Karnataka High Court
Aswatha Reddy vs Anjanappa on 5 April, 1994
Equivalent citations: ILR1994KAR1264, 1995 A I H C 3278, (1996) 1 CIVILCOURTC 470, (1994) 2 KANT LJ 468, (1996) 1 LJR 735, (1994) 3 CURCC 179
JUDGMENT Mirdhe, J.
1. This Appeal is filed by the appellant who was the plaintiff in the Trial Court against the judgment and decree dated 17.6.1992 passed by the Civil Judge and J.M.F.C., at Chickballapur, in O.S.No. 23/1990 partly decreeing the suit of the appellant for specific performance of the agreement of sale.
2. Respondents-1 and 2 were the defendants-1 and 2 in the Trial Court. Respondent-3 is said to be the purchaser of the suit schedule property after the disposal of the suit and hence respondent-3 has been impleaded in this Appeal.
3. We have heard the learned Counsel for the appellant and the learned Counsel for respondents-2 and 3 fully and perused the records of the case.
4. The appellant filed the suit for specific performance of an agreement of sale executed by the 1st defendant in favour of the appellant on 1.11.1986, 6.4.1987, 10.8.1988 and 14.11.1988 and also for the delivery of possession of the same and in the alternative he prayed for a direction to the defendants-1 and 2 to refund the amount of Rs. 45,000/- towards principal and Rs.45,000/- towards interest, with interest at 24% per annum.
5. The case of defendants-1 and 2 is as follows:- Defendant-1 is the father of defendant-2 and the suit schedule property is the property of defendant-1 having acquired the same through the Land Tribunal, Gowribidanur. He entered into an agreement for sale of the property for a sum of Rs. 1,24,000/- which subsequently came to be reduced to Rs. 1,06,000/- and advance amount was paid to the defendants from time to time totalling Rs. 45,000/- in all. As the defendants have evaded to execute agreement of sale the appellant was constrained to file the suit. Defendants-1 and 2 took up a defence denying the execution of the agreement of sale by them and also receipt of any consideration amount. On the basis of the contentions between the parties the Trial Court has framed the following issues:-
"1) Whether the plaintiff proves that defendant-1 entered into an agreement to sell the suit property for Rs. 1,24,000/- in his favour and executed sale agreement dated 1.11.1986 and other documents dated 6.4.87, 10.8.88 and 14.11.88?
2) Whether the plaintiff proves that the defendants received Rs. 45,000/- as part of the sale consideration from him as stated in the plaint?
3) Whether the plaintiff proves that the sale consideration amount of Rs. 1,24,000/- came to be reduced to Rs. 1,06,000/- through the intervention of panchayatdars as stated in para-8 of the plaint?
4) Whether the defendants prove that the suit sale agreement dated 1.11.1986 is not legal and valid?
5) Whether the plaintiff proves that he was ready and willing to perform his part of contract?
6) Whether the plaintiff proves that he is entitled to specific performance of suit sale agreement dated 1.11.1986?
7) Whether the plaintiff proves that he is entitled to recovery of possession of the suit properties from the defendants?
8) In the alternative, whether the plaintiff proves that he is entitled to Rs. 90,000/- from the defendants with interest at 24% p.a.?
9) What order or decree?"
6. Plaintiff examined witnesses PWs-1 to 6 and got exhibited documents Exhibits P-1 to P-6 and closed his case. Thereafter DW-1 was examined on behalf of defendants, exhibited documents at Exhibits D-1 to D-3 and closed their case. The order sheet discloses that on 6.4.1992 plaintiff closed his case and on 18.4.92 the defendants closed their evidence. The order sheet further discloses that the case was posted for orders on 21.4.92 and the arguments were heard and the case was posted to 25.4.92 for Judgment and on 25.4.92 Judgment was not pronounced but was posted for further arguments to 2.6.92. Again on 2.6.92 the case came to be posted for further arguments to 6.6.92. The order sheet dated 4.6.92 reads as follows:-
"4.6.92: Sri G.M. Advocate for the plaintiff files a memo under Section 151 CPC praying to advance the case from 6.6.92 to today i.e., 4.6.92 in the interest of justice along with memo.
Case is advanced for today. Sri G.M. Advocate files a joint memo. To hear by 5.6.92."
When the case was so posted on 5.6.92, the Court heard the arguments and posted the case for pronouncement of Judgment to 10.6.92. The case was adjourned from 10.6.92 to 17.6.92 for pronouncement of Judgment and on that day Judgment was pronounced decreeing the plaintiff's suit in part without any costs.
7. The Trial Court while dealing with issue Nos.1 and 2 has given findings in favour of the plaintiff that the defendant-1 entered into agreement of sale with the plaintiff to sell the property for Rs. 1,24,000/- and executed the sale agreement dated 1.11.86, 6.4.87, 10.8.88 and 14.11.88. It was also held that defendants received Rs. 45,000/- as part of the sale consideration. In spite of having given these findings in favour of the plaintiff the Trial Court decreed the suit of the plaintiff for payment of Rs. 45,000/- in terms of the Memo which is alleged to have been filed on behalf of the plaintiffs and defendants. We have seen the original Memo. It is purported to have been signed by the plaintiff, but he submits that he has not signed that Memo and a fraud is practised by his Counsel not only on him but also on the Court below. One fact is clear that there was no application filed under Order 23 Rule 3 of C.P.C. The Court ought to have satisfied itself about the genuineness of the compromise entered into between the parties. The perusal of the order sheet of the relevant dates does not disclose that the parties were present before the Court or that the Court has questioned the plaintiff and defendants about the genuineness of the compromise or that it has satisfied about the genuineness of the compromise. Even the Judgment pronounced by the Trial Court does not disclose that it has satisfied about, the genuineness of the compromise between the parties.
