Tuesday 9 August 2022

Whether the court is bound to record partial compromise and pass a decree in terms of it?

  The allegations in grounds 1 and 2 of the Memo of Appeal (which have been referred to in a foregoing part of this judgment) are too vague and general to amount to an averment. They appear to have been introduced just as a matter of form and habit by the draftsman. From the Memo of Appeal, read as a whole, it is clear that, in substance and truth, the challenge was directed only against that part of the decree which fixed the quantum of rent and damages. In fact, before the High Court it was vigorously contended on behalf of the appellants that that part of the decree which, in effect, declared that the village is not an 'estate' under Section 3(2)(d), having been imported with the consent of the parties, was not appealable under Section 96(3), CPC, and, in reality, had not been appealed against. In support of this contention, reliance was placed on the Division Bench decision in Srinivasa v. Tathachariar A.I.R. 1918 Mad. 546. The High Court did not discuss or distinguish this decision. Nor did it say in so many words that the whole of the decree including the part based on compromise, was under challenge in the appeal. It rejected the contention with the remark that it had already "observed that the appeal is but a continuation of the suit and there could be no estoppel against a statute". Perhaps, it was assumed that in the Memo of Appeal, every bit of the decree was being challenged by the appellants. We think, with all respect, that such an assumption was contrary to the well-established principle that in construing a pleading or a like petition, in this country, the court should not look merely to its form, or pick out from it isolated words or sentences; it must read the petition as a whole, gather the real intention of the party and reach at the substance of the matter. Thus construed, the Memo of Appeal in this case could not be said to contain a challenge to that part of the decree which was in terms of the compromise agreement between the parties. {Para 57}

58. Order 23, Rule 3, CPC, not only permits a partial compromise and adjustment of a suit by a lawful agreement, but further gives a mandate to the court to record it and pass a decree in terms of such compromise or adjustment in so far as it relates to the suit. If the compromise agreement was lawful-and, as we shall presently discuss, it was so-the decree to the extent it was a consent decree, was not appealable because of the express bar in Section 96(3) of the Code.

59. Next point is, whether this agreement was lawful ? We have already discussed that the Amending Acts of 1957 did not affect pending actions in which a declaration is sought that a particular property is not an estate, on the ground that it is not an 'inam village'. This issue which was intertwined with that of jurisdiction, was very largely a question of fact. It follows therefrom that in any such suit, the parties in order to avoid unnecessary expense and botheration, could legitimately make an agreement to abide by a determination on the same point in issue in another pending action in an advanced stage. There was nothing unlawful and improper in such an arrangement particularly when the interests of the respondents were sufficiently safeguarded by the State which was hotly controverting the decree of the trial court regarding Kadakalla being an estate. By no stretch of reasoning it could be said that this agreement was collusive or was an attempt to contract out of the statute.

60. There can be no doubt that as soon as the Court accepted the compromise agreement between the parties, and, acting on it, passed a decree in terms thereof, the compromise, to the extent of the matter covered by it, was complete. Nothing further remained to be done by the parties in pursuance of that agreement. The decree had become absolute and immediately executable on February 12, 1959 when the High Court in A.S. 668 of 1954 finally decided that Kadakalla was not an estate.

61. Be that as it may, the bar to an appeal against a consent decree, in Sub-section (3) of Section 96 of the Code is based on the broad principle of estoppel. It presupposes that the parties to an action can, expressly or by implication, waive or forego their right of appeal by any lawful agreement or compromise, or even by conduct. Therefore, as soon as the parties made the agreement to abide by the determination in the appeal (A.S. 668) and induced the court to pass a decree in terms of that agreement, the principle of estoppel underlying 1. 96(3) became operative and the decree to the extent it was in terms of that agreement, became final and binding between the parties. And it was as effective in creating an estoppel between the parties as a judgment on contest. Thus, the determination in A.S. 668-that Kadakalla was not an 'estate'-became as much binding on the respondents, as on the parties in that appeal.

62. In the view we take, we can derive support from the ratio of this Court's decision in Raja Sri Sailendra Narayan Bhanja Deo v. State of Orissa MANU/SC/0081/1956 : [1956]1SCR72 . In that case, there was a compromise decree between the predecessors-in-title of the appellant therein on the one hand, and the Secretary of State on the other, that Kanika Raj was an 'estate' as defined by Orissa Estates Abolition Act of 1951. This Court held that the appellant was estopped by the compromise decree from denying that the Raj was not such an 'estate'.

63. In the light of the above discussion, we would hold that that part of the decree in Suit No. 101 of 1954 which was in terms of the compromise agreement had become final between the parties, and the appeal from that decree could not be said to be a continuation of that part of the claim which had been settled by agreement. The combined effect of the two integrated decrees in Suit No. 47 and Suit No. 101, in so far as they, declared that Kadakalla, not being an 'inam village', was not an estate under Section 3(2)(d) of the 1908 Act, was to completely vacate and render non-est the decision dated September 2, 1950 of the Settlement Officer.


Civil Appeal No. 1936 of 1967

Decided On: 11.12.1973

Katikara Chintamani Dora and Ors.  Vs. Guntreddi Annamanaidu and Ors.

Hon'ble Judges/Coram:

D.G. Palekar, R.S. Sarkaria and V.R. Krishna Iyer, JJ.

Citation:  AIR 1974 SC 1069, MANU/AP/0440/1987

Read full Judgment here: Click here

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