BIJAYESH MUKHERJI, J. ( 1 ) HAS it been proved to the satisfaction of the Court that this suit being Suit No. 1969 of 1964, by Prakash Chandra Gangoly against Nawn Estates Private Ltd. , principally for specific performance of the contract dated January 22, 1959, to sell 3 odd cottahs of land inside of 6 Brabourne Road, Calcutta, has been adjusted wholly by a lawful agreement come to between them on October 10, 1966 ? That is the question debated before me in the hearing of the plaintiff Gangoly's petition, affirmed on September 12, 1967, and filed in Court on September 14 following, under Order 23, Rule 3 of the Procedure Code (V of 1908), by which the Orders he prays the Court for are - (i) The compromise dated October 10, 1966, be recorded. (ii) A decree be passed in accordance therewith. ( 2 ) BUT what is the compromise so come to on October 10, 1966, as the plaintiff Gangoly alleges? The parties had negotiations which culminated in an agreement 'for lease of the suit land' on certain terms, the more important of which are - one, the defendant company will execute a lease in favour of the plaintiff of the land in controversy for a term of 71 years from November 1, 1965, with an option to the lessee for extension for 10 years more. Two, rent Rs. 501 a month, subject to an increase by 5% on the expiry of every 12th year from the date of execution of the lease. Three, the plaintiff will pay the defendant company an advance of Rs. 1,25,000, the Rent Controller permitting, under Section 5 (b) of the Premises Tenancy Act, 12 of 1956. And the monthly rent will be adjusted towards such advance until such time as the whole of it is liquidated. Four, the plaintiff will construct pucca buildings on the land, to be demised so, with good materials; the defendant company in turn will consent to the requisite plan to be submitted to the Corporation of Calcutta for sanction. ( 3 ) SO far then about the agreement for lease of the land in controversy. Now about the suit. On the defendant company executing and registering a lease as aforesaid, the plaintiff will withdraw the suit, each party bearing its costs. ( 4 ) SUCH then was the compromise come to on October 10, 1966. ( 3 ) SO far then about the agreement for lease of the land in controversy. Now about the suit. On the defendant company executing and registering a lease as aforesaid, the plaintiff will withdraw the suit, each party bearing its costs. ( 4 ) SUCH then was the compromise come to on October 10, 1966. But the manner in which it was come to has got to be known, the matter having taken before me the turn it has done. On October 10, 1966, the plaintiff Gangoly wrote a letter to the defendant company recording the terms just noticed, as also a few more (all of which are not deserving of notice), and enclosing a cheque for Rs. 25,000 in part payment of the advance of the agreed sum of Rs. 1,25,00. So he did, without prejudice, an expression which appears almost at the tope of the letter, and that too in capital letters, his signature appearing as usual at the bottom thereof. Two directors of the defendant company, A. Nawn and S. Nawn, lent their signatures to the same letter just below the plaintiff Gangoly's but not without prefacing such signatures with that expression again : 'without Prejudice'. ( 5 ) IF only to complete the narration, in so far as it material here, the defendant company accepted the cheque for Rs. 25,000, applied before the Rent Controller on January 19, 1967, for permission to accept the advance payment of rent to the extent of Rs. 1,25,000 and obtained his permission that very day on the strength of evidence given by both parties before him : vide Exs. D and F to the plaintiff's petition sworn on September 12, 1967, Ex. D being the petition before the Rent Controller and Ex. F being his order. ( 6 ) MR. Panja, appearing for the defendant company, sees no completed agreement in the terms come to on October 10, 1966. All the sees is that various things are left to be done in future, such as (i) the suit will be withdrawn by the plaintiff on the defendant executing the lease (ii) the defendant will execute the lease of the type noticed above, etc. etc. So, Mr. All the sees is that various things are left to be done in future, such as (i) the suit will be withdrawn by the plaintiff on the defendant executing the lease (ii) the defendant will execute the lease of the type noticed above, etc. etc. So, Mr. Panja concludes, everything remains in future, and it is impossible to say that the suit has already been adjusted wholly, the utmost you can say is that, all these future events taking place, the suit will be adjusted then. ( 7 ) A contention as this appears to run counter to the first principles. The question is : do the terms of compromise reproduced above, though they make a generous use of the future tense, disclose a completed agreement? Mr. Panja says : they do not. I say : they do. They do, because consideration such terms evince is executory. The defendant company does promise to execute the lease. But for what? What indeed is the quid pro quo which leads the company to do so? In return for counter-promise