Delhi High Court
Dr Hans U Nagar vs John Nagar & Anr on 12 June, 2020
Equivalent citations: AIR 2020 DELHI 177, AIRONLINE 2020 DEL 830
Author: Asha Menon
Bench: Hima Kohli, Asha Menon
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ FAO(OS) 3/2019 and CM APPL. 549/2019
Date of decision: 12.06.2020
IN THE MATTER OF:
DR HANS U NAGAR ..... Appellant
Through: Mr. Tanmay Mehta, Mr. Amiet Andlay,
Mr. Arun K. Sharma and
Mr. Karan K. Dahiya, Advocates.
versus
JOHN NAGAR & ANR ..... Respondents
Through: Mr. Pradeep Dewan, Sr. Advocate with
Mr. Ujjawal Jha and Ms. Anupam Dhingra, Advocates
for R-1.
Mr. Pradeep Dewan, Sr. Advocate with
Mr. Ujjwal Jha, Advocates for R-2.
CORAM:
HON'BLE MS. JUSTICE HIMA KOHLI
HON'BLE MS. JUSTICE ASHA MENON
HIMA KOHLI, J.
1. The present appeal has been filed by the appellant (defendant No.1 in CS (OS) 666/2008, instituted by the respondent No.1/plaintiff), being aggrieved by an order dated 29.10.2018, passed by the learned Single Judge, dismissing an application moved by him under Section 94 CPC read with Order XXIII Rule 3A CPC, praying inter alia that the compromise arrived at between the parties as recorded on 12.4.2012, may be set aside.
FAO (OS) 3/2019 Page 1 of 242. By this order, we propose to dispose of the preliminary objection take by learned counsel for the respondents No.1 and 2 to the maintainability of the present appeal, filed under Section 10 of the Delhi High Court Act, 1966 (in short, 'the Act').
3. Mr. Pradeep Dewan, learned Senior Advocate appearing for the respondent No.1 contends that Section 10 of the Act cannot be invoked by the appellant/defendant No.1 to assail the order dated 29.10.2018, passed by the learned Single Judge and if aggrieved by the settlement that was arrived at between the parties and recorded in the order dated 12.4.2012, the appellant had only two options. The first option was under the proviso appended to Order XXIII Rule 3 CPC and the other option is available under Order XLIII Rule 1A (2) that deals with the right to challenge non- appealable orders in appeal, against decrees. Learned counsel also cited Section 96(3) of the CPC which contemplates under what circumstances does an appeal lie from the original decree, to urge that the said provision makes it amply clear that no appeal shall lie from a decree passed by the Court with the consent of the parties and argued that in the instant case, the suit instituted by the respondent No.1/plaintiff having been decreed in terms of a consent order, the present appeal is not maintainable. To substantiate his submission, reliance has been placed on the following decisions:-
(i) Banwari Lal vs. Smt. Chando Devi (Through LRs) reported as 1993 (1) SCC 581;
(ii) Jaswinder Singh vs. Mrigendra Pritam Vikramsingh Stenier reported as 2013 SCC Online Delhi 794.FAO (OS) 3/2019 Page 2 of 24
(iii) Govt. of NCT of Delhi & Ors. vs. Mool Chand Sharma, (2013) 135 DRJ 705 (DB).
4. Mr. Dewan, Senior Advocate thus concluded that the very same principles would apply to the application filed by the appellant for setting aside of the comprise decree, as would apply to a review application and just as on the dismissal of a review application, no right can vest on the review petitioner to file an appeal, similarly, on the dismissal of the application moved by the appellant herein, no appeal is maintainable.
5. On the other hand, Mr. Tanmay Mehta, learned counsel for the appellant asserted that the present appeal is maintainable and submitted that in fact no other legal remedy is available to the appellant who is aggrieved by the impugned order dated 29.10.2018, except for invoking the provisions of Section 10 of the Act. He pointed out that first the appellant had filed a suit [CS (OS) 185/2017] on the Original Side of this court, for declaration and injunction wherein he had prayed for cancellation of the MoU dated 15.9.2011, executed by the parties. However, the said suit was withdrawn by the appellant on 1.5.2017 due to lack of territorial jurisdiction. Thereafter, another suit was instituted by the appellant, registered as CS (OS) 337/2017, asking for permanent and mandatory injunction. The said suit was also withdrawn by him on 2.2.2018, with liberty sought to file an application under Order XXIII Rule 3A of the CPC or take any appropriate legal proceedings. On 18.7.2018, the appellant filed I.A. 9472/2018, under Order XXIII Rule 3A of the CPC in CS (OS) 666/2008, challenging the FAO (OS) 3/2019 Page 3 of 24 compromise decree dated 12.4.2012, which came to be dismissed by the impugned order.
