SHALLO DEVI AND ORS vs HANS RAJ AND OTHERS

This appeal is directed against the judgment and order dated 30.09.2009 passed by the learned Additional District Judge, Kathua, in file

No.24/Appeal, bearing the title Santu Vs. Puran Chand and others whereby the learned Additional District Judge has set aside the judgment and

decree dated 05.02.2009 based on a compromise, passed by the learned Munsiff Billawar.Â

The factual background in which this appeal has been filed is that the appellants herein filed a suit for declaration to the effect that being

descendants of the common ancestor of the appellants and the respondents namely Khoja, they are entitled to inherit ½ of the estate left by him

which comprises of land measuring 151 kanals and 10 marlas as also the land measuring 71 kanals and 11 marlas falling under the Khewat Nos.92/69

and 66. The appellants pleaded before the learned trial Court that they are in possession of land measuring 71 kanals & 11 marlas whereas the

respondent No.1/defendant is in possession of the land to the tune of 79 kanals & 19 marlas. Consequently, they sought the relief of possession with

regard to the land measuring 04 kanals & 04 marlas which allegedly was retained by the respondent No.1 in excess and an injunction seeking to

restrain the respondent No.1/defendant from interfering in the land measuring 71 kanals & 11 marlas as stated herein before, which was in the

exclusive possession of the appellants and the respondent No.2. The suit was contested by the respondent No.1 herein by filing a written statement

as well as the amended written statement. Although the respondent No.1/defendant did not dispute the status of the appellants being descendants of a

common ancestor and their right to inherit the property of the deceased Khoja, yet they opposed the suit on technical grounds including the one that

the suit is hit by the principles of res judicata in view of some orders passed by learned Revenue Minister under the provisions of the Land Revenue

Act and also on the ground that since the respondent No.1/defendant is in exclusive possession of the land measuring 79 kanals & 19 marlas, as such,

the law of limitation would come in the way of the appellants to seek the relief as prayed for in the suit.

Be that as it may, the learned trial Court after the completion of the pleading, framed as many as five issues, out of which, issue Nos.2 to 5 were

treated as preliminary issues. The learned Trial Court, after hearing the arguments, decided all the preliminary issues against the respondent No.1 vide

its order dated 31.10.2008 and accordingly held that the suit is maintainable in the form in which it has been presented, as a corollary to which, the

appellants and the respondent No.2 were directed to lead their evidence. Respondent No.1 challenged the order dated 31.10.2008 in a revision filed

before the High Court. When the revision petition was taken up for consideration by the Court, the learned senior counsel appearing for the

respondent No.1 namely Sh. Ved Raj Wazir stated at the Bar that there was no dispute with regard to the ownership and possession of the appellants

over 71 kanals & 11 marlas of land and it restricted to the land measuring 04 kanals & 04 marlas only which the appellants/plaintiffs allege to be the

land possessed by the respondent No.1 in excess of his share. In order to settle the matter once for all, the learned counsel for the appellants and

respondent No.2 herein and the respondents in the revision petition stated that the appellants would not lay their claim over the land measuring 04

kanals & 04 marlas, which would remain in the possession of the respondent No.1. Taking into consideration the statements made by the learned

counsel appearing for the parties, the High Court came to the conclusion that nothing survives in the revision petition and accordingly, disposed of the

same by an order dated 24.11.2008 directing the trial Court to record the statements of the parties and decree the suit in terms of the compromise

made by the parties to the extent of 71 kanals & 11 marlas of land. On the directions extended by the High Court, the learned trial Court proceeded

to record the statements of the parties in terms of the order dated 24.11.2008. Since the compromise had been arrived at between the parties in

principal in the revision petition itself disposed of by the Honâ€ble High Court on 24.11.2008, yet in terms of the said order, the statements of the

parties were required to be recorded and a decree based on compromise had to be passed by the trial Court.

On 05.02.2009, the statement of respondent No.2, one of the plaintiffs before the trial Court, namely Puran Chand and that of the counsel for the

plaintiffs/appellants herein was recorded by the learned trial Court. The defendant/respondent No.1 was not present in the Court, therefore, his

statement could not be recorded but the counsel appearing for the respondent No.1 herein stated before the trial Court that the respondent No.1 had

instructed him to make the statement before the trial Court in line and in tune with the statement made by his counsel namely Sh. Ved Raj Wazir in the

revision petition filed before the Honâ€​ble High Court.Â

Accordingly, the statement of the learned counsel appearing for the defendant/respondent No.1 herein was recorded on the same day. Relying on

the statement of the parties, the learned trial Court passed a compromise decree dated 05.02.2009 in terms of the aforesaid statements.

