Bombay High Court
Siddesh Suresh Chawan vs Suresh Chawan And 5 Ors on 27 July, 2022
Author: B. P. Colabawalla
Bench: B. P. Colabawalla
19-IA(L)-23040-2022.docx
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INTERIM APPLICATION (L) NO. 23040 OF 2022
IN
ADMINISTRATION SUIT NO. 55 OF 2022
Siddhesh Suresh Chawan .. Applicant/Plaintiff
IN THE MATTER BETWEEN:
Siddhesh Suresh Chawan .. Plaintiff
Vs.
Suresh Chawan & Ors. .. Defendants
Cherag Balsara a/w. Agnel Carmeorp & Vaibhav Shah i/b. Mulla & Mulla & CBC
for the Applicant/Plaintiff.
Girish Utangale a/w. Shahzad M. Pandey & Saurabh Utangale i/b. Utangale &
Co. for Defendant Nos. 1 to 4.
Shanay Shah a/w. Rajesh Maravoor i/b. Maravoor Wamorkar & Co. for
Defendant No.5.
Yogesh Patil a/w. Meghna Vijan i/b. Bali Associates for Defendant No.6.
CORAM:- B. P. COLABAWALLA,J.
DATE :- 27th JULY, 2022.
P. C.:
1. The above Suit is filed inter alia seeking the administration Ganesh Lokhande page 1 of 16 19-IA(L)-23040-2022.docx of the estate of the deceased grandfather and grandmother of the Applicant/Plaintiff, the Late Mr. Gopal Maruti Chawan and the Late Mrs. Anusaya Gopal Chawan (collectively referred to as "the deceased").
The Applicant herein is the grand child of the deceased. The above Interim Application is filed seeking an amendment of the plaint as well as in Interim Application No.1013 of 2022, in terms of Schedule - A and Schedule - B annexed to the present Interim Application. The amendments sought are reproduced hereunder:
"SCHEDULE A AMENDMENT TO THE PLAINT The below mentioned prayer may be added in Paragraph 34 After Prayer Clause (a) (a1) For the reasons set out in Paragraph 16 of the Plaint, this Hon'ble Court may be please to declare that the Consent Terms dated 15.07.2021 filed in the said Suit No. 684 of 2014 and Testamentary Suit No. 160 of 2014 are fraudulent, illegal and non-est and the same may kindly be set-aside.
The below mentioned prayer may be added in Paragraph 34 After Prayer Clause (k) (k1) Pending the hearing and Final disposal of the present Suit, this Hon'ble Court may be please to stay the effect and implementation of the Consent Terms dated 15.07.2021 filed in the said Suit No. 684 of 2014 and Testamentary Suit No.160 of 2014;"
Ganesh Lokhande page 2 of 16 19-IA(L)-23040-2022.docx "SCHEDULE AMENDMENT TO THE INTERIM APPLICATION The below mentioned prayer may be added in Paragraph 13 of the Interim Application After Prayer Clause a) a1) Pending the hearing and Final disposal of the present Suit, this Hon'ble Court may be please to stay the effect and implementation of the Consent Terms dated 15.07.2021 filed in Testamentary Suit No. 684 of 2014 and Suit No. 160 of 2014;
The below mentioned prayer may be added in Paragraph 13 of the Interim Application After Prayer Clause g) g1) Ad-interim Relief in terms of Prayer Clause (a1) be granted"
2. In effect, by the above amendments, in the present Suit, the Applicant/Plaintiff now seeks to challenge the Consent Terms dated 15th July 2021 filed in Suit No. 684 of 2014 and Testamentary Suit No. 160 of 2014. I must mention that the Applicant/Plaintiff is not a signatory to these Consent Terms.
