Madaswami Pillai v. Mathevan Pillai — 1950 DIGILAW 128 (KER)

Judgment :- 1. This is a plaintiff's appeal. It was once heard exparte and allowed by a Division Bench of the Travancore High Court consisting of Krishnaswami Aiyar, C.J. and Simon, J. The case has since been allowed to be reopened under O. XL, R. 20 C.P.C. (Travancore). The previous decision is reported in Madaswami Pillai v. Madhava Pillai -1947 T.L.R. 822. The opening paragraph of the judgment of the learned Chief Justice sets out the material facts as follows: "The plaintiff is the appellant. He had a brother the 2nd defendant and a sister Chattamuthu since deceased. Chattamuthu married the 1st defendant about 1092. On account of differences between the husband and the wife, Chattamuthu left her husband's home and from about 1094 till her death she was living away from him altogether in a different place. The 1st defendant was living at Aramboly admittedly and Chattamuthu was living with her parents at Trivandrum. Chattamuthu started a milk trade at Trivandrum and by her exertions, acquired substantial properties during the time she was living with her parents. She executed a gift deed Ext. A dated 13.4.1106 by which she conveyed all her properties to the plaintiff, her brother who was a minor, making the 2nd defendant his guardian. The 2nd defendant was commissioned to keep accounts and to deliver the same over to the plaintiff on his attaining majority. The 1st defendant the husband instituted O.S. 30 of 1107 on the file of the District Court of Nagercoil to set aside the gift deed Ext. A on the ground that Chattamuthu was not competent to do so and that on her death he the husband would have been the heir to those said properties. Chattamuthu died in 1106 and the suit filed in 1107 was compromised in 1109. Under the compromise the 2nd defendant guardian ad litem and brother of the plaintiff agreed to the gift deed Ext. A being set aside. The 1st defendant was to take the properties gifted and he undertook to pay the plaintiff Rs. 625 on the plaintiff attaining majority. The compromise was stated to be for the benefit of the minor and a decree was passed in accordance with these terms. A being set aside. The 1st defendant was to take the properties gifted and he undertook to pay the plaintiff Rs. 625 on the plaintiff attaining majority. The compromise was stated to be for the benefit of the minor and a decree was passed in accordance with these terms. The present suit has been filed for setting aside the compromise decree on the ground that the compromise was not reasonable, not for the benefit of the minor and fraudulent and the plaintiff seeks to recover possession of the properties gifted to him." 2. The trial court dismissed the suit. The ground of the decision is that the compromise decree in the prior suit, O.S. No. 30 of 1107, was valid and binding on the plaintiff. That question forms the main point in the appeal but speaking with respect we feel constrained to say that that aspect would seem not to have been fully kept in view by the learned judges who disposed of the case previously. They had not the benefit of an argument from the first defendant's side. In their judgment they first considered whether the gift evidenced by Ext. A could have been validly made by Chattamuthu without her husband's consent. Taking what may be called a liberal or progressive view that so long as she was not living with her husband or even within his control when she acquired the property or gifted it the rule prohibiting a married woman from disposing of her non-soudayika stridhanom without the husband's consent will not render the gift invalid they would seem to have thought that the plaintiff was as a matter of course entitled to have the compromise decree annulled. This approach, would seem to us not to have been proper. 3. If a court is for the first time called upon to decide whether a particular gift is valid or not it is certainly open to that Court to give a liberal construction to a rule of ancient Hindu Law and decide the case accordingly. That however is not the position in the case on hand. The question of the validity of the gift was directly put in issue in the former litigation and that litigation ended in a decree passed no doubt on foot of a compromise. That however is not the position in the case on hand. The question of the validity of the gift was directly put in issue in the former litigation and that litigation ended in a decree passed no doubt on foot of a compromise. The Court gave leave to the plaintiff's guardian to enter into that compromise before the Court made it the basis of the decree. In such circumstances the first step the plaintiff has to take is to have the compromise of the former litigation set aside Rameswar Pershad Singh v. Ram Bhaduar Singh - (1907) ILR 34 Cal. 70 (P.C.). Though the rule of res judicata does not in terms apply to a compromise decree, to all intents and purposes such a decree has the same effect as res judicata as a decree passed in Initum Bhaishanker v. Morarji (1912) I.L.R. 36 Bom. 283 at 286 and In re South American & Mexican Co. (1895) I Ch. 37. So long as the compromise decree stands it is not open to either party thereto to give the go by to it, but being a mere creature of the agreement on which is founded