8. Learned Counsel for respondent-2 relied on the Decision in the case of DEPUTY GENERAL MANAGER v. KAMAPPA, , wherein it has been held that an Advocate who was authorised by vakalathnama to enter into compromise entered into a compromise and such compromise shall be binding on the party. The contention raised in that case was compromise petition was not signed by the party and therefore, it was not binding on them. In that context this Court has held that vakalath gives an authority to the Counsel to enter into a compromise and if he enters into a compromise will be binding on the parties. But the point in this case is not whether the appellant's Counsel was authorised by the appellant to enter into compromise or not, In fact Sri C.B. Srinivasan, learned Counsel for the appellant concedes that the vakalath was given by the appellant in the Trial Court to enter into compromise on his behalf, but the appellant is challenging the compromise not on that point but he is challenging on the ground that the compromise itself is not genuine and it is fraud practised not only on him but also on the Court. Therefore, this Ruling relied upon by the Counsel for respondent-2 will not come to his aid.
9. Learned Counsel for respondent-3 relied on a Ruling in AKKABAI AND ANR. v. GOWRAWWA, 1990(1) KLJ 57, wherein it has been held that the identity of the respondent who entered into the compromise was in question. The Court questioned the parties to the compromise petition and they accepted that they had voluntarily and without any coercion entered into compromise. In this case there is nothing on the record of the Trial Court to show that the Trial Court tried to satisfy itself about the genuineness of the Memo by questioning the parties. Therefore, this Ruling also will not help the respondents in this case. Counsel for respondent-2 relied on the Decision of the Supreme Court in BYRAM PESTONJI GARIWALA v. UNION BANK OF INDIA AND ORS., , wherein it has been held that the Counsel or the agent of the party can enter into compromise and he can sign the compromise petition and though such a compromise petition is not signed by the parties in person it can be binding. The question involved in the Ruling was the authority of the Counsel to enter into compromise. But that is not the point involved in this case. The point involved in this case is whether the Trial Court has satisfied itself about the genuineness of the compromise as required by law.
10. In BANWARILAL v. SMT. CHANDO DEVI (through L.R.) AND ANR., , the Supreme Court has held as follows:-
"Compromise in suit-
Allegation that compromise was not lawful - Trial Court can entertain application of plaintiff for considering said question -Material on record showing that compromise was not lawful within meaning of Order 23, Rule 3 - Order recording compromise can be recalled."
In this Ruling the Supreme Court has held that a party challenging a compromise can file a petition under Proviso to Rule 3 of Order 23 or an appeal under Section 96(1) of CPC in which he can question the validity of the compromise. In this case the appellant has filed the appeal and is questioning the validity of the compromise Memo. The Supreme Court in para-11 of its Judgment has held as follows:-
"The present case depicts as to how on 27.2.1991 the Court recorded the alleged agreement and compromise in a casual manner. It need not be impressed that Rule 3 of Order 23 does not require just a seal of approval from the Court to an alleged agreement or compromise said to have been entered into between the parties. The statute requires the Court to be first satisfied that the agreement or compromise which has been entered into between the parties is lawful, before accepting the same. Court is expected to apply its judicial mind while examining the terms of the settlement before the suit is disposed of in terms of the agreement arrived at between the parties. It need not be pointed out that once such a petition or compromise is accepted, it becomes the order of the Court and acquires sanctity of a judicial order."
The Supreme Court has highlighted the duty of the Court in recording the compromise under Order 23 Rule 3 CPC and it has laid down that the compromise should not be recorded in a casual manner, but the Court must apply its judicial mind while examining the terms of the settlement before the suit is disposed of in terms of the agreement arrived at between the parties. There is a responsibility cast on the Court to satisfy itself about the lawfulness and genuineness of the compromise as the compromise accepted before the Court wilt acquire the sanctity of a Judicial order. In this case, neither the order sheet nor the Judgment of the Trial Court shows that it has applied its Judicial mind before accepting the joint Memo alleged to have been filed by both sides before it. It has disposed of the case in terms of the compromise petition in a very casual manner without applying its Judicial mind. Therefore, the Judgment and the decree of the Trial Court based on the joint Memo cannot be sustained in law.
11. Hence, we proceed to pass the following Order:-
The Appeal is allowed. The Judgment and decree of the Courts below are set aside and the case is remitted back to the Trial Court with a direction to apply its Judicial mind to the joint Memo filed before it and decide whether it is a lawful and genuine compromise of the parties and thereafter dispose of the case in accordance with law. No order as to costs.
Refund the Court fee to the appellant in accordance with law.