KRISHNAMACHARIAR Vs. CHINNAMMAL

JUDGEMENT

(1.) The suit which led to this second appeal was instituted for a declaration that the compromise and the decree passed in pursuance of it in A.S. Nos. 31 and 36 of 1908 in the District Court of Trichinopoly were not binding on the plaintiffs and the other Brahmin residents of the two villages, for an injunction restraining defendants 1 to 3 from executing the decrees in those appeals, and for recovering possession of 4 items of properties which the defendants had taken possession of in execution. The decrees which the plaintiffs wanted to avoid were passed on appeals from the decree of the District Munsif s Court of Srirangam in O.S. No. 167 of 1906. That suit was instituted by plaintiffs Nos. 1 to 5 in the present suit for recovery of possession of certain items of property including items Nos. 1 to 4 in the plaint schedule which were claimed to belong to a certain charity. Plaintiff s Nos. 1 to 5 obtained a decree in O.S. No. 167. Some of the defendants in that suit preferred the appeals Nos. 31 and 36 of 1908. While the appeals were pending the parties entered into a compromise by which the appellants there were to be allowed to remain in possession and enjoyment of the lands from which they had been directed to be ejected by the District Munsif on condition of performing certain services but they were not to be entitled to alienate the properties. The suit No. 167 was instituted by the plaintiffs Nos. 1 to 5 on behalf of themselves and other Brahmin residents of two villages with leave obtained under Section 30 of the Old Civil Procedure Code, all the Brahmin residents being according to the allegations in the plaint equally entitled to the properties on behalf of the charity. Item No. 4 in the plaint was delivered to the 2nd defendant in pursuance of the decree which was passed in pursuance of the compromise. The present suit was at first instituted by the same persons who had launched the previous suit as the representatives of the Brahmins, but subsequently plaintiffs Nos. 6 to 11 were also made plaintiffs. The plaintiffs alleged in the present suit that the compromise in the previous suit was brought about by the fraud of the 5th Defendant, who caused the plaintiffs Vakil to sign the compromise by misrepresentation. The District Munsif found that the Vakalat, Exhibit D, executed by the plaintiffs to their Vakil for the conduct of the appeals, itself authorised the Vakil to enter into a compromise and that the Vakil s act was therefore binding on the plaintiffs in the previous suit and those represented by them. The Subordinate Judge took the same view with respect to the Vakils authority under Exhibit D to compromise the appeals. He also found that the conduct of the plaintiffs showed that their allegation that the compromise was entered into against their wishes was baseless.

(2.) We agree with the Subordinate Judge on the construction of the Vakalatnama Exhibit B. It is contended by Mr. Ananthakrishna Aiyar, the learned pleader for the appellant, that, as a decree had been passed in favor of the Brahmins in the Munsif s Court, their representatives had no right to give up the advantage obtained under it by a compromise and that the authority given to the Vakil by the representatives was invalid in law and not binding on the Brahmins. The appeal to the District Court and the second appeal to this Court were preferred only by the representatives of the Brahmins who were actually parties to the appeals that were compromised. In consequence of a question put from the Bench to the appellants Vakil, whether in any event there would not be a bar by personal estoppel to the maintainability of this second appeal by those who were actually parties to the previous appeals, 31 and 36 and who had executed a Vakalatnama authorising their pleader to enter into a compromise, he asked for permission to allow plaintiff s Nos. 6 to 11 to come in as parties to the second appeal and to conduct it on behalf of the Brahmin residents of the two villages concerned. We have allowed them to do so and the appeal has been argued on their behalf.

