1. We are obliged to the learned pleaders who have assisted the Court with their arguments.
2. This is a reference by the Subordinate Judge of Talegaon and arises in a suit brought by the assignee of a mortgage for the recovery of the mortgage-money due on a simple bond dated the 18th June 1897.
3. The defendant admitted the mortgage bond and the receipt of the consideration.
4. The plaintiff and the defendant entered into a compromise which is Exhibit 15, and which provides that the defendant should pay Rs. 100 as claimed and costs namely, Rs. 10 in Falgun of Shake 1831 and yearly Rs. 10 in each future Falgun and so on until the whole sum was paid off; if defendant should make default in payment of any two instalments, then it was provided that the plaintiff should realize the whole sum by sale of the entire mortgaged property through the Court.
5. The defendant admitted the assignment deed produced by the plaintiff. The parties prayed for a decree to be passed in terms of this compromise, and the defendant, on being examined by the Court and on the terms of the compromise being explained to him, agreed to be bound by it.
5. Thereupon the learned Subordinate Judge refers to us two questions, (1) Whether the aforesaid compromise is lawful although it provides that in default of the payment of two instalments the plaintiff should realize the whole balance due by sale of the entire mortgaged property, such provision being opposed to Section 15B, Clause (2) of the Dekkhan Agriculturists' Relief Act; and (2) Whether the Court was bound to pass a decree on a compromise of this character.
6. The Subordinate Judge thought that both questions should be answered in the negative, and we are of the same opinion.
7. A compromise is merely an agreement between the parties to settle an existing dispute, and if it is to be enforceable in law it must not contain a term opposed to public policy, see Lakshmanaswami Naidu v. Rangamma ILR (1902) Mad. 31. Here the term ' that in default of payment of two instalments the whole mortgaged property shall be liable to sale' is contrary to public policy, for the public policy upon this point is declared in Section 15B, (2), of the Act which enacts that in such circumstances not the whole mortgaged property but only such part of it as may be necessary for the realization of the over-due instalments shall be liable to sale.
8. We think, therefore, that it is not competent to the Court to pass a decree which would be in conflict with a clear provision of the Statute, and we are supported in this view by the decision in Rama walad Rama Dhere v. Ramchand valad Fulchand (1894) P.J. 456.
9. We are of opinion, moreover, that the mere fact, that the defendant though apprised of the terms of the compromise agreed to it, does not invest the Court with jurisdiction to pass a decree to carry out such a compromise. It must be observed that the only knowledge which appears to have been brought home to the defendant is a knowledge of the terms of the compromise, not a knowledge of his legal position under the specially favourable Dekkhan Agriculturists' Relief Act. That is important in connection with Section 12 of the Act which deals with admissions by the debtor, and requires the Court to be satisfied, before giving effect to such admissions, that they were made with the full knowledge of the debtor's legal rights as against the creditor. This section and Section 13 seem to us to indicate that the object of the Act was to place the defendant-agriculturist's interests rather in the hands of the Court for protection than to trust them to the hands of the defendant himself.
10. And Section 44 may be referred to for guidance as to the manner in which the Court receiving an agreement should scrutinize it. The section declares that before accepting such an agreement the Court must be of opinion that it is a legal and equitable 'agreement, a description which we think cannot be applied to compromise which is in direct variance with the provisions of Section 156, (2), of the Act.
11. The case of Piraji v. Ganapati : (1910)12BOMLR378 is not in point, for the compromise which was there allowed was not alleged to contain any term in conflict with the Statute.
12. For these reasons therefore we answer in the negative both the questions which have been referred to us.