TRILOKI NATH SINGH vs. ANIRUDH SINGH (D) THR. LRS .

Case Type: Civil Appeal

Date of Judgment: 06-05-2020

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REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO(S). 3961 OF 2010 TRILOKI NATH SINGH ….APPELLANT(S) VERSUS ANIRUDH SINGH(D) THR. LRS & ORS. ….RESPONDENT(S) J U D G M E N T Ajay Rastogi, J. 1. The question arises in the appeal for our consideration is as to whether the decree passed on a compromise can be challenged by the stranger to the proceedings in a separate suit. 2. The seminal facts which are relevant for the present purpose and the circumstances in which it arises for our consideration are Signature Not Verified Digitally signed by DEEPAK SINGH Date: 2020.05.06 16:03:14 IST Reason: th that the appellant­plaintiff filed suit before 4   sub­judge, Chapra th seeking   a   declaration   that   the   compromise   decree   dated   15 1 September, 1994 passed in Second Appeal No. 495/86 by the High Court   is   illegal,   inoperative   and   obtained   by   fraud   and misrepresentation   and   also   prayed   for   injunction   against   the respondents­defendants   restraining   them   from   entering   into peaceful possession of the suit property. 3. The case in shorn of the appellant­plaintiff is that the land described in Schedule 1 of the plaint originally belonged to Lakhan Singh   who   died   leaving   behind   three   sons,   namely,   Din   Dayal Singh, Jalim Singh and Kunjan Singh.  Din Dayal Singh is said to have   died   issueless   during   lifetime   of   his   father   and   his   other brother, namely, Jalim Singh also died leaving behind a son Ram Nath Singh and two daughters Sampatiya and Soniya.  As regards the third son Kunjan Singh, he is said to have died issueless but prior to his death he gifted the land of his share to Sampatiya on th the   basis   of   a   gift   deed   dated   10   July,   1978   which   came   on possession over her.   4. The further case of the appellant is that one Salehari wife of Satyanarayan Prasad claiming herself to be the daughter of late Kunjan Singh filed a partition suit 13/78 in the Court of Munsif, 2 Chapra for setting aside the aforesaid gift and for partition of her share in the ancestral property.   In that suit, Sampatiya, Dulari Devi, Ram Nath and Soniya were impleaded as party respondents­ defendants.   Ram Nath died during pendency of the proceedings and only Sampatiya contested the suit.  It was further stated that suit   was   dismissed   and   it   was   held   that   Salehari   was   not   the daughter of Kunjan Singh and have no right in the properties. th 5. Salehari filed T.A. No. 19/84 which was dismissed on 7  April, 1986.  The further case is that a total of 3 Bigha 6 Katha 3 Dhurs was   sold   by   Sampatiya   to   appellant­plaintiff   for   a   sum   of   Rs. th 25,000/­ by a registered sale deed dated 6  January, 1984 and put the appellant­plaintiff in possession over the suit property.  In July, 1995, when respondents­defendants started making interference in possession of the suit property of the appellant­plaintiff and on query   it   revealed   that   it   was   claimed   on   the   strength   of   a compromise decree entered between Sampatiya and Salehari which was filed in second appeal before the High Court of Patna. 6. The case of the appellant­plaintiff is that the said compromise decree was obtained by fraud and misrepresentation concealing the 3 salient fact from the High Court that the sale deed was executed much prior to the compromise being executed between the parties to the proceedings and as such the said compromise was liable to be   declared   to   be   void   which   was   obtained   by   fraud   and misrepresentation. 7. The respondents­defendants contested the suit on the ground that the suit was not maintainable.  It was also alleged that the suit was hit by the provisions of Section 34 of the Specific Relief Act and Order 23 Rule 3A Code of Civil Procedure(hereinafter being referred to as “CPC”).  It also urged that the appellant­plaintiff has no right to file the suit in the Court of Sub­Judge rather he ought to have filed   an   application   before   the   High   Court   which   passed   the compromise decree and the appellant­plaintiff has no right to seek relief   of   injunction.     That   apart,   it   was   stated   to   be   barred   by Section 52 of Transfer of Property Act.   The specific plea of the respondents­defendants in the written statement was that Kunjan Singh has  not  died  issueless  rather  he   had  a  daughter  namely Salehari   being   his   sole   heir.     