Jineshwardas (D) By Lrs. And Others v. Jagrani (Smt) And Another

Doraiswamy Raju, J.— Special leave granted.

2. The appellant before this Court was the appellant in Second Appeal No. 693 of 1996 on the file of the Madhya Pradesh High Court at Jabalpur. The original plaintiff Jineshwardas, whose legal representatives are the appellants in this Court, filed Civil Suit No. 102-A of 1980 before the Court of the IVth Civil Judge, Class I, Jabalpur, seeking for a decree for specific performance and recovery of the possession of the suit land or in the alternative, damages at market value as may be proved for non-performance of the contract and for recovery of Rs 2500 paid by the plaintiff as deposit. The defendants disputed the suit claim by attributing fraud and undue influence as vitiating the agreement, stating that it was opposed to public policy as well and really constituted no agreement of sale of immovable property. After trial and on consideration of the materials on record, the suit filed was dismissed. The matter was pursued on appeal before the VIth Additional District Judge, Jabalpur, and the learned Ist Appellate Judge also, after an elaborate consideration of the evidence on record, affirmed the findings of the learned trial Judge by holding that the suit agreement cannot be considered as an agreement for sale of the land. The Ist Appellate Judge also noticed the specific fact that the father of the plaintiff was a practising advocate and it is in respect of certain amounts spent for the litigation only, the agreement came to be executed and that it was merely an agreement to repay and not to convey the property itself. In that view of the matter, while partly allowing the appeal and affirming the judgment of the trial Judge denying specific performance and recovery of possession, decreed the claim of the plaintiff to receive the sum of Rs 2500 with interest from 18-8-1963 till the date of filing of the suit, namely, 28-8-1975, at Re 1 per month and thereafter interest at the rate of paise 50 per month. Aggrieved, the matter appears to have been pursued further before the High Court by means of a second appeal. From the copy of the order-sheet filed relating to the order made at the time of entertaining the appeal when it came up for admission, it is seen that the second appeal was admitted on 27-2-1998 on the following questions of law:

“(1) Whether the courts below were in error in holding that the agreement dated 23-4-1963 (Ext. P-2) was not a genuine agreement to sell the property in suit and the same is not enforceable?

(2) Whether the court below was right in non-suiting the plaintiff also on the ground of limitation?”

3. Thereupon, when the second appeal came up before the Court for final hearing before another learned Single Judge, the following order came to be passed on a consensus expressed by both the learned counsel before the High Court at the time of hearing. It would be useful and necessary to set out the said order:

“Both the counsel are in agreement to settle the matter. The learned counsel for the respondents submits that the respondents will pay an amount of Rs 25,000 to the appellant within a period of one month, otherwise it will carry interest at the rate of 12% per annum from the date of today. On this agreed submission, this appeal is decided and judgment and decree passed by the court below is modified to this extent:

1. The respondents will pay Rs 25,000 (Rupees twenty-five thousand) to the appellants within a period of one month.

2. If this amount is not deposited in the court on or before 10-6-2002, the above amount will carry interest @ 12% per annum till its realization.

3. Cost of the litigation will be borne by both the parties.

The appeal is disposed of in view of the abovesaid agreed submissions.”

4. Thereupon, the appellants seem to have filed an application for review contending that the order passed on 9-5-2002 disposing of the appeal is nothing but a compromise decree and since the compromise could, if at all, have been entered into only under Order 23 Rule 3 CPC, and the one in this case has not been so entered into in writing and signed by the parties, the same is not to be made the basis for disposal of the appeal and submissions, if any, made in this regard by the counsel appearing for the appellants in the High Court were without any instructions of the appellants. The learned Judge by an order dated 15-7-2002 rejected the review application observing that the aforesaid settlement was arrived at between the parties in the Court at the time of hearing and if the applicants are aggrieved, they may take appropriate action under law but no case for review has been made out. At this stage, the above appeal has been filed.

