Laxman and Others vs Laxman

B. Veerappa, J.

The plaintiff and defendants 1 and 2 have filed the above writ petition challenging the order dated 6.11.2014 made in O.S. No. 124/2014 by the learned Principal Civil Judge, Gokak, refusing the Compromise Petition filed by the plaintiff and defendants 1 and 2 filed under Order 23 Rule 3 CPC.

According to the plaintiff, he had entered into an agreement of sale with defendants 1 and 2 on 12.12.2000 and subsequently, defendants 1 and 2 have executed registered sale deed in favour of defendant-3 on 7.6.2004. Since the defendants-1 and 2 have not come forward to execute sale deed in terms of the agreement, the plaintiff filed original suit in O.S. 124/2004 for specific performance to enforce the agreement executed by the defendants 1 and 2 and to execute the sale deed after receipt of balance sale consideration, etc. Defendant-1 filed written statement on 15.01.2009, and defendant-2 adopted the writ statement filed by defendant-1. In the written statement defendants-1 and 2 have denied in paras 3 and 4, stating that the defendants never executed any agreement in favour of plaintiff nor received any earnest money of Rs. 50,000/- from the plaintiff and till today they are in lawful possession and enjoyment of the same. Para-3 and 4 of the written statement reads as under:

"3. The averments made in the plaint para No. 2 that, the defendant No. 1 was in need of for payment of hand debts and his family necessity he was negotiated the sale transactions with the plaintiff about the suit property for valuable consideration of Rs. 64,000/- and defendant No. 1 and 2 have received an earnest money of Rs. 50,000/- from the plaintiff and hand over the possession of the suit property to the plaintiff and till today the plaintiff was/is in lawful, peaceful possession and use and enjoyment of the suit property, are all entirely false.

Further the averments made in plaint para No. 2 that, the defendant No-1 and 2 have executed legal, valid and lawful agreement of sale in favour of the plaintiff duly attested by the witnesses on 12.12.2000 by receiving the part consideration of Rs. 50,000/-, it was further agreed between plaintiff and defendants No. 1 and 2 that the defendants have to execute a registered sale deed by receiving remaining consideration amount of Rs. 14,000/- within one year from the date of intimation from the defendants to plaintiff, are entirely false."

In the written statement defendants 1 and 2 also admitted at para-9 that they have alienated the property in favour of defendant-3 on 7.6.2004, which reads as under:

"9. The defendant No. 3 before purchasing the suit property verified the record of rights and encumbrance if any on the said property. And found that Balappa S/o. Revappa Jagamutti is the exclusive owner of the suit property and thereafter defendant No. 3 purchase the suit property for valuable consideration of Rs. 40,000/- under registered sale deed dated 7.6.2004 in pursuance of the sale deed, defendant No. 3 has given a wardi to concern land revenue officers and the name of D-3 has appeared in the R/R under M.RNo.33/2006-07. The plaintiff has not objected for the same therefore the defendant No. 3 is a bona-fide purchaser for valuable consideration of the suit property and he is in exclusive possession and actual wahivata of the suit property as exclusive owner thereof."

Defenant-3 also filed written statement specifically contending that, he is a bonafide purchaser for valuable consideration and stated that the alleged agreement executed by the plaintiff in favour of defendants was not reduced on a properly stamped paper. The recitals in the alleged agreement of sale shows that the possession of the property was delivered and if that is so, the same ought to have been on a requisite stamp paper, etc.

It is not in dispute that, after completion of evidence the plaintiffs and defendants 1 and 2 have filed Compromise Petition under Order 23 Rule 3 read with Section 151 CPC. In the compromise petition the defendants 1 and 2 have withdrawn all the objections raised in the written statement. The learned trial Judge, after considering the entire compromise petition was pleased to held as under:

"28. If the compromise is entertained as it is, defendant No. 3 will have to substantiate his claim of being a bonafide purchaser so far as plaintiff is concerned, in addition to it he also has to show that the defendants No. 1 and 2 have really executed the sale deed. So, it is the defendant No. 3 who is going to be prejudiced if the compromise is entertained."

