1. This is an appeal under Clause 10 of the Letters Patent against the order of Dulat, J., affirming the decisions of the Court of first appeal and the trial Court dismissing the suit of the appellant IsharSingh.
2. Briefly the facts are that one Punjab Singh had brought two suits for possession of land in which he was financed by Pritam Singh respondent on condition that Punjab Singh would make over half of the land gained by him in the event of his success. Punjab Singh succeeded in obtaining possession of about 78 bighas of land as the result of his suits, but apparently he did not carry out his part of the bargain and Pritam Singh was then forced to institute a suit for possession of his half share i. e., about 39 Bighas. Pritam Singh succeeded in the trial Court but his suit was dismissed in first appeal, and when the second appeal came to this Court the parties compromised and Pritam Singh as a result of the compromise was given about half the land he was claiming, some 19 bighas.
3. The matter was, however, complicated by the fact that during the pendency of the appeal Punjab Singh had died and his place was taken by his legal representatives who were his son Kartar Singh and the minor son of a predeCased son Jshar Singh, the present appellant, and when the compromise was reached in this Court it was apparently lost sight of by Kartar Singh, the guardian ad litem of his minor nephew, that an application under Order XXXII Rule 7 Civil Procedure Code ought to have been filed for the permission of the Court to enter into the compromise on behalf of the minor.
4. This led in due course to the filing of the present suit by Eshar Singh for a declaration that the compromise was void and ineffective and not binding on his rights. Order XXXII Rule 7 reads-
'(1) No next friend or guardian for the suit shall, without the leave of the Court, expressly recorded in the proceedings, enter into any agreement or compromise on behalf of a minor with reference to the suit in which he acts as next friend or guardian.
(2) Any such agreement or compromise entered into without the leave of the Court so recorded shall be voidable against all parties other than the minor.'
5. There is no doubt that these provisions are mandatory but the question which arises in the present case is whether in a suit of this kind brought by a minor to have a compromise set aside it is or is not open to the Court to go into the question whether the compromise was in fact in the interests of the minor, and to refuse to set it aside if it finds that the compromise was in fact in the interests of the minor. There are concurrent findings of the Courts below that the compromise in this case was in the interests of the minor and I find it impossible to disagree with this view.
6. In upholding the decision of die Courts below the learned Single Judge has followed views expressed by the Lahore Court and this Court though there is no doubt that there are conflicting views of other Courts. For instance, in Suresh Chandra Saha v. Gobind Nath Saha, AIR 1927 Cal 798, a Division Bench has held that where a minor after attaining majority seeks to set aside a Compromise under Sub-rule (2) of Rule 7 of Order XXXII, the question whether the minor derived any benefit from the compromise or not is foreign to the enquiry.
Similarly in Bhiwa Jotiba v. Devchand Bechar, ILR 35 Bom 322, a Division Bench has held that when a suit to which a minor is a party is compromised and no leave of the Court is obtained under Section 462 of the Civil Procedure Code the compromise does not bind the minor and is voidable and the fact that it is for the benefit of the minor or that he has derived benefit from it makes no difference.
7. On the other hand a different view was taken by Tek Chand and Beckett, JJ., in Sat Na-rain Goenka v. Kanti Lal AIR 1943 Lah 313. In the judgment delivered by Tek Chand, J., the cases cited above among others have been considered and the view of the learned Judge has been expressed as follows:-
'From this review of the authorities, it will be seen that it is in ILR 35 Bom 322 alone that it has been expressly held that the Court will pass a decree declaring that the decree is not binding on the quondam minor, regardless of whether it was or was not beneficial to him. It is true that the provisions of Rule 7 of Order 32 are mandatory and a decree or order passed on a Compromise without strict compliance with them is voidable against all parties other than the minor. The minor may, at his option, have such decree or order set aside either on review by the Court which had passed it or he may sue for a declaration that the decree or order is not binding on him. In the former case, as soon as the review is granted, the original suit or appeal is reopened before the same Court.
