Delhi High Court
Manmohan Singh Dhaliwal vs Gurbax Singh Arora And Ors. on 2 November, 2001
Equivalent citations: 94(2001)DLT820, 2002(61)DRJ801, 2002 A I H C 275, (2001) 94 DLT 820, (2002) 61 DRJ 801, (2002) 3 CIVLJ 2, (2002) 1 RECCIVR 320
Author: J.D. Kapoor
Bench: J.D. Kapoor
JUDGMENT J.D. Kapoor, J.
1. Through IA No. 4726/2000 moved under Section 151 of the Code of Civil Procedure, the applicant/plaintiff has sought recall or setting aside of the order dated 18th April, 2000 whereby the suit filed by him was purportedly withdrawn in terms of the application under Order 23 Rule 3 CPC moved by t he attorney of the applicant and the respondents jointly.
2. Order 23 Rule 3 CPC is invoked where the parties settle their disputes by themselves. There are certain legal and factual aspects the Court is required to satisfy itself while dealing with the suit under Order 23 Rule 3 CPC. These are-
(i) That the suit has been adjusted wholly or in part by any lawful agreement or compromise and signed by the parties.
(ii) That such an agreement or settlement has been recorded to the satisfaction of the Court irrespective of the fact whether or not the subject matter of the agreement, compromise or satisfaction is the same as the subject matter of the suit.
3. Any agreement or compromise which is void or voidable under Section 23 of the Indian Contract Act, 1872 is not deemed to be lawful the meaning of this Rule.
4. Order under recall reads thus:-
"18.4.2000 Present: Mr. N.S. Varma counsel for the plaintiff.
Mr. G.L.Rawal with Mr. Kuljit Rawal counsel for defendants 1 and 2.
IA 3124/2000 and Section 1584/99 This is an application under Order XXIII Rule 3 duly singed by the plaintiff and by defendant No. 2. The application has been duly supported by an affidavit of Mr. K.C. Bhatia, who is present in Court and is stated to be General Power of Attorney holder of the plaintiff. The original General Power of Attorney has been seen and returned.
I have perused the terms of the compromise and am satisfied that they are legal. In terms of Para 5 of the compromise application a Bank Draft No. 287212 dated 7.3.2000 drawn on State Bank of India, Naraina Branch for a sum of Rs. 9.5 lakhs has been haded over to the attorney of the plaintiff.
The application is allowed and as prayed therein, the suit is dismissed as withdrawn leaving the parties to bear their respective costs.
5. Perusal of order shows that the application was represented to have been signed by the plaintiff whereas the presence of the plaintiff was not recorded and rightly so as the plaintiff was not present being abroad.
6. Admittedly the application was neither signed by the plaintiff/applicant nor was it presented by the plaintiff though impression was given that the same had been signed by the plaintiff. In actuality the attorney had signed at the place where plaintiff was mentioned. It was the attorney Mr. K.C. Bhatia who presented the application. The original power of attorney was also seen by the Court and returned. Order further says that the bank draft was in the name of the plaintiff but was handed over to the attorney of the plaintiff.
7. Mr. H.S. Phoolka, learned senior counsel has assailed the order on two fold grounds. Firstly that under the power of attorney dated 16th march, 1999 the attorney Mr. K.C. Bhatia was not conferred with the power to either enter into any negotiations with the defendants or to withdraw the suit. Moreover suit under Order 23 Rule 3 CPC is always decreed or decided in terms of the settlement whereas Order 23 Rule 1 CPC is invoked if the dismissal of the suit by way of withdrawal is sought. Secondly by executing the compromise application and misrepresenting that the application purports to bear the signatures of the plaintiff, the attorney and defendants have played fraud upon the Court.
