Sunday, 29 September 2019

Whether third party would be entitled to challenge compromise decree passed in representative suit passed in violation of O 23 R 3-B of CPC

 The decree is contended to be void for two reasons. Firstly, the compromise entered into in the representative suit without the leave of the court and without due notice and publication as required under Order XXIII Rule 3-B and Order I Rule 8(4) of CPC is void; secondly, in view of the violation of Sections 89 and 139 of the Kerala State Housing Board Act, the decree is void.

9. It is not in dispute that the suit was instituted by the plaintiffs in a representative capacity. The suit was decreed, as prayed for. in the compromise entered into pending appeal, the decree was accepted by the defendant and the plaintiffs gave up their right to recover costs, it is also not in dispute that prior to entering into the compromise, the leave of the court under Order XXIII Rule 3-B CPC was not obtained and the publication as required under Order I Rule 8(4) of CPC was not effected.

10. What is the effect of non-compliance of Order XXIII Rule 3-B and Order I Rule 8(4) of the CPC, on the decree in question? It would be appropriate to refer to Order XXIII Rule 3-B and order I Rule 8(4). The said provisions read thus:-

"3-B. No agreement or compromise to be entered in a representative suit without leave of Court.- (1) No agreement or compromise in a representative suit shall be entered into without the leave of the Court expressly recorded in the proceedings; and any such agreement or compromise entered into without the leave of the Court so recorded shall be void."

"8(4) (4) No part of the claim in any such suit shall be abandoned under sub-rule (1). and no such suit shall be withdrawn under sub-rule (3). of rule 1 of Order XXIII. and no agreement, compromise or satisfaction shall be recorded in any such suit under rule 3 of that Order, unless the Court has given, at the plaintiffs expense, notice to all persons so interested in the manner specified in sub-rule (2)."

A plain reading of the provisions indicate that the provisions regarding leave and notice, are mandatory in character. In Mohammed v. Avarankutty Haji [1996 (1) KLT 474], relying on the judgment of the Apex Court in Charan Lai Sabhu v. Union of India (MANU/SC/0285/1990 : AIR 1990 SC 1480), it was held that, violation of Order XXIII Rule 3-B and Order I Rule 8(4) of the CPC makes the order void.

11. Then the question would be, is the defendant who suffered a decree in terms of the plaint, entitled to take shelter under the said provisions and contend that the decree is void? To whom would such a plea be available?

12. It is to be noticed that the defendant was impleaded in the suit in his individual capacity and it was the plaintiff who filed the suit in a representative capacity. Under Order I Rule 8 CPC, one person may sue or be sued on behalf of numerous persons having the same interest. As per Order I Rule 8(6) CPC, a decree passed in such a suit binds all persons on whose behalf the suit is instituted or on whose behalf the suit is defended, as the case may be.

13. The trial court decreed the suit, as prayed. The decree was literally accepted in the compromise, and no prejudice was caused to the plaintiffs or the numerous persons whose interests they purported to represent in the suit.

14. The very purpose of requiring leave of the court to enter into a compromise and also effecting publication in terms of Order I Rule 8(4) CPC is to ensure that the persons who represent the interests of others, does not enter into a compromise defeating, prejudicing or affecting the interests of the third parties whose interests also they represent. As noticed supra, the decree binds them also. So, if a compromise is entered into and decree passed in violation of Order XXIII Rule 3-B and Order I Rule 8(4), the decree shall be void in so far as they are concerned- They will not be bound by the decree. However the eo-nominee parties to the compromise should be held by the same. The plea that the decree passed on compromise is void for violation of Order XXIII Rule 3-B and Order I Rule 8(4) shall be open only for the persons whose interests were represented by the plaintiff or the defendant in the suit, as the case may be. in other words, the decree on compromise without conforming to the provisions of Order XXIII Rule 3-B and Order I Rule 8(4) will be void only as against persons who interests the plaintiff or the defendant, as the case may be, sought to represent. Such a plea would not be available to the persons who entered into the compromise. The provisions are to be so read and understood. Any other interpretation would entail miscarriage of justice.

17. The construction of the procedural provisions, Order XXIII Rule 3-B and Order I Rule 8(4), as I have adopted, would only advance the cause of justice.

18. In the instant case, as noticed supra, no prejudice whatsoever has been caused to the persons whom the plaintiff represented. The decree would at best be void as against the interests of the persons whom the plaintiff represented and not as against the defendant who had contested and lost. Therefore, I hold that the plea that the decree is void for violation of Order XXIII Rule 3-B and Order I Rule 8(4) is not available to the defendant, on the facts of the case.

IN THE HIGH COURT OF KERALA AT ERNAKULAM

OP(C) No. 2075 of 2018

Decided On: 16.11.2018

Shibu Vs. Pradeep Kumar and Ors.

Hon'ble Judges/Coram:
Sathish Ninan, J.

Citation: AIR 2019(NOC) 98 Ker


1. The dismissal of an application under Section 47 of the Code of Civil Procedure (hereinafter referred to as "CPC"), is under challenge by the fifth judgment debtor.

