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IN THE HIGH COURT OF JAMMU & KASHMIR AND LADAKH AT SRINAGAR
JAVED IQBAL WANI, J.
Nikhat Nabi – Petitioner
Versus
M/s Fancy Fabrics and Others – Respondents
CM(M) No. 265 Of 2022, CM(1655/2023) CM(2036/2023) CM(2785/2023) CM(6382/2022) CM(6652/2022) c/w CCP(S) 78/2023
Decided On : 22-09-2023
Supervisory Jurisdiction - Quashing of Compromise Judgment and Decree - Order 23 Rule 3 CPC - [SUPERVISORY JURISDICTION] - [QUASHMENT OF COMPROMISE JUDGMENT AND DECREE] - [Order 23 Rule 3 CPC] - The court discussed the provisions of Order 23 Rule 3 CPC, which mandates the court to record and pass a decree in accordance with any lawful agreement or compromise between the parties. The court emphasized that the provision aims to permit the parties to settle disputes and recognizes and encourages compromise. The court also highlighted the bar to set aside a decree based on a compromise on the ground that the compromise was not lawful. The judgment of the Apex Court in R. Janakiammal v. S. K. Kumarasamy was referenced to establish that the bar to sue is limited and applicable only to parties to the compromise and not to third parties or strangers. The court concluded that the petitioner, being a stranger to the suit, had no right to seek setting aside of the compromise judgment and decree and had chosen a wrong remedy by invoking supervisory jurisdiction. Therefore, the court declined to interfere with the impugned order.
Fact of the Case:
The petitioner invoked the supervisory jurisdiction of the court to seek quashment of an order passed by the trial court, which dismissed the petitioner's application seeking to set aside a compromise judgment and decree. The petitioner claimed to have a charge/lien over the property and stocks hypothecated by the respondents and sought to protect and enforce her rights against the loan amount advanced to the respondents.
Finding of the Court:
The court found that the petitioner, being a stranger to the suit, had no right to seek setting aside of the compromise judgment and decree. The court emphasized that the supervisory jurisdiction of the court was not warranted to be exercised in the case and declined to interfere with the impugned order. Consequently, the petition was dismissed, and the ancillary applications were disposed of.
Issues: The fundamental issue was whether the petitioner, as a stranger to the suit, could seek the setting aside of the compromise judgment and decree. Additionally, the court addressed the appropriate remedy available to the petitioner against the compromise judgment and decree and the exercise of supervisory jurisdiction in the matter.
Ratio Decidendi: The court held that the provisions of Order 23 Rule 3 CPC aim to permit the parties to settle disputes and recognize and encourage compromise. The court emphasized the bar to set aside a decree based on a compromise and highlighted that the bar is limited and applicable only to parties to the compromise and not to third parties or strangers. The court concluded that the petitioner, being a stranger to the suit, had no right to seek setting aside of the compromise judgment and decree and had chosen a wrong remedy by invoking supervisory jurisdiction.
Final Decision: The court declined to interfere with the impugned order, dismissed the petition, disposed of the ancillary applications, and closed the contempt petition arising out of the interim order passed during the proceedings of the instant petition.
ORDER :
1. Respondents 1-11 have been set ex parte in terms of order dated 26.4.2023.
2. The record of the proceedings reveals that on 24.7.2023 a Coordinate Bench of this court has directed listing of the main petition along with connected applications for consideration after observing that that instead of passing interim orders on the applications in the case, the main petition itself should be heard finally.
3. Learned counsel for the petitioner, however, would insist that the order passed on 21.2.2023 by this court is not being complied with, whereunder respondent 13 came to be directed to deposit an amount of Rs.10/- lakhs before the Registrar Judicial of this court within two weeks’ time and in the event it was deposited, the Registrar Judicial had to deposit the same in a fixed deposit in initially for a period of six months. Perusal of the order dated 21.2.2023 passed by this court also required the Registrar Judicial to have the record of the suit titled as “JK Bank vs. Fancy Fabrics” claimed to have been disposed of by the court of Principal District Judge, Srinagar, upon a compromise on 3.6.2006, and ensure its production before this court, and in the event the said record is found to be missing as is alleged by the petitioner, necessary action as warranted under law be initiated.
Learned counsel for the petitioner would contend that the said order has not been complied with. On the contrary, counsel for respondent 13 states that an application for vacation of the said order has been filed, being CM no. 1655/2023, to which objections are stated to have been filed by the counsel for the petitioner.
4. Perusal of the record would reveal that the Registry has made a report on 31.3.2023 stating therein that though in terms of order passed by this court, the record of the suit was summoned from the District Court, Srinagar, however, same, appears to have got affected by the floods of 2014 and although efforts were made to get the record copied but same could not be scanned/copied owing to the inability expressed by the concerned sections of the High Court. Perusal of the record would reveal that the Registry has also made a report on 6.4.2023 stating therein that copy of the original suit filed by the J&K Bank through M/s Zaffar Law Associates has become available and is attached with the file.
5. Be that as it may, in view of order dated 24.7.2023 supra, the main matter is taken up for consideration.
6. In the instant petition supervisory jurisdiction of this court enshrined under Article 227 of the Constitution is being invoked by the petitioner herein for seeking quashment of order dated 14.9.2022 (for short the impugned order) passed by the court of Principal District Judge, Srinagar, (for short the trial court) in case titled as “The Jammu and Kashmir Bank Ltd. vs. M/s Fancy Fabrics and others.
The facts emerging from the record would reveal that the respondents 2 and 3 herein were running a wholesale and retail business of cloth, textiles, readymade garments, fabrics, etc. at the business place namely “M/s Fancy Fabrics and M/s Saman Sagar Collection at Budshah Chowk, Srinagar” as proprietors and in furtherance of the said business had applied for loan from J&K Bank Limited, New Secretariat Road, Srinagar, respondent 13 herein, against primary security of hypothecation of stocks of all kinds as also against the collateral security of mortgage and other immovable properties owned by the said respondents 2 an 3, besides availing loan from various private individuals including the present petitioner.
7. The petitioner herein claims to have also provided a loan of Rs.3 lakhs to the respondent 2 and 3 in the month of February 2002 at the rate of 3% interest per month and in lieu thereof, the said respondents are stated to have executed a promissory note as also a declaration providing therein that in case the said respondents fail to repay the amount of loan availed from the private respondents reflected in the said decl
The main legal point established in the judgment is that a stranger to a suit/lis is not entitled to seek setting aside of a compromise judgment and decree and cannot invoke supervisory jurisdiction ....
Compromise decree – Provisions of CPC are designated to facilitate justice as it is not a penal law to punish a person.
(1) No suit shall lie to set aside a decree on the ground that compromise on which decree is based was not lawful.(2) Mere clever drafting would not permit plaintiff to make suit maintainable which o....
Judicial orders of civil courts are not amenable to writ jurisdiction under Article 226; challenges to compromise decrees must be made within the same court that issued them, and such decrees can onl....
A party aggrieved by a compromise decree has a right to challenge the compromise decree by way of an appeal or to approach the same court which passed such decree by way of an appropriate application....
A plaint cannot be rejected if it discloses a cause of action, and non-parties to a compromise decree have the right to challenge its validity.
A party not involved in a compromise decree may challenge it if they do not claim rights through a party to that decree, as per Order 23 Rule 3-A.
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