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Himachal Pradesh High Court · body

2012 DIGILAW 409 (HP)

Fateh Singh v. Tohal Singh

2012-07-25

DEV DARSHAN SUD

body2012
ORDER : Dev Darshan Sud, J. This is the defendants petition against the order passed by the learned Civil Judge (Jr. Division), dismissing the application under Order 23 Rule 3 of the Code of Civil Procedure (hereinafter Civil Procedure Code) praying that the suit has been compromised and may be disposed of as such. 2. The plaintiff had filed a suit for permanent prohibitory injunction and in the alternative for possession on the pleadings that she is a poor illiterate lady. The defendant was a social worker asked her for the grant of no objection in order to get some kind of clearance for a road to be built through her land. When she refused after consultation with her sons, the defendant held out that she would be adequately compensated. In order to achieve this, he took the plaintiff to the Tehsil office Kandaghat where he informed her that formalities for grant of compensation etc. would be completed. She was asked to put her thumb impression on some papers and was assured by him that these documents have been prepared for this purpose only. On 6.10 2003 when Ram Rattan son of the plaintiff was in Patwar Circle, Satrol, he was shocked to know that mutation with respect to the suit land has been sanctioned in favour of the defendant. The plaintiff claims to have been cheated/defrauded and the entire transaction as the outcome of mis-representation. She pleaded that she was kept in the dark and her son Asha Ram is also an illiterate person. Sale deed with respect this suit land was registered with the Sub Registrar, Kandaghat on 19.9.2003. He was requested to cancel the sale deed but did not do so leaving the plaintiff no option but to file the present suit. These allegations have been denied. For the purposes of the present suit, it is only the application under Order 23 Rule 3 Civil Procedure Code which is being considered by me and no observation has been made on the merits of the respective case of the parties. 3. Application dated 6.4.2004 under Order 23 Rule 3 Civil Procedure Code signed by the plaintiff, defendant and their counsel was submitted before the learned Court in which it was pleaded that with the intervention of some well wishers and relatives etc. the parties to the suit had sorted out all differences. 3. Application dated 6.4.2004 under Order 23 Rule 3 Civil Procedure Code signed by the plaintiff, defendant and their counsel was submitted before the learned Court in which it was pleaded that with the intervention of some well wishers and relatives etc. the parties to the suit had sorted out all differences. Application recites that the plaintiff had executed the sale deed of her own free will and volition. The plaintiff accepted the sale of 3 bighas of land along with structure standing thereon and admitted the possession of the defendant. She also accepted the receipt of full consideration for the sale transaction. 4. This application was resisted by the plaintiff who alleged that she never entered into any compromise of her free will. The only purpose of filing the compromise was to grab the property of the plaintiff by hook or by crook. It was pleaded that the application contains half truths and contorted facts. Most important of all,it is pleaded that her counsel was not contacted/consulted neither she was given any opportunity to do so in order to understand the true purport and meaning of the application. Some other counsel was engaged so as to conceal true facts and to rush to the compromise against her interest. She has no knowledge of the compromise and the document/application filed in Court is the outcome of fraud and mis-representation. These allegations have been denied in the reply which has been filed. 5. Parties went to evidence on their respective pleadings, each supporting his/her particular stand. The learned trial Court dismissed the application on the ground that the compromise was not proved to the satisfaction of the Court. To arrive at this conclusion, the learned Court refers to the bare provisions of Order 23 Rule 3 Civil Procedure Code and two precedents one of the High Court of Allahabad and the second of the High Court of Delhi holding that the compromise should be signed by the parties and their respective counsel. It is in this backdrop that the legality of the order has been challenged. 6. Learned senior counsel appearing for the parties have placed reliance on a number of judgments of this Court. Mr.G.D.Verma, learned senior counsel for the respondent at the out set relies upon the decision of this Court in Oriental Insurance Company v. Smt. Sheela Devi and others, 2006 (1) Shim. 6. Learned senior counsel appearing for the parties have placed reliance on a number of judgments of this Court. Mr.G.D.Verma, learned senior counsel for the respondent at the out set relies upon the decision of this Court in Oriental Insurance Company v. Smt. Sheela Devi and others, 2006 (1) Shim. L.C. 454, holding that : "4. A bare perusal of this Rule clearly indicates that no Advocate should file his Vakalatnama or put in appearance in any case in which the party is already represented by an Advocate without obtaining the consent of such Advocate. In case such consent is not forthcoming and cannot be produced the party/counsel should apply to the Court giving reasons thereof and shall only appear after the permission of the Court..... 