Sunday, 15 September 2019

Whether Bar On Appeal Against Compromise Decree is Applicable Where Court Declines To Record Some Part Of Compromise?

Again, in Kishun alias Ram Kishun (supra) it was held that
where the compromise is contested, the bar under Section 96 (3) will
not come into play. The order passed by the court on such contest
and the resultant decree would be subject to appeal and second
appeal. It has been observed that “when there is a contest on the

question whether there was a compromise or not, a decree accepting
the compromise on resolution of that controversy, cannot be said to
be a decree passed with the consent of the parties. Therefore, the bar
under Section 96(3) of the Code could not have application. An
appeal and a second appeal with its limitations would be available
to the party feeling aggrieved by the decree based on such a disputed
compromise or on a rejection of the compromise set up.”
The law laid down in Ram Kishun has been reiterated by the
Supreme Court in a more recent judgement in Daljit Kaur and
another Vs. Muktar Steels Private Limited and others (2013) 16 SCC 607 holding
that bar under Section 96 (3) CPC will not get attracted where the
compromise is disputed. In my considered opinion, the same would
also be the position where the court refuses to record compromise or
part of it on the ground that it is not lawful, as in the instant case.
The legal position which thus emerges after amendment of
Civil Procedure Code by Act No.104 of 1976 is that the appellant in
an appeal against a decree passed in suit after recording a
compromise or refusing to record a compromise is entitled to contest
the decree on the ground that the compromise should, or should not,
have been recorded (Order 43 Rule1-A). The same principle would
apply where the court records some part of the compromise while

declines to record the remaining part. In such cases, the bar
contained under Section 96 (3) CPC would not get attracted. 

ALLAHABAD HIGH COURT

Case :- MATTERS UNDER ARTICLE 227 No. - 3147 of 2019

 Sri Ram Krishna Vivekanand Shishu Niketan Vs
Sri Onkarnath And 19 Others

Hon'ble Manoj Kumar Gupta,J.
Dated:Order Date :- 3.9.2019

An interesting question as to whether second appeal would lie
against the impugned order/judgement of the first appellate court or
the same is barred by Section 96 (3) of the Code of Civil Procedure
(for short 'Code' or 'C.P.C.') arises for consideration in the instant
petition filed before this Court invoking its supervisory jurisdiction
under Article 227 of the Constitution. In case, an appeal is
maintainable, this Court in view of availability of efficacious remedy
under the Code would decline to entertain the instant petition.
The backdrop in which the controversy has arisen is as
follows:-
Two suits were instituted by the petitioner ( hereinafter referred
to as 'the plaintiff') bearing Original Suit Nos.381 of 1987 and 800 of
1987. In Original Suit No.381 of 1987, the plaintiff prayed for
permanent injunction, declaration of its title in respect of the suit
property and mandatory injunction against respondents no.1 to 14

