Devi Bhagat Vs. Rajinder Singh & Ors  Insc 392 (11 July 2006)
Singh & R V Raveendran
out of S.L.P. (C) No. 13894/2004) R. V. Raveendran, J.
appeal is directed against the judgment dated 3.3.2004 passed by learned Single
Judge of Delhi High Court in FA No.247 of 2003.
& 2 are the landlords of the suit property (front portion of residential
premises no. C-25, Friends Colony, New Delhi).
1 & 2 and their father Late Brig. S. Rameshwar let out the suit property
with the fittings and fixtures to M/s Usha Fisheries Agriculture and Dairy
Farm, a partnership firm (third respondent herein) for a period of three years
under a registered lease deed dated 6.6.1979, the purpose being the residential
use of a partner of the firm. Pushpa Devi (mother of the appellant) and
respondents 4, 5 & 6 were its partners. The suit property was being used by
Pushpa Devi for her residential use. The tenancy was continued after the lease
term of three years.
(Respondents 1 & 2 and their father) terminated the said tenancy as at the
end of 31.3.1989 by notice dated 9.2.1989 and filed a suit against the firm and
Pushpa Devi in the court of the District Judge, Delhi on 10.4.1989 for recovery of the possession of the suit
property. It was originally numbered as RC Suit No. 265 of 1989 and later,
transferred to the court of the Sub-Judge, New Delhi (later, Civil Judge,
Delhi) and renumbered as Suit No. 52 of 1993.
Devi, second defendant, resisted the suit inter alia on the ground that the
first defendant firm had been dissolved and as a consequence all its partners
including herself became the co-tenants and the suit was not maintainable
without impleading the other partners. Subsequently, M.L. Wadhwa, S. K. Mittal
and Badan Singh (the other three partners of the firm), were impleaded as
defendants 3 to 5. During the pendency of the suit, the first plaintiff S. Rameshwar
died, and the suit was continued by showing his two sons (original plaintiffs 2
& 3) as plaintiffs 1 & 2. The fifth defendant also died and his son Chaman
Lal Gahlot was brought on record in his place as the fifth defendant.
were examined on behalf of the plaintiffs and their evidence was closed on
16.9.1998. Thereafter, the case was adjourned a number of times for defendants'
evidence. Shri Dinesh Garg, counsel for defendants stated that as the first
defendant firm was dissolved, he will not appear for the firm. In view of it,
after issuing court notice, the first defendant was placed ex parte on
24.4.2000. The order-sheet dated 7.7.2000 shows that as defendants 2 & 3
did not let in any evidence, their evidence was closed and the matter was
listed for evidence of defendants 4 & 5. On 19.5.2001, the court made the
following order :- "The case was filed in the year 1989. Keeping in view
the fact that it has already been delayed, defendant no. 4 and newly added
defendant no.5 are given only one (more) opportunity to lead their evidence
otherwise the same will be closed on the next date of hearing i.e.
23.5.1991." On 23.5.1991, the two plaintiffs and their counsel and Shri Dinesh
Garg, counsel for the Defendants were present. On the basis of the submissions
made, the court recorded the following submissions in the order sheet :
is stated that the matter has been compromised between the parties. The defendants
undertakes to vacate the suit premises by 22.1.2002 and will keep on paying the
rent/damages of the suit premises @ Rs.4800/- with effect from 1.5.2001, till
the time of vacation of the suit premises. Let the statement of both the
parties be recorded." (emphasis supplied) Thereafter, the following
statement of Shri Dinesh Garg, counsel for defendants was recorded by the court
of Shri Dinesh Garg, Adv. for the defendants.
instructions on behalf of the defendants to make the present statement that the
defendants undertake to vacate the suit premises by 22.1.2002 and will keep on
paying the rent/damages @ Rs.4800/- w.e.f. 1.5.2001, till the vacation of the
suit premises. The rent upto 30.4.2001 already stands paid.
Garg, Adv. R.O.A.C.
Civil Judge) Thereafter, the following statement of Shri B. Khan, counsel for
the plaintiffs was recorded :
of Shri B. Khan, Counsel for both the plaintiffs.
instructions on behalf of plaintiffs to make the present statement that in view
of the statement made by the counsel for the defendants, on behalf of the
defendants, the suit may kindly be disposed of accordingly. I accept the terms
of the statement of counsel for defendants. The plaintiffs are also present
today in the court and will countersign this statement.
