Feb. 22.

SUPREME COURT REPORTS

ti.

DHIYAN SINGH AND ANOTHER

JUGAL KISHORE AND ANOTHER.

[SAIYAD FAZL Au and VIVIAN BosE JJ.]

[1952J

Arbitration-Award-"Malik Mustaqil", meaning of-Whether conveys absolute estate-Award acted upon-Estoppel against contesting its validity.

S and B were sons of two brothers respectively. S died in 1884 leaving a daughter M, surviving him.

On the death of S dispute arose between B and M. B claimed the entire estate by survivorship, alleging that S died in a itate of jointness with him and that all the properties were joint family properties and M was entitled only to maintenance.

The dispute was referred to arbitration and an award was delivered.

Under it the suit properties were given to M and the rest of the estate then in dispute was given to B.

The operative part of the award stated inter alia that B, first party, and M, the second party, were held entitled to specified shares in the properties in dispute and each had become permanent owner (Malik Mustaqil) of his or her share.

A division was effected and ever since the date of the award in 1884 each branch continued in possession of the pro perties allotted to it and each had been dealing with them as absolute owner.

The defendants claimed that the plaintiffs were bound by the award and were in any evc::nt estopped from chal lenging it.

In 1941 B's grandsons instituted a suit claiming the pro perties allotted to M claiming that on the death of S his daughter M succeeded to a limited estate and reversion opened out on her death in 1929 and the plaintiffs were entitled as next reversioners, as M's son had predeceased her. The defendants {M's grandsons) alleged that the property possessed by M consisted partly of property which belonged to her and partly of property which belonged exclusively to he; r father to which she siua:eeded as daughter.

Hld, that the award gave an absolute estate to' M as the words uMalik Mustaqil" were strong, clear and unambiguous and were not qualified by other words and circumstances appearing in the same document in the present case.

Held further, that even if the award be assumed to be invalid the plaintiffs' claim was barred by the plea of estoppcl.

There was estoppcl against B because by his conduct he induced M to believe that the decision of the arbitrator was fair and reasonable and both the parties would be bound by it and he induced her to act greatly to. her detriment and to alter her position by accepting the award and never attempting to go behind it as long

.as he lived; there was estoppel against B's sons because it des- '' cended to them as they stepped into his shoes, and further there was independent estoppel against B's son K by his acts and conduct as evidenced in this case.

There was estoppel against plaintiffs who claimed_ through their father K.

CIVIL

APPELLATE JuRISDICTION : Civil Appeal No. 8 of 1951.

Appeal from the judgment and decree dated 12th October, 1944, of the High Court of Judicature at Allahabad (Allsop and Malik JJ.) in First Appeal No. 374 of 1941 arising out of a Decree dated 31st July, 1941, of the Court of the Civil Judge, Moradabad, in Original Suit No. 9 of 1941. - Bakshi Tek Chand (S. K. Kapoor, with him) for the appellant.

Achhru Ram (/wala Prasad, with him) for the respondent.

1952. February 22. The judgment of the Court was delivered by BosE J.-This is a litigation between two branches of a family whose common ancestor was one Megh Raj Singh. The family tree is as follows :

I .

Jawahar Singh

Megh Raj Singh

I Shanker Lal (d. 1884)

Mada~Singh - I

Brijlaf (d. 1889 or (1890)

I Daughter : Mst. Mohan Dei (d. Oct.1929) Husband: Narain Das

Shri Kisan Das (d. March 1929)

I I

I .

Mst.Deok• (d. 1894)

 h I 1 I. d K1s an La Mahabir Prasa (d. 21-5-1940) (d. 1921)

l I.

I Juga Ki shore Amar Nath

Plff. 1 Plff.2

Dhiyan Singh

Deft. l Jai Bhagwan Singh

Deft. 2 I I Obas Ram Onkar Prasad

The dispute is about property which, according to the plaintiffs, formed part of Shanker Lal's estate.

The plyaintiffs state that the two branches of the

..1.. 7 family were separate at all material times; that on

and Anotht:r

v. /ugal Kishore,

11nd Another.

Dhiyan Singh

and Another

v. fugal Kishore

11nd Another.

Bose/.

Shanker Lal's death in 1884 his daughter Mst. Mohan Dei (the defendants' grandmother) succeeded to a limited estate.

The reversion opened out on her death in October 1929 and the plaintiffs are entitled as the next reversioners, for Mt. Mohan Dei's son Shri Kishan Das predeceased her.

The defendants admit that Shanker Lal was separate from the other branch of the family.

They divide the property which their grandmother Mst.

Mohan Dei possessed into two categories.

First, there was property which they say belonged to her.

These are properties which, according to them, she purchased or obtained under mortgages in her own right.

Next, there were properties which belonged exclusively to her father and to which she succeeded daughter. On Shanker Lal' s death disputes arose between Shanker LaJ's father's brother's son Brijlal (the plaintiffs' grandfather) and the defendants' grandmother Mst.

Mohan Dei.

Brijlal claimed the entire estate by survivorship, his allegation being that Shanker Lal died in a state of jointness with him and that all the properties were joint family properties.

This dispute was referred to arbitration and an award was delivered.

Under it Mst. Mohan Dei was given the suit properties as absolute owner and the rest of the estate then in dispute was given to Brijlal. A division was effected accordingly and ever since, that is to say, from 21-12-1884, the date of the award, down to 26-3-1941, the date of the suit, each branch has been in separate and uninterrupted possession of the properties respectively allotted to it and each has been dealing with them as absolute owner.

The defendants claim that the plaintiffs are bound by this award and are in any event estopped.

The plaintiffs lost in the first Court but won in the High Court. The defendants appeal.

The first question is about the nature of the award.

The defendants say that it gave Mst. Mohan Dei an absolute estate.

The plaintiffs deny this and say she obtained only a limited estate.

In our opinion, the defendants are right.

... -

The question at issue tion.

The award is Ex. runs thus :

is a simple one of construe- 1952

A-1.

The operative portion Dhiyan Singh

rznd .dnotlier "Having regard to the specifications given above, Brij Lal, first party, and Musammat Mohan Devi, the deceased's female issue, second party, have been . held entilted to shares, worth Rs. 28,500 and Rs. 42,482-10-0 respectively in the said properties; and accordingly .•. two lots have been made and the first lot is allotted to the first party and the second lot to the second party; and henceforth the parties shall have no claim or liability against each other; and each party has become permanent owner (malik mustaqil) of his or her share; and each party should enter in proprietary possesion and occupation of his or her respective share ...... "

The underlining is ours.

We do not think, the words admit of any doubt, particularly as the words "malik mustaqil" have been used: see Ram Gopal v. Nand /.Jal and Others(1) and Bishunath Prasad Singh v.

Chandika Prasad Kumari(2). But it was argued that the award must be viewed as a whole and that certain earlier passages show that this could not have been the intention. The passages relied on are these.

First, the finding that the properties claimed by Mst. Mohan Dei s her own really belonged to Shanker Lal. He had purchased some and acquired others through mortgages in her name but she was only a benamidar and had no title to them. Second, that some of the properties in dispute were ancestral and the rest self acquired, though whether with the help of ancestral funds or not the arbitrator was unable to determine.

Third, the arbitrator's view of the Hindu law, namely that- "the brother should be the owner of the 1oznt ancestral property and the daughter who has a male issue should be owner of the self-acquired property."

And lastly, this passagev. fugal Kislior~

ant .dnotlier.

Bose/.

..i... (I) [1950] S.C.R. 766 at 778.

(2) (1933) 60 I. A. 56 at 61 & 62.

and Another

v. fugal Kishore

and Another.

JJose /.

"Furthermore, when the 2nd party (Mohan Dei) has inherited no property from her husband, she, m case of getting this share, will certainly settle down in Amroha and will make her father's haveli as her abode and thus the haveli shall remain abad as heretofore, and in this way the deceased's naine will be perpetuated; and it is positive that, after the Musammat, this property shall devolve on her son, who will be the malik (owner) thereof, and later the descendant of this son will become the owner thereof."

We do not think1 these passages qualify the operative portion of the award and are unable to agree with the learned Judges of the High Court who hold they do. In our opinion, the arbitrator was confused in his mind both as regards the facts well as regards the law.

His view of the law may have been wrong but the words used are, in our opinion, clear and, m the absence of anything which would unainbiguously qualify tl1em, we must interpret them in their usual sense.

Some cases were cited in which the word "malik", and in one case the words "malik mustaqil" were held to import a limited estate because of qaulifying circumstances.

We think it would be pointless to examine them because we are concerned here with the document before us and even if it be conceded that words which would ordinarily mean one thing can be qualified by other words and circumstances appearing in the saine document, we are of op11110n that the passages and circumstances relied on in this case do not qualify the strong, clear and unambiguous words used in this document.

The learned counsel for the plaintiffs-respondents had to search diligently for the meaning for which he contended in other passages and had to make several assumptions which do not appear on the face of the award as to what the arbitrator must have thought and must have intended.

We are not prepared to qualify clear and unambiguous language by phrases of dubious import which can be made to coincide with either view by calling in aid assumptions of fact about whose existence we can only guess.

,..

The award was attacked on other grounds also.

It was urged, among other things, that the arbitrator had travelled beyond the terms of his reference in awarding Mst. Mohan Dei an absolute interest.

It was . also urged that even if Brijlal was bound his son Kishan Lal, who did not claim through him but who had an independent title as reversioner to Shanker Lal, would not be bound, and it was contended that if Kishan Lal was not bound the plaintiffs would not be -either.

But we need not examine these points because we do not need to proceed on the binding nature of the award. Even if the award be invalid we are of opinion that the plaintiff's claim is completely answer- .ed by the plea of estoppel.

Now it can be conceded that before an estoppel can arise, there must be, first, a representation of an exist- ing fact as distinct from a mere promise de futuro made by one party to the other; second, that the other party, believing it, must have been induced to act on the faith of it; and third, that he must have o

acted to his detriment.

