PRIVY COUNCIL

ANNADA MOHAKROY (Plaintiff)
Vs.
GOUR MOHAN MULLICK (Defendant)

(AND CONSOLIDATED APPEALS).

[ON appeal from the high court of CALCUTTA.]

DATE: 4-jun-1923

Bench: A Ali, Phillimore, Sumner, J Edge

Contract—Sale of expectancy—Agreement to transfer on possession vesting — Transfer of Property Act (IV of 1882), s.6 (a)— Agreement “discovered to be void”—Recovery of money paid— Accrual of cause of action—Indian Contract Act (IX of 1872) s.65.

A contract by a Hindu Lo sell immovable property to which he is the then Dearest reversionary hair, expectant upon the death of; a widow in possessory, and to transfer it upon possession accruing to him, is void. The Transfer of Property Act, 1882, s,6a, which forbids the transfer of expectancies would be futile if a contract of the above character was enforceable.

Sri Jaganttada Maju v. Sri Eajnh Prasada Rao (1) approved.

The time at which such an agreement is “discovered to be void,” so that a cause of action to recover the consideration arises under s. 65 of the Indian Contract Act, 1872, in the absence of special circumstances the date of the agreement.

Harnath Kunwar v. Indar Bahadur Singh (2) distinguished.

Judgment of the High Court affirmed.

Consolidated Appeal (No, lOA of 1921) from a judgment and three decrees of the High Court in its appellate jurisdiction (April 22 ,1921 ) affirming decrees of the Court in its original jurisdiction.

The three suits giving rise to the consolidated appeal were brought by the appellant in the High.

Present; Loan Sumneb, Lord Phillimore, Sib John Edge and Mr. Ameer Ali.

(1) (1915) I.L.R. 39 Mad. 554 (2) (1922) L. L. R. 45 All, 179 ;

Court against the respondents severally in the following circumstances :—

GopaL Lai Seal, a Hindu, governed by the Dayabhaga, died childless in 1902 leaving two widows and live nephews, including among them the three respondents. After his death a will was propounded by which the greater part of the property of the deceased was devised to his nephew, including the respondents. That will was pronounced by the High Court to be a forgery.

On May 7, 1908, while an appeal to the Privy Council was pending, the appoint and the respondents severally entered into agreements now sued on. These agreements were to the same effect, and it is sufficient to refer to that with the first respondent. In consideration of payments of Hs. 300 a months which the appellant had been making to the respondent and agreed to continue, the agreement provided: “ I, Gour Mohan Mullick. shall convey in your favors whatever rights I have to the estate of Gopal Lai Seal deceased (that is to say, rights under the will or reversionary rights) immediately upon the same being established.” It was further provided that if the appeal failed, the respondent within three months of getting any share of the property would sell to the appellant for the consideration already stated; also that if the widows of the deceased should relinquish their life interest, either jointly, or severally, or sell the same to the appellant, then the respondent becoming owner of a share by inheritance would within three months transfer it to the appellant.

The appeal to the Privy Council was dismissed in 1909.

One of the widows died in 1917, and in 1918 one of the respondents brought a suit against the other widow claiming the property, and the parties to that suit entered into a compromise whereby the nephews obtained half the entire property in equal shares.

The appellant by his plaints in the present suits claimed a conveyance from each of the respondents of the share which he had received, or alternatively to recover the sum advanced to him. The respondents by their written statements pleaded (inter alia) that the agreement was void and inoperative in law as being for a transfer of an expectancy.

Four issues arising upon that pleading were tried as preliminary issues by Greaves J., the trial of the remaining issues, which included issues as to the plaintiff’s alternative claim and whether it was barred by limitation, stood over.

The learned Judge held that the agreement was void and the suit for specific performance not maintainable.

That decision was affirmed on appeal by Mookerjee and Fletcher JJ., the remaining. Issues not being tried.

De Gruyther K.C. and Abdul Majid, for the appellant. If the agreement was unenforceable the appellant nevertheless was entitled under s. 65 of the Indian Contract Act to recover the money which he had advanced. Whether that cause of action was barred by limitation depends upon when it was “discovered” that the agreement was void; that date may have been later than the date of the agreement; harnath Kunvar v. Indar Bahadur Singh (1). If necessary the suit should be remitted in order that evidence may be induced on that question. But it is submitted that the property having come to the hands of the defendant the agreement is enforceable. Section 6(a) of the Transfer of Property Act prohibits merely a transfer of an expectancy, but does not

prohibit an agreement to transfer one; there is nothing in Hindu law whieli prohibits an agreement of that nuture, aacl its validity is recognized by the Contract Act; Ram Niranjan Singh v. Prayag Singh (1), pindiprolu Sooraparaju v. Pindiprolu Veerabhadrudu. (2). Baldeo Prasad Sahu v. Miller (3), Colebrook’s Digest, Bk. II., ch. 2, s. 1 (25) (27); indian Contract Act. 1872, s.32, Transfer of Property Act, 1882. s. 54 Sri Jagannada Raju v. Sri Rajah prasada Rao (4) wan wrongly decided. Sir George Lowndes K. C. aod E. B. Raikes, for the respondents in the first two appeals.

The judgment of their Lordships was delivered by LORD SUMNER.

1. Three points have been argued on these appeals, one by Mr. de Gruyther, the leading counsel for the appellant, and two others by Dr. Abdul Majid, the junior counsel.

2. The plaintiff, the present appellant, had agreements with three persons, who are the respondents, only two of whom, however, appear, by counsel, under which he purported with great elaboration to purchase from them their expectations under the will of their uncle, or alternatively their rights as his nephews expectant upon the termination of the surviving widows’ rights in the property of the uncle, and among many other purposes which are recited in this agreement, for which advances are agreed to be made, one, and apparently the principal one, was that an appeal might be prosecuted ultimately to His Majesty in Council for the purpose of establishing a will which the deceased was said to have made. Unfortunately their Lordships, affirming the decision in the Court below, found that that will was a forgery. That therefore reduced the expectations of the three respondents to their interest in the property after the widows’ rights should come to an end, and as a matter of fact after a time one widow died and a compromise was entered into with the approbation of the Court in respect of the rights of the other widow, the effect of which was to accelerate the time when the nephews became entitled to the inheritance.