6. It is the submission of learned counsel for the appellant that the impugned order though interlocutory in nature, has all the trapping of finality and ought to be treated as a judgment, as contemplated by the Supreme Court in Shah Babulal Khimji (supra). It has been argued that the impugned order is in reality, a judgment, as it decides the matter of the moment and affects valuable rights of the appellant. Learned counsel has canvassed that since the compromise decree passed in CS(OS) 688/2008, is nothing but a contract between the parties which has the seal of the court affixed on it and in terms of the Explanation appended to Order XXIII Rule 3 CPC, a compromise decree can be challenged if it is void or voidable under the Indian Contract Act, 1872, the learned Single Judge ought to have gone into the said aspect raised by the appellant in the application. He has urged that the respondents No.1 & 2 had deliberately failed to discharge their reciprocal obligations under the MoU dated 15.9.2011, particularly recorded in para 17 thereof and their conduct was itself sufficient reason for the court to have intervened and having declined to do so, serious injustice has been caused to the appellant, which requires to be remedied in appeal.
7. Thus, Mr. Mehta, learned counsel for the appellant vehemently argued that his client has no other remedy in law except for filing the present appeal to assail the impugned order and to substantiate this submission, he has cited the following decisions:-
(i) Shah Babulal Khimji Vs. J.R. Kaniya, (1981) 4 SCC 8;
(ii) Pushpa Devi Bhagat vs. Rajinder Singh & Ors., (2006) 5 SCC 566;FAO (OS) 3/2019 Page 4 of 24
(iii) Jagwinder Singh Vs. Migender Pritam Vikarm Singh Stilar, (2013) 133 DRJ 1 FB; and
(iv) R. Rajanna Vs. S.R. Venkataswamy and Ors., 2014 (15) SCC 471.
8. Before dealing with the objection taken by learned counsel for the respondents to maintainability of the appeal, we may briefly advert to the relevant facts of the case.
9. The appellant and the two respondents are brothers, sons of late Brigadier H.C. Nagar and Mrs. Ida Nagar. Mrs. Ida Nagar was the exclusive owner of agricultural land situated in the revenue estate of village Gadaipur, Tehsil Mehrauli, New Delhi. Mrs. Ida Nagar expired on 17.2.2007 and in the same year, respondent No.1/plaintiff filed TEST CASE 14/2007, propounding a will dated 18.3.2000, stated to have been executed by his mother.
10. In the year 2000, respondent No.2 filed a suit for permanent and mandatory injunction (Suit No.2019/2007 entitled Ronald Nagar Vs. Dr. Hans Nagar & Anr.) alleging therein that his egress and ingress in premises No.C-6/7, Safdarjung Development Area, New Delhi was being hindered. A year later, respondent No.1/plaintiff instituted CS (OS) 666/2008 on the Original Side of this Court praying inter alia for permanent and mandatory injunction and for possession of the agricultural land situated in village Gadaipur, Tehsil Mehrauli, New Delhi. In the year 2009, respondent No.2 instituted a suit for cancellation of the Sale Deed dated 2.7.1999, in favour of the children of appellant/defendant No.1, registered as CS (OS) 1391/2009. The daughter of the appellant/defendant No.1 also jumped into FAO (OS) 3/2019 Page 5 of 24 the fray by filing TEST CASE No.15/2010 entitled Emmi Nagar Vs. State, setting up another will of Mrs. Ida Nagar.
11. While the parties were embroiled in all the aforesaid litigations, on 9.4.2011, the court referred them to mediation in CS(OS) 666/2008. However, the mediation did not end in a settlement. On 6.9.2011, the respondents put forth a MoU that had been prepared in the month of August, 2011, during the course of the mediation proceedings and all the parties agreed to the terms and conditions recorded in the said MoU that was finally executed on 15.9.2011. In the said MoU, the parties agreed to inter-se allocation of the agricultural land referred to hereinabove and other immoveable properties left behind by Mrs. Ida Nagar. One of the terms and conditions of the MoU as recorded in para 17 was that the appellant herein and the respondent No.1 would execute a separate MoU with regard to some of the properties that did not form a part of the MoU.