It is conceded that the Court at that stage will then follow the proper procedure, that is to say, examine the terms of the compromise and accept or reject it according as it finds that it is, or is not, for the minor's benefit. But if this is so, there seems to be no reason why, if the other alternative is followed and a regular suit is brought, the Court is bound to automatically decree it, without determining whether the minor has or has not, in fact been prejudiced by the compromise. It is conceded that there is no statutory authority for this view and, so far as I can see, it cannot be supported on general grounds. It is well-established that the Court before which a suit for a declaration is brought has a discretion to grant or refuse the declaration; and this discretion is to be exercised secun-dum arbitrium boni judicis. No reason has been suggested why an exception to this general rule should he made in a case like this. Following the rule, the Court is entitled -- indeed, it is bound --to determine whether in the circumstances of the case before it the declaration asked for should or should not be granted and for this purpose the benefit of the minor is of paramount importance. If the Court trying the suit finds that the compromise was for the benefit of the minor it must dismiss the suit. If, however, it is established that the compromise was prejudicial to him the suit must be decreed, the effect of the decree being to restore the original suit or proceedings in which the compromise had been arrived at. To hold otherwise would (to use the words of Edge, G. J., m. Aman Singh v. Narain Singh, ILR 20 All 98 at p. 100) 'be opening a door to ruinous litigation' in this counby. This is the view which has been taken uniformly by the Courts in this province and. if I may say so with respect, this appears to me to be the correct view.'
8. This view has been followed in a similar case by J. L. KaPur, J., in Raja Ram v. Brij Lal. 57 Pun LR 149, where there has been also some consideration of the case law.
9. It does not seem that in either the Calcutta or Bombay cases cited on behalf of the appellant the argument was raised or considered that in a declaratory suit the Court has a discretion whether or not to grant a decree, and I find myself in respectful agreement with the views expressed on this point by Tek Chand, J. I would accordingly dismiss the appeal but leave the parties to bear their own costs.
Tek Chand, J.
10. I agree that this appeal should be dismissed and that the parties left to bear their own costs. I, however, wish to give my reasons for arriving at the same conclusion.
11. This case involves the consideration of two principles of law which apparently, though not actually, seem to he conflicting. Order 32, Rule 7, forbids next friend or guardian from entering into any agreement Or compromise on behalf of a minor with reference to the particular suit without the leave of the Court expressly recorded in the proceedings. Any such agreement or com-promise entered into without ' the leave of the Court so recorded shall be voidable against all parties other than the minor. This rule of law is mandatory and has to be strictly construed and applied.
This rule applies where the minor is a party to a suit and the agreement or compromise is with reference to that suit. The leave of the Court must be expressed in all cases and cannot be implied. In the words of Lord Macnaghten in Ma-nohar Lal v, Jadunath Singh, ILR 28 All 585 (588) -
'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 on Petition, or in some way not open to doubt, that the leave of the Court was obtained.'
The law therefore, expect that in the exercise of its judicial discretion on the question of the propriety of the compromise and in the interest of the minor, the Court must satisfy itself from the material placed before it that the proposed settlement is for the benefit of the minor.
12. The next question is as to what is the effect of the compromise which is entered into without obtaining the leave of the Court. Order 32, Rule 7, Civil Procedure Code, requires compliance with the following conditions before a minor is held bound by the compromise -
1. The next friend or guardian has to apply to the Court for leave to enter into the compromise proposed on behalf of the minor stating its terms.
2. The Court then examines the compromise with a view to satisfy itself that it is in the interest of the minor and is otherwise proper; and
3. If the Court, in the exercise of its judicial discretion, approves of the compromise it grants leave by recording an order to that effect in express terms.
But if the above conditions are not observed, the decree passed on the basis of such a compromise does not become a nullity; such a decree is not void but only voidable, and that also at the option of the minor. No other party can call in question such a decree. The right to avoid such a compromise is given to the minor alone and he has the exclusive option to affirm or disaffirm the settlement. This he may do by ratifying the compromise on attaining majority or he may seek to avoid it by a separate suit, as has been done in this case, or in an application for review.
A compromise arrived at in contravention of the rule is, however, not void against the minor, understanding the word Void' in the sense of complete nullity or being without force or effect. The distinction between void and voidable transactions is a fundamental one. A transaction or an agreement is said to be void when it is of no legal effect at all. A voidable act is effectual unless it is disputed. In the case of a voidable act it is open to one of the parties to treat it as never having been binding on him.
A void Contract is incapable of ratification or confirmation, but this is not so with resPect to an agreement which is merely voidable In Birbhan v. Harmukh Rai, AIR 1952 All 240 (FB), leave of Court had not been obtained for an agreement to refer the dispute to arbitration. The award given on the reference was held voidable at the option of the minor but not void ab initio. In other words, the agreement was binding on the minor until he had it set aside.