It will be necessary to deal with this in stages and first we will consider whether there was any estoppel agtainst Brijlal.

It is beyond dispute that he laid .serious claim to the property in 1884. He claimed that he was joint with Shanker Lal and &, o, on Shanker Lal's death he became entitled to the whole of the •estate and that Mst. Mohan Dei had only a right of maintenance.

Whether he would have had difficulty in establishing such a claim, or indeed whether it would have been impossible for him to do so, is wholly immaterial. The fact remains that he pressed his claim and was serious about it, so much so that he was able to persuade the arbitrator that he had an immediate right to part of the estate.

Mst. Mohan Dei, on the other hand, resisted this claim and contended that she was entitled to separate and exclusive possession, and in any event, that she was entitled in .absolute right to a part of the property. On the facts which now emerge it is evident that Brijlal had no .right and that his hopes of one .day succeeding :u

and Another

v • fugal Kishore

and Another.

Bose/.

and Another

v. fugal Kishore

and Another.

Bose /.

reversioner were remote.

Mst. Mohan Dei had a son Shri Kishan Das who was the next presumptive reversioner and as the boy was a good deal younger than Brijlal, Brijlal's chances were slim.

Actually, the boy survived Brijlal by nearly forty years. Bnjlal died in 1889 or 1890 and the boy did not die till March 1929.

Had he lived another eight or nine months he would have succeeded and the plaintiffs would have been nowhere. Now this dispute, seriously pressed by both sides, was refered to arbitration.

It is neither here nor there whether the award was valid, whether the decision fell within the scope of the reference or whether it had any binding character in itself.

Even if it was wholly invalid, it was still open to the parties to say : Never mind whether the arbitrator was right or wrong, his decision is fair and sensible, so instead of wasting further time and money in useless litigation, we will accept it and divide the estate in accordance with His findings.

That would have been a perfectly right and proper settlement of the dispute, and whether it bound third parties or not it would certainly bind the immediate parties; and that in effect is what they did. By his conduct Brijlal induced Mst. Mohan Dei to believe that this would be the case and on the faith of that representation, namely the acceptance of the award, he induced Mst.

Mohan Dei to act greatly to her detriment and to alter her position by accepting the award and parting with an appreciable portion of the estate, and he himself obtained a substantial advantage to which he would not otl1erwise have been entitled and enjoyed the benefit of it for the rest of his life; and to his credit be it said, he never attempted to go behind his decision.

In any event, we are clear that that created an estoppel as against Brijlal.

In our opinion, the present case is very similar to the one which their Lordships of the Privy Council decided in Kanhai Lal v. Brij Lal('). There also there was a dispute between a limited owner and a person who, but for an unproved claim (adoption) which he

(I) (1919) 45 I.A. 118, .

... +

put forward, had no right to the estate. The dispute was taken to the courts but was compromised and according to the agreement the property was divided between the two rival claimants and the agreement was given effect to and acted on for a period of twenty years.

Later, the succession opened out and the other party to the comprol!lise, who by then had stepped into the reversion, claimed the rest of the estate, which had been assigned to the limited owner, against her personal heirs.

The Judicial Committee rejected the claim on the ground of estoppel and held that even though the plaintiff claimed in a different character in the suit, namely as reversioner, he having been a party to the compromise and having acted on it and induced the other side to alter her position to her detriment, was estopped.

We do not think the fact that there was a voluntary compromise, whereas here there was the imposed decision of an arbitrator makes any difference because we are not proceeding on the footing of the award but on the actings of the parties in accepting it :when they need not have don.e so if the present contentions are correct.

It is true that in one sense a question of title is one of law and it is equally true that there can be no estoppel on a question of law. But every question of law must be grounded on facts and when Brijlal's conduct is analysed it will be found to entail an assertion by him that he admitted and recognised facts which would in law give Mst. Mohan Dei an absolute interest in the lands awarded to her.

It was because of that assertion of fact, namely his recognition and admission of the existence of facts which would give Mst. Mohan Die an absolute interest, that she was induced to part with about one-third of the property to which Brijlal, on a true estimate of the facts as now known, had no right.

There can be no doubt that she acted to her detriment and there can, we think, be equally no doubt that she was induced to do so on the faith of Brijlal's statements and conduct which induced her to believe that he accepted all the implications of the

Dhiyan Singlt

and Another

v. fugal Kishortt

and Another.

Bose/.

Dhiyan Singh and Another v. /ugal Kishorc

and A nothcr.

Bo,.].

award.

But in any event, we are clear that Brijlal would have been estopped. The nature of the dispute and the description of it given m the award show that there was considerable doubt, and certainly much dispute, about the true state of affairs. Even if the arbitrator was wholly wrong and even if he had no power to decide as he did, it was open to both sides to accept the decision and by their acceptance recognisr, the existence of facts which would in law give the other an absolute estate in the properties they agreed to divide among themselves and did divide.

That, in our opinion is a representation of an existing fact or set of facts.

Each would consequently be estopped as against the other and Brijlal in particular would have been estopped from denying the existence of facts which would give Mst. Mohan Dei an absolute interest in the suit property.

We turn next to his son Kishan Lal. Brijlal died in 1889 or 1890.

At that date Mst.

Mohan Dei's son Shri Kishan Das was alive and was the next presumptive reversioner.

Brijlal's sons therefore had no more right to that portion of his estate which was assigned to Brijlal than Brijlal himself.

But they took possession and claimed through their father. They dio not claim an independent title in themselves, and, as we know, they had no other title at that date. They were therefore in no better position than Brijlal and as Brijlal would have been estopped, the estoppcl descended to them also because they stepped into his shoes.

This would be so even if Brijlal had claimed the property independently for himself, which he did not; but much more so as he claimed in joint family rights and evidently acted as karta or manager on behalf of his family.

But apart from this, there was also an independent estoppel in Kishan Lal.

We have said, he had no right to this part of , the estate when his father died apart from the award.

But nevertheless he took possession along with his brother and the two of them treated the property as their own and derived benefit

i( -

from it.

They partitioned the estate between themselves and sold away parts of it to third parties. Kishan Lal knew of the award.

He knew that mutation had been effected in accordance with . it and possession taken by Brijlal under it and that the rest had been retained by Mst.

Mohan Dei. His retention of the property therefore and his continuing to deal with it on the basis of the award. indicated his own acceptance of the award and, therefore, by his acts and conduct, he represented that he also, like his father, admitted the existence of facts which would in law give Mst.

Mohan Dei an absolute estate,; and further, he allowed Mst. Mohan Dei to deal with the estate as her own, for she, on her part, also acted on the award and claimed absolute rights in the property assigned to her. She dealt with it on that footing and gifted it in that right to her grandsons, the contesting defendants, on 4th April, 1929.

Mutation was effected and Kishan Lal raised no objection.

We see then that Brijlal retained possession of property to which he was not entitled for a period of five or six years from 1884 to 1889 or 1890

and induced Mst. Mohan Dei to part with it by representing that he accepted the award and her absolute title to the rest, and after him Kishan Lal and his brother between them enjoyed the benefit of it from 1889 or 1890 down to October 1929 when Mst. Mohan Dei died, that is, for a further forty years, and led Mst. Mohan Dei to believe that. they also acknowledged her title to an absolute estate. We have no doubt that down to that time Kisan Lal was also estopped for the reasons given above. Had he questioned the award and reopened the dispute Mst. Mohaµ Dei would at once have sued and would then for forty years have obtained the benefit of property from which she was excluded because of her acceptance of the award on the faith of Brijlal's assertion that he too accepted it.

Kishan Lal's inaction over these years with full knowledge of the £acts, as is evident from the deposition of D.W. 2, Dhiyan Singh, whose testimonyis uncontradicted, and his acceptance of the estate with all its consequential benefits, unquestionably creates an estoppel in him. This witness tells us that-

Dhiyan Singh

and Anoth"

v. fugal Kishore

and Another.

Bose/.

•nd Anolhcr v. /ugal Kishore

and Another.

Bose],

"Kishanlal always accepted this award and acted upon it."

He qualifies this in cross-examination by saying that Kishan Lal had also objected to it but the witness did not konw whether that was before or after 'Mst. Mohan Dei's death.

The documents filed show it was after, so there is no reason why the main portion of his statement which is uncontradicted, and which could have been contradicted, should not be accepted.

In March, 1929, Mst. Mohan Dei's son Shri Kishan Das died and Kishan Lal thereupon became the next presumptive reversioner, and in October, 1929, when the reversion opened out the estate vested in him, or rather would have vested in him but for the estoppel.

The question therefore is, did he continue to be bound by the estoppel when he assumed a new character on the opening out of the reversion?

We have no doubt he did. The decision of the Judicial Committee which we have just cited.

Kanhai Lal v.

Brzjla/(1), is, we think, clear on that point. Although other reversioners who do not claim through the one who has consented are not bound, the consenting reversioner is estopped.

This is beyond dispute, when there is an alienation by a limited owner without legal necessity. See Ramgouda Annagouda v.

Bhausaheb(') where the ground of decision was- ". . . but Annagouda himself being a party to and benefiting by the transaction evidenced thereby was precluded from questioning any part of it."

In our opinion, the same principles -apply to a case of _ the present kind.

It was contended, however, on the strength of Rangasami Gounden v. Nachiappa Gounden(8 ) and Mt. Binda Kuer 11. Lalitha Prasad('), that even if Kishan Lal did take possession in 1889 or 1890 on the strength of a title derived from his father, that would not have precluded him from asserting his own rights in a different character when the succession opened

(I) (1918) 45 I.A. 118.

(2) (1927) 54 I.A. 396 at 403.

(3) (1919) 46 I.A. 72.

(4) (1936) A.I.R. 1936 P.C. 304 at 308.

" -

out.

Reliance in particular was placed upon page 308 of the latter ruling.

In our opinion, that decision is to be distinguished.

In that case the reversion did not fall in till 1916.