Aggrieved by the compromise decree dated 05.02.2009, the respondent No.1 herein, preferred an appeal before the learned Additional District

Judge, Kathua, i.e. First Appellate Court, inter alia, on the grounds that the suit pertains to the agricultural land and as such, the Civil Court had no

jurisdiction to pass the decree impugned and that no satisfaction as required under Order 23 Rule (3) CPC was derived by the learned trial Court

before passing the compromise decree. The compromise decree was also assailed on the ground that there was no lawful agreement of compromise

in writing signed by the parties placed on record and the statements of the parties were not sufficient to conclude that the suit has been settled. The

respondent No.1 also assailed the compromise decree on the ground that his counsel appearing before the trial Court had no instructions to make any

statement and he exceeded his authority in doing so. The appellants filed their objections in the appeal pleading therein that no appeal was maintainable

against the compromise decree passed by the trial Court besides contesting the aforesaid preliminary objections.

The contentions as propounded by the appellants before the Ist Appellate Authority did not find favour with the trial Court and the trial Court after

hearing the parties vide its order dated 30.09.2009 impugned in this appeal, accepted the appeal of the respondent No.1 and set aside the judgment of

the learned trial Court passed in terms of Order 23 Rule 3 CPC and remanded the case back to the learned trial Court for recording the statements of

the parties in terms of the order passed by the High Court in the revision petition. It is this order of the First Appellate Court that is the subject

matter of challenge in this appeal chiefly on the grounds that the failure of the learned Ist Appellate Court to consider and adjudicate upon the very

maintainability of the appeal against the composite decree, rendered the judgment bad in the eyes of law. The appellants had specifically opposed the

maintainability of the appeal on the ground that in terms of Section 96 of Civil Procedure Code, no appeal against the compromise decree passed in

terms of Order 23 Rule 3 was maintainable.

The appellants also relied upon the judgment of the Honâ€ble Supreme Court passed in Pushpa Devi Bhagatâ€s case to substantiate their arguments.

The learned Ist Appellate Court deliberately skipped to consider the preliminary objection of the appellants and set aside the judgment and decree of

the learned trial court without returning any finding as to whether the appeal against the compromise decree was maintainable in view of the bar

created under sub-section 3 of Section 96 of the CPC. Since the appeal against the compromise decree impugned before the learned Ist Appellate

Court was not maintainable, as such, the order impugned is without any jurisdiction and nullity in the eyes of law.

It is further pleaded that the findings recorded by the learned trial court that in terms of order passed by the Honâ€ble High Court in Revision

Petition No:138 of 2008, it was obligatory on the part of the learned trial court to record the statements of parties in person and the statement of the

learned counsel appearing for the defendant-Respondent No.1 herein though recorded under the instructions of Respondent No.1, was not sufficient to

meet the requirement as envisaged in the order of the Honâ€ble High Court passed in the aforesaid Revision Petition. The learned trial court in

principal agreed with the appellants that the word “by parties†refers not only to the parties in person but their duly authorized Attorney Holder

and duly authorized Pleader, yet for reasons not disclosed in the order impugned, the learned Ist Appellate Court still insisted that the learned trial court

should have recorded the statement of Respondent No. 1 in person and the statement of his counsel was not sufficient to clothe the learned trial court

with powers to pass a decree in terms of Order 23 Rule 3 CPC. The approach adopted by the learned Ist Appellate Court in returning the findings

which are contrary to the settled position of law, renders the order impugned erroneous in law and unsustainable.

The appellants have proceeded to state that the findings returned and the conclusion arrived at by the learned Ist Appellate Court that no

compromise deed was presented by the parties before the learned trial court, as such, the compromise decree in terms of Order 23 Rule 3 could not

have been validly passed, is again erroneous in law. The Honâ€ble Supreme Court in Pushpa Devi Bhagatâ€s case has elaborately considered this

aspect of law and has authoritatively pronounced that the statement of parties or their counsel recorded by the court duly signed by them would be

“statements in writing and signed by partiesâ€. Referring to Order 3 Rule 1 of CPC, the Honâ€ble Supreme Court held that “the party†would

mean his recognized agent or a pleader appearing, applying or acting as the case may be, on his behalf.

This aspect of the matter was earlier also considered by the Honâ€ble Supreme Court in case titled Byram Pestonji Gariwala Vs. Union Bank of India

1992(1) SCC-31 wherein the Honâ€ble Supreme Court referred to Order 3 CPC and held that when an act is required to be done by a party in law,

the same can be done by his recognized agent or by a pleader. This aspect of the matter has not been appreciated by the learned Ist Appellate Court.