(hereinafter referred to as 'the defendants 1st set). The declaration of
title was sought on the ground that the suit property was donated to it
by Dwarika Nath Bhargava, Kedar Nath Bhargava and Onkar Nath
Bhargava by an unregistered instrument dated 10.3.1969. Since then,
the plaintiff had been in possession of the same as its owner without
any objection from any one and thus perfected its title by adverse
possession. In alternative, the plaintiff also prayed for mandatory
injunction directing defendants 1 to 10 as well as defendants 11, 12
and 13 to execute registered gift deed in pursuance of an alleged
agreement dated 12.2.1969. In Original Suit No.800 of 1987, the
plaintiff took the same stand and prayed for permanent injunction
against respondents 12 to 20 (hereinafter referred to as 'the
defendants 2nd set). Both the suits were dismissed by the trial court
by judgement dated 14.12.2018. The trial court held that the plaintiff
was not able to prove its title to the suit property; that it also failed to
prove its possession and thus, also not entitled to declaration as
owner on basis of adverse possession. Aggrieved by the judgement
of the trial court, the plaintiff filed an appeal under Section 96 CPC.
It was registered as Civil Appeal No.213 of 2018. During pendency
of the appeal, the plaintiff entered into a compromise with defendants
12/1 and 14 ( Paper No.18 Ka/4). The compromise was signed by the
parties/their authorised representatives and their signatures were duly
3
verified by respective counsel for the parties except respondents 1 to
11 and 13, who were discharged from the suit and also the
compromise. There is a map annexed with the compromise,
according to which, the portion of land shown with letters DEFH was
admitted to be in possession of the plaintiff and would continue in its
possession; ABHF was recognised as belonging to defendant 12/1
and BCDH as belonging to defendant no.14. On 22.1.2019 the date
on which compromise application Paper No.18 Ga was filed before
the appellate court, one Kapil Dev Upadhyay filed an application
seeking his impleadment alleging title in respect of 322.66 sq. yards
of the suit property on basis of a sale deed dated 18.1.2019 executed
in his favour by Narain Das Agrawal, power of attorney holder of
Desh Bandhu Kagaji (son of defendant no.13 of Original Suit No.381
of 1987 and defendant no.1 of Original Suit No.800 of 1987) and
Manager of Phool Chandra Kagaji HUF. According to him, the
original owner of the suit property namely Thakur Madan Mohan Ji
Maharaj had executed registered lease deed on 29.12.1987 in favour
of Phool Chandra Kagaji HUF with respect to 1320 sq. yards of the
suit property. It is also his case that Phool Chandra Kagaji HUF had
also obtained a sale deed dated 7.10.1987 (registered on 15.1.1988)
in respect of the same land from the Bhargavas, through whom the
plaintiff also claims title to the suit property. It is common ground
4
between the parties that the predecessor of Bhargava family namely
Late Girdhar Das Bhargava obtained the said property by way of a
registered perpectual lease deed dated 21.8.1943 from the then
Shebiat of Thakur Madan Mohan Ji Temple, the original owner of the
property. According to both the parties, after death of Girdhar Das
Bhargava, his three sons inherited the suit property. According to the
plaintiff society, the three sons of Girdhar Das Bhargava donated the
suit land to the plaintiff and since then, it has been in possession of
the same.
The Appellate Court, by order dated 1.2.2019, rejected the
impleadment application observing that intervention of a third party
at the appellate stage when the matter had remained pending for last
32 years would not be in interest of justice. However, on the same
date, it proceeded to pass order on the compromise application as
well. The Appellate Court accepted the compromise in part i.e. in
respect of defendant no.12/1 and 14 but it refused to decree the suit
in favour of the plaintiff for the suit land DEFH observing that as per
boundaries, it is the same land in respect of which Kapil Dev
Upadhyay had filed impleadment application claiming title on basis
of registered lease deed of thirty years. The Appellate Court has held
that the plaintiff had failed to bring on record any document to prove
its title; consequently, the compromise application in respect of land
5
shown with letters DEFH was rejected. In pith and substance, the
Appellate Court, in absence of any document of title with regard to
the portion of land shown with letters DEFH, declined to grant
declaration in favour of the plaintiff. The operative part of the
order/judgement of the Appellate Court dated 1.2.2019 reads thus:-
{Vernacular omitted}
Being aggrieved by the above order/judgement of the Appellate
Court, declining to record compromise in respect of the claim of the
plaintiff while deciding the appeal, the instant petition has been filed.
Sri Diwakar Rai Sharma Advocate appearing on behalf of
respondent no.14 raised a preliminary objection relating to
maintainability of the instant petition under Article 227 of the
Constitution. Sri Tarun Agrawal Advocate appearing on behalf of
Kapil Dev Upadhyay, the applicant seeking impleadment also
submitted that the petitioner has remedy of challenging the impugned
judgement by filing a second appeal under Section 100 CPC. It is
urged that since the remedy is available under the Code itself,

