Himachal Pradesh High Court
Reserved On: 12.3.2024 vs Manavinder Singh & Ors on 31 May, 2024
Author: Virender Singh
Bench: Virender Singh
1 ( 2024:HHC:3048 )
IN THE HIGH COURT OF HIMACHAL PRADESH AT
SHIMLA
OMP No. 20 of 2022
in C.S. No. 6 of 2022
.
Reserved on: 12.3.2024
Decided on: 31.5.2024
Ms Amayra Singh
...Applicant/Plaintiff
Versus
Manavinder Singh & ors
...Non-applicants/Defendants
___________________________________________ Coram Hon'ble Mr. Justice Virender Singh, Judge Whether approved for reporting?
________________________________________________ For the Applicant/ Plaintiff : Mr. Arjun Lall, Advocate.
For the defendant non-applicant No.1 : Mr. Vikas Rajput, Advocate.
For the defendant
Non-applicants No.
1&2 : Mr. Ajay Kumar, Senior
Advocate with Mr. Rohit,
Advocate.
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2 ( 2024:HHC:3048 )
Virender Singh, Judge
Plaintiff Amayra Singh has filed the suit for .
declaration that the compromise decree, passed in Civil Suit No. 59 of 2006, is a result of fraud and misrepresentation of facts and against the interest of the plaintiff, thus, not binding upon her.
2. The suit has been filed by the plaintiff on the ground that she is grand daughter of Sardar Sohan Singh, S/o late Rai Bahadur Sardar Sujjan Singh of Rawalpindi, now in Pakistan, who was the coparcener of the HUF. It has been averred by the plaintiff that late Rai Bahadur Sardar Sujjan Singh was running a Trust from his house, commonly known as 'Sardaran-Wala-Bagh', in the year 1916. His estate was equally divided and Sardar Sohan Singh, in his capacity, as the eldest grand son, along with designated land, also took over the Trust and thus, became "Karta" (head of the family). The plaintiff is the daughter of defendant No. 1 and was born on 10 th December, 2003, ::: Downloaded on - 31/05/2024 20:36:48 :::CIS 3 ( 2024:HHC:3048 ) who has attained the age of majority on 10.12.2021. As such, she has filed the suit with the following reliefs "a) Pass a decree for declaration that the compromise decree of .
5/8/2010 passed in Civil Suit No. 59 of 2006, is a result of fraud and misrepresentation of facts and against the interest of the present plaintiff, is unlawful and void and is thus not binding on the plaintiff and to consequentially direct restoration of status quo ante as it existed prior to the passing of the fraudulent and unlawful compromise;
b. Pass a decree of declaration holding the plaintiff to be entitled to 1/4th share in the suit properties detailed in para 9 of the plaint; c. Pass a preliminary decree for partition by metes and bounds and separate possession of 1/4th share of the plaintiff in the suit properties as detailed in para 9 of the plaint be passed in favour of the plaintiff and against the defendants and to appoint a Local Commissioner to partition the suit properties in accordance with the shares of the parties and put them in separate and independent possession of their respective shares; d. A decree for damages by way of mesne profits and rendition of accounts of the income accrued to the defendants from the suit properties and use and occupation charges; e. A decree for permanent injunction restraining the defendants from encumbering, transferring, creating a charge/ third party rights in the suit properties;
f. Award costs throughout in favour of the plaintiff and against the defendants."
3. Alongwith the suit, the plaintiff has filed the present application, under Order 39 Rules 1 & 2 CPC, for ::: Downloaded on - 31/05/2024 20:36:48 :::CIS 4 ( 2024:HHC:3048 ) restraining the defendants from alienating, transferring and creating any third party interest, in any manner, on the suit land, during pendency of the present suit.
.
4. When, put to notice, the suit, as well as, application has been contested/resisted by the defendants by filing the written statement/reply. Alongwith the written statement, they have also filed the counter claim.
5. The defendants have taken the objections in the written statement that the suit is not r preliminary maintainable; the plaintiff has no cause of action to file the present suit, she has no locus-standi to file the present suit, the suit is barred under the provisions of Order 23 Rule 3A CPC; the suit is barred by Section 11 of the CPC;
and the suit is collusive. In the written statement, the stand as taken by the plaintiff, has been controverted.
6. Thus, a prayer has been made to dismiss the present application.
7. Although, the primary purpose of the application under Order 39 Rules 1 and 2 CPC is to preserve the ::: Downloaded on - 31/05/2024 20:36:48 :::CIS 5 ( 2024:HHC:3048 ) subject matter of the suit, but, considering the peculiar facts and circumstances of the present case, the plaintiff has filed the suit for declaration to the effect that the .
judgment and decree, passed in Civil Suit No. 59 of 2006, is a result of fraud and misrepresentation of facts, against the interest of the present plaintiff, whereas the filing of the separate suit challenging the judgment & decree, passed on compromise, has been prohibited by the legislature, in its wisdom, by inserting Rule 3-A of Order 23 in the CPC.
