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1930 Supreme(SC) 2
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
VISCOUNT DUNEDIN, SIR GEORGE LOWNDES, AND SIR BINOD MITTER.
KAMINI KUMAR BASU - Appellant
Versus
BIRENDRA NATH BASU - Respondents
On appeal from the High Court at Calcutta.
Decided On : Jan. 21. 1930.
Solicitors for appellants: Francis & Harker.
An agreement to stifle a criminal prosecution for non-compoundable offenses is contrary to public policy and void due to unlawful consideration, regardless of whether the prosecution had formally commenced under the procedural law.
Headnote:(A) Indian Penal Code - Sections 465, 467, 193 and 194 - Criminal Procedure Code - Section 203 - Agreement to stifle prosecution - Public policy - Validity of agreement - If an agreement is made with the implied term that a criminal complaint will not be proceeded with, the consideration is unlawful and the agreement is void, regardless of whether the prosecution had formally commenced under the procedural code.
(B) Arbitration - Validity - A reference to arbitration that is not bona fide for the settlement of civil disputes but is intended to induce the withdrawal of criminal proceedings is invalid and unenforceable.
Facts of the case:
A dispute arose between parties regarding the proprietary shares of a market. Criminal complaints were filed against several individuals for non-compoundable offenses, including forgery. During the pendency of these proceedings, a reference to arbitration was made, and a written agreement was subsequently executed by some of the accused and their relatives, admitting the plaintiffs' shares in the property. Following the execution of the agreement, the criminal complaint was dismissed by the magistrate. The plaintiffs sought to enforce the arbitration award and the written agreement.
Findings of Court:
The court found that the written agreement was executed with the implied understanding that the criminal proceedings would be dropped. The arbitration was conducted hastily and was not a bona fide attempt to resolve civil title disputes, but rather a means to placate the complainant. Consequently, the consideration for both the arbitration and the agreement was unlawful.
Issues: Whether an agreement and an arbitration award are enforceable when they are executed to secure the withdrawal of criminal proceedings for non-compoundable offenses, and whether the technical stage of the prosecution (i.e., whether a summons had been issued) affects the validity of such an agreement.
Ratio Decidendi: Any agreement where part of the consideration is the stifling of a criminal prosecution is contrary to public policy and void. The technicality of whether a prosecution had formally commenced under the Criminal Procedure Code is irrelevant; the central issue is whether the consideration for the agreement was unlawful. An agreement to drop criminal charges in exchange for civil concessions is void for being against public policy.
Result: Decree of the High Court set aside.
Legal Category Hierarchy
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civil law
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property law
- land title
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contract law
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public policy
- void agreements
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public policy
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arbitration
- validity of awards
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property law
-
criminal law
-
criminal procedure
- compounding of offenses
-
criminal procedure
Judgement
Appeal (No. 17 of 1928) from a decree of the High Court (May 28, 1925) reversing a decree of the Subordinate Judge, Fourth Court of Dacca.
The plaintiffs-respondents by their plaint claimed a declaration that they were entitled to a 3 annas 12 gandas share in a hat (market) known as Taltola Hat under an arbitrators award and an agreement, dated January 23, 1917; or, if the award and agreement were unenforceable, they claimed as purchasers a 10 annas share of the property against some of the defendants.
Among the issues settled were whether the award and agreement were valid and enforceable.
The Subordinate Judge held that the reference to arbitration and the agreement were made to stifle a prosecution for a non-compoundable offence, and therefore were contrary to public policy and unenforceable ; on the alternative claim he made a decree for a 1 anna 4 pies share in certain plots.
On appeal the High Court (Walmsley and Ghose JJ.) held, on grounds which appear from the present judgment, that the award and agreement were valid, but that they bound only some of the defendants, against whom the Court decreed the plaintiffs a 3 anna 12 gandas share of the property.
1929. Nov. 14, 15. Subba Row for the appellants.
The respondents did not appear.
1930. Jan. 21. The judgment of their Lordships was delivered by
SIR BINOD MITTER. The facts out of which this appeal arises are as follows —
The Basu family referred to in the pleadings in the suit, owned Taltola Hat and Bazar, which was an old and estab lished hat of considerable repute. It was originally held on land owned by the Basu family on the bank of the River Dhaleswari. The site of the hat had to be changed from time to time owing to the action of the river, and ultimately, in the year 1916, there was no land owned and possessed by the family on which the hat could be held and it was removed to some lands belonging to a Mussulman family. There was a great scramble for the purchase of such lands from the different members of the Mussulman family amongst the plaintiffs on the one hand and the principal defendants on the other. One Abdul Aziz purported to execute conveyances in favour both of the plaintiffs and the principal defendants in respect of the same land, and in the course of the proceedings taken by both parties to have their respective documents registered, he sometimes admitted and sometimes denied the execution of such documents before the sub-registrar.
On December 14, 1916, one Rohini, a servant of the plaintiffs, and on their behalf, complained before the Sub-Divisional Officer of Munshigunj, against various persona, including some of the principal defendants—namely, Paresh Chandra Basu, defendant No. 16, Gopal Chandra Basu, defendant No. 13, Benoy Chandra Basu, defendant No. 14, Krishna Kumar Basu, defendant No. 18, Kamini Kumar Basu, now defendant No. 2 (son of Ananta Kumar Basu, since deceased, who was originally defendant No. 2 in the suit). The complainant charged them with having committed offences under ss. 465, 467, 193 and 194 of the Indian Penal Code, all of which offences were non-compoundable. The persons against whom the complaint was made are referred to for the purposes of the judgment as the accused in the criminal proceedings. The magistrate did not issue any summons, but directed the complainant to prove his case on January 8, 1917.
The criminal proceedings served to bring matters to a head, and after its institution Ananta, whose son, Kamini, was accused No. 6, became exceedingly alarmed, and was very anxious to have all the disputes settled between the plaintiffs and the defendants, including the criminal proceedings. He desired that the disputes should be referred to the arbitration of A. C. Basu, a relation of the parties, and one of the pro forma defendants in the suit.
The disputes as to the title concerned the plaintiffs and defendants Nos. 1 to 21. A. C. Basu in his deposition, stated that at the time of the reference there were only