5. Pursuant to the notice ordered, the respondents entered appearance and have filed their counter-affidavit contending that in the teeth of the factual findings made by both the courts below that the transaction was not one for sale of any property, there was no merit in the claim to be effectively adjudicated in the appeal before the High Court, that the counsel appearing were duly authorized by their respective parties to argue the second appeal on merits and, if necessary, compromise the same and the counsel on either side, who have expressed such a desire to settle, being advocates of repute with a long standing of more than 35 years at the Bar, could not be attributed with any motive and in the absence of any concrete material to show that something illegal has been done, the appellants cannot take advantage of hypertechnicalities to avoid the decree in the second appeal, which, if at all, is really more in favour of the appellants in the teeth of the concurrent findings recorded by the courts below.

6. The learned counsel for the appellants strongly placed reliance upon the decision of this Court reported in Gurpreet Singh v. Chatur Bhuj Goel (1988) 1 SCC 270 to contend that in the absence of compliance with the provisions contained in Order 23 Rule 3 CPC, the judgment of the High Court could not be sustained. The learned counsel for the respondent reiterated the stand taken in the counter, noticed supra.

7. We have carefully considered the submissions of the learned counsel appearing on either side. Though in Gurpreet Singh case (1988) 1 SCC 270 this Court explained the object and purport of Rule 3 of Order 23 CPC, by laying emphasis on the words “in writing and signed by parties”, to be necessitated in order to prevent false and frivolous pleas that a suit had been adjusted wholly or in part by any lawful agreement or compromise with a view to protract or delay the proceedings in the suit itself, it was also observed therein that as per Rule 3 of Order 23 CPC, when a claim in the suit has been adjusted wholly or in part by any lawful agreement or compromise, such compromise must be in writing and signed by the parties and there must be a complete agreement between them and that to constitute an adjustment, the agreement or compromise must itself be capable of being embodied in a decree. The fact that the parties entered into a compromise during the hearing of the suit or appeal was considered not to be sufficient to do away with the requirement of the said rule and that courts were expected to insist upon the parties to reduce the terms to writing. In Byram Pestonji Gariwala v. Union Bank of India (1992) 1 SCC 31 this Court while adverting to the very amendment in 1976 to Rule 3 of Order 23 CPC, noticed also the effect necessarily to be given to Rule 1 of Order 3 CPC, as well and on an extensive review of the case-law on the subject of the right of the counsel engaged to act on behalf of the client observed as follows:

“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.

40. Accordingly, we are of the view that the words ‘in writing and signed by the parties’, inserted by the CPC (Amendment) Act, 1976, must necessarily mean, to borrow the language of Order 3 Rule 1 CPC:

‘any appearance, application or act in or to any court, required or authorized by law to be made or done by a party in such court, may except where otherwise expressly provided by any law for the time being in force, be made or done by the party in person, or by his recognized agent, or by a pleader, appearing, applying or acting as the case may be, on his behalf:

Provided that any such appearance shall, if the court so directs, be made by the party in person.’ ”

(emphasis in original)

8. We are in respectful agreement with the above statement of law. Consequently, it is not permissible for the appellant to contend to the contrary. That apart, we are also of the view that a judgment or decree passed as a result of consensus arrived at before court, cannot always be said to be one passed on compromise or settlement and adjustment. It may, at times, be also a judgment on admission, as in this case.

9. Considering the facts and circumstances of the case, we find that there are no adequate reasons on merits also to call for interference in a second appeal. The so-called questions formulated cannot be considered to be even questions of law and, at any rate, not substantial questions of law, as required under Section 100 CPC. The courts below have concurrently rejected the claim of the plaintiff-appellants on pure findings of fact based upon relevant evidence and nothing survived for consideration at all in such an appeal. Further, the respondent's side alone appears to have been saddled with additional liabilities under the decision of the High Court, though on the basis of admission made by counsel appearing for parties. There is nothing said against the counsel, who appeared for parties, and no allegations have been made also attributing any impropriety to their action. Therefore, we are not persuaded to agree with the submissions made on behalf of the appellants.

10. The appeals, therefore, fail and shall stand dismissed. No costs.