3. In the present suits in India the trial Judge stated ten issues. The first four of those issues were argued and dealt with by him. The point in substance upon which those four issues turned was whether or not the agreements were illegal or void on the ground that they dealt with an expectancy. There were a number of othersas a matter of fact, eleven in allbut the remaining seven were not dealt with by the learned Judge. An application was made to him that he should pronounce a decree giving effect to his determination of the first four issues, which he declined to do upon the ground that there remained some issues in the case which had not been dealt with, one of them, for example, being an issue whether the plaintiff was entitled to a refund of the amounts which he had in fact paid or any of them, and another whether his rights were barred by limitation.

4. The present appellant was advised that his best course was to obtain an immediate decree upon the four issues, which had been dealt with and appeared at that time to be the only, substantial ones, in order that he might prosecute his appeal to the High Court, and ultimately to His Majesty in Council, and he therefore elected to abandon all the other issues, whatever they might be; in fact, he never called any evidence in support of them, and a formal order was made upon his petition disposing of them all in that way. We are told, and very likely it may be so, that at that time the advice was largely influenced by the consideration that it was still thought to be an open question before their Lordships whether, apart from the Transfer of Property Act, it might be held competent to these heirs, according to the ordinary Hindu law, to contract to transfer, and ultimately to transfer their expectation, such as it was, and no doubt, if that was the real point of the litigation it was worth while to abandon minor points in order to get that issue determined. Between the time when the decree was asked for and obtained and the present time there has been a decision of their Lordships’ Board in the case of Harnath Kaur v. Indar Bahadur Singh (1922) L.R. 50 J.A. 69 and although, as it appears to their Lordships, it simply restates what had frequently been stated before, the appellant now recognises that the last word has been said, so far as he is concerned, about the possibility under Hindu law of such an interest being transferred.

5. Under these circumstances an application was made to their Lordships by Mr. de Gruyther to allow the petition which had been presented to the High Court to be recalled, and the decree that was made upon that petition to be set aside and so to allow in some shape or form discussion, if not proof, of the remaining issues in the case, the object being to show that there were, or might be, circumstances in which it possibly could be held that the time of the discovery of the illegality of the contracts was not the time when the contracts Were made and the parties knew the law or must be presumed to have known it, but at a later date (what date their Lordships are not exactly told). It was urged that, if such circumstances could be suggested here, a view similar to that which the Board took in the case above mentioned might be taken in favour of the present appellant also. In that case, however, there were special circumstances, wholly differant from those in the present case, circumstances which were proved in evidence and were sufficient for their Lordships to act upon and to enable them to say that the discovery in the case was later than the date of the contract itself. There has been no suggestion anywhere in the course of the present proceedings that any such facts occurred as could alter the view which must normally be taken of the meaning of the word “discovery” and of the time at which that discovery must be held to have occurred. Not only so, but it was by the deliberate act of the appellant himself, for considerations which at the time were very likely wise considerations, that he closed the door to any investigation of that issue at all. Their Lordships are content to dispose of the first point by saying that the additional issues cannot be gone into now and that upon the face of the matter the appeal must be dealt with upon the question whether, either under the Transfer of Property Act or under the Hindu law applying to purchases of expectations of inheritances, there is any ground upon which these contracts can be supported.

6. Dr. Abdul Majid has developed these points, and his points appear to be two, setting aside for the moment the Transfer of Property Act, upon the ground that it deals with an actual transfer or conveyance and not with a contract to transfer. It is contended that there is nothing in the reason of the thing to prevent two parties, who are concerned in the way in which these parties were concerned, from entering into a contract for the future sale of future expectations. It is admitted that there is no authority to be found anywhere, which supports the view that such a contract is possible, and it in admitted that there is authority in India to the contrary, the authority in question being the case of Sri Jagannada Raju v. Sri Rajah Prasada Rao (1915) I.L.R. 39 Mad. 554, which so satisfied the learned Judge at the trial that he expressed his assent to the reasoning, without further discussion, and the High Court in its turn was satisfied also. The reasoning of that decision may well be summed up first in a quotation from the judgment of Chief Justice Wallis, and secondly, in a quotation from that of his colleague, Mr. Justice Tyabji.

7. The learned Chief Justice says, at page 558:

On this question, looked at apart from authority, I should not entertain any doubt, as it seems futile to forbid such transfers of expectancies if contracts to transfer them are to be enforced as soon as the estate falls into possession. In these circumstances it seems to me that it is our duty to give effect to what we consider plain provisions of our statute law instead of following a course of English decisions, which would appear to have been based, from the very first, on a regard for long established practice rather than on principle and to have failed to commend themselves to Lord Elden.

8. Then Mr. Justice Tyabji, at page 559, says:

The Transfer of Property Act does not permit a person having expectations of succeeding to an estate as an heir, to transfer the expectant benefits) when such a transfer is purported to be made an attempt is in effect made by the two persons to change with each other their legal positions, an attempt by the one to clothe the other with what the Legislature refuses to recognise as rights, but styles as a mere chance incapable of being transferred. It would be defeating the provisions of the Act be hold that though such hopes or expectations cannot be transferred in present or future, a person may bind himself to bring about the same results by giving to the agreement the form of a promise to transfer not the expectations but the fruits of the expectations, by saying that what he has purported to do may be described in a different language from that which the Legislature has chosen to apply to it for the purpose of condemning it. When the Legislature refuses to the transaction as an attempt to transfer a chance, it indicates the true aspect in which it requires the transaction to be viewed.

9. Their Lordships think that they are only following oat numerous other passages which have been referred to in earlier judgments of this Board when they accept that reasoning and that conclusion. It is impossible for them to admit the common sense of maintaining an enactment which would prevent the purpose of the contract, while permitting the contract, to stand as a contract, or to see how by appealing to Section 65 of the Indian Contract Act, or to the nature of the bargain as a mere bargain de future, they could uphold it as a contract when it is a contract as to which, not only must specific performance be refused under the Transfer of Property Act, but as to which damages can never be recovered, because the contract is not a performable contract until the realisation of the expectation occurs.

