Dhiyan Singh and Another vs Jugal Kishore and Another

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Civil Appeal No. 8 of 1951

Decision Date: 22 February 1950

Coram: Saiyid Fazal Ali, Vivian Bose

In the matter titled Dhiyan Singh and Another versus Jugal Kishore and Another, the Supreme Court rendered its judgment on the twenty-second day of February, 1950. The opinion was authored by Justice Saiyid Fazal Ali, who also formed the bench that heard the case. The parties are identified as the petitioner, Dhiyan Singh and another, and the respondent, Jugal Kishore and another. The judgment bears the citation 1952 AIR 145 and is reported in the Supreme Court Reporter at 1952 SCR 478. Additional citator references include reports from the years 1953, 1955, 1961, 1971 and 1976. The dispute concern underlies the Arbitration Act, specifically the interpretation of the term “Malik Mustaqil,” the question of whether such a designation confers an absolute estate, and whether estoppel prevents a party from contesting the validity of an arbitral award.

The factual background involves two brothers whose sons, designated here as S and B, were the principal parties in a family estate dispute. S died in 1884 leaving a surviving daughter, M. Upon S’s death, a disagreement arose between B and M with B asserting that S had died in a state of joint ownership with him, thereby claiming the entire estate by survivorship and contending that all the property formed part of the joint family estate, leaving M entitled only to maintenance. The matter was referred to arbitration, and the arbitrator issued an award that allocated the suit properties to M while awarding the remainder of the disputed estate to B. The operative portion of the award expressly stated that B, as the first party, and M, as the second party, were each entitled to specified shares in the properties and that each had become a permanent owner, described as “Malik Mustaqil,” of his or her respective share. Following the award, a division of the estate was effected, and from the date of the award in 1884 each branch has possessed and dealt with its allotted properties as an absolute owner. The defendants later argued that the plaintiffs were bound by the award and, irrespective of that, were estopped from challenging it. In 1941, the grandchildren of B instituted suit claiming the properties allotted to M, asserting that on S’s death his daughter M succeeded only to a limited estate, which reverted upon her death in 1929, making the plaintiffs the next reversioners because M’s son had predeceased her. The defendants, representing M’s grandchildren, countered that the property in M’s possession consisted partly of property belonging to her personally and partly of property exclusively belonging to her father, which she inherited as his daughter. The Court held that the arbitral award conferred an absolute estate upon M, as the term “Malik Mustaqil” was strong, clear and unambiguous, and was not qualified by any other words or circumstances in the document. Moreover, the Court concluded that even if the award were assumed invalid, the plaintiffs’ claim was barred by estoppel, because B’s conduct had induced M to accept the arbitrator’s decision as fair and binding, thereby estopping B and his successors from later contesting the award.

The Court observed that the award had been accepted by the defendant and that he had acted in reliance upon it for the remainder of his life, thereby suffering detriment and altering his position. Consequently, the Court held that an estoppel arose against the defendant’s sons because the estoppel was transferred to them when they stepped into their father’s shoes. In addition, the Court found that an independent estoppel applied to the defendant’s son identified as K, based on his own acts and conduct as demonstrated in the record. The Court also determined that an estoppel operated against the plaintiffs who claimed their rights through their father K, preventing them from contesting the effect of the award.