2. The suit was filed by the plaintiffs, two in number, in a representative capacity under Order I Rule 8 CPC, for a permanent prohibitory injunction to restrain the first defendant from using the plaint schedule building for any purpose other than residential. The second defendant in the suit was the Chalakkudy Municipality and the third defendant, the Kerala State Housing Board. There was also prayer to restrain them (second and third defendants) from granting permission to the first defendant for using the plaint schedule building for a commercial purpose. The suit was decreed in terms of the plaint, by the trial court, as per judgment dated 30.10.2010.

3. Against the said decree and judgment, the first defendant filed appeal as AS 114/11. Pending the appeal, the parties were referred to the Mediation Centre wherein the disputes were settled and a compromise was entered into, as per the compromise, the decree and judgment passed by the trial court was accepted by the appellant, and the plaintiffs gave up the costs. On 14.10.2014, the appellate court passed a decree in terms of the compromise.

4. Thereafter, on 24.08.15, the first defendant assigned the property to the petitioner (judgment debtor no. 5) and judgment debtors 4 and 6. The decree was allegedly violated by using the petition schedule building for commercial purpose. E.P.185/16 was filed seeking enforcement of the decree.

5. After taking evidence, the execution court as per order dated 13.06.17 directed the judgment debtors to stop the business in the petition schedule building within seven days, on failure of which the Amin was directed to lock and seal the building. The said order was challenged before this Court in O.P.(C) No. 1887/17 by the petitioner herein. As per judgment dated 28.07.17, this Court affirmed the order passed by the execution court, but granted a further period of one month to close down the business. Seeking review of the judgment, he filed R.P.745/17. The contention, essentially was, that the decree is void. As per order dated 04.01.2018, the review petition was disposed of, leaving open the right of the petitioner to move under Section 47 of CPC, if the law permits.

6. After the disposal of the review petition, the present application has been filed by judgment debtors 4, 5 and 6 under Section 47 of CPC seeking a declaration that the decree and judgment is null and void. The execution court took evidence on the application and as per the impugned order dismissed the same.

7. Heard Sri. G. Sreekumar (Chelur) on behalf of the petitioner, Sri. T.N. Manoj, learned counsel for the decree holders, Sri. M.P. Ashok Kumar learned counsel for the municipality and Sri. Denny Devassy K., learned counsel for the Housing Board.

8. The decree is contended to be void for two reasons. Firstly, the compromise entered into in the representative suit without the leave of the court and without due notice and publication as required under Order XXIII Rule 3-B and Order I Rule 8(4) of CPC is void; secondly, in view of the violation of Sections 89 and 139 of the Kerala State Housing Board Act, the decree is void.

9. It is not in dispute that the suit was instituted by the plaintiffs in a representative capacity. The suit was decreed, as prayed for. in the compromise entered into pending appeal, the decree was accepted by the defendant and the plaintiffs gave up their right to recover costs, it is also not in dispute that prior to entering into the compromise, the leave of the court under Order XXIII Rule 3-B CPC was not obtained and the publication as required under Order I Rule 8(4) of CPC was not effected.

10. What is the effect of non-compliance of Order XXIII Rule 3-B and Order I Rule 8(4) of the CPC, on the decree in question? It would be appropriate to refer to Order XXIII Rule 3-B and order I Rule 8(4). The said provisions read thus:-

"3-B. No agreement or compromise to be entered in a representative suit without leave of Court.- (1) No agreement or compromise in a representative suit shall be entered into without the leave of the Court expressly recorded in the proceedings; and any such agreement or compromise entered into without the leave of the Court so recorded shall be void."

"8(4) (4) No part of the claim in any such suit shall be abandoned under sub-rule (1). and no such suit shall be withdrawn under sub-rule (3). of rule 1 of Order XXIII. and no agreement, compromise or satisfaction shall be recorded in any such suit under rule 3 of that Order, unless the Court has given, at the plaintiffs expense, notice to all persons so interested in the manner specified in sub-rule (2)."

A plain reading of the provisions indicate that the provisions regarding leave and notice, are mandatory in character. In Mohammed v. Avarankutty Haji [1996 (1) KLT 474], relying on the judgment of the Apex Court in Charan Lai Sabhu v. Union of India (MANU/SC/0285/1990 : AIR 1990 SC 1480), it was held that, violation of Order XXIII Rule 3-B and Order I Rule 8(4) of the CPC makes the order void.

11. Then the question would be, is the defendant who suffered a decree in terms of the plaint, entitled to take shelter under the said provisions and contend that the decree is void? To whom would such a plea be available?

12. It is to be noticed that the defendant was impleaded in the suit in his individual capacity and it was the plaintiff who filed the suit in a representative capacity. Under Order I Rule 8 CPC, one person may sue or be sued on behalf of numerous persons having the same interest. As per Order I Rule 8(6) CPC, a decree passed in such a suit binds all persons on whose behalf the suit is instituted or on whose behalf the suit is defended, as the case may be.

13. The trial court decreed the suit, as prayed. The decree was literally accepted in the compromise, and no prejudice was caused to the plaintiffs or the numerous persons whose interests they purported to represent in the suit.