10. There is another way in which the learned Counsel for the appellant puts the point, namely, that there is here a contract wholly distinguishable from any contract as to spes successione, because, after carefully providing for all eventualities, the documents deal with the possibility of the widows, or one of them, relinquishing their life intersts either jointly or severally, or selling them to the reversionary heirs, in which event from the date of the relinquishment or sale the heirs would become the present owners of the estate by right of inheritance. It is suggested that this provision ought to be read as relating to a transaction with strangers, embedded in the middle of a much longer contract with the parties to this appeal and relating to their hopes of inheritance; in other words, that it should be treated as though it read : “Further, if we can obtain by purchase from total strangers to the family a portion of our late uncle’s property, then we undertake to sell it to you on the same terms as those upon which we have undertaken to sell our spes successione.” It is not necessary to discuss how far such a contract might be supportable, because it is quite plain upon the documents that this is not such a contract, and therefore the point, ingenious though it is, is sufficiently dealt with by dismissing it.

11. The result, therefore, is that on all the points the appeal fails. As they have been consolidated in India and before their Lordships there will be one set of costs only, and the two successful respondents who appear by counsel will get that set of costs, and their Lordships will humbly advise. His Majesty accordingly.

Solicitors for the appellant; Chapman Walker & Shephard.

Solicitors for the appellant; Watkins & Hunter.

A.M.T.

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M.M. DUTT, J.

(1) THIS appeal arises out of a suit for specific performance of an agreement for sale. The appellant is the assignee of the original plaintiff Bishnupada Bose.

(2) THE property in suit belonged to one Nemai Chandra Banerjee, the brother of the defendant No. 1 Nirmal chandra Banerjee. By an agreement dated February 24, 1950, Nirmal Chandra Banerjee agreed to sell the property to the plaintiff for a consideration of Rs. 10,000/ -. It is recited in the agreement that his brother Nemai suddenly disappeared on May 21, 1946. He was suffering from various ailments. He made searches for his brother but he could not be traced. He believes that his brother is not alive and that he has committed suicide. Further, it is stated that after the death of his brother he is his only heir and that he has been in enjoyment and possession of the disputed property. In order to be sure as to the death of his brother he agreed to defer the execution of the sale deed till six months after May 21, 1953. On the date of the agreement the plaintiff paid a sum of rs. 2,500/- to his vendor Nirmal Chandra Banerjee on account of earnest money. It is the plaintiff’s case that although he was ready and willing to perform his part of the contract the defendant No. 1 failed and neglected to complete the same by executing the sale deed as agreed. Instead, he transferred the disputed property by a registered deed of conveyance dated October 1, 1954, to the defendant No. 2, the predecessor-in-interest of the defendants Nos. 2 (a) to 2 (d). On the afore said allegations the plaintiff Bishnupada Ghosh prayed for a decree for specific performance of the contract or in the alternative, for refund of the earnest money.

(3) THE suit was contested by the defendant No. 2 and subsequently, after his death, by one of his heirs the defendant No. 2 (a). One of the contentions of the contesting defendant was that the agreement to sell executed by the defendant No. 1 in favour of the plaintiff was hit by the provision of section 6 (a) of the Transfer of Property Act, for what was agreed to be transferred was a mere chance of the vendor to succeed to his brother Nemai. The other defences, which were taken by the defendant, are not relevant for our present purpose.

(4) THE trial court came to the find ing that by the said agreement the defendant No. 1 agreed to transfer spes successionis and it was, therefore, hit by the provision of section 6 (a). In coming to the said finding the trial court took the view that no presumption of the death of Nemai arose on the day the said agreement was executed, for seven years did not pass from the date of his disappearance. Upon the said findings, the trial court dismissed the suit. On appeal by the plaintiff, the lower appellate court took the same view as that of the trial court. The lower appellate court held that the parties were aware of the truth that the defendant was an heir apparent to his elder brother, at the time of the agreement and that the agreement was in substance an agreement to transfer spes successionis which the defendant no. 1 had in the property. Further, it was held that the agreement taken as a whole showed that the vendor was not sure of the death of his elder brother from whom he would inherit the property and that he was conscious of his doubtful or inchoate title. According to the lower appellate court, as the defendant No. 1 was, on the date of the agreement, merely an heir apparent of Nemai, who was the owner of the property in the absence of any presumption under section 108 of the evidence Act, what was transferred by him was mere spes successionis. In that view of the matter, the lower appellate court upheld the judgment of the trial and dismissed the appeal. Hence, this second appeal.

(5) IN our view, both the courts below have misunderstood the legal position. Under section 6 of the Transfer of Property Act, property of any kind may be transferred except as otherwise provided by the Act or by any other law for the time being in force. Clauses (a) to (i) of section 6 enumerates the properties which cannot be transferred. Clause (a) provides that the chance of an heir-apparent succeeding to an estate, the chance of a relation obtaining a legacy on the death of a kinsman, or any other mere possibility of a like nature, cannot be transferred. What is forbidden by clause (a) is a mere chance of an heir succeeding to an estate or a mere possibility of a like nature. When the transfer is a transfer by an heir-apparent on his chance to succeed to an estate, the transfer will be hit by section 6 (a). But where the transfer is not of the right of expectancy but of the property itself, it cannot be said, to be a transfer of a mere chance to succeed to an estate. The position was made clear long ago in a Bench decision of the Allahabad high Court consisting of Sulaiman, c. J. and Rachhpal Singh, J. (Shyam narain Misir and another v. Mangal prasad Misir and others) reported to a. I. R. 1935 All. , 244. The question that arose for consideration in that case was whether there was a conflict between the illustration to section 43 of the Transfer of Property Act and section 6 (a). Their Lordships observed as follows :