12. A lawyer does not only represent his client. He is also an officer of the Court. Therefore, in any matter in which such lawyer is engaged he has to assist the Court till his Vakalatnama is determined in accordance with law. 13. A client if he wants to change his Counsel should ordinarily first approach his Counsel for return of the brief and to obtain no objection from him. Normally a lawyer is expected to grant his consent unless there are sufficient and cogent reasons for him to decline the same. If however the lawyer does not give his consent then there is nothing to prevent the client from approaching the Court to determine the Vakalat of the Counsel previously representing him. Without determining the Vaka lat a fresh counsel cannot be engaged. 14. As per the Bar Council of India Rules quoted above every lawyer owes a duty to his colleague not to appear in any matter in which Vakalat has already been filed by some other counsel. This is a salutary provision to maintain the dignity of the profession. This should not be by-passed. In any event the client has a remedy even if the counsel does not give his no objection. He can always apply to the Court giving his reasons why the consent could not be produced and why he has to engage a new counsel. The Bar Council of India Rules are in consonance with the Rules framed by this Court referred to above as well as the provisions of the Code of Civil Procedure." (Pp.455, 456 and 459) 7. The Bar Council of India Rules are in consonance with the Rules framed by this Court referred to above as well as the provisions of the Code of Civil Procedure." (Pp.455, 456 and 459) 7. He submits that the very fact that new counsel has been engaged itself proved the intentions of the defendant which was to mislead and cheat the plaintiff. I will advert to the submission later. He also places reliance on the judgment of the Supreme Court in Som Dev and others v. Rati Ram and another, (2006) 10 S.C.C. 788 , the Court holds : "13. After the amendment of the Code of Civil Procedure by Act 104 of 1976, a compromise of a suit can be effected and the imprimatur of the Court obtained thereon leading to a decree, only if the agreement or compromise presented in court is in writing and signed by the parties and also by their counsel as per practice. In a case where one party sets up a compromise and the other denies it, the Court can decide the question whether, as a matter of fact, there has been a compromise. But, when a compromise is to be recorded and a decree is to be passed, Rule 3 Order 23 of the Code insists that the terms to the compromise should be reduced to writing and signed by the parties. Therefore, after 1.2.1977, a compromise decree can be passed only on compliance with the requirements of Rule 3 Order 23 of the Code and unless a decree is passed in terms thereof, it may not be possible to recognise the same as a compromise decree. In the case on hand, a decree was passed on 10.10.1980 after the amendment of the Code and it was not in terms of Order 20 III Rule 3 of the Code. On the other hand, as the decree its elf indicates, it was one on admission of a pre-existing arrangement." 8. He submits that the learned trial Court has followed the procedure prescribed by law in rejecting the compromise. A determination has been made on merits holding that there was, in fact, no compromise. He relies upon the judgment of the Supreme Court in Zahoor Bux and another v. Fareed Bux and others, (2005) 13 S.C.C. 383 , holding : "3. He submits that the learned trial Court has followed the procedure prescribed by law in rejecting the compromise. A determination has been made on merits holding that there was, in fact, no compromise. He relies upon the judgment of the Supreme Court in Zahoor Bux and another v. Fareed Bux and others, (2005) 13 S.C.C. 383 , holding : "3. If any of the parties has any objection to the recording of compromise on the ground that the same was not genuine inasmuch as it did not bear the signature of the affected party, in that event, the court, which recorded the compromise, is required to hold an inquiry with regard to genuineness or otherwise of the compromise after giving opportunity to the parties to lead oral and documentary evidence on the said question, which procedure having not been adopted by the Deputy Director or Consolidation, we are of the view that the impugned orders passed by the Deputy Director of Consolidation as well as the High Court are fit to be set aside." (P.384) 9. Lastly, he places reliance on the judgment of the Supreme Court in A.A. Gopalakrishnan v. Cochin Devaswom Board and others, (2007) 7 S.C.C., holding : 11. Learned counsel for respondents 3 and 4 submitted that the settlement in the suit (OS No.399/1998) was validly arrived at between them (Plaintiffs) and the Devaswom Board (defendant), that the Devasw om Board had considered the proposal after taking legal advice and had duly passed a resolution to settle the suit. It is further submitted that a decree having been made in terms of the compromise and such decree having attained finality, it cannot be questioned, interfered or set aside at the instance of a third party in a writ proceeding. Order 23 Rule 3 of Civil Procedure