therefore, the present petition under Article 227 of the Constitution
should not be entertained and the petitioner should be relegated to
the remedy available under the Code. It is urged by them that a
second appeal would lie against the impugned order/judgement in
view of Order 43 Rule 1-A read with Order 42 Rule 1 CPC and
Section 100 and 108 CPC. In support of their contention, they have
placed reliance upon the judgements of the Supreme Court in
Banwari Lal Vs. Chando Devi (Smt.) (Through Lrs.) and
another1, Kishun alias Ram Kishun Vs. Behari2 and a Division
Bench judgement of Madhya Pradesh High Court in Thakur Prasad
Vs. Bhagwandas3.
On the other hand, Sri Nirvikar Gupta, learned counsel
appearing on behalf of plaintiff-petitioner submitted that the
impugned order recording compromise in part and declining to
record other part would not amount to a decree. He points out that
even no decree has been drawn in pursuance of the impugned order.
It is urged that clause (m) of Rule 1 of Order 43 under which an
appeal was maintainable against an order recording or refusing to
record an agreement, compromise or satisfaction was omitted by Act
No.104 of 1976 w.e.f. 1.2.1977. Consequently, it is submitted that no
appeal would lie against such an order. He further submitted that
1 (1993) 1 SC 581
2 (2005) 6 SCC 300
3 1984 Law Suit (MP) 120

