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2016 DIGILAW 182 (CAL)

Sudhangsu Dey v. Ashis Das

2016-02-19

HARISH TANDON

body2016
JUDGMENT : Harish Tandon, J. The point, which initially looks simpliciter becomes complex because of the rival stand taken by the counsels relying the judgments of the different High Courts and the Supreme Court. The point so agitated becomes complex and needs deliberation in the instant Revisional Application upon scanning the different judgments relied upon by the respective counsels. 2. The legal point which germane in this Revisional Application is what would be the remedy of a person against the compromise decree passed by the Trial Court. The complexity is seen from the different provisions contained in the Civil Procedure Code. Section 96(3) of the Code of Civil Procedure expressly bars the remedy by way of an appeal against the decree based on consent of parties. 3. Order 23, Rule 3A of the Code does not allow any challenge to a compromise decree by way of separate suit. On the other hand, Order 43, Rule 1A of the Code provides the remedy by way of an appeal against the decree that the Order recording the compromise or refusing to record the compromise is not lawful. 4. One view is that when the legislature expressly bars the institution of a suit and takes away the right of an appeal the proper remedy is to approach the same Court under Order 23, Rule 3 or Section 151 of the Code. The other view, which could be seen is that though Section 96(3) of the Code took away the remedy by way of an appeal against the decree passed on consent, still, the party aggrieved can explore its remedy under Order 43, Rule 1A of the Code before the Appellate Court. The third view which does not get support in majority of the decision is that the challenge to a compromise decree or a consent decree on the ground of fraud, coercion, misrepresentation which renders the compromise decree void and/or voidable can be assailed in a separate suit despite the embargo under Order 23, Rule 3A of the Code. 5. The third view which does not get support in majority of the decision is that the challenge to a compromise decree or a consent decree on the ground of fraud, coercion, misrepresentation which renders the compromise decree void and/or voidable can be assailed in a separate suit despite the embargo under Order 23, Rule 3A of the Code. 5. There is unanimity in almost all the decisions sighted at the bar that a person cannot be rendered without remedy against the compromise or a consent decree though they defer from such remedy and interpreted the aforesaid provisions either conferring a right to approach the same Court who recorded and/or passed the compromise or consent decree or to approach the Appellate Court by preferring an appeal. The expression used under Section 96(3) of the Code is “consent of parties” and does not incorporate the expression “compromise decree”. Order 43, Rule 1A of the Code did not use the expression appearing in Section 96(3) of the Code but provides a remedy of an appeal against the recording or non-recording of compromise. It would, however, be seen that there was an express provision that is Order 43, Rule 1 (m) of the Code bestowing the right of an appeal against the compromise decree but was later on deleted by an amendment having brought in the year of 1976. It is a trite law that a person cannot be without remedy and therefore, the point assumed significance on the question what is a proper remedy for such aggrieved person? The consent coming out of free volition is an act of estoppel and brings finality to the litigation. Every litigation attains finality, is a fundamental rule as the party, cannot remain in uncertainty. It would not be healthy in a judicial system to keep the litigation open for all time to come in order to keep the parties in uncertainties. Certainty is a virtue and every litigation should reach its finality. 6. There is a freedom of contract as the parties can compromise their dispute at any point of time during the pendency of the proceeding. The compromise is nothing but an agreement entered into by the parties and gets its legal sanction from the Court in the form of a decree. 6. There is a freedom of contract as the parties can compromise their dispute at any point of time during the pendency of the proceeding. The compromise is nothing but an agreement entered into by the parties and gets its legal sanction from the Court in the form of a decree. The role of Court is not mere to give a seal to the mandate of the parties but explanation appended to Order 23, Rule 3 of the Code requires the Court to scrutinise whether such compromise is lawful or not. The Court may in an attending circumstances refuse to record compromise for the reasons to be recorded, therefore, the language of Order 43, Rule 1A of the Code conveys sufficiently the legislative intent by permitting the party to assail such order in an appeal. Even recording of compromise which is otherwise unlawful can be assailed by an aggrieved person before the Appellate Court. One of the ground on which the compromise decree can be assailed in an appeal is that such compromise is either void or voidable under any of the provisions of the Indian Contract Act, 1872. By virtue of an explanation to Order 23, Rule 3 the provisions of the Indian Contract Act relating to an agreement being void or voidable has its applicability. The distinction can be seen from Rule 3 Order 23 of the Code, which contains two eventualities. The first part relates to the adjustment of the claim wholly or in part by any lawful agreement or compromise in writing and signed by the parties; the second part is referable to the satisfaction of the plaintiff’s claim either wholly or in part. The proviso to the said provision makes it imperative on the Court to decide the question whether the adjustment or satisfaction has been arrived at. The present case does not involve the recording of the satisfaction or adjustment by the Court but the question which begging an answer is the remedy against the compromise decree. 