1. The plaintiffs base their suit on the consent decree in suit No. 4403 of 1924.
2. The decree, after explaining the nature of the claim and reciting that a settlement of the suit beneficial to the minor concerned had been arrived at, removes certain trustees and appoints others; orders the retiringtrustee Karmally (the first defendant), to account; orders the receiver to hand over certain securities as directed and discharges him; provides that the new trustees do hold the trust estate, and that all allegations be withdrawn; and finally orders:
that the respective costs of all the parties to the suit including thecosts, charges and expenses incurred by the trustees, be paid out of estate...and that the costs of thefirst defendant be paid to his attorneys, Messrs. Rustomji and Ginwalla, when taxed and noted in the margin hereofliberty to apply is then reserved.
3. The suit is based on the penultimate part of the decree which I have quoted. The question I have to decide is shortly: Where a decree provides that the costs of one of the parties should be paid to the solicitors named in the decree, can the solicitors so named enforce the decree, notwithstanding the fact that they are not parties to the suit ?
4. This involves the consideration of whether the portion of the decree in favour of the plaintiffs is capable of being executed in accordance with the provisions relating to the execution of decrees in the Civil Procedure Code; secondly, whether the only proper person for executing the decree was the first defendant in suit No. 4403 of 1924 (who is now dead); thirdly, whether, if so, the solicitors may enforce the decree either in execution proceedings or by suit; and, fourthly, (as a portion of thislatter argument) whether, on general principles, a consent decree (such as this) ought to be construed as a contract and enforced on principles not differing from those governing the enforcing of contracts; and, consequently, whether a consent decree should be held to be unenforceable at the instance of a stranger to the decree, so that a person who was not a party to the suit should have no right to have any part of the consent decree executed on the same principle as a stranger to a contract is not as a general rule entitled to enforce the contract.
5. Assuming that the portion of the decree now in question is capable of being enforced, it was strenuously argued (with reference to the mode of enforcement) that it could not be enforced in accordance with the rules applicable to the execution of decrees. Under those rules, it was argued, a decree can be enforced only by a party to the suit in whose favour it is passed, and since the only party who could have had it enforced was the first defendant (who is now dead), it is now incapable of being executed at all. On behalf of the plaintiffs it was pressed that no party to a decree can enforce any part of a decree unless that part is in his favour : and that, therefore, the first defendant could not have enforced the part of the decree in question, because it was not in his favour.
6. These arguments are, in my opinion, unsound. When a party to a decree applies for execution, the authority charged with the execution of the decree need not, in my opinion, take upon itself to require that the applicant should satisfy it that the provision of the decree which he desires to enforce is a provision in his favour. The fact that he applies for execution ought certainly to be sufficient.
7. But I will assume that it is the function of the authority whose duty it is to execute the decree to satisfy itself that the provision of the decree which a party thereto is desirous of getting enforced is in fact in favour of the applicant for execution. Even so, it seems to me that this portion of thedecree, that the costs of the first defendant should be paid out of the estate and that they should be paid to Messrs. Rustomji &Ginwala;, was a provision in favour of the first defendant. This seems to follow when it is remembered that costs between party and party aregiven by law as an indemnity to a person entitled to them: Harold v. Smith(1860) 5 H. & N. 381
8. Therefore, in my opinion, the first defendant could in execution have got payment made to Messrs. Rustomji & Ginwala in accordance with the terms of the decree.
9. Mr. Vakeel for the defendants very strenuously and ably argued that on the construction of the decree the only person entitled to enforce it must be the first defendant; and that the provision that his solicitors' costs be paid to them must be interpreted as merely a provision in favour of the first defendant who alone was concerned with it. I shall at a later stage address myself to the construction of the decree. I may, however, state at once that from the fact that one person is entitled to enforce a decree it does not follow that no other person is similarly entitled.
10. Can the plaintiffs get the decree enforced If so, can they do so in the execution proceedings or by an independent suit ?
11. The question whether a person who is not a party to the suit, or to the decree, can apply for execution of the decree under Order XXI of the Civil Procedure Code, is not easy todecide.
