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2006 (7) TMI 707

is directed against the judgment dated 3.3.2004 passed by learned Single Judge of Delhi High Court in FA No.247 of 2003. 2. Respondents 1 & 2 are the landlords of the suit property (front portion of residential premises no. C-25, Friends Colony, New Delhi). Respondents 1 & 2 and their father Late Brig. S. Rameshwar let out the suit property with the fittings and fixtures to M/s Usha Fisheries Agriculture and Dairy Farm, a partnership firm (third respondent herein) for a period of three years under a registered lease deed dated 6.6.1979, the purpose being the residential use of a partner of the firm. Pushpa Devi (mother of the appellant) and respondents 4, 5 & 6 were its partners. The suit property was being used by Pushpa Devi for her residential use. The tenancy was continued after the lease term of three years. 3. The landlords (Respondents 1 & 2 and their father) terminated the said tenancy as at the end of 31.3.1989 by notice dated 9.2.1989 and filed a suit against the firm and Pushpa Devi in the court of the District Judge, Delhi on 10.4.1989 for recovery of the possession of the suit property. It was originally numbered as RC Suit No. 265 of 1989 and later, tr .....

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hri Dinesh Garg, counsel for defendants was recorded by the court : "Statement of Shri Dinesh Garg, Adv. for the defendants. W. O. I have instructions on behalf of the defendants to make the present statement that the defendants undertake to vacate the suit premises by 22.1.2002 and will keep on paying the rent/damages @ ₹ 4800/- w.e.f. 1.5.2001, till the vacation of the suit premises. The rent upto 30.4.2001 already stands paid. Sd/- Dinesh Garg, Adv. R.O.A.C. (Sd. Civil Judge) Thereafter, the following statement of Shri B. Khan, counsel for the plaintiffs was recorded : "Statement of Shri B. Khan, Counsel for both the plaintiffs. W.O. I have instructions on behalf of plaintiffs to make the present statement that in view of the statement made by the counsel for the defendants, on behalf of the defendants, the suit may kindly be disposed of accordingly. I accept the terms of the statement of counsel for defendants. The plaintiffs are also present today in the court and will countersign this statement. Sd/- B. Khan, Adv. R.O.A.C. (Sd/- Civil Judge) In addition to the learned counsel for plaintiffs and defendants signing the order sheet, plaintiffs 1 & 2 who were .....

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"written compromise between the parties duly signed by the parties", and therefore, there was no lawful agreement or compromise. The court issued notice of the said application to Shri Dinesh Garg, counsel for the defendants as also the plaintiffs. Shri Dinesh Garg filed a detailed statement dated 7.12.2001. We extract below the relevant portions of the said statement : "The counsel had represented the defendant no. 2 for about 12 years in the aforesaid matter. The counsel was getting the instructions from the defendant no. 2 most of times through her daughter Ms. Sadhna Rai or her son in law, Shri Vinay Rai or through Group Head of Law Department Dr. M.C. Gupta. All the proceedings were always communicated to the defendant no.2. After the closing of evidence by the plaintiff, the case was listed for the defendant's evidence time and again and under instructions of the defendant no. 2, the counsel took adjournments for evidence for several years. The adjournment were taken on 4.12.1998, 5.4.1999 and 21.5.1999. When the case fixed for 12.7.1999 for evidence of defendant no. 2, she again did not come and sent her medical certificate which was placed on record and .....

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structions and that the decree has been passed. This communication was duly received by the defendant no. 2 as well as Dr. M.C. Gupta. The copy of the letter, postal receipts and the AD card duly signed by the defendant as received are annexed." 7. The second defendant did not, however, pursue her application dated 21.8.2001 for setting aside the consent decree. On 27.8.2001, within six days of filing the application dated 21.8.2001 before the trial court for setting aside the decree, the second defendant filed an appeal against the said consent decree before the District Judge, Delhi. The appellate court by judgment dated 21.12.2002 set aside the consent decree on the ground that there was no agreement or compromise reduced to writing and signed by the parties. The matter was remanded to the trial court with a direction to proceed with the trial of the suit in accordance with the law by ignoring the statement of the counsel made on 23.5.2001. 8. The said judgment of the Appellate Court was challenged by the landlords in FAO No. 247 of 2003 on the file of the Delhi High Court, under Order 43 Rule (1)(u) of CPC. During the pendency of the said appeal before the High Court, Push .....

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irmed the same and the suit had been disposed of recording the said submission, then it would fall under the second part. The appellant contends that the High Court having held that the case did not fall under the first part of Rule 3, and the case demonstrably not falling under the second part of Rule 3, it has to be held that there was no lawful agreement or compromise. It is submitted that the first appellate court was justified in setting aside the consent decree and remanding the matter to the trial court. On the other hand, the learned counsel for the landlords contended that the District Court had no jurisdiction to entertain the appeal against a consent decree. It is also contended that there was a compromise by admitting the claim of the plaintiffs, and, therefore, the consequential decree is valid and binding. On the contentions raised, the following two questions arise for consideration : (i) Whether the appeal filed by Pushpa Devi under section 96 of the Code of Civil Procedure, against the consent decree was maintainable. (ii) Whether the compromise on 23.5.2001 resulting in a consent decree dated 18.7.2001 was not a valid compromise under Order 23 Rule 3 CPC. Re : Poi .....