8. It is no-longer res-integra that the judgment and decree, passed by the Court, which has allegedly been obtained by playing fraud and misrepresentation of facts, can be challenged by a 3rd party, but, by moving the application before the same Court, and not by filing the separate suit. The provisions of Order 23 Rule 3 and Order 23 Rule 3-A CPC are reproduced as under:
"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 to 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 ::: Downloaded on - 31/05/2024 20:36:48 :::CIS 6 ( 2024:HHC:3048 ) 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 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: bur 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."
9. The Hon'ble Supreme Court in Banwari Lal versus Smt. Chando Devi (through L.R.) & Another, (1993) 1 Supreme Court Cases 581, has elaborately discussed the provisions of Order 23 Rules 1, and 3-A CPC, vis-à-vis Order 43 Rule 1A CPC.
Relevant paragraphs 7 to 15 of the judgment, are reproduced, as under:-
"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 :-::: Downloaded on - 31/05/2024 20:36:48 :::CIS
7 ( 2024:HHC:3048 ) 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.
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:-
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.
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 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 preferring 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.
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10. The learned Counsel appearing for the respondent took a stand that the High Court was justified in taking the view that the suit had been simply withdrawn by the plaintiff appellant under Rule 1 of Order 23 and it had not been compromised in terms of Rule 3 of the said Order 23; as such there was no occasion for the appellant to file an application for recall of the said order and for restoration of the suit in question for being heard on merit. From .
the copy of the petition which was filed on 27.2.1991 it appears that the terms and conditions of settlement and agreement had been mentioned saying that both parties had entered into a compromise because of which the plaintiff-appellant had thereafter no connection with the disputed land and defendant-respondent shall be deemed to be in possession and the owner of the said disputed land. The prayer made in the said petition also says that the compromise may be ordered to be accepted. On basis of that petition, as already mentioned above, the Court passed an order saying that the compromise had been accepted. In the order it has been mentioned that the suit of the plaintiff be "dismissed as per compromise deed Ex. C". In view of the aforesaid facts and circumstances, it is difficult to hold that by order dated 27.2.1991 the Court allowed the suit to be withdrawn in terms of Rule 1 of Order 23. The order on face of it purported to dismiss the suit of the plaintiff on basis of the terms and conditions mentioned in the petition of compromise. As such, the validity of that order has to be judged treating it to be an order deemed to have been passed in purported exercise of the power conferred on the Court by Rule 3 of Order 23 of the Code. The learned Subordinate Judge should not have accepted the said petition of compromise even if had no knowledge of the fraud alleged to have been practised on the appellant by his counsel, because admittedly the petition of compromise had not been signed either by the respondent or his counsel. This fact should have been discovered by the Court. In the case of Gurpreet Singh v. Chatur Bhuj Goel, it has been said:-
Under Rule 3 as it now stands, when a claim in suit has been adjusted wholly or in part by any lawful agreement or compromise, the compromise must be in writing and signed by the parties and there must be a completed agreement between them. To constitute an adjustment, the agreement or compromise must itself be capable of being embodied in a decree. When the parties enter into a compromise during the hearing of a suit or appeal, there is no reason why the requirement that the compromise should be reduced in writing in the form of an instrument signed by the parties should be dispensed with. The court must therefore insist upon the parties to reduce the terms into writing.
11. The requirement of the petition of compromise being signed by the parties concerned has been considered also in the case of Byram Pestonji Gariwala v. Union Bank of India. It appears the attention of learned Judges was not drawn to the aforesaid case of this Court in Gurpreet Singh v. Chatur Bhuj Goel (supra).
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12. 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 Courts 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 of compromise is accepted, it becomes the order of the Court and acquires the sanctity of a judicial order.
13. On behalf of the respondent a stand was taken that the learned Subordinate Judge by his order dated 20.9.1991 could not have recalled the order dated 27.2.1991 and restored the suit to its original number. It cannot be disputed that the respondent can support the order of the High Court setting aside order dated 20.9.1991 on any other reason than the reason given by the High Court.
14. When the amending Act introduced a proviso along with an explanation to Rule 3 of Order 23 saying that where it is alleged by one party and denied by other that an adjustment or satisfaction has been arrived at, "the Court shall decide the question", the Court before which a petition of compromise is filed and which has recorded such compromise, has to decide the question whether an adjustment or satisfaction had been arrived at on basis of any lawful agreement. To make the enquiry in respect of validity of the agreement or the compromise more comprehensive, the explanation to the proviso says that an agreement or 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. In view of the proviso read with the explanation, a Court which had entertained the petition of Compromise has to examine whether the compromise was void or voidable under the Indian Contract Act. Even Rule 1(m) of Order 43 has been deleted under which an appeal was maintainable against an order recording a compromise. As such 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 the Code, in which he can now question the validity of the compromise in view of Rule 1A of Order 43 of the Code.
