Ravindra vs Vimal and Others

S. Sujatha, J.—Respondents Nos. 1 to 7 through their Power of Attorney holder, respondent Nos. 8 and 9 filed a suit against respondent No. 10 in O.S. No. 13/2013 on the file of the Senior Civil Judge, Chikodi for declaration and injunction in respect of suit lands bearing R.S. No. 421/1 + 2A+1 and 432/2A situated at Nippani. The said suit was compromised between the parties before the Lok Adalat on 29.01.2013. The Lok Adalat accorded the compromise and passed the decree. The appellant, not a party to the compromise proceedings preferred an appeal challenging the same, before the VII Additional District and Sessions Judge, Belgaum at Chikodi in R.A. No. 91/2013 along with an application seeking permission to prefer the appeal, besides filing applications for condonation of delay and production of additional evidence. The appeal was dismissed by the lower appellate Court, against which, this appeal is filed.

Sri. M.G. Naganuri, learned counsel appearing for the appellant contended that appellant was not a party to the original proceeding, compromise decree passed by the Lok Adalat is much against the interest of the appellant and is not binding on him. The Lok Adalat, the alternative dispute resolution mechanism exercising the jurisdiction under Legal Services Authorities Act failed to consider the collusive nature of the compromise decree entered into between the parties in O.S. No. 13/2013, depriving the legitimate right and interest of the appellant over the disputed property. The parties to the said suit without impleading this appellant as a party to the proceedings, knowing well that the appellant is in possession of the suit property, played a fraud in obtaining the compromise decree misusing the powers of the Lok Adalat. In such circumstances, the only option available to the appellant is to file an appeal against the said compromise decree before the competent appellate Court and the lower appellate Court without appreciating the same, out-rightly rejected the appeal as not maintainable. It is further contended that the applications filed by the appellant for condonation of delay and production of additional documents have not been considered by the lower appellate Court, on the other hand, considering the memo filed by the respondents stating that the Land Tribunal in year 1981 itself has decided the tenancy rights of the parties over the suit property and as per the award passed by the Land Tribunal, Smt. Parvatibai, wife of Sri. Maruti Dawakar (mother of respondent Nos. 1 to 7) was declared as tenant dismissed the appeal. It is argued that, it was incumbent on the part of the lower appellate Court to dispose of the applications filed by the appellant before disposing of the appeal. The lower appellate Court without passing any orders on the applications filed by the appellant, dismissed the appeal much against the law. In support of his contentions, the following judgments were relied upon:

"i) Ananthaiah Vs. Gangamma, (2014) 4 KCCR 3573 : (2014) 4 KCCR 3127

ii) Banwari Lal Vs. Smt. Chando Devi (through L.R.) and another, AIR 1993 SC 1139 : AIR 1992 SC 1139 : (1992) 1 JT 420 Supp : (1992) 3 SCALE 448 : (1993) 1 SCC 581 : (1992) 3 SCR 524 Supp .

iii) Veera Vahana Udyog Pvt. Ltd. Vs. The Kranataka State Road Transport Corporation and Kannappa Automobiles Pvt. Ltd., (2010) ILR (Kar) 507 ."

Per contra, Sri. B.S. Kamate, learned counsel appearing for the respondents argued that, no appeal lies against the compromise decree passed by the Lok Adalat, moreover, when the appellant is not a party to the proceedings. The lower appellate Court after considering the material on record and as well as the judgment pronounced by this Court in respect of maintainability of an appeal against compromise decree, had rightly dismissed the appeal filed by the appellant. It is further contended that the appellant has no locus standi to challenge the validity of the decree passed by the Lok Adalat, since he is not an aggrieved person. The learned counsel also relied upon the following judgments in support of his arguments.