“s. 6 does not prohibit emphatically the transfer of a chance of an heir ; nor does it make it absolutely illegal so as to vitiate the entire contract. It merely lays down that the property of any kind may be transferred, but the chance of an heir cannot be transferred. This is no more than saying that a transfer of a mere chance of an heir is void in law and is of no effect. S. 6 (a) would therefore apply to cases where professedly there is a transfer of a mere spes successionis, the parties knowing that the transferor has no more right than that of a mere expectant heir. The result, of course, would be the same where the parties knowing the full facts fraudulently clothe the transaction in the garb of an out and out sale of the property, and there is no erroneous re presentation made by the transferor to the transferee as to his owner ship. But where an erroneous representation is made by the transferor to the transferee that he is the full owner of the property transferred and is authorised to transfer it and the property transferred is not a mere chance of succession, but immovable property itself, and the transferee acts upon such erroneous representation, then if the transferor happens later, before the contract of transfer comes to an end, to acquire an interest in that properly, no matter whether by private purchase, gift, legacy or by inheritance or otherwise, the previous transfer can at the option of the transferee operate or the interest which has been subsequently acquired, although it did not exist at the time of the transfer. ”

(6) IT is clear from the above observation that unless the transfer is professedly of a mere spes successionis and the parties are aware of the same, it does not come within the purview of section 6 (a). When the property transferred is not a mere chance of succession, but immovable property itself, the transfer is not hit by section 6 (a). In the instant case, the agreement to sell relates to the immovable property, that is, the property in suit, and not a mere chance of succession of the defendant No. 1 to that property as an heir of his elder brother Nemai.

(7) IT is true that on the date the agreement was executed, that is, after 3 years 9 months of the date of disappearance of Nemai, the legal presumption under section 108 of the Evidence act was not available. In our opinion, the provision of section 108 is not relevant. The defendant No. 1 believed that his brother was dead and that be inherited the disputed property as his sole hair. He agreed to transfer the property itself to the plaintiff Bishnupada Bose on the footing of his firm belief that his brother was dead. By no stretch of imagination can it be said that he agreed to transfer his chance of succession. It is true that the execution of the deed of sale or the completion of the sale was deferred till six months after May 21, 1953, that is, after 7 years, in order to avail of that legal presumption. But, in our view that is quite immaterial. That might have been done for the purpose of fortifying or strengthening his sound belief that his brother was dead and also for the purpose of an additional assurance. But that has nothing to do with the question whether he agreed to transfer a mere chance of succession to his brother’s estate. The courts below thought that after the lapse of 7 years, his brother could be said to have died. Section 108 of the Evidence Act does not lay down any such provision. All that has been provided for in that section is that when the question is whether a man is alive or dead, and it is proved that he has not been heard of for seven years by those who would naturally have heard of him if he had been alive, the burden of proving that he is alive is shifted to the person who affirms it. It only raises a presumption of death when a person is not heard or for seven years. But it does not say that after the lapse of seven years it can be said that the man is definitely dead. In this connection we may refer to Article 624, page 345, Vol. 15, 3rd Edition of Halsbury’s Laws of england, which is as follows :

“there is no legal presumption either that the person concerned was alive up to the end of the period of not less than seven years, or that he died at any particular point of time during such period, the only presumption being that he was dead at the time the question arose, if he has not been heard of during the preceding seven years. If it is necessary to establish that a person died at any particular date within the period of seven years, this must be proved as a fact by evidence raising that inference ; for example, that when last heard of he was in bad health. or exposed to unusual perils, or had failed to apply for a periodical payment upon which he was dependent for support. ”

(8) APART from the legal presumption under section 108, it can be shown that the man died at any time after his disappearance, even before the expiry of the period of seven years. In this case, the statements in the agreement, which have not been denied or disputed by the defendant, show that nemai was suffering from various aliments and that accordingly, the defendant No. 1 was justified in inferring that his brother was dead.

(9) IT has been already stated that section 108 of the Evidence Act is not relevant for the purpose of considering as to whether the agreement is hit by section 6 (a) of the Transfer of Property Act. All that has to be seen is whether by a contract of transfer or by a deed of transfer, spes successionis is agreed to be transferred or has been transferred. In this case, the defendant No. 1 agreed to transfer the immovable property itself and not his right of expectancy. In the circumstances, in our view, the agreement is not void ad held by the courts below.

(10) IT is not disputed that the defendant No. 2, the predecessor-in-interest of the present contesting respondent, purchased the disputed property from the defendant No. 1 with know ledge of the agreement in favour of the plaintiff Bishnupada Bose. In these circumstances, the sale of the disputed property by the defendant No. 1 to the defendant No. 2 is void. The plaintiff must succeed and he is entitled to a decree as prayed for by him.

(11) IN the result, the judgments and decrees of the courts below are set aside. The suit for specific performance is decreed with costs against the contesting defendant No. 2 (a). The appellant is directed to deposit in the trial court a sum of Rs. 7,500/- (Rupees seven thousand and five hundred), the balance of the consideration money, to the credit of the defendants nos. 2 (a) to 2 (d) within one month of the arrival of the records in the trial court. The appellant shall also put in within the said period, the requisite stamps, draft conveyance and the cost of registration. The defendant No. 1 nirmal Chandra Banerjee is directed to execute and register a deed of sale in respect of the disputed property within two months of the arrival of the records in the trial court. The defendants Nos. 2 (a) to 2 (d) will also join in the sale deed that will be executed by the vender, the defendant no. 1. If the defendants fail to execute the document of sale as directed, the trial court will execute the sale deed on behalf of all the defendants and get the same registered in accordance with law at the cost of the appellant. The defendants Nos. 2 (a) to 2 (d) are also directed to deliver possession of the disputed property to the appellant within two months of the arrival of the records in the trial court, failing which the appellant will be entitled to recover khas possession of the disputed property in execution of the degree. The appeal is allowed, but there will be no order for costs in this Court.

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TNDTAN LAW KEPOHTS. [VOL. XLIII.

APPELLATE CIVIL.

Before Sharfuddin and Cose JJ.

PUNCHA THAKUR
Vs.
BINDESWARI THAKUR*

Offerings to a Temple—Transferability— Transfer of Property Act (IV of 1882)s . 6, cl. (a).

