and M.D., B.P.L. Ltd. Vs. S.P. Gururaja & Ors  Insc 481 (26 September 2003)
Raju & Arijit Pasayat.
out of S.L.P. (C) Nos. 23323-23324 of 2002] D. RAJU, J.
appellant before this Court was the appellant in Second Appeal No.693 of 1996
on the file of the Madhya Pradesh High Court at Jabalpur. The original plaintiff Jineshwardas, whose legal
representatives are the appellants in this Court, filed the Civil Suit No.102-A
of 1980 before the Court of IV Civil Judge Class-I, Jabalpur, , seeking for a
decree for specific performance and recovery of the possession of the suit land
or in the alternative, damages at market value as may be proved for
non-performance of the contract and for recovery of Rs.2500/- paid by the
plaintiff as deposit. The defendants disputed the suit claim by attributing
fraud and undue influence as vitiating the agreement stating that it was
opposed to public policy as well and really constituted no agreement of sale of
immovable property. After trial and on consideration of the materials on
record, the suit filed was dismissed. The matter was pursued on appeal before
the VIth Additional District Judge, Jabalpur, and the learned First Appellate Judge also, after an elaborate consideration
of the evidence on record, affirmed the findings of the learned Trial Judge by
holding that the suit agreement cannot be considered as an agreement for sale
of the land. The First Appellate Judge also noticed the specific fact that the
father of the plaintiff was a practicing Advocate and it is in respect of
certain amounts spent for the litigation only, the agreement came to be
executed and that it was merely an agreement to repay and not to convey the
property itself. On that view of the matter, while partly allowing the appeal
and affirming the judgment of the Trial Judge denying specific performance and
recovery of possession, decreed the claim of the plaintiff to receive the sum
of Rs.2,500/- with interest from 18.8.1963 till the date of filing of the suit,
namely, 28.8.1975, at Re.1/- per month and thereafter interest at the rate of paise
50 per month. Aggrieved, the matter appears to have been pursued further before
the High Court by means of a Second Appeal. From the copy of the order-sheet filed
relating to the order made at the time of entertaining the appeal when it came
up for admission, it is seen that the Second Appeal was admitted on 27.2.1998
on the following questions of law:-
Whether the courts below were in error in holding that the agreement dated
23.4.63 (Ex. P.2) was not a genuine agreement to sell the property in suit and
the same is not enforceable?
Whether the Court below was right in non-suiting the plaintiff also on the
ground of limitation?"
when the Second Appeal came up before the Court for final hearing, before
another learned Single Judge, the following order came to be passed on a
consensus expressed by both the learned counsel before the High Court at the
time of hearing. It would be useful and necessary to set out the said order:-
"Both the counsel are in agreement to settle the matter. The learned
counsel for the respondents submits that respondents will pay an amount of
Rs.25,000/- to the appellant within a period of one month, otherwise it will carry
interest at the rate of 12% per annum from the date of today.
this agreed submission, this appeal is decided and judgment and decree passed
by the court below is modified to this extent.
respondents will pay Rs.25,000/- (Rupees twenty five thousand) to the
appellants within a period of one month.
this amount is not deposited in the Court on or before 10th June, 2002, the above amount will carry
interest @ 12% per annum till its realization.
Cost of the litigation will be borne by both the parties.
appeal is disposed of in view of the above said agreed submissions."
Thereupon, the appellants seem to have filed an application for review
contending that the order passed on 9.5.2002 disposing of the appeal is nothing
but a compromise decree and since the compromise could, if at all, had been
entered into only under Order 23 Rule 3, CPC, and the one in this case has not
been so entered into in writing and signed by the parties, the same is not to
be made the basis for disposal of the appeal and submissions, if any, made in
this regard by the counsel appearing for the appellants in the High Court was
without any instructions of the appellants. The learned Judge by an order dated
15.7.2002 rejected the review application observing that the aforesaid
settlement was arrived at between the parties in the Court at the time of
hearing and if the applicants are aggrieved, they may take appropriate action
under law but no case for review has been made out. At this stage, the above
appeal has been filed.
to the notice ordered, the respondents entered appearance and have filed their
counter affidavit contending that in the teeth of the factual findings made by
both the courts below that the transaction was not one for sale of any property,
there was no merit in the claim to be effectively adjudicated in the appeal
before the High Court, that the counsel appearing were dully authorized by
their respective parties to argue the Second Appeal on merits and, if
necessary, compromise the same and the counsel on either side, who have
expressed such a desire to settle, being Advocates of repute with a long
standing of more than 35 years at the bar, could not be attributed with any
motive and in the absence of any concrete material to show that something
illegal has been done, the appellants cannot take advantage of
hyper-technicalities to avoid the decree in the Second Appeal, which, if at
all, is really more in favour of the appellants in the teeth of the concurrent
findings recorded by the courts below.
learned counsel for the appellants strongly placed reliance upon the decision
of this Court reported in Gurpreet Singh vs. Chatur Bhuj Goel [(1988)1 SCC
270], to contend that in the absence of compliance with the provisions
contained in Order 23 Rule 3, CPC, the judgment of the High Court could not be
sustained. The learned counsel for the respondent reiterated the stand taken in
the counter, noticed supra.