3. Mr. Utangale, the learned advocate appearing on behalf of Defendant Nos. 1 to 4, and Mr. Shah, the learned advocate appearing on behalf of Defendant No.5, vehemently opposed the aforesaid amendments. Both counsels submitted that by the aforesaid amendments, the Plaintiff now seeks a declaration that the Consent Terms dated 15th July 2021 filed in Suit No. 684 of 2014 and Ganesh Lokhande page 3 of 16 19-IA(L)-23040-2022.docx Testamentary Suit No. 160 of 2014 are fraudulent, illegal and non-est and the same ought to be set aside. Mr. Shah as well as Mr. Utangale submitted that this relief can never be granted because there is an express bar under the provisions of Order XXIII Rule 3-A of the Code of Civil Procedure, 1908 [for short the "CPC"]. Both counsels brought the aforesaid provision to my attention and contended that Order XXIII Rule 3-A clearly stipulates that no Suit shall lie to set aside the decree on the ground that the compromise on which the decree is based was not lawful. They, therefore, contended that in view of this express bar, there is no question of allowing the present amendment. To substantiate this argument, Mr. Shah relied upon a decision of the Supreme Court in the case of Triloki Nath Singh V/s. Anirudh Singh (Dead) through legal representatives and others [(2020) 6 SCC 629]. Relying upon this decision, Mr. Shah submitted that even a complete stranger to the compromise decree has to challenge the same, if he so desires, by going before the very Court that passed the decree and not by a separate substantive Suit. In these circumstances, he submitted that the present Interim Application seeking an amendment to challenge the compromise decree dated 15th July 2021 be dismissed with costs.
4. On the other hand, Mr. Balsara, the learned counsel appearing on behalf of the Applicant/Plaintiff, submitted that the Ganesh Lokhande page 4 of 16 19-IA(L)-23040-2022.docx decision of the Supreme Court relied upon by Mr. Shah is distinguishable on facts and would not apply to the present case. Mr. Balsara submitted that when one goes through the facts in the case before the Supreme Court, it is clear that the party that sought to challenge the compromise decree, was a person claiming through a party to the said compromise. It was in these facts that the Supreme Court came to the conclusion that the Appellant [before the Supreme Court], could not file a substantive Suit to challenge the compromise decree and would have had to take out proceedings in the very Suit in which the decree was passed. Mr. Balsara submitted that the facts of the present case are completely different. He submitted that in the facts of the present case, the Plaintiff is not claiming through any party, who was a party to the compromise dated 15th July 2021. The Plaintiff in the present Suit is claiming rights independently and not through any party who was a party to the compromise. Mr. Balsara submitted that this distinction, though being small, is significant, if one was to apply the law laid down by the Supreme Court. He submitted that if his submission is correct then clearly his case is covered by a decision of the learned Single Judge of this Court in the case of Ramkrishna Shridhar Choube and others vs. Court Receiver and Others [2011 (2) Mh.L.J. 473]. He submitted that this decision has clearly laid down that Order XXIII Rule 3-A would not be applicable to a person who was not a party to the compromise. He, therefore, Ganesh Lokhande page 5 of 16 19-IA(L)-23040-2022.docx submitted that there was no merit in the contentions raised by Defendant Nos. 1 to 5 in opposition to the above Interim Application. Consequently, he submitted that the amendments be allowed, and the above Interim Application be disposed of accordingly.
5. I have heard the learned counsels for the parties at length and I have perused the papers and proceedings in the above Interim Application as well as in the above Suit. Order XXIII Rule 3 of the CPC deals with compromise of the Suit. Rule 3 stipulates that where it is proved to the satisfaction of the Court that the Suit has been adjusted wholly or in part by any lawful agreement or compromise, in writing and signed by the parties, or where the Defendant satisfies the Plaintiff in respect of the whole or any part of the subject matter of the Suit, the Court shall order such agreement, compromise or satisfaction to be recorded, and shall pass a decree in accordance therewith so far as it relates to the parties to the Suit, whether or not the subject matter of the agreement, compromise or satisfaction is the same as the subject matter of the Suit. The proviso to Rule 3 stipulates 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. There is an Ganesh Lokhande page 6 of 16 19-IA(L)-23040-2022.docx explanation also to Rule 3 of Order XXIII which states that an agreement or compromise which is void or voidable under the Indian Contract Act 1872, shall not be deemed to be lawful within the meaning of Rule 3.