There are certain rights that cannot be transferred. They are res extra commercium ; for instance, sacerdotal office which belongs to the priest of a particular class. Similarly a right to receive offerings from pilgrims, resorting to a temple or shrine, is inalienable. The chance that future worshippers will give offerings is a mere possibility and as such it cannot be transferred.

Lakhsmanaswami Naidu v. Rangamma (1), Kashi Chandra v. Kailash Chanira (2). Ditto Nath Chuakarbutty v. Pratap Chandra Gosxami (3) referred to.

Second Appeal by Puncha Thakur and another the defendants

[1] The suit out of which this second appeal arises was instituted by the plaintiffs for recovery of possession of a 3-annas share in the offerings made to the temple of Sri Bhairo Nath on establishment of their title thereto. The plaintiffs and the defendant third party form a joint Hindu family. It is alleged that out of the 16-annas offerings, they owned and possessed a 3-annas share and to that extent they used to get charhawa(offering s) offered by the people. The defendant second party, it appears, in execution of a decree put up that share to sale and himself purchased it. Thereafter he sold it to the defendant first party. The defendant third party, father of plaintiffs Nos. 1 to 4, and the father of plaintiff No. 5 had executed a mortgage-bond with respect to the above share in favour of the defendant second party and it was in execution of the mortgage-decree obtained on the strength of the above mortgage that the defendant No. 2 sold and purchased that share which he afterwards sold to the defendant first party.

[2] In the plaint it is urged that the right in the share of the offerings is inalienable and so the father of the defendant No. 5 and the third party defendant, father of plaintiffs Nos. 1 to 4, had no right to mortgage it and that, therefore, the defendant second party and his vendee the defendant first party acquired no valid title as the whole transaction from mortgage to sale was invalid.

[3] The suit was contested only by the defendants Nos. 1 and 2 of the first party and by the defendant No. 4 of the second party. Their contention is that the suit is barred by-limitation and that the right in the offerings is transferable.

[4] The first Court gave a modified decree in favour of the plaintiffs and the defendant third party jointly. The defendants Nos. 1 and 2 of the first party, therefore, appealed to the lower Appellate Court which affirmed the judgment and decree of the first Court and dismissed the appeal. The decree passed by the first Court which was affirmed on appeal is in the following terms: “That the suit be decreed modifiedly with full costs, that the plaintiffs title be declared, that they jointly with the defendant third party do recover possession over 2-annas 16-gundas 1-kara share of charhawa interest and that permanent injunction be issued on the defendants first and second parties restraining them from receiving the charhawa offerings for the aforesaid share”.

[5] The defendants Nos. 1 and 2 now appeal to this Court.

[6] Two grounds were urged on their behalf, first, that of estoppel and second, that the right to offerings was transferable. The first question to be decided is whether such a right as is claimed by the plaintiffs is transferable or not. I am of opinion that such a right, is not transferable.

[7] There are certain rights that cannot be transferred; they are termed res extra commercium, for instance sacerdotal office which belongs to the priest of a particular temple. It was so held in Lakshmanaswami Naidu v. Rangamma 26 M. 31. Similarly a right to receive offerings from pilgrims resorting to a temple or shrine is inalienable and no suit can be maintained for the recovery of wasilat in respect of properties derived from a turn of worship which from its very nature is voluntary. It was so held in the case of Kashi Chandra Chuckerbutty v. Kailash Chandra Bandopadhya 26 C. 356 : 3 C.W.N. 279. Indeed, no man can compel another to make voluntary offerings. Offerings are, according to true significance, made to the diety of which the image is its visual symbol and their appropriation by the officiating priest is not a right with which he is entitled to traffic. This was held to be so in the case of Dino Nath Ghuckerbutty v. Pratap Chandra Goswami 27 C. 30 : 4 C.W.N. 79.

[8] A very strong reason has been given by the lower Appellate Court that such a right is not transferable. It says: “In the present case the duty of a pujari seems to have been assigned to Brahmans who make pujas to the idol Bhairo Nath. To my mind the performance of puja or sheba of the idol creates a right to receive the offerings made to it if it be assumed for a moment that aright to receive offerings is alienable or transferable, then it is clear that an alienation of such right can be made in favour of Muhammadans or persons of another caste who would obviously be incompetent to perform the puja.” Offerings are voluntary presents to the deity to which, no doubt, the shebait is entitled. They are nothing but voluntary payments. The income arising from them is uncertain and indefinite and an income from such a right is not transferable under the Transfer of Property Act.

[9] For the above reasons, I am of opinion that the mortgage of that right and the purchase of it in execution of the mortgage-decree are invalid and that the judgment of the lower Appellate Court cannot be assailed on that point.

[10] It is somewhat difficult to reconcile the decree given with the character of the property which is clearly not transferable, but this point is not raised in the grounds of appeal and need not be considered.

[11] As to estoppel I think the statutory provisions being against transfer, no question of estoppel can arise.

[12] The appeal is dismissad with costs.

Coxe, J.

[13] I agree. It appears to me that the chance that future worshippers will give offerings to the temple is a mere possibility within the meaning of Section 6, Clause (a), of the Transfer of Property Act. Such a possibility cannot be transferred and, in my opinion, this being a statutory provision, no question of estoppel can arise.

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M/s. National Highway Authority of India
Vs.
M/s. B. Seenaiah & Company (Projects) Ltd.

CORAM : The Hon’ble Mr. Justice Tapen Sen
&
The Hon’ble Mr. Justice Indrajit Chatterjee

For the Appellant : Mr. Jaydip Kar, Sr. Advocate, Mr. Dipankar Das, Ms. Ashish Shah.

For the State Respondent : Mr. Jayanta Kumar Mitra, Sr. Advocate, Mr. Tilak Bose, Mr. Aryak Dutta, Mr. A.P. Agarwalla.

Heard On : 19.1.15, 21.1.15, 28.1.15, 18.2.15, 20.2.15.

