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Suraj NaraIn Chaube Vs. Beni Madho Chaube and ors. - Court Judgment

LegalCrystal Citation
Subject Civil
CourtAllahabad
Decided On
Reported inAIR1937All701
AppellantSuraj NaraIn Chaube
RespondentBeni Madho Chaube and ors.
Excerpt:
.....that. the statement made by the referee was clearly a statement made by a person to whom the parties to the suit had expressly referred for information in reference to the matters in dispute, and was a statement within the meaning of section 20, evidence act. it is true that under order 23, rule 3, before a court can order an agreement or compromise to be recorded and pass a decree in accordance therewith, it has to be satisfied that the suit has been adjusted wholly or in part by such agreement or compromise. where the parties agree to abide by the statement of a third person, their agreement is still in the nature of a contract, and it may well be said that so long as that third party has not made his statement, and the contract has not been carried out, there is yet no..........b. brij behari lal was in fact an arbitrator and not a referee, inasmuch as a referee can only make a statement from his own knowledge and is not competent to make an enquiry or to take evidence or examine documents. it is further pleaded that the provisions of sections 8 to 11, oaths act, had no application.4. there can be no doubt that b. brij behari lal was not a person who had offered to make a statement on oath or solemn affirmation in a particular form within the meaning or contemplation of section 8, oaths act. it is of course a fact that on 14th october 1935 he was examined by the court on oath, but neither the statement of 23rd september nor the statement of the 14th october required that any oath should be administered to him. it follows that this was not a proceeding.....
Judgment:
ORDER

1. This is an application in revision by one out of four plaintiffs. The suit was for partition of joint family properties. There were five defendants and all except defendant 2 contested the suit. The main ground of defence was that a partition had already taken place and that the suit was therefore not maintainable. A number of issues were framed, but the only two with which we are concerned are Issues 7 and 12. These were as follows : Issue 7 : Has there been already a partition of the properties in Ballia district; if so, how will it affect the suit? Issue 12 : Did the parties separate before the institution of the suit; if not, how will it affect this suit?

2. On 23rd September 1935 the parties and their counsel made a, statement before the Court in which they agreed that the Government Pleader, a gentleman named B. Brij Behari Lal, be appointed as referee (the word used was 'Munhasir-aleh') and that the first portion of Issue 12 should be decided in accordance with whatever statement the aforesaid referee might make in Court after he had made enquiries, both open and secret. The referee was authorized to take oral evidence and also to inspect such documents as had been filed in Court. On 14th October 1935 a further statement was made on behalf of the parties to the effect that they would accept the referee's statement in respect of Issue 7 also. On that same date B. Brij Behari Lal made a statement in Court in pursuance of which the Court decided Issues 7 and 12 against the plaintiffs and proceeded to dismiss the suit.

3. The point which has been taken before us by learned Counsel for the plaintiff applicant is that the statement of 23rd September 1935 was in effect an application for reference to arbitration and accordingly the procedure which is prescribed in Schedule 2, Civil P.C., ought to have been followed and ten days ought to have been allowed for objections after B. Brij Behari Lal had given his verbal 'award' in Court. It is contended that B. Brij Behari Lal was in fact an arbitrator and not a referee, inasmuch as a referee can only make a statement from his own knowledge and is not competent to make an enquiry or to take evidence or examine documents. It is further pleaded that the provisions of Sections 8 to 11, Oaths Act, had no application.

4. There can be no doubt that B. Brij Behari Lal was not a person who had offered to make a statement on oath or solemn affirmation in a particular form within the meaning or contemplation of Section 8, Oaths Act. It is of course a fact that on 14th October 1935 he was examined by the Court on oath, but neither the statement of 23rd September nor the statement of the 14th October required that any oath should be administered to him. It follows that this was not a proceeding under' the Oaths Act. On the other hand, there is nothing to prevent the parties to a suit from agreeing, apart altogether from the Oaths Act, to abide by the statement of a third person.