Long before that, namely in 1868, the next presumptive reversioners entered into a compromise whereby the grandfather of one Jairam who figured in !hat case obtained a good deal more than he would nave been entitled to in the ordinary way.

But for the compromise this grandfather would have got only one anna 12 gundas share, whereas due to the compromise he got as much as 2 annas 4 gundas. The actual taking of possesion was however deferred under the compromise till the death of one Anandi Kuer. She died in 1885 and on that date Jairam was entitled to his grandfather's share as both his father and grandfather were dead.

Jairam accordingly reaped the benefit of the transaction.

But it is to be observed that the extra benefit which he derived was only as to a 12 gundas share because he had an absolute and indefeasible right to 1 anna 12 gundas in any event in his own right under a title which did not spring from the compromise.

Jairam lost 1 anna 4 gundas to a creditor Munniram and out of the one anna which he had left from the 2 annas 4 gundas he sold 13 gundas to the plaintiffs for a sum of Rs. 500.

Now it is evident that on those facts it is impossible to predicate that the 13 gundas which the plaintiffs purchased came out of the extra 12 gundas which Jairam obtained because of the compromise rather than out of the 1 anna 12 gundas to which he had a good and independent title anyway; and of course unless the plaintiffs' 13 gundas could be assigned with certainty to the 12 gundas it would be impossible to say that they had obtained any benefit from the compromise.

The Judicial Committee also added that even if it was possible to assign this 13 gundas with certainty to the 12 gundas it by no means followed that the plaintiffs admitted that fact nor would that necessarily have given them a benefit under the compromise. They had the right to contest the

Dhiyan Sitttlt

and Anotht:r

v. /ugal Kishore and Another. -- Bose/,

Dhiyan Singh

and Another

v. fugal Kishorc and Another

Bo,_ J.

pos1t10n and gamble on the possibility of being able to prove the contrary. Their Lordships added-

"Unless the plaintiffs' individual it unjust that they should have a Bajrangi Lal's revers1oners their legal have effect."

conduct place rights

makes among should

In the other case, Rangasami Gounden v. Nachiappa Gounden('), their Lordships' decision about this matter turned on the same sort of point : see page 87.

The present case is very different.

When Kishan Lal took possession of his father's property he held by virtue of the award and under no other title, and for forty years he continued to derive benefit from it.

Accordingly, he would have been estopped even if he had claimed in a different character as reversioner after the succession opened out.

It was conceded that if the estoppel against Kishan Lal enured after October 1929, then the plaintiffs, who claim through Kishan Lal, would also be estopped.

The appeal succeeds. The decree of the High Court is set aside and that of the first Court dismissing the plaintiffs' claim is restored. Costs here and m the High Court will be borne by the plaintiffs-respondents.

Appeal allowed.

Agent for the appellan~ : Ganpat Rai.

Agent for the respondents : Sardar Bahadur Saharya.

{I) (1919) 461.A. 72.

DHIYAN SINGH AND ANOTHER

JUGAL KISHORE AND ANOTHER

VIVIAN BosE JJ.

Malik Mustaqil

uMalik Mustaqil

12th October, 1944

High Court of Judicature at Allahabad

Allsop

Malik

Bakshi Tek Chand

S. K. Kapoor

Achhru Ram

Megh Raj Singh

Jawahar Singh

Mada~Singh

Kisan Das

Dhiyan Singh

Obas Ram Onkar Prasad

Dhiyan Singh

fugal Kishore

Bose/.

Shanker Lal

Mohan Dei

Kishan Das

Shanker LaJ

Brijlal

Brij Lal

Musammat Mohan Devi

Amroha

Kishan Lal

Bnjlal

Mohan Die

Dhiyan Singlt

4th April, 1929

Kisan Lal

Mohaµ Dei

Dhiyan Singh

Kishanlal

Annagouda

Lalitha Prasad

Jairam

Anandi Kuer

Munniram

Dhiyan Sitttlt

/ugal Kishore

fugal Kishorc

Bajrangi Lal

Ganpat Rai

Sardar Bahadur Saharya


,..

S.C.R.

SUPREME COURT REPORTS 491

KASHINATH BHASKAR DATAR

ti.

BHASKAR VISHWESHW AR KARVE

[SAIYID FAzL ALI and VMAN BosE JJ.]

Indian Registration Act (XVI of 1908), s. 17(l)(b)-Subsequent document varying terms of previous document-Limiting and extinguishing "interest" in immoveable property-Equitable doctrine of part performancc-W hether applicable.

A suit to recover money based on two mortgages was resisted by the defendant on the plea that the mortgages were satisfied as the assignor of the mortgages to the plaintiff had executed an agreement in favour of the defendant which proved satisfaction.

This agreement was not registered and the question for determination was whether it required registration and whether if it did, it could not be used for the collateral purpose of proving full payment of the mortgage amount.

The agreement contained, inter alia, the following terms: "(i) I am settling and formulating new terms and I am confirming some very terms which were declared before; (ii) Although the rate of interest mentioned in the mortgage deeds is 14 annas still the actual rate is to be received at the rate of 8 annas and so it is settled between the original parties; (iii) It was agreed that if you pay me Rs. 1,800 in a lump it will be understood that the transaction has been wholly completed and paid up.

As you have no sufficiency of funds ................ it is settled that you are to pay me Rs. 80 per month; (iv) As mentioned above no interest of any nature

whatever has remained claimable by me ..... . and in like manner I understand whole of the principal has been fully paid; ( v) If you so wish or if necessity may arise then at any time you may ask for it I shall give you this agreement written out on stamp paper and on being registered."

Held, that the agreement was not exempt from registration because the document itself limited and extinguishecl an "interest" in immoveable property in the present within the meaning of s. 17( 1 )(b) of the Indian Registration Act, and it was not exempt under s. 17(2)(v).

Held, also that the document could not be used under the proviso to s. 49 of the Registration Act as the suit was not for specific performance and no question of part performance arose in the case and also no question of using the document for a collateral transaction arose because the document was to be used to prove the very agreement which it created itself .

., U. Po Thin v. Official Assignee (A.I.R. 1938 Rang. 285) and Tik_aram

v. Deputy Commissioner of Bara Banki (26 I.A. 97), ..,. Mahim Chandra Dey v. Ram Dayal Dutta (A.I.R. 1926 Cal. 170),

2-6 S.C. India/71

Feb. 22.

19)2

Kashinatk Bhaskar Datar v.

Bhaskar Vishweshwar

Karve.

Ram Rar.fn v .. fayantilal (A.LR. 1926 Cal. 906) and Collector of Etan v. Kr.<hon Lal (A.I.R. 1930 All. 721) referred to.

C!V!L

APPELLATE Ju&1so1CTI0N : Civil Appeal No. 140 of 1951. Appeal from a Judgment and Decree dated 22nd September, 1947, of the High Court of Judicature at Bombay (Sen and Bavdekar JJ.) in Appeal No. 41 of 1943 arising out of decree dated 4th September, 1942, of the Court of the First Class Subordinate Judge at Poona in Civil Suit No. 808 of 1941.

Roshan Lal and B. S. Shastri for the appellant.

Hardyal Hardy for the respondent.

1952. Februray 22. The Judgment of the Court was delivered by

BosE J.-This is a defendant's appeal in a suit Oil two mortgages.

The first was executed on the 7th of April, 1931, by the defendant and his father.

The second was dated the 17th of December, 1935, and was executed by the defendant alone. The first was for a sum of Rs. 9,500, the second for Rs. 3,500. The same property was mortgaged each time.

The claim on the two deeds together was for Rs. 20,774-3-0.

These mortagages were in favour of one Narayan Gopal Sathe. On the 28th of March, 1940, the mortgagee assigned them both to the plaintiff who now sues on them.

The defence was that both mortgages were satisfied.

The main evidence on which the defendant relied to prove satisfaction was an agreement dated the 17th of October, 1937, executed by the mortgagee Narayan Gopal Sathe in favour of the defendant. The document has been excluded from evidence by the trial Court as well as by the High Court on appeal on the ground that it required registration.

If this document is excluded, then there is a concurrent finding of fact by both the Courts that the rest of the evidence is not good enough to prove satisfaction.

They have disbelieved it and decreed the plaintiff's claim in full.

The -0nly questions before us are ( 1) whether this document :required registration and (2) whether, if it did,. it

cannot still be used for what the defendant claims is a

collateral purpose, namely proving full payment of 1952

Kflshinath the mortgage amount.

Bhaskar Dat/JI' The agreement came about in this fashion.

The - v. mortgagee, Narayan Sathe, was appointed Receiver of Bhaskar h h Vishweshwar two Cinemas in Poona.

T e Court appointing im Kt1rt1e. required him to produce a surety in the sum of Rs. 10,000.

The defendant agreed to undertake t~ responsibility and as a consideration for that the mortgagee executed the agreement in question.

The portions of document relevant for the present purpose are as follows.

The mortgages are there described as the "transactions of give and take".

"(3) It is extremely necessary to explain beforehand the transaction of give and take outstanding

etween both of us ...

(4) Whereas two transactions have been done between you and me ...... Therefore you have agreed to stand surety ... And only for that reason I am executing this agreement and giving it to you in writing and thereunder I am settling and formulating some new terms and I am confirming some very terms which were declared before.

(5) Although in the matter of the transaction relating to the aforesaid mortgage deed~ the rate of interest mentioned in the documents purporting to be the mortgage deeds is 14 annas per mensem per centum, still the actual interest is to he received only at the rate of 8 annas per mensem per centum; so it if settled between you and me and I have also agreed to the same.

And even at that rate I have also been receiving the interest and I shall also receive hereafter ....

( 6) As regards the transaction of the second mortgage deed .... if as agreed at tltat time between you and me you pay me Rs. 1,800 in the lump then it will be understood that the transaction of give and take s11bsisting between you and me has been wholly completed rand fully paid up.

As you have no sufficiency of funds to make up and pay :in full the above sum at once it is settled that you are to pay to me Rt. 80 per

Bose /.

Ka1hina1h Bhaskar Datar v.

