P L D 1958 Dacca 179 (PLP)

RAHMAN, J.--‑This appeal arises out of a proceeding under section 47 of the Code of Civil Procedure whereby the execution of a compromise decree entered into in Money Suit No. 59 of 1949 in the 2nd Court of the Munsif, Sadar, Mymensingh, has been stayed under section 69 of the East Bengal State Acquisition and Tenancy Act, 1950. It appears that the appellant herein obtained a decree against the respondent for Rs. 1,998 and odd from the Presidency Small Cause Court, Calcutta; on the 22nd of March 1947, for hotel and boarding charges. After giving credit for certain payments made in respect of the said decree, the decree‑holder got it transferred to the Munsif's Court at Mymensingh for execution and started a Money Execution Case No. 11 of 1949 for the recovery of the balance amounting to Rs.1,531‑8‑0 but on an objection being filed by the judgment‑debtor it was held that the decree was not executable in Pakistan after partition and the execu tion was refused. The decree‑holder thereafter filed a Money Suit; being Money Suit No. 56 of 1949, for recovery of the amount due on the basis of a foreign judgment and this suit was ultimately on the 12th of March 1951, decreed on com promise for Rs. 1,907 and odd. Under this compromise the decretal amount was payable by instalments of Rs. 300 per mensem from April 1951 to October 1951. The usual default clauses were also incorporated in the said decree and attachments before judgment obtained against certain landed properties of the judgment‑debtor were also to continue until payment had been completed. The judgment‑debtor did not pay in accordance with the said compromise decree. Hence, the decree‑holder started an execution case, being Money Execution case No. 97 of 1951, in September 1951. The judgment‑debtor again filed an objection thereto on the 10th of November 1951, objecting to the execution of the decree by reason of the provisions of the Foreign Exchange Rugulation Act, 1947, and the non‑conversion of the amount of the decree into Pakistan currency. The objection was, however, disallowed on the 16th of February 1952. As against this, the judgment debtor preferred an appeal to the District Judge. During the pendency of the said appeal, however, on the 7th of May 1952, the judgment‑debtor filed another objection upon which Miscellaneous Case No. 122 of 1952 was started. This last objection was founded on the provisions of section 69 of the East Bengal State Acquisition and Tenancy Act. The contention of the judgment‑debtor was that he was a rent‑receiver and the decree was for the recovery of a debt which was liable to be scaled down under section 70 of the said Act and, therefore, the decree should be stayed under section 69 thereof. The decree‑holder opposed this Miscellaneous Case, firstly, on the ground that this second objection by the judgment debtor was barred by the principle of constructive res judicata since he has not taken this objection in the earlier Miscellaneous Case filed by him on the I0th of November 1951 and secondly, the decree‑holder contended that the debt in the present case having arisen from the date of the com promise decree, namely, the 12th of March 1951, it was not a debt incurred before the 7th of April '‑948, and was, there fore, not hit by the provisions of section 70 of the East Bengal State Acquisition and Tenancy Act. The executing Court rejected both the above contention of the decree‑holder and stayed the execution of the decree under section 69 of the said East Bengal State Acquisition and Tenancy Act. In Miscellaneous Appeal No. 35 of 1953, this decision of the executing Court was affirmed by the Sub ordinate Judge, 4th Court, Mymensingh, and it is against this order of affirmance that the appellant has now come up to this Court. On behalf of the appellant, the same two grounds are urged before me. With regard to his contention that since this objection was not taken in the previous objection filed by the judgment‑debtor on the 10th of November 1951 the second objection was barred by the principles of constructive res judicata. I must observe that this argument is not open to the appellant in this Court, for, in two Decisions of the two Division Benches of this Court, this 4uestion has been considered and it has been decided that notwithstanding the fact that in the previous objection petition this objection though available, was not taken, there is no bar to the objection being subsequently taken. The first decision is in the case of Jnanendra Chandra Mazumder v. Dhirendra Chandra Shaha Roy and others (1), where my Lord the Chief justice sitting with Murshed, J., held that the principles of res judicata were not attracted in such a case, for, there could be no estoppel against the statute and the Court would be bound under the provisions of the said Act to act as required thereunder. This was a case, however, where the first