It was further held that defendants 1 and 2 having executed sale deeds in favour of defendant-3, now they want to say it is only a document evidencing money transaction and not a sale deed and further they want to say that defendant-3 got created that sale deed. This stand of defendants-1 and 2 is clearly amounting to withdrawing an admission already made and has the effect of introducing a new case. But they do this under the guise of a compromise with the plaintiff Though the defendants 1 and 2 may say so many things, that should not prejudice another. In this case if the compromise is entertained it would be allowing the defendants 1 and 2 to change the side at the cost of defendant No. 3. It is also to be observed that amendment of pleading cannot be allowed, when it has effect of withdrawing an admission. The parties may be given absolute liberty to change their stands for their benefit, which should not be prejudicial to somebody else. Accordingly, the learned Judge refused to entertain the compromise petition.

Aggrieved by the said order, the present writ petition is filed.

Sri. Dinesh M. Kulkarni, learned Counsel for the petitioner contends that under Order 23 Rule 3, there is no bar and at any stage the parties can compromise the suit and therefore, he sought to set-aside the impugned order.

Per contra, the learned Counsel Sri. Sangram S. Kulkarni, for caveator/respondent sought to justify the impugned order.

The provisions of Order 23 Rule 3 CPC reads as under:

"3. Compromise of suit.--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 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:

Provided 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; but no adjournment shall be granted for the purpose of deciding the question, unless the Court, for reasons to be recorded, thinks fit to grant such adjournment."

A plain reading of the said provision makes it clear that, it is no doubt true that the parties can compromise the suit at any stage of proceedings provided if the other party right who is also party in the proceedings should not be affected and if affected then they cannot compromise the matter ignoring the other party rights in the property of the suit.

In the present case, it is not in dispute that the defendants in paras 3 and 4 of their written statement specifically denied that they never executed any agreement in favour of the plaintiff nor received any part consideration of Rs. 50,000/- from the plaintiff and till today they are in lawful possession and enjoyment of the same. It is also not in dispute, in para-9 of the written statement the defendants have categorically stated that they have alienated the property in favour of defendant-3 on 7.06.2004, specifically stating that the defendant No. 3 before purchasing the suit property verified the records and purchased the suit property for valuable consideration of Rs. 40,000/- under registered sale deed dated 7.6.2004 and in pursuance of the sale deed, defendant No. 3 has given Varadi to the concerned revenue officer and his name appeared in record of rights under M.R. No. 33/2006-07 and plaintiff has not objected for the same. Therefore, defendant No. 3 is a bonafide purchaser for valuable consideration of the suit property and he is in exclusive possession and actual wahivatdar of the suit property as exclusive owner thereof. Very strangely the plaintiff and defendants 1 and 2 filed compromise petition. In the compromise petition, defendants 1 and 2 stated that they have withdrawn all the objections raised in the written statement. This stand of the defendants and the plaintiff is nothing but withdrawing an admission already made and it has the effect of introducing a new case and it will definitely affect the rights of defendant No. 3 in respect of immovable property. That is not the intention of the legislature to enact Order VI Rule 17 CPC. Therefore, the impugned order passed by the learned Civil Judge is perfectly justified.

Considering the material on record, the learned Civil Judge has rightly refused to accept the compromise petition, which is in accordance with law, since it is not disputed by the plaintiffs or the defendants-1 and 2 before filing of the suit, defendants 1 and 2 executed a registered sale deed dated 7.6.2004 under which a right accrued to defendant-3 in respect of the property in question under Section 54 of the Transfer of Property Act and very strangely, in the present writ petition which is filed challenging the compromise petition by both plaintiff and defendants 1 and 2 by engaging the same Counsel, clearly indicates that plaintiff and defendants 1 and 2 have colluded together and only to deprive the third defendant right they have filed the compromise petition. The same cannot be allowed. If it is allowed, there is no end for the litigation.

In view of the same, the impugned order passed by the trial court is perfectly justified and no ground is made out to interfere with the same under extraordinary jurisdiction of this court under Articles 226 and 227 of the Constitution of India. Accordingly, writ petition is dismissed.