Indra Deo v. Pancho — 1976 DIGILAW 892 (ALL)

JUDGMENT H.N. Agrawal, Member. - This is a reference made by Sri S.M. Hasan, Additional Commissioner, Faizabad Division, Faizabad, recommending that the revision petition filed against the order dated July 8, 1970 passed by the Judicial Officer, Sadar/Tanda, district Faizabad in a case under Section 229-B of the U.P.Z.A. and L.R. Act may be dismissed. 2. I have heard the learned counsels for the parties and have gone through the record. 3. The facts may be briefly stated here. Srimati Pancho had filed a suit under Section 229-B, U.P.Z.A. and L.R. Act impleading Shital Prasad, Chhote Lal, State of U.P. and the Collector, Faizabad, as defendants. Subsequently, Indra Deo, the present revisionist, was also impleaded as a defendant by the trial court's order. On April 10, 1970, Indradeo filed an application to the effect that there had been an adjustment of claims between the parties. On June 10, 1970, Shital Prasad and Chhote Lal filed an application to the effect that as there had been as adjustment of claims through a compromise, the suit may be dismissed in accordance with the compromise. Srimati Pancho, plaintiff, however, denied that there had been any compromise. On July 8, 1970, the trial court framed issues and fixed September 22, 1970 for the evidence of the parties. Indradeo has filed the revision against this order. 4. The learned counsel for the revisionist has contended that the trial court has erred in law in exercising its jurisdiction not vested in it in not deciding the legality of the compromise and the adjustment filed under Order XXIII, Rule 3, C.P.C., and that the court was wrong in ordering for the evidence of the parties on the next date. 5. Order XXIII, Rule 3 of the Code of Civil Procedure reads as follows:- "3. 5. Order XXIII, Rule 3 of the Code of Civil Procedure reads as follows:- "3. Compromise of suit - Where it is proved to the satisfaction of the Court that a suit has been adjusted wholly or in part by any lawful agreement or compromise in writing and signed by the parties or where the defendant satisfies the plaintiff in respect of the whole or any part of the subject matter of the suit, the Court shall order such agreement, compromise or satisfaction to be recorded, and shall pass a decree in accordance there with so far as it relates to the parties to the suit whether or not the subject-matter of the agreement, compromise or satisfaction is the same as the subject-matter of the suit. Provided that where it is alleged by one party and denied by the other that an adjustment or satisfaction has been arrived at, the Court shall decide the question: but no adjournment shall be granted for the purpose of deciding the question, unless the Court, for reasons to be recorded, thinks fit to grant such adjournment." The main ingredients of the above rule are, firstly that the agreement or the compromise should be entered into by all the parties to the suit; secondly, that it should be lawful; thirdly, that the suit should be adjusted wholly or in part by the agreement or compromise, and fourthly that the agreement or compromise must be proved to the satisfaction of the Court. Where all these four ingredients are not fulfilled, a suit cannot be decided in terms of the compromise. 6. A perusal of the record shows that Srimati Pancho in her application dated April 29, 1970 has stated that she did not enter into any compromise or agreement at all, and that her thumb-impression was obtained on an application on April 10, 1970 by fraud and misrepresentation. It is observed that the alleged compromise dated April 10, 1970 only bears the thumb-impression of Srimati Pancho and the signatures of Shital Prasad and Chhote Lal alias Kailash Chandra. Thus, it has not been entered into by all the defendants as the defendant No. 3 (State of U.P.) defendant No. 4 (Collector Faizabad) and defendant No. 5 (Indradeo) have not signed it. Apart from it, the compromise still required to be proved to the satisfaction of the Court. Thus, it has not been entered into by all the defendants as the defendant No. 3 (State of U.P.) defendant No. 4 (Collector Faizabad) and defendant No. 5 (Indradeo) have not signed it. Apart from it, the compromise still required to be proved to the satisfaction of the Court. The trial court rightly decided that both the parties should be given due opportunity of proving or disproving the alleged compromise and ordered on June 10, 1970 that issues may be framed it deemed necessary regarding compromise and its effect. This is a perfectly legal and sound order and in no way infringes the provisions of Order XXIII Rule 3 C.P.C. On the other hand, the trial court was merely acting in accordance with this rule and trying to satisfy itself whether or not the compromise had in fact been entered into between the parties and in giving opportunity to both the parties to produce evidence to this effect. 