Bha1k_ar Vuhweshwar

Karve.

Bose /.

month and thus you are to make payment in full .... ln accordance with the agreement arrived at between us both subsequent to the document purporting to be the second mortgage deed the said documents and papers . ... and the written receipts in respect of interest given to you by me relating to the payment in full made by you in respect of interest and principal on account of the first transaction dated 7-4-31 have been kept with me ...

• • •

(8) As mentioned above (vide paras 5 and 6 ) no interest of any nature whatever has remained claimable by me from you in accordance with the agreement arrived at between us both from the date of your suretyship onward and prior to it and in like manner I understand that the whole of the principal has been fully paid. • • •

(10) If you so wish or if necessity may arise then at any time you may ask for it and I shall give you this agreement on being written out on stamped paper and on being registere.d."

In our opinion, this is a document which limits and extinguishes interests in immovable pi{operty , fo the present within the meaning of section 17(1) (b) of the Indian Registration Act.

Clause ( 4) of the agreement expressly says so.

Referring to the two mortgages it says-

"! am settling and formulating some new terms."

This speaks from the present. It does not say that this was some past agreement, and that fact is underlined in the next sentence which reads-

"and I am confirming some very terms which were declared before."

Among the new terms is the following. The rate of interest agreed upon in the two mortgage deeds was 14 annas per cent per month. Clause ( 5) reduces this to 8 annas.

It is true that according to clause (5) only 8 annas had actuallv been paid all along b11t that hardly

matters because the question is not what was paid but what was due and what the mortgagee could have enforced under his bond. It is evident from clause ( 4) that it was the agreement embodied in the document which effected the change and therefore it was the document itself which brought the altered terms into being.

The next question is whether this limits an interest in immovable property.

We are of opinion it does.

We agree . with the learned Rangoon Judges in U. Po Thin v. Official Assignee(1) that one part of the

"interet" which a mortgagee has in mortgaged property is the right to receive interest at a certain rate when the document provides for interest.

If that rate is varied, whether to his advantage or otherwise, then, in our judgment, his "interest" in the property is affected.

If the subsequent agreement substitutes a higher rate, then to the extent of the difference it "creates" a fresh "interest" which was not there before.

If the rate is lowered, then his original "interest" is limited.

The question of a higher rate was considered by their Lordships of the Privy Council in Tika Ram v.

Deputy Commissioner of Bara Banki(2).

There, the mortgagors gave the mortgagees an unregistered rukka or written promise simultaneously with the registered mortgage stipulating that they would pay an extra 6 per cent per annum over and above the 15 per cent entered in the mortgage.

Their Lordships held that these rukkas could not be used to fetter the equity of redemption.

They did not decide whether the personal covenant in the rukkas could be enforced because that point had not been raised in the plaint and pleadings, nor did they refer to the Registration Act, but we think the words.

"an unregistered instrument which the staute declares is not to affect the mortgaged property"

can only have reference to that Act.

(I) (1938) R.L.R. 293 : A.LR. 1938 R. 285.

(2) (1899) 26 I.A. 97 at 100.

Kashinath Bhaskar Datar v.

Bhaskar Vishweshwlll'

Karve.

Bose f.

195'!

K6ShiHth lJhuk.Rr D1tlilr ... 1ihasfr,11r Vishweshwu

x..,.u~. .. ,. /.

It was argued, on the strength of M ahim Chandra Dey v. Ram Dayal Dutttt,(1) Ram Ranian v. Jayanti lal(') and Collector of Etah v. Kishori Lal("), that it is always open to a mortgagee to release or remit a part of the debt, aod when he doe.s so he does not limit or extinguish an interest in immovable property any more than when he passes a receipt acknowledging payment of the whole or part of the money. The effect of the payment, or of the release, may be to extinguish the mortgage but in themselves they do not limit the interest.

Extending this, the learned counsel for the defendant contended that when a mortgagee agrees to accept a lower rate of interest he docs no more than release that part of the debt which would be covered by the difference in rate.

We do not agree. There is a difference between a receipt and a remission or a release.

A receipt is aot the payment, nor does the document in such a case serve to extinguish the mortgage or limit the liability.

It is the payment of the money which does that and the receipt does no more than evidence the fact. Not ro a release.

The extinguishment or diminution of liability is in that event effected by the agreement itself and not by something external to it. If the agreement is oral, it is hit by proviso 4 to section 92 of the Evidence Act, for it "rescinds" or "modifies" the contract o~ mortgage. If it is in writing, it is hit by section 17(1) (b) of the Registration Act, for in that case the writing itself "limits" or "extinguishes" the liability under the mortgage.

It is to be observed that when the mortgagor pays money due on the mortgage, in whole or in part, he is

carrying out the terms of the bond and is not making any alteration in it, and even though the fact of payment may limit or extinguish the mortgagee's interest that is only because the bond is working itself out by the force of its own terms and not by reason of some new agreement which seekls to modify it or limit or extinguish the interest which it creates.

A simple test

(1) A.I.R. 1926 Cal. 170.

(3) A.LR. 1930 All. 721 at 725 F.B.

(2) A.I.R. 1926 Cal. 91J6.

...

is this : see whether the mortgagee can, in the face of the subsequent agreement, enforce the terms of his bond.

If he cannot, then it is plain that the subsequent undertaking has effected a modification, and if that has the effect of limiting or extinguishing the mortgagee's interest, it is at once hit either by section 17 (1) (b) or section 92 proviso 4.

But when there is a mere payment of money, that is done under the terms of the bond, for the contract of mortgage postulat'Es that the mortgagor should repay the money borrowed and that when he does so the mortgagee's interest in the property shall be "limited" to the extent of the repayment or, when all is repaid, be wholly extinguished ; nor, of course, does a payment !?.ave to be made by a written or registered instrument, or even evidenced by one.

Clause (xi) to section 17 (2) of the Registration Act is based on this principal.

It draws a distinction between a document which, by the force of its terms, effects the extinguishment, or . purports to do so, and one which merely evidences an external fact which brings about that result.

Now apply the test just given to the present case.

Under the mortgages the mortgagee .is entitled to . interest at 14 annas per cent. per month but the mortgagor says he cannot claim that.

Why?

Because, according to him, the subsequent agreement altered the terms of the bond and reduced his liability to only 8 annas. It hardly matters what the agreement is called, whether a release or a remission, nor is it germane to the question that the mortgagee is entitled to remit or release the whole or a part of the debt; the fact remains that his agreement to do so effects an alteration in the original contract and by the force of its terms or extinguishes his interest.

Assume that the mortgagor repaid the whole of the interest at the altered rate and the whole of the principal, would those repayments by themselves effect an extinguishment ef the mortgage?

Clearly not, because unless the subsequent agreement is called in aid, more would be due under the terms of the bond on account of the higher rate of interest.

It is evident then that it is the

Kwliinatli Bhaskar DilltW Y, Bliasl(llr VishUJesllwtw

Kar11e.

Kasliinatlt Bllask_ar Datar v.

Bliask_ar Visliwesliwar

K"rve.

Bose f.

agreement which limits the mortgagee's interest and serves to extinguish the mortgage and not mere payment at the reduced rate.

Similar observations apply to clause ( 6) of tbe agreem.ent.

It begins by reciting a past agreement in which the mortgagor had promised to pay Rs. 1,800 in a lump sum.

We are left to infer that this was to extinguish the mortgage. If it was, then it would be hit by either section 92, proviso 4, of the Evidence Act or section 17 (1) (b) of the Registration Act, but that does not matter because the present document varies even that agreement and substitutes a third agreement in its place; namely that payment of Rs. 1,800 by instalments at the rate of Rs. 80 a month will effect "payment in full", that is to say, will extinguish the mortgage.

This speaks from the date of the document, for it says, referring to this agreement, that "it is settled" etc.

Next we come to clause(8). That refers us back to clauses (5) and (6) and says that

"as mentioned there no interest of any nature whatever has remained claimable by me"

and speaking of the principal says "and in like manner I understand the whole of the principal has been fully paid".

We have already dealt with clauses (5) and (6). Clause (8) carries us no further and merely states that because of clauses (5) and (6) neither interests nor prjncipal is now claimable; and of course if neither interest nor principal is claimable that extinguishes the mortgage, and in this case the extinguishment is brought about, not by mere payment in accordance with the terms of the bond, but because of the. fresh agreement.

Clause ( 10) remains for consideration. It was argued that this brings the matter within section 17(2) (v) of. the Registration Act because it gives the defendant the right to obtain another document which will effect the extinguishment.

We do not agree because clause

(v) of sub-section (2) of section 17 of the Act postulates that the document shall not of itself create, declare,

...

assign, limit, extinguish any right etc., and that it shall merely create a right to obtain another document etc. (The stress is on the words "itself" and

merely".)

We agree with Sir Dinsha Mulla at page 86 of the 5th edition of his Indian Registration Act that

"If the document itself creates an interest in immoveable property, the fact that it contemplates the execution of another document will not exempt it from registration under this clause."

As we have seen, this document of itself limits or -extinguishes certain interests in the mortgaged property.

The operative words are reasonably clear.

Consequently, the document is not one which merely confers a right to obtain another document. It confers the right only in certain contingencies, namely, "if you so wish" or "if necessity may arise". Its purport is to effect an immediate alteration in the terms of the two bonds and because of that alteration to effect an immediate extinguishment and limitation. Clause (10) merely confers an additional right, namely the right to obtain anotr document "if you so wish" or "if necessity may arise".

Therefore, the document in question is not one which merely creates a right to obtain another.

An agreement to sell, or an agreement to transfer at some future date, is to be distinguished because that sort of document does not 0£ itself purport to effect the -transfer. It merely embodies a present agreement to execute another document in the future which will, when executed, have that effect.

The document in hand is not of that type.

It does not postpone the effect of extinguishment or limitation of the mortgages t.o a future date. It does not say that the agreement it embodies shall take effect in the future.

