A couple indulged in a marital dispute in a village went to Village mukhiya to request him to be arbiter to the dispute and agrees for divorce in front of him. Mukhiya know the law of land he tells them it is not possible for any couple to divorce in front of Mukhiya by word of mouth, a decree should be obtained from competent court for divorce. Both the husband and wife begged him to be arbiter to the case and told him whatever decision you take will be binding on us we will abide by it. Mukhiya told them, "I propose for divorce between you and him as the solution, however having agreed to arbitrate your case tomorrow if you initiate legal proceedings I will stand to lose my honor so you both enter into the following agreement with me. I don't want any money from you now, I am agreeing to be arbitrator on the condition that if anyone of you go to initiate legal proceedings against other, then the party winning the case would give me Rs.10 lacs and the party losing me would give me Rs.5 lacs, I shall treat that amount as Revenue to Panchayat and utilize it for the development of village."
Accordingly, the couple having agreed to divorce on the advise given by Mukhiya written down the terms of agreement of divorce on a stamp paper of which Village Mukhiya is a party. Both the husband and wife agree that if they initiate legal action against each other, the party winning the case would pay Rs.10 lacs to village mukhiya and the party losing the case would pay Rs.5.00 lacs to Village mukhiya.
Is that valid? The idea is to prevent legal action by each other but at the same time not violate the law of contracts which put a bar on any agreement that prevents citizens to invoke their legal rights. Here we are not preventing anyone from invoking legal rights.
The money so paid by the winner and loser of the case would be utilized by Mukhiya for the development of village. In other words, it is part of revenue generated by the Panchayat.
Consideration : For agreeing to be Arbiter to the dispute between husband and wife.
