Research › Search › Judgment

J&K High Court · body

2018 DIGILAW 334 (JK)

Mushtaq Ahmad Bhat v. Habibullah Dhobi

2018-05-24

JANAK RAJ KOTWAL

body2018
JUDGMENT : 1. This revision has been filed by the petitioner (landlord) against order dated 16.06.2015 passed by the learned District Judge, Baramulla in appeal filed by the respondent (tenant) whereby the order dated 30.07.2012 passed by the Rent Controller (Chief Judicial Magistrate), Sopore in an application for enhancement of rent filed by him has been set aside. 2. Heard learned counsel for the parties and perused the record. 3. Petitioner’s shop situate at Main Bazaar, Baramulla, opposite Karipa Park, is in possession of the respondent on annual rental of Rs. 3500/-. In November, 2008, petitioner filed an application before the Rent Controller for enhancement of rent of the said shop under the House and Shops Rent Control Act (for short the Rent Control Act). On 30.07.2012, when the application was at final hearing stage, learned Rent Controller disposed of the same by a short order, which reads: “30.07.2012 Mr. M. A. Mir for petitioner, Mr. Pir Khurshid Adv. Ld. Counsel for the non applicant. Parties by consensus fixed the reasonable rent of one shop at Kariap Park (opposite) as Rs. 7000 (Seven thousand only) with hike of 10% after every two(2) years w.e.f. January 2012. Accordingly office to draw up decree sheet and file to be considered to records.” 4. Respondent (tenant) challenged the order passed by the Rent Controller in appeal before learned District Judge, Baramulla, primarily, on the ground that he was not party to the consensus recorded by the Rent Controller nor has he signed any such compromise or put his signature at the margin of the order passed by the Rent Controller. Petitioner (landlord) raised objection to the maintainability of the appeal on the ground that the order was passed by the Rent Controller with the consensus of the parties so appeal does not lie. It was also contended on behalf of the landlord that once counsel for the parties have put their signatures, it should be construed that parties have duly signed the same and signatures of the parties are not required. 5. It was also contended on behalf of the landlord that once counsel for the parties have put their signatures, it should be construed that parties have duly signed the same and signatures of the parties are not required. 5. Learned appellate court noticed that counsel for the tenant had not signed the order passed by the Rent Controller at its margin and the space earmarked for his signature was lying vacant and took the view that it cannot be construed that the tenant was consenting party even if his counsel has signed the order observing further that there was not even iota of evidence on the record of file of the Rent Controller to disclose that parties ever have entered into a compromise and showed their willingness to the compromise. Learned appellate court, thus, refused to hold that the order passed by the Rent Controller can be considered as consent order and therefore, set aside the same. Hence this revision petition by the landlord. 6. Learned counsel for the petitioner, Mr. N. H. Shah, Advocate submitted that a duly engaged counsel is authorized to enter into a compromise on behalf his client and the compromise arrived through such a counsel or a statement made by him is as good as the compromise or the statement made by the party himself and binds the party on whose behalf compromise is arrived at or statement in the court is made. Learned counsel, thus, argued that respondent (tenant) is bound by the consent given by his counsel in the court and learned appellate court has fallen in error by holding that the respondent was not a consenting party to the compromise. Learned counsel submitted further that under section 96(3) of the Code of Civil Procedure (for short the Code) no appeal lies against a consent order so the order dated 30.07.2012 being a consent order, learned appellant court has fallen in error and acted without jurisdiction in entertaining and hearing the appeal and setting aside the order passed by the Rent Controller. Learned counsel cited Jineshwardas (D) by LRs. and others v Jagrani (Smt) and another, (2003) 11 SCC 372 . Learned counsel cited Jineshwardas (D) by LRs. and others v Jagrani (Smt) and another, (2003) 11 SCC 372 . Karam Kapahi and others v M/s Lal Chand Public Charitable Trust and another, AIR 2010 SC 2077 , Vimaleshwar Nagappa Shet v Noor Ahmed Sheriff and ors, AIR 2011 SC 2057 , Sooba and another v Amarnath Krishan Lal AIR 1985 J&K 72 and Mst. Jana v Ghulam Rasool Sheikh, 1983 KLJ 252. 7. Per contra, learned counsel for the respondent, Mr. M. A. Wani, Advocate, supported the impugned order passed by the learned District Judge. Referring to Order 23 (3) of the Code learned counsel submitted that compromise in a suit or an application can be arrived at by the parties only by a written agreement signed by the parties. Such an agreement is required to be executed between the parties and cannot be executed through counsel for the parties or one of them. Learned counsel further argued that the respondent, who is a poor person, had been contesting the application for four long years and would not have authorized his counsel to give a consent at the fag end of the proceedings to enhancement of the rent to double of the amount what he had been paying. Learned counsel cited Himalayan Coop. Group Housing Society v Balwan Singh and others, (2015) 7 SCC 373 and State Forest Corporation J&K v Haji Wali Mohammad, 1992 SLJ 260. 