It   was   also   denied   that   he   had executed a deed of gift in favour of Sampatiya and has delivered 4 possession of the gifted land to her.  It was, however, conceded that Salehari   filed   a   partition   suit   no.   13/79   in   which   she   lost, whereafter she filed First Appeal No. 19/84 which was dismissed. In   Second   Appeal   No.   495/86   before   the   High   Court,   at   her instance,   a   compromise   was   executed   between   the   parties   and accordingly, the compromise decree was passed by the High Court th dated   15   September,   1994.     The   extract   of   the   terms   of compromise is reproduced ad infra:­ “That the said compromise has been reached on following terms and conditions:­ (i) That the respondent no. 1(Sampatiya D/o Late Jalim Singh) accepts that the plaintiff­appellant Salehari Devi is the daughter of Kunjan Mahto. (ii) That respondent no. 1 accepts the alleged deed of   gift   dated   10.7.1987   executed   by   Kunjan Mahto in favour of respondent no. 1 is illegal, void and in­operative and that respondent no. 1 derived neither title nor possession on account of the said deed of gift. (iii) That it is accepted by the respondent no. 1 that the   plaintiff   appellant   Salehari   Devi   after   the death   of   her   father   Kunjan   Mahto   came   in possession of his properties as she was the sole surviving legal heir of her father, (iv) That the plaintiff­appellant accepts that she has got only half share in the entire suit properties and other half share belongs to respondent no. 1 Sampatiya Devi. (v) That   to   remove   vagueness   as   to   which   suit properties   will   go   to   whose   share,   it   is   made clear   that   schedule­I   property   of   the   plaint which   is   made   annexure­1   containing exhaustive   details   of   properties   will   go   to   the 5 share of plaintiff appellant and the rest of the suit properties as described in schedule­II of the plaint will go to the share of respondent no. 1, (vi) That   according   to   their   respective   shares   the appellant   and   respondent   nos.   1   and   2   have come in possession thereof.” 8. On   the   basis   of   pleadings   of   the   parties,   the   learned   trial Judge in all framed 9 issues.  The same are reproduced as under:­ 1. Is the plaintiff got any valid cause of action? 2. Is the suit as framed maintainable? 3. Is the Court fee paid sufficient? 4. Is the suit barred by limitation? 5. Is the suit u/s 34 S.R. Act. th 6. Is the compromise dated 30  May, 1994 and order dated th nd 15  September, 1994 in 2  appeal 495/95 of the Hon’ble High Court is illegal, inoperative and inaffective due to fraud. 7. Is the plaintiff got right, title and interest in the suit property? 8. Is the plaintiff entitle for decree as claimed 9. To what over relief and reliefts plaintiff to? 9. It is relevant to notice that issue nos. 4 & 5 were not pressed and rest of the issues were decided against the appellant­plaintiff after due appreciation of the evidence on record on merits by the st trial Judge by its judgment and decree dated 31  July, 1998 which was   challenged   by   the   appellant­plaintiff   in   appeal   before   the learned District Judge in Title Appeal No. 80/98(3/99).   On due 6 appreciation of evidence on record, the appeal came to be dismissed th by the Court of Appeal by its judgment dated 5   May, 2003 that came to be challenged by the appellant in Second Appeal No. 153 of 2003 before the High Court which came to be dismissed at the th motion stage by judgment dated 20  April, 2009 which is a subject matter in appeal before us. 10.   Learned   counsel   for   the   appellant­plaintiff   submits   that provision of Order 23 Rule 3A CPC is applicable only to the parties to the suit and the said provision does not apply to a stranger to the compromise   decree,   therefore,   the   remedy   is   always   open   to   a stranger to the compromise decree to file a separate suit to ventilate his   grievance   in   the   appropriate   proceedings.     In   the   given circumstances, the High Court has committed a manifest error in dismissing the appeal at the motion stage to non­suit the appellant­ plaintiff and make him remediless in questioning the compromise decree   which   has   seriously   affected   his   right   over   the   subject property   in   question   and   the   only   remedy   available   with   the appellant­plaintiff   was   to   file   a   suit   claiming   his   right   over   the subject land in question which was created on the basis of a sale 7 th deed executed by one of the party to the proceedings dated 6 January, 1984 much before the compromise decree was passed by the High Court. 