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Gangadhar Balkrishna Vs. Dattatraya Baliram - Court Judgment

LegalCrystal Citation
SubjectCivil;Limitation
CourtMumbai High Court
Decided On
Case NumberSecond Appeal No. 461 of 1949
Judge
Reported inAIR1953Bom424; (1953)55BOMLR433; ILR1953Bom1055
ActsCode of Civil Procedure (CPC), 1908 - Sections 462 - Order 32, Rule 7, 7(1) and 7(2); Limitation Act, 1908 - Schedule - Article 44; Transfer of Property Act, 1882 - Sections 60
AppellantGangadhar Balkrishna
RespondentDattatraya Baliram
Appellant AdvocateR.B. Kotwal, Adv.
Respondent AdvocateK.V. Joshi, Adv.
Excerpt:
.....guardian--decree in favour of mortgagee--compromise by mortgagee and guardian pending execution--suit by minor, to set aside compromise, filed three years after attaining majority--whether compromise void or void able--suit whether barred.;an agreement entered into without complying with the provisions of order xxxii, rule 7, of the civil procedure code, 1908, is riot void but is void able at the option of the minor.;the mortgagee sued the minor plaintiff by his guardian on his mortgage which was executed by the plaintiff's father. the plaintiff's mother was appointed as his guardian in the suit. a decree was passed in favour of the mortgagee, who took out execution of the dscroe. pending these dark hast proceedings the plaintiff's mother in 1932 entered into a compromise with the..........held that order 33, rule 7, was applicable to the agreement entered into by the minor's guardian, their lordships proceeded to consider the effect of the failure of the guardian to obtain the sanction of the court, before he agreed to refer the dispute to arbitration, sir john beaumont in his judgment emphasised the fact that the policy of order 32, rule 7, seems to be to protect the interest of the-minor against possible mischief and he observed that (p. 74):'....the interests of minors might well be sacrificed by an improper reference to arbitration and it is necessary that their interest be protected-by the court.' then he added (p. 74):'... .if minors successfully challenge an agreement to refer as not made in compliance with sub-section (1) of rule 7, it is.....
Judgment:

Gajendragadkar, J.

1. The principal question which, arises in this appeal is whether art-agreement entered into by the next friend or guardian of a minor without the sanction of the Court is entirely void or is voidable at the option of the minor. A subsidiary question of limitation also arises, but its decision will depend upon the answer that is given to the first question. Both the Courts below have found that the agreement entered into by the guardian of the plaintiff was void and so his suit was within time. When this matter was argued before Dixit J., he was apparently disposed to take the view that the agreement in question was voidable and the present suit was barred; but he was requested to refer this matter to a Division Bench because there were conflicting judgments on this point. That is why this case has been referred to a Division Bench and has come before us for final disposal.

2. The facts leading to the present litigation are few and there is really no dispute about it. The property in suit is a field bearing survey No. 254 situate at Songir. The plaintiff's father executed a mortgage in respect of this property in favour of the defendant on 27-4-1920, for Rs. 400. Subsequently, the plainitiff's father died and the mortgagee sued the plaintiff by his guardian in 1929 (Civil Suit No. 350 of 1929). The plaintiff's mother was appointed as the guardian of the plaintifi. A decree was passed in favour of the mortgagee for Rs. 200 and costs. The mortgagee took out execution of this decree and filed darkhast No. 137 of 1932. He sought ta recover the decretal amount by sale of the mortagaged properties. The mortgaged property was valued and the panchas put the value at Rs. 700. Pending these darkhast proceedings, the mother of the plaintiff entered into a compromise with the mortgagee as a result of which the mortgaged property was sold to the defendant for Rs. 1000 in full satisfaction of his decretal claim. As a resuit, the decree was entire-Jy satisfied and the darkhast was accordingly disposed of. The mortgagee entered into possession of this property and has been in such possession ever since. The plaintiff became a major in 1941, and on 15-1-1946, he brought the present suit for accounts of the mortgage and for redemption. In respect of the sale executed by his mother in far vour of the mortgagee, the plaintiff's case was that the agreement of compromise and the resulting sale effected by his mother who had been appointed as his guardian in suit No. 350 of 1929 were void, since the sanction of the Court had not been obtained for the agreement, between the guardian and the mortgagee as required by Order 32. Rule 7, Civil P. C. The Courts below have held that the failure to comply with the requirements of Order 32, Rule 7, made the agreement void and so they have granted the plaintiff's claim for redemption and have held that his suit for redemption is within time. If the transaction of sale between the plaintiff's mother and the defendant is void, there is no doubt that his suit is within time. If, however, it is voidable, the question of limitation will have to be decided, because it has been argued before us that even if the transaction is voidable, the present suit should be held to be within time. That is how the principal question which we have to decide is as to the effect of the provisions of Order 33, Rule 7, on the agreement entered into by the plaintiff's mother with the defendant in 1932.