7. The learned counsel for the revisionist has referred to Mohammad Hasnain v. Yusuf Husain, AIR 1956 Alld. 121 in which Randhir Singh, J., has observed as follows:- "In the present case it was admitted by the plaintiffs that there had been a compromise between the defendant and plaintiff 1 in terms mentioned in Ex. 4, and in pursuance of the compromise the money which was to be paid by the defendant had been paid. The compromise could not be filed in Court on September 16, 1952 only because the approval of the other two plaintiffs to the compromise had not been obtained. Exhibit 4 clearly shows that after this compromise had been arrived at between the defendant and plaintiff 1, the approval and signatures of the other plaintiffs were also obtained. All that remained to be done was the filing of the compromise on the date fixed for the same after the defendant had put his signatures. The defendant, however, did not turn up on that date and he set up in his re-written statement, which he was allowed to file subsequently the terms of compromise which were different from those mentioned in Ex. 4. It is therefore, clear that both parties admitted that there had been an adjustment but there was a difference with regard to the terms of the adjustment. 4. It is therefore, clear that both parties admitted that there had been an adjustment but there was a difference with regard to the terms of the adjustment. It was, therefore, the duty of the Court to find out what were the terms of the adjustment and the Court having found that the plaintiff's allegations were correct, it was the duly of the Court to have passed a decree in terms of the compromise Ex. 4." 8. I may observe that the present case is to be distinguished from the above case inasmuch as in the above case it was not in dispute that there had been a compromise between the parties, but only the terms of the compromise were disputed, and the learned Judge had rightly held that it was the duty of the Court to find out what the terms of the adjustment were. In the present case, however, the very fact of compromise is disputed and the case of one of the parties is that the alleged compromise was not really entered into at all and there has been a fraud played. 9. The learned counsel for the revisionist has also referred to Mst. Kalpa v. Sita Ram, AIR 1955 Alld. 187 in which Beg and Randhir Singh, JJ., have held as follows:- "If the Court does not pass an order recording the compromise or refusing to record the compromise but decides a case after a compromise has been filed, the question would arse as to whether there was or was not an order for the recording of the compromise, as required by O. 23, R. 3 Civil Procedure Code. A ruling of this Court in Mst. Shah Jahan Begam v. Ghulam Rabani, AIR 1935 Allahabad 738 (A), has been cited on behalf of the respondent in support of the proposition that an omission to pass an order to record a compromise was a mere irregularity curable under Section 99 Civil Procedure Code. If there had been a mere omission to record the compromise, we could possibly have treated it as an irregularity, but it appears to us that the lower court did not consider the objection raised by defendant No. 1 to the compromise before the final order decreeing the claim in terms of the compromise was passed. If there had been a mere omission to record the compromise, we could possibly have treated it as an irregularity, but it appears to us that the lower court did not consider the objection raised by defendant No. 1 to the compromise before the final order decreeing the claim in terms of the compromise was passed. It was evidently the duty of the court below to have come to a conclusion on the allegations made by the defendant with regard to the making of the compromise. If a party to a compromise denies having entered into the compromise, the Court will have to come to a finding as to whether there had or had not been a compromise effected between the parties and then also to decided if the agreement or the adjustment was lawful. It is only after the Court is satisfied that there had in fact been a compromise and further that that compromise was a lawful compromise, that there would be no option left to the Court but to record it and to pass a decree in terms of the compromise." 10. The learned Judges have rightly laid down the principle that it is only after the Court has been satisfied that there has in fact been a compromise and further that the compromise was a lawful compromise, that there would be no option left to the Court but to pass a decree in terms of the compromise. From this, it follows that the Court has first of all to satisfy itself about the compromise and in so doing has to give the parties the opportunity to produce evidence about the compromise having been entered into. 11. In this connection, I may further observe that the trial court has not merely to see whether Srimati Pancho has entered into the compromise, but also whether all the defendants including the State of U.P. and the Collector Faizabad also have no objection to the said compromise and whether the compromise is lawful and does not infringe any provisions of the U.P. Zamindari Abolition and Land Reforms Act regarding the non-transferability of the interest of a Sirdar. 12. 