5. In Himanchal Singh v. Jatwar Singh A.I.R. 1924 All 570, the parties and their counsel entered into an agreement in writing, signed by them, to the effect that it had been settled between the parties that a certain vakil should hear out the whole affair and that they would accept any statement that he might make before the Court. What precisely was meant by 'hear out' is not clear. A sworn statement was subsequently made by the referee and a decree in accordance therewith was duly passed. The plaintiff appealed and it was contended on his behalf that the statement was neither a reference to arbitration nor a statement under the Oaths Act and was therefore not binding upon him; but it was held by this Court that the parties could not be permitted to resile from the agreement entered into by them and the decree must stand. This was a judgment of Sulaiman, J. (as he then was) and Kanhaiya Lal, J. At page 711 they observed:

We are of opinion that the contention of the plaintiff cannot prevail. The case can be looked at from two points of view. To say the least, the statement, being duly signed by the plaintiff as well as his pleader, amounted to an agreement that. he would be bound by the statement that would be made by the referee. The statement made by the referee was clearly a statement made by a person to whom the parties to the suit had expressly referred for information in reference to the matters in dispute, and was a statement within the meaning of Section 20, Evidence Act. It is tree that ordinarily mere admissions are not conclusive, as is provided in Section 31, but admissions of this kind must be taken to be admissions made in a suit by the nominee of a party thereto. Such admissions, therefore, are as conclusive and effectual as admissions made by the parties in their written or oral pleadings. The effect is to prevent each party from resiling from the statement made by such a nominee.

It may also be said that the parties really compromised their dispute in this manner that they agreed that the decree of the Court shall be in accordance with the statement to be made by their nominee hereafter. There is nothing to prevent the parties from compromising the suit and agreeing to a decree being passed in terms to be stated by a person named. Such an agreement, therefore, would be an adjustment of the suit, and it is difficult to see how any party could be allowed to go back on it.

6. This case was followed by a learned Judge of this Court in Gordhan Das v. Husaina : AIR1927All659 . In that case the plaintiff in execution of a decree had attached certain property as belonging to his judgment-debtor. There was an objection under Order 21, Rule 58, Civil P.C. and during the hearing of that objection both parties agreed to abide by the statement which a certain pleader might make after local inquiry. The pleader, having made an inquiry, gave a statement to the effect that certain of the property belonged to the objector, and that property was accordingly released from attachment. The decree-holder thereupon brought a regular suit and his suit was decreed; but on appeal the lower Appellate Court found that the plaintiff was bound by the statement of the pleader and it accordingly dismissed the suit. A second appeal was then presented to this Court, but it was dismissed. It was held that the plaintiff could not go behind his admission and was bound by it.

7. Both the above authorities and many others were referred to by a Full Bench in Akbari Begam v. Rahmat Hussain : AIR1933All861 . In that case two sisters sued three brothers for recovery of their shares of property. The defendants set up deeds of gift executed by the deceased father. On the date fixed for producing evidence, a joint application was presented to the Court which was signed by the husband of the plaintiff 2 and by the counsel of both parties. The applicants agreed to abide by the statement which defendant 1 might make in Court. Defendant 1 made a statement on oath in favour of the defendants on all important points and the suit was accordingly dismissed. It was held that the parties to a suit can validly agree, even apart from the Indian Oaths Act, that they will abide by the statement of a witness, whether he is a party to the suit or not, and they can leave the decision of all points arising in the case to be made according to such statement.

8. At page 1149 the learned Chief Justice observed:

Now there is an overwhelming authority in favour of the view that a decree passed on the basis of such an agreement, when carried out by the statement of the referee, is binding upon the parties. The only difference of opinion that seems to have arisen is as to whether the binding character of the decree should be based on the supposition that such a reference amounts to a reference to arbitration or an adjustment of the claim, or is an admission of the parties of an offer amounting to an estoppel.

The trend of the authorities in this Court appears to be more in favour of the view that such an agreement is in substance a compromise or adjustment of the suit and neither a mere admission capable of being rebutted nor strictly speaking a reference to arbitration.

Although in some cases the right to resile from such an agreement has been doubted, in some others it has been held that such an agreement can be resiled from in special circumstances. But it has never been held so far that if the agreement has been acted upon and the referee has made the statement in pursuance of the agreement, the party against whom the statement goes is entitled to go back upon it after having come to know what it amounts to.

