( 1 ) THIS is an appeal from a judgement and decree passed on 29th March, 1994 recording a compromise between the plaintiff bank and the respondent Tea Company. .

( 2 ) THE Bank, the appellant, has pressed the case that there was no finalized agreement and such recording of compromise by invoking Order 23 Rule 3 was inappropriate. .

( 3 ) IT is well known, that in the present amended state of the Code, parties are free to enter into a compromise in relation to their suit, and even settle matters outside the suit, provided the agreement is in writing and signed by the parties. Needless to mention that the agreement must also be lawful.

( 4 ) THE facts of this case are short and simple. On the 2nd day of July, 1990, following several negotiations the Tea Company wrote "without prejudice" to the bank proposing to pay off its principal dues of Rs. 335 lac and interest in a certain manner.

( 5 ) THE scheme is detailed but the basics are as follows :on the principal sum for the five years immediately passed, interest would be Rs. 9 lac only. Rs. 335 lac would again be divided into two parts and one part would not carry interest at all. Payment also would spread