8. Under Section 21 of the Rent Control Act order passed by the Rent Controller is appealable before the District Judge of the concerned District. Sub-section (3) of section 21 provides that the procedure for filing the appeal and powers and procedure of the court in entertaining and hearing the appeals shall be the same as that in the appeals from orders under the Code. Section 108 of the Code, which is comprised in Part VII of the Code, provides that the provisions of Part VII relating to appeals from original decrees shall apply, so far as may be, to appeals from orders made under the Code or under any special or local law in which a different procedure is not provided. Sub-section (3) of section 96 of the Code, which too is comprised in Part VII, lays down that “no appeal shall lie from a decree passed by the Court with the consent of the parties”. Sub-section (3) of section 96 of the Code, which too is comprised in Part VII, lays down that “no appeal shall lie from a decree passed by the Court with the consent of the parties”. These provisions of the Code and the Rent Control Act are being referred to in order to make out that no appeal shall lie from an order passed by the Rent Controller with the consent of the parties, similarly as no appeal shall lie from a decree passed with the consent of the parties. 9. The primary and important question raised in this petition is, whether the order dated 30.07.2012 passed by the Rent Controller can be said to have been passed with the consent of the tenant. The consent of landlord, however, is not denied. 10. The order dated 30.07.2012 passed by the Rent Controller on first look would show that the parties to the application had by consensus fixed Rs. 7000/- as the annual rent of the shop with effect from January, 2012 and that there shall be 10 per cent enhancement after every two years and the Rent Controller ordered drawing of the decree sheet accordingly. It, however, needs to be noticed that the presence of the parties before the Rent Controller is not recorded in the order and further that, besides the counsel for each of the parties, only the landlord, Mushtaq Ahmed, has signed the order at its margin, whereas the space earmarked for signature of the tenant is lying vacant. It is, thus, clear that, whereas the impugned order purports to have been passed by the learned Rent Controller on the basis of the consent given by the parties, but as far as the tenant is concerned, the consent on his behalf certainly was given by his counsel. It cannot be said that the tenant himself was present in the court at that time, whereas in the appeal filed by him within four days of the date of order he had denied to have authorized his counsel to give such a consent in the court. 11. The Rent Control Act does not contain any provision providing for passing a consent/compromise order in an application for enhancement of rent filed by the landlord nor the procedure for passing such an order. 11. The Rent Control Act does not contain any provision providing for passing a consent/compromise order in an application for enhancement of rent filed by the landlord nor the procedure for passing such an order. However, as there is no contra provision in the said Act, the procedure provided for compromise of the suits in Order 23 Rule 3 of the Code will apply and attract consideration in determination of a question, whether appeal filed against a consent order passed by the Rent Controller in an application for enhancement of the rent is hit by sub-section (3) of Section 96 of the Code. In order to hold that the appeal is barred under sub-section (3) of section 96 the impugned order must satisfy the requirement of Order 23 Rule 3. Order 23 Rule 3 reads: “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 than 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.” 12. Important ingredients of Order 23 Rule 3 of the Code are that for passing a decree on the basis of a compromise between the parties the compromise should have been reduced into an agreement or a compromise deed in writing and signed by the parties, it should be proved to the satisfaction of the court that the agreement or compromise has been executed between and signed by the parties and the terms of the compromise should be indicated in the judgment/order passed by the court. A learned Single Bench of this Court in State Forest Corporation J&K (supra) has held that under Order 23 Rule 3 court can pass a decree in terms of compromise only where it is proved to the satisfaction of the court that the suit has been adjusted wholly or in part by any lawful agreement in writing and signed by the parties. The filing of the compromise deed in writing and signed by the parties is a condition precedent for passing the compromise/consent decree in a case. In view of the clearly stated ingredients of Order 23 Rule 3 of the Code and supported by the legal position stated in the State Forest Corporation J&K (supra), I respectfully, am not in a position to agree with the view taken by the learned Single Bench of this Court in Sooba and another (supra) to the extent that “there need not be any written terms of agreement between the parties placed before the court and it is enough the judgment discloses that the decree was passed on the basis of the consent of the parties”. Order 23 Rule 3 contemplates an agreement or compromise in writing and signed by the parties, which cannot be dispensed with in passing a judgment/order on the basis of compromise between the parties. 