A. N. Ray, D. P. KUNDU ( 1 ) THIS is an appeal from a judgement and decree passed on 29th March, 1994 recording a compromise between the plaintiff bank and the respondent Tea Company. . ( 2 ) THE Bank, the appellant, has pressed the case that there was no finalized agreement and such recording of compromise by invoking Order 23 Rule 3 was inappropriate. . ( 3 ) IT is well known, that in the present amended state of the Code, parties are free to enter into a compromise in relation to their suit, and even settle matters outside the suit, provided the agreement is in writing and signed by the parties. Needless to mention that the agreement must also be lawful. ( 4 ) THE facts of this case are short and simple. On the 2nd day of July, 1990, following several negotiations the Tea Company wrote "without prejudice" to the bank proposing to pay off its principal dues of Rs. 335 lac and interest in a certain manner. ( 5 ) THE scheme is detailed but the basics are as follows :on the principal sum for the five years immediately passed, interest would be Rs. 9 lac only. Rs. 335 lac would again be divided into two parts and one part would not carry interest at all. Payment also would spread over 15 years. . ( 6 ) ON the basis of that without prejudice pay up proposal, the Deputy General Manager (Credit) and the General Manager (Credit) prepared a note dated 25th July, 1990 and put it up to the Board. The Board favoured the acceptance of the proposal. ( 7 ) ON the 4th day of August, 1990 the Board of the bank resolved that they would accept the proposal subject to the approval of the Reserve Bank of India. ( 8 ) THE Reserve Bank of India was written to by the bank. They communicated to the bank on or about 9th October, 1990 that Reserve Bank of India' permission was not necessary and the bank was to look after its own financial interest. ( 9 ) THEREAFTER another note was prepared by the Deputy General Manager (Credit), this being dated 2nd March, 1991. Here C. B. I. investigation was mentioned. Different terms of recovery were thought of than those which were then approved by the bank in July and August, 1990. ( 9 ) THEREAFTER another note was prepared by the Deputy General Manager (Credit), this being dated 2nd March, 1991. Here C. B. I. investigation was mentioned. Different terms of recovery were thought of than those which were then approved by the bank in July and August, 1990. ( 10 ) THE Board of the bank passed another resolution on 5th March, 1991 regarding the dues from the Tea Company. This time they again fixed the principal at Rs. 355 (335) lac but they decided to charge 6 per cent interest on the full amount from 1st July, 1990 on an yearly basis and thought of allowing 8 years time for liquidation instead of 15 years which had been allowed by the earlier Board resolution. ( 11 ) THE case of the Tea Company was that after the passing of the Board resolution of 4th August, 1990, Reserve Bank of India permission being unnecessary, the parties had entered into a contract. They applied for recording of it. They succeeded in the Court below. ( 12 ) THE point of primary importance is that all the events relating to the bank and the Reserve Bank of India starting right from the note of 25th July, 1990 up to the second resolution of the Board dated March, 1991, these were all internal matters. Not a single official communication issued in regard to this to the outside Tea Company; the Board resolutions were not forwarded; so 'ecret' were these that the Trial Court had to bring out the Board resolutions by allowing subpoena to be served on the bank by the Tea Company. ( 13 ) THE respondent applicant has boldly stated in its petition for recording of compromise that it was informed of the internal bank matters by 'the said officers' being the then General Manager (Credit) and the Deputy General Manager (Credit); we are of the opinion that such gaining of inside information by the private party cannot take the place of an official communication of an acceptance of an offer by the offeree. ( 14 ) THE application for recording was made in December, 1991. It was one year and four months after the alleged agreement for payment of dues came into being. Why was it so delayed? The answer is simple. ( 14 ) THE application for recording was made in December, 1991. It was one year and four months after the alleged agreement for payment of dues came into being. Why was it so delayed? The answer is simple. The bank filed a mortgage suit at Jalpaiguri sometime in the year 1991 and a few months after the second Board resolution was taken. The suit being a suit for land, the Court was the Jalpaiguri Court. A suit at Calcutta could not be a mortgage suit but the dues of the bank being involved, if those dues could be stopped from immediate recovery, the mortgage suit could also be stopped. Thus the application for record of compromise was filed in Calcutta in December, 1991. ( 15 ) WE are of the opinion that the application for recording of compromise should not have succeeded. It is true, that if there is a dispute, as to whether there is an agreement for compromise or not, in regard to the whole or part of a suit, the Court has to determine that dispute. But in the facts, issuance of a subpoena for bringing out Board resolutions and other