12. The relevant portions of the Civil Procedure Code, so far as I have been able to discover them-some of them were cited to me by Mr. Vakeel-are Order XXI, Rules 10, 11 and 16, and Section 2, Clauses (2) and (3).
13. Rule 10 requires 'the holder of a decree,' if he 'desires to execute it,' to apply to the Court. Rule 11(1) allows an oral application by the ' decree holder' in the circumstances mentioned in the clause. Under Rule 11(2) written applications must be made in all other cases. They must be signed or verified by the 'applicant or other person acquainted with the facts of the case.' The context seems vaguely to indicate that the applicant mentioned in Rule 11(2) must be the decree holder. This indication, is somewhat strengthened by Rule 16 (though four rules intervene). Under Rule 16 the transferee of a decree may apply for execution, and his application is put On the same footing as an application by the ' decree holder,'
14. The terra ' decree holder ' is defined in Section 2(3). That definition read with the definition of a ' decree ' in Section 2(2) so far as the latter is relevant provides the following explanation of the term ' decreeholder' any person in whose favour an adjudication conclusively determining the rights of the parties with regard to the matters in controversy In the suit, or an order capable of execution, has been made.' Presumably, therefore, such ft person alone may be the applicant for the execution of a decree under OrderXXI, Rule 11(2). Though the decree-holder is particularized in Section 2(3) as 'a person' and not 'a party to the suit' either the adjudication in his favour must determine the rights of the parties (their duties or liabilites are not mentionedas being within the scope of a 'decree' or there must be an order in his favour ' capable of execution.'
15. It is difficult to bring the plaintiffs under the definition of a decree holder so derived, to consider the provision in the decree in their favour as such an adjudication, or to determine whether there is such an order. This is on the assumption that the rules and provisions I have considered are intended to be given a precise literal interpretation-an assumption which I do not imply is justified.
16. A reference to Order XLII, Rule 26, of the Rules of the Supreme Court in England, is instructive. That rule is as follows :-
Any person not being a party to a cause or matter, who obtains any order, or in whose favour any order is made, shall be entitled to enforce obedience to such order by the same process as if he were a party to such cause or matter; and any person not being a party to a cause or matter, against whomobedience to any judgment or order may be enforced, shall be liable to the same process for enforcing obdience to such judgment or order as if he were a party to such cause or matter.
17. Moreover, with reference to the words 'order capable of execution' in Section 2(3), an order for payment of costs may be enforced in England by execution under Rules of the Supreme Court, O, XLII, r. 17; Halsbury's Laws of England, 'Solicitors,' p. 814, paragraph 1338.
18. It is not easy to say whether the implications-they are no more in the Civil Procedure Code point in favour of or against a similar rule being adopted in India, I need not, however, press the matter further, .as an application wasmade by, the paintiffs under Order XXI, r. 22, which was dismissed with costs by Blackwell J. There is no judgment containing the grounds on which the plaintiffs' application was dismissed, But I am informed by the plaintiffs' counsel that they were referred to a suit, and that the-present suit is the result, This information is borne out by the fact stated to me that the notice was before the Court on August 19 and 26, 1929, and this suit was instituted between these two dates. The present defendants opposed the plaintiffs' said application for execution of the decree. They cannot, of course, reprobate and approbate. They cannot now contend that the plaintiffs must now fail because their proper remedy is by an application under Order XXI and not by suit. Nor did the defendants take up any such contention in such a form. What was, however, pressed upon me was that there was no remedy under Order XXI, r.22 for that (it is argued) was the reason why the plaintiffs' application for execution wasrightly dismissed by Black well J. and that that application being dismissed, there was no remedy at all.
19. The argument for the defendants was developed in this form: that the decree must be considered asaffecting only the parties reference was made to A Debtor, In re (1929) 2 Ch. 146 as showing that a provision in a decree that the costs should be paid to certain solicitors must be held to be a provision in favour of the party whose costs were provided for, and not a provision in favour of the solicitors who were to receive the costs, The real ground of that decision, however, was that there was no 'final order'; whereas under the Bankruptcy Act, Section 4, only a person who is entitled to enforce a final judgment or final order is deemed to be a creditor. To the extent that this decision implies that had the order been final the solicitor could have proceeded as a creditor, it is opposed to the defendants' argument.