B. Khan, Adv. R.O.A.C.
Civil Judge) In addition to the learned counsel for plaintiffs and defendants
signing the order sheet, plaintiffs 1 & 2 who were present in court, also
signed the order sheet. Thereafter, the court made the following order :-
"ORDER In view of the statement made by the counsel for parties in the
presence of both the plaintiffs, the suit stands disposed off as settled.
Parties to be bound by their statements made today.
be consigned to R/R. Decree sheet in terms of said compromise be prepared.
23.5.2001 Sd/Savita Rao Civil Judge, Delhi"
subsequently found that Shri Dinesh Garg though appearing for all defendants,
had not filed Vakalatnama for defendants 3 & 4 and one Shayam Kishore had
entered appearance for them.
an application under sections 151 and 152 CPC was moved. Shri Dinesh Garg filed
the Vakalatnama on behalf of the defendants 3 & 4 on 18.7.2001. In view of
it, the trial court made the following order on 18.7.2001 :
to application under section 151 and 152 filed. Copies given.
stated Vakalatnama on behalf of the defendants 1, 2, & 5 is already on
record but inadvertently, the Vakalatnama on behalf of the defendants 3 & 4
was not filed which the counsel Shri Dinesh Garg is filing today. It be taken
on record. Counsel for defendant states that when he gave the statement, he was
duly authorized on behalf of the defendants for making statement.
further states that defendant no. 1 is a partnership firm which has now been
dissolved and is not in existence and even if the decree is passed against
defendant no.1 then also it will be executable against defendents 2 to 5 only.
However, I pass a decree against all the defendants. Let the decree be modified
and a fresh decree sheet be prepared mentioning therein that the defendants
will vacate the suit premises by 22.1.2002 and will keep on paying the
rent/damages @ Rs.4800/- with effect from 1.5.2001 till the vacation of the
suit premises, i.e., front portion forming part of premises No.C-25, Friends
Colony, New Delhi as shown red in the site plan annexed with the plaint. File be
sent to RR. Sd/Civil Judge" Accordingly, a fresh decree was drawn on
18.7.2001 in terms of the final order dated 23.5.2001.
second defendant (Pushpa Devi) filed an application under section 151 CPC for
setting aside the decree dated 18.7.2001 alleging that she had not instructed
her counsel Shri Dinesh Garg to enter into any compromise on her behalf that
there was no "written compromise between the parties duly signed by the
parties", and therefore, there was no lawful agreement or compromise. The
court issued notice of the said application to Shri Dinesh Garg, counsel for
the defendants as also the plaintiffs. Shri Dinesh Garg filed a detailed
statement dated 7.12.2001. We extract below the relevant portions of the said
counsel had represented the defendant no. 2 for about 12 years in the aforesaid
matter. The counsel was getting the instructions from the defendant no. 2 most
of times through her daughter Ms. Sadhna Rai or her son in law, Shri Vinay Rai
or through Group Head of Law Department Dr. M.C. Gupta. All the proceedings
were always communicated to the defendant no.2.
the closing of evidence by the plaintiff, the case was listed for the
defendant's evidence time and again and under instructions of the defendant no.
2, the counsel took adjournments for evidence for several years. The adjournment
were taken on 4.12.1998, 5.4.1999 and 21.5.1999. When the case fixed for
12.7.1999 for evidence of defendant no. 2, she again did not come and sent her
medical certificate which was placed on record and case was adjourned to
8.9.1999. Again adjournment was sought and the case was adjourned to 22.10.1999
as last and final opportunity for her evidence. A written communication dated
20.9.1999 was sent by registered post to defendant no. 2, but she did not
appear. Again adjournment was sought as per her instructions and this time the
case was adjourned for 30.11.1999 for her evidence subject to cost of Rs.500/-
which was paid by her but still she did not appear in witness box. Even
thereafter case was adjourned on 13.1.2000, 24.4.2000, 7.7.2000, 4.9.2000,
16.10.2000, 20.12.2000 and 26.4.2001 for evidence of remaining defendants but
none appeared in witness box.