The appeal before the Civil Appellate Court was Civil Appeal No 8 of 1951, arising from a judgment and decree dated 12 October 1944 rendered by the High Court of Judicature at Allahabad, bench of Allsop and Malik JJ., which itself stemmed from First Appeal No 374 of 1941. That first appeal was based on a decree dated 31 July 1941 issued by the Civil Judge, Moradabad, in Original Suit No 9 of 1941. The appellant was represented by counsel, while the respondent was likewise represented. The judgment was delivered on 22 February 1952 by the presiding judge. The dispute involved two branches of a family descending from a common ancestor, Megh Raj Singh. The family lineage included Megh Raj Singh, his son Jawahar Singh, followed by Madan Singh, and then Shankar Lal (deceased 1884). Shankar Lal’s descendants comprised Brijlal (deceased 1889 or 1890) and a daughter, Mst Mohan Dei (deceased October 1929). Other related figures mentioned were Kishan Lal, Mahabir Prasad, Narain Das (deceased 21 May 1940), Shri Kishan Das, Mst Deoki, Jugal Kishore, and Amar Nath (deceased March 1929). The plaintiffs, identified as Dhiyan Singh and Jai Bhagwan Singh, asserted that the property under dispute formed part of Shankar Lal’s estate. They claimed that the two family branches had remained separate at all material times and that, upon Shankar Lal’s death in 1884, his daughter Mst Mohan Dei succeeded only to a limited estate. The reversion was said to have opened on her death in October 1929, making the plaintiffs the next reversioners because Mst Mohan Dei’s son, Shri Kishan Das, had predeceased her. The defendants acknowledged the separation of Shankar Lal from the other branch and divided the property possessed by their grandmother Mst Mohan Dei into two categories: (1) property that belonged to her personally, acquired through purchase or mortgage in her own right, and (2) property that belonged exclusively to her father, to which she succeeded as his daughter. A dispute arose after Shankar Lal’s death between Brijlal, the plaintiffs’ grandfather and son of Shankar Lal’s father’s brother, and the defendants’ grandmother Mst Mohan Dei. Brijlal claimed the entire estate by survivorship, alleging that Shankar Lal had died in a state of jointness with him and that all the properties were joint family properties. The matter was referred to arbitration, and the award granted Mst Mohan Dei absolute ownership of the suit properties, while allocating the remainder of the estate to the other party.

From the date of the arbitral award on 21-12-1884 until the filing of the suit on 26-3-1941, each branch of the family has remained in separate and uninterrupted possession of the specific properties allotted to it, and each branch has dealt with its respective portion as an absolute owner. The defendants contend that the plaintiffs are bound by that award and, in any event, are estopped from asserting any contrary right. The plaintiffs initially lost in the first court but succeeded on appeal before the High Court, prompting the defendants to appeal further. The primary issue presented for determination concerns the nature of the arbitral award. The defendants maintain that the award conferred upon Musammat Mohan Dei an absolute estate, while the plaintiffs argue that the award granted her only a limited estate. The Court finds that the defendants’ view is correct and that the dispute reduces to a question of construction of the award’s terms.

The award, reproduced as Exhibit A-1, contains an operative clause stating: “Having regard to the specifications given above, Brij Lal, first party, and Musammat Mohan Devi, the deceased’s female issue, second party, have been held entitled to shares, worth Rs 28,500 and Rs 42,482-10-0 respectively in the said properties; and accordingly… two lots have been made and the first lot is allotted to the first party and the second lot to the second party; and henceforth the parties shall have no claim or liability against each other; and each party has become permanent owner (malik-mustaqil) of his or her share; and each party should enter in proprietary possession and occupation of his or her respective share.” The underlining in the quoted passage is the Court’s. The language, particularly the term “malik-mustaqil,” leaves no room for ambiguity, as supported by the precedents cited in Ram Gopal v. Nand Lal and Others and Bishunath Prasad Singh v. Chandika Prasad Kumari. Nevertheless, counsel for the plaintiffs urged that the award be read as a whole, pointing to earlier passages that, in their view, indicated a different intention. Those passages included a finding that the properties claimed by Musammat Mohan Dei actually belonged to Shanker Lal, who had purchased or mortgaged them in her name, rendering her a mere benamidar without title; a statement that some of the disputed properties were ancestral while others were self-acquired, a distinction the arbitrator could not resolve; an articulation of the arbitrator’s understanding of Hindu law that the brother should own joint ancestral property and a daughter with male issue should own self-acquired property; and a concluding remark that, having inherited no property from her husband, Musammat Mohan Dei would settle in Amroha, make her father’s haveli her abode, and that the property would thereafter descend to her son as malik. The Court holds that these ancillary passages do not qualify the operative part of the award. While acknowledging that the arbitrator may have been confused both factually and legally, the Court interprets the clear wording “malik-mustaqil” in its ordinary sense, unqualified by any contradictory context. References to cases where “malik” or “malik-mustaqil” were read as indicating a limited estate are deemed inapplicable, and the Court concludes that the award grants Musammat Mohan Dei a permanent and absolute ownership of her allotted share.