objection to execution was dismissed for default. In the case of Dhirendra Dath Datta Roy and others v. Sudhindra Chandra Chakraborty, being S M A No. 9 of 1954, again my Lord the Chief Justice, sitting with Murshed, J., on the 26th of January 1956 (not yet reported) reiterated the same view. In this case, the first objection to execution was heard and decided and the execution was directed to be issued on the 15th of December 1951, and the second objection to execution under section 69 of the East Bengal State Acquisition and Tenancy Act, 1950, was filed on the 20th of August 1952. Even in those circumstances it was held by the Division Bench that the second application was not barred. In view of the decisions in these two cases, so far as I am concerned, the question is no longer res integra and, therefore, I must also hold that the second objection to the executability of the decree in the present case on the ground that it was hit by the provisions of section 69 of the East Bengal State Acquisition and Tenancy Act was not barred by the principle either of res judicata or of constructive res judicata. The second contention put forward on behalf of the appellant is that since the decree that was sought to be executed in the present case was a compromise decree entered into on the 12th of March 1951, it was a mere creature of the agreement of', he parties on which it was based and, as such, was subject to all the incidents of such an agreement. There fore, it, according to the learned Advocate for the appellant, amounted, in accordance with the provisions of section 62 of the Contract Act, to a novation of a contract whereby the debt arising from the foreign judgment became merged in this agreement or contract upon which the compromise decree was passed. The previous contract, if any, was, as such, novated and could no longer be enforced. In this view of the matter, it is further contended that the debt in the present case which was sought to be recovered by the decree put into execution was a debt which arose by the agreement of the parties on the 12th of March 1951, and was, therefore, not a debt which had been incurred before the 7th of April 2948, which is the relevant date under section 70 of the East Bengal State Acquisition Act. As against this, the learned Advocate for the judgment debtor‑respondent in this appeal has argued that whether the decree is a compromise decree or not is immaterial, for, in either event, it is a decree which is being sought to be executed and further that it is clear from the terms of section 70 of the East Bengal State Acquisition Act itself that the executing Court has been given a special power in this case to look beyond the decree to ascertain as to whether the debt sought to be recovered by the decree is of the kind which is exempt under section 70 (19 C W N 565) of the said Act. The debts, referred to in section 70 of the said Act, therefore, are not the debts created by the decree itself but the debts for the recovery of which the decree has been made. If that debt is a debt which arose before the 7th of April 1948, it is a debt liable to be scaled down under the said Act. In the present case, therefore, since the foreign judgment was passed in March 1947, it created a debt on that date which was prior to the 7th of April 1948, and, therefore, that debt was liable to be scaled down. In the present case, however, there is no dispute that the judgment‑debtor is a rent‑receiver as found by both the Courts below. The only dispute is as to whether that debt is a debt which is liable to be scaled down under section 70 of the East Bengal State Acquisition and Tenancy Act. Unfortunately, the learned Advocate ,appearing on behalf of the appellant did not assist me by placing any decision as to the scope and effect of a compromise decree, but his arguments nevertheless appeared to me to have some force behind them and hence I have myself examined this question with some care. It appears that in the case of Amrita Sundari Debi and others v. Serajuddin Ahmad and others (1), Mookerjee and Walmsly, JJ., whilst considering the question as to whether a compromise decree could be chal lenged in subsequent proceedings, held that a consent decree being a mere creature of agreement had no greater sanctity attached to it than the original agreement of the parties themselves and to give it a separate existence apart from the said agreement would amount to giving the branch of a tree an existence which is independent of the tree itself and opined further that such a decree was the contract of the parties and as such, was subject to the incidents of a contract, even though it had superadded to it the command of the judge and, hence, a compromise decree or consent decree could be challenged in the same circumstances as a contract itself could be. This view was arrived at by their Lordships after a detailed survey of the English