contesting the matter for about 10 years when it was not possible to take any
further date for recording of the evidence of the defendants, the counsel
advised the defendant no. 2 to lead evidence and made it clear that it will not
be possible the counsel to meet any further adjournment.
she requested for getting her some time to enable her to find an alternative
counsel took her oral instructions under good faith and because of level of
confidence developed after representing Usha Group for about 18 years, started
negotiations with the plaintiff which went on for several months, during which
period there were several offers and counter offers duly communicated to the
defendants. Ultimately when plaintiff came out with plea to first clear the
arrears of rent with effect from 01.10.1999, the counsel asked defendant no. 2
to clear the arrears which were sent to counsel vide communication of their Law
Officer dated 9.4.2001 through the Head of Law Department Dr. M.C. Gupta.
that, the term are negotiated and ultimately, with prior approval of defendant
no. 2 a statement was made on behalf of the defendant no. 2 as well on behalf
of the other defendants and the decree was obtained based on admission.
Pursuant to request of the counsel, the plaintiff as well as this Hon'ble Court was pleased to allow time upto
22.1.2002 to the defendants to vacate the premises.
after recording of the statement, a written communication dated 24.5.2001 was
sent to the defendant no. 2 as well as to Dr. M.C. Gupta, Head of the Law
Department of Usha Group of Companies was sent by Registered A.D. post clearly
indicating therein that a statement has been made as per the instructions and
that the decree has been passed. This communication was duly received by the
defendant no. 2 as well as Dr. M.C. Gupta. The copy of the letter, postal
receipts and the AD card duly signed by the defendant as received are
defendant did not, however, pursue her application dated 21.8.2001 for setting
aside the consent decree.
27.8.2001, within six days of filing the application dated 21.8.2001 before the
trial court for setting aside the decree, the second defendant filed an appeal
against the said consent decree before the District Judge, Delhi. The appellate
court by judgment dated 21.12.2002 set aside the consent decree on the ground
that there was no agreement or compromise reduced to writing and signed by the
parties. The matter was remanded to the trial court with a direction to proceed
with the trial of the suit in accordance with the law by ignoring the statement
of the counsel made on 23.5.2001.
judgment of the Appellate Court was challenged by the landlords in FAO No. 247
of 2003 on the file of the Delhi High Court, under Order 43 Rule (1)(u) of CPC.
During the pendency of the said appeal before the High Court, Pushpa Devi died,
and her daughter (the Appellant) came on record and pursued the appeal. The
High Court allowed the landlords' appeal by judgment dated 3.3.2004. The High
Court held that the consent decree in question did not fall under the first
part of Rule 3 of Order 23 (requiring an agreement or compromise between the
parties to be in writing and signed by the parties), but fell under the second
part of Rule 3 of Order 23 (relating to satisfaction of the claim of the
plaintiff, which did not require any document in writing signed by the
parties), and that there was a valid compromise under Order 23 Rule 3 CPC and
the second defendant "could not repudiate the consensus by attempting to
challenge their satisfaction". From the fact that the second defendant did
not pursue the application dated 21.8.2001 filed before the trial court, and
from the fact that she did not challenge the integrity of her counsel (who
entered into the compromise) either before the appellate court or before it, the
High Court drew an inference that second defendant's counsel Sri Dinesh Garg,
had the authority on her behalf to make the statement leading to the consent
The judgment of
the High Court is challenged by the appellant (second defendant's legal representative)
in this appeal. Learned counsel for the appellant contended that the High Court
having held that the case did not fall under the first part of Rule 3 of Order
23, committed a serious error in holding that the case fell under the second
part of the said Rule. It is contended that the second part applies only where
the defendant satisfies the plaintiff in regard to the whole or part of the
subject matter of the suit. It is pointed out that the second part refers to
completed acts, that is acts which have been already executed or performed,
where nothing more remains to be done in future by a defendant. He submitted
that in this case when the counsel for the defendants agreed to vacate the suit
premises on a future date, that is on or before 22.1.2002, it was a promise or
an agreement to do an act in future to satisfy the suit claim, and not a case
where "defendant satisfies the plaintiff in respect of the subject matter
of the suit". He pointed out that if the defendants had vacated and
delivered the premises to the plaintiffs and thereafter the counsel for the
defendants had confirmed the same and the suit had been disposed of recording
the said submission, then it would fall under the second part.
appellant contends that the High Court having held that the case did not fall
under the first part of Rule 3, and the case demonstrably not falling under the
second part of Rule 3, it has to be held that there was no lawful agreement or
compromise. It is submitted that the first appellate court was justified in
setting aside the consent decree and remanding the matter to the trial court.
