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SUPREME COURT OF INDIA
N.M. KASLIWAL AND N.P. SINGH, JJ.
Banwari Lal, Appellant
Versus
Smt. Chando Devi (through L.R.) and another, Respondents.
Civil Appeal No.5299 of 1992 (arising out of S.L.P.(C) No. 12395 of 1992)
Decided on 11-12-1992.
Civil Procedure Code-Order 23 Rule 1, 3, 3A and Order 43-Rule 1A (2) - validity of the compromise-whether Court has power to recall the order of dismissal of suit on the basis of compromise entered between the parties;
Held that the learned Subordinate Judge was justified in entertaining the application. 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. (Para 14)
Certainly. Based on the provided legal document, here are the key points:
The order of dismissal of a suit based on a petition of compromise can be challenged and recalled if it is found that the compromise was not lawful or was obtained through fraud or collusion. The Court has the authority to recall such an order if the compromise is not valid within the meaning of the applicable rules (!) (!) .
A petition of compromise must be in writing and signed by the parties involved. The Court must be satisfied that the compromise is lawful before recording it, and the agreement must be capable of being embodied in a decree (!) .
An agreement or compromise that is void or voidable under the Indian Contract Act shall not be deemed lawful within the meaning of the relevant rule. The Court is required to decide whether an adjustment or satisfaction has been lawfully arrived at before recording the compromise (!) (!) .
Orders recording a compromise are judicial orders and acquire the sanctity of a Court decree. Therefore, such orders can be challenged if the compromise is invalid or obtained through fraud, and the Court has the jurisdiction to examine the validity of the compromise even after it has been recorded (!) .
The amendments to the Civil Procedure Code have introduced specific provisions that restrict the remedies available against orders recording compromises, including the abolition of appeals against such orders. However, parties can still challenge the validity of the compromise through appeals against the decree or through other procedural avenues provided under the law (!) (!) .
The Court's power to recall or set aside an order recorded under the rules depends on whether the compromise was lawful, and the Court must apply its judicial mind to the terms before accepting and recording the compromise (!) .
The procedural requirements for recording a compromise are strict, and courts must ensure that all formalities, including signatures and lawful agreement, are duly satisfied before dismissing a suit based on such a compromise (!) .
The legal framework emphasizes that the validity of a compromise can be questioned even after it has been recorded, especially if it is found to be void, voidable, or obtained through fraud or misrepresentation. The Court retains the authority to examine and set aside such compromises to prevent abuse and prolonged litigation (!) .
Please let me know if you need a detailed analysis or specific legal advice related to this document.
JUDGMENT
N. P. SINGH, J.:—Speical leave granted.
2. This appeal has been filed for setting aside an order passed by the High Court on the revision application filed on behalf of the respondent. By the impugned order the learned Judge has held that the trial Court could not have entertained the application filed on behalf of the appellant, for recall of the order recording a compromise alleged to have been entered between the appellant and the respondent.
3. The suit in question had been filed on behalf of the appellant on 14-9-1990. It appears that on 27-2-1991 a petition of compromise was filed, on behalf of the appellant, saying that both parties have entered into a compromise on the basis whereof the appellant had delivered the possession of the disputed land to the respondent. A prayer was made that in view of the compromise arrived at between the parties the suit be dismissed. It may be mentioned that the said petition had not been signed by the contesting respondent or by his counsel. It appears that one Shri Soran Ram, Advocate, had made a note - Thumb impression has been marked in my presence - meaning thereby that thumb impression had been given by the appellant in his presence. On the same day the learned Subordinate Judge passed the following order :-
"Compromise deed Ex. C, tendered by plaintiff Banwari Lal. Statement of the Counsel for the plaintiff is also recorded to that effect. The counsel for the plaintiff has stated that the suit of the plaintiff to be dismissed as withdrawn as per compromise deed Ex. C. The possession of the property has already been delivered to the defendant, and defendant No. 2 Smt. Chando Devi is in possession of the disputed land as owner as per compromise deed. Hence the suit of the plaintiff is dismissed as per compromise deed Ex. C. Decree sheet be prepared accordingly."
4. On 3rd April, an application was filed on behalf of the plaintiff-appellant in the said suit that he had engaged Shri Soran Ram, Advocate, Karnal, to appear on his behalf, who had told the appellant that the date fixed for the hearing of the suit was 5-3-1991. When the appellant went to him on 5-3-1991 the counsel informed him that the case had been adjourned to 2-4-1991. On 2-4-1991 the appellant learnt from the cause list that the case was not on the cause list. Then he approached his counsel aforesaid Shri Soran Ram along with Shri I. D. Swamy, a retired IAS Officer. His counsel informed him that the suit had been dismissed as withdrawn. The appellant got the records of the case inspected which revealed that Shri Soran Ram, Advocate of the appellant, in collusion with defendant No. 2 of the said suit had played a fraud on the appellant by filing a fabricated petition of compromise although no compromise had been effected between the appellant and the respondent. Further details of fraud were mentioned in the said petition and it was stated that as the alleged compromise itself was void, illegal and against the requirement of R. 3 of O. 23 of the Code of Civil Procedure (hereinafter referred to as "the Code"), the order recording such compromise be recalled and suit be restored and be heard on merit. About his counsel aforesaid Shri Soran Ram, it was said that the appellant had learnt that he had cheated several persons and because of that a case had been registered against him.
5. The learned Subordinate Judge, after hearing both the parties and referring to different facts and circumstances of the case including that the compromise petition filed on 27-2-1991 had not been signed by both the parties as required by O. 23, R. 3 of the Code, recalled the order disposing of the suit in terms of the petition of compromise. He directed restoration of the suit to its original number. Against that order a revision application was filed before the High Court on behalf of the respondent. A learned Judge, as already stated above, set aside the aforesaid order passed by the learned Subordinate Judge saying that the petition wh
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