from the plaintiff Gangoly: 'i shall then withdraw the suit'. So soon as that is said and that must be said on a fair reading of the terms embodied in the letter of October 10, 1966, over the joint signature of both the parties - a completed contract is plain to be seen, even though because of executory consideration, the whole thing remains in futuro. True it is that a contract forms itself also when consideration is executea instead of being executory, that is to say, ?when it is made in return for the performance of an act? as distinguished from a promise to do an act. (see Law of Contract, 6th ed. , by Cheshire and Fifoot, P. 61 ). But one is as much a completed and lawful contract as the other, no matter whether consideration is executory or executed, and Order 23, Rule 3 is comprehensive enough to cover both. ( 8 ) THE authorities cited go their own way on facts which have little in common with those I see before me. In (1) Jagatput Dugar v. Puran Chand Nahatta, AIR 1924 Privy Council 200 by compromise, the senior Counsel for the defendant was elected by both parties as the person to give his verdict in the dispute. ( 8 ) THE authorities cited go their own way on facts which have little in common with those I see before me. In (1) Jagatput Dugar v. Puran Chand Nahatta, AIR 1924 Privy Council 200 by compromise, the senior Counsel for the defendant was elected by both parties as the person to give his verdict in the dispute. According to one party, a verdict as this was to be taken as final judgment. According to the other, nothing of the kind; it was not to be taken as conclusive, but only for consideration as a leading and predominant element in contributing to the compromise of the action. Thus, the parties were not ad idem on the so-called compromise which necessarily failed as a settlement of the suit. Nothing like this can be said of the compromise before me when the joint signatures of the parties proclaim their having been ad idem. In (2) Rupchand Balmukund Agarwalla v. Jankibai Kanhyalal, AIR 1926 Bom 24 reveals an agreement, recording not that the pending suit be settled or abandoned, but that it do continue to its normal end and that whatever the Court's decree ultimately be, it be replaced by the private arrangement arrived at. Such an agreement does not adjust the suit but keeps it going instead, and cannot, therefore, come within Order 23, Rule 3. In (3) Haridas Modak v. Ramdas Modak, (1930) 34 CWN 1068 : AIR 1931 Cal 205, by a joint petition presented to the Court on November 20, 1925, the parties, while announcing their decision to settle the suit on certain terms, prayed not for the settlement then inchoate being recorded, nor for a decree being passed in accordance therewith but for a postponement until Thursday next, so that certain properties could meanwhile be exchanged by two kobalas, one by each in favour of the other, and 'a complete, clean and final settlement' come to by the next date prayed for. In the circumstances, the intention of the parties it was not to commit themselves to the bargain on November 20, 1925, but ?to wait till Thursday and then have a completed settlement? : the intention was not that ?the parties were to be remitted to the process of execution to compel the performance of each kobala by the other?. In the circumstances, the intention of the parties it was not to commit themselves to the bargain on November 20, 1925, but ?to wait till Thursday and then have a completed settlement? : the intention was not that ?the parties were to be remitted to the process of execution to compel the performance of each kobala by the other?. In the case, on hand, the intention appears to be just the other way about : (i) the parties bind themselves to the bargain as has been embodied in the letter of October 10, 1966, over their joint signatures; (ii) no less do they bind each other to be remitted to the process of execution to compel the performance of the lease by the defendant company in favour of the plaintiff, and of other terms too by each, should no amicable performance be forthcoming. No special feature is here, as it was in the Haridas Modak's Case (Supra), because of the only prayer by both parties for a postponement in order to complete all that was to be done, instead of anything like a prayer to the Court for such agreement as has been come to for being recorded and a decree passed in accordance therewith. The Special Bench decision in (4) Mr. Akbari Begam v. Rahamat Husain, (1933) ILR 56 All 39 : AIR 1933 All 861 finds absence of adjustment of a suit when all that the parties agree upon is to abide by the statement of a certain person, though such agreeing may amount to a mere contract; but when that certain person does make the statement the parties had wanted him to make and agreed upon to abide by, the suit may well be regarded as adjusted by such contract. This has little to do will the case before me where the parties themselves set their seals to an agreement come to, not in a huff, but in all solemnity, after negotiations, no other person coming anywhere near to effectuate such agreement by announcing his verdict later as