3. Rule 7 of Order 32 provides that 'No next friend or guardian for the suit shall, without the leave of the Court, expressly recorded in the proceedings, enter into an agreement or compromise on behalf of a minor with reference to the suit in which he acts as next friend or guardian.''

It is common ground that the plaintiff's mother was appointed as the guardian for the p:aintiff in the suit which the mortgagee had filed against him in 1929; and it is not disputed that before the plaintiff's mother entered into a compromise with the mortgagee by which the mortgaged property was sold in full satisfaction of the decretal amount, the previous sanction of the Court had not been obtained. Therefore, it is clear that the requirements of Sub-rule 1 of Rule 7 of Order 32 have not been complied with. Sub-rule 2 of Rule 7 of Order 32 cea's with cases where the requirements of Sub-rule 1 have not been complied with. It provides that an agreement which has been entered into by the guardian of a minor without complying with the requirements of Sub-rule 1 shall be voidable against all parties other than the minor, and it is these words which we have to construe in the present appeal.

4. Apart from authorities, as the words stand they do not present any difficulty. They clearly indicite that an agreement which has teen made without' complying with the requirements of Sub-rule 1 would be binding against all the parties except the minor. The minor is not bound by such an agreement and he can avoid it. But the other parties to the agreement cannot purport to avoid it on the ground that the agreement affected the interests of the minor as the sanction required by Sub-rule 1 of Rule 7 of Order 32 for the protection of the minor's Interests had not been obtained. It seems to us clear that the effect of the provisions of Rule 7 is to make the impugned agreement voidable at the option of the minor. Such an agreement is not void altogether because if it is held to be void, it would be a nullity and it would not bind lany parties to the agreement. That clearly does not appear to be the effect of the words used in Sub-rule 2 of Rule 7. Therefore, in our opinion, reading Rule 7 of Order 32 by itself, the position seems to be that the agreement which offends against the requirements of Sub-rule 1 can be avoided by the minor and if it is so avoided, the parties would naturally be restored to the position which they occupied before the agreement was made. But if the minor docs not avoid the agreement, the other parties are bound by the agreement, and it would be fully effective against them. As I have already mentioned, Dixit J, was himself inclined to take the same view; hut he felt that there was a conflict of judicial decisions on this point and so we-must proceed to examine these decisions.

5. The decision of the Privy Council in --'Chhabba Lal v. Kallu Lal' must be considered first. In this case, their Lordships of the Privy Council were dealing with an award which had been made on a reference to-which a minor was a party; and it appeared that in agreeing to the reference, the guardian of the minor had not obtained the sanction of the Court under Order 32, Rule 7. When the arbitrator made his award and the report was received by the Court, the minor sought to challenge the award on the ground that his guardian had not obtained the-sanction of the Court in submitting to the reference and so neither the reference nor the award following it bound his interest. Two questions therefore, fell to be considered in this case. The first was whether the provisions of Order 32, Rule 7, applied to an agreement to refer the disputes pending between the parties in a suit- to arbitration and their Lordships of the Privy Council held that such an agreement fell within the scope of Order 32, Rule 7. Sir John Beaumont who delivered the judgment of the Board expressed the conclusion of the Board on this point by saying that (p. 74) :

'....Their Lordships agree with the view of the High Court, following on this point, a ruling of a full bench of the Allahabad Higli Court --'Mariam Bibi v. Amina Bibi'. AIR 937 All 65 (B) disagreeing with certain other Indian rulings that Order 32, Rule 7, applies to an agreement to refer matters in dispute to arbitration.'

Having held that Order 33, Rule 7, was applicable to the agreement entered into by the minor's guardian, their Lordships proceeded to consider the effect of the failure of the guardian to obtain the sanction of the Court, before he agreed to refer the dispute to arbitration, sir John Beaumont in his judgment emphasised the fact that the policy of Order 32, Rule 7, seems to be to protect the interest of the-minor against possible mischief and he observed that (p. 74):

'....The interests of minors might well be sacrificed by an improper reference to arbitration and it is necessary that their interest be protected-by the Court.'

