Palakurthi Appalaraju and others vs Yedukondalu and others

Chandra Reddy, J.—This appeal is brought by the plaintiff against the judgment of the Subordinate Judge of Kakinada dismissing his suit for recovery of Rs. 5,070-13-3 from the property of the minor defendant. The suit was based on a promissory note executed by the guardian and next friend of the minor on 20-1-1950 marked as Ex. A-7 in favour of the plaintiff. The promissory note came to be executed under the following circumstances.

The present plaintiff filed Original Suit No. 51 of 1948 on the file of the Subordinate Judge, Kakinada for partition and for separate possession of half a share of the casurina plantations raised on a land belonging to the 1st defendant therein i.e., the father of the present defendant and for recovery of Rs. 4000/- being the value of the half share of the trees which the defendant had cut and carried away. That plaint was founded on the allegation that there was an agreement between the plaintiff and the defendant whereunder the plaintiff was to plant casurina and water them for two years at his expense, that the taxes for the lands were to be paid in equal halves by the parties, that after the expiry of two years the defendant should himself look after the casurina trees, that when the trees grew up they should be cut and each of the parties should take one half of the yield.

In pursuance of the aforesaid agreement the plaintiff planted the trees and after they grew up, the defendants without the knowledge of the plaintiff and unauthorisedly cut and carried away a large number of trees worth about Rs. 7,000/-.

Pending the suit the defendant died and his widow and the son the present defendant were brought on record as his legal representatives. The suit was posted for further hearing on 16-1-1950. On that date an adjournment was asked for on the ground that the matter was compromised between the parties. It was accordingly adjourned to 18-1-1950, but no compromise petition was filed. The learned Subordinate Judge thereupon delivered the judgment dismissing the suit with costs and upholding the contention of the defendant that the suit could not be based upon an agreement which was Inadmissible in evidence for want of registration.

The learned Subordinate Judge also expressed a doubt in the course of the judgment as to the genuineness of the contract said to have been executed by the defendant therein. On 20-1-1950 the guardian of the minor entered into a compromise with the plaintiff agreeing to pay him a sum of Rs. 5,000/-, the consideration therefor being the plaintiff refraining from carrying the matter in appeal to the High Court. For payment of this money a promissory note was executed by the guardian, which is marked as Ex. A-7 in the case.

Having regard to the importance of this document in the context of this present enquiry, it is useful to set out the contents of the document in extenso.

The suit O. S. No. 51 of 1948 on the file of the Sub Court, Kakinada was decided in favour of the minors. However you are trying to take the matter in appeal to the High Court. As the pleader gave us the advice that it is not possible to say as to how the final result would turn on the point of law, we have in the presence of Sri Venpatti Ramabrahman Garu effected a settlement with the terms that a sum of Rs. 5,000/- (rupees five thousand) should be given to you in cash towards the value of your share in the casurina grove covered by the said suit, that you should give up the entire rights to your share as also the right to prefer the appeal etc., against the said decree and that you should receive the bid amount of Rs. 250/- deposited by you into Court.

Having felt that it is beneficial to the interest of the minors, I have agreed to the said terms. I shall on demand pay in cash to you or to your order the said sum of rupees five thousand together with interest accruing due thereon at the rate of Re. 0-8-0 per cent per mensem and take a return of this pro-note after getting the endorsement of payment made thereon. To this effect is the promissory note executed and delivered by me with consent.

The reference in Ex. A-7 to Rs. 250/- is this. During the pendency of the earlier suit, 100 casurina tress that fell down were auctioned and they were purchased by the plaintiff therein for Rs. 250/-. This money was deposited into the Court, It is said that one of the terms of the compromise was that the 100 casurina trees purchased by the plaintiff should be returned to the defendant and the former should be entitled to withdraw Rs. 250/- deposited by him in court by way of purchase price. As the plaintiff was not paid the sum of Rs. 5000/-, the suit was laid on the foot of this promissory note.

The suit was resisted on various defence such as (1) that there was no agreement between the parties as set up in the plaint, that the plaint did not raise any casurina plantation on the la(sic) that the defendant''s father himself grew trees (sic) his land at his own expense and that at any ra(sic) there was no consideration for the promissory no (sic) there being no enforceable agreement against t(sic) defendant''s father or himself and as such it was (sic) binding on the defendant''s estate.

The trial Court dismissed the suit being (sic) the opinion that a promissory note executed by (sic) guardian of a minor in which she excluded her personal liability was unenforceable against the mine(sic) estate, that there was no consideration for the (sic) promissory note, that the suit agreement which required registration was inadmissible in evidence want of registration and that the compromise offe(sic)ed the provisions of O. XXXII R. 7 of the Civil Procedure Code. It is this judgment and decree (sic) are under appeal now.