The finding of learned Ist Appellate Court that the compromise reduced into writing in the form of an instrument and signed by parties, was not placed

on record, is also fallacious in view of the settled position of law. The Honâ€ble Supreme Court in the judgments aforesaid has clearly held that if the

terms of a compromise written on a paper in the form of an application or petition could be considered as a compromise in writing, could it be said that

specific and categorical statements on oath recorded in writing by the court duly read over and accepted to be correct by the person making the

statement and signed by him, could be said to be not in writing?

The Honâ€ble Supreme Court answered this question say “No†and thus concluded that the statements recorded by the court would amount to

compromise in writing. Despite there being a clear finding on this question of law by the Honâ€ble Supreme Court, the learned Ist Appellate Court

passed the order impugned, which on the face of it is contrary to the law settled by the Honâ€ble Supreme Court. On this count also the order

impugned deserves to be set aside.

The appellants have further averred that the learned Ist Appellate Court has erroneously misinterpreted the order passed by the Honâ€ble High

Court in the Revision Petition, to mean that the statements of the parties in person were only required to be recorded. The Honâ€ble High Court had

only directed the learned trial court to record the statements of parties, obviously in accordance with law particularly the provisions of Order 23 Rule

The statement of the counsel appearing for the Respondent No. 1, which is appended herewith, clearly indicates that he made the statement on the

specific instructions of the Respondent No. 1, which fact has not been disputed by the Respondent No. 1 either before the learned trial court or before

the learned Ist Appellate Court. The learned Ist Appellate Court has further failed to appreciate that the only remedy to avoid the consent decree was

to approach the court, which recorded the consent decree and to establish that there was no compromise. The Respondent No. 1 having not availed

the remedy provided under law, was not entitled to invoke the appellate jurisdiction of the learned Ist Appellate Court in view of the specific bar

created by sub-section 3 of Section 96 of Civil Procedure Code. The provision of Order 23 Rule 3 particularly the proviso appended to Rule 3 was not

considered and appreciated by the learned Ist Appellate Court in correct perspective. The learned Ist Appellate Court has thus fallen in serious error

in accepting the appeal and setting aside the consent decree particularly when the very appeal before it was not maintainable. On this score also the

order impugned is liable to be set aside.Â

Heard and considered.

The questions that need to be answered in this appeal are; firstly, whether an appeal against the consent decree passed in terms of Order XXIII

Rule 3 CPC is maintainable in view of the bar created under Section 96(3) of the Civil Procedure Code; secondly, whether the consent decree

operates as an estopple and is valid and binding on the parties unless it is set aside by the court, which passed the decree by an order on an application

made under proviso to Rule 3 of Order 23; thirdly, whether the words “singed by parties†occurring in Rule 3 of Order 23 would mean the

compromise signed by the parties in person or it would include within its ambit and scope the recognized agent or pleader appearing, applying or acting,

as the case may be, on his behalf; fourthly, whether the words “compromise in writing†would mean that there has necessarily to be a separate

instrument/ document in writing signed by the parties or the statements of counsel recorded on oath, read over and accepted by the counsel, to be

corrected and then signed by them also constitute a valid compromise in writing and signed by the parties in terms of Order 23 Rule 3 CPC; and lastly,

whether the order impugned is perverse in law and against the facts having been passed in violation of the substantive provisions of law as well as the

law settled by the Honâ€​ble Supreme Court.Â

Section 96(3) of the Code of Civil Procedure provides that no appeal shall lie from a decree passed by the Court with the consent of the parties.Â

The underlying principle in framing this provision appears to be that a person who gives his consent to a decree being passed against him cannot

subsequently turn around and resile from his statement that he has made before the Court. Once a decree is passed on the basis of a compromise in

terms of Order 23 Rule 3 CPC, no appeal can lie against the said judgment and decree. This is what has precisely been held in Pushpa Devi

Bhagatâ€s case cited above. Since the appeal was not maintainable, therefore, the order of the Ist Appellate Authority is without jurisdiction and

cannot sustain in the eyes of law.

Testing the instant appeal from the perspective of what has been stated above, although the High Court had directed the trial Court to record the

statements of the parties to the lis when the revision was determined and decided, yet the point for consideration is, whether the order of the High

Court had to be construed and interpreted in the technical sense of the term scribed in the order or that it could be stretched to a further length by

stating that it would include within its definition and scope the statement of the counsel representing one of the parties also (as has been the case in

this appeal), who signed the compromise on his behalf. The law on the point is no longer res integra. It has been held in the case of Byram Pestonji

Gariwala Vs. Union Bank of India and others reported in (1992) 1 Supreme Court Cases 31, more particularly in paras 38 & 39, as under:-

Considering the traditionally recognised 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 authorised 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.