C.A.V. on : 20.02.15 Judgment Delivered on : 13.03.15

Tapen Sen, J.:

This appeal is directed against the Order / Judgment dated 26.4.2011 passed in Misc. Case No. 50 of 2008 by the learned 4th Additional District Judge, Paschim Midnapore whereby and whereunder, while dealing with an application under Section 34 of The Arbitration and Conciliation Act, 1996, he was pleased to dismiss the said Misc. Case holding inter-alia that the arbitral award was not fit to be interfered with.

At this stage we would like to point out that during the course of his submissions, Mr. Jaydip Kar, learned Senior Advocate appearing for the appellants, raised a preliminary issue with regard to the authority and the jurisdiction of the learned Additional District Judge in having proceeded with the matter under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to for the sake of brevity as the Arbitration Act). His submission was based on serious points of law and therefore, we thought it appropriate to decide such preliminary issue first and then, subject to our decision, either proceed with the matter on merits and if, we found that there was lack of inherent jurisdiction with the said Additional District Judge, then to pass appropriate orders as may be deemed fit and proper by us. Consequently, intensive arguments were raised on behalf of the appellants and equally intensively replied to by Mr. Jayanta Kumar Mitra, learned Senior Advocate appearing for the respondents. We will now therefore, deal with this preliminary issue.

The question that has been posed for our consideration is as to whether, under the provisions of Section 34 of the Arbitration Act, the reference to the learned Additional District Judge could at all have been made or whether, the same could only have been made before a “Court” as defined under Section 2(e) of the said Arbitration Act?

In short, Mr. Jaydip Kar has submitted that an application for setting aside an arbitration award can only be made before a “Court”, as defined under Section 2(e) and not before an Additional District Judge. According to him, “Court” as defined under Section 2(e) of the Arbitration Act defines “Court” as being the principal Civil Court of original jurisdiction in a district…. but does not include any Civil Court of a grade inferior to such principal Civil Court… .

The definition of Section 2(e), for the convenience of all, is reproduced below:-

“2. Definitions (1) In this Part, unless the context otherwise requires,–

(e) “Court” means the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any civil court of a grade inferior to such principal Civil Court, or any Court of Small Causes;” Similarly, Section 34, for the convenience of all is reproduced below:-

“34. Application for setting aside arbitral award.— (1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3).

(2) An arbitral award may be set aside by the Court only if—

(a) the party making the application furnishes proof that—

(i) a party was under some incapacity, or

(ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or

(iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or

(iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration:

Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or

(v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or

(b) the Court finds that–

(i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or

(ii) the arbitral award is in conflict with the public policy of India.

Explanation.—Without prejudice to the generality of sub-clause (ii) it is hereby declared, for the avoidance of any doubt, that an award is in conflict with the public policy of India if the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81.

(3) An application for setting aside may not be made after three months have elapsed from the date on which the party making that application had received the arbitral award or, if a request had been made under section 33, from the date on which that request had been disposed of by the arbitral tribunal:

Provided that if the Court is satisfied that the applicant was prevented by sufficient cause from making the application within the said period of three months it may entertain the application within a further period of thirty days, but not thereafter.

(4) On receipt of an application under sub-section (1), the Court may, where it is appropriate and it is so requested by a party, adjourn the proceedings for a period of time determined by it is order to give the arbitral tribunal an opportunity to resume the arbitral proceedings or to take such other action as in the opinion of arbitral tribunal will eliminate the grounds for setting aside the arbitral award.”

Mr. Kar submits that Section 2(e) clearly and in no uncertain terms lays down that a “Court”, for purposes of Section 34, would obviously mean the principal Civil Court, i.e. the District Judge himself. According to him, when the statute itself mandates the principal Civil Court to deal with such matters, then he could not have delegated such power to a court which is a “grade inferior” to such District Judge. In support of such a contention, Mr. Kar has relied upon a judgment passed by the Hon’ble Allahabad High Court in the case of M/s I.T.I Ltd., Allahabad vs District Judge, Allahabad & Ors. reported in AIR 1998 Allahabad 313.

Mr. Jayanta Mitra, learned Senior Advocate, on the other hand, contended that under the provisions of The Bengal, Agra & Assam Civil Courts Act, 1887 (hereinafter referred to for the sake of brevity as the Civil Courts Act), the power of delegation has been provided for and therefore the Additional District Judge cannot be said to be a “Court” being a “grade inferior” to the said District Judge in the context of the provisions of the Civil Courts Act laying down inter-alia that the District Judge has the power to assign certain cases to the Additional District Judge. He further submits that under Article 236 of the Constitution of India, the expression “District Judge” would include a Judge of a City Civil Court, Additional District Judge, Joint District Judge, Assistant District Judge, Chief Judge of a Small Cause Court, Chief Presidency Magistrate, Additional Chief Presidency Magistrate, Sessions Judge, Additional Sessions Judge & Assistant Sessions Judge.

Section 3 of the Civil Courts Act deals with the Constitution of Civil Courts and, provides that there shall be the following classes of Civil Courts under the said Civil Courts Act:-

(1) The Court of the District Judge;

(2) the Court of the Additional Judge (now nomenclated as the Additional District Judge);

(3) the Court of the Assistant District Judge (now nomenclated as Civil Judge Senior Division); and

(4) the Court of the Munsif (now nomenclated as Civil Judge, Junior Division).

Now under the provisions of Sections 8 of the Civil Courts Act which deals with Additional Judges, it has been provided that Additional Judges shall discharge any of the functions of a District Judge which the said District Judge may assign to them and, in the discharge of those functions, they shall exercise the same powers as the District Judge.

In view of the provisions of Sections 3 & 8 of the aforesaid Civil Courts Act read with Article 236 of the Constitution of

India, Mr. Mitra contended that the words “grade inferior” used in Section 2(e) of the Arbitration Act must be held to be a “loose drafting” by the legislature and it cannot take away the power of the District Judge to assign matters to an Additional District Judge who, by reason of Section 8(2) of the Civil Courts Act has been authorized to exercise the same powers as the District Judge.

