Supreme Court: In an appeal filed against the judgement and decree dated 08-03-1946 passed by Allahabad High Court (‘the High Court’), the three-judges bench of B.K. Mukherjea, Vivian Bose and N.H. Bhagwati*, JJ., opined that in the present case, clause 6 of the deed of waqf (‘compromise deed’) provided that the cases under Section 145 of the Criminal Procedure Code, 1973 (‘CrPC’) and Section 395 of the Penal Code, 1860 (‘IPC’) pending in the criminal court, should be made to struck off. However, that would not necessarily render the compromise unlawful as per Section 23 of the Contract Act, 1872 (‘ICA’). The Supreme Court opined that the real question in a case of this kind was whether the consideration of a contract was unlawful.
The Supreme Court opined that in the present case, it would not have mattered what the parties agreed about these proceedings because they could not have been proceeded with in the face of the agreement. The object of the agreement was not to drop the criminal proceedings but to settle the outstanding disputes about title and ownership. Therefore, the Supreme Court opined that the conclusion reached by the majority Judges of the High Court was correct and the compromise was valid and binding on Kausilla Devi. Accordingly, the Supreme Court dismissed the present appeal.
Background
Benarsi Prasad died in 1930 leaving him surviving his widow, Kausilla Devi, his son, Brij Bhukan and a widow of his predeceased son. Brij Bhukan died in January 1931 leaving him surviving his two widows, Ram Sumirni and Ganga Devi. Benarsi Prasad and his son Brij Bhukan were interested in a grove, Kausilla Devi was also desirous of acquiring that grove. In 1936 the said grove was for sale and Goswami Bal Krishna, who was the spiritual preceptor of Ganga Devi ostensibly purchased the grove for a consideration of Rs. 10,000. Out of the cash consideration of Rs. 9000 a sum of Rs. 4000 was paid by Kausilla Devi while the balance of Rs. 5000 was borrowed by Goswami Bal Krishna on a simple mortgage of the grove. Both the conveyance and the deed of simple mortgage were registered, and the grove was acquired in the name of Goswami Bal Krishna.
In March/April 1940 disputes arose between Kausilla Devi and Goswami Bal Krishna about the cutting of trees in the grove and Kausilla Devi gave a licence to gather fruits from the grove to Ruder while a similar licence was granted by Goswami Bal Krishna to Nabi Baksh. Nabi Baksh was obstructed by Ruder in gathering the fruit of the grove and Goswami Bal Krishna filed an application under Section 145 of the CrPC against Kausilla Devi. Nabi Baksh also filed a complaint against Goswami Bal Krishna charging him with offence under Sections 417/420 of the IPC.
While these proceedings were ongoing, a settlement of the disputes between Kausilla Devi and Goswami Bal Krishna was arrived. The terms of this settlement were embodied in a compromise deed, whereby both the parties created a waqf of the grove in favour of Shri Thakurji Radha Krishnaji Maharaj. It was specifically provided that the disputes related to cases triable by a civil court were settled by means of a compromise. After the execution of the deed of waqf, the application under Section 145 of the CrPC and the complaint under Section 395 of IPC were dismissed on 23-7-1940.
On 24-9-1940 Kausilla Devi filed the suit in the Trial Court against Goswami Bal Krishna for possession of the grove on a declaration that the compromise deed was unlawful. The Trial Court held that the grove was purchased benami and that the compromise was arrived at by Kausilla Devi with a view to avoid criminal prosecution and was liable to be set aside. It was also held that there was no deity of Shri Thakurji Radha Krishnaji as alleged in the compromise, and the dedication was unenforceable at law. Therefore, the compromise was not binding on Kausilla Devi.
Subsequently, an appeal was filed in the High Court by respondents, whereby it was held that Kausilla Devi had not become the proprietor or owner of the property in dispute, that the compromise was binding upon her and that even if the idol did not exist the endowment in favour of the deity would not be invalid. Kausilla Devi had died during the pendency of the appeal and the present appellants filed an appeal before the Supreme Court as her legal representatives.