20. I do not, therefore, accede to the defendants' contention. The safer way of approaching the question seems to be that if the plaintiffs have been invested by the decree with a substantive right capable of being enforced, then the existence of a remedy must follow. In the circumstances (which prevent both parties from contending that an application under Order XXI is the proper remedy) the only available remedy is by way of suit; and by reason of Section 47(2) of the Civil Procedure Code the form of the remedy is of no importance, The substance and not the mere technicalities of the transaction should be regarded: Sripat Singh Dugar v. Prodyot KumarTagore (1916) 44 Cal. 524 : 19 Bom. L. L. 290 and Mahabir Pershad v. Moheswar NathSahai I.L.R. (1889) Cal. 584
21. Though I have arrived at this conclusion on a consideration of the provisions of theCivil Procedure Code, my conclusion seems to be in agreement with the decisions in England. Those decisions are, of course, to areal extent based on the rules of the Supreme Court which are very different from the Civil Procedure Code. The aid I derive, however, from the English decisions is based on the reference to general principles which are stated there. An action on the judgment is described by Brett J, as 'one means of enforcing the judgment': Philpott v.Lehain (1876) 35 L. T. 855 That decision was followed in Norton v. Gregory (1895) 73 L.T. 10 The remarks of Brett J. in the earlier case indicate what Rigby L.J. in the later case explicity states, that the right to sue upon the order is independent of O. XLII, r. 24, which I will presently quote. Kennedy L.J.'s observation which I am going to cite later should be read in the light of this consideration as the Lord Justice refers to Rule 24. Godfrey v.George (1896) 1 Q.B. 48is in some aspects very pertinent. Wright J. and the Court of Appeal decided in that case that an action will lie for enforcing an order that a solicitor should pay the costs of an application to strike him off the rolls, notwithstanding that an unsuccessful application to attach him for disobedience had been mnde by the person to whom he had been ordered to pay the costs. In Seldon, v.Wilde (1910) 2 K.B. 9 in appeal (1911) 1 K. B. 701 Darling J. said:-
The order on which the plaintiff is suing in this action is an order for the payment of certain costs; it is in the words of Chitty J. (in Harvy v. Harvy (1884) 26 Ch. D, 644 to be considered only as process to enforce payment of a debt.
22. This was upheld in Appeal, (1911) 1 K. B. 70 where Kennedy L.J. observed (p. 710) :-
It is not disputed that, in general, under O. XLII, r. 24, an action wayproperly be brought upon the order of a Court or a Judge directing costs to be paid by one or other of the parties to a motion, because such an action is a mode of enforcing a judgment within the meaning of O.XLII r. 24.
23. That rule is to this effect:-
Every order of the Court or a Judge in any cause or matter may be en-forced against all persons bound thereby in the same manner as a judgment to the same effect.
24. With reference to the construction of the decree, Mr. Vakeel also argued that this was a consent decree; and that, therefore, it stood on the same footing as a contract. He put forward the chain of reasoning that the decree was acontract, and a contract between the parties to the suit alone; that no stranger could enforce it; conversely, that it ought not to be construed as creating any rights except between the parties to the contract.
25. That, I think, is stating the proposition too broadly, A consent decree has, no doubt, been referred to as a mere creature of the precedent contract. On this ground it may indeed be arguable that the parties to the precedent contract, and not merely the parties to the suit, must be deemed to be the parties to the transaction evidenced by the consent decree. In any case, it cannot be overlooked that there is a decree of the Court, any more than it can be overlooked that there is a contract preceding the decree. So, if the contract itself is invalid, the decree cannot be of more validity than the invalid contract on which it is based. For instance, a company will not be allowed to do what is beyond its legal powers ' by simply going into Court and consenting to a decree which orders that the thing shall be done': GreatNorth-West Central Railway v. Charlebois (1899) A. C. 114. If, again, any alteration in the decree is sought to be made, the Court will not overlook that the basis of the decree was a contract between the parties, and will not allow any alteration in a consent decree except on conditions which would be precedent to the alteration of a contract: as, for instance, the consent of all the parties concerned : Huddersfield Banking Company, Limited v. Henry Lister & Son,Limited (1895) 2 Ch, 273 and In re South American and Mexican Company, Ex parte Bank ofEngland (1895) 1 Ch. 37
26. Many of these considerations might be proper and relevant in proceedings for rectifying the decree or for setting it aside. No question has, however, been raised before me as to the validity of the decree or the consent terms; nor has any similar question, to which the principles I have just alluded have any application. What I have to determine, in the first instance, is whether this decree creates an independent right in favour of the plaintiffs, or merely creates in favour of the client of the plaintiffs a right to receive his costs.
