IN THE HIGH COURT OF JUDICATURE AT MADRAS
R.S. Ramanathan, J.
S. Kandasamy S/o Sengodu Gounder
Versus
Subramani S/o Pongia Gouder and Another
CMP No. 988 of 2013 in A. S. No. 1008 of 2003
Decided On: 28 March 2014
Compromise - Civil Procedure Code - Order 23 Rule 3 - 1, 2, 3, 18, 19, 37 - The court discussed the validity of a compromise decree passed on the basis of an endorsement made by counsels without the signature of the parties. The court referred to various judgments to establish that a compromise must be in writing and signed by the parties to be valid. The court held that the compromise decree passed on the basis of the endorsement made by the counsels without the signature of the parties is liable to be set aside and it is set aside.
Fact of the Case:
The petitioner filed a suit for specific performance of an agreement of sale, which was decreed. The respondents challenged the decree in an appeal, which was disposed of based on a compromise between the parties. The petitioner filed a petition to set aside the compromise decree, claiming that the endorsement was made without his knowledge and consent.
Finding of the Court:
The court found that the compromise decree passed on the basis of the endorsement made by the counsels without the signature of the parties is liable to be set aside.
Issues: Validity of a compromise decree based on an endorsement made by counsels without the signature of the parties.
Ratio Decidendi: A compromise must be in writing and signed by the parties to be valid. The compromise decree passed on the basis of the endorsement made by the counsels without the signature of the parties is liable to be set aside.
Final Decision: The Civil Miscellaneous Petition to set aside the compromise decree was allowed.
1. The respondent in A.S.No.1008 of 2003 is the petitioner in this CMP.
2. The petitioner herein filed a suit in O.S. No. 455 of 1997 on the file of the Sub Court, Salem (O.S. No. 118 of 2002 on the file of the Additional District Court/Fast Track Court No.1, Salem) against the respondents herein, for specific performance of agreement of sale, dated 28.08.1996 and the suit was decreed as prayed for. As per the decree, the petitioner/plaintiff is liable to pay the balance sale consideration, after deducting Rs. 52,000/- as advance and get the sale deed executed by the respondents. The judgment and decree made in O.S. No. 118 of 2002 was challenged in A.S.No.1008 of 2003 before this court by the respondents. By judgment, dated 02.08.2011, the said appeal was disposed of, on the basis of the compromise entered into between the parties, as evident by the endorsement made in the bundle by the respective counsel appearing for both sides and the following is the terms of the comprise arrived at between the parties:
“(1) Plaintiff and the defendants agree for decree for Rs. 2,50,000/- (Rupees Two Lakhs Fifty Thousand only) payable by the defendants to plaintiff within three months from this date for which there will be a charge on suit schedule property. However, the defendants are permitted to mortgage the suit scheduled property for raising loan so as to discharge this decree amount.
(2) There will not be any other claim against each other.:
3. Later, the petitioner herein filed the above Civil Miscellaneous Petition to set aside the judgment and decree passed on 02.08.2011 in A.S. No. 1008 of 2003 on the basis of the compromise memo, endorsed in the grounds of appeal by the learned counsels and to restore the Appeal Suit for hearing stating that he never agreed to receive a sum of Rs. 2,50,000/- payable by the respondents to him and the endorsement was made by his counsel without his knowledge and consent and therefore, the judgment and decree made on 02.08.2011, on the basis of the above endorsement has to be set aside.
4. It is submitted by Mr. S. Parthasarathy, the learned Senior counsel appearing for the petitioner that though the learned counsel on record is an Agent of the party, having regard to the specific provisions under Rule 23 Order 3 CPC, without getting the signature of the party in writing to the alleged compromise arrived at between the parties, the learned counsel should not have made the endorsement and the endorsement has no legal force and the endorsement is not binding on the parties and the endorsement is also contrary to Order 23 Rule 3 CPC and therefore, the decree passed in Appeal Suit has to be set aside.
5. Mr. S. Parthasarathy, the learned Senior counsel appearing for the petitioner further submitted that at this point of time, he does not want to blame, either the counsel appearing for the petitioner before this court as well as the learned counsel, who appeared in the trial court and considering the overall circumstances, namely the case was pending for eight years and the arguments were partly heard, the petitioner could not have agreed for receiving Rs. 2,50,000/- in full quit against the judgment obtained in his favour and the learned counsel appearing for the petitioner before this court ought to have been vigilant and ought to have obtained the signature of the parties and having regard to the stand taken by the petitioner that he never agreed for compromise and also the conduct of the petitioner in coming to this court immediately on coming to know of the order passed in A.S. No. 1008 of 2003 on the basis of the compromise, this CMP has to be allowed and the judgment and decree passed in A.S. No. 1008 of 2003 has to be set aside.
6. On the other hand, Mr. S. Ramanarayanan, the learned counsel appearing for the respondents submitted that the respondents herein offered to pay Rs. 2,50,000/- to the petitioner herein for allowing the Appeal Suit and that was conveyed to the respondents counsel, who ap
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