People''s Co-operative Bank Ltd. vs Shyam Narain and Another

Varma, J.—This is an appeal against an order of the lower Court refusing to record a compromise in an appeal by the appellant before us. The appellant happens to be the People''s Co-operative Bank Ltd., Patna. It appears that there was a family consisting of one Raja Lal who had a son, Ram Chandra Chaudhuri. Ram Chandra Chaudhuri had two sons, Ram Narain and Shyam Narain. On 19th May 1930, the Bank obtained an award for Rs. 3872-5-6 against Raja Lal and Ram Chandra and one Ishwari Prasad. In the year 1935, the award was executed before the First Subordinate Judge''s Court at Patna.

The Bank got holding Nos. 138 and 139 within the Patna Municipality attached. The sons of Ram Chandra filed a petition with regard to holding No. 138 under Order 21, Rule 58, Civil P.C., but no claim was preferred with regard to holding No. 139. The claim was rejected with the result that holding No. 139 was sold for Rs. 50 and holding No. 138 for Rs. 100 and purchased by the Bank. A suit was filed with regard to holding No. 138 by Shyam Narain and Ram Narain and another suit was filed by one Sheo Shankar Kumhar with regard to holding No. 139. The suit filed by Shyam Narain and Ram Narain was decreed in favour of the plaintiffs of that suit, and the appeal, in connexion with which the present compromise was filed, was numbered 41 of 1938/39. The suit filed by Sheo Shankar was dismissed in connexion with holding No. 139. Sheo Shankar also preferred an appeal which was numbered 52 of 1938.

Both the appeals were pending before the District Judge of Patna but while the appeal filed by Sheo Shankar remained before the District Judge, the appeal filed by Shyam Narain and Ram Narain was transferred to the Court of the Subordinate Judge. The case of the appellant was that both the cases were compromised. The compromise petition in Sheo Shankar''s case, which was Appeal No. 52 of 1938, was filed before the Judge, but although a compromise petition was prepared and faircopied the case of the Bank is that the respondents took the fair-copy to have it signed by their pleader and file it on 31st August 1938, which was the date fixed in the appeal.

They however did not file the petition on that date and when they did not file it for some time the present petition, out of which this appeal arises, was filed. The Bank relied upon Ex. 1 which is a draft of the aforesaid petition of compromise. The respondents however deny any compromise as alleged by the appellant. They contended that there was no occasion for a compromise in the appeal to agree to pay Rs. 200 to the appellant, i.e. the Bank.

On behalf of the appellant, it is contended that the two appeals were compromised as part of one transaction, and if this appeal had not been compromised they would not have compromised the other appeal No. 52 of 1938 by Sheo Shanker Kumhar.

The Court below has not relied upon the evidence of the witnesses on behalf of the present appellant and, after having found that there was no ground for a compromise on terms so favourable to the Bank, and also that there was no consideration for the compromise, has refused to record the com-promise. Mr. Hareshwar Prasad Sinha, appearing on behalf of the appellant, has drawn our attention to the fact that the only reason given by the Court below for disbelieving the appellant''s witnesses is that they are

all men of the appellant and must speak for them and I am not inclined to attach much weight to their oral evidence.

The witnesses for the appellant are:

Bhagwat Prasad Karan (witness 1), Law Agent of the Bank, Bateshwar Jha (witness 2), manager of the Bank, Bhagwandhari Singh (witness 3), a peon of the Bank, among other witnesses.

The reason given by the lower Court does not appeal to me. In a case of this nature who else but the servants of the Bank can be the witnesses to the transaction, and simply because they happen to be connected with the Bank their evidence should not have been discarded altogether. The Assistant Secretary of the Provincial Co-operative Bank was examined in this case on commission. He said that the compromise was arrived at with his approval, and his evidence has been held to be insufficient because, it did not appear from his statements that the respondents were parties to the compromise and agreed to its terms. Appellant''s witness 4 is Sukhdeo Prasad. He has been disbelieved because he happens to be a bhagina of the Law Agent of the Bank (witness 1).

What has weighed mostly with the Court below is that the learned pleader appearing on behalf of the Bank was not examined and also that the respondents having won in the lower Court were not likely to enter into a compromise so favourable to the Bank. When this point was pressed by Mr. Girija Nandan Prasad on behalf of the respondents we adjourned the hearing of this appeal to give an opportunity to them to examine that pleader in the case on payment of costs, and 6th May 1940 was fixed for getting the information from the learned advocate for the respondents. We are informed that the respondents will abide by the decision of the Court without any examination of the pleader. Moreover, we are informed that Mr. Satchidanand was personally conducting the case in the lower Court.

Mr. Girija Nandan Prasad has further pointed out that in Exs. 3 and 3(a), the notes submitted by the office as well as the remarks of the officer, there is no mention of the draft. But these were submitted on 29th August 1938, and the petition for recording the compromise was filed on 22nd September 1938, and the date fixed for filing the petition of compromise was 31st August 1938. In the note Ex. 3(a) it is noted as follows:

According to the terms of compromise the amounts must be realised on due dates in "Aghan and Magh" 1316 Fasli.

From this it is clear that some sort of compromise was actually hinted at; the actual draft may not have been placed before the office. Mr. Girija Nandan Prasad also pointed out that Title Appeal No. 45, i.e., the appeal filed by Sheo Shankar has nothing to do with the appeal out of which this appeal arises.

But from the trend of events mentioned above, it is clear that it was in execution of the same award that holding Nos. 138 and 139 were attached, and although different parties objected to the execution of the award the Bank''s attitude was to finish the litigation as soon as possible. On the whole, it appears to me that the reason given by the Court below for not relying upon the Bank''s witnesses simply because they happen to be employees of the Bank is not sufficient; and the question of consideration does not seem to have much bearing in this case because the results of litigations are after all uncertain and'' parties enter into compromise with the object of escaping from the worries and anxieties of continuing a litigation. I am therefore of opinion that the appeal should be allowed, the compromise should be recorded and a decree passed in terms of the compromise.

Mr. Girija Nandan Prasad also urged a preliminary point that no appeal lay in this case. He has relied upon a Single Judge decision of the Lahore High Court in Shanti Sarup v. Jahagir Mal Bansi Mal AIR (1924) Lah 248, where it was held that no appeal lay when it was found that there was no compromise. But a later Division Bench decision of that very Court in Nand Lal v. Ram Sarup AIR (1927) Lah 546 has not accepted that view. In Mulla''s Civil P.C. (Edn. 10, p. 903) a number of authorities has been mentioned in support of the proposition that an appeal lies in the circumstances existing in the present case. I am of opinion that there is no force in this preliminary objection. I would therefore allow the appeal with costs.

Manohar Lall, J.

I agree.