7. In case of Jnanendra Chandra Nath v. Smt.Pabitra Bhowmick & Ors. reported in 1992(1) CLJ 130 the Division Bench of this Court was considering a situation where a compromise decree was assailed on an application under Section 151 of the Code of Civil Procedure on the ground of fraud, undue influence and misrepresentation. 7. In case of Jnanendra Chandra Nath v. Smt.Pabitra Bhowmick & Ors. reported in 1992(1) CLJ 130 the Division Bench of this Court was considering a situation where a compromise decree was assailed on an application under Section 151 of the Code of Civil Procedure on the ground of fraud, undue influence and misrepresentation. The Trial Court allowed the said application as a consequence whereof the decree based on compromise was set aside. The said order was assailed in a Revision before this Court and it was urged by the revisionist that the proper remedy is to file an appeal against the compromise decree. After noticing the provisions contained under Section 96(3) and Rule 1A Order 43 of the Code, the Division Bench opined that sub-Section 1 of Section 96 of the Act conferred a right of an appeal against all the decrees barring one passed by the Court with consent of parties. It is, however, observed that the bar created under sub-Section 3 of Section 96 of the Act is against a lawful compromise decree but not when such compromise decree is assailed on any of the grounds envisaged under the Indian Contract Act by conferring a right under sub-Rule 2 of Rule 1A Order 43 of the Code. It is, thus, held that the remedy available to a person assailing the compromise decree being unlawful is to prefer an appeal under sub-Rule 2 of Rule 1A Order 43 of the Code. 8. The another Division Bench in case of Morium Bibi & Ors. v. Musst. Showkatara Begum & Ors. reported in 1995(1) CLJ 80 took a view that the compromise decree can be assailed by filing an application under proviso to Order 23, Rule 3 of Code before the Court which passed the decree or may however be assailed by preferring an appeal. In the said judgment the Division Bench noticed a decision of the Supreme Court rendered in case of Banwarilal v. Chandu Devi reported in AIR 1993 SC 1139 which supports the aforesaid view. 9. In case of Byram Pestonji Gariwala v. Union Bank of India & Ors. reported in (1992) 1 SCC 31 the Apex Court was poised with the question whether the compromise in writing and signed by the counsels representing the parties is valid and binding on them or the requirement of law is that the parties should sign the compromise. 9. In case of Byram Pestonji Gariwala v. Union Bank of India & Ors. reported in (1992) 1 SCC 31 the Apex Court was poised with the question whether the compromise in writing and signed by the counsels representing the parties is valid and binding on them or the requirement of law is that the parties should sign the compromise. The challenge to the compromise decree was made by way of a chamber application in an execution proceeding which was turned down by the Bombay High Court. It was ultimately held that the compromise effected by the counsels under the authority so given is valid and upheld the decision of the High Court by which the application was dismissed. 10. Another Division Bench of this Court in case of Ashis Kumar Ghosh & Ors. v. Gopal Chnadra Ghosh & Ors. reported in (2004) 3 CHN 146 faced the similar question as to what would be the remedy of an aggrieved person against a compromise decree. In the said decision the compromise decree was assailed in a suit before the Civil Court and an argument was advanced that such suit is barred under Order 23, Rule 3A of the Code. In the above backdrop, the point arose what would be the remedy against a compromise decree when a challenge is made on the ground of fraud or of like nature. Relying upon a decision rendered in case of Banwarilal (supra) it was held that the suit is not maintainable. 11. It would be apposite to notice the judgment of the Supreme Court in case of Pushpa Devi Bhagat v. Rajinder Singh & Ors. reported in (2006) 5 SCC 566 where the suit for recovery of possession ended on a compromise by which the defendants therein undertook to vacate the premises within the specified time. An application under Section 151 was taken out by one of the defendants to set aside the said compromise decree alleging that she never instructed her Advocate to enter into any compromise on her behalf. On the above conspectus it is held that the only remedy available to the party challenging consent decree is to approach the Court which recorded the compromise. 