12. Thereafter, a joint application was moved by the parties under Order XXIII Rule 3 CPC (I.A. No.15688/2011) in TEST CASE 40/2007, setting out therein, the terms and conditions of the settlement and requesting the court to record their statements for binding them down to the terms and conditions of the MoU dated 15.9.2011. The statement of the parties was duly recorded before the court and by a Local Commissioner appointed by the court. On 12.4.2011, CS (OS) No. 666/2008 was finally decreed by the learned Single Judge in terms of the settlement recorded in the MoU dated 15.9.2011. However, the matter did not end here.
13. On 27.3.2012, the appellant filed I.A. 5906/2012 in the captioned suit praying inter alia that the respondents No.1 and 2 be directed to execute the FAO (OS) 3/2019 Page 6 of 24 requisite MoU, Relinquishment Deed and connected documents, as contemplated in the MoU dated 15.9.2011. In February, 2014, the appellant filed a another application in CS (OS) 666/2008, praying inter alia that all the cases pending between the parties before the Revenue Authorities be transferred to the court. The said application was dismissed with costs on 4.2.2015. Aggrieved by the aforesaid order, the appellant has filed an appeal [FAO(OS) 90/2015].
14. After five years reckoned from the date CS(OS) 666/2008 was decreed, on 12.04.2012, the appellant filed CS(OS) 185/2017 on the Original Side of this Court, praying inter alia for a decree of declaration, partition, permanent and mandatory injunction, cancellation of the MoU dated 15.9.2011 and for setting aside the judgment and decree dated 12.4.2012 passed in CS (OS) 666/2008. However, on 1.5.2017, the appellant withdrew the aforesaid suit on the ground of lack of territorial jurisdiction and on 24.4.2017, he instituted another suit for permanent and mandatory injunction, registered as CS (OS) 337/2017 praying inter alia that the respondents herein be called upon to discharge their obligations under the MoU dated 15.9.2011 and cooperate with him for the demarcation of "Nagar Estate" situated in Village Gadaipur, Mehrauli, New Delhi and execute all the necessary documents, as contemplated in the said MoU. It is matter of record that on 2.2.2018, the captioned suit was withdrawn by the appellant with liberty to file an application Order XXIII Rule 3A CPC or seek any other legal proceedings.
15. It was only thereafter that the appellant filed I.A. No.9472/2018 under Order XXIII Rule 3A, CPC in CS (OS) 666/2008, praying inter alia for FAO (OS) 3/2019 Page 7 of 24 setting aside the consent decree dated 12.4.2012, on the ground that the respondents had reneged from their obligations and undertakings recorded in the MoU dated 15.9.2011 and by their conduct, had demonstrated their intention not to be bound by the said MoU. By the impugned order dated 29.10.2018, the learned Single Judge has declined to invalidate the compromise decree and dismissed the application. Aggrieved thereby, the present appeal has been filed by the appellant, maintainability whereof has been questioned by learned counsel for the respondents.
16. Since we are only required to examine the aspect of maintainability of the appeal as filed by the appellant and not the merits thereof, we propose to refer to the following relevant provisions of law :-
Code of Civil Procedure, 1908 Section 96. Appeal from original decree--
(1) Save where otherwise expressly provided in the body of this Code or by any other law for the time being in force, an appeal shall lie from every decree passed by any Court exercising original jurisdiction to the Court authorized to hear appeals from the decisions of such Court.
(2) An appeal may lie from an original decree passed ex parte. (3) No appeal shall lie from a decree passed by the Court with the consent of parties.
(4) No appeal shall lie, except on a question of law, from a decree in any suit of the nature cognizable by Courts of Small Causes, when the amount or value of the subject-matter of the original suit does not exceed ten thousand rupees.
