Full Judgment Text
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.2342 OF 2008
Muni Reddy & Anr. …..Appellant(s)
VERSUS
C. Nagaraju & Ors. …..Respondent(s)
J U D G M E N T
Abhay Manohar Sapre, J.
1. This appeal is directed against the final
judgment and order dated 02.01.2008 of the High
Court of Karnataka at Bangalore in Regular Second
Appeal No.804 of 2001 whereby the Single Judge of
the High Court dismissed the appeal filed by the
Signature Not Verified
appellants herein and affirmed the judgment and
Digitally signed by
ANITA MALHOTRA
Date: 2018.09.20
16:51:15 IST
Reason:
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decree dated 02.08.2001 passed by the District &
Sessions Judge, Bangalore Rural Dist., Bangalore.
2.
In order to appreciate the short issue involved
in the appeal, it is necessary to set out few facts
infra.
3. The appellants are the plaintiffs whereas the
respondents are the defendants in the civil suit out
of which this appeal arises.
4. The appellants (plaintiffs) filed a civil suit (O.S.
No.3/90) against the respondents (defendants) in
the Court of 2nd Additional Civil Judge (Sr.
Division), Bangalore for cancellation of sale deed
dated 24.08.1989. The respondents contested the
suit. By judgment/decree dated 16.09.1997, the
Trial Court dismissed the suit.
5. The appellants (plaintiffs) felt aggrieved and
filed first appeal (R.A. No. 18/97) in the Court of
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District and Sessions Judge, Bangalore Rural
District. By judgment dated 02.08.2001, the first
Appellate Court dismissed the appeal and upheld
the judgment/decree of the Trial Court.
6. The appellants pursued the matter further and
filed second appeal in the High Court being
R.S.A.No.804/2001. Subsequently, the parties
compromised the matter and, therefore, the High
Court (Single Judge) by order dated 10.04.2002
disposed of the appeal in terms of compromise
arrived at between the parties.
7. Thereafter, defendant No. 2 (C Naga Raju),
respondent No. 1 herein, filed an application in the
disposed of appeal (RSA No. 804/2001) and
complained therein that the compromise arrived at
between the parties, which resulted in disposal of
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the second appeal, is not binding on him and
prayed for recalling of the order dated 10.04.2002.
8. The High Court, by order dated 23.07.2002
dismissed the application filed by defendant No. 2
(respondent No. 1 herein). Aggrieved by the said
order, defendant No.2 filed appeals by way of special
leave in this Court. By order dated 04.08.2003,
this Court allowed the appeals (Civil Appeal Nos.
553132/2003 etc.etc.) and while setting aside the
order dated 23.07.2002 remitted the matter to the
High Court for fresh consideration in accordance
with law including to decide the question of
consideration of the compromise petition. The order
reads as under:
“ Leave granted.
When a Second appeal came up for
consideration before the High Court, it
disposed of the same in the following terms:
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"Mr. Siddappa, learned counsel
files power for respondent No.2.
Both the sides have filed the
compromise petition. All the
parties are present. Advocate for
both sides are also present. The
compromise petition is allowed.
In view of the compromise
petition, the appeal stands
disposed of. Draw the decree
accordingly."
Whether the compromise had really
been entered into between the parties or not
was not inquired into by the High Court in
terms of Order XXIII Civil Procedure Code.
Further, it is not clear as to the impact
of the Memo filed before the Court on the
appeal as a whole. The same should have
been examined by the High Court and a
decision should have been taken by it.
Therefore, we set aside the order made
by the High Court and remit the matter to
the High Court for fresh consideration in
accordance with law including the question
of consideration of the compromise petition.
The appeals are allowed accordingly.”
9. After the remand, the High Court took up the
matter and on few dates fixed the case for recording
evidence of the parties to decide the question of
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genuineness of the compromise as is clear from the
order sheets dated 26.07.2006, 03.09.2007,
26.10.2007, 12.11.2007, 18.12.2007 (Annexures P
8/9).
