Dismissed

Mrs. Shradha Prashant Kumbhar v. Smt. Jayanti Bhaskar Shirsat and Ors.

Bombay HC27 Feb 2024WP/4505/2022

Case brief

AI extract

What is this about?

Petitioners challenged a Lok Adalat compromise decree in a partition suit on grounds that defendant No.1 lacked power-of-attorney authority to compromise their shares and Section 20 procedure was breached. Holding the power of attorney expressly conferred compromise powers and the referral complied with Section 20, the court found no fraud or collusion and disposed of both petitions.

What the court decided

AI extract

Mrs. Shradha Prashant Kumbhar Vs Smt. Jayanti Bhaskar Shirsat and… — Partition | Bombay HC (2024)

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Nikita

¶3

IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION

¶4

WRIT PETITION NO.4505 OF 2022

NIKITA

KAILAS

DARADE

Digitally signed byNIKITA KAILAS DARADE Date: 2024.03.04 14:30:03 +0530

¶9

Shradha Prashant Kumbhar… Petitioner
V/s.
Jayanti Bhaskar Shirsat and Ors.… Respondents

¶10

WITH WRIT PETITION NO.9063 OF 2022

¶11

Bhakti Vinaykumar Khatu… Petitioner
V/s.
Jayanti Bhaskar Shirsat and Ors.… Respondents

¶12

Mr. Nitin Gangal a/w Ashok Kadam a/w Ms. Prerna
Shukla a/w Ms. Prapti Karkera for the Petitioner, in
WP/4505/2022.

¶13

Mr. Rajendra Pai, Sr. Adv. a/w Mr. Vinayakumar A.
Khatu for the Petitioner in WP/9063/2022.

¶14

Mr. Abhay Khandeparkar, Sr Adv. a/w N. U. Dedhia
a/w Mr. Rohit Mahadik, a/w Mr. Rushikesh Bhagat, a/
w Mr. Farhan Shaikh a/w P. A. Sharma a/w Ms.
Apoorva Khandeparkar i/b Khandeparkar and
Associates for Respondent Nos.1 and 2.

¶15

Ms. Jayanti Shirsat and Mr. Kapil Shirsat, Respondent
Nos. 1 and 2 are present in Court.

¶16

CORAM :AMIT BORKAR, J.

¶17

DATED:FEBRUARY 27, 2024

¶18

P.C.:

¶19

1. The challenge in these petitions is to the compromise decree

¶20

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dated 11th April 2015 recorded by the Lok Adalat recording
compromise pursis dated 11th April 2015 below Exhibits-42 and 43
in Regular Civil Suit No.17 of 2015.

¶23

2.The facts relevant to the adjudication of the issue involved
are as under:

¶24

3.Respondent No.1/original plaintiff filed Regular Civil Suit
No.17 of 2015 for partition and separate possession of properties
referred to in the plaint. In the said suit, defendant No.1 and the
plaintiff filed a pursis on 4th April 2015 to place the suit for
compromise before the Lok Adalat. Accordingly, on 11th April 2015,
the head of the Panel of the National Lok Adalat recorded a
compromise. While recording the compromise, he passed the
following order:

¶25

“The matter is amicably settled between the parties in today's
National Lok-Adalat. Both the parties are present before me
today. Accordingly, both parties have filed compromise pursis
exh.42 and compromise-memo exh. 43. Hence, the suit is
required to be disposed of accordingly.

¶26

The suit is disposed of as compromised.

¶27

Parties to bear their respective costs.

¶28

Decree be drawn in terms of compromise pursis exh. 42

¶29

Court fees can be refunded as per the rules.

¶30

 Sd/-

¶31

 (Jaywant C. Yadav)
 Head of the Panel
 Civil Jude, J. D., Kudal”

¶32

4.This order passed by the Panel of Lok Adalat is the subject
matter of the present writ petitions.

¶33

¶34

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5.On behalf of the petitioners, the following submissions are
made:

¶36

i) No power to compromise the petitioners' right was conferred on defendant No.1 expressly or by necessary implication. Defendant No.1 was not conferred with power to reduce the petitioners'shareand, therefore, recording of compromise by the Lok Adalat based on such compromise without authority amounts to fraud.

¶37

ii) The satisfaction as required under Section 20 of the Act
was not recorded and, therefore, the petitions challenging
non-compliance of mandatory procedure laid down in
Section 20 of the Act are maintainable.