and Indian authorities having a bearing on the question. Again in the case of Kandarpa Nag v. Banwar i Lai Nag and others (33 C L J 244), Sir Asutosh Mookerjee, then acting as the Chief Justice of the Calcutta High Court, and Fletcher, J. reiterated the same principles which I propose co quote here :‑ "Two principles are well‑settled with regard to the nature and operation of consent decrees. In the first place, there is high authority for the proposition that a consent decree is just as binding on the parties thereto as a decree after a contentions trial: In re South American and Mexican Co. ((1895) 1 Ch. 37) ; The Bellcaim ((1855) 10 P D 161) ; Jenkins v. Robertson ((1867) L R 1 Sc. & Div. 117) ; Thomas v. Moore ((1889) L R 23 It. 599) ; Irish Land Com. v. Ryan ((1900) 2 L R 565 (584)). This rule has been repeatedly recognized and applied in Indian Courts : Nicholas v. Asphar (1 ); Raj lakshmi v. Katyayani (1910 ILR 38 Cal. 639 (647)) ; Fate Chand v. Narsing Das (1912) 22 CLJ 383) ; Amrita Sundari v. Seraj‑ud‑Din (supra) ; Raja v. Thatha (1911 ILR 35 Mad/ 75) ; Tirumamabla v. Chinna (1915)ILR 40 Mad. 177). In the second place, it is equally well‑settled that a consent decree cannot have greater validity than the compromise itself. As was observed by the Court of Appeal in Huddersiteld Banking Co. v. Lister (1895) 2 Ch. 273), the real truth of the matter is that a consent order is a mere creature of the agreement, and if greater sanctity were attributed to it than to the original agreement itself, it would be to give the branch an existence which is independent of the tree. ‑To use the language of Kay, L. J., the consent order is only the order of the Court carrying out the agreement between the parties. The same idea was expressed in different terms when Parke, J., said in Wentworth v. Bullen (1829) 9 B& Co. 840;33RR 353) that `the contract of the parties is not the less a contract and subject to the incidents of a contract, because there is superadded the command of the Judge .... This logically leads to, the conclusion that the Court could not be compelled to enforce the agreement unquestioningly and literally ; the decree is to be deemed, so long as it stands, as only the indisputable, correct presentment of the contract, subject necessarily to the incidents of such a contract with include equitable relief against a forfeiture as not the least important and well established." The same view has been taken in the Madras High Court by Shephard and Davies, JJ., in the case of Nagappa v. Venkat Rao (ILR 24 Mad. 265), where it was held that "Inasmuch as the decree passed by the Court was a mere adoption of the contract which existed between the parties to it, the Court must be taken to have adopted the contract with all its incidents." This view also seems to find support in the observations of their Lordshihs of the Judicial Committee in the case of Mirza Sadik Hussain v. Mst. Kaniz Zohra Begum (38 IA 181), where by the terms of compromise entered into in a suit the parties agreed to refer their disputes to arbitration and one of the clauses in the said compromise decree also provided that if by a particular date the defendant in the suit did not submit his proposals to the arbitrator appointed by the plaintiffs, the plaintiffs would be at liberty to apply to the Court to have a Commissioner appointed for partition. One of the arbitrators so appointed refused to act and an application was, therefore, made to the District Court praying for the withdrawal of the order of reference and for dealing with the matter itself. The Court accordingly passed an order making certain allotments of properties. With regard to the effect of this compromise, their Lordships observed as follows :‑ "The suit was at an end, and something different from and going ranch beyond the suit had been entered upon. The decree of 2nd August 1905, was not a decree for partition nor for administration. It was simply a decree ordering the agreement and compromise of parties to be carried into effect, and that decree was final. It put an end to the suit, and that was the very object of the compromise." and further with regard to the action, in the circumstances of the case, which the Courts in India could take, their Lord ships expressed themselves thus:-- "All that the Courts in India could do was to take advantage of the sections of the Code which enabled them to keep the machinery of arbitration going. This could have been done, and, had it not been for the decisions cited, would in all probability have been done, by simply naming a fresh arbitrator. Parties who agree to set up a tribunal of arbitration are not bound to submit the case referred to another tribunal, such as a District or other Judge. It may be regretted that the supersession of the arbitration and the inter‑position of the judge himself to settle the points referred to arbitrators should not have been assented