11. Learned counsel further submits that when the previous suit th filed by Salehari was dismissed on merits on 30  December, 1983, th thereafter on 6  January, 1984, Sampatiya sold the suit property to the appellant­plaintiff on the basis of the gift deed executed in her favour.  It was not open for Sampatiya to enter into the compromise against her pleadings without any consideration and such an act of Sampatiya clearly implies her collusion with Salaheri in order to dishonestly and fraudulently defeat the rights of her vendor/the appellant/plaintiff for no forceable reason whatsoever. 12. Per  contra,   learned   counsel for   the  respondents­defendants while supporting the findings recorded by the High Court under the impugned judgment submits that at least the compromise decree which was executed between the parties was not open to question even by the stranger to the proceedings although suit could have been filed by the appellant­plaintiff for the protection of his own rights admissible under the law but, in the instant proceedings, suit 8 th was filed seeking a declaration that a compromise decree dated 15 September, 1994 passed in Second Appeal by the High Court of Patna be declared to be illegal which was obtained by fraud and misrepresentation   and   that   was   not   open   to   the   civil   court   for adjudication in view of bar under Order 23 Rule 3A CPC.   That apart,   the   learned   trial   Judge   on   the   basis   of   pleadings   of   the parties specifically framed issue nos. 6 & 7 and recorded a finding th regarding the effect of the compromise decree dated 15  September, 1994 passed by the High Court against the appellant.   Even the finding in reference to issue no. 7 with regard to right, title and interest   in   the   suit   property   of   the   appellant   has   been   decided against him on merits. In the given circumstances, their appears no substance in the present appeal and deserve to be dismissed.  13. The precise question that falls for our determination is as to whether   the   suit   filed   by   the   appellant­plaintiff   in   seeking   a th declaration against the decree of compromise dated 15  September, 1994 passed by the High Court of Patna in Second Appeal was maintainable in view of the provisions of Order 23 Rule 3 and Rule 9 3A CPC.    Order 23 Rule 3 and Rule 3A CPC may at this stage be extracted for ready reference:­
“3.Compromise of suit.—Where it is proved to the<br>satisfaction of the Court that a suit has been adjusted wholly<br>or in part by any lawful agreement or compromise in writing<br>and signed by the parties, or where the defendant satisfies<br>the plaintiff in respect of the whole or any part of the<br>subject­matter of the suit, the Court shall order such<br>agreement, compromise or satisfaction to be recorded, and<br>shall pass a decree in accordance therewith so far it relates<br>to the parties to the suit, whether or not the subject­matter<br>of the agreement, compromise, or satisfaction is the same as<br>the subject­matter of the suit:
Provided that where it is alleged by one party and denied<br>by the other that an adjustment or satisfaction has been<br>arrived at, the Court shall decide the question; but no<br>adjournment shall be granted for the purpose of deciding the<br>question, unless the Court, for reasons to be recorded,<br>thinks fit to grant such adjournment.
Explanation.—An agreement or compromise which is void<br>or voidable under the Indian Contract Act, 1872 (9 of 1872),<br>shall not be deemed to be lawful within the meaning of this<br>Rule.
3A. Bar to suit – No suit shall lie to set aside a decree on the<br>ground that the compromise on which the decree is based<br>was not lawful.”
14. What is emerged as a legislative intent has been considered in extenso by this Court in  Pushpa Devi Bhagat(Dead) Through LR 1 Sadhna Rai(Smt)  Vs.  Rajinder Singh and Others     , after taking note of the scheme of Order 23 Rule 3 and Rule 3A added with 1 2005(5) SCC 566 10 st effect from 1   February, 1977.   The relevant paragraphs are as under:­
“17. The position that emerges from the amended provisions<br>of Order 23 can be summed up thus:
(i) No appeal is maintainable against a consent<br>decree having regard to the specific bar<br>contained in Section 96(3) CPC.
(ii) No appeal is maintainable against the order<br>of the court recording the compromise (or<br>refusing to record a compromise) in view of the<br>deletion of clause (m) of Rule 1 Order 43.
(iii) No independent suit can be filed for setting<br>aside a compromise decree on the ground that
the compromise was not lawful in view of the bar
contained in Rule 3­A.