Mr. Mitra then contended that the appellants had always submitted to the jurisdiction of the Additional District Judge and they had taken a chance for a judgment and therefore after delivery of the judgment they cannot be allowed to turn around and say that there was lack of jurisdiction. Mr. Mitra relies upon a judgment of the Hon’ble Supreme Court passed in the case of Hira Lal Patni vs Sri Kali Nath reported in AIR 1962 SC 199. He has also relied upon a judgment of this Court passed in the case of Jupiter General Insce. Co. Ltd. vs Corporation of Calcutta reported in AIR 1956 Calcutta 470. Mr. Mitra has also relied upon another judgment of the Hon’ble Supreme Court passed in the case of Prasun Roy vs The Calcutta Metropolitan Development Authority & Anr. reported in AIR 1988 SC 205.

In the cases cited above on behalf of the respondents, it is clear that if a person has not taken a point during the course of the proceedings then he would be deemed to have waived his rights to do so at a later stage. This principle of law is well settled and one need not to go into different judgments of different courts. However, what is relevant to be taken note of in the facts and circumstances of this case is, whether the Additional District Judge had, at all, the right or the jurisdiction to proceed with the matter? This can be answered only in the context of the provisions of the Arbitration Act itself which is a special statute in the field and which creates or carves out a jurisdiction which, then, can be said to be jurisdiction “vested by law”. The court of the Additional District Judge is undoubtedly a Civil Court as contemplated by the Civil Courts Act and by reason of the said Civil Courts Act it will be deemed to exercise the same powers of a District Judge in relation to matters assigned to it. However, we cannot lose track of the provisions of the Arbitration Act because that is a special statute, which must override the provisions of the general law of the land as per the principles enunciated in the legal principle, generalia specialibus non derogant.

In the context of this case therefore the provisions of the Civil Courts Act are provisions relating to consolidating and amending the law relating to Civil Courts and therefore it is a general law in the domain of the functioning of Civil Courts.

On the other hand, the need to frame effective laws relating to domestic and international commercial disputes was felt by the legislature because there was no specific general law on the subject of arbitration. With the increase in industrialization and the advent of commercial litigations, the Arbitration Act of 1940 became outdated whereafter the Law Commission of India and several representatives from the trade and industry and, experts in the field of arbitration proposed amendments to the Act. It is in that context that the Arbitration and Conciliation Act, 1996 was framed and it came into effect on and from 22/8/1996. Therefore by the time Misc. Case No. 50 of 2008 had been initiated, the new Act was already in force. Article 236 of the Constitution of India deals with subordinate Courts and the provisions of Section 2(e) of the Arbitration Act has not been held to be ultra vires Article 236 and unless it is so done, strict interpretation will have to given to the provisions of the Arbitration Act of 1996 without drawing analogies from the general law of the land such as the Civil Courts Act.

The expression appearing in the Civil Courts Act under Section 8(2) cannot be read in isolation or in ignorance of Section 42 of the said Arbitration Act which lays down that “notwithstanding anything contained elsewhere in this Part or in any other law for the time being force, where with respect to an arbitration agreement any application under this Part has been made in a Court, that Court alone shall have jurisdiction over the arbitral proceedings and all other subsequent applications arising out of that agreement and the arbitral proceedings shall be made in that Court and in no other Court.”

The word “Court” therefore has cropped up in different provisions of the Arbitration Act such as Sections 2, 9, 42 & 34 and therefore the intention of the legislature qua “Court”, has to be interpreted in the light of the provisions and definitions provided therein. If the word “Court” under Section 2(e) has clearly and specifically stated that it will not include a Civil Court being a grade inferior to the principal Civil Court, then the High Court or the Judiciary cannot be called upon to give an interpretation which is different from the intention of the legislature. The expression that an Additional District Judge shall exercise the same functions and powers of a District Judge as provided for in Section 8 of the Civil Courts Act does not mean that such a general law would take away the specific meaning of a “Court” ascribed under the special statute.

If therefore we hold that the District Judge could not have transferred a matter under Section 34 of the Arbitration and Conciliation Act, 1996 then as a natural consequence, we must also hold that the entire proceeding before the said Additional District Judge was wholly without jurisdiction as there was lack of inherent jurisdiction in the said Court to proceed with the matter. We are inclined therefore to hold that in view of Section 2(e) read with Sections 34 and 42 of the Arbitration Act, it was only the District Judge alone who could have dealt with the matter and any assignment made by the District Judge to a Court being a grade inferior to the said District Judge would amount to delegation of his own power without there being any such provision of delegation under the Arbitration Act and therefore such an act was wholly illegal and without jurisdiction.

Even if the appellant had taken part in the said proceedings before the Additional District Judge, they cannot be estopped from raising this point before us since this is a point of law and a point of jurisdiction that goes to the root of the matter. In a judgment of the Hon’ble Supreme Court passed in the case of Kanwar Singh Saini vs High Court of Delhi reported in (2012)4 SCC 307, it has inter-alia been held that there can be no dispute regarding the settled legal proposition that conferment of jurisdiction is a legislative function and it can neither be conferred with the consent of the parties nor by a superior Court, and if the Court passes order / decree having no jurisdiction over the matter, it would amount to a nullity as the matter goes to the root of the cause. Their Lordships have further held that such an issue pertaining to jurisdiction can be raised at any belated stage of the proceedings including in appeal or execution. It has also been held that acquiescence of a party should equally not be permitted to defeat the legislative animation. The Court cannot derive jurisdiction apart from the statute.

It is in the context of the aforesaid observations that we must also deal with the concept of “coram non judice”. From the discussions made above we are satisfied that the impugned judgment can safely be said to suffer from the vice of “coram non judice.” In our view therefore an award can be set aside under Section 34 of the Arbitration Act only by “ Court” as defined under Section 2(e) thereof. The Additional District Judge, 4th Court is not the principal Civil Court of the district. It is only the principal District Judge who has been clothed with the power to deal with an application under Section 34 of the Arbitration Act. He is also a delegate under the said statute qua Section 34 thereof. The statute has delegated the power to set aside an arbitration award to the principal District Judge being the principal Civil Court of original jurisdiction in a district, and therefore, he had no authority, in the absence of an enabling provision under said statute to redelegate of subdelegate the said power upon a Court which is not the principal Civil Court of original jurisdiction contrary to the well known concept of “delegatus non potest delegare.”