6. Thereafter, comes Rule 3-A of Order XXIII. Rule 3-A clearly stipulates that no Suit shall lie to set aside the decree on the ground that the compromise on which the decree is based was not lawful. The provisions of Order XXIII Rule 3 as well as Rule 3-A came up for consideration before the Hon'ble Supreme Court in the case of Triloki Nath Singh (Supra). The question framed by the Supreme Court in the very first paragraph of the Judgment was whether a decree passed on a compromise can be challenged by a stranger to the proceedings, in a separate Suit. The Supreme Court, thereafter, went on to examine the law and inter-alia held that after the amendment of 1976 (to the CPC) neither any 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 of the CPC. The relevant portion of this decision reads thus:
"Ajay Rastogi, J.-- The question arises in the appeal for our consideration is as to whether the decree passed on a compromise can be challenged by a stranger to the proceedings in a separate suit.
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13. The precise question that falls for our determination is as to whether the suit filed by the appellant-plaintiff in seeking a declaration against the decree of compromise dated 15-9-1994 Ganesh Lokhande page 7 of 16 19-IA(L)-23040-2022.docx passed by the High Court of Patna in second appeal was maintainable in view of the provisions of Order 23 Rule 3 and Rule 3- A CPC.
14. Order 23 Rule 3 and Rule 3-A CPC may at this stage be extracted for ready reference:
"3. Compromise of suit.--Where it is proved to the satisfaction of the Court that a suit has been adjusted wholly or in part by any lawful agreement or compromise in writing and signed by the parties, or where the defendant satisfies the plaintiff in respect of the whole or any part of the subject-matter of the suit, the Court shall order such agreement, compromise or satisfaction to be recorded, and shall pass a decree in accordance therewith so far as it relates to the parties to the suit, whether or not the subject-matter of the agreement, compromise or satisfaction is the same as the subject-matter of the suit:
Provided that where it is alleged by one party and denied by the other that an adjustment or satisfaction has been arrived at, the Court shall decide the question; but no adjournment shall be granted for the purpose of deciding the question, unless the Court, for reasons to be recorded, thinks fit to grant such adjournment.
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.
3-A. 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."
15. What has emerged as a legislative intent has been considered in extenso by this Court in Pushpa Devi Bhagat v. Rajinder Singh [Pushpa Devi Bhagat v. Rajinder Singh, (2006) 5 SCC 566] , after taking note of the scheme of Order 23 Rule 3 and Rule 3-A added with effect from 1-2-1977. The relevant paragraphs are as under : (SCC p. 576, para
17) Ganesh Lokhande page 8 of 16 19-IA(L)-23040-2022.docx "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.
Therefore, the only remedy available to a party to a consent decree to avoid such consent decree, is to approach the court which recorded the compromise and made a decree in terms of it, and establish that there was no compromise. In that event, the court which recorded the compromise will itself consider and decide the question as to whether there was a valid compromise or not. 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. The second defendant, who challenged the consent compromise decree was fully aware of this position as she filed an application for setting aside the consent decree on 21-8-2001 by alleging that there was no valid compromise in accordance with law. Significantly, none of the other defendants challenged the consent decree. For reasons best known to herself, the second defendant within a few days thereafter (that is on 27-8-2001) filed an appeal and chose not to pursue the application filed before the court which passed the consent decree. Such an appeal by the Ganesh Lokhande page 9 of 16 19-IA(L)-23040-2022.docx second defendant was not maintainable, having regard to the express bar contained in Section 96(3) of the Code."
(emphasis supplied)
16. The scope of intent of Order 23 Rule 3 and Rule 3-A was further considered by this Court in R. Rajanna v. S.R. Venkataswamy [R. Rajanna v. S.R. Venkataswamy, (2014) 15 SCC 471 : (2015) 4 SCC (Civ) 238] wherein this Court held as under : (SCC p. 474, para 11) "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. That is precisely what has happened in the case at hand. When the appellant filed OS No. 5326 of 2005 to challenge the validity of the compromise decree, the court before whom the suit came up rejected the plaint under Order 7 Rule 11 CPC on Ganesh Lokhande page 10 of 16 19-IA(L)-23040-2022.docx the application made by the respondents holding that such a suit was barred by the provisions of Order 23 Rule 3-A CPC. Having thus got the plaint rejected, the defendants (respondents herein) could hardly be heard to argue that the plaintiff (appellant herein) ought to pursue his remedy against the compromise decree in pursuance of OS No. 5326 of 2005 and if the plaint in the suit has been rejected to pursue his remedy against such rejection before a higher court."