12. In case of Ashim Kumar Dey v. Calcutta Wholesale Medicine Market Area Committee of Bengal Chemists & Druggists Association & Ors. On the above conspectus it is held that the only remedy available to the party challenging consent decree is to approach the Court which recorded the compromise. 12. In case of Ashim Kumar Dey v. Calcutta Wholesale Medicine Market Area Committee of Bengal Chemists & Druggists Association & Ors. reported in (2007) 1 CHN 814 , an appeal was filed by a third party to the suit challenging the compromise decree passed therein. The point which fell for consideration was whether such appeal is maintainable despite the embargo created under Section 96(3) of the Code of Civil Procedure. The Division Bench opined that the third party has neither a right to challenge the compromise decree by filing an application before the self same Court who recorded the compromise and passed the decree nor can assail such compromise decree before the Appellate Court in view of a bar created under Section 96(3) of the Code. It is, however, held that such third party can maintain a separate suit challenging such compromise decree. 13. In the case of Horil v. Keshav & Anr. reported in (2012) 5 SCC 525 the challenge was made before the Supreme Court to a judgment and order of the Allahabad High Court allowing the Writ Petition setting aside the order of the District Judge and affirming the order of the Munsif who held that the suit was not maintainable being barred under Order 23, Rule 3A of the Code. The fact which emerges from the said decision is that the appellant therein filed a suit before the Civil Court for declaration that the decree passed by the Assistant Collector, Class-I, in a suit under Section 176, 178 and 182 of the UP Zamindari Abolition and Land Reforms Act, 1950 was fraudulent, inoperative and not binding upon him. Such challenge was based on the fake signature of the father of the appellant in a compromise petition which was the basis of the said decree. 14. A point was urged before the Supreme Court that the suit of this nature is hit by the provision of Order 23, Rule 3A of the Code. The decision rendered in Banwarilal (supra) was placed before the Bench in support of the contention that the remedy available to an aggrieved person against a compromise decree is to approach the same Court and not by separate suit. The decision rendered in Banwarilal (supra) was placed before the Bench in support of the contention that the remedy available to an aggrieved person against a compromise decree is to approach the same Court and not by separate suit. The judgment rendered in Banwarilal (supra) was distinguished as the compromise was effected not before the Civil Court but the Revenue Court and therefore the bar against the institution of suit challenging the compromise decree cannot operate. In the said judgment the Supreme Court did not take a contrary view to what has been taken in Banwarilal (supra) but distinguished on the special fact of the said case. 15. However, in case of Daljit Kaur & Anr. v. Muktar Steels Pvt. Ltd. & Ors. reported in (2014) 2 CHN(SC) 142 the judgment rendered in case of Banwarilal (supra) was not placed. On the other hand the Bench noticed the judgment delivered in case of Kishun (supra) and Pushpa Devi Bhagat (supra) and framed two questions, firstly whether the Appellate Court was justified in holding that the appeal against the consent/compromise decree is not maintainable in view of bar created under Section 96(3) of the Code of Civil Procedure and secondly, whether the judgment rendered in case of Pushpa Devi Bhagat (supra) is contrary to Order 43, Rule 1A of the Code. A distinction was drawn between the consent/compromise decree passed by the Court without any enquiry as no challenge was thrown at the time of its passing and a consent/compromise decree passed by the Court after making an enquiry as one of the parties have raised a dispute. The judgment in Pushpa Devi Bhagat (supra) was held to apply in case where the compromise/consent decree was passed without any dispute being raised in the Court of the first instance and therefore such consent decree is not amenable to be challenged by way of an appeal. But when the Court passed a compromise decree after making an enquiry and adjudicating the dispute, the aggrieved person can maintain an appeal against such decree under Order 43, Rule 1A of the Code. 16. What emerges from the aforesaid decisions are – (i) An appeal is not maintainable against a consent decree in view of the bar created under Section 96(3) of the Code. 16. What emerges from the aforesaid decisions are – (i) An appeal is not maintainable against a consent decree in view of the bar created under Section 96(3) of the Code. (ii) It is obligatory on the part of the Court to make an enquiry and adjudicate the dispute if raised at the time of proceeding the compromise and the decision either recording or refusing to record the compromise can be assailed in an appeal under Order 43, Rule 1A of the Code. (iii) A party to a proceeding which ended on compromise can approach the same Court which passed the compromise decree with a substantive application and it is imperative on the Court to adjudicate the said application. (iv) Ordinarily, a party who suffered the compromise decree cannot challenge the same in a separate suit because of the embargo created under Order 23, Rule 3A of the Code. (v) The Court passed the compromise decree can adjudicate the dispute raised by the party to the proceeding on the ground of fraud, coercion or of like nature if an approach is made with an application. (vi) The compromise effected before a Court of limited jurisdiction can be challenged in a separate suit before the Civil Court under Section 9 of the Code. (vii) A third party to a compromise decree can maintain a separate suit challenging the compromise decree on fraud or coercion and the bar under Order 23, Rule 3A shall not be attracted. 