in the Akbari Begam's Case (Supra ). The verdict, considered and agreed upon by both parties here, is right in the letter of Oct. 10, 1966, over the joint signatures of both parties. The verdict, considered and agreed upon by both parties here, is right in the letter of Oct. 10, 1966, over the joint signatures of both parties. In (5) Maung Hlay v. U. Ge, AIR 1939 Rang (3000 (FB) the Full Bench decision of the Rangoon High Court, furnishes still another example of citation of an irrelevant precedent where, it is emphasized, the governing word in Order 23, Rule 3 is not 'compromise' but 'adjustment'. That being so, it is held that merely a reference to arbitration falls short of adjustment by any lawful agreement or compromise? which indeed it does. It is a step to an adjustment, not an adjustment in itself. In (6) Sundar Sahu Gountia v. Chamra Sahu Gountia, AIR 1954 Orissa 80 reveals an agreement which is to serve as a prelude to a completed agreement Shares of the parties, already agreed to are to be localized with reference to plot numbers of the area and plans prepared by a Patwari; that done, the parties, it is agreed, shall file a compromise in Court. To notice this little is to notice absence of a completed compromise yet. All such a preliminary agreement does is to prescribe a procedure for the adjustment of the suit, the agreement remaining executory protanto, and the suit remaining unadjusted yet. Not that every contract on the basis of consideration executory, it is held, keeps a suit unadjusted. Such an agreement, the one in the Sundar Sahu's Case (Supra), may well be enforced by a separate suit, but not by the Court through the process of execution, what the parties seek to do through the Patwari taking it completely out of the control of the Court. Say this of the case on hand? Nobody like a Patwari is here. Who are here the parties whom the hands of the Court are long enough to reach ever and, what is more, to make them do through the process of execution what they had agreed to. ( 9 ) IT is time now to notice one term (not referred to yet) in the compromise of October 10, 1966. The fourth one in that letter, it bears : if the suit property is subject to any mortgage then you will obtain the consent of the mortgagee for granting the lease to me. ( 9 ) IT is time now to notice one term (not referred to yet) in the compromise of October 10, 1966. The fourth one in that letter, it bears : if the suit property is subject to any mortgage then you will obtain the consent of the mortgagee for granting the lease to me. Were there, in fact, a mortgagee, the image of a Patwari in the Sundar Sahu's Case (Supra), would have cast its shadow here, what the mortgagee would or would not do putting the matter completely out of the control of the Court. Such an approach merits two answers. First : I find, in fact, no mortgagee any where - neither in the affidavit-evidence nor in the course of the address at the Bar on behalf of the defendant company. Still less do I find any evidence aliunde of the mortgage of the suit land, in the shape of the mortgage deed or the like. So, this appears to be an idle term, a hypothetical one at that providing by way of abundant caution for the contingency of a mortgagee though none exists in fact. Second : a lease, subject to the mortgage, consent or no consent of the mortgagee, can always be there and has to be there. That way too it appears to be an idle term by way of abundant caution. And for all that goes before, I hold, rejecting Mr. Panja's contention, that there appears to be a completed agreement, here, though consideration thereof is executory, adjusting the pending suit wholly. ( 10 ) DOES the use of the expression 'without prejudice', as noticed in the letter of October 10, 1966, stand in the way of the compromise embodied there being recorded and given effect to? Mr. Panja contends: it does. Mr. Bachawat, for the plaintiff petitioner, contends just the opposite : it does not. ( 11 ) THAT well-known decision, in (7) In re : River Steamer Company's Case, (1871) LR 6 Ch Appellant 822, Mr. Bachawat refers me to, is a distinct and strong authority on what the words 'without prejudice' mean. Says Sir G. Mellish, L. J. at pp. Bachawat, for the plaintiff petitioner, contends just the opposite : it does not. ( 11 ) THAT well-known decision, in (7) In re : River Steamer Company's Case, (1871) LR 6 Ch Appellant 822, Mr. Bachawat refers me to, is a distinct and strong authority on what the words 'without prejudice' mean. Says Sir G. Mellish, L. J. at pp. 831-832 of the report: now, if a man says his letter is 'without prejudice', that is tantamount to saying, ?i make you an offer which you may accept or not, as you like; but if you do not accept it, the having, made it is to have no effect all. ? or, as James, L. J. puts it (p. 827) in the course of arguments from the Bar :- does not 'without prejudice' mean, ?i make you an offer; if you do not accept it, this letter is not to be used against me?? then, to take a decision of yesterday, so to say, of this Court : In (8) Ajit Kumar Bose v. Snehalata Biswas, (1967) 72 CWN 1 which Mr. Bachawat reminds me