Sunday 2 April 2023

Whether the court should accept compromise petition if it is not signed by a party or his Advocate?

  The learned Counsel appearing for the Respondent took a stand that the High Court was justified in taking the view that the suit had been simply withdrawn by the Plaintiff-Appellant Under Rule 1 of Order 23 and it had not been compromised in terms of Rule 3 of the said Order 23; as such there was no occasion for the Appellant to file an application for recall of the said order and for restoration of the suit in question for being heard on merit. From the copy of the petition which was filed on February 27, 1991 it appears that the terms and conditions of settlement and agreement had been mentioned saying that both parties had entered into a compromise because of which the Plaintiff-Appellant had thereafter no connection with the disputed land and Defendant-Respondent shall be deemed to be in possession and the owner of the said disputed land. The prayer made in the said petition also says that the compromise may be ordered to be accepted. On basis of that petition, as already mentioned above, the court passed an order saying that the compromise had been accepted. In the order it has been mentioned that the suit of the Plaintiff be "dismissed as per compromise deed Ex. C". In view of the aforesaid facts and circumstances, it is difficult to hold that by order dated February 27, 1991 the Court allowed the suit to be withdrawn in terms of Rule 1 of Order 23. The order on face of it purported to dismiss the suit of the Plaintiff on basis of the terms and conditions mentioned in the petition of compromise. As such, the validity of that order has to be judged treating it to be an order deemed to have been passed in purported exercise of the power conferred on the Court by Rule 3 of Order 23 of the Code. The learned Subordinate Judge should not have accepted the said petition of compromise even if he had no knowledge of the fraud alleged to have been practised on the Appellant by his counsel, because admittedly the petition of compromise had not been signed either by the Respondent or his counsel. This fact should have been discovered by the Court. In the case of Gurpreet Singh v. Chatur Bhuj Goel [MANU/SC/0032/1987 : (1988) 1 SCC 270 : AIR 1988 SC 400] it has been said: (SCC p. 276, para 10)

Under Rule 3 as it now stands, when a claim in suit has been adjusted wholly or in part by any lawful agreement or compromise, the compromise must be in writing and signed by the parties and there must be a completed agreement between them. To constitute an adjustment, the agreement or compromise must itself be capable of being embodied in a decree. When the parties enter into a compromise during the hearing of a suit or appeal, there is no reason why the requirement that the compromise should be reduced in writing in the form of an instrument signed by the parties should be dispensed with. The court must therefore insist upon the parties to reduce the terms into writing.
The requirement of the petition of compromise being signed by the parties concerned has been considered also in the case of Byram Pestonji Gariwala v. Union Bank of India [MANU/SC/0485/1991 : (1992) 1 SCC 31 : AIR 1991 SC 2234]. It appears the attention of learned Judges was not drawn to the aforesaid case of this Court in Gurpreet Singh v. Chatur Bhuj Goel [MANU/SC/0032/1987 : (1988) 1 SCC 270 : AIR 1988 SC 400]. {Para 10}


Civil Appeal Nos. 2913-2915 of 2018

Prasanta Kumar Sahoo and Ors.  Vs.  Charulata Sahu and Ors.

Hon'ble Judges/Coram:

A.S. Bopanna and J.B. Pardiwala, JJ.

Author: J.B. Pardiwala, J.

Decided On: 29.03.2023

Citation: MANU/SC/0326/2023.

Read full Judgment here: Click here

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