Then he added (p. 74):

'... .If minors successfully challenge an agreement to refer as not made in compliance with Sub-section (1) of Rule 7, it is avoided against all parries under Sub-section (2).'

Then the learned Judge proceeded to consider the second question as to whether it was open to the minor to raise an objection against the award at the stage that he did, and having answered this point in favour of the minor, the learned Judge concluded by saying that (p. 74):

'If there is no valid reference, the purported award is a nullity, and can be challenged in any appropriate proceeding.'

It is this last statement on which considerable reliance is placed by Mr. Joshi in support of his argument that the Privy Council have held that non-compliance with Sub-rule 1 of Rule 7 of Order 32 makes the agreement with which we are concerned void. We are not prepared to accept this contention. It would be noticed that in dealing with the objections of the minors, the learned Judge has expressly pointed out that it is only if and when the minors successfully challenge an agreement to refer as not complying with, Sub-rule (1) of Rule 7 that it can be avoided against all the parties under Sub-rule (2). In other words, it seems to follow even from this judgment that if the minors had not avoided the agreement, the agreement would have bound all the other parties even, the minors. It is only where the minors succeed in setting aside the said agreement that the parties are restored to their original position before the agreement was made and it is only at that stage and in that sense the agreement is ultimately avoided against, all the parties. Therefore, in our opinion, it would not be correct to read this decision as supporting the view that failure to comply with the requirements of Sub-rule (1) of Rule 7 makes the offending agreement of compromise totally void.

6. The next case to which reference may be made is a judgment of Rachhpal Singh J. in --Mahatab Singh v. Durga Narain Singh' : AIR1936All811 . Mr. Joshi has strongly relied upon certain observations in this judgment and it must be conceded that these observations are very much in favour of Mr. Joshi's contentions. Dealing with the compromise entered into by a minor's guardian without obtaining the sanction of the Court, the learned Judge has no doubt observed in the earlier part of his judgment that such a compromise is not only voidable but, is void altogether. He read the provisions of Order 33, Rule 7, Sub-rule 2 as meaning (p. 814):

'....that a compromise made in total disregard of the provisions of Rule 7, Order 32, is voidable against all parties who arc majors and not void, but it does not bind the minor in any manner. As it is not binding on the minor, it is void against him.'

But, in the subsequent portion of his judgment, the learned Judge has added that (p. 816):

'....If a minor after attaining majority does not get the agreement set aside within three years of the date of his attaining majority, the compromise decree may be held to be binding upon him, but so long as that stage has not arrived, it is always open to him to plead in defence that it is not binding whenever an attempt is made in any subsequent suit to enforce the terms of the compromise decree.'

With respect, we find it difficult to reconcile this statement of law with the earlier observation made by the learned Judge that a compromise which offends against the provisions of Sub-rule 1 of Rule 7 of Order 32 is void against the minor. If it is void, it is unnecessary for the minor to avoid it, end his failure to avoid it within three years after attaining majority cannot make it binding against him. Further, on the facts with which the learned Judge was dealing, it appears that the minor was avoiding the contract by his defence within three years of his attaining majority and the judgment proceeded more on the consideration of the question as to whether it. was necessary for the minor to bring a suit, to avoid the compromise or whether he could do it by a written statement and the learned Judge took the view that the minor could either bring a suit or he may even plead the voidable character of the contract by a written statement, subject of course to the overriding consideration that the plea is taken in a written statement within three years after he attains majority. Therefore, in our opinion, with respect, not much importance can be attached to the am part of the judgment in which the learned Judge has categorically stated that an agreement which offends against Sub-rule 1 of Rule 7 of Order 32 is altogether void and not voidable.

7. The decision of the Privy Council In -- ramanian Chettiar v. Raja Rajeswara Dorai', AIR 1915 PC 33 (D) has also been relied upon by Mr. Joshi. In this particular case, the document impeached was found to be bad on other grounds. But incidentally the Privy Council observed that the said document would bo invalid on the additional ground that the compromise on which it was based did riot comply with the condition imposed by Section 462, Civil P. C. Old Section 462 was materially in the same terms as the provisions contained in the present Code under Order 32, Rule 7. Leave of the Court has not been obtained and in the absence of such leave the compromise, says the judgment, cannot be supported. Mr. Justice Ameer Ali added that the provisions contained in Section 482 of the Code were of great importance to protect the interests of the minor; and he referred with approval to the observations of Lord Macnaghten in -- 'Manohar Lai v. Jadu Nath Singh', 33 Ind App 128 (E), where it was observed that it is not sufficient that the terms of the compromise were before the Court (p. 131) :

'....There ought to be evidence that the attention of the Court was directly called to the fact that a minor was a party to the compromises, and it ought to be shown, by an order or petition, or in some way not open to doubt, that the leave of the Court was obtained.'

