Gujarat High Court
Ibrahim Gulam Rasulbhai Lotiwala vs Fatehmomhhad Noormohmmad Dholkawala on 1 September, 2022
Author: A. S. Supehia
Bench: A.S. Supehia
C/CRA/582/2018 ORDER DATED: 01/09/2022
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/CIVIL REVISION APPLICATION NO.582 of 2018
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IBRAHIM GULAM RASULBHAI LOTIWALA
Versus
FATEHMOMHHAD NOORMOHMMAD DHOLKAWALA
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Appearance:
MR SP MAJMUDAR(3456) for the Applicant(s) No. 1,2
KRUPABEN S LIMBACHIYA(7851) for the Opponent(s) No. 6,7
MR.CHIRAG B UPADHYAY(6735) for the Opponent(s) No. 6,7
NOTICE SERVED for the Opponent(s) No. 1,10,11,12,2,3,4,5,8,9
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CORAM:HONOURABLE MR. JUSTICE A.S. SUPEHIA
Date : 01/09/2022
ORAL ORDER
1. RULE. Learned advocate Mr.Chirag Upadhyay waives service of notice of rule for and on behalf of the respondent Nos.6 and 7.
2. At the outset, learned advocate Mr.S.P.Majmudar appearing for the applicants has submitted that the trial Court by rejecting the application under the provision of Order VII Rule 11 of the Code of Civil Procedure, 1908 (for short "the CPC") has fallen in error in recording the fact that the provision of Order XXIII Rule 3A of the CPC will not apply in the suit, which has been instituted by the plaintiffs (respondent Nos.6 and 7). He has submitted that for the very same prayers, Regular Civil Suit No.105 of 2015 was instituted by the present applicants and the respondent Nos.6 and 7-the original plaintiffs of the present suit were also arraigned as party respondents along with other family members. He Page 1 of 14 Downloaded on : Tue Sep 06 20:15:04 IST 2022 C/CRA/582/2018 ORDER DATED: 01/09/2022 has submitted that during pendency of the said suit being Regular Civil Suit No.105 of 2015, a compromise was arrived at between all the parties and on behalf of the respondent Nos.6 and 7- original plaintiffs, their mother had signed. He has invited attention of this Court to the compromise dated 15.05.2015 at Exh.14 filed in Regular Civil Suit No.105 of 2015. It is submitted that accordingly, the compromise decree was drawn by resorting to the provision of Order XXIII of Rule 3A of CPC and the suit was disposed of on 15.05.2015. It is submitted by him that the respondent Nos.6 and 7-original plaintiffs thereafter, have instituted Regular Civil Suit No.30 of 2018 questioning validity of the compromise and compromise decree passed in Regular Civil Suit No.105 of 2015, without resorting to the provision of Order XXIII Rule 3A of the CPC. It is submitted that the suit is not maintainable in view of Bar stipulated under the provision of Order XXIII Rule 3A of the CPC.
2.1 In support of his submissions, he has placed reliance on the recent judgement of the Apex Court in the case of Sree Surya Developers And Promoters Vs. N. Shailesh Prasad Vs. Raja Pushpa Properties Pvt. Ltd. Vs. N. Shailesh Prasad and in the case of Banwari Lal Vs. Chando Devi, (1993) 1 S.C.C. 581. He has submitted that accordingly, the applicants filed the application Page 2 of 14 Downloaded on : Tue Sep 06 20:15:04 IST 2022 C/CRA/582/2018 ORDER DATED: 01/09/2022 before the Trial Court under the provision of Order XXIII Rule 3A of the CPC, which has been rejected by the impugned order dated 31.08.2018 passed below Exh.16. Thus, he has submitted that the impugned order may be set aside.
3. Per contra, learned advocate Mr.Upadhyay appearing for the respondent Nos.6 and 7-original plaintiffs has submitted that the compromise decree itself is illegal since the same has been signed by the mother of the respondent Nos.6 and 7, who were minor at that time, which is in violation of the provision of Order XXII Rule 7 of the CPC. It is submitted that thus, there was no option left with the respondent Nos.6 and 7- original plaintiffs but to institute the suit seeking declaration for declaring the compromise as null and void, which has been arrived at in Regular Civil Suit No.105 of 2015. He has further submitted that in fact, it is the case of the respondent Nos.6 and 7 that they were not minors and signatures have been made by their mother behind their back.
4. Heard the learned advocates for the respective parties and also perused the documents as pointed out by them.
5. It is very curious to note the inconsistent approach of the respondent no.6 and 7. On one Page 3 of 14 Downloaded on : Tue Sep 06 20:15:04 IST 2022 C/CRA/582/2018 ORDER DATED: 01/09/2022 hand, the respondent Nos.6 and 7 are asserting that the compromise, which was arrived at in Regular Civil Suit No.105 of 2015 is in violation of Order XXII Rule 7 of the CPC by contending that the respondent Nos.6 and 7 were minor and such compromise could not have been signed by their mother and on other hand, it is being argued and contended that in fact, the respondent Nos.6 and 7 were major and their signatures were obtained without informing them. Thus, the respondent Nos.6 and 7 are oblivious of their actual stand.