In the award the arbitrator stated that the haveli would remain the domicile of the woman and that, after the death of the Musammat, the property would pass to her son, who would become the malik, or owner, and that the son’s descendants would subsequently inherit the property. The Court does not consider these passages to be part of the operative portion of the award, and it disagrees with the High Court judges who treated them as such.

The Court observes that the arbitrator appeared confused both about the factual background and about the applicable law. Although his legal view may have been mistaken, the wording he employed is, in the Court’s opinion, clear. In the absence of any language that would unmistakably limit those words, they must be understood in their ordinary meaning.

The Court notes that previous cases were cited in which the term “malik” and, in one instance, the phrase “malik mustaqil” were interpreted to denote a limited estate because of qualifying circumstances. The Court finds it unnecessary to examine those authorities because the present dispute concerns only the document before it. Even if it were accepted that ordinary words can be qualified by other words or circumstances within the same document, the Court is of the view that the passages and circumstances relied upon in this case do not qualify the strong, clear and unambiguous language used in the award.

The counsel for the plaintiffs-respondents was required to search intensively for an interpretation of the award that would fit the meaning he advocated in other passages. In doing so, he made several assumptions that are not evident on the face of the award regarding what the arbitrator might have thought or intended. The Court is not prepared to modify clear and unequivocal language by inserting phrases of doubtful import that could be made to support either view through speculative factual assumptions.

The award was also challenged on additional grounds. It was argued, among other points, that the arbitrator exceeded the scope of his reference by granting Mst. Mohan Dei an absolute interest in the property. It was further submitted that, even if Brij lal was bound by the award, his son Kishan lal, who did not claim through his father but possessed an independent title as reversioner to Shanker lal, would not be bound, and that if Kishan lal were not bound, the plaintiffs could not be bound either. The Court does not need to address these arguments because it is not required to decide on the binding nature of the award.

Even assuming that the award were invalid, the Court holds that the plaintiffs’ claim is fully answered by the doctrine of estoppel. The Court acknowledges that, before an estoppel can arise, three conditions must be satisfied: first, a representation of an existing fact must be made, distinct from a mere promise of a future act; second, the other party must have relied on that representation; and third, the relying party must have acted to his detriment based on that reliance.