Code deals with compromise of suits. Rule 3A provides that no suit shall lie to set aside a decree on the ground that the compromise on which the decree is based was not lawful. We are of the considered view that the bar contained in Rule 3A will not come in the way of the High Court examining the validity of a compromise decree, when allegations of fraud/collusion are made against a statutory authority which entered into such compromise. We are of the considered view that the bar contained in Rule 3A will not come in the way of the High Court examining the validity of a compromise decree, when allegations of fraud/collusion are made against a statutory authority which entered into such compromise. While, it is true that decrees of civil courts which have attained finality should not be interfered lightly, challenge to such compromise decrees by an aggrieved devotee, who was not a party to the suit, cannot be rejected, where fraud/collusion on the part of officers of a statutory board is made out. Further, when the High Court by order dated 9.9.1998 had directed the Board to take possession of Sy. No. 1042/2 immediately from respondents 3 and 4 in CDB No.3/1996, in a complaint by another devotee, it was improper for the Board to enter into a settlement with respondents No.2 and 3, giving up the right, title and interest in Sy. No.1042/2, without the permission of the court which passed such order. Viewed from any angle, the compromise decree cannot be sustained and is liable to be set aside. (P.486 and 487) 10. Mr. Bhupinder Gupta, learned senior counsel appearing for the petitioner urges that the compromise being lawful, the pleading being bereft of any particulars of fraud, the adjudication by the learned Court below is not in accordance with law. He places reliance on the decision of this Court in Bimal Kumar v. Ram Kumar and others, 2007 (2) Cur. L.J. (H.P) 281, holding : "9. What is under consideration before me in the aforesaid two appeals is whether to allow C.M.Ps No.907 and 908 of 2006 or to reject these two applications, thus consequentially allowing C.M.Ps No.24 and 27 of 2007. 10. Rule 3 of Order 23 C.P.C. reads thus: "3. L.J. (H.P) 281, holding : "9. What is under consideration before me in the aforesaid two appeals is whether to allow C.M.Ps No.907 and 908 of 2006 or to reject these two applications, thus consequentially allowing C.M.Ps No.24 and 27 of 2007. 10. Rule 3 of Order 23 C.P.C. reads thus: "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 therewith 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. Explanation.- An agreement or compromise which is void or voidable under the Indian Contract Act, 1872 (9 of 1872), shall not be deemed to be lawful within the meaning of this rule." 11. A plain reading of the aforesaid Rule 3 Order 23 clearly suggests that where the Court is satisfied that a suit has been adjusted wholly or in part by any lawful agreement between the parties or a compromise has been duly effected between the parties, in writing and signed by the parties, the Court has to pass an order that such agreement or compromise be recorded and accordingly it has to pass a decree in accordance therewith in so far as it relates to the parties to the suit. Once, therefore, in terms of Order 23 Rule 3 Civil Procedure Code the parties jointly, of their own accord, free will and volition approach the Court and inform the Court that they have compromised the matter, such joint compromise application would amount to a lawful agreement between the parties and if the Court is satisfied that the parties, in fact, had entered into such a lawful agreement, it has no option but to record the agreement and based thereupon to pass a decree, thus disposing of the matter pending before the Court. The law is well settled that the parties having entered into a lawful agreement and jointly compromised the matter, cannot retract there-from or wriggle out except in some rare, exceptional and specified circumstances. 12. In Pannalal and another v. Kisanlal and others, AIR 1952 Nagpur 84 , the learned single Bench of Nagpur High Court was dealing with the question as to whether it is open to a party to an agreement to challenge the agreement on the ground of fraud. Undoubtedly, it has been held in this judgment that fraud, in fact, is a ground for challenging the agreement and if it is alleged by a party that a compromise was entered into through fraudulent means, under Order 23 Rule 3 Civil Procedure Code an investigation can be conducted by the Court to decide whether to terminate the agreement and thus to reject the same. The following observations in the aforesaid judgment are apposite and I quote : "I have not read all these authorities. Some of them do not go as far as that, but if they do then with the utmost respect I am unable to agree. In my opinion the word lawfulhas a wider meaning as used there than is contended for in the argument. Under Section 23 of the Contract Act it is explained that the consideration or object of an agreement is lawful unless, and then a number of instances are set out. One of them is if the object or consideration is fraudulent. But that does not refer to the contract itself being brought about by fraud. Section 23 is confined to the object or consideration. Now a contract with a fraudulent object may be brought about with the full consent and agreement of