13. It is worthwhile to take up the contextual and connected question raised in the facts and circumstances of this case as to, whether the compromise can be entered and deed of compromise can be signed by a party through his counsel. The Supreme Court in the learned two-Judge Bench decision in Jineshwardas’ case (supra), relied upon on behalf of the petitioner, has referred with approval to an earlier decision of the Court in Byram Pestonji Gariwala v Union Bank of India (1992) 1 SCC 31 where the Court has interpreted Rule 3 of Order 23 and Rule 1 of Order 3 of the Code in juxtaposition and, while upholding the permissibility of a party entering into a compromise through his counsel and a counsel entering into and signing the compromise/agreement on behalf of his client, however, has held as under: “37. We may, however, hasten to add that it will be prudent for counsel not to act on implied authority except when warranted by the exigency of circumstances demanding immediate adjustment of suit by agreement or compromise and the signature of the party cannot be obtained without undue delay. In these days of easier and quicker communication, such contingency may seldom arise. A wise and careful counsel will no doubt arm himself in advance with the necessary authority expressed in writing to meet all such contingencies in order that neither his authority nor integrity is ever doubted. This essential precaution will safeguard the personal reputation of counsel as well as uphold the prestige and dignity of the legal profession. 38. Considering the traditionally recognized role of counsel in the common law system, and the evil sought to be remedied by Parliament by the CPC (Amendment) Act, 1976, namely, attainment of certainty and expeditious disposal of cases by reducing the terms of compromise to writing signed by the parties, and allowing the compromise decree to comprehend even matters falling outside the subject-matter of the suit, but relating to the parties, the legislature cannot, in the absence of express words to such effect, be presumed to have disallowed the parties to enter into a compromise by counsel in their cause or by their duly authorized agents. Any such presumption would be inconsistent with the legislative object of attaining quick reduction of arrears in court by elimination of uncertainties and enlargement of the scope of compromise. 39. To insist upon the party himself personally signing the agreement or compromise would often cause undue delay, loss and inconvenience, especially in the case of non-resident persons. It has always been universally understood that a party can always act by his duly authorized representative. If a power-of-attorney holder can enter into an agreement or compromise on behalf of his principal, so can counsel, possessed of the requisite authorization by vakalatnama, act on behalf of his client. Not to recognise such capacity is not only to cause much inconvenience and loss to the parties personally, but also to delay the progress of proceedings in court. If the legislature had intended to make such a fundamental change, even at the risk of delay, inconvenience and needless expenditure, it would have expressly so stated.” 14. Not to recognise such capacity is not only to cause much inconvenience and loss to the parties personally, but also to delay the progress of proceedings in court. If the legislature had intended to make such a fundamental change, even at the risk of delay, inconvenience and needless expenditure, it would have expressly so stated.” 14. Similar question has been considered by the Supreme Court in the learned three-Judge Bench decision in Himalayan Coop. Group Housing Society’s case (supra) cited on behalf of the respondent. In paragraph 22 of the reporting it has been held that “the law is now well settled that a lawyer must be specifically authorized to settle and compromise a claim, that merely on the basis of his employment he has no implied or ostensible authority to bind his client to a compromise/settlement. To put it alternatively that a lawyer by virtue of retention, has the authority to choose the means for achieving the client’s legal goal, while the client has the right to decide on what the goal will be. If the decision in question falls within those that clearly belong to the client, the lawyer’s conduct in failing to consult the client or in making the decision for the client, is more likely to constitute ineffective assistance of counsel.” 15. Paragraphs 31 and 32 of the judgment are important to be noticed: “31.Therefore, it is the solemn duty of an advocate not to transgress the authority conferred on him by the client. It is always better to seek appropriate instructions from the client or his authorized agent before making any concession which may, directly or remotely, affect the rightful legal right of the client. The advocate represents the client before the Court and conducts proceedings on behalf of the client. He is the only link between the Court and the client. Therefore his responsibility is onerous. He is expected to follow the instructions of his client rather than substitute his judgment. 32. Generally, admissions of fact made by a counsel is binding upon their principals as long as they are unequivocal; where, however, doubt exists as to a purported admission, the Court should be wary to accept such admissions until and unless the counsel or the advocate is authorised by his principal to make such admissions. 