Kamlesh Devi and Ors. vs Oriental Insurance Co.Ltd.& Anr.

The appellants filed a claim petition under Section 173 of the Motor Vehicles Act (hereinafter called the Act) being the legal heirs and

dependants of deceased Mahesh Kumar, who had died in a motor vehicle accident with Bus No. 2079/JK02D, which was driven rashly and

negligently by Gurdeep Singh, driver, on 10.01.1996 at Karara, DodaKishatwar Road, before the learned Motor Accident Claims Tribunal, Doda

(hereinafter called the Tribunal).

When the case was taken up for hearing before the Tribunal, learned counsel for the parties agreed and a consent award of Rs. 1,15,000/ was

passed in favour of the appellants, aggrieved by which the present appeal has been preferred.

Mr. P.N. Goja, learned counsel for the appellants submitted that learned Tribunal fixed the case before Lok Adalat and statement of counsel for

claimants/appellants was recorded but the appellants have never authorized their counsel Mr. B.S. Manhas to enter into compromise and agree to

accept a meager compensation on their behalf. He contended that appellant Nos. 2 and 3 are minors and the claim petition was filed through their

mother, who is the natural guardian. He has further submitted that for affecting a compromise on behalf of the minors, there is a special provision as

it has been laid down in Order 32 Rule 7 of CPC. He further submitted that the learned Tribunal without following the procedure, passed the

award on the basis of consent given by Mr. B.S. Manhas, counsel for the claimants before the Tribunal.

Mr. Baldev Singh, learned counsel for the respondent No. 1 has failed to rebut the submissions made by the learned counsel for the appellants.

After hearing learned counsel for the parties and perusing the record, I am of the considered opinion that the learned Tribunal has committed a

legal error in passing the award on the basis of consent given by Mr. B.S. Manhas, counsel for the appellants before the Tribunal.

The sole point which is to be determined in this appeal is whether the counsel for the parties can enter into a compromise without consent of the

parties. Before the Claim Tribunal all the provisions of Civil Procedure Code are not applicable but the Tribunal is performing the same function as

that of Civil Courts.

The Claims Tribunal is constituted under Section 165 of the Act for assessing the compensation in respect of accident involving the death of, or

bodily injury to, persons arising out of the use of motor vehicles or damages to any property of a third party so arising, or both. Under subsection 3

of Section 165 of the Act, a person shall not be qualified for appointment as a member of a Claims Tribunal unless he (a) is, or has been, a Judge

of a High Court, or (b) is, or has been a District Judge, or (c) is qualified for appointment as a Judge of a High Court (or as a District Judge).

Therefore, the claim Tribunal has to follow the provisions of Civil Courts as it has been laid down in case 'Amarjeet Kour and others v. Vanguard

Insurance CO. Ltd.

In Municipal Corporation of Delhi v. Kuldip Lal Bhandari, decided by a Full Bench of this Court I had an occasion in speaking for the Court, to

point out that the nature of the jurisdiction of the Tribunal is precisely the same as that of a civil Court, inasmuch as it entertains the same claim for

compensation base on negligence, as was done by the civil Courts. Even now, in those areas in which Tribunals are not established by the State

Governments, these claims would be still entertained by the ordinary civil Courts. As the claims before the civil Courts and the Tribunals are the

same and as they are tried by the same law, the decisions of the Tribunals are like the decisions of the civil Courts, though they may be called an

'award'. Such a claim for compensation is based on a cause of action arising prior to the making of the claim before the Tribunal.

The procedure to affect the compromise has been laid down in Order 23 Rule 3 of Civil Procedure Code, which reads as under;

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) 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 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 above said provision shows that the agreement should be in writing and signed by the parties. It is also clear that before passing the decree,

the Court has to record its satisfaction with regard to the adjustment of whole or part of the claim in terms of the compromise. In the case in hand,

the learned Tribunal has not recorded the satisfaction before passing the award. The compromise has not been reduced into writing nor the parties

have signed it. Therefore, on the basis of the statements of counsel for the parties, an award cannot be passed. Not only this, the appellant Nos. 2

and 3 are minors.

In case of minor, the procedure has been laid down in Order 32 Rule 7 of CPC for affecting the compromise by next friend or guardian, which

reads as under;

(1) No next friend or guardian for the suit shall, without the leave of the Court, expressly recorded in the proceeding, enter into any agreement or

compromise on behalf of a minor with reference to the suit in which he acts as next friend or guardian.