the parties. One of them is if the object or consideration is fraudulent. But that does not refer to the contract itself being brought about by fraud. Section 23 is confined to the object or consideration. Now a contract with a fraudulent object may be brought about with the full consent and agreement of the parties. It is not fraudulent as between the parties, that is to say neither of the parties is being defrauded, but the object is to defraud somebody else. That is the type of agreement which is held to be unlawful. All other agreements are lawful even though one of the parties may be defrauded by the other, but it is open to the defrauded party in that event to have the agreement set aside. So also a void agreement is not necessarily unlawful unless its object or consideration falls within the purview of Section 23. It is just non-existent in the eye of the law. Viewing the matter in that light, a compromise which is said to be fraudulent can be investigated by the Court under O.XXIII, R.3." 13. There is no manner of doubt that fraud vitiates an agreement. Similarly, there is no manner of doubt that an agreement brought about by undue influence, threat, coercion or by duress might also be invalid in the eyes of law. Applying these well established and well recognised principles, we find that in the present case, no element of fraud or undue influence, threat, coercion or duress either exists or has been spelt out in clear terms or made out by the appellant warranting vitiation of the compromise arrived at between the parties or leading to a conclusion by the Court that the agreement was not lawful or that it was vitiated because of any of the mischiefs or vices. A very careful reading of the averments in C.M.Ps No.24 of 2007 and 27 of 2007 clearly indicates the total absence of any of the aforesaid elements or ingredients of fraud etc. The only ground urged by the appellant in the two applications is that an assurance was held out to him by the respondents to do certain acts. These are very unspecified and vague as well as unsubstantiated allegations which in any event do not amount to fraud or undue influence, threat, coercion or duress. It is not the appellants case that the appellant is a rustic villager. These are very unspecified and vague as well as unsubstantiated allegations which in any event do not amount to fraud or undue influence, threat, coercion or duress. It is not the appellants case that the appellant is a rustic villager. It is also not the appellants case that any force was applied against him. The appellant is a literate educated person. The compromise applications have been signed, apart from the appellant, by his duly constituted Advocate. No explanation has been forthcoming from any quarter as to how and under what circumstances did the Advocate sign the compromise applications if fraud was played upon the appellant. Affidavits supporting the applications have been sworn and affirmed by the appellant. There is not an iota of allegations as to how did the appellant come about to swear and affirm these affidavits if he was under duress, fraud or coercion etc. 20. On a totality of facts and circumstances of this case, therefore, I have absolutely no manner of doubt in my mind that C.M.Ps No.907 and 908 of 2006 were jointly filed by the appellant and the respondents, on the free will and volition of the parties including the appellant and by these two applications the parties have entered into a compromise which can thus be termed as a lawful agreement between the parties in terms of Order 23 Rule 3 CP C, which binds the parties as well as enjoins upon the Court a mandatory obligation to record the agreement and to pass decrees in terms thereof. It was not, therefore open to the appellant to have wriggled out of the compromise or to have retracted from the same. These two applications are accordingly allowed and consequentially C.M.Ps No.24 and 27 of 2007 are dismissed". (Pp.284, 285, 286 and 287) 11. He then submits that in the absence of particulars of fraud etc., no adjudication is possible in law and the objections require to be dismissed. He relies upon the decision of the Supreme Court in Afsar Shaikh and another v. Soleman Bibi and others, AIR 1976 S.C. 163 , holding : "15. (Pp.284, 285, 286 and 287) 11. He then submits that in the absence of particulars of fraud etc., no adjudication is possible in law and the objections require to be dismissed. He relies upon the decision of the Supreme Court in Afsar Shaikh and another v. Soleman Bibi and others, AIR 1976 S.C. 163 , holding : "15. While it is true that 'undue influence', 'fraud', 'misrepresentation' are cognate vices and may, in part, overlap in some cases, they are in law distinct categories, and are in view of Order 6, Rule 4, read 333 with Order 6, r.2, of the Code of Civil Procedure, required to be separately pleaded, with specificity, particularity and precision. A general allegation in the plaint, that the plaintiff was a simple old man of ninety who had reposed great confidence in the defendant, was much too in sufficient to amount to an averment of undue influence of which the High Court could take notice, particularly when no issue was claimed and no contention was raised on that point at any stage in the trial court, or, in the first round, even before the first appellate court" (P.167) 12. He contends that