(emphasis supplied)
17. By introducing the amendment to the Civil Procedure Code (Amendment) 1976 w.e.f. 1-2-1977, the legislature has brought into force Order 23 Rule 3-A, which creates bar to institute the suit to set aside a decree on the ground that the compromise on which decree is based was not lawful. The purpose of effecting a compromise between the parties is to put an end to the various disputes pending before the court of competent jurisdiction once and for all.
18. Finality of decisions is an underlying principle of all adjudicating forums. Thus, creation of further litigation should never be the basis of a compromise between the parties. Rule 3-A of Order 23 CPC put a specific bar that no suit shall lie to set aside a decree on the ground that the compromise on which the decree is based was not lawful. The scheme of Order 23 Rule 3 CPC is to avoid multiplicity of litigation and permit parties to amicably come to a settlement which is lawful, is in writing and a voluntary act on the part of the parties. The court can be instrumental in having an agreed compromise effected and finality attached to the same. The court should never be party to imposition of a compromise upon an unwilling party, still open to be questioned on an application under the proviso to Order 23 Rule 3 CPC before the court.
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20. Thus, after the amendment which has been introduced, neither any 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 23 CPC. As such, a right has been given under Rule 1-A(2) of Order 43 to a party, who denies the compromise and invites order of Ganesh Lokhande page 11 of 16 19-IA(L)-23040-2022.docx the court in that regard in terms of the proviso to Order 23 Rule 3 CPC while preferring an appeal against the decree. Section 96(3) CPC shall not be a bar to such an appeal, because it is applicable where the factum of compromise or agreement is not in dispute.
21. In the present case, the partition suit was filed in 1978 and after the decision of the trial court, the matter went in first appeal and eventually, Second Appeal No. 495/86 before the High Court. During the pendency of first appeal being continuation of the suit as stated, one of the parties to the pending proceedings, namely, Sampatiya allegedly entered into a sale deed with the appellant on 6-1-1984. Indubitably the issue regarding right, title and interest in respect of the land which was the subject-matter of sale deed dated 6-1-1984, was still inchoate and not finally decided. In that sense, the claim of the appellant was to be governed by the decision in favour of or against Sampatiya in the pending appeal. It must follow that the alleged transaction effected in favour of the appellant by a sale deed dated 6-1-1984 ought to abide by the outcome of the said proceedings which culminated with the compromise decree passed by the High Court in Second Appeal No. 495/86 dated 15-9-1994.
22. Indeed, the appellant was not a party to the stated compromise decree. He was, however, claiming right, title and interest over the land referred to in the stated sale deed dated 6-1-1984, which was purchased by him from Sampatiya judgment-debtor and party to the suit. It is well settled that the compromise decree passed by the High Court in the second appeal would relate back to the date of institution of the suit between the parties thereto. In the suit now instituted by the appellant, at best, he could seek relief against Sampatiya, but cannot be allowed to question the compromise decree passed by the High Court in the partition suit. In other words, the appellant could file a suit for protection of his right, title or interest devolved on the basis of the stated sale deed dated 6-1- 1984, allegedly executed by one of the party (Sampatiya) to the proceedings in the partition suit, which could be examined independently by the Court on its own merits in accordance with law. The trial court in any case would not be competent to adjudicate the grievance of the appellant herein in respect of the validity of compromise decree dated 15-9-1994 passed by the High Court in the partition suit.