ORDER XXIII - Rule 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 satisfied the plaintiff in respect of the whole or any FAO (OS) 3/2019 Page 8 of 24 part of the subject-matter of the suit, the Court shall order such agreement, compromise satisfaction to be recorded, and shall pass a decree is 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.] [Explanation-An agreement or compromise which is void or voidable under the Indian Contract Act,1872 (9 of 1872), shall not be deemed to be lawful within the meaning of this 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 XLIII Rule 1A. Right to challenge non-appealable orders in appeal against decrees-
(1) Where any order is made under this Code against a party and thereupon any judgment is pronounced against such party and a decree is drawn up, such party may, in an appeal against the decree, contend that such order should not have been made and the judgment should not have been pronounced. (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.(emphasis added) Delhi High Court Act, 1966 Section 5 - Jurisdiction of High Court of Delhi-- (1) The High Court of Delhi shall have, in respect of the territories for the time being included in the Union territory of FAO (OS) 3/2019 Page 9 of 24 Delhi, all such original, appellate and other jurisdiction as, under the law in force immediately before the appointed day, is exercisable in respect of the territories by the High Court of Punjab.
(2) Notwithstanding anything contained in any law for the time being in force, the High Court of Delhi shall also have in respect of the said territories ordinary original civil jurisdiction in every suit the value of which exceeds rupees five crore.
Section 10 - Powers of Judge--
(1) Where a single Judge of the High Court of Delhi exercises ordinary original civil jurisdiction conferred by sub-Section (2) of Section 5 on that Court, an appeal shall lie from the judgment of the single Judge to a Division Court of that High Court.
(2) Subject to the provisions of sub-section (1), the law in force immediately before the appointed day relating to the powers of the Chief Justice, single Judges and Division Courts of the High Court of Punjab and with respect to all matters ancillary to the exercise of those powers shall, with the necessary modifications, apply in relation to the High Court of Delhi.
17. For the record, by Act 104 of 1976, Order XLIII Rule 1(m) CPC that originally provided for an appeal against an order passed under Order XXIII Rule 3 CPC, recording or refusing to record an agreement, compromise or satisfaction, was omitted w.e.f. 1.2.1977. Contemporaneously, a proviso was appended to Rule 3 of Order XXIII CPC w.e.f. 1.2.1977, that provided that in circumstances where one party alleges and other party denies that an adjustment or satisfaction had been arrived at between them, the said question would be decided by the court.
18. Post amendment of Order XXXIII CPC, the position that has arisen, has been succinctly summed up by the Supreme Court in para 17 of Pushpa FAO (OS) 3/2019 Page 10 of 24 Devi Bhagat (supra), and is extracted below :
"17. The position that emerges from the amended provisions of Order 23 can be summed up thus:
(i) No appeal is maintainable against a consent decree having regard to the specific bar contained in Section 96(3) CPC.
(ii) 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) of Rule 1 Order 43.
(iii) No independent 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 3-A.
(iv) 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 Order 23."
19. Thus, the Supreme Court concluded as above, that no appeal is maintainable against a consent decree in view of the specific bar imposed under Section 96(3), CPC and nor can an appeal lie against an order passed by the court, recording a compromise or refusing to record a compromise due to the deletion of clause (m) of Rule 1, Order XLIII CPC. Further, no independent suit can be instituted for setting aside a compromise decree in view of the embargo placed under Order XXIII Rule 3A CPC. The only remedy that is available to a party to avoid such a consent decree is to approach the very same court that had recorded the compromise and passed a decree and demonstrate before the said court that there was in fact, no valid compromise. The logic behind the said course of action was explained FAO (OS) 3/2019 Page 11 of 24 by the Supreme Court in Pushpa Devi Bhagat (supra) in the following words:-
"17. ...... 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. ......"
20. In Banwari Lal (supra), the appellant therein had approached the Supreme Court against an order passed by the High Court on a revision application filed by the respondent wherein it was held that the trial court was not empowered to entertain an application filed by the appellant seeking recall of the order recording a compromise between the parties. Taking note of the provisions of Order XXIII CPC and the amendment thereto whereby a proviso with an explanation was added, the Supreme Court made the following observations:-
"7. By adding the proviso along with an explanation the purpose and the object of the amending Act appears to be to compel the party challenging the compromise to question the same before the Court which had recorded the compromise in question. That Court was enjoined to decide the controversy whether the parties have arrived at an adjustment in a lawful manner. The explanation made it clear that an agreement or a compromise which is void or voidable under the Indian Contract Act shall not be deemed to be lawful within the meaning of the said Rule. Having introduced the proviso along with the explanation in Rule 3 in order to avoid multiplicity of suit and prolonged litigation, a specific bar was prescribed by Rule 3A in respect of institution of a separate suit for setting aside a decree on basis of a compromise saying :-
3A. Bar to suit - No suit shall lie to set aside a decree on FAO (OS) 3/2019 Page 12 of 24 the ground that the compromise on which the decree is based was not lawful.