In order to establish an estoppel, the Court explained that three distinct conditions must be satisfied by the parties concerned. First, there must be a clear representation of an existing fact, and this representation cannot be merely a promise of something to occur in the future. Second, the other party must have believed that representation and must have been induced to act on the faith of it. Third, the party who relied on the representation must have acted to his detriment. The Court said it would examine the issue step by step, beginning with the question of whether any estoppel could be said to exist against Brijlal. It was undisputed that Brijlal had asserted a considerable claim over the disputed property in the year 1884. He maintained that he held a joint interest with Shanker Lal, and therefore, upon Shanker Lal’s death, he believed he became entitled to the entire estate, while Ms. Mohan Dei possessed only a right of maintenance. The Court observed that it was irrelevant whether Brijlal might have encountered difficulty in proving his asserted right, or even whether proving such right would have been impossible. What mattered was that he had actively pressed his claim and had done so with seriousness. His vigorous advocacy was sufficient to persuade the arbitrator that Brijlal possessed an immediate entitlement to a portion of the estate. Conversely, Ms. Mohan Dei opposed Brijlal’s claim, asserting that she held a separate and exclusive right of possession, and further argued that she owned an absolute right to a share of the property. The Court noted that, based on the facts now emerging, it became clear that Brijlal possessed no legal right to the estate and that his expectation of eventually becoming a reversioner was highly unlikely. Ms. Mohan Dei had a son, Shri Kishan Das, who was the next presumptive reversioner, and because Kishan Das was considerably younger than Brijlal, Brijlal’s chances of succeeding were minimal. In reality, Kishan Das outlived Brijlal by nearly forty years; Brijlal died in 1889 or 1890, whereas Kishan Das survived until March 1929. Had Kishan Das lived only eight or nine months longer, he would have succeeded, and the plaintiffs would have had no claim. The sharply contested dispute, vigorously presented by both sides, was referred to arbitration. The Court remarked that it was not required to determine whether the arbitral award was valid, whether it fell within the scope of the reference, or whether it possessed any inherent binding character. Even assuming the award to be wholly invalid, the Court said the parties could still decide to accept the award as a fair and sensible resolution, thereby avoiding further costly litigation. Such acceptance would constitute a proper settlement, binding the immediate parties regardless of its effect on third parties. Accordingly, the Court observed that Brijlal’s conduct induced Ms. Mohan Dei to believe that the award would be accepted and to act on that belief. Relying on that representation, Ms. Mohan Dei altered her position by accepting the award and surrendered a substantial portion of the estate, thereby suffering a considerable detriment. At the same time, Brijlal obtained a substantial advantage that he would not otherwise have been entitled to, and he retained that benefit for the remainder of his life, never attempting to reverse his earlier decision.

The Court observed that Brijlal could not have obtained the benefit of the property for the remainder of his life and, to his credit, he never attempted to overturn his own decision. The Court held that this conduct created an estoppel against Brijlal. In the Court’s view, the present dispute closely resembled the case decided by the Privy Council in Kanhai Lal v. Brij Lal (1919) 45 I.A. 118. In that earlier case a contention arose between a limited owner and another person who, but for an unproven claim of adoption, had no right to the estate. The matter was litigated and ultimately resolved by a compromise that divided the property between the two claimants; the agreement was implemented and acted upon for twenty years. Subsequently, when succession opened, the other party to the compromise, having stepped into the reversionary position, asserted a claim over the remainder of the estate that had been assigned to the limited owner, seeking it against the personal heirs of the limited owner. The Judicial Committee rejected that claim on the ground of estoppel, reasoning that although the plaintiff asserted a different character in the suit—as a reversioner—he had been a party to the compromise, had acted upon it, and had induced the opposite side to alter her position to her detriment, and therefore was estopped. The Court stated that the distinction between a voluntary compromise in Kanhai Lal and the imposed arbitral award in the present case does not alter the analysis, because the present enquiry does not rest on the award itself but on the parties’ conduct in accepting it when they were not obligated to do so. While acknowledging that a question of title is a question of law and that estoppel does not operate directly on a question of law, the Court explained that every legal question is rooted in factual findings. Upon examining Brijlal’s conduct, the Court concluded that he effectively asserted that he admitted and recognized facts which, under law, would give Mst. Mohan Dei an absolute interest in the lands awarded to her. This asserted fact—his recognition of the existence of facts conferring an absolute interest on Mst. Mohan Dei—induced her to relinquish roughly one-third of the property, a portion to which Brijlal, based on a correct assessment of the facts now known, had no entitlement. The Court found no doubt that Mst. Mohan Dei acted to her detriment and, equally, no doubt that she was induced to do so by reliance on Brijlal’s statements and conduct, which led her to believe that he accepted the full implications of the arbitral award. Accordingly, the Court was clear that Brijlal would have