Ganesh Lokhande page 12 of 16 19-IA(L)-23040-2022.docx
23. In other words, the appellant can only claim through his predecessor -- Sampatiya, to the extent of rights and remedies available to Sampatiya in reference to the compromise decree. Merely because the appellant was not party to the compromise decree in the facts of the present case, will be of no avail to the appellant, much less give him a cause of action to question the validity of the compromise decree passed by the High Court by way of a substantive suit before the civil court to declare it as fraudulent, illegal and not binding on him. Assuming, he could agitate about the validity of the compromise entered into by the parties to the partition suit, it is only the High Court, who had accepted the compromise and passed decree on that basis, could examine the same and no other court under the proviso to Order 23 Rule 3 CPC. It must, therefore, follow that the suit instituted before the civil court by the appellant was not maintainable in view of specific bar under Rule 3-A of Order 23 CPC as held in the impugned judgment.
(emphasis supplied)
7. After carefully going through the above decision of the Supreme Court, I find that the ratio laid down therein would squarely apply to the facts of the present case. The distinction that is sought to be made by Mr. Balsara and referred to by me earlier, is not something that is carved out in the aforesaid decision of the Supreme Court. As mentioned earlier, the issue before the Supreme Court was whether the decree passed on a compromise can be challenged by a stranger to the proceedings in a separate Suit. The Supreme Court answered this question in the negative. In these circumstances, I am unable to agree with Mr. Balsara that the aforesaid decision of the Supreme Court in Ganesh Lokhande page 13 of 16 19-IA(L)-23040-2022.docx Triloki Nath Singh's case (supra) would not apply to the facts and circumstances of the present case. Once this is my opinion, then the decision of the learned single judge of this Court in the case of Ramkrishna Shridhar Choube (Supra) will be of no assistance to Mr. Balsara. This is for the simple reason that the Supreme Court (in Triloki Nath Singh) has clearly held that even a stranger to the proceedings cannot file a separate Suit to challenge the compromise decree.
8. In view of foregoing discussion, this Interim Application is dismissed. It is, however, open to the Plaintiff to file appropriate proceedings in Suit No. 684 of 2014 and Testamentary Suit No. 160 of 2014 to challenge the Consent Terms dated 15th July 2021. If such proceedings are filed, they shall be decided on their own merits and in accordance with the law. I have not opined in any manner whatsoever whether the said compromise is either lawful or unlawful or whether same has been entered into by playing a fraud on the Court or otherwise.
9. At this stage, Mr. Balsara, the learned counsel appearing on behalf of the Applicant/Plaintiff submitted that there is a serious apprehension that Defendant No.1 is going to execute a Gift Deed in favour of Mr. Sudesh Suresh Chawan (Son of Defendant No.1) in relation Ganesh Lokhande page 14 of 16 19-IA(L)-23040-2022.docx to Unit No. 119, Building No.1, Wing "C" First Floor, Wooden Boxes Manufacturers Co-Op. Industrial Estate Ltd., Kailas Industrial Complex, Veer Sawarkar Marg, Park Site, Vikhroli (West), Mumbai - 400 079. Mr. Balsara submitted that for a period of three weeks from today, Defendant No.1 ought not to act on the said proposed Gift Deed.
10. Mr. Utangale, the learned advocate appearing on behalf of Defendant No.1 has stated, on instructions, that without prejudice to the rights and contention of Defendant No. 1, the 1st Defendant shall not act on the proposed Gift Deed for a period of three weeks from today. He submitted that this statement should not be construed to mean that Defendant No.1 in any way accepts that the Plaintiff herein has any rights in the property that have come to the share of Defendant No.1. This statement made by Mr. Utangale, and which is accepted as an undertaking given to the Court, adequately redresses the apprehensions of Mr. Balsara. It is made clear that this statement is made only to enable the Plaintiff herein to file appropriate proceedings before the Competent Court to challenge the compromise decree dated 15th July 2021. This is only a pro-tem arrangement and I have not opined on the merits of the matter.
11. The Interim Application is therefore dismissed with the Ganesh Lokhande page 15 of 16 19-IA(L)-23040-2022.docx aforesaid clarification.
12. This order will be digitally signed by the Personal Assistant of this Court. All concerned will act on production by fax or email of a digitally signed copy of this order.
Digitally signed by GANESH ( B. P. COLABAWALLA, J. ) GANESH SUBHASH SUBHASH LOKHANDE LOKHANDE Date:
2022.08.10 17:07:05 +0530 Ganesh Lokhande page 16 of 16