Analysis, Law, and Decision
The Supreme Court opined that in the present case, clause 6 of the deed of waqf provided that the cases under Section 145 of the CrPC and Section 395 of the IPC pending in the criminal court, should be made to struck off. However, that would not necessarily render the compromise unlawful as per Section 23 of the ICA. The Supreme Court opined that as observed in Kamini Kumar Basu v. Birendra Nath Bose 1930 SCC OnLine PC 1 and Bhowanipur Banking Corpn v. Durgesh Nandini Dasi, 1941 SCC OnLine PC 19 the real question in a case of this kind was whether the consideration of a contract was unlawful.
The Supreme Court observed that long before the date of the compromise, disputes had arisen between Kausilla Devi and Goswami Bal Krishna. The object of the compromise was clearly not the stifling of the prosecution but the settlement of the civil dispute between the parties regarding their respective rights to the grove. The withdrawal of the prosecutions followed as a necessary corollary once the disputes were settled.
Further the Supreme Court opined that the question was whether the consideration was the real foundation for the execution of the deed. The test for this was would this compromise had been entered into even if the parties had not agreed to drop the criminal proceedings. Every term in an agreement was not fundamental in the sense that it would afford the other side a right of rescission if it were broken. The Supreme Court opined that in the present case, it would not have mattered what the parties agreed about these proceedings because they could not have been proceeded with in the face of the agreement. The object of the agreement was not to drop the criminal proceedings but to settle the outstanding disputes about title and ownership. Both the contesting parties gave up their rival claims to the grove and Shri Thakurji Radha Krishnaji Maharaj became the owner of the grove. Therefore, it was clearly provided in Clause 9 of the deed of waqf that thereafter there was nothing in dispute or claim in respect of any other proprietary title to the grove and both the parties relinquished whatever right, title and interest they claimed till then in the grove.
The Supreme Court opined that so far as the Section 145 of CrPC proceedings were concerned, there never was any question of the prosecution and once the parties had settled their disputes, the whole foundation of the proceedings fell to the ground. Regarding the complaint under Section 395 of IPC, the essence of the complaint was that Kausilla Devi’s licensee and her men had wrongfully entered the grove and had wrongfully removed fruit which Goswami Bal Krishna said belonged to him. However, the whole foundation of these proceedings depended upon whether Kausilla Devi had authority to grant the licence. If she had, the men were lawfully on the premises and no question of an offence under Section 395 of IPC could arise. If the main object of their compromise was to settle that dispute, then the dropping of the proceedings did not form an essential part of the consideration, for that would have followed in any event the moment the dispute regarding the title was settled.
The Supreme Court opined that this was clearly a case of Kausilla Devi and Goswami Bal Krishna entering a valid compromise regarding their rival claims to the grove. Kausilla Devi had herself contributed out of her own monies and those of Ganga Devi for the purchase of the grove. Goswami Bal Krishna also had executed a simple mortgage of the grove making him personally liable for the deficit. It was under these circumstances that both the parties arrived at a settlement of their rival claims to the grove and agreed to dedicate the grove to Shri Thakurji Radha Krishnaji Maharaj. This settlement had nothing to do with the criminal proceedings and they were not utilised by Goswami Bal Krishna as a lever for bringing about the settlement. The Supreme Court opined that non-prosecution for the complaint under Section 395 of the IPC was not the consideration for the execution of the deed of waqf and the compromise could not be said to be void under Section 23 of the ICA.
Therefore, the Supreme Court opined that the conclusion reached by the majority Judges of the High Court was correct and the compromise was valid and binding on Kausilla Devi. Accordingly, the Supreme Court dismissed the present appeal.
[B. Ram Gopal v. Jagdish, (1953) 1 SCC 249, decided on 12-02-1953]
Note: Unlawful consideration
Section 23 of the Contract Act, 1872 specifically addresses unlawful agreements. As per the provision, a consideration or object of an agreement is deemed lawful unless- i.) it is forbidden by law; ii) if it would contradict any existing law; iii) be fraudulent; iv) cause harm to another person or their property; v) be considered immoral or against public policy.
*Judgment authored by- Justice N.H. Bhagwati
Advocates who appeared in this case :
For the Appellants: Rang Behari Lal, Senior Advocate (Sudarshan Kaul, Advocate);
For the Respondents: Tarachand Brij Mohan Lal and B.C. Misra, Advocates; Gopi Nath Kunzru, Senior Advocate (B.C. Misra, Advocate with him).
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