It purports to limit and extinguish the liabilities on the two mortgages at once by virtue of the document itself and merely adds that "if it is necessary or should you r.vant another document, I will repeat the present

Kashinath Bhaskar Datar v.

Bhaskilr VishweshwlZI

Ktm1e.

Bose f.

K.shinuh lJh•, k•r Datar v.

Bh•Jk#!' ViJhW46htVtlr

KMe.

lJoJe /.

agreement in a registered agreement".

By implication it means that if it is not necessary, or if the mortgagor does not want a registered instrument, the document itself will have effect. Incidentally, one effect of hold-- ing that this document does not limit or extinguiili the mortgagor's liability would be that there is noagreement to that effect yet in force.

This may or may not give the mortgagor a right to obtain specific performance of his right to obtain such an agreement but until he does that there would be no bar to the mortgagee's claim in this suit.

However, it Is not necessary to go as far as that because we are of opinion that thio document is not exempt from registration under section 17(2)(v), and we so hold.

The next question is whether the document can beused in evidence under the proviso to section 49 of the Registration Act. We are clear it cannot.

This is not a suit for specific performance nor does any question of part performance under section 53A of the Transfer of Property Act arise.

It remains then to be seen whether the use now sought ro be made of the document is to evidence a collateral transaction not required to be

evidenced by a registered instrument.

But what is thetransaction sought to be proved but the very :igre<- ment which the document not merely evidence~ but~ by reason of its own force, creates? That is not a-. collateral transaction and even if it were a transactionof that type, it would require a registered instrument_ for the reasons we have already given.

Section 53A of the Transfer of Property Act wa. referred to but it has no application, for the agreement • we are concerned with is not a transfer. There are no

words of conveyance in it; also the mortgagor is not continuing in possession in part performance of thecontract.

Both mortgages were simple and the right to possession never resided in the mortgagee. He might

in due course have acquired it by process of law if heobtained a decree and purchased at the sale; on theother hand, a stranger might have purchased and the , right to possession would in that event have passed:_ elsewhere.

But he had no right to possession at the: "' "'

date of the agreement and having none he could not have transferred it.

The mortgagor's possession was consequently not referable to the agreement.

The appeal fails and is dismissed with costs.

Appeal dismissed.

Agent for the appellant : Ganpat Rai.

Agent for the respondent: A. C. Dave.

RUBY GENERAL INSURANCE CO. LTD.

ti.

PEAREY LAL KUMAR AND ANOTHER.

[ SAIYID F AZL Au and VIVIAN BosE JJ.]

lt1Jian Arbitration Act (X of 1940), s. 33-Arbitration clause-· Wht'ther" disputt' "arises out of agrt't'ment"-Tests-Plea that agree•

1flt'11t is not applicable and does not subsist-No dispute about the existence or validity or meaning-Jurisdiction of arbitrator-Appli; cation under s. 33-Maintainability.

The appellant company insured a car belonging to respondent' No. 1 and issued a policy which contained, inter alia, the following_ tcrms:-"All differences arising out of this policy shall be referred to the decision of an arbitrator to be appointed by the parties •

. . . . . . If the company shall disclaim liability to the insured for any claim hereunder and such claim shall not within twelve calendar months from the date of such disclaimer have been referred to arbitration then the claim shall have been deemed to have been abandoned and shall not be recoverable." The car was lost, and the company through its Branch Manager disclaimed liability on three different dates.

The insured did not take any action in regard to the appointment of an arbitrator until more than twelve months after the last disclaimer by the company.

The case of the company was that the insured must be deemed to have abandoned his claim by virtue of the contract ef insurance policy while the respondent averred that there was never any valid disclaimer by the company of its liability as the Branch Manager had no authority to disclaim the liability and it could have been disclaimed only by the resolution of the company. The company presented the present application under sec. 33 of the Indian Arbitration Act praying for a declaration that the reference to arbitration was illegal and the award if made by the arbitrator would not bind the company.

It was contended on its behalf that the arbitration clause had ceased to be

Kashinath Bhaslr..ar Datar v.

Bhaslr,, ar VishweshwM'

Karve.

Fe/J. 25,

491

KASHINATH BHASKAR DATAR

BHASKAR VISHWESHW AR KARVE

SAIYID FAzL ALI

VMAN BosE JJ.

Indian Registration Act

s. 17(l)(b)

s. 17( 1 )(b)

Registration Act

s. 17(2)(v)

s. 49

Registration Act

Sen

Bavdekar

Roshan Lal

B. S. Shastri

Hardyal Hardy

BosE

7th of April, 1931

17th of December, 1935

Narayan Gopal Sathe

28th of March, 1940

17th of October, 1937

Narayan Sathe

Poona

section 17(1)

Registration Act

Rangoon

Registration Act

section 92

section 17(1)

Registration Act

section 17

section 92

section 17

Registration Act

section 92

section 17

Registration Act

section 17(2)

Registration Act

section 17

Dinsha Mulla

Indian Registration Act

section 17(2)(v)

section 49

Registration Act

section 53A

Transfer of Property Act

Section 53A

Transfer of Property Act

Ganpat Rai

A. C. Dave

RUBY GENERAL INSURANCE CO. LTD

PEAREY LAL KUMAR

SAIYID F AZL Au

VIVIAN BosE

Jian Arbitration Act

s. 33

s. 33

sec. 33


S.C.R.

SUPREME COURT REPORTS 501

date of the agreement and having none he could not have transferred it.

The mortgagor's possession was consequently not referable to the agreement.

The appeal fails and is dismissed with costs.

Appeal dismissed.

Agent for the appellant : Ganpat Rai.

Agent for the respondent: A. C. Dave.

RUBY GENERAL INSURANCE CO. LTD.

ti.

PEAREY LAL KUMAR AND ANOTHER.

[ SAIYID F AZL Au and VIVIAN BosE JJ.]

lt1Jian Arbitration Act (X of 1940), s. 33-Arbitration clause-· Wht'ther" disputt' "arises out of agrt't'ment"-Tests-Plea that agree•

1flt'11t is not applicable and does not subsist-No dispute about the existence or validity or meaning-Jurisdiction of arbitrator-Appli; cation under s. 33-Maintainability.

The appellant company insured a car belonging to respondent' No. 1 and issued a policy which contained, inter alia, the following_ tcrms:-"All differences arising out of this policy shall be referred to the decision of an arbitrator to be appointed by the parties •

. . . . . . If the company shall disclaim liability to the insured for any claim hereunder and such claim shall not within twelve calendar months from the date of such disclaimer have been referred to arbitration then the claim shall have been deemed to have been abandoned and shall not be recoverable." The car was lost, and the company through its Branch Manager disclaimed liability on three different dates.

The insured did not take any action in regard to the appointment of an arbitrator until more than twelve months after the last disclaimer by the company.

The case of the company was that the insured must be deemed to have abandoned his claim by virtue of the contract ef insurance policy while the respondent averred that there was never any valid disclaimer by the company of its liability as the Branch Manager had no authority to disclaim the liability and it could have been disclaimed only by the resolution of the company. The company presented the present application under sec. 33 of the Indian Arbitration Act praying for a declaration that the reference to arbitration was illegal and the award if made by the arbitrator would not bind the company.

It was contended on its behalf that the arbitration clause had ceased to be

Kashinath Bhaslr..ar Datar v.

Bhaslr,, ar VishweshwM'

Karve.

Fe/J. 25,

1Ruby General

Insurance Co. Ltd. v.

Pearey Lal

Kumar 'llnd Anoth<r.

operative and the question as to the existence and validity of the Arbitration agreement was triable by the court under sec. 33 of the Arbitration Act and not by the arbitrator.

Held, (i) that the point on which the parties were in dispute was a difference "arising out of the policy", because recourse to the contract by which both the parties were bound was necessary for the purpose of determining the matter in dispute between them as there was no contention raised in the present case by either of the parties that there was no contract entered into at all or that it was void ab initio, and therefore the arbitrator had jurisdiction to decide the matter referred to him. A contention 'that the arbitration agreement has ceaseG to be applicable or that it no longer subsists will not oust the jurisdiction of the arbitrator.

(ii) No question of determining the effect of the arbitration :within the n1eaning of sec. 33 arose because there was no dispute between the parties as to what it meant.

A. M. Mair and Co. v. Gordhandas Sagarmul/ [1950] (S.C.R. '792), Heyman v. Darwins Ltd. ([1941] 1 A.E.R. 337), Mecaura v.

Northern Assurance Co. ([1925] A.G. 619), Stebbing v. Liverpool, London and Globe Insurance Co. Ltd. ([1917], 2 K. B. 433) referred to.

CIVIL

APPELLATE JuRISDICTION : Civil Appeal No. 163 of 1951.

Appeal by special leave from the Judgment dated the 10th April, 1951, of the High Court of Judicature for the State of Punjab at Simla (Kapur J.) in Civil Revision No. 286 of 1950 arising out of Order dated the 24th March, 1950, of the Court of Subordinate Judge, 1st Class, Delhi, in an Application under Section 33 of Indian Arbitration Act, X of 1940.

Rattan Lal Chawla (K. N. Agarwal, with him) for the appellant.

Som Nath Chopra

1952. February 25. was delivered by

for the The respondent.

Judgment of the court

FAZL Au J .-This is an appeal by special leave against the i"udgment of the Punjab High Court upholding the decision of a Subordinate Judge of Delhi relating to a petition filed by th~ 3:ppellant-compny under section 33 of the Indian Arb1trat10n Act against the respondents.

1952 The material facts are these. On the 22nd April, 1947, the appellant company insured a car belonging Ruby General'

Insurance

Co. Ltd. to the first respondent and issued a policy which fully sets out the terms and conditions of the agreement relating to the insurance. The first respondent left his car in a garage at Lahore and came away to India on the 31st July, 1947.

Subsequently, he learned about the loss of his car, and sent a legal notice dated the 18th March, 1948, through his advocate Mr.