15. The application for exercise of power under proviso to Rule 3 of Order 23 can be labeled under Section 151 of the Code but when by the amending Act specifically such power has been vested in the Court before which the petition of compromise had been filed, the power in appropriate cases has to be exercised under the said proviso to Rule 3. It has been held by different High Courts that even after a compromise has been recorded, the Court concerned can entertain an application under Section 151 of the Code, questioning the legality or validity of the compromise. Reference in ::: Downloaded on - 31/05/2024 20:36:48 :::CIS 10 ( 2024:HHC:3048 ) this connection may be made to the cases Smt. Tarn Bai v. V.S. Krishnaswamy Rao AIR 1985 Karnataka 270, S.G. Thimmappa v. T. Anantha, Bindeshwari Pd. Chaudhary v. Debendra Pd. Singh, Mangal Mahton v. Behari Mahton and Sri Sri Iswar Gopal Jew v. Bhagwandas Shaw, where it has been held that application under Section 151 of the Code is maintainable. The Court before which it is alleged by one of the parties to the alleged compromise that no .
such compromise had been entered between the parties that Court has to decide whether the agreement or compromise in question was lawful and not void or voidable under the Indian Contract Act. If the agreement or the compromise itself is fraudulent then it shall be deemed to be void within the meaning of the explanation to the proviso to Rule 3 and as such not lawful. The learned Subordinate Judge was perfectly justified in entertaining the application filed on behalf of the appellant and considering the question as to whether there had been a lawful agreement or compromise on the basis of which the Court could have recorded such agreement or compromise on 27.2.1991. Having come to the conclusion on the material produced that the compromise was not lawful within the meaning of Rule 3, there was no option left except to recall that order."
10. The issue with regard to the challenge to a compromise decree, by a third party, had arisen before the Hon'ble Supreme Court in A.A. Gopalakrishnan versus Cochin Devaswom Board & Others, (2007) 7 Supreme Court Cases 482. The three Judge Bench of Hon'ble Supreme Court has held that the challenge to the compromise decree at the instance of third party cannot be rejected. Relevant paragraph 11 of the judgment, is reproduced, as under:-
11. Learned counsel for respondents 3 and 4 submitted that the settlement in the suit (OS No.399/1998) was validly arrived at between them (Plaintiffs) and the Devaswom Board (defendant), that the Devaswom Board had considered the proposal after taking legal advice and had duly passed a resolution to settle the suit. It is further submitted that a decree having been made in terms of the ::: Downloaded on - 31/05/2024 20:36:48 :::CIS 11 ( 2024:HHC:3048 ) compromise and such decree having attained finality, it cannot be questioned, interfered or set aside at the instance of a third party in a writ proceeding. Order 23 Rule 3 of CPC deals with compromise of suits. Rule 3A provides 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.
.
We are of the considered view that the bar contained in Rule 3A will not come in the way of the High Court examining the validity of a compromise decree, when allegations of fraud/collusion are made against a statutory authority which entered into such compromise. While, it is true that decrees of civil courts which have attained finality should not be interfered lightly, challenge to such compromise decrees by an aggrieved devotee, who was not a party to the suit, cannot be rejected, where fraud/collusion on the part of officers of a statutory board is made out. Further, when the High Court by order dated 9.9.1998 had directed the Board to take possession of Sy. No.1042/2 immediately from respondents 3 and 4 in CDB No.3/1996, in a complaint by another devotee, it was improper for the Board to enter into a settlement with respondents No.2 and 3, giving up the right, title and interest in Sy. No.1042/2, without the permission of the court which passed such order. Viewed from any angle, the compromise decree cannot be sustained and is liable to be set aside."
(self emphasis supplied)
11. The view taken by the Hon'ble Supreme Court, in Banwari Lal's case supra has again been reiterated in Horil versus Keshav & Another, (2012) 5 Supreme Court Cases, 525.
12. In view of the above discussion, this Court is of the view that the compromise can only be questioned before the Court, which has passed the compromise decree and the fresh suit for setting aside the compromise decree ::: Downloaded on - 31/05/2024 20:36:48 :::CIS 12 ( 2024:HHC:3048 ) is clearly barred in view of the provisions contained under Order 23 Rule 3A CPC.
13. The applicant, for all intents and purposes, .
falls within the definition of a person, aggrieved by the compromise decree, as such, in view of the bar as created by Order 23 Rule 3A, she cannot file separate suit to challenge the compromise decree.
14. When, the very foundation of litigation has been held to be, prima facie, barred in view of the provisions of law, then, this Court is of the view that the applicant/plaintiff is not entitled to the relief, as prayed for.
15. Thus, at this stage, it can be said that the plaintiff/applicant, prima-facie, could not make out a case to grant relief under Order 39 Rules 1 and 2 CPC.
16. In view of above, this Court is of the considered opinion that there is no merit in the application and the same is, thus, dismissed.
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17. Any of the observations, made hereinabove, shall not be taken as an expression of opinion, on the merits of the case, as these observations, are confined, .
only, to the disposal of the present application.
(Virender Singh) Judge 31.5.2024 Kalpana ::: Downloaded on - 31/05/2024 20:36:48 :::CIS