since rights of parties have not been decided under the impugned
order, therefore, it would not amount to a judgement nor would result
in a decree, therefore, Order 43 Rule 1-A (2) will also have no
application. He placed a strong reliance on Section 96 (3) CPC and
the same judgments upon which reliance was placed by the other
side in contending that no appeal is maintainable from a decree
passed by court with consent of the parties.
Before adverting to the submissions advanced by learned
counsel for the parties, certain amendments carried out in the Code
by Act No.104 of 1976 are worth noticing. Order 23 Rule 3 CPC
envisages compromise of suit. Prior to its amendment by Act No.104
of 1976, it read as follows in its application to the State of Uttar
Pradesh:-
“R.3. 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, 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 suit.”
“ ALLAHABAD.- (1) In Rule 3 of Order 23 between the
words “ or compromise” and “or where” insert the
words “in writing duly signed by parties”; and between
the words “subject matter of the suit” and the words “the
Court” insert the words “and obtains an instrument in
writing duly signed by the plaintiff.”
(2) At the end of the Rule 3 of Order 23 add the
following, namely:
8
“Provided that the provisions of this rule shall not
apply to or in any way affect the provisions of Order XXXIV,
Rules 3, 5 and 8.
Explanation.- The expression “agreement” and
“compromise”, include a joint statement of the parties
concerned or their counsel recorded by the Court, and the
expression “Instrument” includes a statement of the plaintiff
or his counsel recorded by the Court”- U.P. Gaz., 31-8-1974,
Pt.II, p.52 (31-8-1974)”
Order 43 Rule 1 (m) enabled a party aggrieved by an order
passed under Rule 3 of Order 23 recording or refusing to record an
agreement, compromise or satisfaction to challenge the order in
appeal. Clause (m) was to the following effect:-
“(m) an order under Rule 3 of Order XXIII recording or
refusing to record an agreement, compromise or
satisfaction;”
Section 96 (3) placed a specific embargo on maintainability of
appeal from a decree passed by the court with the consent of parties.
It reads thus:-
“96 (3). No appeal shall lie from a decree passed by the
Court with the consent of parties.”
Under Order 43 Rule 1 (m), an order recording or refusing to
record an agreement, compromise or satisfaction could be directly
challenged by filing an appeal even before the final judgement is
passed in the suit. In cases where the decree is passed by the court
with consent of parties, no appeal would lie in view of the
prohibition contained under Section 96 (3). It was settled by a series
9
of precedents that the prohibition under Section 96 (3) would remain
limited to cases where the parties, after complying with the
procedure prescribed under Order 23 Rule 3 CPC, invites the court to
pass decree in a particular manner to which they had agreed to and
the court acts accordingly. However, in cases where a party disputes
being signatory to the compromise or the compromise decree is
challenged on ground of fraud, undue influence or misrepresentation,
the bar stipulated under Section 96 (3) would not come in way of
filing an appeal. It was also open to such a party to file a regular civil
suit challenging the compromise decree on the ground of it being
void or voidable.
After the Code was amended by Act No.104 of 1976, clause
(m) of Rule 1 of Order 43 was omitted, meaning thereby that an
order recording or refusing to record an agreement, compromise or
satisfaction is no more appealable. By the same amendment, Rule 1-
A was inserted in Order 43. Sub-rule (2) thereof, which is relevant
for our purpose, is as follows:-
“(2) In an appeal against a decree passed in a suit after
recording a compromise or refusing to record a
compromise, it shall be open to the appellant to contest
the decree on the ground that the compromise should, or
should not, have been recorded.”
At the same time, certain amendments were also made in Rule
3 of Order 23 conferring jurisdiction upon the same court to decide
10
whether adjustment or satisfaction has been arrived at where it is so
alleged by one party while denied by the other. It has also been made
mandatory that the compromise should be in writing and signed by
the parties. An Explanation has also been inserted clarifying that an
agreement or compromise, which is void or voidable under the
Indian Contract Act, 1872, shall not be deemed to be lawful within
the meaning of this rule. Rule 3-A, inserted by the same Amending
Act of 1976 specifically bars a suit before civil court for setting aside
a compromise decree on the ground that it was not lawful. Order 23
Rule 3 and Rule 3-A as amended by Act No.104 of 1976 are as
follows:-
“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
“3-A. Bar to suit.- No suit shall lie to set aside a decree on
the ground that the compromise on which the decree is based
was not lawful.”
In Pushpa Devi Bhagat Vs. Rajinder Singh4, a two Judge
Bench of the Supreme Court, after considering Rule 3 and 3-A of
Order 23, summed up the statement of law emerging from these
provisions as follows:-
“13.1. no appeal is maintainable against a consent
decree having regard to the specific bar contained in
Section 96(3) CPC;
13.2. 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) of Rule 1,
Order 43;
13.3. 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 3-A; and
13.4. 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.”
Even before the above principles were laid down by the
Supreme Court, another Division Bench in Banwari Lal (supra)
considered the interplay between Order 43 Rule 1-A added by Act
No.104 of 1976 and Section 96 (3) as well as the impact of deletion
of clause (m) of Rule 1 of Order 43. The Supreme Court has
observed that the amendments were carried out taking into
consideration the past experiences, as on many occasions, parties
4 (2006) 5 SCC 566
12
used to file compromise on basis of which suit used to be decreed but
later on, for one reason or the other, the validity of such compromise
was challenged by way of separate suit dragging the litigation for
years together. By the amendments made by 1976 Act, special
requirements were introduced before a compromise is recorded by
the court. The compromise should be lawful, must be in writing and
signed by the parties. The relevant observations made in this regard
by the Supreme Court in Banwari Lal (supra) are extracted below:-
“7. By adding the proviso along with an explanation the
purpose and the object of the amending Act appears to
be to compel the party challenging the compromise to
question the same before the court which had recorded
the compromise in question. That court was enjoined to
decide the controversy whether the parties have arrived
at an adjustment in a lawful manner. The explanation
made it clear that an agreement or a compromise which
is void or voidable under the Indian Contract Act shall
not be deemed to be lawful within the meaning of the
said rule. Having introduced the proviso along with the
explanation in Rule 3 in order to avoid multiplicity of
suit and prolonged litigation, a specific bar was
prescribed by Rule 3-A in respect of institution of a
separate suit for setting aside a decree on basis of a
compromise saying:
“3-A. Bar to suit.–No suit shall lie to set aside a decree
on the ground that the compromise on which the
decree is based was not lawful.”
8. Earlier under Order 43, Rule 1(m), an appeal was
maintainable against an order under Rule 3 of Order 23
recording or refusing to record an agreement, compromise or
satisfaction. But by the amending Act aforesaid that clause
has been deleted, the result whereof is that now no appeal is
maintainable against an order recording or refusing to
record an agreement or compromise under Rule 3 of Order
23. Being conscious that the right of appeal against the order
recording a compromise or refusing to record a compromise
13
was being taken away, a new Rule 1-A has been added to
Order 43 which is as follows:”
The 1976 Amendment, while on one hand conferred right to
challenge decree passed in suit after recording a compromise or
refusing to record a compromise by filing regular appeal but at the
same time, Section 96 (3) of the Code, which says that no appeal
shall lie from a decree passed by the court with the consent of the
parties, was left untouched. The impact of insertion of Rule 1-A (2)
upon Section 96 (3) was explained thus:-
“9. Section 96(3) of the Code says that no appeal shall
lie from a decree passed by the Court with the consent of
the parties. Rule 1-A(2) has been introduced saying that
against a decree passed in a suit after recording a
compromise, it shall be open to the appellant to contest
the decree on the ground that the compromise should not
have been recorded. When Section 96(3) bars an appeal
against decree passed with the consent of parties, it
implies that such decree is valid and binding on the
parties unless set aside by the procedure prescribed or
available to the parties. One such remedy available was
by filing the appeal under Order 43, Rule 1(m). If the
order recording the compromise was set aside, there was
no necessity or occasion to file an appeal against the
decree. Similarly a suit used to be filed for setting aside
such decree on the ground that the decree is based on an
invalid and illegal compromise not binding on the
plaintiff of the second suit. But after the amendments which
have been introduced, neither an appeal against the order
recording the compromise nor remedy by way of filing a suit
is available in cases covered by Rule 3-A of Order 23. As
such a right has been given under Rule 1-A(2) of Order 43 to
a party, who challenges the recording of the compromise, to
question the validity thereof while preferring an appeal
against the decree. Section 96(3) of the Code shall not be a
bar to such an appeal because Section 96(3) is applicable to