10. However, the High Court then did not pursue
the proceedings in relation to the genuineness of the
compromise and went on to observe that in terms of
this Court's order dated 04.8.2003, once the matter
is examined on merits, there is no need to go into
the genuineness of the compromise petition. This is
what the High Court observed:
“8…………..I do not find any need to
adjourn the matter to some other date for
cross examination of respondent No.2 who
has filed his affidavit purporting to be by way
of evidence in support of his application for
setting aside the compromise petition for two
reasons. Firstly, the Supreme Court has
itself set aside the judgment/compromise
decree passed by this Court on 10.04.2002.
Secondly, the Supreme Court has also
observed that the matter has to be examined
on merits and including the genuineness of
the compromise or otherwise.
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9. It is obvious that if the matter is to be
examined on merits, there is no need for
going into the genuineness of the
compromise petition or otherwise and
therefore I do not propose to look into the
contents of the affidavit itself which if at all
looked into and is to be accepted requires the
necessity for cross examination. Instead, I
propose to proceed to judgment on merits of
the appeal and, therefore, there is no
requirement of cross examination of
respondent No.2 as the very affidavit is not
looked into.”
11. Having thus observed, the High Court did not
consider it necessary to examine the genuineness of
the compromise petition impugned by defendant No.
2 in his application dated 23.07.2002 and
proceeded to decide the second appeal on merits
and by impugned order 02.01.2008 dismissed the
second appeal.
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12. It is against this order of the High Court, the
plaintiffs have felt aggrieved and filed the present
appeal by way of special leave in this Court.
13. Mr. Trideep Pais, learned counsel appeared for
the appellants and Mr. K. Radhakrishnan, learned
senior counsel for the respondents.
14. Having heard the learned counsel for the
parties and on perusal of the record of the case, we
are inclined to allow the appeal and while setting
aside the impugned order remand the case to the
High Court for deciding the matter afresh as
directed hereinbelow.
15. In our considered opinion, the High Court
erred in interpreting the order of this Court dated
04.08.2003 quoted supra. On mere reading of the
order dated 03.08.2003, it is clear that this Court
remanded the matter to the High Court with a
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request to decide it afresh in accordance with law
including the question of consideration of the
compromise petition. This implied that the question
of consideration of compromise petition was
required to be decided first. It is for the simple
reason that if the compromise was held to be legal
and proper, there was no need to decide the second
appeal on merits. In other words, the need to decide
the second appeal on merits would have arisen only
if the compromise would have been held illegal and
not binding on the parties concerned.
16. The High Court, therefore, erred in not
considering the question of genuineness and legality
of the compromise as complained by defendant No.
2 and straightaway proceeded to decide the second
appeal on merits. In this process undertaken by the
High Court, the question as to whether the
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compromise was legal or not could not be gone into
on its merits, which it ought to have been gone into
in the first instance.
17. In the light of the foregoing discussion, the
impugned order of the High Court is not legally
sustainable as the same was passed without
properly appreciating the purport of the directions
of this Court contained in the order dated
04.08.2003. It, therefore, caused prejudice to the
rights of the parties.
18. In view of the foregoing discussion, the appeal
succeeds and is allowed. Impugned order is set
aside. The case is remanded to the High Court for
deciding the matter afresh as directed above.
19. The High Court while deciding the question of
genuineness of the compromise application, as
directed by this Court’s order dated 04.08.2003,
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may consider it proper to remit the matter to the
Trial Court for the purpose of recording evidence of
the parties in time bound period. On receiving the
evidence from the Trial Court, the High Court would
proceed to decide the question in the light of
evidence adduced by the parties.
20. In case the compromise is held legal and
proper, there will be no need to decide the second
appeal on merits. It is for the reason that in such
eventuality, the order dated 10.04.2002 disposing of
the second appeal in terms of compromise would
continue to hold the field as being legal and proper.
21. However, if the compromise is held illegal, the
order dated 10.04.2002 will stand set aside. As a
consequence thereof, the second appeal will revive
for being heard on merits. The High Court will then
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proceed to decide the second appeal on merits in
accordance with law.
22. The High Court is requested to dispose of the
matter, as observed supra, as expeditiously as
possible preferably within 6 months.
.……...................................J.
[ABHAY MANOHAR SAPRE]
.……...................................J.
[S. ABDUL NAZEER]
New Delhi,
September 20, 2018.
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