32. Generally, admissions of fact made by a counsel is binding upon their principals as long as they are unequivocal; where, however, doubt exists as to a purported admission, the Court should be wary to accept such admissions until and unless the counsel or the advocate is authorised by his principal to make such admissions. Furthermore, a client is not bound by a statement or admission which he or his lawyer was not authorised to make. Lawyer generally has no implied or apparent authority to make an admission or statement which would directly surrender or conclude the substantial legal rights of the client unless such an admission or statement is clearly a proper step in accomplishing the purpose for which the lawyer was employed. We hasten to add neither the client nor the Court is bound by the lawyer’s statements or admissions as to matters of law or legal conclusions. Thus, according to generally accepted notions of professional responsibility, lawyers should follow the client’s instructions rather than substitute their judgment for that of the client. We may add that in some cases, lawyers can make decisions without consulting client. While in others, the decision is reserved for the client. It is often said that the lawyer can make decisions as to tactics without consulting the client, while the client has a right to make decisions that can affect his rights. We do not intend to prolong this discussion. We may conclude by noticing a famous statement of Lord Brougham: “an advocate, in the discharge of his duty knows but one person in the world and that person is his client.” 16. Legal position is, thus, clear too. By engaging a counsel, a party to the litigation authorises and empowers him to context the lis on his behalf but such authorization and empowerment does not impliedly authorize and empower the counsel to compromise or adjust the case on behalf of the party engaging him. To enter into a compromise is the prerogative of a party and normally parties themselves should enter into a compromise and sign the compromise deed. Nonetheless, it is permissible for a party in exceptional circumstances to enter into a compromise through his counsel by specially empowering him in this regard. To enter into a compromise is the prerogative of a party and normally parties themselves should enter into a compromise and sign the compromise deed. Nonetheless, it is permissible for a party in exceptional circumstances to enter into a compromise through his counsel by specially empowering him in this regard. An engaged counsel can enter into a compromise on behalf of his client and sign the deed of compromise only when he is specially empowered in this behalf. Therefore, a deed of compromise executed through and signed by the counsel must indicate that the counsel was specifically authorized by the party and the court, while recording such a compromise and passing final judgment/order on the basis thereof, must indicate its satisfaction that the compromise has been entered into by the party, though through his counsel. 17. In the case on hand, the impugned order passed by the Rent Controller sans all the requirements of Order 23 Rule 3 of the Code and cannot be said to have been passed on the basis of a compromise between the parties or with the consent of the tenant. The compromise was not reduced into writing, either by the parties or through their counsel. Learned Rent Controller did not record his satisfaction that there was a compromise between the parties. What the Rent Controller cryptically has recorded in the order is that the parties by consensus have fixed Rs. 7000/- as annual rent with a condition of 10 per cent hike after every two years, without stating clearly whether the parties or either of them was present before the court or that the consensus was arrived at through counsel for the parties. Absence of the signature of the tenant/respondent at the margin of the order passed by the Rent Controller indicates positively that he was not present before the court and there is no reason for holding that the counsel engaged by him was authorized by him to make such a statement on his behalf. 18. The decision in Karam Kapahi and ors (supra) relied upon on behalf of the petitioner has no application as same deals with the judgment and decree on admission of facts by a party under Order 12 Rule 6 of the Code and not with the judgment on the basis of compromise between the parties. 18. The decision in Karam Kapahi and ors (supra) relied upon on behalf of the petitioner has no application as same deals with the judgment and decree on admission of facts by a party under Order 12 Rule 6 of the Code and not with the judgment on the basis of compromise between the parties. Distinction between a compromise between the parties and admission of a fact by a party needs to be understood. An order or judgment on the basis of admission does not require consent of the other party, whereas a compromise has inbuilt element of consent of both the parties. Likewise Mst. Jana’s case (supra) cannot help petitioner’s case because it refers to a statement made by counsel for a party about a point of fact not leading to passing of any compromise judgment or an order. Decision in Vimaleshwar Naggapa Shet’s case (supra) justifies the concession made by a counsel in the court on a question of fact and makes it binding on its client but does not deal with the power of a counsel to arrive at a compromise on behalf of his client without specific authorization in this regard. 19. The procedure adopted by the Rent Controller in the case on hand was contrary to the one provided in Order 23 Rule 3 of the Code so neither the bar contemplated in sub section (3) of section 93 of the Code is attracted nor the order could have sustained in appeal before the learned District Judge. Learned District Judge, therefore, cannot be said to have committed any illegality or error in setting aside the order passed by the Rent Controller. 20. Viewed thus, this petition has no merit and is dismissed. The impugned order passed by the learned District Judge, Baramulla is upheld. 21. Record of the courts below be remitted back along with a copy each of this order.