We may add that Sub-rule 1 of Rule 7 in the present Code requires that the leave of the Court must be expressly recorded in the proceedings so that it is no longer open to any party to suggest that such leave should be inferred from surrounding circumstances. Rule 7, Sub-rule 1, expressly requires that the Court must consider the interests of the minors in sanctioning a compromise entered into by the guardian and must expressly record its sanction in the proceedings themselves. But the judgment in -- 'Raja Rajeswara Dorai's case (D)' does not carry the point any further. It only emphasises the importance of complying with the provisions of Section 482 in order that the interests of the minors should be protected. The question as to whether failure to comply with these provisions makes the agreement void or not did not fall to be considered in this case. Therefore, in our opinion, these decisions on which reliance has been placed by Mr. Joshi do not support his contention that the agreement in suit was void altogether and need not have been avoided by the plaintiff. On the other hand, there are some decisions which seem to take the view that the agreement is merely voidable; and as we have already mentioned, the words used in Sub-rule 2 itself are unambiguous and clear.

8. In -- 'Virupakshappa v. Shidappa',' 26 Bom 109 (F), this Court held that

'The compromise of a suit on behalf of a minor without the leaves of the Court is voidable under Section 462 of the Civil Procedure Code and can be avoided by the minor on his attaining majority. It can be avoided before that time:'

To the same effect is another decision in -- 'Bhiwa v. Devchand', 35 Bom 322 (G). It must however be added that both these cases arise from a said filed by the minor plaintiff to avoid the transaction which offended against the provisions of Section 462 or Order 32, Rule 7, and so the question as to whether the transaction which offends against the said provisions is void or voidable did not strictly arise for decision. The suits themselves were based on the assumption, that the transactions were voidable and had to be avoided and in fact the plaintiffs in both the suits sought to avoid the same.

9. Mr. Kotwal has referred us to the observations made by Divatia J. in -- 'Chliotsahai v. Dadabhai', AIR 1935 Bom 54 (H) in regard to the effect of the provisions of Order 32, Rule 1. The learned Judge has observed that:

'In each particular case it must be seen from the application and order thereon, whether the Court intended to grant such leave, but if no such leave is given, the compromise or the withdrawal of the suit in virtue of a compromise is voidable at the instance of the minor by a suit to avoid it, with the result that if the decree or order of the Court disposing of the suit is set aside, the minor is restored to his original position in that suit'

In our opinion, therefore, the compromise entered into by the plaintiff's mother with the mortgagee contrary to the provisions of Order 32, Rule 7, Sub-rule 1, was not void but was voidable at the option of the minor, and so we must consider the question of limitation raised by the defendant in the present suit on this basis.

10. I may also refer here to a decision of a division bench of this Court to which my brother Vyas was a party, in which the question, as to the construction of Order 32, Rule 7, was incidentally considered. In -- 'Gangadhar Balkrishna v. Datta-traya Baliram', F. A. No. 28 of 1951, D/- 3-9-1952 (Bom) (I), it has been held that a partition effected by a compromise, but without the sanction of the Court when one of the parties to the partition is a, minor, is not void but is voidable only at the instance of the minor. It was also held that it could not be avoided by any person other than the minor himself.

11. The pica of limitation which has been raised by the defendant is based upon the provisions of Article 44, Limitation Act, Article 44 provides a period of throe years for a suit by a ward who has attained majority to set aside a transfer of property by his guardian, and column 3 lays down the starting point of limitation as the time when the ward attains majority. Mr. Kotwal's contention is that if the compromise made by the plaintiff's mother was voidable, it was necessary that he should have brought a suit, within three years after attaining majority; and since he has not done so, the said compromise and the sale that followed it have become binding against the plaintiff.