have carefully considered the submissions of the learned counsel appearing on
either side. Though, in Gurpreet Singh's case (supra) this Court explained the
object and purport of Rule 3 of Order 23 CPC, by laying emphasis on the words,
"in writing and signed by parties", to be necessitated in order to
prevent false and frivolous pleas that a suit had been adjusted wholly or in
part by any lawful agreement or compromise with a view to protract or delay the
proceedings in the suit itself. It was also observed therein that as per Rule 3
of Order 23 CPC, when a claim in the suit has been adjusted wholly or in part
by any lawful agreement or compromise, such compromise must be in writing and
signed by the parties and there must be a complete agreement between them and
that to constitute an adjustment, the agreement or compromise must itself be capable
of being embodied in a decree. The fact that the parties entered into a
compromise during the hearing of the suit or appeal was considered not to be
sufficient, to do away with the requirement of the said rule and that courts
were expected to insist upon the parties to reduce the terms into writing. In Byram
Pestonji Gariwala vs Union Bank of India & Others [(1992) 1 SCC 31), this
Court while adverting to the very amendment in 1976 to Rule 3 of Order 23 CPC,
noticed also the effect necessarily to be given to Rule 1 of Order 3, CPC, as
well and on an extensive review of the case law on the subject of the right of
the counsel engaged to act on behalf of the client observed as follows:
We may, however, hasten to add that it will be prudent for counsel not to act
on implied authority except when warranted by the exigency of circumstances
demanding immediate adjustment of suit by agreement or compromise and the
signature of the party cannot be obtained without undue delay. In these days of
easier and quicker communication, such contingency may seldom arise. A wise and
careful counsel will no doubt arm himself in advance with the necessary
authority expressed in writing to meet all such contingencies in order that
neither his authority nor integrity is ever doubted. This essential precaution
will safeguard the personal reputation of counsel as well as uphold the
prestige and dignity of the legal profession.
Considering the traditionally recognized role of counsel in the common law
system, and the evil sought to be remedied by Parliament by the C.P.C.
(Amendment) Act, 1976, namely, attainment of certainty and expeditious disposal
of cases by reducing the terms of compromise to writing signed by the parties,
and allowing the compromise decree to comprehend even matters falling outside
the subject matter of the suit, but relating to the parties, the legislature
cannot, in the absence of express words to such effect, be presumed to have
disallowed the parties to enter into a compromise by counsel in their cause or
by their duly authorized agents. Any such presumption would be inconsistent
with the legislative object of attaining quick reduction of arrears in court by
elimination of uncertainties and enlargement of the scope of compromise.
insist upon the party himself personally signing the agreement or compromise
would often cause undue delay, loss and inconvenience, especially in the case
of non-resident persons. It has always been universally understood that a party
can always act by his duly authorized representative. If a power-of- attorney
holder can enter into an agreement or compromise on behalf of his principal, so
can counsel, possessed of the requisite authorization by vakalatnama, act on
behalf of his client. Not to recognise such capacity is not only to cause much
inconvenience and loss to the parities personally, but also to delay the
progress of proceedings in court. If the legislature had intended to make such
a fundamental change, even at the risk of delay, inconvenience and needless
expenditure, it would have expressly so stated.
Accordingly, we are of the view that the words 'in writing and signed by the
parties', inserted by the C.P.C. (Amendment) Act, 176, must necessarily mean,
to borrow the language of Order III Rule 1 CPC.
appearance, application or act in or to any court, required or authorized by
law to be made or done by a party in such court, may except where otherwise
expressly provided by any law for the time being in force, be made or done by
the party in person, or by his recognized agent, or by a pleader, appearing,
applying or acting as the case may be, on his behalf:
that any such appearance shall, if the court so directs, be made by the party
in person." (emphasis supplied) We are in respectful agreement with the
above statement of law.
it is not permissible for the appellant, to contend to the contrary.
apart we are also of the view that a judgment or decree passed as result of
consensus arrived at before court, cannot always be said to be one passed on
compromise or settlement and adjustment. It may, at times, be also a judgment
on admission, as in this case.
the fact and circumstances of the case, we find that there are no adequate
reasons on merits also to call for interference in a second appeal.
so-called questions formulated cannot be considered to be even questions of law
and, at any rate, not substantial questions of law, as required under Section
100, C.P.C. The courts below have concurrently rejected the claim of the
plaintiff/appellants on pure findings of fact based upon relevant evidence and
nothing survived for consideration at all in such an appeal. Further,
respondent side alone appears to have been saddled with additional liabilities
under the decision of the High Court, though on the basis of admission made by
counsel appearing for parties. There is nothing said against the counsel, who
appeared for parties, and no allegations have been made also attributing any
impropriety to their action. Therefore, we are not persuaded to agree with the
submissions made on behalf of the appellants.
appeals, therefore, fail and shall stand dismissed. No costs.