Following this analogy, the power under Section 8(2) of the Civil Court’s Act being only a power of assignment, cannot be interpreted to mean that since the District Judge has the power to assign any of its functions to an Additional Judge, he would also have the power to subdelegate or to upset and render otiose, the provisions of the Special statute. The Special statute, in the facts and circumstances of this case is The Arbitration and Conciliation Act, 1996 and this Statute (Sections 2(e) + 34) mandates the principal District Judge ONLY to exercise powers under Section 34 thereof. Therefore, even if he has a general power of assignment under the general law, being the Civil Court’s Act, such exercise of power in the context of the special statute, is clearly without jurisdiction.

Consequently, and in our opinion therefore, the impugned Order has been passed without jurisdiction and therefore, is a nullity. It is coram non judice. It is non est in the eye of law. Reference for this analogy can be made to paragraph 26 of the judgment of the Hon’ble Supreme Court of India passed in the case of Chandrabhai K. Bhoir & Ors. vs Krishna Arjun Bhoir & Ors. reported in (2009)2 SCC 315.

In a similar case, their Lordships in the Supreme Court, in the case of Chief Engineer, Hydel Project & Ors. vs Ravinder Nath & Ors. reported in AIR 2008 SC 1315, have held in Para 19 thereof that once an original decree has been held to be without jurisdiction and hit by the doctrine of coram non judice, there would be no question of upholding the same merely on the ground that the objection to the jurisdiction was not taken at the initial First Appellate or the Second Appellate stage.

This judgment also answers the submissions of learned Counsel for the respondents to the effect that the Appellants having all along submitted to the jurisdiction of the Additional District Judge, cannot be allowed to turn around after delivery of the judgment to say that there was lack of jurisdiction.
While we are on this issue, we would go a step further by saying that if the person who made the order did not have the authority to do so then such an order would not only be a nullity but in such cases even the principles estoppels, waiver, acquiescence and even the principles of res judicata would have absolutely no application. This analogy finds support in the judgment of the Hon’ble Supreme Court passed in the case of Hasham Abbas Sayyad vs Usman Abbas Sayyad & Ors. reported in AIR 2007 SC 1077.

A similar point fell for consideration before the Hon’ble Supreme Court in the case of Jagmittar Sain Bhagat & Ors. vs Director, Health Services, Haryana & Ors. reported in (2013)10 SCC 136.

In the said judgment their Lordships have held that “Indisputably, it is a settled legal proposition that conferment of jurisdiction is a legislative function and it can neither be conferred with the consent of the parties nor by a superior court, and if the court passes a decree having no jurisdiction over the matter, it would amount to nullity as the matter goes to the root of the cause. Furthermore an issue as to lack of subject-matter jurisdiction can be raised at any stage of the proceedings. The finding of a court or tribunal becomes irrelevant and unenforceable/inexecutable once the forum is found to have no jurisdiction. Similarly, if a court/tribunal inherently lacks jurisdiction, acquiescence of a party should not equally be permitted to perpetrate and perpetuate defeating of the legislative animation. The court cannot derive jurisdiction apart from the statute. A decree without jurisdiction is a nullity. It is a coram non judice; when a special statute gives a right and also provides for a forum for adjudication of rights, the remedy has to be sought only under the provisions of that Act and the common law court has no jurisdiction. The law does not permit any court/tribunal/authority/forum to usurp jurisdiction on any ground whatsoever in case such an authority does not have jurisdiction on the subject-matter.”
[ Quoted ].

In this context we would once again like to say that the special statute in this case being the Arbitration and Conciliation Act, 1996, while dealing with the definition of the word “Court” has clearly stipulated that “Court” means the principal Civil Court of

original jurisdiction in a district. Under the General Clauses Act, 1897, a “District Judge” has been defined under Section 3(17) thereof to mean that “District Judge shall mean the Judge of a principal Civil Court of original jurisdiction.”

Thus, on a comparison of these two statutes, i.e. the General Clauses Act and the Arbitration Act, the common feature is that the words “principal Civil Court of original jurisdiction” shall only mean a “District Judge” of a principal Civil Court of original jurisdiction. The remaining portion of the definition ousting the High Court from the meaning of the word “District Judge” need not be gone into as a High Court is a High Court and it cannot be said to mean District Judge.

In view of our discussions referred to above we must also record that when a statute gives a right and provides a forum for adjudication of rights, the remedy has to be sought only under the provisions of that Act. Their Lordships in the aforementioned judgment of Kanwar Singh, supra, have held that when an Act creates a right or obligation and enforces the performance thereof in a specified manner, that performance cannot be enforced in any other manner.

In the instant case Section 34 enjoins that an application for setting aside an arbitral award can be made by an application before a Court and the definition of the word “Court” clearly lays down that it must be the principal Civil Judge of the District and such a principal Civil Judge cannot mean to include a Civil Court being a grade inferior to such principal Civil Judge. That being the position, the assignment to the Additional District Judge who may be a Civil Court under the Civil Courts Act was clearly illegal in view of Sections 2(e) read with Sections 34 and 42 of the Arbitration Act. The question posed at the outset is therefore answered accordingly.

Having answered the question as above and having held that the very assignment to the Additional District Judge was wrong, there is no point in dealing with the merits of this case. Since the impugned order suffers from inherent lack of jurisdiction, it is accordingly set aside. The matter is now remanded to the concerned District Judge who will deal with the matter de novo, afresh and pass a fresh order in accordance with law.

The Appeal stands allowed to the extents indicated above. No order as to costs.

The Registrar General of this Court is directed to take note of this judgment and circulate the same to all the District Judges in the State of West Bengal and to the concerned District Judge of the Andaman & Nicobar Islands.

This Judgment is approved for reporting.

(Tapen Sen, J.)

I agree,

(Indrajit Chatterjee, J.)

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