somewhat similar in terms to that in the present case. At p. 1136 of the report Panckridge, J., observed that although a suit for sale of the property would have been dismissed on the ground of want of jurisdiction inasmuch as no part of the property was situated within the local limits of the jurisdiction, it was no ground for refusing to make an order for sale, in execution of the decree. The learned Judge added that, if the parties had succeeded in getting the assistance of the Court which they would not have been able to obtain by proceeding in another way, no harm had been done. With respect I agree with those observations. In my opinion the agreement in suit is a lawful agreement, it relates to the suit and the decree passed pursuant to it is not a nullity but is valid and capable of execution. I would allow this appeal with costs here and below and direct the Registrar to sell the structures and to hold the proceeds of sale subject to further orders of a Judge sitting on the Original Side of this Court. Derbyshire, C.J. I agree.