cases where the factum of compromise or agreement is not in
dispute.”
Once again, in paragraph 13 of the Law Report, the Supreme
Court explained the interplay between the above provisions as
follows:-
“13. When the amending Act introduced a proviso along with
an explanation to Rule 3 of Order 23 saying that where it is
alleged by one party and denied by other that an adjustment
or satisfaction has been arrived at, "the Court shall decide
the question", the Court before which a petition of
compromise is filed and which has recorded such
compromise, has to decide the question whether an
adjustment or satisfaction had been arrived at on basis of
any lawful agreement. To make the enquiry in respect of
validity of the agreement or the compromise more
comprehensive, the explanation to the proviso says that an
agreement or compromise "which is void or voidable under
the Indian Contract Act..." shall not be deemed to be lawful
within the meaning of the said Rule. In view of the proviso
read with the explanation, a Court which had entertained the
petition of Compromise has to examine whether the
compromise was void or voidable under the Indian Contract
Act. Even Rule 1(m) of Order 43 has been deleted under
which an appeal was maintainable against an order
recording a compromise. As such a party challenging a
compromise can file a petition under proviso to Rule 3 of
Order 23, or an appeal under Section 96(1) of the Code, in
which he can now question the validity of the compromise in
view of Rule 1-A of Order 43 of the Code.”
(emphasis supplied)
Again, in Kishun alias Ram Kishun (supra) it was held that
where the compromise is contested, the bar under Section 96 (3) will
not come into play. The order passed by the court on such contest
and the resultant decree would be subject to appeal and second
appeal. It has been observed that “when there is a contest on the

question whether there was a compromise or not, a decree accepting
the compromise on resolution of that controversy, cannot be said to
be a decree passed with the consent of the parties. Therefore, the bar
under Section 96(3) of the Code could not have application. An
appeal and a second appeal with its limitations would be available
to the party feeling aggrieved by the decree based on such a disputed
compromise or on a rejection of the compromise set up.”
The law laid down in Ram Kishun has been reiterated by the
Supreme Court in a more recent judgement in Daljit Kaur and
another Vs. Muktar Steels Private Limited and others (2013) 16 SCC 607 holding
that bar under Section 96 (3) CPC will not get attracted where the
compromise is disputed. In my considered opinion, the same would
also be the position where the court refuses to record compromise or
part of it on the ground that it is not lawful, as in the instant case.
The legal position which thus emerges after amendment of
Civil Procedure Code by Act No.104 of 1976 is that the appellant in
an appeal against a decree passed in suit after recording a
compromise or refusing to record a compromise is entitled to contest
the decree on the ground that the compromise should, or should not,
have been recorded (Order 43 Rule1-A). The same principle would
apply where the court records some part of the compromise while

