Laws like the Punjab Registration of Money﷓lenders Act (III of 1938) are enacted not for the benefit of any particular individ (PLP)

KAIKAUS, J.--‑Chanan Din, respondent filed a suit against Barkat Ali appellant on the basis of a mortgage and a com promise decree for Rs. 6,981 was passed. The respondent decree‑holder applied for execution of the decree and the appellant‑judgment‑debtor objected that the respondent was a money‑lender and, therefore, under section 3 of the Punjab Registration of Money‑lenders Act the decree could not be executed. The executing Court framed the following issue :‑ Is the plaintiff a money‑lender ? If so, has he complied with the provisions of Punjab Act III of 1938 ? If not, what is its effect ? The Court decided this issue against the appellant on the ground that when the appellant compromised the suit he had accepted that the respondent was not a money‑lender because section 3 of the Punjab Registration of Money lenders Act forbade the passing of a decree as well as its execution. The judgment‑debtor has come up in appeal and it is urged that this decision is incorrect, because there could be no estoppel on a question of law. In the suit the appellant had taken a plea that the respondent was a money‑lender, Under the circumstances in giving up this plea and getting a decree passed against him the appellant obviously accepted that the respondent was not a money‑lender. As to how far. a consent decree operates as estoppel depends upon what facts the parties must be deemed to have accepted as correct by their compromise. In the present case there can be no doubt that the appellant had admitted the respondent not to be a money‑lender as the passing of decree was inconsistent with his being a money lender. Learned counsel for the appellant urges, however, 'that as there is no decision on the merits there can be no res‑judicata, and so far as estoppel is concerned there can be no estoppel against a statute, and the judgment-debtor is not estopped, therefore; from taking the plea that the decree holder is debarred by section 3 of the Punjab Registration of Money‑lenders Act from applying for execution of the decree. Reliance is placed by learned counsel on L. Prem Parkash v. Pt. Mohan Lai and another (A I R 1943 Lah. 268 (F. B).). In that case the facts were that by a money‑decree a charge had been created on the salary of the public servant which exceeded the limits allowed by section 60 of the Code of Civil Procedure. The decree‑holder sought execution of the decree by the attachment of the salary. It was pleaded by the judgment‑debtor that salary is excess of the limit provided by section 60 could not be attached. It was urged by the decree‑holder that inasmuch as the decree had been passed on the basis of a compromise the judgment‑debtor was estoppel from taking up the plea that the salary was not liable to attachment. This contention was repelled by the Full Bench. It was held that the original contract on which the decree was passed being illegal and opposed to public policy, the decree passed on its basis could have no greater validity. With respect to the argument that the judgment‑debtor was entitled to waive the benefit of section 60 it was pointed out that this provision was one relating to public policy and not merely four the benefit of a particular judgment‑debtor and, therefore, it could not be waived. The facts of the present case are a little different because here it cannot be said that the decree has been passed on the basis of a void agreement. In the present case it may be that the plea taken by the defendant in the suit as to the plaintiff being a money‑lender was frivolous or that it was doubtful whether the plaintiff was a money‑lender. Under the circumstance: i the plaintiff and the defendant entered into a compromise by which a particular sum was decreed, it could not he said that the agreement was illegal. The agreement by which a party waives the right of an enquiry into the question of the applicability of a section of a statute, like section 3 of the Punjab Registration of Money‑lenders Act, cannot be said to be illegal in the absence of mala‑fides. Of course, if both parties knew that the plaintiff was a money lender and they deliberately, in order to evade the provisions of section 3, entered into an agreement for the passing of the decree the result will be different f6r in that case there would be an agreement to defeat a statute. They could, however, have honestly entered into a compromise for the settling of the dispute about the status of the plaintiff. Such a contract would be valid. Any argument, therefore, that is based on the illegality of the agreement that forms the foundation of a compromise decree has no application to the present case. The facts of L. Prem Parkash v. Pt. Mohan Lal and another are, therefore, distinguishable. However, it has still to be considered whether, on the basis of the general proposition, stated in that case and so many others, that there is no estoppel against a statute, the appellant can succeed. The proposition itself is well established but the question is whether