17. Let me now examine the facts of the present case on the enunciation of law indicated above and to find out whether the decision of the Trial Court warrants interference in this Revisional Application. 18. Shown of unnecessary details, the opposite party filed a suit for declaration that the deed of dissolution of partnership is valid and binds the parties: with further declaration of title on the strength of the said deed of dissolution. In course of the said suit a compromise petition was filed recording the terms duly signed by them. The Trial Court invited the parties to appear personally and depose in support of the compromise petition. Both the plaintiff and defendant affirmed the recording of the compromise on oath and thereafter the Court decreed the suit on the basis of the said compromise petition. The Trial Court invited the parties to appear personally and depose in support of the compromise petition. Both the plaintiff and defendant affirmed the recording of the compromise on oath and thereafter the Court decreed the suit on the basis of the said compromise petition. Subsequently, the said compromise decree was challenged in a freshly instituted suit being Title Suit No. 24 of 2006 before the learned Civil Judge (Senior Division), First Court, Alipore. The application was taken out by the defendant therein for framing a preliminary issue that the suit is hit by the provision of Order 23, Rule 3A of Code. The said order was assailed before this Court in C.O. 455 of 2008 which was disposed of on 29.04.2009 upholding the decision of the Trial Court but observing that the Petitioner can challenge the propriety of the compromise decree in appropriate forum in accordance with law. The Court, however, noticed the judgment in case of Ashis Kumar Ghosh (supra) and Jnanendra Chandra Nath (supra) wherein it has been held that the compromise decree can only be challenged under Order 43, Rule 1 of the Code and not by a separate suit. Taking clue from such observation an appeal being T.A. No. 261 of 2009 is filed before the learned District Judge, Alipore. In the said appeal an application was taken out by the Petitioner raising a plea that the appeal is not competent and therefore should be dismissed. By the impugned order the Appellate Court held that the appeal is maintainable as the bar under Section 96(3) of the Code cannot apply. 19. Admittedly, the compromise was accepted by the Court which led to the passing of a decree was without contest. There was no challenge before the Court at the time of passing the compromise decree. The opposite party felt aggrieved only after recording the compromise, which follows the decree being tainted by fraud, undue influence and misrepresentation. There was no occasion to make an enquiry by the Court and to pass a decision for recording the compromise. It partakes a character of a decree having passed on consent of parties and therefore the bar under Section 96(3) of the Code stands in the way of maintaining the appeal. There was no occasion to make an enquiry by the Court and to pass a decision for recording the compromise. It partakes a character of a decree having passed on consent of parties and therefore the bar under Section 96(3) of the Code stands in the way of maintaining the appeal. It is a settled proposition of law that a person cannot be rendered remediless, a proper course of action is to approach the same Court which passed the compromise decree by taking out an application and thereafter the Court is required to adjudicate the same. The decision rendered in Pushpa Devi Bhagat (supra) squarely applies in the present proceeding and therefore this Court has no hesitation to opine that the appeal is not maintainable. 20. The above aspect is further fructified on a subsequent decision of the Supreme Court in case of R. Rajanna v. S.R. Venkataswamy reported in (2014) 15 SCC 471 . The Apex Court notices the earlier decision of Pushpa Devi (Supra) case and held that the separate suit is barred, even when the compromise decree is challenged on the ground of fraud. 21. The right to appeal is a statutory right unless provided for cannot be conferred by an order of the Court. Though, in an earlier Revisional Application, the Court did not expressly held that the appeal is maintainable even otherwise if the statute bars the remedy by way of an appeal the same cannot be conferred by the Court. 22. The Order, therefore, suffers from illegality and/or infirmity and cannot be sustained. Impugned Order is, thus, set aside. 23. There shall be no order as to costs. Revisional application is allowed.