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1974 Supreme(Ori) 98

Orissa High Court
R. N. MISRA, AND P. K. MOHANTI, JJ.
Rama Krushna Swain - Appellant
Versus
Smt. Fulamani Kamila - Respondents
A. H. O. No. 25 of 1973
Decided On : 18 November 1974

Advocates Appeared:
R. Mohanty, for Appellant; P.C. Mohapatra, D. Mohanty and G. Sahu, for Respondents.

A compromise that is voidable due to fraud, undue influence, or misrepresentation cannot be recorded under Order 23, Rule 3 of the Code of Civil Procedure.

Headnote:

COMPROMISE - LAWFUL AGREEMENT - MEANING - SCOPE OF ENQUIRY UNDER ORDER 23, RULE 3 OF THE CODE OF CIVIL PROCEDURE - ADJUSTMENT OF SUIT - FRAUD, UNDUE INFLUENCE OR MISREPRESENTATION - VOIDABLE AGREEMENT - INDEPENDENT SUIT.

Fact of the Case:

Plaintiff filed a suit for a declaration that defendant No. 1 acquired no title under a sale deed executed by her. On the date fixed for trial, the parties filed a petition of compromise. The court recorded the compromise and passed a decree in accordance therewith. Plaintiff later filed an application to expunge the name of the second defendant from the record and to advance the date of trial so that the suit could be disposed of in terms of the compromise. Defendant No. 2 filed a petition for being transposed as plaintiff. Plaintiff filed an application saying that the compromise was not in accordance with the terms agreed upon. The trial court rejected the applications of the plaintiff and defendant No. 2 and recorded the compromise. Plaintiff appealed to the High Court.

Finding of the Court:

The High Court held that the enquiry envisaged under Order 23, Rule 3 of the Code of Civil Procedure admits of two questions being examined: (1) whether there has been an adjustment or compromise and whether such adjustment or compromise is lawful; and (2) challenge on ground of undue influence, fraud, or misrepresentation make an agreement voidable and not void and when a compromise is challenged on such ground, the matter is not within the ambit of Rule 3 and must be left to be decided by an independent suit.

Issues: 1. Whether the enquiry under Order 23, Rule 3 of the Code of Civil Procedure includes a challenge to the compromise on the ground of fraud, undue influence, or misrepresentation? 2. Whether a compromise that is voidable due to fraud, undue influence, or misrepresentation can be recorded under Order 23, Rule 3 of the Code of Civil Procedure?

Ratio Decidendi: 1. The enquiry under Order 23, Rule 3 of the Code of Civil Procedure admits of two questions being examined: (1) whether there has been an adjustment or compromise and whether such adjustment or compromise is lawful; and (2) challenge on ground of undue influence, fraud, or misrepresentation make an agreement voidable and not void and when a compromise is challenged on such ground, the matter is not within the ambit of Rule 3 and must be left to be decided by an independent suit. 2. A compromise that is voidable due to fraud, undue influence, or misrepresentation cannot be recorded under Order 23, Rule 3 of the Code of Civil Procedure.

Final Decision: The High Court set aside the decision of the learned Single Judge and restored that of the learned Subordinate Judge. The court directed parties to bear their own costs of the appeal.

Judgement

R. N. MISRA, J. :- Baina and Banamali were two brothers. Baina died in the year 1950 leaving behind his widow Fulamani (Plaintiff). Banamali started oppressing the plaintiff with a view to grabbing the properties. Plaintiff, therefore, sought protection of defendant No. 1. Defendant No. 1 taking advantage of the fact that plaintiff was a pardanasin and illiterate lady had an eye on her properties. He got a sale deed executed by plaintiff, but she having come to know of the evil designs of defendant No. 1 objected before the Sub-Registrar. After enquiry, an order was duly made under the Registration Act for registration of the document. The plaintiff, therefore, instituted Title Suit No. 16 of 1966 for a declaration that defendant No. 1 acquired no title under the sale deed dated 15-2-1966. She impleaded an alienee from her as second defendant.The suit was posted for trial to 28-2-68. On 24-2-1968, plaintiff and defendant No. 1 filed a petition of compromise. Plaintiff applied for expunging the name of the second defendant from the record and parties asked for advancing the date of the trial to 24-2-1968 so that the suit could be disposed of in terms of the compromise. On 24-2-1968, the Court made the following order:-

"Plaintiff and defendant No. 1, file a compromise petition and two more petitions, one for putting up the record today for recording the compromise and another to expunge defendant No. 2 from record since the plaintiff seeks no relief against defendant No. 2. Learned Advocate for defendant No. 2 appears and prays to postpone the recording of compromise till the date fixed since he wants to cite some rulings against such compromise between plaintiff and defendant No. 1 Heard Advocates of both parties. I find no valid ground to postpone the recording of compromise but the final order on the suit will be passed later on. The compromise is read over and explained to plaintiff and defendant No. 1 and they admit the same to be correct.

Put up on the date fixed." On 28-2-1968, defendant No. 2 filed a petition for being transposed as plaintiff. On 9-3-1968, to which date the matter was posted inviting objections against defendant No. 2 s application, plaintiff filed an application saying that the compromise placed before the court was not in accordance with the terms agreed upon.

2. The learned Suboddinae Judge entered into an enquiry purporting to be under Order 23, Rule 3 of the Code of Civil Procedure and after hearing parties rejected the applications of the plaintiff and defendant No. 2 on a finding that the compromise dated February 24, 1968, was lawful and should, therefore, be recorded.

3. Against this decision of the learned Subordinate Judge, Miscellaneous appeal No. 158 of 1969 was carried to this court under Order 43, Rule 1 (m) of the Code of Civil Procedure and came to be disposed of by our learned brother B. K. Ray, J. on 26th October, 1973. The learned Single Judge came to hold that the plaintiff had not signed the compromise deed after understanding its items and, therefore, there was no agreement as set up by defendant No. 1 for adjustment of the suit. The stand taken by defendant No. 1 that the question of undue influence and fraud pleaded by plaintiff must be left to be disposed of by an independent suit was negatived. The order disposing of the suit in terms of the compromise was thus vacated. Defendant No. 1 challenges the appellate decision of the learned Single Judge.

4. Plaintiff s stand in her objection to the compromise was that it was the outcome of fraud practised on her. Defendant No. 1 had taken the stand both before the learned Trial Judge as also the learned Single Judge of this court that an enquiry on the ground of fraud did not come within the ambit of Order 23, Rule 3 of the Code of Civil Procedure and, therefore, she should have been left to an independent suit. Order 23, Rule 3 of the Code is to the following effect :-

"Where it is proved to the satisfaction of the Court that a s

















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