27. The argument on behalf of the defendants taking its full implications is that a consent decree containing a provision in favour of a stranger to a suit is nugatory to that extent; and that a Court in interpreting a consent decree ought not to construe it as containing such a clause, I must preface my remarks on this head by saying that, as a Court executing a decree, I must take upon myself the humbler function of interpreting what the Court has decided. I cannot dictate to that Court how it ought to have decided and what should have been the contents of thedecree even though the decree be passed by consent. Nor can the Court executing thedecree so it seems to me lightly take upon itself to declare provisions in the decree to be nugatory, because they may not seem to be warranted by the definition of the word 'decree' in Section 2(2). The assumption that underlies this whole discussion is that the scope of the Court's jurisdiction in regard to making decrees has been determined by the legislature in explaining the term ' decree ' in an interpretation clausea course which is not easily to be attributed to the legislature.
28. Subject to the observations I have last made and what I have said in connection with the definition of a decree-holder in the Code and Rule 26 of Order XLII of the Rules of the Supreme Court in England, I may with all respect refer to the difficulties that arise, if clauses are introduced in a decree-exceptwith great caution in favour of persona who are not parties to the suit. If such persons could be made parties to the suit such difficulties would be removed.
29. Is then the rule preventing the enforcement of a contract by strangers to it so rigid that its analogy must absolutely preclude any provision being made in a consent decree, in favour of persons who are not parties to the suit. The fundamental reason for the rule, as far as contracts are concerned, seems in the opinion of a great authority to be that an obligation under a contract arises by the agreement of the parties, and by their taking the obligations upon themselves, and imposing them in respect of each other. A stranger who is not privy to the act by which the obligation has been undertaken or imposed cannot prima facie hold any one to the performance of the obligation (Savigny, System, III, p. 308).
30. This being the origin of contractual obligation, the reasons why a stranger is not allowed to enforce it may for the present purpose be considered under four main heads. When the circumstances are such that those reasons are absent, the rule against enforcement by strangers is itself relaxed. First of all in a contract 'the parties have the power of coming to a new agreement the next day, releasing the old one ': In re EmpressEnggneering Company(1880) 16 Ch, D 125 Secondly, as Lord Justice Cotton said in Gandy v. Gandy (1885) 30 Ch. D. 57 :-.if the contract, although in form it is with A., is intended to secure a benefit to B., so that B. is entitled to say he has a beneficial right as cestuique trust under that contract; then B. would, in a Court of Equity, be allowed to insist upon and enforce the contract.
31. Thirdly, a contract can be enforced only subject to the equities between the parties and a stranger to the contract cannot, therefore, be given an independent right which would be independent of the equities between the parties. Finally, where specific property is charged for the sole benefit of the third party, the rule may be relaxed.
32. It will be seen that the enforcement of a consent decree by a person in whose favour it is made but who is not a party to the suit is not necessarily obnoxious to any of the principles expressed or implied in the considerations I have mentioned. Initially, the nature, terms, and conditions,- of the obligations intended to be created by a consent decree are fixed by agreement to which presumably the person would be a party in whose favour there is to be a term in the consent decree. Ultimately these terms are imposed upon the persons concerned by the authority of the Court. Those obligations being contained in a decree cannot be altered at the mere will of the parties; they are intended to benefit the persons in whose favour they are made; they may be made subject to equities exactly in the same way as in a contract whether they are in favour of a party to the suit or to a stranger to the suit; a specific estate may be charged with the payment of the amount in question, as is the case in the present decree.
33. These considerations apply with greater force where the person seeking to enforce the decree is the solicitor of one of the parties, and the provision in his favour is an order for payment of the costs of one of the parties, for the solicitor of a party may not improperly be deemed to be in a sense no stranger to the suit; and an order as to costs may well be deemed to be a determination of the rights of the parties with regard to the matter in controversy in the suit: Civil Procedure Code Section 2(2).