8. Earlier under Order 43, Rule 1(m), an appeal was maintainable against an order under Rule 3 of Order 23 recording or refusing to record an agreement, compromise or satisfaction. But by the amending Act aforesaid that clause has been deleted; the result whereof is that now no appeal is maintainable against an order recording or refusing to record an agreement or compromise under Rule 3 of Order 23. Being conscious that the right of appeal against the order recording a compromise or refusing to record a compromise was being taken away, a new Rule 1A has been added to Order 43 which is as follows:-
1.A. Right to challenge non-appealable orders in appeal against decrees.-
(1) Where any order is made under this Code against a party and thereupon any judgment is pronounced against such party and a decree is drawn up, such party may, in an appeal against the decree, contend that such order should not have been made and the judgment should not have been pronounced.
(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.
9. Section 96(3) of the Code says that no appeal shall lie from a decree passed by the Court with the consent of the parties. Rule 1A(2) has been introduced saying that against a decree passed in a suit after recording a compromise, it shall be open to the appellant to contest the decree on the ground that the compromise should not have been recorded. When Section 96(3) bars an appeal against decree passed with the consent of parties, it implies that such decree is valid and binding on the parties unless set aside by the procedure prescribed or available to the parties. One such remedy available was by FAO (OS) 3/2019 Page 13 of 24 filing the appeal under Order 43, Rule 1(m). If the order recording the compromise was set aside, there was no necessity or occasion to file an appeal against the decree. Similarly a suit used to be filed for setting aside such decree on the ground that the decree is based on an invalid and illegal compromise not binding on the plaintiff of the second suit. 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 3A of Order 23. As such a right has been given under Rule 1A(2) of Order 43 to a party, who challenges the recording of the compromise, to question the validity thereof while prefering 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." (emphasis added)
21. Thus, the Supreme Court concluded that after amendment of Rule 3, Order XXIII, CPC by introduction of a proviso alongwith an explanation, a court that had entertained the petition for compromise, must be the court, which is required to examine as to whether the said compromise was void or voidable under the Indian Contract Act and therefore, a party challenging a compromise has an option to file a petition under the proviso to Rule 3 of Order XXIII CPC or prefer an appeal u/S 96(1) of the Code whereunder the validity of the compromise can be questioned in view of Rule 1A of Order XLIII of the Code.
22. The decision in Pushpa Devi Bhagat (supra) was reiterated in R. Rajanna (supra), where the question that came up for determination before the Supreme Court was as to whether the High Court was right in directing the appellant therein who was a party to a compromise recorded by the trial court, to seek redressal in a separate suit, in the light of the provisions of FAO (OS) 3/2019 Page 14 of 24 Order XXIII Rule 3 and Rule 3A, CPC. We may usefully refer to the observations made on the remedy available to a litigant against a compromise decree :-
"11. It is manifest from a plain reading of the above that in terms of the proviso to Order 23 Rule 3 where one party alleges and the other denies adjustment or satisfaction of any suit by a lawful agreement or compromise in writing and signed by the parties, the Court before whom such question is raised, shall decide the same. What is important is that in terms of Explanation to Order 23 Rule 3, the agreement or compromise shall not be deemed to be lawful within the meaning of the said Rule if the same is void or voidable under the Contract Act, 1872. It follows that in every case where the question arises whether or not there has been a lawful agreement or compromise in writing and signed by the parties, the question whether the agreement or compromise is lawful has to be determined by the court concerned. What is lawful will in turn depend upon whether the allegations suggest any infirmity in the compromise and the decree that would make the same void or voidable under the Contract Act. More importantly, Order 23 Rule 3-A clearly bars a suit to set aside a decree on the ground that the compromise on which the decree is based was not lawful. This implies that no sooner a question relating to lawfulness of the agreement or compromise is raised before the court that passed the decree on the basis of any such agreement or compromise, it is that court and that court alone who can examine and determine that question. The court cannot direct the parties to file a separate suit on the subject for no such suit will lie in view of the provisions of Order 23 Rule 3-A CPC."(emphasis added)
23. Thus, citing the decisions in Pushpa Devi Bhagat (supra) and Banwari Lal (supra), the Supreme Court concluded that the High Court in the said case had fallen into an error by permitting the plaintiff to seek FAO (OS) 3/2019 Page 15 of 24 recourse against a compromise decree by way of a separate suit, which clearly fell fowl of the provisions of Order XXIII Rule 3 and 3A of the Code. Resultantly, the order of the High Court was set aside and it was held that a party challenging a compromise, can only file a petition under the Proviso appended to Rule 3 of Order XXIII CPC, but no separate suit can be instituted to challenge the compromise decree.