On the other hand, the learned counsel for the landlords contended that the
District Court had no jurisdiction to entertain the appeal against a consent
decree. It is also contended that there was a compromise by admitting the claim
of the plaintiffs, and, therefore, the consequential decree is valid and
binding. On the contentions raised, the following two questions arise for consideration
appeal filed by Pushpa Devi under section 96 of the Code of Civil Procedure,
against the consent decree was maintainable.
compromise on 23.5.2001 resulting in a consent decree dated 18.7.2001 was not a
valid compromise under Order 23 Rule 3 CPC.
: Point No. (i)
It is no doubt
true that the landlords did not contend either before the first appellate court
or before the High Court that the appeal against the consent decree was not
maintainable. This contention is urged for the first time in this Court. The
contention relates to jurisdiction of the appellate court and is evident from
the record. Such a plea does not require any evidence. Further, being a
contention relating to the jurisdiction of the appellate court, it does not
require any 'pleading'. Though this Court will not normally permit a new plea
to be raised at the hearing of the special leave petition or an appeal under
Article 136, where such plea does not involve any question of fact or amendment
of pleading and is purely one of law, particularly relating to jurisdiction of
the appellate court, it can be entertained by this Court. (See Shanti Devi vs. Bimla
Devi - AIR 1988 SC 2141 and Zahoor vs. State of U.P - AIR 1991 SC 41). In Hiralal
vs. Kasturi Devi [AIR 1967 SC 1853], this Court observed :
though the question of jurisdiction had not been urged before the High Court,
it stares one in the face of the judgment of the appellate court. We are
satisfied that the appellate court had no jurisdiction though this point was
not raised in the High Court, it is so obvious that we have permitted the plea
to be raised before us." In this case, the contention raised being one
relating to jurisdiction of the appellate court, we have permitted the said
contention and heard both sides thereon.
provides for appeals from original decrees.
(3) of section 96, however, provided that no appeal shall lie from a decree
passed by the court with the consent of the parties. We may notice here that
Order 43 Rule 1 (m) of CPC had earlier provided for an appeal against the order
under Rule 3 Order 23 recording or refusing to record an agreement, compromise
or satisfaction. But clause (m) of Rule 1 Order 43 was omitted by Act 104 of
1976 with effect from 1.2.1977.
a proviso was added to Rule 3 Order 23 with effect from 1.2.1977. We extract
below the relevant portion of the said proviso :
that where it is alleged by one party and denied by the other that an
adjustment or satisfaction has been arrived at, the court shall decide the
question" Rule 3A was also added in Order 23 with effect from 1.2.1977
barring any suit to set aside a decree on the ground that the compromise on
which the decree is based was not lawful.
that emerges from the amended provisions of Order 23, can be summed up thus :
No appeal is
maintainable against a consent decree having regard to the specific bar
contained in section 96(3) CPC.
No appeal is
maintainable against the order of the court recording the compromise (or refusing
to record a compromise) in view of the deletion of clause (m) Rule 1 Order 43.
suit can be filed for setting aside a compromise decree on the ground that the
compromise was not lawful in view of the bar contained in Rule 3A.
A consent decree
operates as an estoppel and is valid and binding unless it is set aside by the
court which passed the consent decree, by an order on an application under the
proviso to Rule 3 of Order 23.
the only remedy available to a party to a consent decree to avoid such consent decree,
is to approach the court which recorded the compromise and made a decree in
terms of it, and establish that there was no compromise. In that event, the
court which recorded the compromise will itself consider and decide the
question as to whether there was a valid compromise or not. This is so because
a consent decree, is nothing but contract between parties superimposed with the
seal of approval of the court. The validity of a consent decree depends wholly
on the validity of the agreement or compromise on which it is made. The second
defendant, who challenged the consent compromise decree was fully aware of this
position as she filed an application for setting aside the consent decree on
21.8.2001 by alleging that there was no valid compromise in accordance with
law. Significantly, none of the other defendants challenged the consent decree.
