Authored By : P.B. Chakravartti, Arthur Trevor Harries

P.B. Chakravartti, J.

1. The question involved in this appeal is a short one, butthe facts make a rather long history.

2. The plaintiff brought a suit for accounts against thedefendants on the basis of a compromise decree to which fuller reference willpresently be made. It appears that there was one Bahir Das Das who resided atSerampore and carried on a business in dyeing and printing. He died in 1333B.S., leaving five sons, three of whom, defendants 1, 2 and 3 of the presentsuit, were majors and the remaining two defendants 4 and 5 were minors. Afterthe death of Bahir Das Das the business is said to have practically collapsedwhen the plaintiff came forward with an offer of assistance and thereupon thebusiness was, as it were, reconstructed. It was agreed between the parties thatthe business would be re-started under the name and style of Pioneer CalicoPrinting Works, Ltd., the plaintiff contributing Rs. 1000 towards its workingcapital and the defendants jointly another Rs. 1000 to the same fund. It wasfurther agreed between the parties that the services of one Mr. K. Chatterjeewould be availed of as he was an expert in the line. A further term of theagreement was that the plaintiff would be the owner of a half share of thebusiness and the defendants jointly between themselves the owner of the otherhalf.

3. The business seems to have been carried on for a fewyears without any trouble arising, but about the year 1932, by which time theexpert had left, some disagreement seems to have arisen between the parties. Itwas composed by an agreement entered into on 11th August 1932, whereby apartnership was formed. That was an agreement between the plaintiff on one partand the defendants on the other part, defendants 4 and 5 still being minors andbeing represented by their guardian, defendant 1. The material terms of thisagreement were that the plaintiff would be the owner of a half share of thebusiness as before and the defendants between themselves would be the owners ofthe remaining half share, that defendant 1 would be in charge of the cash andaccounts, and that if it was found impossible to carry on the business, theparties would dissolve the partnership amicably and settle the accounts betweenthemselves. This agreement was followed by a further agreement executed on 1stDecember 1932. By that agreement the partnership was dissolved and it wasdecided that the parties would settle the accounts between themselves and ifthey failed to do so amicably, they would refer their dispute to arbitration.The plaintiff in due course gave notice to the defendants to settle theaccounts, but inasmuch as there was no compliance on the part of the latter, hebrought a suit which was Title Suit No. 1216 of 1935 for accounts.

4. At the time that suit was brought, defendants 4 and 5were still minors. At the inception of the suit, both the defendants wererepresented by defendant 1 as their guardian ad litem, but it appears thatsubsequently, during the pendency of the suit one Bhagabati Dasi was appointedtheir guardian in a certain guardianship proceeding, and thereupon that ladywas substituted as the guardian ad litem of the minors in Suit No. 1216 of1935. The suit failed both in the trial Court and in the Court of first appealon the ground that the agreement of 1st December 1932 by which the partnershiphad been sought to be dissolved, was not binding on the minors, andconsequently, the suit for accounts, being based on that agreement, could notsucceed. A second appeal from the decision of the lower appellate Court wasdisposed of by Edgley J. on compromise. The terms of the compromise decree wereas follows:

By consent this appeal is disposed of in the followingterms. It is agreed that the plaintiff will be regarded by all the partiesconcerned as a partner to the extent of 8 annas in the Pioneer Calico PrintingWorks. It is also agreed that the document Ex. 8(a) dated 1st December 1932,must be regarded as ineffective. The plaintiff will, therefore, be at libertyto institute a suit for dissolution of partnership against the defendants onthe basis that the partnership still exists between him and the otherdefendants, in which he has an eight annas interest and in that suit he willalso be at liberty to sue for accounts in respect of the working of thebusiness up to date.

5. It is not necessary to quote the remaining clauses of thecompromise decree.

6. On the basis of this compromise decree, the plaintiffserved a notice of dissolution on 18th April 1940 and thereafter brought thepresent suit on 3rd July following.

7. Of the various defences taken in the suit, it isnecessary for the purposes of this appeal to mention only one. It was contendedthat inasmuch as both defendants 4 and 5 were minors on 1st December 1932, thealleged contract of dissolution of the partnership was not binding on oreffective against them. It was contended in the nest place that inasmuch asdefendant 4 had attained majority before the compromise decree had been passed,but had nevertheless been treated as a minor in the compromise petition and thedecree following thereupon, the decree was not binding upon him. As regardsdefendant 5 it was contended that inasmuch as he continued to be a minor evenat the date of the compromise decree, it was not binding on him at all inasmuchas the learned Judge did not give any leave to the guardian to enter into thecompromise on his behalf.