internal matters of the Bank was an unwarranted procedure. It was as if a contract was being attempted to be made out for the parties when at least one of the parties had stopped short of making its consenting mind known in any official or proper manner to the other party. It is no part of the duty of the Court to make out an agreement for the parties when the applicant party cannot on its own show that both the parties had agreed and one party is merely trying to resile from the agreement now. ( 16 ) AN appeal was preferred from the order of 26th March, 1991 in July, 1991. The interim application in aid of the appeal was finally heard in 1997 and by an order of the Court of Appeal dated 19th February, 1997 it was ordered that the amounts already deposited by the respondents in terms of the compromise decree could be withdrawn by the appellant bank. It was also ordered that there would be no stay of operation of the decree appealed from. It was also ordered that there would be no stay of operation of the decree appealed from. Thus if the respondent chose to abide by the terms of the decree it would have to go on paying under the decree and also the Jalpaiguri Mortgage suit would remain stayed as the first Court had decreed and ordered in its judgment of 26th March, 1994. ( 17 ) WE shall say shortly what, in our opinion, is to be done in regard to the payment already made by the Tea Company. But we make it clear that even on the basis of the letters of July, 1990 and the Board resolution of August, 1990, the parties did not mention expressly anything about the Jalpaiguri Mortgage Suit. They could not have done so because the suit was filed nearly one year after July/august, 1990. Yet the learned Judge in the Court below directed stay of the mortgage suit in case payments were made under the compromise decree regularly as ordered. This was beyond the terms of any compromise between the parties, either alleged or actual. In these circumstances passing orders outside the terms of compromise was not within the jurisdiction of the Court below when hearing an application under Order 23 Rule 3. In our opinion the decree and order is bad on this ground also. ( 18 ) MR. Mitra has handed up a chart of payments made. We find that out of these Rs. 50 lac was paid in two equal halves in February, 1992 and April, 1993 but both these are prior to the date of the order which is under appeal. ( 19 ) IN the order dated 29th March, 1994 it was decreed and Rs. 33 lac shall be paid by the Tea Company within two weeks; in default the full amount of Rs. 335 lac will fall due with interest at the rate of 6 per cent. Rs. 33 lac was paid on 13th April, 1994. ( 20 ) WE are told that Rs. 25,000/- towards costs awarded by the Court below was also paid within two days thereafter. The effectively losing party in the Court below, the bank, for some unexplained reason, was awarded costs. ( 21 ) AFTER this, four payments of Rs. Rs. 33 lac was paid on 13th April, 1994. ( 20 ) WE are told that Rs. 25,000/- towards costs awarded by the Court below was also paid within two days thereafter. The effectively losing party in the Court below, the bank, for some unexplained reason, was awarded costs. ( 21 ) AFTER this, four payments of Rs. 25 lac each have been made in the four years from 1995 to 1998, each in the respective months of March, as per the compromise decree. ( 22 ) MR. Mitra submitted that as Rs. 33 lac was paid and accepted under the decree, the appellant is estopped from the pressing this appeal. He submitted that if an advantage is taken under a decree or order then it cannot also be appealed from. He invoked the principle against simultaneous approbation and reprobation. ( 23 ) MR. Mitra gave us the case of a Calcutta Special Bench being that on Banku Chandra Bose reported at AIR 1917 Cal 546 and another decision of a Calcutta Division being the case of Indian Economist reported at AIR 1981 Cal 310 . In the first of these cases costs of Rs. 250/- had been accepted and the order was that on payment of such costs, the order for dismissal of the suit for non-prosecution would be recalled. After acceptance of costs the order was held no longer to be liable to challenge. In the second of these cases acceptance of conditional costs for permission to amend was held to make the order further unchallengable by the party accepting the costs. ( 24 ) WE are not minded to dispose of this point of substance on the petty answer (the Court found this out itself) that Rs. 33 lac was paid not exactly within two weeks of the order of 29th March, 1994 but one day later. We dispose of this point on broad and general equitable principles of justice and good conscience. The principle forbidding simultaneous approbation and reprobation is an equitable principle. So are the principles relating to estoppel. We find here that on the own admission of the Tea Company made in its letter of 2nd July, 1990 a sum of Rs. 335 lac was due in the principal. The principle forbidding simultaneous approbation and reprobation is an equitable principle. So are the principles relating to estoppel. We find here that on the own admission of the Tea Company made in its letter of 2nd July, 1990 a sum of Rs. 335 lac was due in the principal. ( 25 ) THE letter was without prejudice but