6. The established facts are that initially the present applicants had instituted Regular Civil Suit No.105 of 2015, in which the respondent Nos.6 and 7 i.e. Zuber Salim Noormohmmad Dholkawala and Faiza D/o. Salim Noormohmmad Dholkawala were party defendants. During pendency of that suit, a compromise was arrived at between the parties and compromise dated 15.05.2015 has been signed by the mother of the respondent Nos.6 and 7. Pursuant to the compromise pursis, which was produced at Exh.14, the suit was decreed in terms of Order XXIII Rule 3A of the CPC. On 15.05.2015, the respondent Nos.6 and 7 thereafter, have instituted Regular Civil Suit No.30 of 2018 questioning the said compromise. The prayers in the plaint of the said suit suggest that they are seeking declaration Page 4 of 14 Downloaded on : Tue Sep 06 20:15:04 IST 2022 C/CRA/582/2018 ORDER DATED: 01/09/2022 declaring the compromise dated 15.05.2015 arrived at in Regular Civil Suit No.105 of 2015 as illegal and void ab initio. The present applicants, who are arraigned as defendants in Regular Civil Suit No.30, filed an application below Order XXIII Rule 3A of the CPC and have subsequently contended that as per the said provision, there is a specific bar of filing a subsequently suit questioning the compromise arrived at in the earlier suit. By the impugned order dated 31.08.2018 passed below Exh.16, the application has been rejected by the Civil Court by holding that the same would not apply in the facts of the present case by resorting to provision of Order XXXII Rule 7 of the CPC. It is contended by the respondent Nos.6 and 7-original plaintiffs that the said compromise is illegal in view of the order XXXII Rule 7 of the CPC since the mother of the respondent Nos.6 and 7 could not have signed on their behalf being their minor. Simultaneously, it is also contended that in fact they were major when such compromise was arrived at.
7. At this stage, it would be apposite to refer to the provision of Order XXIII Rule 3A of the CPC. The same reads as under:
"23[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."Page 5 of 14 Downloaded on : Tue Sep 06 20:15:04 IST 2022
C/CRA/582/2018 ORDER DATED: 01/09/2022 7.1 Rule 3A stipulates that no suit shall lie to set aside a decree on the ground of compromise on which the decree is passed was not lawful.
8. It is the specific case of the respondent Nos.6 and 7 that the decree passed in Regular Civil Suit No.105 of 2015, is premised on an unlawful compromise, hence, the subsequent suit being Regular Civil Suit No.30 of 2018 is barred by the provision of Order XXII Rule 3A of the CPC.
9. At this stage, it would be apposite to refer to the observations made by the Apex Court in the case of Sree Surya Developers And Promoters (supra), whereby the Apex Court, while examining the provisions of Order XXIII Rule 3A has observed thus:
"8. Therefore, on plain reading of Order XXIII Rule 3A CPC, no suit shall lie to set aside a decree on the ground that the compromise on which the decree is based was not lawful. Identical question came to be considered by this Court in the case of R. Janakiammal (supra). It is observed and held by this Court that Rule 3A of Order XXIII bars the suit to set aside the decree on the ground that the compromise on which decree was passed was not lawful. It is further observed and held that an agreement or compromise which is clearly void or voidable shall not be deemed to be lawful and the bar under Rule 3A shall be attracted if compromise on the basis of which the decree was passed was void or voidable. In this case, this Court had occasion to consider in detail Order XXIII Rule 3 as well as Rule 3A. The earlier decisions of this Court have also been dealt with by this Court in paragraphs 53 to 57 as under:-Page 6 of 14 Downloaded on : Tue Sep 06 20:15:04 IST 2022
C/CRA/582/2018 ORDER DATED: 01/09/2022 "53. Order 23 Rule 3 as well as Rule 3-A came for consideration before this Court in large number of cases and we need to refer to a few of them to find out the ratio of judgments of this Court in context of Rule 3 and Rule 3- A. In Banwari Lal v. Chando Devi, (1993) 1 SCC 581, this Court considered Rule 3 as well as Rule 3-A of Order
23."