¶38

iii) Under the provisions of the Act and Rules, notice
needed to be issued to the parties to the suit and in the
absence of individual notice being served on the petitioners
recording of compromise by the panel of the Lok Adalat was
contrary to the provisions of the Act and Regulations.

¶39

6.Per contra, respondent No.1 supported the compromise
decree inviting my attention to clause (d) of the petitions wherein
the petitioners admitted the execution of power of attorney in
favour of defendant No.1. They submitted that the terms of power
of attorney expressly conferred power on defendant No.1 to enter
into a compromise and in the exercise of such power, the
compromise was entered into by defendant No.1.

¶40

7.I have heard both sides. Before considering issues involved in
the case, it is necessary to set out parameters of judicial review as

¶41

¶42

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regards the challenge to the Award made by Lok Adalat in terms of
settlement arrived at between the parties. The said issue is no
longer res integra given the decision of the three-Judges Bench of
Apex Court in the State of Punjab & Anr. Vs. Jalour Singh &
Ors. reported in (2008) 2 SCC 660 wherein it is held as under:

¶44

“12.It is true that where an award is made by Lok Adalat in
terms of a settlement arrived at between the parties (which
is duly signed by parties and annexed to the award of the
Lok Adalat), it becomes final and binding on the parties to
the settlement and becomes executable as if it is a decree of
a civil court, and no appeal lies against it to any court. If any
party wants to challenge such an award based on settlement,
it can be done only by filing a petition under Article 226
and/or Article 227 of the Constitution, that too on very
limited grounds. But where no compromise or settlement is
signed by the parties and the order of the Lok Adalat does
not refer to any settlement, but directs the respondent to
either make payment if it agrees to the order, or approach
the High Court for disposal of appeal on merits, if it does not
agree, is not an award of the Lok Adalat. The question of
challenging such an order in a petition under Article 227
does not arise. As already noticed, in such a situation, the
High Court ought to have heard and disposed of the appeal
on merits.”

¶45

8.Regulation 12 of the National Legal Services Authority (Lok
Adalat) Regulations 2009 also lays down parameters for challenge
to the award based on settlement restricting it to the violation of
procedure prescribed in Section 20 of the Act. Regulation 12(3)
reads as under.

¶46

“12. Pre-Litigation matters.— (1) ….

¶47

(2)….

¶48

¶49

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¶50

(3) An award based on settlement between the parties can
be challenged only on violation of the procedure prescribed
in section 20 of the Act by filing a petition under articles 226
and 227 of the Constitution of India."

¶51

9.It is well settled that the Regulations framed under a statute
cannot restrict the power of judicial review of this Court under
Article 226 or 227 of the Constitution of India. However,
considering the scheme of the Act, a challenge to the award by
way of a writ petition under Article 226 of 227 is restricted to
limited grounds, such as fraud, and collusion.

¶52

10. Therefore, it is necessary to adjudicate whether defendant
No.1 had authority to enter into compromise on behalf of the
petitioners. For said adjudication, it is necessary to consider
relevant clauses of power of attorney.

¶53

11. According to the petitioners, the Authority conferred on
defendant No.1 was in relation to third parties and such authority
could not have been used for resolution of dispute amongst the
parties. According to the petitioners, said clause cannot be
interpreted to confer authority on defendant No.1 to effect
inequitable partition to the prejudice of the petitioners.

¶54

12. He relied on Bowstead on Agency 13th Edition Article 24 on
construction of power of attorney reads as under:

¶55

“Article 24

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CONSTRUCTION OF POWERS OF ATTORNEY

¶57

Powers of attorney must be strictly constried, and are
interpreted as giving only such authority as they confer
expressly or by necessary implication (Bryant, Powis &

¶58

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Bryant v. La Banque Du Peuple [1893] A. C. 170; Jonmenjoy
Coondoo v. Watson (1884) 9 App. Cas 561; Jenkins v. Gould
(1827) 3 Russ. 385;and see Illustrations. As to execution of
deeds under powers of attorney, see Article 90.) The
following are the most important rules of construction:

¶61

(a) The operative part of a deed is controlled by the recitals
where there is ambiguity.

¶62

(b) Where authority is given to do particular acts, followed
by general words, the general words are restricted to what is
necessary for the proper performance of the particular acts.
(Illustration 2,3; Perry V. Holl (1860) 2 De. G. F. & J. 38;
Harper v. Godsell (1870) L. R. 5 Q. B. 422.)