declines to record the remaining part. In such cases, the bar
contained under Section 96 (3) CPC would not get attracted. These
principles would also apply to appeals from appellate decrees in view
of Order 42 Rule 1 read with Section 108 CPC.
In the instant case, as would appear from the facts noted above,
the appellate court, while deciding appeal under Section 96 CPC, has
passed a composite order recording compromise in part and refusing
to record other part of compromise in so far as it relates to the
plaintiff-petitioner. On the same date, the appellate court has also
proceeded to decide the appeal finally. This takes the Court to the
other limb of the argument of learned counsel for the petitioner i.e.
the order passed by the appellate court would not qualify to be a
decree, as there had been no adjudication of its rights. Consequently,
no appeal would lie at this stage.
The submission made in this regard, albeit attractive, is bereft
of any substance. A plain reading of the order passed by the appellate
court on 1.2.2019 reveals that the appellate court has not only
recorded the compromise in part and refused to record the remainder,
but has also proceeded to pass a decree in terms thereof. The order
specifically provides that the compromise application and the map
would form part of the decree except in respect of property shown
with letters DEFH. There is a specific direction for consigning the

file to the record room. The operative part evinces a clear intention
that the proceedings of the appeal have thereby terminated. It is not
the case of the petitioner that the appellate court is incompetent to
pass a composite order verifying/refusing to verify the compromise
and also pass decree in accordance therewith on the same date. The
main thrust of the argument of learned counsel for the petitioner is
that the appellate court has not adjudicated the rights of the plaintiff
in the suit land, consequently, the order impugned would not qualify
to be a 'decree' within the meaning of Section 2 (2) CPC.
In Rana Narang Vs. Ramesh Narang (2006) 11 SCC 114, the Supreme Court
has held that a compromise decree is as much a decree as a decree
passed on adjudication. It is not merely an agreement between the
parties. In passing the decree by consent, the court adds its mandate
to the consent.
A similar controversy arose before a Three Judges Bench of the
Supreme Court in Shyam Sunder Sharma Vs. Pannalal Jaiswal
and others  AIR 2005 SC 226 though in a slightly different context. The issue before
the Supreme Court was whether an order of dismissal of appeal as
barred by limitation would amount to a decree or not. The contention
before the Supreme Court was that in such a case there is no
adjudication of lis on merits, therefore, it is merely an 'order' and