this proposition also involves that there can be no estoppel with respect to a fact on which the application of a statute may depend. Learned counsel for the appellant contends that there can be no estoppel even with respect to the facts which call for the application of a statute. He relied on the following passage in L. Prem Parkash v. Pt. Mohan Lal and another :‑ "But what is more there can be no estoppel, in my view, if the agreement which forms the basis of contention in this case is found to be in contravention of a statute or against public policy. In that case a party cannot be held estopped from pleading or proving facts which would render the agreement void ab initio. .And this because both the appellant and .the respondents must be presumed to have known .the law. It is true that in that case the appellant may be enabled to take advantage of his own wrong but even this consideration cannot be allowed to militate against the mischief which would otherwise follow. There can be no estoppel against pleading or relying upon a statute, I would, therefore, with great deference dissent from the decision in 6 Pat. 254 or the observations in some other cases if they lay down any rule to the contrary. This view is, however, based on the supposition that .the prohibitions contained in the proviso to section 60 Civil P. C. are mandatory and not merely directory and that in any case the exemptions contained in the proviso were made on grounds of public policy it being not permissible for a Court of law to shut its eyes to the statute and to act in contravention thereof." The observation on which learned counsel particularly relies is the one relating to "pleading or proving facts which would render the agreement void ab initio". In order to explain whether a party may or may not be debarred from proving facts which attract the application of the statute, I have to refer to the nature and kinds of estoppel. An estoppel (I do not include res‑judicata in it) is a rule which debars a party to a proceeding on account of his conduct from taking a plea or adopting a particular course of action for instance, seeking a remedy impeaching an order etc. Its essence is the inconsistency between the previous conduct of the party and the course which he wants to pursue. Its basis is equity and justice or an implied agreement. Estoppel is a rule of procedure and unless aided by statute does not affect substantive rights. In so far as estoppels as rules of evidence are concerned, they are contained in sections 115 to 117 of the Evidence Act which are exhaustive of such rules, As regards other estoppels, they are of infinitc variety. As examples of circumstances that attract estoppels we may refer to inconsistent positions in litigation, election of remedies, impeaching a transaction, decree or order after taking its benefit, acquiescence in irregular proceedings, and part performance. Some estoppels have been incorporated in our statutes and given the force of substantive provisions so that they actually affect rights in property. I may refer,1 as instances of such estoppels, to sections 38, 41 and 43 of the' Transfer of Property Act and to sections 27 to 29 of the Sale of Goods Act. Let me state that the English Division of estoppels into estoppel by judgment, estoppel by record and estoppel in pai is neither relevant nor helpful in understanding our rules of estoppel, though the English cases, which deal with estoppel, may be of great help. For us there are, apart from the estoppels which are by statute part of the substantive law, only two categories of estoppel ; (1) rules of evidence which are contained in sections 115 to 117 of the Evidence I Act, and (2) rules of justice, equity and good conscience not based on any statute. I will now explain how, with respect to proof of facts on which violation of a statute is based, the rule is different in the two categories which I have mentioned above. So‑ far as the statutory rules of evidence under sections 115 to 117 of the Evidence Act are concerned, one cannot fail to apply them merely because the object of the party against whom an estoppel is pleaded is to prove that a statute has been violated. I will make this clear by reference to an example. If A represents to B who is not a member of an agricultural tribe that he himself does not belong to an agricultural tribe and B believing his representation purchases land from him, A would, by the application of section 115 of the Evidence Act, be debarred from raising a plea that he in fact belongs to an agricultural tribe. Section 115 would be clearly applicable. A representation of a fact has been made and has been believed and acted upon to the detriment of the other party. Section 115' makes no exception in the case of a fact which would establish the violation of a statute. A would, therefore, in any suit between A and B, be bound by the representation which he made and the decision would be against him, apart, of course, from any remedy which the Deputy Commissioner, by virtue of the provisions of the Punjab Land Alienation Act, may have against the judgment. So far as sections 116 