24. Coming next to Shah Babulal Khimji (supra), in the said case, the Supreme Court had the occasion to extensively examine the question of maintainability of appeals from orders passed by a learned Single Judge, exercising ordinary original civil jurisdiction which are not appealable under Order XLIII Rule 1, CPC. After an exhaustive discussion on various provisions of the CPC, the Supreme Court laid down the following tests to assess the import and definition of the word 'judgment', as used in Clause 15 of the Letters Patent of the Bombay High Court and the corresponding clauses in the Letter Patent of other High Courts :-
"91. Analysing the observations of the learned Chief Justice it would appear that he has laid down the following tests in order to assess the import and definition of the word "judgment" as used in clause 15 of the Letters Patent:
(1) It is not the form of adjudication which is to be seen but its actual effect on the suit or proceeding;
(2) If, irrespective of the form of the suit or proceeding, the order impugned puts an end to the suit or proceeding it doubtless amounts to a judgment;
(3) Similarly, the effect of the order, if not complied with, is to terminate the proceedings, the said order would amount to a judgment;FAO (OS) 3/2019 Page 16 of 24
(4) Any order in an independent proceeding which is ancillary to the suit (not being a step towards judgment) but is designed to render the judgment effective can also be termed as judgment within the meaning of the letters patent.
So far as this test is concerned, the learned Chief Justice had in mind orders passed by the trial Judge granting or refusing ad interim injunction or appointing or refusing to appoint a receiver.
(5) An order may be a judgment even if it does not affect the merits of the suit or proceedings or does not determine any rights in question raised in the suit or proceedings.
(6) An adjudication based on a refusal to exercise discretion the effect of which is to dispose of the suit, so far as that particular adjudication is concerned, would certainly amount to a judgment within the meaning of the letters patent."
25. Going further, the Supreme Court examined in extenso, the connotation and the import of the word 'judgment' by referring to the provisions of Section 2 (2) and (9) of the CPC that define the words 'judgment' and 'decree'. It was observed that under the CPC, as a judgment consists of the reasons and grounds for the decree passed by a court, it follows that the said judgment must be treated as a formal adjudication, that conclusively determines the rights of the parties relating to all or any of the matters in controversy. Juxtaposing Clause 15 of the Letters Patent against Section 2(2) of the CPC, the Supreme Court held that while the word 'judgment' ought to receive a wider and liberal interpretation under the Letters Patent, when the same word is used in the CPC, three categories of FAO (OS) 3/2019 Page 17 of 24 decisions can be carved out namely, a final judgment, a preliminary judgment and an intermediary or interlocutory judgment. It was however clarified that not every interlocutory order can be regarded as a judgment and only those orders would be treated as judgments which "decide matters of moment or affect vital and valuable rights of the parties and which work serious injustice to the party concerned." Such an order though interlocutory in nature, would encompass the attributes and characteristics of finality and ought to be treated as a judgment within the meaning of Letters Patent.