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ct from 1.2.1977 barring any suit to set aside a decree on the ground that the compromise on which the decree is based was not lawful. 12. The position that emerges from the amended provisions of Order 23, can be summed up thus : (i) No appeal is maintainable against a consent decree having regard to the specific bar contained in section 96(3) CPC. (ii) No appeal is maintainable against the order of the court recording the compromise (or refusing to record a compromise) in view of the deletion of clause (m) Rule 1 Order 43. (iii) No independent suit can be filed for setting aside a compromise decree on the ground that the compromise was not lawful in view of the bar contained in Rule 3A. (iv) A consent decree operates as an estoppel and is valid and binding unless it is set aside by the court which passed the consent decree, by an order on an application under the proviso to Rule 3 of Order 23. Therefore, the only remedy available to a party to a consent decree to avoid such consent decree, is to approach the court which recorded the compromise and made a decree in terms of it, and establish that there was no compromise. In that event, the court which recorded the compromise will i .....

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ordance therewith. The Rule also makes it clear that the compromise or agreement may relate to issues or disputes which are not the subject-matter of the suit and that such compromise or agreement may be entered not only among the parties to the suit, but others also, but the decree to be passed shall be confined 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. We are not, however, concerned with this aspect of the Rule in this appeal. 14. What is the difference between the first part and the second part of Rule 3 ? The first part refers to situations where an agreement or compromise is entered into in writing and signed by the parties. The said agreement or compromise is placed before the court. When the court is satisfied that the suit has been adjusted either wholly or in part by such agreement or compromise in writing and signed by the parties and that it is lawful, a decree follows in terms of what is agreed between the parties. The agreement/compromise spells out the agreed terms by which the claim is admitted or adjusted by mutual concessions or promises, so that the parti .....

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nt and the matter falls under the second part, nothing prevents the parties from reducing such satisfaction of the claim/subject matter, into writing and signing the same. The difference between the two parts is this : Where the matter falls under the second part, what is reported is a completed action or settlement out of court putting an end to the dispute, and the resultant decree recording the satisfaction, is not capable of being enforced by levying execution. Where the matter falls under the first part, there is a promise or promises agreed to be performed or executed, and that can be enforced by levying execution. While agreements or compromises falling under the first part, can only be by an instrument or other form of writing signed by the parties, there is no such requirement in regard to settlements or satisfaction falling under the second part. Where the matter falls under second part, it is sufficient if the plaintiff or plaintiff's counsel appears before the court and informs the court that the subject matter of the suit has already been settled or satisfied. 15. In a suit against the tenant for possession, if the settlement is that the tenant will vacate the prem .....

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son in any Court, unless he has been appointed for the purpose by such person by a document in writing signed by such person or by his recognized agent or by some other person duly authorized by or under a power-of-attorney to make such appointment. Sub-rule (2) of Rule 4 provides that every such appointment shall be filed in Court and shall, for the purposes of sub-rule (1), be deemed to be in force until determined with the leave of the Court by a writing signed by the client or the pleader, as the case may be, and filed in Court, or until the client or the pleader dies, or until all proceedings in the suit are ended so far as regards the client. The question whether 'signed by parties' would include signing by the pleader was considered by this Court in Byram Pestonji Gariwala v. Union Bank of India [1992 (1) SCC 31] with reference to Order 3 of CPC : "30. There is no reason to assume that the legislature intended to curtail the implied authority of counsel, engaged in the thick of proceedings in court, to compromise or agree on matters relating to the parties, even if such matters exceed the subject matter of the suit. The relationship of counsel and his party or t .....

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agreement or compromise on behalf of his principal, so can counsel, possessed of the requisite authorization by vakalatnama, act on behalf of his client .. 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." [Emphasis supplied] The above view was reiterated in Jineshwardas v. Jagrani [2003 (11) SCC 372]. Therefore, the words 'by parties' refer not only to parties in person, but their attorney holders or duly authorized pleaders. 19. Let us now turn to the requirement of 'in writing' in Rule 3. In this case as noticed above, the respective statements of plaintiffs' counsel and defendants' counsel were recorded on oath by the trial court in regard to the terms of the compromise and those statements after being read over and accepted to be correct, were signed by the said counsel. If the terms of a compromise written on a paper in the form of an application or petition is considered as a compromise in writing, can it be said that the specific and categorical statements on oath recorded in writing by the court and duly read over and accepted .....

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itled to the payment of only ₹ 4,800/- per month (equivalent to the rent) and nothing more up to 22.1.2002. The effect of it is that the parties have gone to trial on the issues and the only evidence led by defendants is that they will vacate the premises on 22.1.2002. No other evidence being led, the necessary conclusion is that the defendants admitted the plaintiffs' claim and merely sought time to vacate. Therefore, the suit can be said to have been decreed on the basis of evidence and the admissions made by the defendants. In Jineshwardas (supra), such a situation was noticed. In that case, the High Court made an order on a consensus expressed by both the learned counsel at the time of hearing of the second appeal, that the respondents will pay ₹ 25,000/- within a period of one month with interest in the manner stipulated. The appellant subsequently filed an application for review, contending that the said order disposing of the appeal was a compromise decree, and as it was not in writing and signed by the parties, the appeal could not have been disposed of on the basis of the submissions. The High Court, however, refused to entertain such objections. This Court .....

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ppeal was not disposed of by recording those terms. On the other hand, the said 'proposals' were recorded and the matter adjourned for payment in terms of the offer. When the matter was taken up on the next date of hearing, the respondent stated that he was not agreeable. The High Court directed that the appeal will have to be heard on merits as the respondent was not prepared to abide by the proposed compromise. That order was challenged by the appellant by contending that the matter was settled by a lawful compromise by recording the statements of the appellant's counsel and respondent's counsel, and the respondent could not resile from such compromise and therefore, the High Court ought to have disposed of the appeal in terms of the compromise. It is in this factual background, that is, where there was no consent decree, the question was considered by this Court. The distinguishing feature in that case is that though the submissions made were recorded, they were not signed by the parties or their counsel. Nor did the court treat the submissions as a compromise. In this case, the court not only recorded the terms of settlement but thereafter directed that the stat .....

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