(3.) The question for decision is whether persons conducting a suit on behalf of themselves and others with the leave of the Court obtained under Section 30 of the repealed Civil Procedure Code have no authority to enter into a compromise so as to bind those whom they represent. The learned Vakil is hardly prepared to contend that such representatives cannot enter into a reasonable and honest compromise while the suit is pending in the Court of First instance; but he argues that when a decree has been passed in favour of a class represented by some members of it, the representatives cannot compromise the matter in appeal, foregoing either in whole or in part, the benefit of the decree, for that would be in effect a renunciation by them of a right belonging in common to themselves and others. Prima facie it is difficult to support the view that there should be a difference between the powers of the representatives in the original litigation and in appeal. The question in each case would be whether the compromise was unreasonable, fraudulent, or dishonest so as to entitle the members of the class to repudiate the action of their representatives and to claim a declaration that the compromise is not binding on them. If a decree has been passed by one Court in their favor, a compromise by which any portion of the benefit obtained by the decree is given up might require explanation, and it might be more easy to impeach such a compromise as dishonest than a compromise entered into while the litigation is pending in the Court of first instance. This does not however show that there is any difference in principle between the authority of the representatives according as the suit is pending in the Court of first instance or in a Court of appeal when the subject matter of the litigation is brought within the cognisance of the Court of appeal, the decree obtained in the first Court is put in peril and there is no reason why the representatives of the class should not have the right to enter into a reasonable and honest compromise. Mr. Ananthakrishna Aiyar felt himself compelled to go to the length of contending that once there is a decree, the representatives have no power to enter into any compromise at all so as to bind the class, even if the original decree should happen to be against the class. For this proposition, however, we are of opinion there is no real foundation. In a representative suit under Section 30 the representative is dominus litis until judgment, he can discontinue the suits make admissions or compromise the dispute, it is open to any member of the class who may not have confidence in the representative to get himself made a party, and, if at any stage of the suit he has reason to apprehend the honesty of the representative he can take steps to prevent it. In Wolff v. Vanboolen (1894) L.T. 502 it was held that if the representative becomes brankrupt the action abates and may be stayed unless the trustee in bankruptcy elects to continue, but it is open to the other members of the class to come in and prosecute the suit. See Wilson v. Church (1878) 9 Ch. D. 552, Watson v. Cave (1881) 17 Ch. D. 19. See also Leathley v. McAndrew (1876) W.N. 381. In re Alpha Co. Ltd. (1903) 1 Ch. 203, In re Calvary and Medicine Hat Land Co. Ltd. (1908) 2 Ch. 652 and Jenkins v. Robertson (1867) L.R. 1 H.L. & Sc. & D. 117 were relied on in support of the appellant s contention. In the first of these cases Kekewich, J. merely referred to the rule that the plaintiff in a creditor s administration action is precluded from discontinuing his action after judgment and held that the rule did not apply to a debenture-holder s action on behalf of himself and all others-the holders of the debentures. The rule with regard to the authority of a plaintiff-creditor in an administration action is based on the ground that when a decree has been obtained for administration, the Court has taken upon itself the duty of administering the assets and that the Court having undertaken that duty will not allow the assets to be wasted by creditors outside. "Therefore in a case like that until there is a certificate, that all the other debts have been paid, the plaintiff after decree is not dominus litis". It is clear that in such a case the decree for administration is by no means imperilled by the further proceedings in the action and it is obvious that one of a number of persons entitled to a right cannot make a renunciation so as to bind the others. The second case also proceeds on the same principle. It was a representative action on behalf of debenture-holders and the Court had ordered that the trusts of the deed should be carried into execution and the usual accounts were directed. It was held that, as a, matter of fact, the representatives had done no act which would amount to a waiver of any of the rights obtained under the order of the Court, though Fletcher Moulton, L.J. thought that the previous orders made between the representatives and the opposite party might give rise to a personal estoppel as against the former. The Court was of opinion that the representative could not voluntarily give away what the debenture-holders were entitled to under the order of the Court so as to bind them. In the third case Jenkins v. Robertson (1867) L.R. 1 H.L. & Sc. D. & A. 117 the Provost Bailies and Councillors of a burgh instituted an action in the Court of Sessions in Scotland on behalf of the inhabitants and of the public for a declaration that there existed a public right of way for foot passengers along the bank of a river near a town. A decree was passed in their favour. The defenders moved for a rule to show cause why a new trial should not be granted on the ground that the verdict was against evidence. The Court granted a new trial. In this state of matters a compromise was effected whereby the plaintiffs who had instituted the litigation and got a verdict abandoned it and further agreed to pay the defendants two hundred pounds for expenses. It was under these circumstances that a fresh action was instituted by certain persons for the same relief as in the previous action constituted the matter in dispute res judicata. The Scotch Courts held that it did. The House of Lords reversed that judgment. The Lord Chancellor observed that a compromise cannot be admitted as res judicata and expressed a doubt whether any individual may constitute himself the representative of the public in an action of declarator, of a public right of way so as to preclude an action by any other person and to make the plea of res judicata a bar to such action. Lord Romilly observed that according to Scotch law an action of declarator could be maintained by some individuals only so as to bind all members of the public. With respect to the question of res judicata he based his judgment that the principle of res judicata should not apply, on the ground that otherwise it would follow that in every case, where any person had brought an action of declarator which had been compromised, the public would be bound unless some stranger could prove that the judgment had been obtained by fraudulent collusion between the parties". Lord Colonsay observed that there was a material distinction between the law of Scotland and the law of England in regard to the right of an individual member of the community to institute an action of declarator to establish a right of public way. An individual had no such right in England, but it was recognised in Scotch law. With respect to the question whether a compromise decree in such an action would be binding on the community he was not prepared to lay down any general rule that it would not be binding. He agreed with the conclusion of the Lord Chancellor on the ground that the compromise in the particular case was a corrupt one. The judgment of the Lord Chancellor and Lord Romilly might induce the belief that a compromise decree would not make the matters in dispute in the suit res judicata. This notion, however was shown to be substantially wrong in In re South American and Mexican Co. (1895) 1 Ch. 37, I when the Court of appeal laid down that a judgment by consent is as effective an estoppel between the parties as a judgment whereby the Court exercises its mind on a contested case. The Court did not consider that Jenkins v. Robertson (1867) L.R. 1 H.L. & Sc. & D. 117 laid down a different rule. The latter case, it must be observed, is not similar to a representative action under Section 30 of the old code corresponding to Order I Rule 8 of the present Code. It does not appear whether, according to Scotch law, other members of the public could claim, as a matter of right, to intervene as parties in an action instituted by an individual for a declaration of a right of way. If they could not, it would certainly be unreasonable as pointed out by Lord Romilly, to make a compromise entered into by him binding on the whole community, though a decree passed by Court in an action fairly contested by him might be held to be binding on the public. In the case of a representative suit under Section 30, all the members of the class represented are in effect parties to the suit and any one of them is entitled to bring himself on the record as an actual party. It was held in Srinivasa Aiyangar v. Arayar. Srinivasa Aiyangar (1910) I.L.R. 33 M. 483, that a similar right to intervene exists during the pending of an appeal also. By not intervening the absent members of the class in effect constitute the parties Eo nominee their representatives for the conduct of the suit and they must take the consequences of their doing so. They are entitled to the advantage of any judgment passed in the action and must equally suffer any disadvantage arising from it, and there can be no difference in principle in this respect between a decree passed on contest, and a decree passed by the consent of their representatives. They can of course avoid any adjudication or compromise which is the result of fraud on the part of their representatives, and a compromise which is unreasonable and unjustifiable may also possibly be avoided on the same principle. There is no foundation for any distinction on the ground that the compromise was made while the litigation was pending in appeal and not in the Court of first instance. 5. The decision of the Lower Appellate Court must be affirmed and we dismiss the second appeal.