Rameshar Mistri vs Babulal Pandit

Sinha, J.—This is a second appeal on behalf of defendant 2 from the decision of the learned Subordinate Judge of Bhagalpur modifying that of the Munsif of Madhipura in a suit for recovery of Rs. 215 principal with interest. The plaintiff alleged that defendant 1 who is the father of defendants 2 and 3 had incurred an oral debt to the plaintiff promising to pay interest at one per cent, per mensem. The defendants filed a written statement denying the transaction altogether and also adding that there was no necessity for incurring the loan and that there was no benefit to the joint family from the alleged loan. During the pendency of the suit, defendant 2 appellant along with the plaintiff are said to have filed a joint petition of compromise to the effect that defendant 2 bound himself to pay Rs. 200 in all in full discharge of the plaintiff''s claim. This compromise petition was subsequently challenged by defendant 2 as spurious and fraudulent. The learned Munsif instead of holding a preliminary enquiry decided the whole suit on evidence holding that the transaction alleged by the plaintiff was not true, that is to say, that there was no borrowing by defendant 1. In that view of the matter, the trial Court dismissed the suit with costs. On appeal by the plaintiff the lower appellate Court came to the conclusion that the compromise petition had as a matter of fact been filed by the plaintiff along with defendant 2, that is to say, the Court found that there was no fraud on the Court.

As to whether there was a fraud upon defendant 2 himself, the Court held that this was question beyond the scope of the suit and that if and when a suit is brought to set aside the compromise that question may have to be decided. Taking the view that the compromise had been entered into by defendant 2 the Court passed a decree on the basis of the compromise against defendant 2, but the suit as against the other defendants was dismissed. Hence this second appeal by defendant 2.

Counsel for the respondent plaintiff has taken the preliminary objection that no second appeal lies as the suit was one of the nature of Small Cause Court and the valuation being less than Rs. 500 u/s 102, Civil P.C., no second appeal is maintainable. Counsel for the appellant has conceded that no second appeal lies, but he has contended that the lower appellate Court has exercised its jurisdiction with material irregularity in allowing the compromise to be recorded and in passing a decree on the basis thereof. His contention is that on the lower appellate Court''s finding that there was no transaction of lending between the plaintiff and defendant 1 the suit was a false one and that therefore such a suit could not have been compromised between the plaintiff and defendant 1. It is contended that the compromise alleged to have been arrived at between defendant 2 and the plaintiff is an unlawful compromise inasmuch as there was no consideration for the same. In my opinion, there is no substance in this contention. When the matter was compromised the suit was pending and the compromise by a litigant irrespective of the rights and wrongs of the parties is a good consideration for the compromise. It was next contended that such a compromise should not have been recorded inasmuch as it works injustice against defendant 2. Reliance is placed upon the observations of their Lordships of the Judicial Committee in AIR 1930 158 (Privy Council) which run as follows:

The words of the rule do not in terms appear to confer a discretion on the Court, but their Lordships desire to say nothing to prejudge the contention that the Courts retain an inherent power not to allow their proceedings to be used to work a substantial injustice, such as emerged in Neale v. Gordon Lennox (1902) 1902 A.C. 465.

In the case before their Lordships as also in the one before the House of Lords the compromise had been entered into on behalf of Counsel for the parties and not by the parties themselves. Hence the observations made either by their Lordships of the Judicial Committee of the Privy Council or by their Lordships of the House of Lords Neale v. Gordon Lennox (1902) 1902 A.C. 465 do not apply to a case like the present where the compromise was entered into by the litigant himself. On the findings of the learned Subordinate Judge his allegation that he was duped by intoxication by the plaintiff into entering into that compromise has not been accepted, the finding being that defendant 2 entered into the compromise with his eyes open, and he is bound by that compromise. It may be that he was very foolish in entering into that compromise, but the Courts do not exist to help foolish people out of their acts of foolishness.

It may be that the suit was based on a false claim, but compromises are effected irrespective of the merits of the claim of either side. In a case like this the Court may be inclined to sympathise with a person in the position of defendant 2 appellant in this Court, but the law will take its course.

In that view of the matter, in my opinion, there is no reason for interference even treating this appeal as an application in revision.

The appeal is accordingly dismissed, but in the circumstances without costs.