of, where the offer by the plaintiff, in a letter on their behalf, to accept without prejudice a sum of Rs. 5,400 in full settlement, if paid inside of a week, was not accepted, such letter has not been allowed to be used against them with a view to pinning, them down to the offer for ever. ( 12 ) THAT indeed cannot but be so. For, that is jus what sec. 23 of the Evidence Act, 1 of 1872, provides for. Founded on the principle that desire for peace is always to be preferred to spoiling for a fight, this sec. lays down to conditions when in civil cases an admission (otherwise so prized) cases to be relevant even. One, if an admission is made upon an express condition that evidence of it is not to be given: a condition which is well met by 'without prejudice', meaning ?the use of what I commit myself to, if not accepted by you, is impermissible?. Two, the existence of circumstances from which the Court can infer that the agreement of the parties was just so: evidence of the admission should not be given. Two, the existence of circumstances from which the Court can infer that the agreement of the parties was just so: evidence of the admission should not be given. Since an amicable settlement of a dispute merits encouragement always, all that is said and written in the course of negotiations for such settlement appears to be nothing but proof of so many circumstances from which there should be no difficulty in spelling out the agreement of the negotiating parties of not using such statements or writing in evidence. In sum, all that is said and written during such negotiations is generally without prejudice by the very mandate of Section 23, no matter whether those two words 'without prejudice' are made use of or not. A rule as this rests on good sense. But for such rule nobody could have ventured to attempt an amicable settlement, never too sure when the other follow would trip him by pressing into service a statement here or a statement there, conceded only for the sake of peace. ( 13 ) SUCH then is the law, the two cases, Panja refers me to, not showing anything different. One such case is in (9) Umesh Jha v. The State of Bihar, AIR 1956 Patna 425. There the petitioner paid rent to the State for two plots, even after the vesting under the Bihar Land Reforms Act, that more or less uniform pattern of legislation out to do away with latifundia. Yet his tenancy was annulled and he was called upon to give up possession of the two plots. This was resisted on the ground that, in view of the rent having been accepted, the State was estopped from challenging the petitioner's tenancy. But the rent was accepted without prejudice. So, it was held, the receipt of money by one and its payment by the other had not by themselves any legal effect on the rights of the parties, and the position at law was as if no payment had been made. In (10) Y. S. Venkata Subbiah Chetty v. A. Subba Naidu, (1915) 31 Insurance Company 152 is the other case reiterating the same meaning: it is quite true that when a man makes an offer 'without prejudice', the effect is to prohibit the reading of the letter if the offer is not accepted. But the actual meaning of the words. . . . But the actual meaning of the words. . . . is this : ?i am making an offer which I do not admit I am bound to make; and I make it without prejudice to my existing legal rights?. In other words, ?you shall not use this letter as an admission that I own what I offer. ? in the facts of that case, however, there was nothing like any offer, but only a notice to the plaintiff by the defendant company that they were aware of a certain assignment in his favour, as also an assurance that the instructions therein contained would receive effect, without prejudice to their own rights on the foot of an existing agreement of their own, and without binding themselves to any course in future. In such context, it was observed, when used about actual or impending litigation, the words 'without prejudice' have a well-known meaning which is quite inapplicable to their use in documents having no truck with an actual or impending lis. But in the case before me the words 'without prejudice' have been used in the joint letter of October 10, 1996, concerning very much indeed Suit No. 1969 of 1964, an actual litigation which did pend that day and pends to this day, the number of the suit appearing almost at the top of the letter itself. So, the well-known meaning of the words 'without prejudice', as just noticed will apply here, and it is not understood how it can be contended, as indeed it is, that this observation in the Madras case helps the defendant company. ( 14 ) THE accepted and universally recognized meaning of the words 'without prejudice' be now applied to the letter of October 10, 1966. The first to write, listing so many terms and enclosing a cheque for Rs. 25,000, is the plaintiff Gangoly who takes care to prefix the words 'without prejudice', which means: Here is his offer on the basis of negotiations and agreement as he has understood them to be. The defendant company, to whom the offer is made, may accept it or may not just as it pleases. If it does