Sunday 19 November 2023

Under which circumstance Compromise between some of the parties in partition suit will become invalid and no valid decree can be passed based on said compromise?

  The present case depicts as to how on February 27, 1991 the court recorded the alleged agreement and compromise in a casual manner. It need not be impressed that Rule 3 of Order 23 does not require just a seal of approval from the Court to an alleged agreement or compromise said to have been entered into between the parties. The statute requires the Court to be first satisfied that the agreement or compromise which has been entered into between the parties is lawful, before accepting the same. Court is expected to apply its judicial mind while examining the terms of the settlement before the suit is disposed of in terms of the agreement arrived at between the parties. It need not be pointed out that once such a petition of compromise is accepted, it becomes the order of the Court and acquires the sanctity of a judicial order. {Para 11}

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 the 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)

91. Thus, in view of the aforesaid discussion, we hold that the cross-appeal filed by the Original Defendant No. 2, questioning the legality and validity of the settlement was maintainable in law.

92. We shall now look into the circumstances, as highlighted by the learned Senior Counsel appearing for the Defendant No. 2, rendering the settlement agreement dated 28.03.1991 invalid and not binding Under Order XXIII Rule 3 of the Code of Civil Procedure:

First, the alleged compromise agreement has admittedly not been signed by the Plaintiff who concededly has a share in the property as a coparcener. A written consent of all parties is necessary.

Secondly, a coparcenary undivided property in specie (Plot No. 140) has been allotted to Defendant 2 by Defendant No. 1 over which the Plaintiff also has an interest.

Thirdly, there is variance between the agreement and the compromise petition producing the agreement.

Fourthly, the judgment dated 01.08.2000 of the first appellate court accepting the compromise does not make allotment of the property allotted in specie to the Defendant No. 2. The first appellate court has proceeded on the wrong premise that the Defendant No. 2 has surrendered her rights to the Defendant No. 1. The first appellate court was further wrong in specifically noting that the compromise agreement does not cause any prejudice to the rights of the Plaintiff and therefore can be given effect.

Fifthly, the compromise agreement was entered into by beckoning a smaller share to the Defendant No. 2, while she has a larger share in view of Vineeta Sharma (supra). The consideration for the alleged compromise/settlement was therefore inadequate and whole agreement has to fall to the ground due to changed and supervening circumstances effectuated by change in law.

Lastly, even otherwise, the allotment of a co-ownership property in a specie to one coparcener cannot be modified in a preliminary decree. Moreover, under Hindu Law, the gift/renunciation/relinquishment or alienation by one coparcener of his undivided coparcenary interest to another coparcener without consent of other coparceners is void.

93. It is now well settled that Under Order XXIII Rule 3 of the Code of Civil Procedure 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. (See: Gurpreet Singh v. Chatur Bhuj Goel, MANU/SC/0032/1987 : (1988) 1 SCC 270.)

94. Indisputably, in the case on hand, the Plaintiff has not put her signature on the deed of settlement, which was produced before the High Court in first appeal. The Plaintiff has made herself very clear that she never joined in the settlement between her brother i.e., the Defendant No. 1 and her sister i.e., the Defendant No. 2. On this ground alone, the settlement could be said to be unlawful, being without any written consent of all the parties. In a suit for partition of joint property, a decree by consent amongst some only of the parties cannot be maintained.

95. In Nityamoni Dasi v. Gokul Chandra Sen reported in MANU/WB/0534/1910 : (1911) 9 Ind Cas 210 (Cal), the Calcutta High Court observed:

... The decree of the Subordinate Judge must be set aside and the whole case retried, because as this is a suit for partition of joint property, a decree by consent amongst some only of the parties cannot possibly be maintain ed.....

96. In Vir Singh and Ors. v. Kharak Singh and Ors. reported in MANU/LA/0229/1924 : AIR 1925 Lah 280, all the proprietors had not assented to the compromise, Moti Sagar, J. observed:

...the alleged compromise not having been assented to by all the proprietors was clearly contrary to law and the Court was, therefore, fully justified in refusing to enforce it....

97. In Taraprasanna Sarkar and Anr. v. Kalikamohan Sarkar and Ors. reported in MANU/WB/0026/1923 : AIR 1924 Cal 80 Mookerjee and Rankin, JJ., held:

...There can be no compromise binding upon, all the parties to a partition suit until and unless all the parties have joined in the compromise:...


Civil Appeal Nos. 2913-2915 of 2018

Decided On: 29.03.2023

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.

Citation:  MANU/SC/0326/2023.

Read full Judgment here: Click here.

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