13. In Mst. Kaushalya Devi v. Baij Nath, 53 Pun LR 170, a preliminary decree was passed by consent without obtaining the leave of the Court. The preliminary decree was not challenged. Later on, the party who was a minor, raised an objection in an appeal against final decree but it was held by the Division Bench that it was not open to the appellant to raise an objection to the preliminary decree in the appeal against a final decree.
14. The rule of kw embodied in Order 32, Rule 7, is based on a similar rule of English law. A compromise to which an infant is a party acquires validity if the Court gives sanction, after satisfying itself, that it is going to be for his benefit (vide Seton's Forms of Judgments and Orders, Volume II, p. 986 (Notes), Halsbury's Laws of England, Third Edition, Volume 21, p. 326). A compromise entered into, or a settlement made, by an infant is treated, 'like any other of his contracts, as voidable; 'he will be bound by it unless he repudiates it during infancy, or within a reasonable time of attaining majority, otherwise it will be treated as binding' (Edwards v. Carter, 1893 AC 360). The equitable jurisdiction over infants was based on a delegation of the prerogatives which belonged to the sovereign as parens patriae.
15. In this case, the minor has repudiated the agreement by instituting a declaratory suit as contemplated by Section 42 of the Specific, Relief Act. This section clearly provides that it is within the discretion of the Court to grant or refuse a declaration as to one's legal status or right. This provision is in accord with the practice of English Courts of Chancery which grant declaratory relief not as a matter of right but as a matter of discretion. In other words, there is no absolute right to a declaration. While granting or refusing a declaratory relief, the Court in the exercise of its discretion, has to satisfy itself after exercising a sound judgment as to whether it is reasonable and just to grant the relief prayed for, and a declaration without consequential relief cannot be made in all cases (vide Markwald v. Attorney-General, (1920) 1 Ch. 348 (357).) Viscount Finlay in Russian Commercial and Industrial Bank v. British Bank for Foreign Trade Limited, (1921) 2 AC 438 (445) H. L., said -
'The question in what Cases the jurisdiction to give a declaratory judgment should be exercised has been considered in a number of cases which were called to our attention by Mr. Hogg. It should be exercised sparingly. (In re Staples, (1916) 1 Ch 322); 'with great care and jealously' (Austen v. Collins, (1886) 54 LT 903, 905); 'with extreme caution' (Faber v. Gosworth Urban District Council, (1903) 88 LT 549, 550). Stirling, J., took the same view on this subject in Grand Junction Waterworks Co. v. Hampton Urban District Council, (1898) 2 Ch 331, 345, and Lord Sterndale in (1920) 1 Ch 348, 357, said that there had been 'too great a tendency of late years to ask for declarations'.'
16. Thus a declaratory judgment is granted only where interest of justice will be advanced, and also for rendering an adequate and effective judgment. This jurisdiction which is essentially based upon the rule of good conscience and natural justice will not be invoked where the conduct of the minor is not otherwise just and equitable as where he has not come into equity with clean hands. Not only the cause should be justiciable but it should also be just. Flexibility and adaptability are characteristic features of equitable remedies and in granting an equitable relief the circumstances of the case and the justness of the cause are never lost sight of.
An equitable remedy, which is essentially discretionary cannot be invoked automatically at the instances of persons on the ground that they suffer from certain infirmities as, for example, they are not sui juris like infants or are non compos mentis. A declaratory relief will not readily be granted to a minor as a matter of right where such a remedy is opposed to equitable principles. The infirmity of non-age alone will not supply want of equity in a declaratory suit. The rule of law contained in Section 42 of the Specific Relief Act is more broad based than the mandatory procedural rule of Order 32, Rule 7. In AIR 1943 Lab 313, the declaration was refused as, in the circumstances of that case, the minor was not justly entitled to the declaration asked for.
When a Court is given a discretion, the statute confers upon it the power to act according to what may appear to be best and appropriate under the circumstances of the particular case. The discretion is not wilful or arbitrary but is regulated by well-known and well established principles. In this case, the Courts below have rightly come to the conclusion that the compromise effected in the case was beneficial to the minor. The minor should not, therefore, be granted a declaration which should enable him to repudiate the compromise.
17. For the above reasons, I am also of the view that the appeal merits dismissal, but the parties should be left to bear their own costs.