to. But the objection which has been taken‑that the rights having been remitted to one tribunal have been settled by another is, in their Lordships' opinion, a fatal objection." Upon these authorities, it seems to me that there is a great deal of substance in the contention of the learned Advocate, for, if it be the correct proposition in law that a consent or a compromise decree is nothing more and has no greater sanctity than the contract or agreement of the parties upon which it is based and that the incidents of such a contract become also attached to such a consent decree, then I am of the opinion that if the compromise or the contract or the agreement sets up a new contract, it amounts to a novation of a contract and since in such a case the ordinary incident would be as indicated in section 62 of the Contract Act, namely, that the original contract would no longer be liable to be performed, the effect would be to substitute the old debt for a new debt arising from the date of the compromise E decree. In this event the breach of a term of a compromise decree would not also, in my opinion, restore the parties to the rights which they and prior to the decree, for after the compromise decree the rights and liabilities of the parties would be governed by the terms of the compromise itself and not by what it was before the entry into the compromise. In the present case, it will be evident from a perusal of the terms of the compromise. decree itself that they go far beyond the scope of the original suit' which was filed on the basis of a foreign judgment and, therefore, there can be no doubt that this compromise creates a new contract between the parties and fence, also a new debt between the parties which arises from the date of the compromise decree which in its turn came into being long after the 7th of April 1948. I may mention here that on behalf of the respondent in this appeal reliance was placed on the observations of my Lord the Chief Justice in the unreported decision referred to above by me where His Lordship also rejected the argument that a prior debt merged into a decree and, therefore, if the decree was passed after the 7th of April 1948, it did not relate to a debt which is liable to be scaled down under section 70 of the East Bengal State Acquisition and Tenancy Act. The case before His Lordship was not a case of the compromise decree and is, therefore, distinguishable from the case before me. The same principal, in my humble opinion, cannot apply to the case of a compromise decree which is now well‑established to be the creature of the agreement between the parties. This leads me to another subsidiary argument which was advanced on behalf of the respondent in this appeal that, if the compromise decree went beyond the scope of the suit, the decree was not executable. There is no doubt a considerable amount of divergence of judicial opinion on this particular question but it seems to me that at any rate so much of the decree as is within the scope of the suit itself has been generally held to be executable. Indeed, in the case of Rani Hemanta Kumari Debi v. The Midnapur Zemandari Co., Ltd. (24 C W N 177 (P C)), their Lordships of the Judicial Com mittee themselves indicated that the proper procedure in such a case where a compromise went beyond the scope o the suit was to incorporate the compromise in a schedule to the decree and make an order or a decree only in so far as those terms came within the scope of the suit and then that portion would be a perfectly validly executable decree. In the case before me, the decree‑holder is only seeking the recovery of the money decreed by the execution proceed ing ; he is not seeking to execute the decree in any other way. So far as this is concerned, this is within the scope of the suit and there can be no objection on this score either to the execution of the decree. In the view that I have taken, the debt which was sought to be recovered by the decree in the present case was, in my opinion, not liable to be scaled down under section 70 of the East Bengal State Acquisition and Tenancy Act, as it was not a debt which was incurred by the judgment‑debtor‑receiver before the 7th of April 1948. but that it was incurred only on the 12th of March 1951, namely, on the date on which the compromise decree was entered into. In these circumstances, I am of the further opinion that the pro visions of section 69 of the said East Bengal State Acquisition and Tenancy Act were not attracted to the execution of this decree. The result, therefore, is that this appeal is allowed and the judgments and orders of the Courts below are set aside and it is directed that the execution of the said decree do proceed in accordance with law. In view of the fact that the learned Advocate for the appellant did not place before me all the relevant authorities, I make no order as to costs. Z. A. S./ A. H. Appeal allowed.