12. On the other hand, Mr. Joshi contends that in substance his present suit is one for redemption and his argument is that it is not necessary that ids client, should have brought a suit to set aside the agreement so long as the right to redeem was alive. In support of this argument, Mr. Joshi has relied upan a decision of the Privy Council in -- 'Bijoy Qopal v. Krishna Mahishi', 34 Cal 329 (J). In this case, the Court wAS dealing with the reversion in respect of an alienation by a Hindu widow. It was held that such an alienation is not absolutely void but is prima facie voidable at the election of the reversionary heir. Such a reversionary heir, observed Lord Davcy, may think fit to affirm it, or he may at his pleasure treat it as a nullity without the intervention of any. Court, and he shows his election to do the latter by commencing an action to recover possession of the property. In such a case, there is nothing for the Court either to set aside or cancel as a condition precedent to the right of action of the reversionary heir. Mr. Joshi contends that the position of his client is not different in law. There was a mortgage executed by his father. It was followed by a sale executed by his guardian which does not bind him and which it, is conceded could have been avoided by him and he seeks to avoid it by bringing the present suit, and the only relief which he claims is one of redomption and possession. Unfortunately for Mr. Joshi, however, this point cannot be entertained by us because it is covered by a decision of the Full Bench in -- 'Fakirappa Limanna v. Lumanna'. AIR 1920 Bom 1 (K). The decision of the Full Bench was that a Hindu minor on his attaining majority cannot due to recover possession of property transferred by his mother acting as his natural guardian during his minority without suing to set aside the transfer within the period of limitation provided by Article 44, Limitation Act. Mr. Joshi has asked us to consider the facts giving rise to this suit and his whole argument is that on the facts the case with which the Pull Bench was concerned is easily distinguishable. Now these facts were that a mortgage was created by N. After N's death, his widow as natural guardian of his minor son sold the equity of redemption to the mortgagee in 1891 without necessity. The son attained majority in 1895 and died in 1901 without challenging the transfer by his mother. He was survived by his widow who died in 1908 and in 1916 the reversioner had brought the suit. An argument was pressed before the Pull Bench that it was unnecessary for the son or his reversioner to bring a suit under Article 44 and that the narrower period prescribed by Article 44 should be applied only to a suit which is brought for the purpose of setting aside the alienation in question. This argument was repelled and it was held that ttie failure of the son to impeach the transfer by his guardian within three years on his attaining majority precluded the reversioner from obtaining possession of the property on the ground that the transfer by the mother was unauthorised. The argument that it is unnecessary to bring a suit under Article 44 could apply to a suit by a- reversioner, said the learned Chief Justice, impugning a transfer by a Hindu widow, for the widow represents her husband's estate and until her death there is no one who has a vested interest, nor is there an obligation on any one to take proceedings until the reversion falls in. But the natural guardian represents the minor's estate and has power to manage it for the benefit of the minor. In other words, what would be true about the reversioner's suit in which he seeks to challenge the alienation by a Hindu widow would not be true about, an alienation made by a minor's guardian because in the latter case it is obligatory upon the minor to challenge the alienation within the narrower period of limitation prescribed by Article 44, Limitation Act. It would thus be clear that this decision, directly helps to distinguish the observations made in -- 'Bijoy Gopal v. Krishna Mahishi' (J), on which Mr. Joshi relied. Therefore, in our opinion, it was necessary for the plaintiff to have sued within three years on his attaining majority to set aside the impugned compromise, Mr. Joshi says that his right to redeem and to obtain possession of tho property could not be said to be barred under Section 28. Limitation Act because the period for his instituting a suit for redemption and possession had not been determined at the date when he filed the present suit. But the bar which is pleaded against his present suit is. not that his right has not been extinguished by lapse of time, but that it has been extinguished by the sale of the equity of redemption which he can no longer challenge. It is true that the said sale was not binding on him as it was the result of a compromise which was voidable at his option; but if he did not avoid that compromise within the limitation prescribed by Article 44, the result Inexorably was that the compromise became binding and operative against him, and if the compromise must be deemed to be binding against him after the three years expired on his attaining majority, that creates a bar to the present suit for redemption. The equity has been sold and by the act of parties the right to redeem has been extinguished. Therefore, in our opinion, the Courts below were wrong lit decreeing the plaintiff's suit.

13. The result is the appeal succeeds and must be allowed and the decree passed by the Courts below must be set aside and the plaintiff's suit dismissed with costs throughout. Since we are dismissing the plaintiff's suit, the cross-objections also fail and must be dismissed with costs.

14. Appeal allowed.


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