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 authorised

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 authorisation by vakalatnama, act on behalf of his client. Not to recognise such capacity is not only to cause much inconvenience and loss to

the parties 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.â€​

The same view has been repeated and reiterated in the law laid down in the case of Pushpa Devi Bhagat Vs. Rajinder Singh and others reported

in (2006) 5 Supreme Court Cases 566, paras 22 and 23 of which are germane in the context of deciding this issue and these are reproduced herein

below:-

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. The

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. The 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 : (SCC pp. 44 & 46-47, paras 30, 35 & 37-39)

There is 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

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 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

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.

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.

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.â€​

Applying the ratio of law laid down to the facts of the instant case and recapitulating it that Section 96(3) of the Code of Civil Procedure creates a

bar in filing of an appeal against the judgment and decree based on a compromise, the Court has not be guided by the technicalities and adhere to the

express and rigid connotation of the expression used by this Court in the order by which the revision has been decided. The “statements of the

parties†as recorded in the order passed in the revision have to be interpreted to mean that anything required to be done by a party unless expressly

barred if done by a pleader appearing, applying or acting, as the case may be, on behalf of that party shall be deemed to have been done by the party

in person on the strength of Order 3 Rule 1 CPC, which provides that any appearance, application or act in or to any court, required or authorised 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

added to the said Order makes it abundantly clear that the Court can, if it so desires, direct that such appearance shall be made by the party in person.

The legislature never intended to create impediments in the implied authority of the counsel, engaged in the thick of proceedings in court, to

compromise or agree on matters relating to the parties, even if it exceeds the subject matter of the suit. The instant case has to be considered on

the parameters of the statement made by the learned counsel who appeared before this Court in the revision petition on behalf of respondent No.1 and

stated that nothing remains to be adjudicated in the case as the parties have entered into an amicable settlement and it was on the bulwark of his

statement that the revision petition was decided by this Court with a direction that the only thing required to be done by the trial court is to record the

statements of the parties. The law is that the judgment of the Court has not to be interpreted like a statute where every word, as far as possible, has to

be given a literal meaning and no word is to be ignored. The grounds urged in the memo of appeal squarely fall within the ambit of law evolved in the

two decisions of the Supreme Court cited herein before and these need not to be delved into in their entirety.

However, it may be added, the learned trial Court agreed with the submissions of the appellants that the words “by parties†has not to be

restricted to mean “the parties in person†but also their duly authorised attorney holder and duly authorised pleader, yet for reasons not disclosed

in the order impugned, the learned 1st Appellate Authority still insisted that the learned trial Court should have recorded the statement of the

respondent No.1 in person and the statement of his counsel was not sufficient to clothe the trial Court with the powers to pass a decree in terms of

Order 23 Rule 3 CPC. The observation of the 1st Appellate Authority that no compromise deed was presented by the parties is erroneous in law.Â

This aspect has been dealt with by the Honâ€ble Supreme Court in Pushpa Devi Bhagatâ€s case wherein it has been authoritatively pronounced that

the statements of the parties or their counsel recorded by the Court duly signed by them would be statements in writing and signed by the parties. The

consent decree is valid and binding on the parties unless it is set aside by the very court that passed the decree.      Â

There need not to be a written agreement between the parties placed before the Court and it is enough if the judgment discloses that the same

was passed on the basis of the consent of the parties. The contention of the respondent No.1 that since his statement was not recorded but the

statement of his counsel only was recorded and therefore, the impugned judgment and decree is liable to be set aside as has been done by the learned

Additional District Judge Kathua, under these circumstances, pales into insignificance. It is a spurious and spacious argument which has absolutely no

force in it in light of the law evolved in the judicial precedents cited above.

On the strength of what has been stated in answer to issues (a) to (e) herein before, the only conclusion that can be drawn is that the order

impugned is bad in law and against the facts. It has been passed in ignorance of the substantive provisions of law as well as the law settled by the

Honâ€​ble Supreme Court, as a sequel to which, the same requires to be set aside.Â

Viewed thus, the order impugned dated 30.09.2009 passed by learned Additional District Judge Kathua, in file No.24/Appeal, is set aside and the

judgment/decree dated 05.02.2009 passed by learned Munsiff, Billawar, is restored and upheld. The record of the trial Court shall be sent back along

with a copy of this order.

Disposed of accordingly along with all connected matters.