A. R.

Kapur to the Head Office of the company at Calcutta, claiming a sum of Rs. 7,000 for the loss of the car. On the 10th April, 1948, Mr. Kapur received a letter from the Branch Manager of the Company's office at Amritsar asking for information regarding certain matters stated in the letter.

This information appears to have been supplied on the 30th April, 1948. On the 26th May, 1948, the company's Branch Manager at Amritsar wrote to the first respondent repudiating the liability of the company for the loss of the car on the. ground that the loss was "due to communal riots. which were going on in the whole of Punjab" and was not covered by the agreement of insurance. A similar letter was written again by the Branch Manager on the 3rd July, 1948, to the first respondent, and another letter was written by one Mr. Rattan Lal Chawla representing himself to be counsel for the company, to,

Mr. A. R. Kapur, on the 1st August, 1948.

On the. 21st November, 1949, the first respondent wrote a letter to the Branch Secretary of the Company's office at Calcutta, stating that his claim was valid and nominating Mr. T. C. Chopra, Assistant Manager,.

Lakshmi Insurance Company Ltd., Delhi, as arbitrator on his behalf and requesting the company to appoint

another person as arbitrator on its behalf. Thereafter,, the company presented an application on the 29th December, 1949, in the court of the Senior Sub-judge,.

Delhi, under section 33 of the Indian Arbitration Act,. against the first respondent and Mr. T. C. Chopra, thearhitrator, who is the second respondent in tliis appeal,.

praying forv.

Pearey Lal Kumar and Another~

Fazl Ali / ..

; Ruby Generol

Insurance

Co. Ltti.

Pear<y Lal

Kumllf' .-nJ Another.

( 1) a declaration to the effect that the reference to arbitration 1md the appointment of respondent No. 2 as sole arbitrator was illegal;

(2) a declaration to the effect that if the respondent No. 2 made any award it would not be binding . on the company; and

(3) an injunction restraining the respondents Nos . 1 and 2 from taking any proceeding in the matter and the respondent No. 2 from making any award.

Upon this petition, notice was issued to the respondents, and an injunction was issued directing them not to file any award till the date of the next hearing, which was fixed for 31st January, 1950.

On the 4th February, 1950, the first respondent wrote to the second respondent (the arbitrator) that since no arbitrator had been appointed by the company and since the company had refused to appoint any arbitraator, he (Mr. Chopra) was to act as the sole arbitrator.

On the 6th February, 1950, Mr. Chopra wrote to inform the insurance company that he had been appointed sole arbitrator and asked the company to send the • statement of its case and to produce all the evidence ·!>ll the 14th February,

1950. On the 10th February, 1950, the insurance company filed a petition before the Subordinate Judge, Delhi, praying that the responden~ be stopped from proceeding further in the matter so .that its application under section 33 may not become infructuous.

On the 11th February, the Subordinate Judge issued notice to the respondents fixing the 17th }'ebruary as the date of hearing and passed the fol- 'lowing order:

"Moreover (till) the decision of this application the arbitrator should not give or pronounce his award bur should continue the proceedings."

On. the 14th February, 1950, the second respondent pronounced his award after making a note to the following effect:-

"Mr. G. R. Chopra, the counsel of the defendants, , sent a telephonic message at 12 A.M. requesting extenon till ;! P.M.

I agreed and accordingly I waited for

.. .

...

him and the plaintiff with his counsel also waited up to 1 P.M. Nobody turned up on behalf of the defendants.

I commenced the proceedings and took the statement of the plaintiff and the documents that he had produced."

He made a further note at the end of the award to this effect:-

"As after the giving of the award a notice was 1erved upon me not to give the award, I have not sent any formal letter to the parties informing them of the award and its costs."

On the 24th March, 1950, the Subordinate Judge pa$sed an order on the company's application under

section 33, dismissing it and holding that the terms. of clause 7 of the agreement "were comprehensive enough to include the points of disputes between the parties now and as such are triable by the arbitrator and not by the court". The Subordinate Judge concluded his order by observing:

"I, therefore, hold that the reference to the arbitration of the differences is perfectly valid and the points raised by the parties to this application with regard to the abandonment of claim . and its becoming irrecoverable are to be decided by the arbitrator."

The judgment of the Subordinate Judge was upheld in revision by the Punjab High Court and the company has now preferred an .appeal to this court by special leve.

The points that were . urged on behalf of the appellant in this appeal are these:-

(1) that the arbitration clause had ceased to be operative and the question as to the existence and validity of the arbitration agreement was triable by the court under section 33 of the Arbiration Act and not by the arbitrator; and

(2) that the award was invalid and not binding on the appellant, because it was pronounced in spite of the order of the court dated the 11th February, 1950,

directing the arbitrator not to pronounce his award.

19)2

Ruby Gent:ral

lnsuranct:

Co. Lttl.

Pe11rt:y lAl

Kumar ani A.notht:r.

Pal Ali /.

Ruby Genn-111

Insurance

Co. Ltd.

Pearey Ltil

Kumar 11nd A nothn-

F11zl Ali J.

Clause 7 of the policy of insurance runs as follows:-

"All differences arising out of this policy shall be . rderred to the decision of an arbitrator to be appointed in writing by the parties in difference or if they cannot agree upon a single arbitrator to the decision of two arbitrators one to be appointed in writing by each of the parties within one calendar month after having been required in writing so to dO' by either of the parties or in case the arbitrators do not agree of an umpire appointed in writing by the arbitrators before entering upon the reference.

The umpire shall sit with the arbitrators and preside at their meeting and the making of an award shall be a condition precedent to any right of action against the company.

If the company shall disclaim liability to the insured for any claim hereunder and such claim shall not within twelve calender months from the date of such disclaimer have been referred to arbitration under the provisions herein contained then the claim shall for all purposes be deemed to have been aban- . cloned and shall not thereafter be recoverable hereunder."

It will be noticed that this clause provides among other things that if the company disclaimed liability to the insured for any claim under the policy and such claim was not within twelve calendar months from the date of such disclaimer . referred to arbitration, then the claim should be deemed to have been abandoned and was not recoverable.

The case of the company is that it disclaimed liability for the loss of the car on three successive occasions, namely, on the 26th May, 1948, the 3rd July, 1948, and the 1st August, 1948.

The first respondent however did not take any action in regard to the appointroent of an arbitrator until the 21st November, 1949, i.e., until more than 12 months after even the last disclairoer by the company. For this reason, the claim put forward by the first respondent must be deemed to have been abandoned and he cannot recover anything from the company.

On the other hand, the case of the first respondent, which

... .

~ -

is set out m 'his affidavit dated the 17th February, 1950, is that there was never any valid disclaimer by the company of its liability. The position that he took up was that the Branch Manager of the company had no authority to disclaim the liability, and it could have been disclaimed only by a resolution of the company.

Now these being the respective contentions of the parties, the question is whether the point in dispute fell to be decided by the arbitrator or by the court under section 33 of the Arbitration Act.

Section 33 is to the following effect:-

"Any party to an arbitration agreement or any person claiming under him desiring to challenge the existence or validity of an arbitration agreement or an award or to have the effect of either determined shall apply to the Court and the Court shall decide the question on affidavits :

-Provided that where the Court deems it just and expedient, it may set down the application for hearing on other evidence also, and it may pass such orders for discovery and particulars as it may do in a suit."

The question to be decided is whether the point ori which the parties are in dispute is a difference "arising out of the policy" in terms of clause 7 of the policy.

The test for determining such a question has been laid down in a series of cases and is a simple one. The test is whether recourse to the contract by which the parties are bound is necessary for the purpose of determining the matter in dispute between them.

If such recourse to the contract is necessary, then the matter must come within the scope of the arbitrator's jurisdiction.

In the present case; both thP. p; iries admit the contract and state that they are bound by it. Indeed, the appellant-company, in order to mak-ie good its contention, is obliged to rely and does rely on that part of clause 7 of the policy which states that if the company should disclaim liability and the claim be not refered to arbitration within 12 months of such disclaimer, the claim shall be deemed to have been abandoned.

Evidently, the company cannot succeed without calling m aid this clause and 3-6 S. C. India/71

Ruby General Insurance Co. Ltd. v •.

Pearcy Lal Kumar and- Another.

Fazl - Ali. J.

Ruby General

Insurance

Co. Ltd.

Peuey Lal Kumar •ntl Another.

F•d Ali f.

rely.ing on it. Agajn, the first respondent does not say that he is not bound by the clause but states that the matter was referred to arbitration before any valid disclaimer was made.

The position therefore is that one party relying upon the arbitration clause says that there has been a breach of its terms and the other party, also relying on that cla11Se, says that there has been no breach but on the other hand the requirements . of that clause have been fulfilled. Thus, the point in dispute between the parties is one for the decision of which the appellant is compelled to invoke to his aid one of the terms of the insurance agreement. it is thus clear that the difference between the parties is a difference arising out of the policy and the arbitrator had jurisdiction to decide it, the parties having made him the sole judge of all differences arising out of the policy. ,

A large number of cases were cited before us on behalf of the parties, but it is unnecessary to refer to them, since the question which arises in this appeal is a simple one and is covered by the statement of law which is to be found in the decision of this Court in

A. M. Mair & Co. v. Gordhandas; Sagarmull('), and in a series of English authorities, some of which only may be referred to.

In Heyman v. Darwin;, Ltd. (t) the law on the subject has been very clearly stated in the following passage :-

"An arbitration clause is a written submission, agreed to by the parties to the contract, and, like otha written submissions to arbitration, must be construed according to its language and in the light of the circumstances in which it is made. If the dispute is :u to whether the contract which contains the clause has (!ver been entered into at all, that issue cannot go to arbitration under the clause, for the party who denies that he has ever entered into the contract is thereby denying that he has ever joined in the submission.

Similarly, if one party to the alleged contract is contending that it is void ab initi"o (because, for example, the making of such a contract is illegal) the arbitration

(I} [19SOJ S.C.R. 792.

(2) [1941) I A. E. R. 337,343.

....

dause cannot operate, for on this view the clause itself

is also void.