8. These contentions have been given effect to by the lowerappellate Court and it has been contended in support of the appeal that thefinding of the lower appellate Court with regard to defendant 4 is erroneous inlaw and that the finding with regard to defendant 5, so far as the compromisedecree is concerned, is also erroneous inasmuch as although the decree might bevoidable at his instance if he sought to have it set aside as a plaintiff in anappropriate suit brought for the purpose, he could not question it as adefendant in a suit. It has been argued in the third place that assuming thatthe contract of 1st December 1932 was not binding on defendants 4 and 5 inasmuchas they were minors at that date and could not enter into a contract ofpartnership, it was still a good and valid contract so far as the remainingparties were concerned.

9. Having regard to the view we are taking as regards theposition of defendant 5, it is not necessary to consider whether the learnedJudge was right in holding that the compromise decree would not bind evendefendant 4 on the ground that he had attained majority during the pendency ofthe appeal. It is undisputed that defendant 5, at any rate, was a minor at thedate of the compromise decree. It cannot also be disputed that Edgley J. didnot give or record any leave which he gave or purported to give to the guardianad litem of the minor to enter into the compromise. Having regard to those twofacts, it would appear that the compromise was clearly voidable against allparties other than the minor as laid down in R. 7(2) of O. 32. But Mr. Ghosecontended on the authority of the decision in the case of Sajahan Howladar v.Sreenath Mistri, 51 C.W.N. 26 : (A.I.R. (33) 1946 Cal. 438) [LQ/CalHC/1946/47] , that the minorcould not urge the invalidity of the compromise decree as a defendant.

10. The words of the statute to which I have referred arereasonably plain. Sub-rule (2) of R. 7 of O. 32 reads thus:

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

11. That, to my mind, clearly indicates that a compromise towhich a minor is a party, but for entering into which the guardian was notgranted any leave by the Court, can be avoided by the minor if he wishes so todo. The rule makes no distinction between the position of the minor as aplaintiff or as a defendant. It certainly does not say that such a compromise decreewill be valid and operative till it is set aside by the minor in appropriateproceedings, nor that the minor cannot urge the invalidity of such a decree byway of defence to a suit. But all doubts on the true meaning of O. 32, R. 7(2)have been set at rest by the decision of the Judicial Committee in Jamna Bai v.Vasant Rao, 43 I.A. 99 : (AIR 1916 P.C. 2). There, what happened was that oneVasanta Rao instituted a suit in which one Jamna Bai and one Sethuram, herbrother, were defendants, and in the suit the question in dispute was thevalidity of a will of one Sakharam. This suit was subsequently compromised onthe terms that the plaintiff Vasanta Rao should receive Rs. 90,000 in fullsatisfaction of his claim. At the time of this compromise both Vasanta Rao andSethuram were minors, but in order to secure the above sum, Jamna Bai andSethuram, by his grandmother who was guardian of his property, entered into abond by which they jointly agreed to pay Rs. 90,000 to Vasanta Rao within threemonths of their taking delivery of the movable and immovable properties ofSakharam as scheduled in the suit. On a suit being brought for the enforcementof this bond, it was held by the Judicial Committee that the leave of the Courtnot having been obtained on behalf of the minor under S. 462, Civil P.C., 1882,the bond was not enforceable against the minor, but it was enforceable to thefull amount against the joint contractor. Sir Lawrence Jenkins who deliveredthe judgment of the Board seems to have regarded the invalidity of the bond asagainst the minor as patent. He considered it sufficient to say that therequirements of the section not having been observed for the protection ofSethuram, the bond could not be enforced against him. There can be no doubtthat Sethuram was a defendant in that suit and he was pleading theunenforceability of the bond by way of defence. This case is thus a clearauthority for the proposition that a minor, who is ostensibly a party to acompromise, can challenge the validity of the compromise decree on the groundthat leave of the Court was not obtained; that it is not required that heshould bring a suit for the purpose; and that he can take that plea by way ofdefence in a suit as much as he can seek to have the decree set aside by bringinga suit himself.

12. The decision of this Court relied on by Mr. Ghose doescontain a statement of the law which is plainly contrary to what was held bythe Judicial Committee in the case to which I have referred. Mr. Gupta, whoappears for the respondent in the present case and also appeared for therespondent in the case cited, explained to us the peculiar facts of that casein which he contended that the principles laid down by the Judicial Committeein the case of Mir Sarwarjan v. Fakhruddin Mohamed Chowdhury, 39 I.A. 1 : (39Cal. 232 P.C.), could not be applied to a case of a compromise decree to whicha minor was a party. The defence which Mr. Gupta urged was that a contract towhich a minor is a party fell to be considered by reference to considerationsquite different from those which were applicable to a compromise decree,inasmuch as to the latter applied the clear statutory provisions of O. 32, R.7. This contention was not in terms accepted by the learned Judges, althoughthey accepted its substance, and they stated their reasons in their own way. Indoing so, they observed as follows:

No doubt a minor is not bound by a consent decree on theground that his guardian ad litem had not obtained leave of the Court tocompromise. It is not, however, a void decree and he has to avoid it by aproceeding attacking it in a direct manner, and until it is set aside it isbinding on him.

