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High Court Of Calcutta
A. M. BHATTACHARJEE,. , A. N. RAY
MOLLA SIRAJUL HAQUE - Appellant
Versus
GORACHAND MULLICK - Respondent
Appeal 429 Of 1990
Decided On : 06/26/1992
COMPROMISE OF SUIT - ORAL OR UNSIGNED ADJUSTMENT - LEGALITY AND EFFICACY - POWER OF APPELLATE COURT TO RECORD COMPROMISE BEYOND THE SCOPE OF INTERLOCUTORY ORDERS - ORDER 23 RULE 3, C. P. C. - INTERPRETATION.
Fact of the Case:
An application was filed under Order 23 Rule 3 of the Code of Civil Procedure for recording adjustment of all the suits between the parties on the basis of an alleged agreement. The alleged agreement or compromise put forward by the applicant was admittedly not signed by the parties.
Finding of the Court:
1. Under Order 23 Rule 3 of the Code of Civil Procedure, as it now stands, the Court can and shall record an adjustment, by way of agreement or compromise, when, and only when, such agreement of compromise is in writing and signed by the parties. 2. An application under Order 23 Rule 3, when allowed, may not always terminate the Suit, for, as the words "wholly or in part" and the words "whole or any part" in Rule 3 would show, the adjustment or satisfaction sought to be recorded may relate only to a part of the claim in the Suit, and, therefore, even after adjustment or satisfaction of a portion of the suit, is so recorded, the rest of the Suit would have to be proceeded with. 3. In view of Rule 3, as it now stands after the 1976-Amendment, any oral or unsigned adjustment, agreement or compromise can, in law and on its own, be the foundation of a decree. 4. Though oral agreement or compromise can have no place under Rule 3, it is not absolutely useless or ineffective. If any such oral adjustment or compromise or any offer therefore is brought to the notice of the Court as a piece of evidence, the Court trying the proceeding shall have to take the same into account along with all other materials on record and dispose of the proceeding on a consideration of all the materials including the oral compromise or the offer to compromise. 5. Under Order 23 Rule 3 a compromise is today permitted even beyond the scope of a suit. Under section 141 of the Code of Civil Procedure the proceeding with regard to suits is to be followed in all proceedings as far as possible. The proceeding before the Appeal Court thus could very well encompass compromises beyond the scope of the Appellate proceeding itself. In other words, the appeal Court in seisin of an interlocutory matter could compromise the entire suit, just as the suit Court in seisin of the suit could compromise matters beyond the scope of the suit itself.
Issues: 1. Whether an oral or unsigned adjustment, agreement or compromise can, in law and on its own, be the foundation of a decree? 2. Whether an application under Order 23 Rule 3, when allowed, terminates the Suit? 3. Whether a compromise is permitted even beyond the scope of a suit under Order 23 Rule 3?
Ratio Decidendi: 1. The words "in writing and signed by the parties" after the words "lawful agreement or compromise" in the first part of Rule 3 have been inserted by the Amendment Act of 1976 and as a result, under the Rule, as it now stands, the Court can and shall record an adjustment, by way of agreement or compromise, when, and only when, such agreement of compromise is in writing and signed by the parties. 2. The words "in writing and signed by the parties", however, do not quantify the second part of Rule 3 and therefore where the defendant satisfies the plaintiff in respect of the subject-matter of the Suit, such satisfaction is not required to be evidenced by any signed instrument and once the Court is satisfied that such a satisfaction has been arrived at, the Court shall record the same without asking for a signed document. 3. Under Order 23 Rule 3 a compromise is today permitted even beyond the scope of a suit. Under section 141 of the Code of Civil Procedure the proceeding with regard to suits is to be followed in all proceedings as far as possible. The proceeding before the Appeal Court thus could very well encompass compromises beyond the scope of the Appellate proceeding itself. In other words, the appeal Court in seisin of an interlocutory matter could compromise the entire suit, just as the suit Court in seisin of the suit could compromise matters beyond the scope of the suit itself.
Final Decision: The application for recording adjustment of the Suits was rejected solely on the ground that the purported agreement or compromise was not signed by the parties as required under the provisions of Rule 3.
( 1 ) -FACTS necessary for the disposal of the application before us have been succinctly stated by Ray, J. in his Judgment hereinafter following. The questions of law involved have also been dealt with by him with his usual dexterity. I have agreed wholly with the Order proposed by him and mostly with what he has stated as the reasons for the Order. I say mostly and would therefore indicate hereinbelow where I have not been able to agree with him.
( 2 ) IN the two appeals arising out of two interlocutory Orders passed in suits between the parties, one of the parties has filed an application under Order 23, Rule 3 of the Code of Civil Procedure for recording adjustment of all the suits between the parties on the basis of an alleged agreement. Order 23, Rule 3, though ex facie applying to Courts trying Original Suits, would apply to Appellate Courts also in view of section 107 (2) of the Code investing them with all the powers and duties of Courts of Original Jurisdiction. Ray, J. , has chosen to invoke section 141 of the Code for enabling Appellate Courts to exercise the powers of an Original Court. With respect, the Code applies to Appellate Courts on its own and, as already noted, section 107 (2) expressly clothes the Appellate Courts with all the powers of the trial Court.
( 3 ) TRUE, the Suits are not before us in the form of appeals from decrees, but there are only two appeals from interlocutory Orders passed in the Suits. It is also true that under Rule 3, as it stood before the 1976 Amendment, compromise could relate only to the matters in Suit. If the matter stood at that, we sitting in appeal, could record compromise only on matters so far it related to the matters covered by the appeals only and could not go beyond the matters covered by the interlocutory Orders giving rise to the appeals. But Rule 3, as now amended in 1976, authorises recording of compromise on all matters which relate to the parties before us and, therefore, nothing should prevent us from recording a compromise in these appeals on any matter provided they relate to the parties before us, even though they are not covered by the scope of the appeals. Mr. Sen has also, with his usual fairness, conceded that, though he has opposed the application on other grounds. Ray, J. , has also no doubt as to our competence to record adjustment of all the Suits even in these appeals from interlocutory Orders; but he has rejected the application on merits. I agree with brother Ray for reasons stated hereunder. The relevant portions of the provisions of Rule 3 of Order 23 are reproduced hereunder :-"where it is proved to the satisfaction of the Court that a Suit has been adjusted wholly or in part by any lawful agreement or compromise in writing and signed by the parties, or where the defendant satisfies the plaintiff in respect of the whale or any part of the subject matter of the Suit, the Court shall order such agreement, compromise or satisfaction to be recorded, and shall pass a decree in accordance therewith so far as it relates to the parties to the suit, whether or not the subject matter of the agreement, compromise or satisfaction is the same as the subject-matter of the Suit. PROVIDED that where it is alleged by one party and denied by the other that an adjustment or satisfaction has been arrived at, the Court shall decide the question, but no adjournment shall be granted for the purpose of deciding the question, unless the Court, for reasons to be recorded in writing, thinks fit to grant such adjournment".
( 4 ) THE words "in writing and signed by the parties" after the words "lawful agreement or compromise" in the first part of Rule 3 have been inserted by the Amendment Act of 1976 and as a result, under the Rule, as it now stands, the Court can and shall record an adjustment, by way of agreement or compromise, when, and only when, such agreement of compromise is in writing and signed by the parties. No citation shoul
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