For reasons best known to herself, the second defendant within a few days
thereafter (that is on 27.8.2001), filed an appeal and chose not to pursue the
application filed before the court which passed the consent decree. Such an
appeal by second defendant was not maintainable, having regard to the express
bar contained in section 96 (3) of the Code.
: Point No. (ii)
Order XXIII deals
with withdrawal and adjustment of suits. Rule 3 relates to compromise of suits,
relevant portion of which is extracted below :
it is proved to the satisfaction of the Court that a suit has been adjusted
wholly or in part by any lawful agreement or compromise in writing and signed
by the parties, or where the defendant satisfies the plaintiff in respect of
the whole or any part of the subject- matter of the suit, the Court shall order
such agreement, compromise or satisfaction to be recorded, and shall pass a
decree in accordance therewith so far as it relates to the parties to the suit,
whether or not the subject-matter of the agreement, compromise or satisfaction
is the same as the subject-matter of the suit." The said Rule consists of
two parts. The first part provides that where it is proved to the satisfaction
of the court that a suit has been adjusted wholly or in part by any lawful
agreement or compromise in writing and signed by the parties, the court shall
order such agreement or compromise to be recorded and shall pass a decree in
accordance therewith. The second part provides that where a defendant satisfies
the plaintiff in respect of the whole or any part of the subject matter of the
suit, the court shall order such satisfaction to be recorded and shall pass a
decree in accordance therewith. The Rule also makes it clear that the
compromise or agreement may relate to issues or disputes which are not the
subject-matter of the suit and that such compromise or agreement may be entered
not only among the parties to the suit, but others also, but the decree to be
passed shall be confined to the parties to the suit whether or not the subject
matter of the agreement, compromise or satisfaction is the same as the subject
matter of the suit. We are not, however, concerned with this aspect of the Rule
in this appeal.
What is the difference between the
first part and the second part of Rule 3 ? The first part refers to situations
where an agreement or compromise is entered into in writing and signed by the
parties. The said agreement or compromise is placed before the court. When the
court is satisfied that the suit has been adjusted either wholly or in part by
such agreement or compromise in writing and signed by the parties and that it
is lawful, a decree follows in terms of what is agreed between the parties. The
agreement/compromise spells out the agreed terms by which the claim is admitted
or adjusted by mutual concessions or promises, so that the parties thereto can
be held to their promise/s in future and performance can be enforced by the
execution of the decree to be passed in terms of it. On the other hand, the
second part refers to cases where the defendant has satisfied the plaintiff
about the claim. This may be by satisfying the plaintiff that his claim cannot
be or need not be met or performed. It can also be by discharging or performing
the required obligation. Where the defendant so 'satisfies' the plaintiff in
respect of the subject-matter of the suit, nothing further remains to be done
or enforced and there is no question of any 'enforcement' or 'execution' of the
decree to be passed in terms of it. Let us illustrate with reference to a
money-suit filed for recovery of say a sum of Rupees one lakh. Parties may
enter into a lawful agreement or compromise in writing and signed by them,
agreeing that the defendant will pay the sum of Rupees one lakh within a
specified period or specified manner or may agree that only a sum of Rs.75,000
shall be paid by the defendant in full and final settlement of the claim. Such
agreement or compromise will fall under the first Part and if defendant does
not fulfil the promise, the plaintiff can enforce it by levying execution. On
the other hand, the parties may submit to the court that defendant has already
paid a sum of Rupees one lakh or Rs.75,000/- in full and final satisfaction or
that the suit claim has been fully settled by the defendant out of court
(either by mentioning the amount paid or not mentioning it) or that plaintiff
will not press the claim. Here the obligation is already performed by the
defendant or plaintiff agrees that he will not enforce performance and nothing
remains to be performed by the defendant. As the order that follows merely
records the extinguishment or satisfaction of the claim or non- existence of
the claim, it is not capable of being 'enforced' by levy of execution, as there
is no obligation to be performed by the defendant in pursuance of the decree.