In support of this appeal it is urged by (sic) B. V. Subrahmanyam that the conclusions of (sic) learned Judge on all the three points are errone(sic) It is contended on behalf of the appellant tha(sic) the parties entertained a doubt as to the ulti(sic) result of the litigation they thought it advisabl(sic) enter into a compromise at the instance of the (sic) defendant''s lawyer, who is examined as P.W. 1. (sic)ance is placed in support of this proposition on (sic) evidence of P.W. 1, who deposed that he was (sic) certain about the legal position in regard to requirement of registration of the document w(sic) was the foundation of the suit in that case (sic) that he therefore advised the parties to settle (sic) matter.

It was in pursuance of his advice that Ex. (sic) was executed by the guardian and next frien(sic) the minor. It is urged that in view of this evid(sic) and also having regard to some of the reported (sic)sions, the guardian of the minor was justifie(sic) executing Ex. A-7 and could thus bind the m(sic) estate by this document.

An argument was pressed upon us by (sic) Subrahmanyam that the judgment of the Full Be(sic) in Venugopala Pillai v. Thirunavukkarasu, 61 (sic) LW 514 : (AIR 1949 Mad 148) (A), which was (sic) basis of the suit in O. S. No. 51 of 1948 could (sic) govern the instant case for the reason that the (sic)ter does not in any way affect immovable pro(sic) and comes more within the rulings in Nate(sic) Tangavelu, ILR 38 Mad 883 : (AIR 1914 Mad (sic) (B), and Mammikkutti v. Puzhakkal Edom, II Mad 353 (C). We feel that this contention c(sic) prevail. There is little scope for argument i(sic) case that the agreement did not create any i(sic) in immovable property. The case on hand (sic) surely within the ruling of 61 Mad LW 514 : (sic) 1949 Mad 148) (A).

It is convenient here to refer to the re (sic) terms of Ex. A-3:

It has been settled that from this day t(sic) month of November, 1941 casurina seedling(sic) be raised in the said land, that (the plants) s(sic) (sic)tered, that a watch shall be kept over the plants (sic)guard them carefully, that thereafter the plants shall be grown and water poured to them till the month of November, 1943, that the damaged plants shall be replaced by new ones and that you your-(sic)f shall without reference to me bear all the ex-(sic)ises necessary for making the said plants grown (sic) the aforesaid date, that as regards all the taxes......that after the said trees become fully (sic)wn, both of us shall enjoy in equal shares in (sic)pect of the trees in the said garden having re(sic)d to good and bad qualities and enjoy the same keep the same jointly and enjoy in equal halves (sic) usufruct of the said trees after they are cut, (sic)t if the said trees are to be cut you shall bear (sic) entire expenses required therefor and deduct (sic) same from the income derived from the said (sic)ds and both of us shall enjoy the balance of the (sic)unt in equal halves.

(sic) this agreement it is difficult to hold that this (sic)ement is not in relation to immoveable property (sic) only one to divide the sale proceeds of casurina (sic)rged by the counsel for the appellant. (9) The principle applicable to cases of this (sic) was succinctly laid down by a Full Bench of (sic) Madras High Court in Seeni Chettiar v. San-(sic)athan Chettiar & Co., ILR 20 Mad 58 (D). (sic)e, a right to cut and enjoy trees was assigned (sic) person for a period of four years for an ade-(sic)s consideration. This document was not re-(sic)red. In a suit on the basis of this document (sic) is held that the plaintiff was not entitled to any (sic), as the document which purported to convey (sic)terest in immoveable property was not register (sic)nd was consequently inadmissible in evidence, (sic)as observed by Collins, C. J., at page 64 (sic):

It has long been settled that an agreement for (sic)ale and purchase of growing grass, growing (sic)r or underwood, or growing fruit, not made (sic)a view to their immediate severance and re-(sic) from the soil and delivery as chattels to the (sic)aser, is a contract for the sale of an interest (sic)id.

(sic)e judgment of Subramania Ayyar, J., the following massage from Marshal v. Green, (1875) 1 CPD (sic)), was extracted with approval.

It was contemplated that the purchaser should (sic) a benefit from the further growth of the (sic) sold, from further vegetation and from the (sic)ent to be afforded by the land.

(sic) learned Judge was also of the opinion that the (sic)at the comparatively long period of a title (sic)re than four years was granted for cutting (sic)moving the trees was in favour of the view (sic) affected immovable property. It is this (sic) that was applied in 61 Mad LW 514 : (sic) 949 Mad 148) (A).

