Andhra HC (Pre-Telangana)
Pandit Dhareshwarji'S Ashram School vs Arya Pratinidhi Sabha And Anr. on 1 March, 2007
Equivalent citations: 2007(4)ALD672, 2007(5)ALT375
JUDGMENT P.S. Narayana, J.
1. This civil miscellaneous appeal is filed by the appellant, aggrieved by the compromise decree made by the Second Additional Subordinate Judge, Ranga Reddy in OS. No. 22 of 1987, dated 12-2-1996.
2. The recording of the compromise and passing of the compromise decree had been attacked on several grounds. Inasmuch as an objection relating to the maintainability of civil miscellaneous appeal had been taken, this Court is not inclined to express any opinion touching the merits and demerits of such contentions.
3. This civil miscellaneous appeal has been filed under Order-43, Rule 1 of the Code of Civil Procedure (hereinafter referred to for short as 'the Code' for the purpose of convenience). It is needless to say that such order or making a compromise decree in pursuance of such order would not fall under any of the clauses in Order 43, Rule 1 of the Code.
4. It is stated however that prior to 1976 there was such provision. However, it is brought to the notice of this Court that Order 43, Rule 1-A had been introduced by Amending Act 104/1976 and the said provision dealing with right to challenge non-appealable orders in appeal against decrees reads as hereunder:
(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.
5. It is no doubt true that this provision was introduced by the Amending Act 104/1976 under Order 43 of the Code and Order 43 of the Code deals with appeals from orders. The other relevant provisions, which may have to be looked into in this context, are Order 41 of the Code, Order 23, Rule 3 of the Code and Order 23, Rule 3-A of the Code and Sections 96 and 104 of the Code.
6. Section 104 of the Code deals with orders from which appeal lies. Section 96 of the Code deals with appeals from original decrees. Section 96(3) of the Code specifies that no appeal shall lie from a decree passed by the Court with the consent of the parties. It is needless to say that Order 41 of the Code deals with appeals from original decrees. Order 23, Rule 3 of the Code deals with compromise of suits. It is pertinent to note that Order 23, Rule 3A of the Code dealing with bar to suit was introduced by the Amending Act 104/1976, which specifies no suit shall lie to set aside a decree on the ground that the compromise on which the decree is based was not lawful.
7. Section 2 of the Code of Civil Procedure deals with definitions.
Section 2(2) of the Code of Civil Procedure defines "decree" as in this Act, unless there is anything repugnant in the subject or context, "decree" means the formal expression of an adjudication which, so far as regards the Court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit and may be either preliminary or final. It shall be deemed to include the rejection of a plaint and the determination of any question within [the words "Section 47 or omitted by Act 104 of 1976, Section 3 (w.e.f. 1-2-1977) Section 144, but shall not include-
(a) any adjudication from which an appeal lies as an appeal from an order, or
(b) any order of dismissal for default.
Explanation : A decree is preliminary when further proceedings have to be taken before the suit can be completely disposed of. It is final when such adjudication completely disposes of the suit. It may be partly preliminary and partly final;
8. Section 2(14) of the Code defines "order" as in this Act, unless there is anything repugnant in the subject or context,-
"Order" means the formal expression of any decision of a Civil Court, which is not a decree;
9. The words "in an appeal against the decree", in Order 43, Rule 1-A(1) of the Code and the words in "an appeal against the decree passed in a suit after recording a compromise or refusing to record a compromise". In Order 43, Rule 1A(2) of the Code would assume some importance. It is no doubt true that Order 43, Rule 1A of the Code falls under Order 43 of the Code dealing with appeals as against orders.
10. In a slightly different context, the Full Bench of this Court while dealing with deemed decree under Order 21, Rule 58 of the Code arrived at a conclusion that a regular appeal alone would be maintainable in Gurram Seetharam Reddy v. Smt. Gunti Yashoda and Anr. , holding that the view expressed in B. Nookaraju v.
M.S.N. Charities , is not a good law.
11. The Lucknow Bench in Jagdish Narain v. Rasul Ahmad and Ors. (Lucknow Bench), while dealing with Section 96 of the Code and Order 23 of the Code whether appeal would lie against the consent decree, observed that:
A preliminary objection has been raised to the hearing of this appeal. It is urged that the appeal in the Court below was against an order recording a compromise under Order 23, Rule 3 CPC and as such no further appeal lay top this Court. This contention, in our opinion, has no force. The appeal in the lower Court was directed against the decree passed by the trial Court and not against the order recording the compromise.