it may be set aside on any ground which would invalidate an agreement between the parties. See Wilding v. Sanderson (1897) 2 Ch. 534. When a compromise decree is passed against a minor besides the grounds open to parties who are sui jans at the time of the agreement the minor can have it vacated also on other grounds. That the compromise is not beneficial to him and that the guardian or the next friend as the case may be acted with gross negligence in bringing about the compromise is one such recognised ground. Another, or rather the other, is that the provisions prescribed by the Code of Civil Procedure to pass a consent decree against a minor have not been duly complied with. 4. In the case on hand the main if not the only ground on which the compromise decree was sought to be impugned was that the settlement was not in the best interests of the minor. Though charges of fraud and collusion on the part of the plaintiff's guardian in the prior suit were set out in the plaint they were given up at the trial. The lower Court has specifically mentioned that in its judgment. Though charges of fraud and collusion on the part of the plaintiff's guardian in the prior suit were set out in the plaint they were given up at the trial. The lower Court has specifically mentioned that in its judgment. As for the question whether the provisions of the Code regarding the compromise of a suit by a guardian of a minor defendant have been complied with in passing the prior decree, except for a passing reference in the argument before us regarding the form of the order passed by the Court in granting leave to compromise, no point was sought to be made about it in the appeal nor would the point seem to have been raised at all in the court below. The reference made in the argument to the form of the order will be dealt with in its proper place and we shall now proceed to tackle the main point whether the compromise was not beneficial to the present plaintiff. 5. It is a question of fact whether a guardian is justified in entering into a compromise. See Baboo Lekraj Roy v. Baboo Mahtab Chd - (1871) 14 Moores Indian Appeals 393. The last paragraph of the former judgment in this appeal contains a statement to the effect that having reference to the value of the properties gifted the Court should hold that the compromise was not for the benefit of the minor. In the circumstances of the case the more important question is whether the guardian had reasonable grounds to apprehend that the suit might go entirely against the minor, or in other words whether the gift would be declared totally invalid. It is with reference to this question of the validity of the gift that we said earlier that the learned judges who decided this appeal first took a very progressive view. The trial court's finding that the properties gifted under Ext. A were nonsaudayika stridhanam in the hands of Chattamuthu was not challenged before us. That in fact was the previous decision in the appeal also. With respect to such properties it was not disputed that the accepted rule is that a Hindu woman's power of disposal is during covertrue subject to her husband's consent and that without such consent she cannot validly dispose it of by a deed inter vivos or under a will. Bhau v. Raghanatha ILR 30 Bom. With respect to such properties it was not disputed that the accepted rule is that a Hindu woman's power of disposal is during covertrue subject to her husband's consent and that without such consent she cannot validly dispose it of by a deed inter vivos or under a will. Bhau v. Raghanatha ILR 30 Bom. 229 and Mulla's Hindu Law (1946) Tenth Edn. p. 137 paragraph 143(2) may be referred to in this context. The earlier editions of Mayne's Hindu Law expounded the law on the subject in the same strain, but the last two editions (Tenth Edn. 1938 and Eleventh Edn. 1950) take what has now come to be called a progressive view that the restrictions in the text cannot be more than moral precepts. This view, no doubt, finds support in a Division Bench ruling of the Bombay High Court reported in Bhagavanlal v. Bai Divali A.I.R. 1925 Bom. 445 and it was that decision the learned judges who decided the appeal before chose to follow. The said decision distinguishes the decision in 30 Bombay 229 referred to earlier and thus reaffirms that the accepted rule is that what that decision enunciated. The decision in AIR 1925 Bom. 445 is by a Division Bench, but when the point arose again in the same High Court in Sarubai v. Narayandas AIR 1943 Bom. 224 Sir John Beaumont, C.J., sitting along though felt bound by the Division Bench ruling made it clear that he was not prepared to extend the rule of that decision beyond its own facts and that the view was open to challenge. As stated earlier the question before us is not which view-the orthodox or the conservative as we may call one and the progressive the other - is acceptable to us now, but whether the guardian acted bonafide in accepting a compromise on the terms referred to in the opening paragraph of the former decision in the appeal quoted earlier. Even in this case after full arguments the learned trial judge took the view that Chattamuthu was incompetent to make the gift evidenced by Ext. A and he relied on the statement of the law in Mulla's Hindu Law (1940 Edn.) If the former suit had proceeded to judgment on the merits there is no knowing that view the Court had would have taken regarding the competency of Chattamuthu to execute Ext. A and he relied on the statement of the law in Mulla's Hindu Law (1940 Edn.) If the former suit had proceeded to judgment on the merits there is no knowing that view the Court had would have taken regarding the competency of Chattamuthu to execute Ext. A and regard being had to the state of the law the bearing on the subject we are unable to hold that the guardian acted improvidently in accepting the compromise. A guardian cannot be charged with gross negligence in that he did not foresee that the law would change Annapurnayya v. Venkatasubramaniam A.I.R. 1925 Mad. 1285. Even today it would seem to be an open question what view a Court would take regarding the powers of disposal of a woman in the circumstances Chattamuthu was when she disposed of the property she acquired with her own exertions. After quoting the statement of the law on the subject in Mulla's Hindu Law in A.I.R. 1943 Bom. 224 Sir John Beaumont went on to explain that the word 'covertrue' under English law is synonymous with marriage and a woman under covertrue is simply a married woman. It is clear the learned chief justice was demurring to the view expressed in A.I.R. 1925 Bom. 445 that a Hindu wife, who lived separately from her husband nearly thirty or forty years, can dispose of at her will nonsoudayika stridhanom. It is significant that no edition of Mulla's Hindu Law has chosen to refer to that case in discussing this question though the case in A.I.R. 1943 Bom.224 is cited with approval. The guardian was the minor's own brother whom the donor herself had appointed as such by her gift deed and it is difficult to find any conceivable motive for him to give up valuable rights of the minor brother entrusted to his charge. Besides the court had duly appointed him as guardian ad litem. The written statement he filed shows that proper defences were raised and the evidence is also to the effect that a leading lawyer was engaged to defend the suit on behalf of the minor. The necessary formalities to obtain the Court's sanction were all gone through and to repeat what we have already said, in the circumstances of the case we are unable to find any justification to hold that the compromise decree is not valid and binding on the plaintiff. The necessary formalities to obtain the Court's sanction were all gone through and to repeat what we have already said, in the circumstances of the case we are unable to find any justification to hold that the compromise decree is not valid and binding on the plaintiff. Here it is instructive to quote a passage from the decision in 14 Moors Indian Appeals 393 already referred to. In that case Sir Robert Collier said: "It is undoubtedly the duty of guardians scrupulously to regard the interest of Minors in dealing with their estates, and the Court will, when necessary, enforce the performance of this duty. But the interests of infants would seriously suffer if a notion were to prevail, that Guardians were bound for their own security to contest all claims against an infant's estate, whether well or ill-founded; and such a notion might prevail if the compromise of a claim of debt confirmed by a decree of a Court were to be set aside after sixteen years without distinct proof of fraud." 6. On the finding we have recorded above the foundation on which the plaintiff sought to build up his case disappears. A word must be said about the value of the properties. The gift deed mentions that the value of the properties given thereunder is Rs. 1850. The immovable property comprised in the gift deed is an otti right for Rs. 1500. The evidence is that it used to fetch an annual profit of twelve kottas of paddy. The movables which are valued at Rs. 350 consisted of a chitty right, certain items of furniture and some household utensils. It was said that the amount of Rs. 650 promised to be paid as consideration for the compromise was too low. But in considering that question we cannot ignore what we have said in the preceeding paragraph regarding Chattamuthu's competency to make the gift at all and regard being had to that we cannot reasonably hold that the compromise really involved a sacrifice of the minor's interests. The guardian would seem to have acted on the principle that discretion is the better part of the valour and it was prudent to accept a settlement rather than take the chance of losing the whole. 7. The guardian would seem to have acted on the principle that discretion is the better part of the valour and it was prudent to accept a settlement rather than take the chance of losing the whole. 