(sic)0) ILR 38 Mad 883 : Natesa Gramani Vs. Tangavelu Gramani, is based mainly on the definition of ''moveable (sic)y'' as given in the Indian Registration Act (sic) 1877) which included "fruit upon and juice (sic)s". That dealt with a lease for enjoyment (sic)dy, palmyra fruit etc. It was held that though (sic)se the instrument created an interest in land (sic) not a lease of immoveable property having (sic) to the definition referred to above. Hence (sic)cision can have no application to the case (sic)d. Nor does the present case fall within the (sic) of ILR 29 Mad 353 (C).

(sic)ere, what was granted was a right to cut (sic) ready standing and had no reference to the (sic)at had to grow on the land. It was such a (sic) at was held to be a mere license and there-(sic) (sic)d not require registration. In the present case, the position is altogether different. The parities had agreed that trees should be grown on the land, nurtured and after they were fully ripe should be divided into two equal snares. Thus, the parties were to derive a benefit from the growth of the trees and from the nutriment afforded by the, land.

Unlike in ILR 29 Mad 853 (C), in the instant case, there were no trees at all at the time of the agreement which could be sold or which could form the basis of the agreement. By and under the terms of that agreement plants were to be raised, nurtured and then it is only after they were fit for cutting they had to be divided between the parties.

We are clear that an agreement to grow trees on land belonging to one of the parties, and after the trees fully grew up they should be divided into two equal halves or that they should be cut and the sale proceeds be divided into two halves creates an interest in land so as to require registration and failure to do so will render the document inadmissible in evidence and no relief could be granted on the basis of such a document. The contrary proposition in our opinion is unarguable. That being the case the judgment in O. S. No. 51 of 1948 was unassailable.

Consequently the settlement which led to the execution of Ex. A-7 was not a bona fide one which would bind the minor. On this ground alone the suit was liable to be dismissed. Even otherwise no decree could be passed against the minor on a promissory note executed by the guardian. In this case Ex. A-7 makes it abundantly clear that the guardian had excluded her personal liability. In fact she was not even made a party to the present action. In these circumstances can there be a decree against the minor on this promissory note? We feel that the conclusion of the learned Subordinate Judge even in this regard is unimpeachable.

We think it is firmly established that no decree could be passed against a minor on an instrument in which the guardian had excluded her personal liability and the guardian is not a party to the suit. The principles governing such cases are laid down by the Supreme Court in AIR 1949 218 (Federal Court) they are stated thus:

(1) The manager of an infant''s estate can deal with the minor''s estate by way of mortgage, in case of need or for the benefit of the estate.

(2) He cannot bind the minor by contract or under obligations and then transfer them to the minor''s estate so as to enable the creditor to establish a direct relation between himself and the estate.

(3) In certain cases (which must presumably be cases of necessity or benefit to the minor), he might be able to show that the estate ought to bear the burden which he had taken upon himself.

The learned Judge also observed at page 597 (of Mad LJ) : (at p. 227 of AIR):

To give an undertaking on behalf of the minor that a certain sum will be paid on demand and that, in default of such payment, compensation will be payable is a somewhat onerous transaction, and, in my opinion, any contract which exposes the minor and his estate to the risks involved in such a transaction cannot be countenanced in law.

Another passage in the same judgment which" is very illuminating is contained at page 610 (of Mad LJ) : (at p. 238 of AIR):

When the guardian is the maker of the note and he excludes his personal liability, no suit, in my opinion, could be instituted either against the guardian or the infant as explained above; whether a suit would lie on the original consideration is another matter, and if it could be brought the same principles would apply. The position therefore is that in case of contractual debts borrowed either on simple bonds or promissory notes the creditor can have recourse to the minor''s estate indirectly on the principle or subrogation when the guardian has the right of indemnity against the estate of the ward; and he would have the right of direct re-imbursement out of the properties of the infant, only when the debt is for necessaries supplied to the infant.

In this way effect can be given to the personal law of the Hindus in respect of the liability of a minor''s estate for debts contracted by the guardian for legal necessity without infringing in any way the basic principles of the law of contract, and in this way alone, the different pronouncements of the Judicial Committee mentioned above can be consistently explained.

It is thus manifest that it is only in a case where the guardian has been made a party to the suit and the equities between the guardian and the minor could be worked out by applying the principle of subrogation that a decree could be passed against the minor on a promissory note and could not extend to a case where the guardian has excluded his or her personal liability. As already noticed, the minor''s guardian has not even been impleaded as a party to the suit and in this situation there can be no occasion to invoke the doctrine of subrogation and pass a decree in favour of the plaintiff.