12. The apex Court in Banwarilal v. Chando Devi , at paras 13 and 14 observed:
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 IA of Order 43 of the Code.
The application for exercise of power under proviso to Rule 3 of Order 23 can be labelled 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 this connection may be made to the cases Smt. Tara Bai v. V.S. Krishnaswamy Rao AIR 1985 Kar. 270; S.G. Thimmappa v. T. Anantha , Bindeshwari Pd. Chaudhary v. Debendra Pd. Singh ; Mangal Mahton v. Behari Mahton AIR 1964 Pat. 483 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.
13. In Pradip Kumar Das v. Smt. Abanti Das and Anr. AIR 1998 Ori. 26, the Division Bench of the Orissa High Court at para 12 observed:
Present is not the case where any fraud is alleged to have been practised. The plea is unequal and irregular allotment of share and improper valuation. That is stated to be on account of misrepresentation. It is usual in almost every compromise that there is some inequality in allotment of shares. In view of accepted relationship between parties, it appears to be normal. That cannot be a ground to take away the effect of a compromise entered into by the parties. So far as improper valuation is concerned, it is not shown as to how the valuation was improper. An attempt to assail the compromise at this belated stage appears to be outcome of an afterthought. The compromise petition was read over and explained to parties as is evident from the order passed by the learned Subordinate Judge. That being the position, neither the decision of the Apex Court nor the decision rendered by a learned Single Judge of this Court has any application to the facts of present case. In the case at hand, there is no assertion or material to show that there was mistake of the Court or fraud on the Court. 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 is not 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. This is a case where the factum of compromise or agreement is not in dispute. Challenge is on the grounds indicated above.
14. Pothinoda Sainabi and Ors. etc. v. Vatakkiloda Aboobackerkoya and Ors. , Anant Mahadeo Godbole v. Achut Ganesh Godbole and Ors. , Katikara Chintamani Dora and Ors. v. Guatreddi Annamanaidu and Ors. (V-61 C 204), also may be usefully referred to in this context.
15. Further strong reliance was placed on the decision in Smt. Pillamma v. C. Puttanna AIR 2006 Kar. 194, wherein it was observed at paras 4, 5 and 6 as hereunder:
A reading of Rule 1-A of Order XLIII shows that a right is recognized in favour of the appellant to challenge non-appealable orders in an appeal filed against the decree. Rule-1A does not make a non-appealable order appealable. The party aggrieved by an order which is not appealable can make his grievance against such an order when an appeal is preferred against the decree passed in the suit. Sub-clause (2) of Rule 1A of Order XLIII which is relevant for the present purpose states that in case where a compromise is recorded and based on the compromise a decree is passed or after refusing to record the compromise a decree is passed by the Court below, it shall be open to the appellant to contest the decree on the ground that the compromise should or should not have been recorded. It is thus clear that the order recording the compromise is not appelable but where a decree is passed based on the compromise when that decree is assailed, it is open to the appellant to challenge the decree on the ground that the compromise should not have been recorded. In the instant case, the appellant seeks to challenge the decree passed apart from assailing the order recording the compromise. He could not have maintained an appeal against the order recording the compromise. He can certainly challenge the decree in appeal in terms of and in accordance with Section 96 of CPC and the bar enacted under Sub-clause (3) does not apply. When such an appeal is filed, it will be open to the appellant to contend that the order passed recording the compromise was illegal or in other words he could contend that the compromise should not have been recorded.
The contention urged by the learned Counsel for the appellant that Order XLIII, Rule 1A recognizes a separate and substantial right to maintain an appeal against a on-appealable order of the nature assailed in this appeal whereunder. the compromise is recorded by order dated 21-2-2004 cannot be accepted. Therefore, the present Miscellaneous First Appeal cannot be maintained. For this view, support can be sought from the judgment of the apex Court in Banwari Lai's case (supra), wherein it is made clear at paragraph 8 that prior to the deletion of Order XLIII, Rule 1(m), an appeal was maintainable against an order recording or refusing to record an agreement, compromise or satisfaction. But by the amendment Act, that clause having been deleted, the result whereof is that no appeal is maintainable against an order recording or refusing to record an agreement or compromise under Rule 3 of Order XXIII. 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 XLIII. The apex Court has further observed in paragraph 9 that a right has been given under Rule 1A(2) of Order XLIII 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.