Such 'satisfaction' need not be expressed by an agreement or compromise in
writing and signed by the parties. It can be by a unilateral submission by the
plaintiff or his counsel. Such satisfaction will fall under the second part. Of
course even when there is such satisfaction of the claim or subject matter of
the suit by defendant and the matter falls under the second part, nothing
prevents the parties from reducing such satisfaction of the claim/subject
matter, into writing and signing the same. The difference between the two parts
is this : Where the matter falls under the second part, what is reported is a
completed action or settlement out of court putting an end to the dispute, and
the resultant decree recording the satisfaction, is not capable of being
enforced by levying execution. Where the matter falls under the first part,
there is a promise or promises agreed to be performed or executed, and that can
be enforced by levying execution. While agreements or compromises falling under
the first part, can only be by an instrument or other form of writing signed by
the parties, there is no such requirement in regard to settlements or
satisfaction falling under the second part. Where the matter falls under second
part, it is sufficient if the plaintiff or plaintiff's counsel appears before
the court and informs the court that the subject matter of the suit has already
been settled or satisfied.
In a suit against the tenant for
possession, if the settlement is that the tenant will vacate the premises
within a specified time, it means that the possession could be recovered in
execution of such decree in the event of the defendant failing to vacate the
premises within the time agreed. Therefore, such settlement would fall under
the first part. On the other hand, if both parties or the plaintiff submit to
the court that the tenant has already vacated the premises and thus the claim
for possession has been satisfied or if the plaintiff submits that he will not
press the prayer for delivery of possession, the suit will be disposed of
recording the same, under the second part. In such an event, there will be
disposal of the suit, but no 'executable' decree.
In this case, under the settlement,
the tenant undertook to vacate the suit property on a future date (that is
22.1.2002) and pay the agreed rent till then. The decree in pursuance of such
settlement was an 'executable' decree. Therefore the settlement did not fall
under the second part, but under the first part of Rule 3. The High Court
obviously committed an error in holding that the case fell under the second part
of Rule 3.
The next question is where an
agreement or compromise falls under the first part, what is the meaning and
significance of the words 'in writing' and 'signed by the parties' occurring in
Rule 3 ? The appellant contends that the words 'in writing' and 'signed by the
parties' would contemplate drawing up of a document or instrument or a
compromise petition containing the terms of the settlement in writing and
signed by the parties.
appellant points out that in this case, there is no such instrument, document
or petition in writing and signed by the parties.
We will first
consider the meaning of the words "signed by parties". Order 3 Rule 1
of CPC provides that any 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.
The proviso thereto makes it clear that the Court can, if it so desires, direct
that such appearance shall be made by the party in person. Rule 4 provides that
no pleader shall act for any person in any Court, unless he has been appointed
for the purpose by such person by a document in writing signed by such person
or by his recognized agent or by some other person duly authorized by or under
a power-of-attorney to make such appointment. Sub-rule (2) of Rule 4 provides
that every such appointment shall be filed in Court and shall, for the purposes
of sub-rule (1), be deemed to be in force until determined with the leave of
the Court by a writing signed by the client or the pleader, as the case may be,
and filed in Court, or until the client or the pleader dies, or until all
proceedings in the suit are ended so far as regards the client.
question whether 'signed by parties' would include signing by the pleader was
considered by this Court in Byram Pestonji Gariwala v. Union Bank of India [1992 (1) SCC 31] with reference to
Order 3 of CPC :
no reason to assume that the legislature intended to curtail the implied
authority of counsel, engaged in the thick of proceedings in court, to
compromise or agree on matters relating to the parties, even if such matters
exceed the subject matter of the suit. The relationship of counsel and his
party or the recognized agent and his principal is a matter of contract; and
with the freedom of contract generally, the legislature does not interfere
except when warranted by public policy, and the legislative intent is expressly
made manifest. There is no such declaration of policy or indication of intent
in the present case. The legislature has not evinced any intention to change
the well recognized and universally acclaimed common law tradition x x x x x
So long as the
system of judicial administration in India continues unaltered, and so long as
Parliament has not evinced an intention to change its basic character, there is
no reason to assume that Parliament has, though not expressly, but impliedly
reduced counsel's role or capacity to represent his client as effectively as in
the past x x x x x
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 of 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
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
To 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.. 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." [Emphasis supplied] The
above view was reiterated in Jineshwardas v. Jagrani [2003 (11) SCC 372].
Therefore, the words 'by parties' refer not only to parties in person, but
their attorney holders or duly authorized pleaders.