If, however, the parties are at one in asserting that they entered into a binding contract, but a difference has arisen between them as to whether there has been a breach by one side or the other, or as to whether -circumstances have arisen which have discharged one o0r both parties from further performance, such differnces should be regarded as differences which have arisen 'in respect of', or 'with regard to,' or 'under' the contract, and an arbitration clause which uses these, or similar expressions, should be construed .accordingly.''

In Macaura v.

Northern Assurance Co.(1), the :41ppellant had insured a large quantity of timber against fire and the greater part of the timber having been destroyed by fire, he sued the insurance company to recover the loss but the action was stayed and the matter was referred to arbitration in pursuance of the conditions contained in the policy.

The arbitrator held that the claimant had no insurable interest in the -goods insured and disallowed .the claim.

One of the points raised in the case was that the arbitrator had no jurisdiction to decide the matter, but that contention was rejected by Lord Sumner in these words :-

"The defendants do not repudiate the policy or dispute its validity as a contract; on the contrary, they rely on it and say that according to its terms, -express and implied, they are relieved from liability :

!CC Stebbing's case(2}, Woodall v. Pearl Assurance c~.e>

.... It is a fallacy to say that they assert the policy to be null and void."

In Stebbing v. Liverpool. and London and Globe Insurance Company Limited(2), to which reference was

made by Lord Sumner, the policy of insurance contained a clause referring to the decision of an arbitrator "all differences arising out of this policy". It also

(I) (1925] A.C. 619.

(3) [1919] l K.B. 593.

(2) [1917] 2 K. B. 433.

Ruby General

Insurance

Co. Ltd. v.

Pearey Lal

Kumar ond Another.

Fazl Ali f.

Ruby General

lnsuranc~

Co. Ltd. . v.

Pearey Lal Kumar and Another.

Fazl Ali f.

contained a recital that the assured had made a proposal and declaration as the basis of the contract, and a clause to the effect that compliance with the conditions indorsed upon the policy should be a condition precedent to any liability on the part of the insurers •

One of the conditions provided that if any false declaration should be made or used in support of a claim all benefit under the policy should be forfeited.

In answer to a claim by the assured, the insurers alleged that statements in the proposal and declaration were false.

When the matter came before the arbitrator, the assured objected that this was not a difference in the arbitration and that the arbitrator had no power to determine whether the answers were true or not, or to determine any matters which called in question the validity of the policy. In holding that the arbitrator had jurisdiction to decide the matter, Viscount Reading C. J. observed as follows : -

"If the company were seeking to avoid the contract in the true sense they would have to rely upon some matter outside the contract, such as a misrepresentation of some material fact inducing the contract, of which the force and effect are not declared by the contract itself.

In that case the materiality of the fact and its effect in inducing the contract would have to be tried. In the present case the company are claiming the benefit of a clause in the contract when they . say that the parties have agreed that the statements in question are material and that they 'induced the contract.

If they succeed in escaping liability that is by reason of one of the clauses in the policy.

In resisting the claim they are not avoiding the policy but relying on its terms.

In my opinion, therefore, the question whether or not the statement is true is a question arising out of the policy."

The main. contention put forward on behalf of the appellant is that the points in dispute fall outside the jurisdiction: of the artibitrator, firstly because the existence of the arbitration agreement is challenged, and seconaly, because the sole object of the application under section 33 of the Arbitration Act is to have the

... .

effect of the arbitration agreement determined.

In our opinion, neither of these objections is sound. How can it be held that the existence of the arbitration agreement is challenged, when both parties admit that the clause in the policy which contains that agreement binds them. It is neither party's case that there is no arbitration agreement in the policy.

On the other hand, both parties admit that such agreement exists, and each of them relies on it to support its case. It is true that the appellant contends that the arbitration agreement has ceased to be applicable, but that contention. cannot be sustained without having recourse to the arbitration agreement.

It is said that the agreement no longer subsists, but that is very different from saying that the agreement never existed or was void ab initio and therefore is to be treated <!-' non-existent.

Again, no question of determining the effect of the arbitration agreement arises, because there is no dispute between the parties as to what it means.

The language of the arbitration clause is quite clear, and both parties construe it in the s:ame way.

The real question between them is whether the first respondent has or has not compli'ed with the conditions of the agreement.

But this question does not turn on the effect of the agreement.

This is the view which has 1ubstantially been taken by the High Court, and in our opinion it is correct.

The second point urged before us is that the award is invalid, since it was made in spite of the court's injuction directing the arbitrator not to pronounce any award.

This point however does not, in our opinion fall within the scope of this appeal.

The application under section 33 of the Arbitration Act, which is the subject of this appeal, was filed before the award was pronounced.

In that application, there is no reference to the award; nor is there any reference to the circumstances which are now stated to invalidate the award and which happened after the application was filed.

The learned counsel for the appellant made an application before us praying for the amendment of the petition under section 33 by introducing certain

Ruby General

Insurance

Co. Lti.

Pearey Lill

Kumar anti Another.

Fazl Ali /.

Ruby General

Insurance Co. Ltd. v.

Pearey Lal

Kumar and Another.

Fazl Ali /.

additional facts and addiD; g a prayer for declaring the award to be invalid, but it was rejected by us. It should be stated that as early as the 24th March, 1950. the Subordinate Judge in dismissing the appellant's petition under section 33, made the following observations :-

"During the pendency 0£ the arbitration proceedings the arbitrator pronounced the award .... The award has now been filed in the court of S. Mohinder Singh, Sub Judge, 1st class, Delhi. Any objection against the award can be filed there. In this application in which there is no prayer for setting aside the award, which exists, I do not think it proper to decide the question of the validity of the award.''

In OUf opinion, the Subordinate Judge correctly indicated the course which it was open to the appellant in law to adopt for the purpose of questioning the validity of the award, but not having taken that course and not having made any application in the courts below for amending the petition under section 33, the company cannot ask this court to go into the validity of the award by widening the scope of the original petition. This court is always in favour of shortening litigation, but it would be a very unusual step to allow the petition under section 33. to be amended now and to decide a question involving investigation of facts without having the benefit of the judgments of .the courts. below.

In the result the appeal fails and is dismissed with costs.

Appeal dismissecl.

Agent for the appellant G.inpat Rai.

Agent for respondent No. 1 : S. D. Sekhri.

Ganpat Rai

A. C. Dave

RUBY GENERAL INSURANCE CO. LTD

PEAREY LAL KUMAR AND ANOTHER

VIVIAN BosE JJ.

Jian Arbitration Act

s. 33

s. 33

sec. 33

sec. 33

sec. 33

Section 33

Indian Arbitration Act

Rattan Lal Chawla

K. N. Agarwal

Som Nath Chopra

FAZL Au

section 33

31st July, 1947

18th March, 1948

A. R.

Kapur

Calcutta

10th April, 1948

Kapur

Amritsar

30th April, 1948

26th May, 1948

Punjab

3rd July, 1948

A. R. Kapur

1st August, 1948

21st November, 1949

T. C. Chopra

section 33

T. C. Chopra

Pearey Lal Kumar

31st January, 1950

4th February, 1950

Chopra

6th February, 1950

10th February, 1950

Subordinate Judge, Delhi

section 33

14th February, 1950

G. R. Chopra

24th March, 1950

section 33

clause 7

Punjab High Court

section 33

Pal Ali

Clause 7

section 33

Section 33

clause 7

clause 7

Ruby General Insurance Co. Ltd.

Pearcy Lal Kumar

Ruby General

Insurance

Co. Ltd.

Peuey Lal Kumar

Agajn

Sumner

CC Stebbing

Viscount Reading

section 33

section 33

section 33

section 33

S. Mohinder Singh

section 33

section 33

G.inpat Rai

S. D. Sekhri


S.C.R.

SUPREME COURT REPORTS 513

MAHANT

PRAGDASJI GURU BHAGW ANDASJI 1952

M11rcll 7.

PATEL ISHW ARLALBHAI NARSIBHAI

AND

OTHERS

[SAIYID FAZL Au, MuKHERJEA and V1vIAN BosE JJ].

Civil Procedure Code (Act V of 1908) s. 92-Religious trust- Allegation of breach of trust not made out-Direction for administration of trust not sought-Decree declaring existence of public trust -Whether legal and proper-Nature of suit under s. 92.

In a suit under sec. 92 of the Civil Procedure Code alleging that the defendant had been guilty of misconduct and breach of trust as Mahant and praying, inter alia, that the temple and properties in suit be declared as a religious and charitable trust and the defendant be removed from the Gadi and a suitable successor appointed in his place, the District Judge and the High Court held concurrently that the defendant was not guilty of misconduct or breach of trust and dismissed the suit, but made a

declaration to the effect that the temple and properties in the possession of defendant belonged to a public trust of a 1eligious and charitable character :

Held, that a suit under sec. 92, Civil Procedure Code, is a suit of a special character which presupposes the existence of a public trust of a religious or charitable character and it can proceed only when there is a breach of such trust or directions from the Court are necessary for the administration thereof and it must pray for one or other of the reliefs that are specifically mentioned in the section; and therefore as the Courts found concurrently that the allegations of breach of trust were not made out and no direction of the Court for proper administration of trust was sought, the very foundation of a suit under sec. 92, Civil Procedure Code, became wanting and the plaintiffs had no cause of action for their suit; and in the circumstances the declaration of the High Court about the existence of a public trust was inconsequential and was no more than an obiter dictum and such declaration must be deleted from the decree dismissing the suit.

CIVIL

APPELLATE JuRisorcrroN : Civil Appeal No. 99 of 1951.

Appeal from a Judgment and Decree of the High Court of Judicature at Bombay (Stone C. J. and Dixit J.) dated 14th July, 1947, in First Appeal No. 128 of 1943 affirming a decree dated 14th October, 1942, of the Court of the District Judge of Kaira at Nadiad in Civil Suit No. 15 of 1928.

'1952

 Mahant Pragt!asii

Guru Bhagwant!asji

Patd lshwarlalbhai

Narsibhai and Others.