"i) Siddalingeshwar and Others Vs. Virupaxgouda and Others, AIR 2003 Kar 407 : (2003) ILR (Kar) 2559 : (2004) 2 KarLJ 28 : (2003) 3 KCCR 157 SN .

ii) Shaik Sharaff Uddin and Others Vs. Abdul Karim Since deceased by L.Rs. Jamruth and Others, (2011) 2 KCCR 1462 .

iii) P.T. Thomas Vs. Thomas Job, AIR 2005 SC 3575 : (2005) 100 CLT 542 : (2005) 4 CTC 30 : (2005) 10 JT 304 : (2006) 142 PLR 397 : (2005) 3 SCR 20 Supp : (2005) 2 UJ 1234 : (2005) AIRSCW 4593 : (2005) 5 Supreme 374 ."

After considering the rival submissions of the parties, the main question involved in this appeal, whether a compromise decree awarded by the Lok Adalat under the provisions of Legal Services Act is appealable under Order 41 Rule 1 r/w 96 of CPC by a stranger to the suit proceedings is no more res integra in view of the judgment rendered by the Apex Court in P.T. Thomas case (supra) and the judgment of this Court in the case of Shaik Sharaff Uddin (supra) and Siddalingeshwar case (supra). However, in view of the arguments advanced by the learned counsel appearing for the appellant regarding the maintainability of the appeal under Order 43 Rule 1A(2) of the Code by a stranger to the suit proceedings, it would be beneficial to refer to the provisions of Section 96(3) and Order 23 Rule 3A and order 43 Rule 1A(2) of the Code. The same is extracted herein below:

"Section 96(3): No appeal shall lie from a decree passed by the Court with the consent of the parties.

Order 23 Rule 3A Bar to suit: No suit shall lie to set aside a decree on the ground that the compromise on which the decree is based was not lawful.

Order 43 Rule 1A(2): In an appeal against a decree passed in a suit after recording a compromise or refusing to record a compromise, it shall be open to the appellant to contest the decree on the ground that the compromise should, or should not have been recorded."

A conjoint reading of these provisions makes it clear that, no appeal shall lie from a decree passed by a Court with the consent of the parties. Rule 3A of order 23 and Rule 1A(2) of Order 43 of Code were inserted by Act 104 of 1976 with effect from 1.2.1977. Order 43 Rule 1(m) provided for an appeal against the order under order 23 Rule 3, this Clause was omitted by Act 104 of 1976 with effect from 1.2.1977. Simultaneously, proviso was added to Rule 3 of order 23 with effect from 1.2.1977.

Order 43 Rule 1A(2) of the Code provides a right to file an appeal against the decree passed in a suit after recording a compromise or refusing to record a compromise on the ground that the compromise should or should not have been recorded. The said provision has to be given a harmonious interpretation considering Section 96 and Order 23 Rule 3A of the Code. As noticed earlier, Order 23 Rule 3A provides that, no suit can be filed to challenge the compromise decree on the ground that compromise was not lawful. Order 23 Rule 3A is not applicable to a stranger to a proceeding. Similarly, no appeal lies against the order recording the compromise. In the circumstances, the only option left to the stranger to challenge the compromise proceedings is to file a separate suit. This view is supported by the law laid down by this Court in the case of Shaik Shariff Uddin (supra), wherein it is held thus:

"Since the consent decree merely embodies the compromise of a contract between the parties and it is a mere creature of an agreement, the right of appeal from this decree is not provided for. The only reasonable interpretation that can be put on Section 96(3) of CPC is that against a consent decree, ordinarily no appeal is maintainable. However, the provisions contained in Rule 3-A have no application for a stranger to the compromise decree. It is open to a stranger to file a suit to set aside the compromise decree. Consent decree can be set aside in the suit and not in the appeal or review."

This question was also considered by the Division Bench of this Court in the case of Siddalingeshwar and Others Vs. Virupaxgouda and Others, AIR 2003 Kar 407 : (2003) ILR (Kar) 2559 : (2004) 2 KarLJ 28 : (2003) 3 KCCR 157 SN , it is held that:

"Normally, the need to challenge the compromise decree, on the ground that a term of the compromise was not lawful would arise only at the instance of any of the parties to such compromise. This is because no third party would be bound or affected by it."