12. The learned counsel for the opposite party has referred to Misrilal v. Sobhachand, AIR 1956 Bombay 569 in which Justice Shah of the Bombay High Court has held as follows: "The Court has to record the compromise only if it is satisfied that there has been adjustment of the suit by a lawful agreement. The Court has in recording a compromise to consider two questions (1) whether there has been an agreement adjusting the dispute in suit and (ii) whether the agreement is lawful agreement. For coming to a conclusion, whether there is an agreement, the Court has not merely to consider the question whether the parties in fact have arrived at an agreement, but the Court must also consider the question whether the agreement is a lawful agreement as observed by Sri Dinshah Mulla in his commentary on O. 23, R. 3, Civil Procedure Code under the heading 'where a compromise set up by one party is denied by the other at page 982 Edn. 12. The words 'where it is proved to the satisfaction of the Court that the suit has been adjusted wholly or in part; clearly show that the Court has power under this rule, where an agreement or compromise is denied, to decide whether as a fact, the alleged agreement or compromise was made, and if it is satisfied that it was made, to record it. The Privy Council have said that an agreement to compromise a suit must be established by general principles which govern the formation of contracts, although there are special rules governing its enforcement which arise out of its intrinsic nature." 13. The learned counsel for the opposite party has also referred to Mst. Shujarat v. Mohd. Raza, AIR 1957 Allahabad 450 in which Mukherji and Tandon, JJ., have similarly held as follows: "The Court must find, whenever there is a dispute between the parties, whether the agreement, has really been arrived at or not. Without this finding it will be impossible for the Court to record a compromise, much less to pass a decree in accordance therewith. The whole purpose of R. 3 will be lost if the Court is deprived of the power to decide whether the agreement pleaded by a party has been reached or not. Without this finding it will be impossible for the Court to record a compromise, much less to pass a decree in accordance therewith. The whole purpose of R. 3 will be lost if the Court is deprived of the power to decide whether the agreement pleaded by a party has been reached or not. If the Court is deprived of that power, it will enable any dishonest litigant to get away from a compromise reached by him freely and lawfully merely by pleading that he had not done so. That could never be the intention of the Legislature. As we pointed out earlier also, the question whether the agreement is lawful or not and can be avoided by any party thereto on grounds of undue influence, coercion or the like, is a different matter. These considerations can, in effect, arise only subsequently after a finding has been reached that the agreement pleaded by a party was otherwise reached between them." 14. The learned counsel for the opposite party has further referred to Smt. Sumitra v. Sulekha, AIR 1976 Calcutta 196 in which a Bench of the Calcutta High Court has held as follows: "It is clear from Order 23, Rule 3 that before the Court considers whether or not an agreement is lawful, it must be satisfied that there has been an agreement between the parties. An agreement is brought into existence where one party makes an offer and another accepts the same. It is the consensus of minds of two persons in regard to certain matter. Of these two persons if one has not agreed to the term proposed by the other, there is no agreement between them. When the consent of one to the term is obtained by the other by some illegal means, namely, by fraud, coercion or undue influence, it is difficult to hold that the person whose consent has been so obtained has agreed to the terms." 15. The learned counsel for the opposite party has also referred to Section 153 of the U.P.Zamindari Abolition and Land Reforms Act regarding non-transferability of the interest of a Sirdar. As I have observed above, this aspect will no doubt be considered by the trial court while considering the effect of the compromise if indeed it is proved, to have been entered into between the parties. 16. As I have observed above, this aspect will no doubt be considered by the trial court while considering the effect of the compromise if indeed it is proved, to have been entered into between the parties. 16. From the various decisions cited above, the legal position which emerges is as follows: A Court is not required to decide a suit in terms of an alleged compromise blindly on the insistence of one party. On the other hand, the Court has to satisfy itself that all the ingredients of Order XXIII, R. 3, C.P.C. are fully present and for this purpose it may give the parties concerned the opportunity to produce evidence. In the present case, the trial court has not committed and illegality or error of jurisdiction in passing the impugned order. Thus, no revisional interference is called for. 17. Agreeing with the recommendation made by the learned Additional Commissioner, I hereby dismiss the revision.