26. Citing several illustrations of what would amount to an interlocutory order that could be treated as a judgment within the Letters Patent, the Supreme Court concluded in para 119 of the captioned judgment that certain considerations must prevail with the court as guidelines to determine whether an order passed by the trial Judge is a judgment within the meaning of the Letters Patent, or not. One of the tests laid down and relied upon by learned counsel for the appellant in the instant case, is as follows :
"119. Apart from the tests laid down by Sir White, C.J., the following considerations must prevail with the court:
(1) xxx (2) That the interlocutory order in order to be a judgment must contain the traits and trappings of finality either when the order decides the questions in controversy in an ancillary proceeding or in the suit itself or in a part of the proceedings. (3) xxx" (emphasis added) FAO (OS) 3/2019 Page 18 of 24
27. In view of the fact that the present appeal has been filed by the appellant by invoking Section 10 of the Delhi High Court Act, 1966, it is necessary to refer to the decision of a Full Bench of this Court in Jaswinder Singh (supra) where the question referred for a decision was framed in the following words :-
"1. The interplay of the jurisdictions to be exercised under Letters Patent and as the First Appellate Court while dealing with non-appealable orders passed by the learned Single Judge in exercise of ordinary original civil jurisdiction has given rise to the present reference. The question, thus, which arises for consideration is:
"If an order is passed by the learned single Judge in exercise of Ordinary Original Civil Jurisdiction which is not appealable under Section 104(1) read with Order 43(1) of the Code of Civil Procedure, 1908 (hereinafter referred to as the „said Code‟) whether the remedy would be under Section 10(1) of the Delhi High Court Act, 1966 (hereinafter referred to as the „said Act) or under Clause 10 of the Letters Patent?" (emphasis added)
28. On examining the provisions of Sections 5 and 10 of the Delhi High Court Act, the Full Court observed thus:-
"7. The effect of the aforesaid provisions in a nutshell, thus, is that the appellate jurisdiction is conferred on the Division Bench qua appealable orders in view of provisions of Section 5(2) read with Section 10(1) of the said Act. The question, thus, would be whether even non-appealable orders under the said Code can be appealed against if they satisfy certain tests which have been set out hereinafter and whether such an appeal would lie under sub-section (1) of Section 10 of the said Act." (emphasis added) FAO (OS) 3/2019 Page 19 of 24
29. The Full Bench answered the question on the maintainability of appeals from orders passed by a learned Single Judge exercising ordinary original civil jurisdiction that was not appealable under Order XLIII Rule 1 of the CPC, by citing the decision of the Supreme Court in Shah Babulal Khimji (supra), and observed as below:-
"28. The question as to the maintainability of appeals from orders passed by a learned Judge exercising ordinary original civil jurisdiction which are not appealable under Order 43 Rule 1 of the said Code has been examined by the Supreme Court in Shah Babulal Khimji v. Javaben D. Kania, (1981) 4 SCC 8. An appeal was held to be maintainable if the order was within the meaning of judgement. If the order purports to decide valuable rights of parties and what are called the orders of the moment, an appeal was held to be maintainable if it is not categorized in the nature of an order which is appealable under Order 43 Rule 1 of the said Code. The expression judgement, has been held to be capable of taking three different characters. It may be a final judgement, it may be a preliminary judgement or it may be an intermediary or interlocutory judgement. The third category are cases which possess characteristics and trappings of finality and may have direct and immediate effect rather than an indirect or remote one. It is against such orders also that an appeal has been held to be maintainable while discussing the scope of clause 15 of the Letters Patent of the Chartered High Courts as the case emanated from the Bombay High Court. As noticed aforesaid that clause 10 of the Letters Patent of Lahore as applicable to Delhi is distinct on view of the absence of any ordinary original civil jurisdiction in the High Court Judicature at Lahore, not being a Presidency town."
(emphasis added) FAO (OS) 3/2019 Page 20 of 24
30. On a detailed analysis of the distinction between Letters Patent of the chartered High Courts and the non-chartered High Courts, the Full Bench opined that the principles enunciated in Shah Babulal Khimji (supra) as to what would constitute as an appealable judgment/order, would apply with equal force to Section 10 of the Delhi High Court Act and if an order which is not appealable under the CPC, but otherwise satisfies the test laid down in the captioned case, the remedy of an appeal to the Division Bench, would be available. For ready reference, the principle of law laid down in Jaswinder Singh (supra) is extracted below:-
"39. We, thus, conclude by laying down the following principle of law:
In case of an order passed by the learned Single Judge in exercise of ordinary original civil jurisdiction in case of a non-appealable order under Section 104 read with Order 43 of the said Code which meets the test of a "judgement" that decides matters of moment or affects vital and valuable rights of parties and which works serious injustice to the parties concerned as per the parameters laid down in Shah Babulal Khimji case (supra) by the Supreme Court, an appeal to the Division Bench would exclusively lie under Section 10 of the said Act and not under Clause 10 of the Letters Patent."
(emphasis added)
31. For this Court to consider as to whether the appeal preferred by the appellant under Section 10 of the Act against the order dated 29.10.2018, it would be necessary for us to examine as to whether the impugned order passed by the learned Single Judge in exercise of ordinary original civil jurisdiction, which is admittedly not appealable under Section 104 (1) read with Order XLIII Rule 1 of the Code, would still be appealable under Section 10 of the Act.