In this case the Court observed that the dispute described in the award demonstrated considerable uncertainty about the actual facts. Even if the arbitrator had acted beyond his authority or had been wholly erroneous, both parties were free to accept the award, and by doing so they acknowledged facts that, under law, would give the other party an absolute interest in the property that they had agreed to divide. The Court held that such acknowledgment constituted a representation of existing facts, thereby estopping each party against the other. Consequently, Brijlal was estopped from denying the existence of facts which would confer upon Mst. Mohan Dei an absolute interest in the suit property. The Court then considered Brijlal’s son, Kishan Lal. Brijlal died in 1889 or 1890; at that time Mst. Mohan Dei’s son, Shri Kishan Das, was alive and was the next presumptive reverter. Accordingly, Brijlal’s sons possessed no greater right to that portion of the estate than Brijlal himself. Nevertheless, they took possession and claimed the property through their father, without asserting an independent title of their own, and they possessed no other title at that date. The Court therefore stated that because they stepped into Brijlal’s shoes, the estoppel applicable to Brijlal also extended to his sons, even though Brijlal had not claimed the property independently for himself but had acted as karta of the joint family. Moreover, the Court identified an independent estoppel against Kishan Lal. Although he had no right to that part of the estate except by virtue of the award, he nonetheless took possession together with his brother, treated the land as their own, derived benefits, partitioned the estate between themselves, and sold portions to third parties. Kishan Lal was aware of the award, the mutation carried out in accordance with it, and Brijlal’s possession under the award, while the remainder was retained by Mst. Mohan Dei. By retaining the property and continuing to deal with it based on the award, Kishan Lal manifested his acceptance of the award and, through his conduct, represented that, like his father, he admitted the existence of facts that would give Mst. Mohan Dei an absolute estate. He also permitted Mst. Mohan Dei to treat the estate as her own, and she, in turn, acted on the award and claimed absolute rights in the portion assigned to her.

In this case, the Court observed that Mst. Mohan Dei had dealt with the estate on the basis of the award and had subsequently conveyed it to her grand-sons, the defendants, by gift on 4 April 1929. The mutation of the title was carried out and Kishan Lal raised no objection to it. The Court noted that Brijlal had continued to possess a portion of the property to which he had no legal right for a period of five or six years, from 1884 to about 1889 or 1890, and that he had induced Mst. Mohan Dei to part with her interest by representing that he himself accepted the award and recognised her absolute title to the remaining estate. After Brijlal, Kishan Lal and his brother, acting together, enjoyed the benefit of that portion from around 1889 or 1890 up to October 1929, when Mst. Mohan Dei died, a further period of approximately forty years. During that time they led Mst. Mohan Dei to believe that they also recognised her title as an absolute estate. The Court held that Kishan Lal was consequently estopped for the reasons explained. It was further asserted that, had Kishan Lal challenged the award and reopened the dispute, Mst. Mohan Dei would have promptly sued and, for the next forty years, would have obtained the benefit of the property from which she had been excluded only because she relied on Brijlal’s assertion that he too accepted the award. The Court found that Kishan Lal’s inaction over those years, with full knowledge of the facts, was evident from the deposition of D.W. 2, Dhiyan Singh, whose testimony was not contradicted. The witness stated that “Kishan lal always accepted this award and acted upon it.” Although the witness qualified this statement in cross-examination by saying that Kishan lal had also objected to the award, the witness could not confirm whether that objection occurred before or after Mst. Mohan Dei’s death. The documents on record showed that the objection was made after her death; therefore, the Court concluded that the main portion of the uncontradicted testimony should be accepted.

The Court then turned to the events of March 1929, when Mst. Mohan Dei’s son, Shri Kishan Das, died, making Kishan lal the next presumptive reversioner. When the reversion opened in October 1929 and the estate would have vested in him, the Court considered whether the earlier estoppel continued to bind him after he assumed this new character. The Court held unequivocally that the estoppel persisted. It relied on the decision of the Judicial Committee in Kanhai Lal v. Brijlal(1), holding that a consenting reversioner is estopped, whereas other reversioners who do not claim through the consenting party are not bound. The Court found that this principle applied because the alienation was made by a limited owner without any legal necessity. It cited Ramgouda Annagouda v. Bhausaheb(2), where the court held that a party who was a participant and benefitted from the transaction was precluded from questioning any part of it. The Court concluded that, on the basis of these authorities, Kishan lal remained bound by the estoppel even after the reversion opened, and that this conclusion was beyond dispute.