9. At the bottom of page 1154 the learned Chief Justice said:

In concurrence with the opinions of the learned Judges who have made this reference, I hold that an agreement to abide by the statement of a particular witness is in substance not a reference to arbitration. The essence of arbitration is that the arbitrator decides the case and his award is in. the nature of a judgment which is later on incorporated into a decree of the Court. The arbitrator can either proceed on the basis of his own knowledge or make inquiries and take evidence and then give his decision on such evidence. But where parties agree to abide by the statement of a third person or a referee, the referee merely make a statement according to his knowledge or belief and the Court then decides the case and pronounces its judgment on the basis of such a statement and passes a decree thereon. The referee is not authorized to make inquiries and take evidence and then announce his decision on the basis of such evidence. He is called upon to make a statement according to his knowledge or belief. In the case of an arbitration, as the arbitrator's award is an expression of an opinion and his procedure resembles that of a Court, a party is entitled to file objections and challenge the validity of an award. The making of a statement by a referee or a third person has no resemblance to a proceeding conducted by him as if he were a Court of law, and accordingly there can be no procedure for filing objections as to its validity. It is for the Court in pronouncing judgment to consider its effect.

10. Farther on at page 1156 he observed:

In my opinion, the true basis of the binding character of such an agreement is that the original contract to abide by the statement of a third person is perfected into an adjustment of the claim in terms of the statement made as soon as the referee makes the statement. After that stage, neither party can resile from the agreement, because the claim has been duly adjusted and it has become the duty of the Court not only to record it but also to pass a decree in terms of it. It is true that under Order 23, Rule 3, before a Court can order an agreement or compromise to be recorded and pass a decree in accordance therewith, it has to be satisfied that the suit has been adjusted wholly or in part by such agreement or compromise. Where the parties agree to abide by the statement of a third person, their agreement is still in the nature of a contract, and it may well be said that so long as that third party has not made his statement, and the contract has not been carried out, there is yet no adjustment of the suit. Matters have not proceeded beyond the domain of an agreement and the stage of the adjustment of the claim has not yet been reached. Strictly speaking, an agreement is not identical with a compromise of the suit and may amount to a mere contract. But as no decree can be passed forthwith in terms of a mere contract to abide by the statement of a third person, I am prepared to hold that there can be no adjustment of the suit by such a contract until the statement has been made. But as soon as the agreement has been fully carried out by the Court and the referee has made his statement in favour of one party or the other, it is too late for either party to go back upon the agreement, and at this stage the agreement must be deemed to have eventuated into an adjustment of the claim in accordance with the statement already made. A party cannot be allowed to retract his solemn promise for considerations made before the Court after he has come to know the nature of the statement by which he had agreed to abide. It is no longer a question of the carrying out of a promise or the specific performance of a contract. The compromise must be deemed to have been carried out and accordingly the claim already adjusted. The Court cannot therefore entertain an application to withdraw from the previous, agreement and to resile from it unless fraud, misrepresentation, coercion, undue influence or mutual mistake were established.

11. It is argued by learned Counsel for the applicant that since B, Brij Behari Lal was authorized to perform acts of a judicial or quasi, judicial character, he was not a referee, but an arbitrator, and this contention derives some support from certain dicta of the learned Chief Justice which we have quoted from p. 1155 of the last mentioned case. On the other hand, the parties to the present suit allowed the Referee to be examined on oath and no loath is administered to an arbitrator, who merely has to file his award. It is perhaps difficult to say exactly what this proceeding was; it apparently partook of various elements. We think it is obvious however that it was never the intention of the parties that there should be a reference to arbitration under Schedule 2, Civil P.C.; their intention was that their nominee should make an inquiry and that they would be bound by whatever statement he might make in Court. As so often happens in such cases, the party whose interests are adversely affected by the statement thus made, has devised a means of trying to avoid the consequences of his solemn undertaking. Having given the matter our full consideration, we are of opinion that the agreement of 23rd September 1935 and the agreement of 14th October 1935 and the statement which B. Brij Behari Lal gave in pursuance of the reference thus made to him and by which the parties had covenanted with each other to be bound, was in effect an adjustment of the dispute and that each party is estopped from impugning it and from challenging the statement of the referee. All that remained for the Court to do was to satisfy itself under Order 23, Rule 3, Civil P.C. that there had been an adjustment and thereafter to record such adjustment and pass a decree. For the reasons given above this application fails and is dismissed with costs.


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