FAO (OS) 3/2019 Page 21 of 2432. We may note that the appellant had unsuccessfully tried to institute an independent suit to challenge the compromise decree, but had withdrawn the same with liberty to seek appropriate recourse in law. Thereafter, he filed an application for setting aside the compromise decree dated 12.4.2012, that was moved under Section 94 read with Order XXIII Rule 3A of the CPC. However, Order XXIII Rule 3A CPC places an embargo on a party for instituting a suit to set aside a decree on the ground that a compromise on which the said decree is based, was unlawful. It does not provide for the relief as was sought by the appellant. In the light of the pleas taken in the application, the correct course of action for the appellant was to have invoked the Proviso and the Explanation appended to Rule 3, Order XXIII of the Code. It is a different matter that the learned Single Judge did not go by the title of the application, but considered the substantive relief sought by the appellant.
33. Rule 1A, Order XLIII CPC gives a right to a party to challenge non- appealable orders by filing an appeal against a decree passed in a suit after recording a compromise or refusing to record a compromise and entitles the appellant to contest the decree on the ground that the compromise should or should not have been recorded. The respondents have contentended that having exhausted the provisions of Order XXIII Rule 3 CPC and being dissatisfied with the order dated 29.10.2018, the appellant could have invoked the provisions of Order XLIII Rule 1A (2) of the Code. However, learned counsel for the appellant has argued that it is not the appellant's case that the compromise had been wrongly recorded or that the court had declined to record the compromise while passing the consent decree dated FAO (OS) 3/2019 Page 22 of 24 12.4.2012, as contemplated in the said provision. The appellant states that he had no grievance against the consent decree passed in the suit on 12.4.2012 and he was more willing to abide by the terms of the compromise, as recorded in the MoU dated 15.9.2011, but due to the subsequent events and the resistance faced by him due to the non-cooperative conduct of the respondents, in failing to discharge their obligations under the MoU, the appellant had no option but to file the application and on its dismissal by the learned Single Judge, the present appeal.
34. We are of the opinion that in the light of the decision of the Full Bench of the Delhi High Court in Jaswinder Singh (supra), which has taken into consideration the judgment of the Supreme Court in Shah Babulal Khimji (supra), notwithstanding the provisions of Order XLIII Rule 1A(2) of the Code, the appellant would still be entitled to invoke Section 10 of the Delhi High Court Act, 1966 for preferring an intra court appeal against the order dated 29.10.2018 passed by the learned Sing Judge, in exercise of ordinary original civil jurisdiction premised on a plea that the said order, though interlocutory in nature, has all the trappings of finality and is therefore, appealable.
35. We are not persuaded by the submission made by learned counsel for the respondents that the application moved by the appellant was akin to a review application and just as on passing of an order refusing a review, no appeal is maintainable, similarly, no appeal lies against the impugned order dismissing the appellant's application for setting aside the compromise decree. Reliance placed on a decision of a Division Bench of this Court in Mool Chand Sharma (supra), cannot be of any assistance to the respondents FAO (OS) 3/2019 Page 23 of 24 as the fact situation therein was entirely different. In the said case, the appellant had filed a Letters Patent Appeal against an order passed by the learned Single Judge, allowing a writ petition filed by the respondent. The said appeal was withdrawn by the appellant with liberty to file a review application before the learned Single Judge. When the appellant filed the review application, the same was dismissed with certain directions issued to the appellant. Aggrieved by the said directions, the appellant preferred another appeal. An objection to the maintainability thereof was taken by the respondent on the ground that once the first appeal had been withdrawn by the appellant without seeking any liberty to file a fresh appeal, a second appeal questioning the same order, was not maintainable. It was in the aforesaid context that the Division Bench had opined that the second appeal filed by the appellant was not maintainable once it had withdrawn the first appeal and preferred to file a review application.
36. As a result of the aforesaid discussion, the objection raised by the respondents to the maintainability of the present appeal, is turned down and the appeal is held to be maintainable. We may hasten to clarify here that the present order is confined to the maintainability of the appeal alone and this Court has refrained from making any observations on the merits of the appeal, which shall have to be examined and decided after arguments are advanced by both sides.
HIMA KOHLI, J, ASHA MENON, J JUNE 12, 2020/NA/sk/rkb FAO (OS) 3/2019 Page 24 of 24