Mufther}ea /.

Daphtary (N. C. Shah, with him) for the appellant.

Rajani Patel for the respondent.

1952. March 7.

The judgment of the Court was delivered by MuKHERJEA J.-This appeal is on behalf of the defendant and it arises out of a suit, under section 92 of the Civil Procedure Code, commenced by the plaintiffs who were originally nine in number in the court of the District Judge of Kaira at Nadiad.

Out of the nine plaintiffs, only one is surviving, and he is now the sole respondent in this appeal, all the rest having died pending this protected litigation, which began as early as the year 1928.

The case of the plaintiffs, in substance, was that Qne Kuberdas, who was a religious teacher and a holy man founded a cult known as Kaivalya or Karunaagar Panth, the principal tenet of which is that the realization of the Infinite is possible only through the medium of a Guru or spiritual preceptor.

Kuberdas received money and lands from his followers and disciples and with this fund he built a temple at Sarsa.

Kuberdas by will appointed his principal disciple . Narayandas to succeed him on the Gadi and Narayandas built another and a bigger temple wherein he installed an image of Kuberpas, with the images of two staff bearers on two sides.

The Mahants after Narayandas were Baldevdas, Bhagwandas and Pragdasji, who is the defendant in the suit and each one of them was appointed by a will executed by his predecessor.

The defendant, it is alleged, had been acting in a manner contrary to the usages of the institution and was guilty of incontinence, mismanagement and improper alienation of trust properties.

On these allegations the plaintiffs prayed that : ( 1) the properties described in the schedule to the plaint as well as other properties under the manage- . ment of the defendant be declared to be religious and charitable trust properties of the Kaivalya or Karunasagar Panth ;

(2) the defendant be removed from the Gadi and possession of the properties and a suitable successor appointed in his place;

(3) the defendant be called upon to render accounts for the period of his management; and ( 4) a scheme might be framed for proper management of the institution.

The defendant 'in his written statement traversed all the material allegations m the plaint and contended inter alia , that the suit was not maintainable inasmuch

•s no public trust of a religious and charitable character existed m respect to the suit properties which were the private properties of the defendant himself.

On these pleadings, a number of issues were framed by the District Judge, of which the two following were tried as preliminary issues, vzz.,

(1) Whether the temple and the properties in suit -.re public charitable properties? and

(2) if not, whether this court has jurisdiction to try the suit?

By his judgment dated the 18th of July, 1935, the District Judge decided both these issues against the plaintiffs and dismissed the suit.

Against this decision the plaintiffs took an appeal to the High Court of Bombay. The learned Judges of the High Court, who heard the appeal, took! the view that the -0wnership of the suit properties was so restricted by the obligation to maintain the institution for purposes which only could be described as public charitable purposes, that the suit must be regarded as one coming within section 92, Civil Procedure Code. The result was that the judgment of the trial court was reversed . <Uld the case was remanded to that court in order that it might be heard and disposed of on its merits.

The judgment of the High Court is dated 24th of January, 1938.

Being aggrieved by this order, the defendant prayed for leave to appeal to the Judicial Committee, but this application was refused. He thereupon filed a petition before the Privy Council, praying for special leave.

Mahant Pr11gdflsji

Guru Bhazwcmdasji

Patel Ishwnrlalbhai

Narsibhai and Others.

Muk.herieR /.

Mahanl Pragdas; i

Guru Bhagwandasii

Patel lshwarlalbhai

Narsibhai •nd Others.

The Privy Council also refused to grant leave on the ground that the matter was still then in an interlocutory stage. They, however, said specificaJ.ly that the order of refusal was without prejudice to the presentation of a fresh petition after all the issues were determined. The case then went back to the trial court and on the evidence adduced by the parties, the District Judge came to the conclusion that the allegations of misconduct and breach oE trust made by the plaintiffs were not proved and in this view he dismissed the suit, subject to the declaration already given by the High Court that the temple and the properties in possession of the defendant were public, religious and charitable properties.

The plaintiffs filed an

appal against this decision to the High Court of Bombay and the High Court by its judgment dated 14th of July, 1947, affirmed the decision of the District Judge and dismissed the appeal.

The defendant has now come up to this court on the strength of a certificate granted by the High Court; and though formally it is an appeal against the final decree made by the High Court on 14th of July, 1947;. in substance it challenges the propriety of the order of remand passed on 24th January, 1938, by which the High Court reversed the decree of dismissal made by the District Judge and remanded the case, being of opinion th:it the properties in dispute did appertain tO> a public trust of a religious and charitable character_

Mr. Daphtary appearing in support of the appear has contended before us that on the question as to whether or not a public trust existed in respect of the properties in suit, the view taken by the trial judge was right and that the decision of the High Court is based upon a misappreciation of the evidence on the record.

We have been taken through the entire evidence by the learned counsel on both sides; but having regard to the view which we propose to take in this case we . deem it unnecessary to record any finding as to whether the properties in suit do or do not appertain to a public charitable trust.

In our opinion, after the

decision arrived at concurrently, by both the courts below on the merits of the case, it was beyond the scope of a suit framed under section 92, Civil Procedure Code, to give the plaintiffs a bare declaration of this character and make it a part of tl1e decree, although the suit itself was dismissed.

A suit under section 92, Civil Procedure Code, is a suit of a special nature which presupposes the existence of a public trust of a religious or charitable character. Such suit can proceed only on the allegation that there is a breach of such trust or that directions from the court are necessary for the administration thereof, and it must pray for one or other of the reliefs that are specifically mentioned in the section. It is only when these conditions are fulfilled that the suit has got to be brought in confirmity with the provision of section 92, Civil Procedure Code.

As was observed by the Privy Council in Abdur Rahim v. Barkftt Ali(1), a suit for declaration that certain property appertains to a religious trust may lie under the general law but is outside the scope of section 92, Civil Procedure Code. In the case before us, the prayers made in the plaint are undoubtedly appropriate to the terms of section 92 and the suit proceeded on the footing that the defendant, who was alleged to be the trustee in respect of a public trust, was guilty of breach of trust.

The defendant denied the existence of the trust and denied further that he was guilty of misconduct or breach of trust.

The denial could not certainly oust the jurisdiction of the court, but when the courts found concurrently, on the evidence adduced by the parties, that the allegations of breach of trust were not made out, and as it was not the case of the plaintiffs, that any direcion of the court was necessary for proper administration of the trust, the very , foundation of a suit under section 92, Civil Procedure Code, became wanting and the plaintiffs had absolutely no cause of action for the suit they instituted.

In these circumstances, the finding of the High Court about the existence of a public trust was wholly inconsequential and as it was

(I) (1928)55 IA.96

195Z

Mahant Pragdasji Guru Bhagwandasii: v.

Patel lshwarlalbhai Narsibhai and Others.

Mukherjea l~

Mahant Pragdasji

Guru iBhagwanda1ji v.

Patel lshwarlalhhai

Nar1ibhai and Other1.

unconnected with the grounds upon which the case was actually disposed of, it could not be made a part of the decree or the final order in the shape of a declaratory relief in favour of the plaintiffs. It has been argued by the learned counsel for the respondents that even if the plaintiffs failed to prove the other allegations made in the plaint, they did succeed in proving that the properties were public and charitable trust properties-a fact which the defendant denied. In these circumstances, there was nothing wrong for the court to give the plaintiffs a lesser relief than what they actually claimed. The reply to this is, that in a suit framed under section 92 of the Civil Procedure Code the only reliefs which the plaintiff can claim and the court can grant are those enumerated specifically in the different clauses of the section. A relief praying for a declaration thait the properties in suit are trust properties does not come under any of these clauses.

When the defendant denies the existence of a trust, a declaration that the trust does exist might be made as ancillary to the main relief claimed under the section if the plaintiff is held entitled to it; but when .the case of the plaintiff fails for want of a cause of action, there is no warrant for giving him a declaratory relief under the provision of section 92, Civil Procedure Code.

The finding as to the existence of a public trust in such circumstances would be no more than an obiter dictum and cannot constitute the final decision in the suit.

The result is that in our opinion the decision of the High Court should stand, but the decree and the concluding portion of the judgment passed by the trial court and affirmed by the High Court on appeal shall direct a dismissal of the plaintiff's suit merely without its being made subject to any declaration as to the character of the properties. To this extent the appeal is allowed and .the final decree modified. The order for costs made by the courts below will stand. Each party will bear his own costs in this appeal.

Appeal allowed.

Agent for the appellants: Ganpat Rai.

Agent for the respondents: K. f. Kale.

513

MAHANT

PRAGDASJI GURU BHAGW ANDASJI

PATEL ISHWARLALBHAI NARSIBHAI AND OTHERS

MuKHERJEA

V1vIAN BosE JJ

Civil Procedure Code

s. 92

s. 92

sec. 92

sec. 92

Civil Procedure Code

sec. 92

Civil Procedure Code

CIVIL

APPELLATE JuRisorcrroN

High Court of Judicature at Bombay

Daphtary

N. C. Shah

Rajani Patel

section 92

District Judge of Kaira at Nadiad

Qne Kuberdas

Kuberdas

Sarsa

Narayandas

Kuberpas

Baldevdas

Bhagwandas

Pragdasji

Karunasagar Panth

18th of July, 1935

High Court of Bombay

section 92

Civil Procedure Code

24th of January, 1938

Mahant Pr11gdflsji

Guru Bhazwcmdasji

Patel Ishwnrlalbhai

Narsibhai

Mahanl Pragdas

Patel lshwarlalbhai

Narsibhai

14th of July, 1947

24th January, 1938

Daphtary

section 92

Civil Procedure Code

section 92

Civil Procedure Code

section 92

Civil Procedure Code

section 92

Civil Procedure Code

section 92

section 92

Civil Procedure Code

Mahant Pragdasji Guru Bhagwandasii

Patel lshwarlalbhai Narsibhai

section 92

section 92

Civil Procedure Code

Ganpat Rai

K. f. Kale