the Tea Company has itself brought the letter on record and therefore it has to be looked into and given full effect to. In the face of this admission of a principal sum of Rs. 335 lac we are unable to conclude that the payment of 33 lac or the payment of costs of Rs. 25,000/- by the Tea Company is similar to the taking of an advantage under an order by the bank. In our opinion the bank, by accepting these payments, was not taking an advantage arising out of the order under appeal, but it was getting only a minimal fraction of the large dues outstanding to it from the Tea Company. It is not a true view of the law that if one party does something under the dictate of an order or a decree, and another party receives something thereby, and the parties are parties to the litigation in question, then in every such case, the order or decree becomes unchallengeable by the recipient party. The nature of the receipt has to be examined in the facts and circumstances of each different case, and then only the rules of good conscience must be applied. To keep the decree going, and to prevent the default clause from operating, the Tea Company had to pay; the advantage if any, accrued more to itself than to the Bank, which got payment pro tanto and no more. ( 26 ) RESTITUTION in regard to the sum of Rs. 1. 33 crore paid under the Compromise decree would also be most inappropriate and unjust in the facts and circumstances of this case. Why? The answer again is that the tea company itself admits in its letter of the presence of the principal dues of Rs. 335 lakhs. ( 26 ) RESTITUTION in regard to the sum of Rs. 1. 33 crore paid under the Compromise decree would also be most inappropriate and unjust in the facts and circumstances of this case. Why? The answer again is that the tea company itself admits in its letter of the presence of the principal dues of Rs. 335 lakhs. ( 27 ) THUS, restitution by way a separate or consequential order to-day would look and be unjust and improper, because it would be ordering the bank to give back the money to an admittedly large debtor, when these matters must and should be dealt with by the suit Court as when the suit is heard. We, accordingly order that the sum of money paid by the tea company to the bank, whether before or after the order of 29-3-94 shall be taken into consideration by the suit Court hereafter by usual production of documentary and oral evidence; if the bank' dues are to be found to be larger, then the amount paid (when we are thinking of a final decree in the suit, even the admission of the tea company in its letter dated 2-7-90 will have to be further considered), then and in that event, a decree for the balance sum is all that the bank can get, after giving due credit for the sums paid by the tea company. If on the other hand, the bank is unable to prove its claims even up to the amount paid by the tea company to the bank (might be unlikely, but we have to think of the theoretical possibility), then and in that event, the suit Court can and must pass a decree in favour of the tea company and against the bank directing therein the return of the excess payment made to the bank. In our opinion, this is the form, which restitution, if any, must take in this case. ( 28 ) SO far as the appeal is concerned, it is allowed. We again repeat that there was absolutely no communication of the bank' acceptance in any forml or official or proper form to the tea company. There was thus no compromise agreement to record. The judgment and decree appealed from are set aside. ( 28 ) SO far as the appeal is concerned, it is allowed. We again repeat that there was absolutely no communication of the bank' acceptance in any forml or official or proper form to the tea company. There was thus no compromise agreement to record. The judgment and decree appealed from are set aside. ( 29 ) DISCOVERY of documents, if not already made, shall be made by letter with copies of documents annexed within a period of 12 weeks from the date hereof; there shall be these cross orders for discovery and inspection forthwith thereafter. Liberty to mention the suit before the appropriate Court after a lapse of 16 weeks from the date hereof. ( 30 ) THE appellants will be entitled to the costs of the appeal and those in the Court below. We compendiously assess this at Rs. 75,000/ -. Needless to mention that the sum of Rs. 25 thousand already paid for costs will be deducted from this amount. ( 31 ) WE note it as an important part of the record that when Mr. Chakraborty was making his submissions in support of the appeal, we did not hear him out fully and started hearing the respondents because the decree and order under appeal appeared to us to be (with the greatest of respect) somewhat shocking. ( 32 ) IT is particularly made clear that by reason of the allowing of the appeal by this Court, the Mortgage Suit pending in the Jalpaiguri Court will immediately revive and the bank will be at liberty to prosecute that suit and all the applications therein, if any, immediately and without any gap of time. ( 33 ) STAY of operation of this order is prayed for but it is refused. ( 34 ) ALL parties, the Department and all others concerned are directed to act on a signed copy of this judgment on the usual undertakings. Appeal allowed.