8. However, attorney Mr. K.C.Bhatia has defended his action by imploring his long association with the plaintiff/applicant as according to him it was not for the first time that he was appointed as attorney in the case. He also got the plot of the applicant constructed by obtaining the necessary permission from the DDA when it was going to be cancelled on account of non-payment. When the construction was going on, the plaintiff/applicant also stayed with him and executed a power of attorney in his favor on 2nd June, 1996 for the purpose of letting out the premises. Not only he had signed lease deed on behalf of the plaintiff/applicant but also got the NRI bank account opened and so much so he had been even operating the said account on behalf of the plaintiff/applicant.
9. In order to show that the applicant had unflinching confidence in him, Mr. K.C. Bhatia's counsel contended that Mr. K.L. Bhatia, father-in-law of the plaintiff's son was also residing in USA and when he came to India in the year 1988 he took the possession of the suit property from the tenant as a representative of the plaintiff/applicant. Since the plaintiff/applicant was not satisfied with the conduct of Mr. K.L.Bhatia, he appointed Mr. K.C.Bhatia (defendant No.3) as attorney by way of power of attorney dated 16th March, 1999 and filed the instant suit through him.
10. While responding to the allegations that he had colluded with defendants 1 & 2 for an act which he was not authorised to do, Mr. Bhatia pleaded that he was not only authorised to enter into the compromise with defendants 1 & 2 but this was done after due discussions and permission from the applicant who was in India when the talks for settlement and negotiations were going on. So much so the amount received from defendants 1 & 2 by him was deposited in the account of the applicant.
11. Obviously defendants 1 & 2 have supported Mr. Bhatia that the talks for settlement took place in the presence of the applicant as well as Mr. Bhatia and, therefore, the question of playing fraud upon the Court does not arise. It is admitted fact that after the deposit of Rs. 9.5 lacs by the attorney in the account of the applicant, the account was never operated by the applicant. May be it was either the applicant might have disputed having received the amount or disputed having allowed the attorney to enter into the compromise and deposit the amount in his account.
12. Advocating the cause of the attorney, Mr. G.L. Rawal, learned counsel for defendants 1 & 2 contended that the power of attorney specifically mentioned and authorised Mr. K.C.Bhatia to 'prosecute' the suit and whenever an attorney is authorised to prosecute the suit this includes the power to compromise or to effect the ultimate conclusion of the suit. According to Mr. Rawal unless and until the attorney is prohibited from a particular action, the power to prosecute the proceedings encompasses every kind of action depending upon the nature of the suit. In this context learned counsel has relied upon the dictionary meaning of the word 'prosecute'. Black's Law Dictionary defines it as under:-
"Prosecute. To follow up; to carry on an action or other judicial proceeding; to proceed against a person criminally. To "prosecute" an action is not merely to commence it, but includes following it to an ultimate conclusion."
13. The interpretation of the word 'prosecute' provides by the learned counsel for the defendants that the power to prosecute includes the power to withdraw or effect a compromise is entirely misconceived and miscomprehended. The power conferred upon the attorney to 'prosecute' the suit or proceedings is to pursue it and not to withdraw or compromise it unless specific power to withdraw or compromise the suit has been bestowed upon the attorney. To say that the power to prosecute includes the power to effect the ultimate conclusion of the suit by way of compromise or withdrawal is erroneous and highly untenable as such a power is special power can be exercised by the attorney only when he is authorised to do so.
14. Black's Law Dictionary itself shows that the meaning of the word 'prosecute' is to follow up an action or other judicial proceedings which includes ultimate conclusion. By no stretch of imagination the withdrawal or compromise of the suit without legal authority amounts to bringing the suit to ultimate conclusion. In ordinary sense, the terms "ultimate conclusion" connotes getting the suit decreed by making honest and bonafide efforts to prove the claim in the suit. If the suit is to be disposed of by way of compromise, it may loosely be termed as "ultimate conclusion" but for such a conclusion of the suit, specific authority has to be given to the attorney. Even otherwise in the power of attorney the words 'prosecute the suit' don't figure. There is only reference in the plaint.
15. The attorney has only those powers which are specified in the power of attorney and mere reference in the plaint that he is also authorised to prosecute the plaint does not mean that he is vested with the power to withdraw the suit or settle it buy way of compromise.
