SOURENDRA NATH MITRA Vs. SRIMATI TARUBALA DASI

JUDGEMENT

(1.) This is an appeal from the High Court of Judicature in Calcutta, who, differing from the Subordinate Judge of Hoogly, refused to record an alleged memorandum of compromise and to make a decree in accordance therewith. The disputed compromise was made in a partition suit in which the present appellants were plaintiffs and the present respondent was defendant. The question at issue is whether an agreement of compromise made between the plaintiffs and counsel for the defendant bound the defendant. It involves important considerations as to the authority of an advocate in India to bind his client. The parties are members of a Hindu family governed by the Bengal school of Hindu law. The suit related to the joint property inherited from the paternal grandfather of the plaintiffs, one Ishan Chandra Mitra, who had died in 1900. The plaintiffs were the children of the two elder sons of Ishan Chandra Mitra. The defendant was the widow of the third son, Charu Chandra Mitra, who had succeeded to the share of their unmarried son, who had died in 1920. She was a purdanashin lady. The plaint filed in April, 1923, alleged that the property was in the joint possession of the three brothers, and that after the death of the eldest brother the defendant's husband Charu managed the joint estate. It further alleged that Charu had started business on his own account and had used moneys of the joint property for the purposes of this business. It claimed partition of the joint property which was scheduled to the plaint, and of any other property which should be found to be joint, and an account of the dealings of Charu with the joint estate. The defendant's written statement, filed on August 6, 1923, denied that her late husband had conducted the alleged business on his own account, and alleged that his transactions were all joint and further alleged that she had through her attorneys proposed an amicable partition and had no objection to a partition, and that she had the right to bring a separate suit to recover her jewellery and a sum of Rs. 50,000 on account of her husband's life policy, which she said were on deposit with the plaintiffs. She further alleged that she would be entitled to demand accounts from the plaintiffs. Meantime, before filing her written statement, she had, on June 4, 1923, filed a petition for a receiver, alleging acts of waste against the plaintiffs, and that it was necessary that the books of account should be placed in independent custody, and provision made for paying her Rs. 50,000 to provide for the costs of the suit, and for payment of a monthly allowance pending the suit. On this application affidavits were filed on both sides. The date for hearing of the application was postponed by the Subordinate Judge from time to time. The first hearing in Court appears to have been on August 18. It was adjourned to August 25, and again was part heard. It was further heard on September 1 a September, 3, and on the latter day the possibility of a compromise was mentioned to the Judge, and it was adjourned to September 5. On September 5, it appears that the defendant filed a petition assented to by the plaintiffs, praying for time for amicable settlement of the suit, and the Judge ordered an adjournment to September 15, and that parties do file the petition of compromise on that date." On the 3 and 4th, memoranda of compromise were signed by the plaintiffs and counsel for the defendant. On September 15 the plaintiffs alleged that a compromise had been arrived at, while the defendant said that there was no concluded agreement. Eventually the learned Judge, after several adjournments and after hearing oral testimony, decided on March 31, 1924, that an agreement had been concluded, that it bound the defendant, and made a decree in accordance therewith. The High Court reversed this decision on December 18, 1924, holding that counsel had no authority to compromise the suit without express authority, and that it had not been shown that the defendant, a purdanashin lady, had consented to the compromise.

(2.) The document in question was signed by Mr. Sircar as counsel for the defendant. He is a member of the English bar, admitted as an advocate of the High Court at Calcutta. He is a gentleman of the highest reputation and has since occupied the position of Advocate-General of Bengal. Against his integrity, ability and experience nothing is suggested by either side. He was briefed by Mr. K. I. Dutt to appear on behalf of the defendant and support the petition for a receiver. It does not appear to be necessary for their Lordships to decide whether a brief to appear upon an interlocutory application such as this could of itself confer authority upon counsel so briefed to settle the whole action. It is obvious that briefs on some interlocutory applications could not possibly confer such authority. In other applications, and especially in motions for a receiver in a partnership suit, or on motions for an injunction, it has been common practice in this country for counsel to settle the whole suit, but whether they derive their authority solely from the brief on the motion may be open to question. In the present suit it is plain from Mr. Sircar's evidence that settlement was under discussion between him and those representing the defendant from the very beginning. As appears from the defendant's written statement, it was the subject of complaint by her that her suggestion for an amicable settlement had been defeated by the alleged precipitate filing of the plaint by the plaintiffs. Their Lordships have no doubt from the whole course of the proceedings and the communications of the parties both with their own counsel and with one another that it was the intention to place Mr. Sircar in the same position and to arm him with the same authority as though he had received the brief to conduct the entire suit.

(3.) An agreement to compromise a suit must be established by general principles which govern the formation of contracts, though there are special rules governing its enforcement by the Courts which arise out of its intrinsic nature. If the agreement purports to be concluded on behalf of one or both the parties by their respective legal advisers, the first two questions that arise, as on the formation of any contracts by agents, are :- 1. Had the agent, the actual authority of his principal, express or implied, to conclude the contract ? 2. If no actual authority, had he ostensible authority so as to bind his principal against the other party, relying on ostensible authority ?