and 117 of the Evidence Act are concerned, their application also could not be defeated by reference to any general rule that there is no estoppel against a statute if the application of these sections depended not on the mere application of a statute but on the existence or non existence of certain facts. Of course even these two pro visions cannot prevent the application of a statute, for the Evidence Act deals only with facts and the disability of a party can only be with regard to proof or disproof on denial of facts and not in relation to the application of a statute. So far, however, as estoppels in the second category mentioned above are concerned, the position is different. They are applied only as rules of justice, equity and good conscience. In the circumstances of a particular case there may be considerations which override the injustice of allowing the party to take a plea that is not consistent with his previous conduct. One of such considerations is the existence of a statute relating to public policy which would be defeated if estoppel is allowed to prevent adjudication as to certain facts. Such laws are enacted not for the benefit of any particular individual who incidentally benefits by them but for the public benefit and may be enforced in spite of the estoppel that would otherwise bind a party to a litigation. In an estoppel of the second category, therefore the question as to whether an estoppel that binds a party is to be given effect to, would depend upon the circumstances of each case and a party may not be held bound by the facts which he has previously accepted. Section 3 of the Registration of Money‑lenders Act is a provision of the nature mentioned above. This section prevents a decree being passed in favour of a money‑lender without a license. Its object is not to assist a particular defendant against whom a suit may have been filed. The legislature considers that it is in the public interest to control A the money‑lenders and to prevent them from getting decrees unless they are licensed. I would, therefore, hold that in the present case estoppel does, not prevent the judgment‑debtor from taking this plea. The effect might have been different as pointed out in L. Prem Parkash v. Pt. Mohan Lal and another if there was a decision by the Court on the merits of the case instead of by compromise. In that case the party would be debarred from taking this plea, whatever be the powers of the Court to determine that matter apart from the plea of the party. There is another reason why this question can be gone into. Section 3 of the Punjab Registration of Money lenders Act forbids the execution of a decree on the application of a money‑lender. It is a limitation on the powers of Court. In all matters where the jurisdiction of Court is involved a Court is entitled to raise any point suo motu. If it appears to a Court that there are reasonable grounds for believing that it has‑no jurisdiction to proceed or that there are limitations which it may be transgressing it can raise an issue of fact for the purpose of determining its ‑jurisdiction even in the absence of any plea by the parties, Estoppel binds parties not the Court and in the case of an issue which can be raised by Court an estoppel does not prevent the adjudication of the matter though between the parties it may already have been decided. For instance, the Court cannot on account of section 16 of the Punjab Alienation of Land Act sell the land belonging to an agriculturist, although the parties may in a particular case have agreed to admit that the owner of the land was not a member of an agricultural tribe That would not hind the Court which would still have jurisdiction to determine whether it had jurisdiction to proceed at all. Similarly if there were circumstances before the Court showing that a property, with respect to which it was to pass an order, was evacuee property and that section 12 of the Pakistan Administration of Evacuee Property Ordinance 1949 would be applicable, the Court would stay its hand unless there was a determination by the Custodian of Evacuee Property that the property was not evacuee property. Of course the Court would not raise such points unless there was prima facie material showing a defect of jurisdiction. In the present case, therefore, it is open to the Court to raise the question whether the decree‑holder is a money‑lender. There is one more reason why the question as to whether a decree‑holder is a money‑lender should be gone into. A person may not be a money‑lender at the date of the decree but may have become a money‑lender on the date of application for execution. Section 3 would still apply to the application for execution. I accept this appeal and direct that the question as to whether the decree‑holder is a money‑lender and whether the application for execution is not for that reason liable to be dismissed be determined. This order will not by itself have the effect of setting aside the sale already made in execution of the decree. That will depend on the decision of the above mentioned question. Parties will bear their own costs in this Court.