V. NARASIMHA RAJU versus V. GURUMURTHY RAJU AND OTH.T£RS

V. NARASIMHA RAJU versus V. GURUMURTHY RAJU AND OTH.T£RS

The arbitration agreement of December 30, 1943, is invalid under section 23 of the Indian Contract Act, 1872, because its consideration was the withdrawal and non-prosecution of a criminal complaint involving non-compoundable offences, which is opposed to public policy. Consequently, the award under such agreement cannot be enforced.

Parties
Appellant: V. Narasimha Raju; Respondent No. 1: V. Gurumurthy Raju; Arbitrator: Tanguda Narasimhamurty
Jurisdiction
India
Judgment Date
22 August 1962
Procedural Posture
Civil Appeals Nos. 494 and 495 of 1957 / Supreme Court Appeal From Judgment and Decree of the Orissa High Court
Outcome
Appeal allowed
Legal Topics
Arbitration Agreement Validity, Public Policy, Unlawful Consideration, Stifling Prosecution
Arbitration Contract Law Arbitration Agreement Validity Public Policy Unlawful Consideration Stifling Prosecution

Case Brief

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Parties

V. Narasimha Raju

Appellant

V. Gurumurthy Raju

Respondent No. 1

Tanguda Narasimhamurty

Arbitrator

Procedural Posture

Civil Appeals Nos. 494 and 495 of 1957 / Supreme Court Appeal From Judgment and Decree of the Orissa High Court

Legal Issues

  1. 1 Whether the arbitration agreement executed on December 30, 1943, is invalid under section 23 of the Indian Contract Act, 1872, as being opposed to public policy, due to its consideration being the withdrawal of a criminal complaint involving non-compoundable offences.

Ratio Decidendi

The arbitration agreement of December 30, 1943, is invalid under section 23 of the Indian Contract Act, 1872, because its consideration was the withdrawal and non-prosecution of a criminal complaint involving non-compoundable offences, which is opposed to public policy. Consequently, the award under such agreement cannot be enforced.

Court Disposition

Appeal allowed

Orders

  • Application by respondent no. 1 (M.J.C. 105 of 1946) for passing a decree in terms of the award is dismissed.
  • Application by the appellant (M.J.C. 8 of 1947) for setting aside the award is allowed.