7. Mention was made earlier that there was some criticism at the Bar regarding the order the Court passed in sanctioning the compromise of O.S. 30 of 1107. No doubt the order consists only of the word "allowed", but as pointed out by the Court below the guardian had in his affidavit accompanying the application for leave to enter into the compromise brought it to the notice of the Court that the compromise was beneficial to the minor and the Court had after taking time to consider it passed the order allowing it. The terms of the compromise show that they were settled after much discussion and mature deliberation. In the circumstances we are unable to hold that there is any defect or irregularity with reference to the sanction accorded to effect the compromise. The learned Counsel for the respondent invited our attention to the decision reported in Barodaprosad v. Sahanlall A.I.R. 1937 Cal. 658. The effect of the relevant rulings bearing on the point is summarised in that case by Edgley, J. in the following terms: "The principles which have been laid down in the cases cited above seem therefore to be that it is the duty of the Court to see that the interests of minors are adequately protected, that when a compromise is effected to which a minor is a party, it is of considerable importance that the conscience of the Court should be satisfied that the compromise is really in the interest of the minor and that, in ordinary circumstances, when the Court records an order to the effect that a compromise has been allowed, it may be assumed, unless there are clear indications to the contrary, that the Court has exercised its judicial discretion dealing with the matter. In cases, however in which the circumstances are peculiar or suspicious, as they appear to have been in the case with reference to which the present appeal arises, it is clear that a heavy duty lies upon the Court to scrutinize with care the terms of the proposed compromise and the circumstances connected therewith, in order that the conscience of the Court may be satisfied on the point that the compromise is really for the minor's benefit". 8. In this case we are unable to find any suspicious circumstances nor are we of the opinion that the compromise was not reasonable under the circumstances of the case. We would however consider it apposite to refer to a recent Allahabad decision dealing with the duties and powers of the Court granting leave to the guardian or the next friend of a minor to enter into a compromise of a suit before it. The case is reported in Chittan Singh v. Sahib Dayal and Sukhraji (1950) 48 All. Law Journal p. 673. The conclusions Malik, C.J. arrived at (Wanchoo, J. concurring) are correctly set out in the head-note to the decision and for our present purpose it would suffice to quote it. "It is no doubt desirable that an order under 0.32, R.7, Civil Procedure Code should be passed by the courts after carefully considering the facts and the interest of the minor, and the order, as far as possible, should show that the court had applied its mind to the question whether the compromise was or was not for the benefit of the minor. But it cannot be laid down that where all these facts are not mentioned in the order, the order itself must be deemed to have been vitiated." "Where the guardian of a minor applied under 0.22, R.7 C.P.C. setting out the facts and the grounds on which he sought the permission of the court for entering into a compromise as it was for the benefit of the minor, and the court merely passed an order "Allowed", and a compromise was entered into and a decree passed in terms of it but no evidence was produced before the lower court that the application was not given a judicial consideration and the court passed the order without looking into the facts of the case, held that the decision of the lower court was right". 9. 9. We have practically concluded our discussion of the main points raised in the appeal, but if we are to leave it there that would cause considerable hardship to the plaintiff. Unless relief is given in this suit itself to realise the amounts due under the compromise he will be without any remedy to enforce it. The defendant had no doubt a case that the whole or a considerable portion of the amount due thereunder was paid to the plaintiff or to his erstwhile guardian. But there is no proof whatever for it in the case. The memorandum of appeal takes a ground that in case the Court cannot find its way to allow the appeal and grant the plaintiff a decree on the terms of his plaint annulling the compromise and allowing him to take possession of the properties together with mesne profits he may at least be granted a decree for the amount agreed upon under the terms of the compromise and that made a charge in the plaint property. The defendant's Counsel did not seriously oppose relief being granted on those lines. Nor had he in fact anything to say against our adopting such a course. We would, therefore, while negativing the main relief claimed in the appeal grant a decree for Rs. 650 together with interest at 9 per cent per annum (the rate provided by the compromise) charging the plaint A schedule property. From the date of the compromise decree (1.4.1109) till the date of the present suit (25.4.1116) the amount shall carry interest at the above rate and from the latter date till this day the principal sum shall bear the same rate of interest. The aggregate sum shall bear future interest at the same rate till date of payment subject to the limitation imposed by S.31(3) Civil Procedure Code (Travancore). 10. In the result the appeal is allowed to the extent indicated above. In the circumstances of the case we direct the parties to suffer their costs throughout. The plaintiff will pay the State the court-fee due on the plaint he filed in the Court below. Decree modified.