2021 Supreme(SC) 297

SUPREME COURT OF INDIA
ASHOK BHUSHAN, R. SUBHASH REDDY, JJ.
R. JANAKIAMMAL - APPELLANT
VERSUS
S.K. KUMARASAMY(DECEASED) THROUGH LEGAL REPRESENTATIVES AND OTHERS - RESPONDENTS
CIVIL APPEAL NO. 1537 OF 2016
WITH
S.R. SOMASUNDARAM AND ANOTHER - APPELLANTS
VERSUS
S.K. KUMARASAMY(DECEASED) THROUGH LEGAL REPRESENTATIVES AND OTHERS - RESPONDENTS
CIVIL APPEAL NO.1538 OF 2016
DECIDED ON : 30-06-2021

IMPORTANT POINTS
(1) Compromise of suit – No suit shall lie to set aside a decree on the ground that compromise on which decree is based was not lawful. However, when there is a dispute as to whether an adjustment or satisfaction has been arrived at, same shall be decided by Court which recorded compromise.
(2) An agreement, which is void or voidable under Indian Contract Act, shall not be deemed to be lawful as is provided by Explanation to Rule 3 of Order XXIII of CPC.
(3) Intention of parties to terminate status of joint family is a relevant factor to determine status of Hindu Undivided Family.

Headnote:

(A) Civil Procedure Code, 1908 – Order XXIII Rules 3 and 3A – Compromise of suit – Bar to suit – No suit shall lie to set aside a decree on the ground that compromise on which decree is based was not lawful – However, when there is a dispute as to whether an adjustment or satisfaction has been arrived at, same shall be decided by Court which recorded compromise – An agreement or compromise which is clearly void or voidable shall not be deemed to be lawful and bar under Rule 3A shall be attracted if compromise on the basis of which decree was passed was void or voidable – Determination of disputes between persons and bodies is regulated by law – Legislative policy of all legislatures is to provide a mechanism for determination of dispute so that dispute may come to an end and peace in society be restored – Legislative policy also aims for giving finality of litigation, simultaneously providing higher forum of appeal/revision to vend grievances of an aggrieved party – Only remedy available to a party to a consent decree to avoid such consent decree is to approach court which recorded compromise and separate suit is not maintainable. (Paras 41, 49, 54 and 55)

(B) Indian Contract Act, 1872 – Sections 10, 13 and 14 – Free consent – When consent is obtained by coercion, undue influence, fraud, misrepresentation or mistake, such consent is not free consent and contract becomes voidable at option of party whose consent was caused due to coercion, fraud or misrepresentation – An agreement, which is void or voidable under Indian Contract Act, shall not be deemed to be lawful as is provided by Explanation to Rule 3 of Order XXIII of CPC. (Para 44)

(C) Hindu Law – Partition – Under Hindu Law, any member of joint family can separate himself from joint family – Intention of parties to terminate status of joint family is a relevant factor to determine status of Hindu Undivided Family – Hindu Joint Family even if partitioned can revert back and reunite to continue the status of joint family – An individual member of joint Hindu Family can very well file his separate Returns both under Income Tax Act as well as Wealth Tax Act and filing of such Returns was not conclusive of status of family – An individual member of joint Hindu Family can very well file his separate Returns both under Income Tax Act as well as Wealth Tax Act and filing of such Returns was not conclusive of status of family. (Paras 76, 78 and 98)

(D) Property Law – Partition – Tatabad Residential Property – Challenge to compromise decree – Plaintiffs pleads that compromise decree which was intended only to secure and safeguard properties is sham and nominal besides being fraudulent – Only remedy available to plaintiff was to approach court in same case and satisfy court that compromise was not lawful – No error in judgment of trial court and High Court holding that suit was barred under Order XXIII Rule 3A of CPC – Compromise decree could not have been questioned in suit – Real intendment of three branches to partition their properties was not that they did not want Hindu Undivided Family to continue rather partition was with object to get away from application of Ceiling Act, 1961 – Intention of parties when they partitioned their properties in year 1960 is a relevant fact – However, Partition Deed dated 07.11.1960 being a registered Partition Deed between three branches, same cannot be ignored – All three branches have equal share in Tatabad residential property – Parties given liberty to make application before trial court for passing an appropriate final decree and such application to be disposed of by trial court in accordance with law.[Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, 1961 – Section 5](Paras 46, 55, 56, 76, 77, 100, 101 and 102)

Facts of the case:

Present two appeals have been filed challenging Division Bench judgment dated 23.11.2011 of Madras High Court dismissing the A.S. No.281 of 2000 and A.S. No.332 of 1999 filed by the appellants respectively. These appeals are concerned with three branches, namely, Rangasamy, Kumarasamy and Chinnasamy. In the year 1954-55, three brothers purchased various properties and started rice mill business called Laxmi Rice Mills and also started Swamy Textiles in 1976, a match factory, a slate factory, saw mills, timber business and power loom out of joint family funds. On 07.11.1960 a partition deed was registered between three brothers with respect to the properties allotted to them as per registered partition deed dated 27.09.1953 along with the properties purchased by three brothers in the ratio of 1/3rd each. Even after partition, three brothers continued to live under the same roof and carried on business as partners. Whether bar under Rule 3A of Order XXIII of CPC shall be attracted in the facts of the present case is the question to be answered.

Findings of Court:

Plaintiff's case throughout was that family continued to be joint after 07.11.1960 and D1 who alone had filed the written statement and appeared in the witness box having come with the case of partition on 08.03.1981 which he claims to be implemented on 06.08.1984 by Compromise Decree, it is proved that family was joint at least till then, i.e., 08.03.1981 or 06.08.1984. Thus, in the year 1979, when Tatabad residential property was acquired, the three branches were joint.

Result : Civil Appeals Partly allowed.