not, the offer or the terms contained therein will have no legal effect on the rights of the parties, and the position at law will be as if no offer was made ever. But the defendant company accepted the offer. If it does not, the offer or the terms contained therein will have no legal effect on the rights of the parties, and the position at law will be as if no offer was made ever. But the defendant company accepted the offer. So, a contract formed itself then and there, the legal effect being complete. ( 15 ) THAT the defendant company also prefixed the words 'without prejudice' before the signatures of its two directors in the same letter is very much in my mind. It appears to be the same thing as the defendant company accepting the offer, without prejudice, by a separate letter: just what Mr. Bachawat submits, and rightly, in my judgment. What can 'without prejudice' mean in this context? It may mean only this: the defendant company saying to the plaintiff, ?we shall grant you lease and do all that is stated in the letter, your letter, but you must withdraw the suit, as you have promised. ? The same approach again : if the plaintiff will not accept it, here is an end of the matter : the whole thing fails in effect and cannot be used against the defendant company. But the plaintiff Gangoly has accepted it. So, the outlook is at once changed, a completed contract comes into being that way too, and there can be no going back upon it. Thus in all circumstances here the words 'without prejudice' appear to be incapable of doing to the plaintiff Gangoly the harm the terrors of which the defendant company would have shaken on him. ( 16 ) WHAT I have just found disposes of another contention of Mr. Panja : that Section 23 of the Evidence Act having been in breach, the letter of October 10, 1956, cannot be read for the plaintiff Gangoly or against the defendant company and cannot, therefore, be said to have been proved within the meaning of Order 23, Rule 3. Section 23 is not in breach. Indeed, it cannot be in breach, the matter having passed from the domain of negotiations to the domain of a completed agreement, wholly adjusting the suit. ( 17 ) STILL another contention, Mr. Panja has addressed me, remains to be noticed. The resolution dated April 1, 1966, of the defendant company, Ex. Section 23 is not in breach. Indeed, it cannot be in breach, the matter having passed from the domain of negotiations to the domain of a completed agreement, wholly adjusting the suit. ( 17 ) STILL another contention, Mr. Panja has addressed me, remains to be noticed. The resolution dated April 1, 1966, of the defendant company, Ex. C to the plaintiff Gangoly's petition, authorizes any two of the four named directors (Sudhir, Prabhat, Jiten and Anadi, Nawans all) to negotiate with the prospective lessee and to exclude, as also register the deed of lease. But, it is said, the letter of October 10, 1966, is over the signatures of Sunil (not one of the four named) and Anadi. (Really the signatures read S. Nawan and A. Nawan ). But where is such evidence? The affidavit-in-opposition says not a word about it; not even para 13 Mr. Panja refers me to. All that is averred there on the point is : it is denied that a. Nawn or S. Nawn ever had or has any authority to settle or adjust the said suit according to the purported terms. . . . . as alleged. Where then is the serious allegation of Sunil Nawn, said to be a nobody, having lent his signature? No. Mr. Panja is not entitled even to be heard on such a point. First and last, the attempt on the part of the defendant company to flee the compromise, carrying the signatures of their directors to this day, appears to have been so ill-timed after acceptance of the cheque for Rs. 25,000 and after obtaining the Rent Controller permission to take Rs. 1,25,000 as advance rent, just in pursuance of the compromise itself. ( 18 ) TRUE it is, as Mr. 25,000 and after obtaining the Rent Controller permission to take Rs. 1,25,000 as advance rent, just in pursuance of the compromise itself. ( 18 ) TRUE it is, as Mr. Panja points out, on the authority of in (11) Surendra Nath Mitra v. Tarubala Dasi, (1930) LR 57 IA 133 and in (12) Sadasukh Kabra v. Jugol Kishore Singh, (1956) 61 CWN 67 that, even though the words of Order 23, Rule 3 do not in terms confer a discretion on the Court, once the adjustment of the suit is there by compromise, the Court is bound to examine its legality and presumably retains and inherent power not to allow its proceedings to be used to work a substantial injustice : just on the line of what Lord Atkin observed in the first of the two cases. But the difficulty for Mr. Panja's client is that I see neither illegality nor injustice in the terms of the compromise. ( 19 ) THUS, all contentions urged on behalf of the defendant company failing - and fail they must - the question this judgment opens with is answered in the affirmative. In sum, the petition succeeds. In the result, I allow the petition with costs, and direct - (A) The compromise as embodied in the letter of October 10, 1966, be recorded. (B) A decree be passed in accordance therewith. Petition allowed.