However, much emphasis is placed by the learned counsel appearing for appellant on Order 43 Rule 1A(2) to put forth his argument that appeal is maintainable by a stranger challenging the compromise decree, though admittedly, no appeal was filed under the said provision. In support of his contention, learned counsel appearing for the appellant placed reliance on the Banwari Lal''s case (supra), the Apex Court, has held thus:

"But after the amendments which have been introduced, neither an appeal against the order recording the compromise nor remedy by way of filing a suit is available in cases covered by Rule 3-A of Order XXIII. As such a right has been given under Rule 1-A(2) of Order XLIII to a party, to challenge the recording of the compromise, to question the validity thereof while preferring an appeal against the decree. Section 96(3) of the Code shall not be a bar to such an appeal because Section 96(3) is applicable to cases where the factum of compromise or agreement is not in dispute."

Looking at the amendments brought simultaneously, omitting Order 43 (Rule (1)(m) and inserting order 23 Rule 3(A) and Order 43 Rule 1-A(2) to the Code by Act 104 of 1976 with effect from 1.2.1977 coupled with the judgment of the Apex Court in Banwari Lal case(supra), the word, ''appellant'' envisaged in Order 43 Rule 1A(2) of the Code means, the party to the compromise proceedings, not a stranger to the proceedings. The word ''appellant'' gets the colour from the context in which it figures. It cannot be read in isolation. The learned counsel appearing for the appellant drew my attention to paragraph ''7'' of the Banwari Lal case (supra) to suggest that an appeal filed by the stranger challenging the compromise decree is maintainable. In Banwari Lal case (supra), the Apex Court analyzing the relevant amendments brought by Act 104 of 1976 to the Code, has categorically held that the right has been given under Rule 1-A(2) of Order 43 to a party, who challenges the recording of the compromise, to question the validity thereof. Thus, the arguments advanced by the learned counsel appearing for the appellant is untenable and contrary to the judgment enunciated by the Apex Court.

The Apex Court in the case of P.T. Thomas Vs. Thomas Job, AIR 2005 SC 3575 : (2005) 100 CLT 542 : (2005) 4 CTC 30 : (2005) 10 JT 304 : (2006) 142 PLR 397 : (2005) 3 SCR 20 Supp : (2005) 2 UJ 1234 : (2005) AIRSCW 4593 : (2005) 5 Supreme 374 held that:

"In our opinion, the award of the Lok Adalat is fictionally deemed to be a decree of court and therefore the courts have all the powers in relation thereto as it has in relation to a decree passed by itself. This, in our opinion, includes the powers to extend time in appropriate cases. In our opinion, the award passed by the Lok Adalat is the decision of the court itself though arrived at by the simpler method of conciliation instead of the process of arguments in court. The effect is the same. In this connection, the High Court has failed to note that by the award what was put to an end was the appeal in the District Court and thereby the litigations between brothers forever. The view taken by the High Court, in our view, will totally defeat the object and purpose of the Legal Services Authorities Act, 1987 and render the decision of the Lok Adalat meaningless."

In view of the said dictum pronounced by the Apex Court, the award of Lok Adalat is fictionally deemed to be decree of civil Court. Therefore, an appeal shall not lie from the award of Lok Adalat, moreover by a stranger to the proceedings. Thus, finding recorded by the Courts below on the maintainability of the appeal filed by the appellant, cannot be found fault with.

The second contention raised by the appellant regarding the disposal of the appeal as not maintainable, without considering the applications filed by the appellant is untenable. It is forthcoming from the judgment of the lower appellate Court that all these applications were considered and answered accordingly. The lower appellate Court has also examined the case of the appellant with reference to the genealogy produced by the appellant, wherein, the name of the appellant is not found.

As already discussed above, the only option left to a stranger to challenge the compromise decree is by way of filing a suit or proceedings before the competent Court. The disputed question of tenancy rights, possession of the suit property can be resolved only on holding the trial, which requires specific pleas and evidence. In view of the same, no substantial question of law arises for consideration in this appeal and accordingly, appeal is dismissed confirming the judgments and decree passed by the Courts below.