((1A) An application for leave under subrule (1) shall be accompanied by an affidavit of the next friend or the guardian for the suit, as the case may

be, and also, if the minor is represented by a pleader, by the certificate of the pleader, to the effect that the agreement or compromise proposed is,

in his opinion, for the benefit of the minor: Provided that the opinion so expressed, whether in the affidavit or in the certificate shall not preclude the

Court from examining whether the agreement or compromise proposed is for the benefit of the minor.)

(2) Any such agreement or compromise entered into without the leave of the Court so recorded shall be avoidable against all parties other than the

minor.

On behalf of the minor, the guardian or their next friend shall have to obtain a leave of the court for entering into agreement/compromise. When

the guardian and the minor has moved an application for leave of the Court and the advocate has given a certificate that the compromise is in the

interest of minor, before according the leave, the court has to satisfy whether the compromise is in the interest of minor. In the instant case, the

procedure laid down in Order 32 Rule 7 of CPC has not been followed.

In case 'Kaushalya Devi and others v. Baijnath Sayal (deceased) and others 'AIR 1961 SC 790, it has been held as under;

The effect of the failure to comply with O. 32 R, 7(1) is specifically provided by O. 32, R. 7(2) which says that any such agreement or

compromise entered into without the leave of the Court so recorded shall be voidable against all parties other than the minor. Mr. Jha reads this

provision as meaning that the impugned agreement is voidable against the parties to it who are major and is void in respect of the minor; in other

words, he contends that the effect of this provision is that the major parties to it can avoid it and the minor need not avoid it at all because it is a

nullity so far as he is concerned. In our opinion this contention is clearly inconsistent with the plain meaning of the rule. What the rule really means is

that the impugned agreement can be avoided by the parties who are major against the minor. It is voidable and not void. It is voidable at the

instance of the minor and not at the instance of any other party. It is voidable against the parties that are major but not against a minor. This

provision has been made for the protection of minors, and it means nothing more than this that the failure to comply with the requirements of O. 32,

R. 7(1) will entitle a minor to avoid the agreement and its consequences. If he avoids the said agreement it would be set aside but in no case can

the infirmity in the agreement be used by other parties for the purpose of avoiding it in their own interest. The protection of the minor's interest

requires that he should be given liberty to avoid it. No such consideration arises in respect of the other parties to the agreement on the ground that

it has not complied with O. 32, R. 7(1). The nonobservance of the condition laid down by R.1 does not make the agreement or decree void for it

does not affect the jurisdiction of the Court at all. The nonobservance of the said condition makes the agreement or decree only voidable at the

instance of the minor. That, in our opinion, is the effect of the provision of O. 32, R. 7(1) and (2)"".

In case 'Nazir Ahmad Pandita and anr. v. Haneefa and ors.' AIR 1974 J&K 43, it has been observed as under:

It is no doubt that if a decree is passed against a minor without appointment of a guardian the decree is a nullity and void and that the same

principle is applicable to the case of a person of unsound mind in view of Rule 15 of Order 32 of the Code of Civil Procedure, but in the present

case it is not proved that there was anything on the record of the suit in which the decree was passed to establish that Assad Ullah was infact a

person of unsound mind. That apart, no appeal challenging the impugned decree appears to have been filed either by Assad Ullah or any other

person affected by the decree on the ground of the alleged unsoundness of the former. Further the effect of failure to comply with Order 32, Rule 7

(1) which requires a sanction of the Court to the compromise entered into an behalf of the minor to be recorded is specifically provided for in

Order 32, Rule 7 (2) of the Code which says that any such agreement or compromise entered into without the leave of the Court so recorded shall

be voidable against all the parties other than the minor.

In view of the above discussion, the compromise affected on behalf of the appellants by the counsel is not sustainable as this compromise has

been affected in violation of Order 23 Rule 3, Order 32 Rule 7 of Civil Procedure Code and also against the principle of natural justice.

For the reasons mentioned above, the appeal is accepted. The impugned award is set aside. The parties are directed to appear before Motor

Accident Claims Tribunal, Doda, on 5th of October, 2005. The Tribunal is directed to dispose of the case according to law.