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SUPREME COURT OF INDIA
A.M. KHANWILKAR, AJAY RASTOGI, JJ.
TRILOKI NATH SINGH – APPELLANT(S)
VERSUS
ANIRUDH SINGH(D) THR. LRS & ORS. – RESPONDENT(S)
CIVIL APPEAL NO(S). 3961 OF 2010
Decided on : 06-05-2020
(A) Civil Procedure Code, 1908 – Order 23 Rules 3 and 3A – Challenge to compromise decree – Purpose of effecting a compromise between parties is to put an end to various disputes pending before Court of competent jurisdiction once and for all – Finality of decisions is an underlying principle of all adjudicating forums – Creation of further litigation should never be basis of a compromise between 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 compromise on which decree is based was not lawful – 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 part of parties – Court can be instrumental in having an agreed compromise effected and finality attached to the same – Court should never be party to imposition of a compromise upon an unwilling party, still open to be questioned on an application under proviso to Rule 3 of Order 23 CPC before Court. (Paras 16 and 17)
(B) Civil Procedure Code, 1908 – Order 23 Rules 3 and 3A read with Rule 1A(2) of Order 43 and Section 96 – Challenge to compromise decree – Locus standi of stranger to proceedings – After amendment which has been introduced, neither any appeal against order recording 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 compromise and invites order of Court in that regard in terms of proviso to Rule 3 of Order 23 CPC while preferring appeal against decree – Section 96(3) CPC shall not be a bar to such an appeal because it is applicable where factum of compromise or agreement is not in dispute – Appellant was not a party to stated compromise decree – He was, however, claiming right, title and interest over land referred to in stated sale deed dated 6thwhich was purchased by him from Sampatiya-judgment debtor and party to suit – Compromise decree passed by High Court in second appeal would relate back to date of institution of suit between parties thereto – In suit now instituted by appellant, at the best, he could seek relief against Sampatiya, but cannot be allowed to question compromise decree passed by High Court in partition suit – Appellant can only claim through his predecessor to the extent of rights and remedies available to Sampatiya in reference to compromise decree – Merely because appellant was not party to compromise decree in facts of present case, will be of no avail to appellant, much less give him a cause of action to question validity of compromise decree passed by High Court by way of a substantive suit before civil Court to declare it as fraudulent, illegal and not binding on him – Suit instituted before civil Court by appellant was not maintainable in view of specific bar under Rule 3A of Order 23 CPC. (Paras 19, 21 and 22)
Facts of the Case:
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. Precise question that falls for our determination is as to whether the suit filed by the appellant-plaintiff in seeking a declaration against the decree of compromise dated 15th 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 3A CPC.
Findings of the Court:
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 trial Judge devolved on the basis of a stated sale deed dated 6th 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 appellant-plaintiff independently for protection of his right, title or interest being devolved on the basis of the stated sale deed dated 6th 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 appellant-plaintiff.
Result : Appeal dismissed.
Key Points: - The scheme of Order 23 Rule 3 CPC is to avoid multiplicity of litigation and permit parties to amicably come to a lawful, written, and voluntary settlement. (!) (!) - Rule 3A of Order 23 CPC creates 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. (!) (!) (!) - After the amendment, neither an appeal against the order recording a compromise nor a remedy by way of filing a separate suit is available for cases covered by Rule 3A. (!) (!) - A stranger to the compromise proceedings cannot question the validity of the decree in a separate suit and can only claim through their predecessor to the extent of rights available to that predecessor. (!) (!) - The only remedy available to challenge a compromise decree is to approach the court that recorded the compromise via an application under the proviso to Rule 3 of Order 23 CPC, not by filing a suit. (!) (!) - Section 96(3) CPC does not bar an appeal where a party contests the recording of the compromise itself, as this falls under the exception provided in Order 43 Rule 1A(2). (!) (!) - The compromise decree is final and binding unless set aside by the court that passed it on an application challenging the existence of a valid compromise. (!) (!) - In the present case, the appellant's suit to declare the compromise decree fraudulent was not maintainable because the appellant was not a party to the decree and was barred by Rule 3A. (!) (!) - The appellant could potentially seek relief against the predecessor (Sampatiya) for protection of rights devolved via the sale deed, but could not challenge the High Court's compromise decree directly. (!) (!) - The appeal was dismissed as the suit was instituted in 1995 and the findings against the appellant were based on concurrent findings of lower courts regarding the validity of the sale deed. (!)
JUDGMENT
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 that the appellantplaintiff filed suit before 4th subjudge, Chapra seeking a declaration that the compromise decree dated 15th 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 the basis of a gift deed dated 10th 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, 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.
5. Salehari filed T.A. No. 19/84 which was dismissed on 7th 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. 25,000/ by a registered sale deed dated 6th 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 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 del
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