16. On testing the power of Mr. Bhatia on the anvil of aforesaid legal principles, I find that Mr. K.C.Batia did not possess the power as an attorney to withdraw the suit either by way of settlement or otherwise. Thus not only the application under Order 23 Rule 3 but also withdrawal of the suit was without any authority of the plaintiff.
17. The stand of Mr. Rawal that the allegation of fraud is solely based upon the wrong premise that the application has been signed by the plaintiff himself and not the attorney as the application is supported by the affidavit wherein Mr. K.C. Bhatia has clarified the entire position appears to be most feeble attempt to justify the fruad played upon the Court. So are the contentions that the Court while disposing off the application took into consideration the affidavit and even perused the original power of attorney to find out the capability of the attorney Mr. K.C.Bhatia to enter into the compromise and further Mr. K.C.Bhatia's statement was recorded as he represented the plaintiff and that the observation that application has been signed by the plaintiff cannot be read in isolation and de hors the affidavit and the order passed by the Court.
18. There is a distinction between the power to enter into compromise and power to filing of the compromise. Had the compromise application been signed by the applicant himself, the power to prosecute might have impliedly included the power to filing of the compromise in the suit. Even on the compromise application the signatures of the attorney appear over t he word 'plaintiff'. The Court also worked under the belief that the application has been signed by the plaintiff and recorded so. Attorney may file the compromise in order to pursue the litigation but this act is not synonymous to the power to enter into compromise. Power to enter into compromise is distinct power and has to be specifically conferred upon. Clauses 7 & 10 of the power of attorney are the relevant clauses. These are:-
"7. To evict and take necessary 'legal action and to pursue the same against the present unauthorised occupants Shri Gurbux Singha and his family members against whom I have lodged complaint with the concerned authorities and to the police and to deal with him and his family members in any manner as he deems fit and proper at his own will and sole discretion.
10. To execute, sign and present all kinds of suits, writs, complaints, petitions revisions, written statements, appeals, applications, affidavits etc. in law courts i.e. Civil, Criminal or Revenue and/or tribunal and to proceed in all proceedings before arbitration or any other authority in my name and on my behalf in any matter concerning my said plot of land, and erection which has been raised thereon, of any matter incidental thereto.
19. As is apparent these clauses gave the power to pursue the suit. Pursue means to continue or proceed along a course of action and not to withdraw.
20. Power of attorney is always to be interpreted strictly in its terms. There is no scope for searching meanings or intentions. Nor is it permissible to stretch or provide elasticity to the meaning of the words such as "prosecute", "pursue", "proceed', "execute", "sign" etc. Mere execution of power of attorney does not mean that the attorney has been conferred with power to do all such acts which the executor of the attorney possesses. Unless and until a specific power has been conferred upon the attorney, attorney is not free to arrogate the powers of "dominus".
21. As to the allegations of misrepresentation and fraud played upon the Court, Mr. Rawal contended that the allegations of the plaintiff/applicant are of such nature which cannot be settled in a summary manner and have to be ascertained through investigation i.e. by way of evidence. In Mr. Rawal's opinion where there are allegations of fraud played upon the court, these have to be necessarily investigated upon and not dealt with summarily. Mr. Rawal referred to the admission by the applicant that he was in India when talks for settlement were going on. It is pertinent to mention that applicant only admitted his presence in India whereas he has denied the taking place of talks of settlement.
22. I am afraid the above theory propounded by Mr. Rawal is ill founded and distinguishable. This rule may be applicable where the fraud is played upon the party and redressal is sought by way of suit and not where fraud is perpetrated upon the Court. There is difference of mist and mast between fraud upon a party and fraud upon the Court. If fraud is upon the Court, the Court may deal it summarily and can recall its order under Section 151 CPC by virtue of inherent powers.