would not amount to a 'decree'. The Supreme Court, while deciding
the said issue, considered an earlier judgement by Two Judges Bench
in Ratan Singh Vs. Vijayasingh and others (2001) 1 SCC 469, wherein it was held
that dismissal of an application for condonation of delay would not
amount to a decree, therefore, dismissal of appeal as time barred was
also not a decree. The Supreme Court overruled the said judgement
relying on previous judgments by Larger Bench taking a contrary
view. The Supreme Court observed as follows:-
“12. Learned counsel placed reliance on the decision
in Ratansingh vs. Vijaysingh and others [(2001) 1 SCC 469 ]
rendered by two learned Judges of this Court and pointed out
that it was held therein that dismissal of an application for
condonation of delay would not amount to a decree and,
therefore, dismissal of an appeal as time barred was also not
a decree. That decision was rendered in the context of Article
136 of the Limitation Act, 1963 and in the light of the
departure made from the previous position obtaining under
Article 182 of the Limitation Act, 1908. But we must point out
with respect that the decisions of this Court in Messrs Mela
Ram and Sons and Sheodan Singh (supra) were not brought
to the notice of their Lordships. The principle laid down by a
three Judge Bench of this Court in M/s Mela Ram and Sons
(supra) and that stated in Sheodan Singh (supra) was, thus,
not noticed and the view expressed by the two Judge Bench,
cannot be accepted as laying down the correct law on the
question......”
The judgement rendered in Sheodan Singh Vs. Daryao
Kunwar  AIR 1966 SC 1332 was rendered by Four Judges Bench of the Supreme Court
holding thus:-
"We are therefore of opinion that where a decision is given
on the merits by the trial court and the matter is taken in
appeal and the appeal is dismissed on some preliminary
ground like limitation or default in printing, it must be held
that such dismissal when it confirms the decision of the trial
court on the merits, itself amounts to the appeal being heard
and finally decided on the merits whatever may be the
ground for dismissal of the appeal."
In Messrs Mela Ram and Sons Vs. The Commissioner of
Income Tax, Punjab AIR 1956 SC 367 on which reliance was placed by the Supreme
Court in Shyam Sunder Sharma (supra), it was held as follows:-
“.......although the Appellate Assistant Commissioner did not
hear the appeal on merits and held that the appeal was
barred by limitation his order was under Section 31 and the
effect of that order was to confirm the assessment which had
been made by the Income-tax Officer."
The Supreme Court concluded by holding that dismissal of an
appeal on ground of delay in filing the same has the effect of
confirming the decree appealed against. Para 10 from the said
judgement reads thus:-
“10. The question was considered in extenso by a Full Bench
of the Kerala High Court in Thambi vs. Mathew (1987 (2)
KLT 848). Therein, after referring to the relevant decisions
on the question it was held that an appeal presented out of
time was nevertheless an appeal in the eye of law for all
purposes and an order dismissing the appeal was a decree
that could be the subject of a second appeal. It was also held
that Rule 3A of Order XLI introduced by Amendment Act 104
of 1976 to the Code, did not in any way affect that principle.
An appeal registered under Rule 9 of Order XLI of the Code
had to be disposed of according to law and a dismissal of an
appeal for the reason of delay in its presentation, after the
dismissal of an application for condoning the delay, is in
substance and effect a confirmation of the decree appealed
against. Thus, the position that emerges on a survey of the
authorities is that an appeal filed along with an application
for condoning the delay in filing that appeal when dismissed
on the refusal to condone the delay is nevertheless a decision
in the appeal. ”
The order by the appellate court deciding appeal results in
merger of the judgement of the trial court with that of the appellate
court. A perusal of the operative part of the judgement would reveal
that the judgement passed by the trial court stands superseded by the
decree now passed by the appellate court whereunder rights of
respondents 12/1 and 14 have been specifically recognised, while
that of the plaintiff in respect of part of the suit land shown with
letters DEFH has not been accepted. It is the judgement of the
appellate court which would govern the rights of the parties and not
the one passed by the trial court.
The questions (i) whether the appellate court was justified in
declining to record part of the compromise, (ii) whether it was
justified in dismissing the claim of the plaintiff straightaway after
refusing to record part of the compromise without giving the
petitioner opportunity to establish its claim on basis of other material
on record and (iii) whether the finding recorded in the impugned
order that there is no evidence on record to establish the title of the
plaintiff-appellant in respect of property DEFH may or may not be
correct, but on that score the remedy of further appeal provided

under the Code would not be lost. The nature of the order has to be
ascertained in accordance with the legal principles discussed above.
The preparation of decree or formal order in terms of the impugned
judgement is a ministerial act. Even if a formal order has been
prepared and not decree in pursuance of the impugned judgement of
the appellate court, it would not detract from the true nature of the
order nor would denude the petitioner of its right to avail the
statutory remedy of filing second appeal.
Before parting, I would also like to deal with an alternative
submission made by Sri Tarun Agrawal, learned counsel appearing
for the applicant seeking impleadment. He urged that the bar
contained under Section 96 (3) regarding filing of appeal against
consent decree is only applicable to first appeals and not to second
appeals filed under Section 100 CPC. However, the submission is
devoid of any force. Section 108 CPC specifically provides that the
provisions of Part VII relating to appeals from original decree shall
as far as may be applied to appeals from appellate decrees. Section
96 (3) is contained in Part VII. Section 96 (3), as noted above, is
based on doctrine of estoppel which would equally apply to a
consent decree passed in appeal. However, for other reasons stated in
earlier part of the judgement, the bar under Section 96 (3) C.P.C.
would not come in way of the petitioner in filing second appeal.

In consequence, the instant petition is dismissed on the ground
of availability of alternative remedy of second appeal under the Code
itself. The petitioner shall be free to avail the said remedy, in which
event, nothing observed herein would be taken as expression of
opinion on merit of the case.
Office is directed to return certified copies of the impugned
judgments to counsel for the petitioner after retaining photo copies
on record.
(Manoj Kumar Gupta, J)
Order Date :- 3.9.2019

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