13. Then the learned Judges proceeded to cite two decisions,one of the Madras High Court and one of this Court which, according to them,lent support to the proposition which they had formulated earlier.

14. With regard to the observation which I have quoted fromthe decision in the case of Sajahan Howladar, 51 C.W.N. 26 : (AIR 1946 Cal.438 ), it is only necessary to say that the decision of the Privy Council in thecase of Jamna Bai v. Vasanta Rao, 43 I.A. 99 : (AIR 1916 P.C. 2), wasapparently not cited before the learned Judges and, in any event, they do notseem to have had that decision present to their mind when they made the saidobservations. It is true that the observations emanated from a Division Bench,but having regard to the principle authoritatively laid down by the JudicialCommittee, we do not consider that the existence of those observations in a decisionof a Division Bench is any obstacle to our deciding the present case inaccordance with the opinion of the Judicial Committee.

15. In our opinion, for the reasons given above, thecompromise decree, so far as it affected defendant 5, must be held to be voidand ineffective, inasmuch as he seeks to avoid it, although he is doing so as adefendant in the suit.

16. The question then arises as to whether the compromisedecree is still binding on the remaining parties. I shall leave aside the caseof defendant 4 which presents a further complication. But in my view, even sofar as the adult parties are concerned, the compromise decree could not beregarded as binding or effective in the special facts of the present case. Thecompromise decree, as I have already stated, recites that all the parties wereagreeing that the plaintiff was a partner to the extent of eight annas in thebusiness concerned. They were also agreeing that the agreement of 1st December1932 would be regarded as ineffective and that limitation would be saved forthe plaintiff by eliminating the dissolution which was sought to be caused onthat date. It is impossible to see how a compromise of that character canremain effective or operative when one of the contracting parties drops out ofit by reason of the fact that it is not binding upon him. In my view, thecompromise decree not being binding on defendant 5, it ceased to be aneffective and operative compromise decree even so far as the remaining partieswere concerned.

17. In view of the above finding, it is hardly necessary toconsider whether the agreement of 1st December 1932 was a valid agreement. Thelower appellate Court has found that defendants 4 and 5, who were undoubtedlyminors at the date of that agreement, had not merely been admitted to thebenefits of the partnership, but were made contracting parties through theirguardians. But as minors cannot enter into a contract of partnership, the lowerappellate Court has found that even in so far as the (major) partners areconcerned, the contract of 1st December 1932 was invalid and inoperative. Justas in the case of the compromise decree, so in the case of this agreement, Mr.Ghose contended that the rest of the agreement could still survive and it wouldbe a valid contract as between the plaintiff and defendants 1, 2 and 3. Itappears to me that this contention is plainly untenable. As I have statedalready, one of the terms of the agreement was that the plaintiff would have aneight annas share in the interest and the five defendants between themselveswould have a joint interest in the remaining eight annas. If by reason of theminority of defendants 4 and 5 the agreement is to be regarded as invalid andinoperative so far as they are concerned, it is impossible to see that anyvalid, workable or intelligible contract survives so far as it concerns theremaining parties. The minors certainly had a share and an agreement whichproceeds on the footing that the entire property is being dealt with in acertain way and is to be held in certain shares, cannot be given any effectafter the owners of some of the shares are held to be freed of the agreementand their shares are thus left unaccounted for. Mr. Ghose tried to go furtherbackward into the facts and to establish that as a matter of fact defendants 4and 5 had no share in the business. To my mind, it is not possible for him toadopt that course. The contract was one based on the assumption that all thedefendants had an interest in the business and in judging the validity orotherwise of the contract, it is only that assumption which can be regarded andany enquiry into the alleged real position would not be, in my view,admissible. If the validity of the contract is to be judged on the basis thatall the five defendants had a share in the business and that the share was ajoint share of eight annas, the effect of the agreement being invalid, so faras defendants 4 and 5 were concerned, is, in my view, to make the wholeagreement invalid.

18. For the reasons given above, it appears to me that theview taken by the lower appellate Court on both the questions was correct. Thisappeal must accordingly fail and it is dismissed with costs.

Arthur Trevor Harries, C.J.

19. I agree.

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Durga Charan Gangopadhaya vs. Akkari Das and Ors.(08.09.1948 - CALHC)