34. On the other hand, it is difficult to picture a case where occasion should arise for introducing provisions in a consent decree in favour of an entire stranger to the suit-excluding from that expression such persons as have been alluded to in the present discussion. Adapting the language of LordHoghouse in Great North-West Central Railway v. Charlebois (1899) A. C. 114 a person cannot do what is beyond his legal powers by simply going into Court and consenting to a decree which orders that the thing shall be done. One cannot in this manner clothe another with rights which he cannot otherwise confer, or impose liabilities upon a stranger who does not agree to subject himself to such liabilities. Such cases stand on a different footing.
35. The notes to Order XLII, r. 26-1 have cited the rule above in full-in the Annual Practice mention only two decisions, Both refer to the payment of an annuity for the maintenance of a child of a marriage which had been dissolved, the order for payment having been made in the Probate Division against the trustees of the marriage settlement.
36. I turn to the terms of the decree to see whether there is a provision in favour of the solicitors (the present plaintiffs) intended to give them an independant, substantive, claim to receive the costs; or whether the terms merely mean that the first defendant in suit 4403 of 1924 is to receive them, and the plaintiffs are mentioned merely as his agents for receiving payment.
37. The order provides, first, that the respective costs of all parties to the suit shall be paid out of the estate, and, secondly, thatthe costs of the first defendant shall be paid to the present plaintiffs. There is, therefore, first, a general order relating to the costs of all parties, and, secondly, a special order relating to the costs of the first defendant. It seems to me that there being a specific direction in the decree, in the context that I have mentioned, that direction is not to be taken as absorbed in the earlier part of thedecree, as a mere repetition. It is an independent provision made in regard to one set ofsolicito Rs. such as is not made in regard to the other sets concerned. The fact that there is such a provision only in regard to the first defendant's costs is an answer to the argument that it must be considered as explaining andcompleting the provision that immediately precedes it: for if it had been so, there would necessarily have been similar explanatory and complementary provisions in regard to the other costs.
38. I hold, therefore, that the decree should be considered as giving an independent right to thesolicito Rs. and my conclusion is that neither procedure nor principle stands in the way of the plaintiffs' substantive right being enforced. None of the principles on which strangers to a contract are precluded from enforcing it are applicable to this particular provision of the present consent decree.
39. Assuming that I am right in holding that the plaintiffs are entitled to come to the Court,-that they had a cause ofaction are they barred by limitation The contention for the defendants was that article 84 of the Indian Limitation Act applied, unless the decree on which the suit is based treated as a contract.
40. Article 84 governs a suit by as attorney or vakil for his costs of a suit or a particular business. Mr. Vakeel argued that if the plaintiffs proceeded on the basis of the decree, they were out of time, because time must run from the date of the decree. For that purpose, reference was made to the third column of article 84 which is to the effect that time must run from the date of the termination of the suit or business, or where the attorney or vakil properly discontinues the suit or business, the date of such discontinuance. But that does not seem to me to be the article which must govern this case. If a special article had been provided for it, it would have referred to a suit by a person not being a party to a suit or proceeding in whose favour any order is made; or an article in similar terms for enforcing an order for a solicitor's costs in a decree. There being no such article in the Schedule, presumably article 120 must apply. Order XLII, Rules 22, 23, and the connected rules of the Supreme Court in England offer an interestingcomparison.
41. As this is a case of first impression, I shall deal with all the arguments that have been placed before me.
42. In regard to the date of the decree, it was argued that though it provides for the payment of costs when taxed and noted in the margin, and though taxation took place on September 3, 1926 and August 7, 1928, yet I must consider the whole of the decree to be complete on the date of the delivery of the judgment because the decree is dated at the end as of the time when the judgment is delivered, The rules of the High Court laying down the practice in regard to the drawing up of decrees are Rules 288' and 267 and the form is at p. 228 The true effect of these rules seems to me that every judgment is normally considered toincorporate within itself the provisions laid down in the rules, viz., that a particular part of the judgment or decree shall be determined and worked out by such administrative officers of the High Court as the Taxing Master.
