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1995 Supreme(Ker) 194

Judges : K.T.THOMAS,K.S.RADHAKRISHNAN
Narayanan - Appellant
Versus
Rajamany - Respondent
Case No : S.A. No. 509 of 1987
Decided On : 07/28/1995
Advocates Appeared :
C.S. Anantha Krishna Iyer (Sr. Advocate), K.K. Mohammed Rauf & Sajan Varghese For Appellant S. Sankara Subban For Respondents

A compromise decree is subject to the incidents of the agreement on which it is based and can be void if it involves injury to the property of another, as per Section 23 of the Contract Act.

Headnote:

void decree - illegal compromise - Contract Act, Section 23 - Ext. A5(a) - Sine qua non for deciding whether the injunction prayed for could be granted or not - Ext. A4 judgment has a binding effect - A compromise decree is a creature of the agreement on which it is based and is subject to all the incidents of such agreement - Ext. A5(a) decree is void as against the appellant and the same cannot be enforced against his properties

Fact of the Case:

Appellant challenges a previous decree obtained by 1st respondent, claiming it to be void due to an illegal compromise. Appellant seeks a perpetual injunction to restrain the decree holders from proceeding against the suit property. The suit property was sold to the plaintiff, and a suit was filed against the seller, Nanu, for a sum of Rs. 79,000. A compromise was reached, and a decree was passed. Plaintiff contends that the decree was procured through collusion and seeks relief.

Finding of the Court:

The court found that the decree was void as it was based on an illegal compromise involving injury to the property of another, falling within the ambit of Section 23 of the Contract Act. The court set aside the judgment and decree passed by the lower courts and issued a perpetual injunction restraining the defendants from proceeding against the plaintiff's property for realization of the decree debt.

Issues: The main issue was whether the Ext. A5(a) decree was void due to an illegal compromise, and whether the plaintiff was entitled to the injunction prayed for.

Ratio Decidendi: The court held that a compromise decree is a creature of the agreement on which it is based and is subject to all the incidents of such agreement. The court also emphasized that the absence of a prayer for setting aside the decree is not enough to oust the jurisdiction of the court from considering the crucial issue involved in the suit.

Final Decision: The court allowed the appeal, set aside the judgment and decree passed by the lower courts, and issued a perpetual injunction restraining the defendants from proceeding against the plaintiff's property for realization of the decree debt.

Judgment :-

Thomas, J.

The focus of appellant's attack in the suit is on a previous decree which 1st respondent has obtained from this court. According to the plaintiff, the said decree is void as it was based on an illegal compromise made between the parties in that case. Appellant prayed for a perpetual injunction to restrain the said decree holders from proceeding against the suit property in execution thereof. But plaintiff lost the case in the two courts below. Hence this second appeal by him.

2. The background of the present suit is the following: The suit property and some other properties belonged to one Nanu (who was the brother of first respondent's husband), Nanu sold those properties to different persons. Suit property was sold to one Mohammed Haneefa from whom the plaintiff purchased it on 25-7-1964 as per Ext. Al sale deed But prior to the said sale a suit was filed by the first respondent as O.S. No. 12/63 against Nanu for a decree in a sum of Rs. 79,000/- on the allegation that Nanu had borrowed the said sum from 1st respondent's husband. After filing the suit, properties of Nanu were attached before judgment in that case. Nanu contested the suit vehemently and the suit was practically dismissed by the trial court except decreeing a very small portion of the claim (Rs. 3,000/- which Nanu admitted having received from his brother). Then the first respondent filed an appeal before this court as A.S. No. 281/65. Nanu contested the appeal and also filed a memorandum of cross-objections on the ground that he was not liable to return even the amount of Rs. 3,000/- decreed by the first court. While the appeal was pending Nanu died and his legal representatives were impleaded in the appeal. Thereafter the compromise (Ext. A5) was filed in this court signed by both parties in the appeal. As per the said compromise legal representatives of Nanu had conceded that a decree for Rs. 79,000/- might be passed against them. Pursuant to the said compromise Ext. A5(a) decree was passed thereon. Later the decree holders resorted to execution proceedings and the attached properties were brought to sale, plaintiff tiled the present suit contending that Ext. A5(a) decree has been procured in collusion between the parties thereto, as he failed to save his property from such execution proceedings through a claim petition.

3. Both the courts below declined to consider the question whether Ext. A5(a) decree is invalid, since plaintiff did not pray for a relief to set aside the decree.

4. Shri C.S. Ananthakrishna Iyer, learned senior counsel for the appellant/ plaintiff, contended that the two courts below have erred in by-passing the main issue on a mere technical ground that there was no prayer to set aside the decree. According to the senior counsel, when the suit is for permanent injunction restraining the respondents from proceeding against the suit properties on the ground that the decree (Ext. A5(a)) is invalid an issue should necessarily have been formulated "whether Ext. A5(a)) decree is void or not". A finding on such an issue is indispensable for proceeding to decide whether the injunction prayed for could be granted.

5. There is force in the said contention. According to us, the court was bound to enter a finding whether Ext. A5(a) decree is invalid as contended by the plaintiff because such a finding is sine qua non for deciding whether the injunction prayed for could be granted or not! A plaintiff may or may not incorporate in his plaint a prayer to set. aside the decree. Here, the plaintiff took the stand mat the decree is void and on the assumption prayed for the relief of injunction. Absence of a prayer for setting aside the decree is not enough to oust the jurisdiction of the court from considering the crucial issue involved in me suit.

6. As the suit is a very old one having been instituted in 1979, we are not disposed to remit the case to the trial court to determine the aforesaid question. We choose to decide the question h











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