23. In the instant case the applicant has not pleaded that his consent was obtained by way of fraud or coercion. He has pleaded a fraud played upon the Court by misrepresenting that the compromise application has been signed by the applicant and settlement was effected with the consent of the applicant. Had the impression not been given to the Court that the compromise application was signed by the applicant the Court was bound to scan the power of attorney to satisfy itself whether the attorney has been vested with power to enter into the compromise of the nature one in question.
24. The conspectus of following facts manifestly show that the fraud played upon the Court is writ large on the face of the impugned order:
(i) The suit came up for hearing on 26.7.1999 wherein interim injunction as passed and Local Commissioner for visiting the suit property was appointed.
(ii) On 8.10.1999 the defendants appeared and sought time for file the written statement. On 13.3.2000 the defendants again sought the time. Adjournment was granted subject to cost of Rs. 5,000/-. Case was adjourned for 11.7.2001.
(iii) Though the application under Order 23 Rule 3 CPC was signed on 10th April but was filed on 18th April when the case was taken up on mentioning though the actual date fixed was 11th July, 2000. Feverish hurry has remained unexplained.
(iv) Suddenly a new counsel was engaged in order to keep the earlier counsel in dark about the compromise and this bares the designs and the intention of the attorney and the defendants 1 & 2.
(v) The signatures of the attorney appear at the place meant for the signatures of the plaintiff and at first glance it gives the impression as if plaintiff has signed the application and that is why the Court observed that the application has been signed by the plaintiff whereas it was actually signed by the attorney.
(vi) Merely because the application was supported by an affidavit of the attorney does not mean that attorney was conferred the power to compromise the matter nor does this affidavit disclose that the application for compromise has been duly signed by the plaintiff/applicant.
(vii) There was no specific conferred upon the attorney to enter into the compromise. In such cases where the immovable property is to be sold, vesting of such power in the attorney becomes more essential. In absence of such a power, the attorney is precluded from compromising the suit. Thus the application under Order 23 Rule 3 CPC as well as the withdrawal of the suit was without any authority from the plaintiff.
25. The Supreme Court has very lucidly and philosophically dealt with the effect and remedy of the fraud practiced upon the Court and its inherent powers to recall its order/judgment in Indian Banks v. Satyam Fibres (India) Pvt. Ltd., . In the words of Supreme Court fraud and justice never dwell together and fraud and deceit defend or excuse no man. As to the power of the Court to recall or set aside such an order, the Supreme Court has held thus:-
"22. The judiciary in India also possesses inherent power, specially under Section 151 CPC, to recall its judgment or order if it is obtained by Fraud on Court. In the case of fraud on a party to the suit or proceedings, the Court may direct the affected party to file a separate suit for setting aside the Decree obtained by fraud. Inherent power are powers which are resident in all courts, especially of superior jurisdiction. These powers spring not from legislation but from the nature and the constitution of the Tribunals of Courts themselves so as to enable them to maintain their dignity, secure obedience to its process and rules, protect its officers from indignity and wrong and to punish unseemly behavior. This power is necessary for the orderly administration of the Court's business.
23. Since fraud affects the solemnity, regularity and orderliness of the proceedings of the Court and also amounts to an abuse of the process of Court, the Courts have been held to have inherent power to set aside an order obtained by fraud practiced upon that Court. Similarly, where the Court is misled by a party or the Court itself commits a mistake which prejudices party, the Court has the inherent power to recall its order."
26. Thus the Court has inherent powers under Section 151 CPC to recall its judgment or order if it is obtained by playing fraud upon it as it cannot remain a silent or helpless spectator. Main function of the court is to administer justice. Judgment or order procured by playing fraud upon the Court cannot be rammed down the throat of the aggrieved party. Justice and fraud are aliens to each other. Fraud pollutes the sanctity and solemnity of the judicial proceedings. This is why Courts have inherent power to recall or set aside such a judgment or the order.
27. Foregoing reasons persuade me to set aside the impugned order and restore the suit to this original position. Ordered accordingly. Application is allowed.