43. It is not true that the decree bears only the date when the judgment was delivered, It bears several dates. So far as the provision for costs is concerned, it bears the two dates that I have mentioned. The argument for the defendants, on the other hand, was that every part of the decree must be taken to date from the main judgment, and to be completely drawn up then that notwithstanding the directions that the costs shall be paid when taxed and noted, it must be considered that the costs are taxed and noted on the day that the main judgment was delivered. If this were the rule applicable to the construction of the decree, it would obviously be based on a fiction peculiarly calculated to bring about hardship and injustice. For the real facts are that the judgment regarding the costs depends upon their beingtaxed. In fact, the judgment of the Court is split up into two parts That part which relates to costs is postponed until the costs are taxed and determined and finally entered in the decree. The Court in anticipation makes an order which will allow of the results of this furtherdetermination a question of fact (viz., what the costs amount to) being incorporated in the Court's judgment. So that, in truth, this part of the judgment is so to say delivered, or at least completed, only when the costs are taxed and noted.
44. Had there been any statutory provision worded in such a manner as to leave no power to the Court to giveeffect to the real fact's as they take place, and had the Court been required to consider that though the actual provisions relating to costs were not complete nor inserted in the decree till a later date yet they must be referred back to the date of the judgment, I might havebeen constrained to accept Mr. Vakeel's argument that I must give effect to the law as it stands, notwithstanding that a hardship may be worked. I may, however, in this connection, point out, against Mr. Vakeel's argument that Courts have been astute to prevent injustice in similar cases : this is illustrated by the decisions in Abdul Ali v. Mirja Khan I.L.R. (1903) Bom. 8. and Muthiah Chetti v. SuppanServai I.L.R. (1913) Mad. 291 where the words of the rule taken literally would have caused hardship, and they were interpreted so as to give them a reasonable and just operation. Here, however, it is Mr. Vakeel who wishes me to put a strained interpretation on the decree, at variance from the facts. Though the decree makes it clear that the judgment in regard to the costs is completed on the date when the costs are taxed, he wants me by a fiction to deem it to have been completed on the date when the Court made the order that the costs be taxed and noted. I cannot accept this argument. It seems to me to be clear that the judgment as regards the costs must be considered to be delivered when the costs are taxed and noted, and the decree as to costs must date from that time,
45. It was argued for the plaintiffs, on the other hand, that Section 14 of the Indian Limitation Act applied to this matter. The time taken up by the proceedings in execution should, in my opinion, if necessary, be deducted from the period of limitation.
46. I think, therefore, that the plaintiffs must succeed.
47. As to the costs of this suit, the normal procedure would have been for the first defendant in suit No. 4403 of 1924 to apply for the execution of this decree and for the plaintiffs to have taken advantage of such an application to get their costs paid. The plaintiffs' untenable attitude was that such an application would have been disallowed on the ground that the provision for payment of the first defendant's costs was not in favour of the first defendant, and that he could not have got that provision of the decree enforced. I have already dealt adversely with that contention. The plaintiffs have given no explanation for their delay, nor is evidence produced why they did not follow the course which, according to my judgment, would be the right procedure. I offered opportunities to the plaintiffs to tender any explanation for this delay, but no explanations were given. In these circumstances, I felt at one time inclined to follow Sir John Romilly M.R.Norman v. Johnson (1860) 29 Beav. 77 and to order the plaintiffs to pay the costs of these proceedings which have been caused by the unexplained laches on the part of the plaintiffs But in view of the fact that the decree orders the payment of the costs by some of the parties to the plaintiffs, (cf. O. XLII, r. 1, Supreme Court in England), I have come to the conclusion that the more equitable order would be that no costs shall be paid by either side.
48. Owing to this long delay and unexplained laches on the part of the plaintiffs, I am inclined to give the defendants every facility for the payment of the decretal amount (such as payment by instalments) that the defendants may satisfy me will be proper in the circumstances,
49. Mr. Vakeel informs me that he does not want any special orders as regards the payment of the decretal amount.
50. Mr. Manekshah asks for interest. Interest disallowed.
51. Decree as prayed, but without interest. Interest on judgment at six per cent.