Mr. Subrahmanyam fell back upon the theory that even if the promissory note could not be the basis of a suit his client was entitled to a decree on the basis of the original debt. This submission is unsustainable for the reason that the suit is based only upon the promissory note and no claim is put forward in relation to the original debt. We have gone through the plaint carefully and there is no scope for interpreting it as one containing a letter on an alternative basis viz., of the original debt.

Moreover there is no scope for drawing any such distinction. The debt had no independent existence apart from the promissory note. In the present case, the compromise which created a debt is evidenced by the suit promissory note. There was no interval of time between the two. So even this plea is not available to the appellant. Hence this contention fails and is rejected.

Coming now to the last point, viz., whether the suit is hit at by O. 32 R. 7, Civil Procedure Code, the contention urged by Mr. Subrahmanyam is that that provision is inapplicable to compromises entered into after the decree was passed. To appreciate this point, it is necessary to refer to the terms of O. 32 R. 7. It recites :

No next friend or guardian for the suit shall, without the leave of the Court, expressly recorded in the proceedings, enter into any agreement or compromise on behalf of a minor with reference to the suit in which he acts as next friend or guardian.

Any such agreement or compromise entered into without the leave of the Court so recorded shall be voidable against all parties other than the minor.

Mr. Subrahmanyam argues that this rule could not be extended to settlements arrived at after the decree was passed and that it contemplates only compromises entered into during the pendency of the suit and he seeks to substantiate this submission by citing a judgment of the Full Bench in Bapayya(sic) Bhushayya 1950-1 Mad LJ 196 : (AIR 1950 M(sic) 397) (G). There the agreement was that the guardian ad litem should give up the contentions regarding the invalidity of the auction sale and sho(sic) withdraw the petition and also deliver up possession of the properties purchased to the auction purchaser in consideration of the auction purchaser (sic)ing up his claim for costs of the said petition.

The leave of the Court was not obtained (sic) this compromise. It was held that this compror(sic) fell outside O. 32 R. 7 as it did not relate to (sic) rights of the parties as claimed in the suit. T(sic) there is nothing in the Full Bench judgment w(sic) would have the effect that a compromise entere(sic) to between the parties after a decree is pa(sic) would not come within the purview of O. 32 R 7. On the other hand, the observations of the learned Judges are to the opposite effect. At page 199(sic) Mad LJ) : (at p. 400 of AIR), the following pas(sic) occurs:

An examination of the decisions which (sic) held that O. 32 R. 7 may take in Agreement (sic) the course of execution proceedings reveals (sic) in all of them the rights and liabilities of the n(sic) under, the decree were directly dealt with by (sic) terms of the agreement and adjusted in one w(sic) another. Such agreements are agreements "wit(sic) reference to the suit." Before decree, the a (sic)ment or compromise may be with reference to(sic) claims asserted and denied in the suit and (sic) decree they may be with reference to the right (sic) liabilities as ascertained, declared and decree (sic) the decree itself.

Thus, this judgment contemplates co(sic)mise agreements being made after the decree, c(sic) within the scope of O. 32 R. 7. In fact, the learned Judges referred to the dictum of Katneni Venkatakrishnayya and Another Vs. Garapatti China Venkayya and Others, the learned Judge pointed out that the real d(sic)tioh is between matters in dispute between th(sic)ties and matters outside the scope of the sui(sic) the real distinction made in this case as w(sic) in the other Full Bench cases was not bas(sic) whether the agreement was prior to or aft(sic) decree, but whether it related to matters in (sic) in the suit i.e., whether it has reference to the.

There are also cases to the same effect, (sic)rama v. Chotta Raja, AIR 1918 Mad 751 (I), (sic) unnecessary to multiply authorities on this (sic) We are firmly of the opinion that O. 32 R. 7 (sic) to compromises or agreements entered into n(sic) prior to the decree but also subsequent to t(sic) decree, if it covers matters relating to the suit, (sic) is made clear by the language "with reference (sic) the suit in which he acts as next friend or gua(sic) To hold otherwise would be to defeat the (sic)sions of R. 7 which was enacted to protect t(sic) (sic)rests of the minor.

If this enactment was inapplicable to c(sic)mises entered into after the passing of a (sic) minor''s next friend could easily evade the (sic)sions of the rule by entering into agreement (sic) the decree. It follows that any agreement (sic) between the parties by the next friend or th(sic)dian in a suit hearing on the subject matter (sic) suit without the leave of the court is void (sic) the instance of the minor and could not be (sic)ed. The promissory note in this case was e(sic) in pursuance of the compromise and consequences unenforceable against the minor.

So the provisions of O. 32 R. 7 are also (sic) to the maintenance of this suit in that the of the Court was not obtained for the com this ground also, the appeal is liable to be discussed. In the result, the appeal fails and is discussed with costs.