Therefore, when appeal is filed against a decree invoking Order XLIII, Rule 1A, the appeal is not against an order but is against a decree. While challenging the decree, it is open for the appellant to challenge the correctness and validity of the order recording the compromise. Thus, the appeal filed has to be a Regular First Appeal and not a Miscellaneous First Appeal. If a Miscellaneous first Appeal is entertained against the order recording the compromise, then it would mean that the Court will be treating a non-appealable order appealable, thereby frustrating the very object of the Legislature in deleting Order XLIII, Rule 1(m). To the same effect is the judgment rendered by the apex Court in Kishun alias Ram Kishun's case, at paragraph 6 of the judgment, it is observed that no appeal is provided after 1-2-1977 against an order rejecting or accepting the compromise after an enquiry under the proviso to Order XXIII, Rule 3 either by Section 104 or by Order XLIII, Rule 1 of the Code. Only when the acceptance of the Court and it becomes a decree, or the Court proceeds to pass a decree on merits rejecting the compromise set up, it becomes appealable, unless of course, the appeal is barred by Section 96(3) of the Code is what is held by the apex Court In view of the above, the present Miscellaneous First Appeal filed against the order recording the compromise and as also against the decree passed is not maintainable. Consequently, the same is rejected as not maintainable. However, liberty is reserved to the appellant to initiate such proceedings as are open to her in law.
Counsel for the respondent submits that the appellant has abused the process of Court and therefore no liberty could be reserved to her. It is needless to observe that as and when the appellant initiate's appropriate proceedings, it is open to the respondent to take up all such contentions including the contention regarding the alleged abuse of the process of the Court.
16. Strong reliance was placed on the decision of the apex Court in Pushpa Devi Bhagat (Dead) through LR. Sadhna Rai (Smt.) v. Rajinder Singh and Ors. and certain submissions were made that in a case of this nature the very appeal itself is not maintainable.
17. In Babulal v. Chaturiya 2001 (1) CCC 23 (MP), it was held that an application for setting aside the compromise decree on the ground that it is unlawful can be maintained.
18. In Venkata v. Katteboyina 1958 (2) An. WR 291, it was held that a compromise unlawful in part vitiates the compromise.
19. As can be seen from the decision of the apex Court, Order 43 Rule 1A of the Code had not been considered, in the context of Section 96(3) of the Code, only the said decision had been delivered. Hence, the decision of the apex Court is distinguishable.
20. While interpreting the different provisions of the Code, the provisions are to be harmoniously constructed. Section 96(3) of the Code to be harmoniously read with Order 43 Rule 1A of the Code. In the event of any doubt, the same to be clarified by introducing appropriate Amendments to the relevant provisions of the Code if need be.
21. As already referred to supra, this Court is not inclined to express any opinion touching the merits and demerits of the matter. Suffice to state that inasmuch as a compromise decree of this nature also being a decree, regular appeal would lie and not a civil miscellaneous appeal. Hence, the present civil miscellaneous appeal is not maintainable.
22. Inasmuch as for sufficiently for a long time, the matter is pending in the event of a regular appeal lying to this Court appropriate orders could have been passed. But, however, the Counsel for the appellant brought it to the notice of the Court that on pecuniary jurisdiction the appeal would lie not to this Court but to the Court of Principal District Judge, Ranga Reddy.
23. In the light of the peculiar facts and circumstances, this Court is of the considered opinion that in the light of the language of Order 43, Rule 1A of the Code, a regular appeal alone can be maintained and this civil miscellaneous appeal being incompetent the same is dismissed as not maintainable.
24. However, since the appellant had been fighting the litigation sufficiently for a long time having invoked the jurisdiction of this Court by filing civil miscellaneous appeal, the appellant is at liberty to present a regular appeal along with an application to condone the delay under Section 14 of the Limitation Act, 1963 and the learned Judge to consider the same in accordance with law, if the appellant chooses to do so.
25. With the above observation, the civil miscellaneous appeal is dismissed as not maintainable. No order as to costs.