Let us now turn
to the requirement of 'in writing' in Rule 3. In this case as noticed above,
the respective statements of plaintiffs' counsel and defendants' counsel were
recorded on oath by the trial court in regard to the terms of the compromise
and those statements after being read over and accepted to be correct, were
signed by the said counsel. If the terms of a compromise written on a paper in
the form of an application or petition is considered as a compromise in
writing, can it be said that the specific and categorical statements on oath
recorded in writing by the court and duly read over and accepted to be correct
by the person making the statement and signed by him, can be said to be not in
writing? Obviously, no. We may also in this behalf refer to Section 3 of the
Evidence Act which defines a document as any matter expressed or described upon
any substance by means of letters, figures or marks or by more than one of
those means intended to be used or which may be used for the purpose of
recording the matter. The statements recorded by the court will, therefore,
amount to a compromise in writing.
the statements of the parties or their counsel, recorded by the court and duly
signed by the persons making the statements, would be 'statement in writing
signed by the parties'. The court, however, has to satisfy itself that the
terms of the compromise are lawful. In this case we find from the trial court
records that the second defendant had executed a vakalatnama empowering her
counsel Sri Dinesh Garg to act for her in respect of the suit and also to enter
into any compromise.
there can be no doubt that Sri Dinesh Garg was authorized by the second
defendant to enter into a compromise.
also find that the counsel for the plaintiffs and counsel for the defendants
made solemn statements on oath before the trial court specifying the terms of
compromise, which were duly recorded in writing and signed by them. The
requirements of the first part of Rule 3 of Order XXIII are fully satisfied in
The matter can
be viewed from a different angle also. After the issues were framed by the
trial court, the plaintiffs had examined two witnesses and closed their
evidence and thereafter the matter was set down for the evidence of defendants.
The first defendant was treated as ex parte. As defendants 2 and 3 did not lead
any evidence in spite of numerous opportunities, their evidence was treated as
17.5.2001, the matter was finally adjourned to 23.5.2001 for the evidence of
defendants 4 and 5 with a condition that if they do not lead evidence on that
date there evidence will be closed.
23.5.2001, defendants 4 and 5 did not lead any evidence. On the other hand, the
counsel for defendants made a statement on oath that the premises will be
vacated on 22.1.2002. Thereafter, counsel for the plaintiff also made a
statement agreeing to grant of time till 21.1.2002. There was also agreement
that the plaintiffs will be entitled to the payment of only Rs.4,800/- per
month (equivalent to the rent) and nothing more up to 22.1.2002. The effect of
it is that the parties have gone to trial on the issues and the only evidence
led by defendants is that they will vacate the premises on 22.1.2002. No other
evidence being led, the necessary conclusion is that the defendants admitted
the plaintiffs' claim and merely sought time to vacate.
the suit can be said to have been decreed on the basis of evidence and the
admissions made by the defendants.
(supra), such a situation was noticed. In that case, the High Court made an
order on a consensus expressed by both the learned counsel at the time of
hearing of the second appeal, that the respondents will pay Rs.25,000/- within
a period of one month with interest in the manner stipulated. The appellant
subsequently filed an application for review, contending that the said order
disposing of the appeal was a compromise decree, and as it was not in writing
and signed by the parties, the appeal could not have been disposed of on the
basis of the submissions. The High Court, however, refused to entertain such
objections. This Court while upholding the decision of the High Court and
holding that there was a valid compromise, also observed :
apart, we are also of the view that a judgment or decree passed as a 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."
was placed by the appellant on the following observations of this Court in Gurpreet
Singh v. Chatur Bhuj Goel [1988 (1) SCC 270] to contend that a compromise
should be reduced into writing in the form of an 'instrument' and signed by the
parties to be valid under Order 23 Rule 3. He submitted that recording of the
statements of the parties or their counsel, would not be an instrument of
compromise. An 'instrument', according to him, connotes a regular document
drawn up in the form of an agreement. We extract below the observations relied
on by the appellant :
3 as it now stands, when a claim in suit has been adjusted wholly or in part by
any lawful agreement or compromise, the compromise must be in writing and
signed by the parties and there must be a completed agreement between them. To
constitute an adjustment, an agreement or compromise must itself be capable of
being embodied in a decree. When the parties enter into a compromise during the
hearing of a suit or appeal, there is no reason why the requirement that the
compromise should be reduced in writing in the form of an instrument signed by
the parties should be dispensed with. The court must therefore insist upon the
parties to reduce the terms into writing." We have already referred to the
definition of the term document.