In this case the Court observed that the same principles that were applied in the earlier passage also govern the present dispute. The parties argued, relying on the decisions in Rangasami Gounden v. Nachiappa Gounden (3) and Mr. Binda Kuer v. Lalitha Prasad (4), that even if Kishan Lal had taken possession in 1889 or 1890 based on a title that derived from his father, such possession would not have prevented him from asserting his own rights in a different capacity when the succession opened. The authorities cited were (1)(1918) 45 I.A 118, (2) (1927) 54 I.A. 396 at 403, (3) (1919) 46 I.A. 72, and (4) (1936) A.I.R. 1936 P.C. 304 at 308. Particular emphasis was placed on page 808 of the latter ruling. The Court held that the cited decision must be distinguished. In that earlier case the reversion did not vest until 1916. Moreover, in 1868 the next presumptive reversioners had entered into a compromise whereby the grandfather of a person named Jairam obtained a substantially larger share than he would have been entitled to under the ordinary rules. Without the compromise the grandfather would have received only one anna and twelve gundas, but the compromise gave him two annas and four gundas. The actual taking of possession, however, was postponed under the terms of the compromise until the death of Anandi Kuer. When Anandi Kuer died in 1885, Jairam became entitled to his grandfather’s share because both his father and grandfather were already deceased, and he therefore benefited from the transaction. It is important to note that the additional benefit that Jairam received consisted only of twelve gundas, because he already possessed an absolute and indefeasible right to one anna and twelve gundas in his own name under a title that did not arise from the compromise. Jairam later lost one anna and four gundas to a creditor named Munniram, and from the remaining one anna of the original two annas and four gundas he sold thirteen gundas to the plaintiffs for Rs. 500. From these facts the Court concluded that it is impossible to infer that the thirteen gundas purchased by the plaintiffs were drawn from the extra twelve gundas that Jairam obtained because of the compromise, rather than from the one anna and twelve gundas to which he already held an independent title. Moreover, unless the plaintiffs’ thirteen gundas can be positively identified as originating from the twelve gundas, it would be impossible to say that the plaintiffs derived any benefit from the compromise. The Judicial Committee further observed that even if such a direct attribution were possible, it would not follow that the plaintiffs had admitted that fact, nor would it necessarily have conferred any benefit upon them under the compromise. The plaintiffs retained the right to dispute that position and to gamble on the possibility of establishing a contrary outcome.

The plaintiffs attempted to prove the contrary. The judges then observed that unless the conduct of the plaintiffs makes it unfair for them to be counted among Bajrangi Lal’s reversioners, their legal rights must be given effect. In another authority, Rangasami Gounden v. Nachiappa Gounden, the judges’ decision on this issue depended on a similar point, as recorded on page 87 of the report. The present matter differed substantially from that earlier case. Kishan Lal acquired possession of his father’s property solely by virtue of the award, without any other title, and he continued to enjoy the benefits of that property for forty years. Consequently, he would have been prevented, or estopped, from asserting any claim even if he had attempted to assert a different character of right, such as a reversioner, after the succession had become operative. It was acknowledged that if the estoppel applicable to Kishan Lal arose after October 1929, then the plaintiffs, whose claim depends on Kishan Lal, would likewise be estopped. The appellate court allowed the appeal. It set aside the decree of the High Court and restored the earlier decree of the first Court that had dismissed the plaintiffs’ claim. The costs of both this proceeding and the High Court proceeding were ordered to be paid by the plaintiffs-respondents. The appeal was therefore allowed. The representative for the appellants was Ganpat Rai and the representative for the respondents was Sardar Bahadur Saharya. The citation for the earlier case is (1919) 46 I.A. 72.