(iv) A consent decree operates as an estoppel<br>and is valid and binding unless it is set aside by<br>the court which passed the consent decree, by<br>an order on an application under the proviso to<br>Rule 3 Order 23.
Therefore, the only remedy available to a party to a consent<br>decree to avoid such consent decree, is to approach the<br>court which recorded the compromise and made a decree in<br>terms of it, and establish that there was no compromise. In<br>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<br>decree is nothing but contract between parties superimposed<br>with the seal of approval of the court. The validity of a<br>consent decree depends wholly on the validity of the<br>agreement or compromise on which it is made. The second<br>defendant, who challenged the consent compromise decree<br>was fully aware of this position as she filed an application for
11 setting aside the consent decree on 21­8­2001 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 8­2001)   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. (Emphasis supplied) 15. The   scope   of   intent  of   Order   23   Rule   3  and   Rule   3A  was further   considered   by   this   Court   in   R.   Rajanna  Vs.  S.R. 2  wherein this Court held as under:­   Venkataswamy and Others  
“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 3­A clearly bars a suit
to set aside a decree on the ground that the compromise on
2 2014(15) SCC 471 12
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 3­A 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
the application made by the respondents holding that such a
suit was barred by the provisions of Order 23 Rule 3­A 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) 16. By   introducing   the   amendment   to   the   Civil   Procedure st Code(Amendment) 1976 w.e.f. 1   February, 1977, the legislature has brought into force Rule 3A to Order 23, which create 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. 13 17. 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 3A 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 Rule 3 of Order 23 CPC before the Court. 18. It can be further noticed that earlier under Order 43 Rule 1(m), an appeal which recorded the compromise and decide as to whether there was a valid compromise or not, 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 clause has been deleted, the result whereof 14 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 of this fact 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 was added to Order 43 which is as follows:­ “1­A.  Right   to   challenge   non­appealable   orders   in   appeal against decree .— (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.” 19. 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 3A of Order 23 CPC.  As such, a right has been given under Rule 1A(2) of Order 43 to a party, who denies the compromise and invites order of the Court in that regard in terms of proviso to Rule 3 of 15 Order   23   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. 20. 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 th 6  January, 1984.  Indubitably the issue regarding right, title and interest in respect of the land which was the subject matter of sale th deed dated 6   January, 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 th in favour of the appellant by a sale deed dated 6   January, 1984 ought   to   abide   by   the   outcome   of   the   said   proceedings   which 16 culminated with the compromise decree passed by the High Court th in Second Appeal No. 495/86 dated 15  September, 1994. 21. Indeed,   the   appellant   was   not   a   party   to   the   stated compromise   decree.     He   was,   however,   claiming   right,   title   and th interest over the land referred to in the stated sale deed dated 6 January,   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 the 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 th stated sale deed dated 6  January, 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 17 not be competent to adjudicate the grievance of the appellant herein th in   respect   of   the   validity   of   compromise   decree   dated   15 September, 1994 passed by the High Court in the partition suit. 22. 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 proviso to Rule 3 of Order 23 CPC.   It must, therefore, follow that the suit instituted before the civil Court by the appellant was not maintainable in view 18 of  specific   bar   under   Rule   3A  of   Order   23   CPC   as   held   in the impugned judgment. 23. In the instant case, the suit was instituted in the year 1995 and 25 years have rolled by now and after the finding has been recorded in reference to issue no. 7 regarding the right, title and interest of the suit property against the appellant by the learned th trial Judge devolved on the basis of a stated sale deed dated 6 January, 1984 and not interfered by the Court of Appeal preferred at   the   instance   of   the   appellant,   in   the   given   circumstances, remitting the matter back to the learned trial Court to examine the suit filed at the instance of the appellant­plaintiff independently for protection of his right, title or interest being devolved on the basis of th the stated sale deed dated 6   January, 1984 which as alleged to have   been   executed   by   one   of   the   party   to   the compromise(Sampatiya)   in   the   changed   circumstances   may   not serve any purpose more so after the concurrent finding of Courts below have been recorded against the appellant­plaintiff. 24. Consequently, in our view, the appeal is without substance and the same is accordingly dismissed.  No costs. 19 25. Pending application(s), if any, stand disposed of. …………………………………..J. (A.M. KHANWILKAR) …………………………………..J. (AJAY RASTOGI) NEW DELHI MAY 06, 2020 20