term instrument used in Gurpreet Singh (supra) refers to a writing of a formal
nature and nothing more. Further, we will have to understand the observations
in the context in which they were made. In that case when the hearing of a Letters
Patent Appeal commenced before the High Court, the parties took time to explore
the possibility of a settlement. When the hearing was resumed the appellant's
father made an offer for settlement which was endorsed by counsel for the
appellant also. The respondent who was present also made a statement accepting
the offer. Evidently, the said offer and acceptance were not treated as final
as the appeal was not disposed of by recording those terms. On the other hand,
the said 'proposals' were recorded and the matter adjourned for payment in
terms of the offer. When the matter was taken up on the next date of hearing,
the respondent stated that he was not agreeable. The High Court directed that
the appeal will have to be heard on merits as the respondent was not prepared
to abide by the proposed compromise. That order was challenged by the appellant
by contending that the matter was settled by a lawful compromise by recording
the statements of the appellant's counsel and respondent's counsel, and the
respondent could not resile from such compromise and therefore, the High Court
ought to have disposed of the appeal in terms of the compromise. It is in this
factual background, that is, where there was no consent decree, the question
was considered by this Court. The distinguishing feature in that case is that
though the submissions made were recorded, they were not signed by the parties
or their counsel. Nor did the court treat the submissions as a compromise. In
this case, the court not only recorded the terms of settlement but thereafter
directed that the statements of the counsel be recorded. Thereafter, the
statements of counsel were recorded on oath, read over and accepted by the
counsel to be correct and then signed by both counsel. Therefore in this case,
there is a valid compromise in writing and signed by the parties (represented
counsel). The decision in Gurpreet Singh (supra) is therefore of no assistance
to the appellant.
At the cost of
repetition, we may recapitulate the facts of this case. The suit was a simple
suit for possession by a landlord against a tenant filed in the year 1993.
Plaintiff's evidence was closed in 1998. The contesting defendant (defendant
No.2) did not lead any evidence, and her evidence was treated as closed.
matter was dragged on for 3 years for defendant's evidence after the conclusion
of plaintiff's evidence. It was noted on 19.5.2001 that no further adjournment
will be granted for the evidence of defendants 4 and 5 (who are not contesting
the matter), on the next date of hearing (23.5.2001). When the matter finally
came up on 23.5.2001, no evidence was tendered.
other hand, a statement was made agreeing to vacate the premises by 22.1.2002.
The trial court took care to ensure that the statements of both counsel were
recorded on oath and signed. Thereafter, it passed a consent decree. The
attempts of tenants in such matters to protract the litigation indefinitely by
raising frivolous and vexatious contentions regarding the compromise and going
back on the solemn undertaking given to court, should be deprecated. In this
context, we may refer to the observation made by this Court a similar situation
in Smt. Jamilabai Abdul Kadar v. Shankarlal Gulabchand [AIR 1975 SC 2202] :
facts of the present case we have little doubt the pleader has acted
substantially with the knowledge of and encouraged by his client.
x x x x
We feel no doubt
that the broad sanction for the compromise came from the tenant., that no shady
action is imputable to respondent 4 and that his conduct has been motivated by
the good of his client.
The last posting
was for reporting the compromise.
on that date, the Court declined further adjournment and the party being absent
and away, the pleader for the appellant had no alternative but to suffer an
eviction decree or settle it to the maximum advantage of his party. "
Similar are the facts here. Neither the second defendant nor her legal
representative has attributed any improper motive to second defendant's
counsel. The facts go to show nothing further could have been done for the
defendants-tenants. All that the counsel for defendants had done was to get the
maximum advantage to his clients in the circumstances after dragging on the
matter to the extent possible.
This appeal is,
therefore, liable to be dismissed as being devoid of merit. The consent decree
is upheld, though for reasons different from those which weighed with the High
landlords (respondents) will be entitled to seek mesne profits for the period
from 22.1.2002 to date of delivery of possession in accordance with law. The
appeal is accordingly dismissed with costs. The costs payable by the appellant
are quantified at Rs.25,000/-.