Ashburner and Co. vs Anant Das

Turner, Spankie and Oldfield, JJ.—Section. 28, Act IX of 1872, declares that every agreement by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract by the usual legal proceedings in the ordinary tribunals is void to that extent. These provisions appear to embody a general rule recognised in the English Courts which prohibits all agreements purporting to oust the jurisdiction of the Courts; but notwithstanding this rule it was long since determined that, if a person after mature deliberation enters into an agreement for the purpose of compromising a claim bond fide made to which he believes himself to be liable, and with the nature and extent of which he is fully acquainted, the compromise of such a claim is a sufficient consideration for the agreement, and the agreement is valid. This principle has been recognised in the Indian law in the provisions of the Procedure Code, which enable the parties to a suit to go before the Court and obtain a decree in the terms of a compromise. Furthermore, that the parties to a suit may before a decision is passed in the Court of first instance agree to abide by the decision of that Court and forego their right of appeal is shown by the decision of the Privy Council in Munshi Amir Ali v. Maharani Inderjit Koer 9 B.L.R. 460. That ease was, it is true, decided before the Indian Contract Act was passed, but if, as we are of opinion, the provisions on which the appellant relies only declare what was before a recognised rule of law, it is an authority, in favour of the conclusion at which we have arrived, that those provisions are not applicable to the circumstances of the present case. By the agreement not to appeal, for which the indulgence granted by the respondents was a good consideration, the appellant did not restrict himself absolutely from enforcing a right under or in respect of any contract. He forewent his right to question in appeal the decision which had been passed by an ordinary tribunal. Such an agreement is, in our judgment, prohibited neither by the language nor the spirit of the Contract Act, and an appellate Court is bound by the rules of justice, equity, and good conscience to give effect to it and to refuse to allow the party bound by it to proceed with an appeal.