14. The very purpose of requiring leave of the court to enter into a compromise and also effecting publication in terms of Order I Rule 8(4) CPC is to ensure that the persons who represent the interests of others, does not enter into a compromise defeating, prejudicing or affecting the interests of the third parties whose interests also they represent. As noticed supra, the decree binds them also. So, if a compromise is entered into and decree passed in violation of Order XXIII Rule 3-B and Order I Rule 8(4), the decree shall be void in so far as they are concerned- They will not be bound by the decree. However the eo-nominee parties to the compromise should be held by the same. The plea that the decree passed on compromise is void for violation of Order XXIII Rule 3-B and Order I Rule 8(4) shall be open only for the persons whose interests were represented by the plaintiff or the defendant in the suit, as the case may be. in other words, the decree on compromise without conforming to the provisions of Order XXIII Rule 3-B and Order I Rule 8(4) will be void only as against persons who interests the plaintiff or the defendant, as the case may be, sought to represent. Such a plea would not be available to the persons who entered into the compromise. The provisions are to be so read and understood. Any other interpretation would entail miscarriage of justice.

15. It is oft-quoted, "Procedure is the handmaid of justice and not a mistress of law, intended to observe and facilitate the cause of justice and not to govern or obstruct it". It would be apposite to refer to certain observations by the Apex Court in few judgments; State of Punjab v. Shamlal Murari [MANU/SC/0494/1975 : (1976) (1) SCC 719]:-

"...We must always remember that processual law is not to be a tyrant but a servant, not an obstruction but an aid to justice. It has been wisely observed that procedural prescriptions are the handmaid and not the mistress, a lubricant, not a resistant in the administration of justice. Where the non-compliance. the procedural, will thwart fair hearing or prejudice doing of justice to parties, the rule is mandatory. But. grammar apart, if the breach can be collected without injury to a just disposal of the case, we should not enthrone a regulatory requirement into a dominant desideratum. After all. courts are to do justice, not to wreck this end product on technicalities...."
In The Vali Pero v. Fernando Lopez [MANU/SC/0395/1989 : (1989) 4 SCC 671], the Apex Court observed thus:-

"18. Rules of procedure are not by themselves an end but the means to achieve the ends of justice. Rules of procedure are tools forged to achieve justice and are not hurdles to obstruct the pathway to justice. Construction of a rule of procedure which promotes justice and prevents its miscarriage by enabling the court to do justice in myriad situations, all of which cannot be envisaged, acting within the limits of the permissible construction, must be preferred to that which is rigid and negatives the cause of justice. The reason is obvious. Procedure is meant to subserve and not rule the cause of justice. Where the outcome and fairness of the procedure adopted is not doubted and the essentials of the prescribed procedure have been followed, there is no reason to discard the result simply because certain details which have not prejudicially affected the result have been inadvertently omitted in a particular case. In our view. this appears to be the pragmatic approach which needs to be adopted while construing a purely procedural provision. Otherwise, rules of procedure will become the mistress instead of remaining the handmaid of justice, contrary to the role attributed to it in our legal system."
16. In Rani Kusum v. Kanchan Devi [MANU/SC/0489/2005 : (2005) (6) SCC 705], The Apex Court observed thus:-

"10. All the rules of procedure are the handmaid of justice. The language employed by the draftsman of processual law may be liberal or stringent, but the fact remains that the object of prescribing procedure is to advance the cause of justice....."
The court further observed thus:-

"...A procedural law should not ordinarily be construed as mandatory; the procedural law is always subservient to and is in aid to justice. Any interpretation which eludes or frustrates the recipient of justice is not to be followed (See Shreenath v. Rajesh [(MANU/SC/0286/1998 : 1998 4 SCC 543].

14. Processual law is not to be a tyrant but a servant, not an obstruction but an aid to justice. Procedural prescriptions are the handmaid and not the mistress, a lubricant, not a resistant in the administration of justice."
17. The construction of the procedural provisions, Order XXIII Rule 3-B and Order I Rule 8(4), as I have adopted, would only advance the cause of justice.

18. In the instant case, as noticed supra, no prejudice whatsoever has been caused to the persons whom the plaintiff represented. The decree would at best be void as against the interests of the persons whom the plaintiff represented and not as against the defendant who had contested and lost. Therefore, I hold that the plea that the decree is void for violation of Order XXIII Rule 3-B and Order I Rule 8(4) is not available to the defendant, on the facts of the case.

19. Coming to the plea that the decree is void for violation of Sections 89 and 139 of the Kerala state Housing Board Act, as noticed by the court below, any order passed by the Government or the competent authority under the Act has not been challenged in the suit. Any act done or intended to be done by the Board under the provisions of the Act, Rule or Regulation made thereunder is not under challenge. Therefore, the said provisions have no application. The decree is valid and enforceable. That the decree binds the petitioner and the other judgment debtors has been held by this Court in O.P. 1887/17 relying upon the judgment reported in Chothy Theyyathan v. John Thomas [MANU/KE/0050/1997 : 1997 (1) KLT 464]. The said contention is not open for the petitioner, now.

I do not find any merit in this original petition and the same is accordingly dismissed.




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