in the absence of facts constituting fraud etc. the application should and ought to be allowed. He relies upon the decision of the Division Bench of the Bombay High Court in Shivdas Loknathsing and others v. Gayabai Shankar Surwase, 1994 (1) Civil Court Cases 597 (Bombay), holding : "9. Parties to the contract are bound by its terms and they are under an obligation to fulfill part of the contract. Sections 15,16,17,18,20,21 and 22 of the Indian Contract Act, 1872 are exception to this general obligation cast on the party to the contract. If consent of a party to the contract is caused by coercion, undue influence, fraud, mis-representation or mistake, then the contract would be void-able at the instance of the party whose consent was so obtained. This being an exception to the sanctity of the contract, it will have to be proved by the specific pleading followed by the strict proof. Therefore, specific provision has been made in the Code of Civil Procedure, 1908 under Order 6, Rule 4 requiring that the particulars of the said allegation constituting misrepresentation, fraud or undue influence, etc., as the case may be, shall be stated in the pleadings. Therefore, specific provision has been made in the Code of Civil Procedure, 1908 under Order 6, Rule 4 requiring that the particulars of the said allegation constituting misrepresentation, fraud or undue influence, etc., as the case may be, shall be stated in the pleadings. If the requirement of Order 6, Rule 4, is to be complied, it would not be sufficient to show that the other party to the contract was in a position to dominate will of the plaintiff. Apart from this fact, it will also have to be shown that the said party has actually dominated will of the plaintiff and the particulars as to how the will was dominated unduly also will have to be given. In this respect, we will have to examine the pleadings of the plaintiff in the present suit. Apart from the above quoted contention, the only statement in the plaint is to the following effect: "In fact the plaintiff was not willing to sell the disputed property and execute the sale-deed as there was no necessity for her to do the same. Neither she received the consideration amount as mentioned in the sale deeds.........But these sale-deeds were execute d because the relations between the plaintiff and the deceased Loknath Singh were as such that he was in a position that he dominated the will of the plaintiff and he used that position of their relations to obtain unfair advantage over the plaintiff and got executed both the sale-deeds on one and the same day." These pleadings can hardly be treated as necessary particulars of undue influence. Even assuming that Loknath Singh was very close to the plaintiff, it cannot be known as to how he has persuaded plaintiff to execute the sale-deed and while getting consent of the plaintiff for this purpose he has exercised undue influence. It is not for a Court to infer an undue influence since this will have to be distinguished from the influence which a person may exercise on other. Plaintiff Gayabai is conscious of her property rights. As per her contention, when her father-in-law wanted to grab the property she instituted suits. She was so determined that she sought help from Loknath Singh to pursue he r litigation since her father was not well acquainted with Court procedure. Plaintiff Gayabai is conscious of her property rights. As per her contention, when her father-in-law wanted to grab the property she instituted suits. She was so determined that she sought help from Loknath Singh to pursue he r litigation since her father was not well acquainted with Court procedure. If such a woman is to be influenced unduly so as to impair her independent judgment, something more than the mere relationship would be required." (P.600 & 601) 13. I have given careful consideration to the submissions made by the learned senior counsel appearing for the parties. There is no doubt about the proposition that the court has to be satisfied about the legality of the proceedings i.e. say that the compromise has been entered into lawfully between the parties. Learned senior counsel appearing for the respondent based on the decision in Oriental Insurance Company s case (supra) submits that there is no explanation as to why another counsel was engaged in a hurry to write/draft the compromise. If this argument is accepted and taken to its logical conclusion, it would make the counsel an active participant in the alleged episode. However, what I find from the judgment is that it takes a shortcut to decide the entire controversy. Whether there were sufficient particulars or evidence on the record and whether fraud was proved which the Court should or ought to have determined on the material on record. I find no such exercise having been undertaken or the learned Court paying any attention to the principles of law and the applicability of the precedent cited to the facts proved on record. 14. In these circumstances, this petition is allowed. The case is remanded to the learned trial Court with a direction that it shall take up the application afresh for decision in accordance with law. Petition is disposed of. No order as to costs. 15. Parties to appear before the trial Court on September 3, 2012. The learned trial Court shall endeavour to dispose of the case as expeditiously as possible.