This Court held that the object of the Amendment Act, 1976 is to compel the party challenging the compromise to question the court which has recorded the compromise. In paras 6 and 7, the following was laid down: (SCC pp. 584-85) "6. The experience of the courts has been that on many occasions parties having filed petitions of compromise on basis of which decrees are prepared, later for one reason or other challenge the validity of such compromise. For setting aside such decrees suits used to be filed which dragged on for years including appeals to different courts. Keeping in view the predicament of the courts and the public, several amendments have been introduced in Order 23 of the Code which contain provisions relating to withdrawal and adjustment of suit by the Civil Procedure Code (Amendment) Act, 1976. Rule 1 Order 23 of the Code prescribes that at any time after the institution of the suit, the plaintiff may abandon his suit or abandon a part of his claim. Rule 1(3) provides that where the Court is satisfied: (a) that a suit must fail by reason of some formal defect, or (b) that there are sufficient grounds for allowing the plaintiff to institute a fresh suit for the subject-matter of a suit or part of a claim, it may, on such terms as it thinks fit, grant the plaintiff permission to withdraw such suit with liberty to institute a fresh suit. In view of Rule 1(4) if the plaintiff abandons his suit or withdraws such suit without permission referred to above, he shall be precluded from instituting any such suit in respect of such subject-matter. Rule 3 Order 23 which contained the procedure regarding compromise of the suit was also amended to curtail vexatious and tiring litigation while challenging a compromise decree. Not only Page 7 of 14 Downloaded on : Tue Sep 06 20:15:04 IST 2022 C/CRA/582/2018 ORDER DATED: 01/09/2022 in Rule 3 some special requirements were introduced before a compromise is recorded by the court including that the lawful agreement or a compromise must be in writing and signed by the parties, a proviso with an Explanation was also added which is as follows:
'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.'
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 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 3-A in respect of institution of a separate suit for setting aside a decree on the basis of a compromise saying:
'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.'
54. The next judgment to be noted is Pushpa Devi Bhagat v. Rajinder Singh, (2006) 5 SCC 566, R.V. Raveendran, J. speaking for the Court noted the Page 8 of 14 Downloaded on : Tue Sep 06 20:15:04 IST 2022 C/CRA/582/2018 ORDER DATED: 01/09/2022 provisions of Order 23 Rule 3 and Rule 3-A and recorded his conclusions in para 17 in the following words: (SCC p.
576) "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 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 Page 9 of 14 Downloaded on : Tue Sep 06 20:15:04 IST 2022 C/CRA/582/2018 ORDER DATED: 01/09/2022 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 second defendant was not maintainable, having regard to the express bar contained in Section 96(3) of the Code."
55. The next judgment is R. Rajanna v. S.R.Venkataswamy, (2014) 15 SCC 471 in which the provisions of Order 23 Rule 3 and Rule 3-A were again considered. After extracting the aforesaid provisions, the following was held by this Court in para 11: (SCC p. 474) "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 Page 10 of 14 Downloaded on : Tue Sep 06 20:15:04 IST 2022 C/CRA/582/2018 ORDER DATED: 01/09/2022 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 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 (the respondents herein) could hardly be heard to argue that the plaintiff (the 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."
56. The judgments of Pushpa Devi [Pushpa Devi Bhagat v. Rajinder Singh, (2006) 5 SCC 566] as well as Banwari Lal [Banwari Lal v. Chando Devi, (1993) 1 SCC 581] were referred to and relied on by this Court. This Court held 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 which can examine and determine that question.
57. In subsequent judgment, Triloki Nath Singh v. Anirudh Singh, (2020) 6 SCC 629, this Court again referring to earlier judgments reiterated the same proposition i.e. 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 separate suit is not maintainable. In paras 17 and 18, the following has been laid down: (SCC p. 638) "17. By introducing the amendment to the Civil Procedure Code (Amendment) Act, 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.
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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 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." That thereafter it is specifically observed and held that a party to a consent decree based on a compromise to challenge the compromise decree on the ground that the decree was not lawful i.e., it was void or voidable has to approach the same court, which recorded the compromise and a separate suit challenging the consent decree has been held to be not maintainable.
9. In view of the above decisions of this Court, the Trial Court was absolutely justified in rejecting the plaint on the ground that the suit for the reliefs sought challenging the Compromise Decree would not be maintainable."
9.1 The Apex Court, after survey of various judgements in this regard has held that the party to a concerned decree based on a compromise to challenge the compromise decree on the ground that the decree was unlawful, has to approach the same Court, which recorded the compromise and a separate suit challenging the consent decree has been held to be not maintainable.
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10. Thus, in view of the settled proposition of law and the unambiguous provision of Order XXIII Rule 3A of the CPC, the Court below has fallen in error in rejecting the application filed by the present applicants under Order XXIII rule 3A of the CPC.
11. The impugned order dated 31.08.2018 passed below Exh.16 in Regular Civil Suit No.30 of 2018 is hereby quashed and set aside. Accordingly, in view of the specific prayers made in the application below Exh.16 dated 31.08.2018 since there is bar to institute the suit subsequently, the plaint of Regular Civil Suit No.30 of 2018 will not survive and the plaint shall also stands rejected.
12. At this stage, learned advocate Mr.Upadhyay has submitted that liberty may be reserved in favour of the respondent Nos.6 and 7 to file appropriate proceedings before appropriate forum.
13. Liberty is reserved in favour of the respondent Nos.6 and 7 to file appropriate proceedings before the appropriate forum, if available under law and all the contentions of the respective parties are kept open.
14. The present applications stand allowed. Rule made absolute.
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15. Registry to place a copy of this order in each of the connected matters.
Sd/-
(A. S. SUPEHIA, J) NVMEWADA Page 14 of 14 Downloaded on : Tue Sep 06 20:15:04 IST 2022