¶63

(c) General words do not confer general powers, but are
limited to the purpose for which the authority is given, and
are construed as enlarging the special powers only when
necessary for that purpose. ( Illustrations 4 to 8. Lewis v.
Ramsdale ( 1886) 55 L. T. 179; Attwood v. Munnings
(1827) 7 B. & C. 178; Re Bowles ( 1874) 31 l. t. 365;
Bryant, Powis & Byrant v. La Banque du Peuple [1893] A. C.
170)

¶64

(d) The deed must be construed so as to include all
incidental powers necessary for its effective execution.
( Illustrations 9 to 10 ; Withington v. Herring (1829) 5
Bing. 442; Howard v. Baillie ( 1796) 2 H. Bi. 618 ; Willis v.
Palmer (1859) 7 C. B. (N.S.) 340 ; I Routh v. Macmillan
(1863) 2 H. & C. 750.)”

¶65

13. The Judgment in the case of Shankar Tukaram Kakade
Vs. Lakshmibai Shankarrao Ghadge reported inAIR 1928
Bombay 225 in paragraph No.3 observed as under:

¶66

“3. The Power-of-attorney must be strictly construed and it
is necessary to show that on a fair construction of the whole
instrument the authority in question is to be found within

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the four corners of the instrument either in express terms or
by necessary implication : see Bank of Bengal v.
Ramanathan Chetty ( A. I. R. 1915 P. C. 121 : 43 Cal. 527:
43 I. A. 48 (P. C.)). On the proper construction of the power-
of-attorney, Baburao had no right to deal with the ornaments
which were in his physical possession.”

¶70

14. The judgment of the Punjab High Court in the case of Atma
Ram Sohni Vs. Chitra Production Co. and Anr. reported in
A.I.R. (39) 1952 Punjab 99held thus:

¶71

“8.The authority of an attorney has to be very strictly
pursued, and Art. 36 of Bowstead's Law of Agency, in my
opinion, corectly lays down the limits of this authority. This
has received the approval of this Court in 'Pritam Singh v.
Intizamia Committee Gurdwara Harimandir Sahib', 52 Pun L
R 84. The law is expressed in the following terms in
Bowstead at page 49:

¶72

“Powers of attorney must be strictly pursued, and are
construed as giving only such authority as they confer
expressly or by necessary implication. The following are the
most important rule of construction:

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1. The operative part of the deed is controlled by
the recitals.

¶74

2.Where authority is given to do particular acts,
followed by general words, the general words are
restricted to what is necessary for the proper
performance of the particular acts.

¶75

3. General words do no confer general powers, but
are limited to the purpose for which the authority is
given, and are construed as enlarging the special
powers only when necessary for that purpose.

¶76

 4. The deed must be construed so as to include all
medium powers necessary for its effective execution”.”

¶77

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15. In the case of Syndicate Bank Vs. Amitha and Ors.
reported in 1995 I.L.R. (Karnataka) 1902, the Karnataka High
Court has held that the power of attorney should be strictly
construed.

¶80

16. The Apex Court in the case of Timblo Irmaos Ltd.,
Margo v. Jorge Anibal Matos Sequeira & Anr. reported in
(1977) 3 SCC 474 has held in paragraph 11, 13, 15 and 16 as
under:

¶81

11.We think that perhaps the most important factor in
interpreting a power of attorney is the purpose for which it is
executed. It is evident that the purpose for which it is
executed must appear primarily from the terms of the power
of attorney itself, and, it is only if there is an unresolved
problem left by the language of the document, that we need
consider the manner in which the words used could be
related to the facts and circumstances of the case or the
nature or course of dealings. We think that the rule of
construction embodied in proviso 6 to Section 92 of the
Evidence Act, which enables the Court to examine the facts
and surrounding circumstances to which the language of the
document may be related, is applicable here, because we
think that the words of the document, taken by themselves,
are not so clear in their meanings as the learned Judicial
Commissioner thought they were.

¶82

13.The learned Judicial Commissioner had, in our
opinion, overlooked several well-known rules of
interpretation: firstly, that, a word used in a document has to
be interpreted as a part of or in the context of the whole;
secondly, that, the purpose of the powers conferred by the
power of attorney have to be ascertained having regard to
the need which gave rise to the execution of the document,
the practice of the parties, and the manner in which the
parties themselves understood the purpose of the document;

¶83

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and, thirdly, that, powers which are absolutely necessary and
incidental to the execution of the ascertained objects of the
general powers given must be necessarily implied.

¶86

15.Learned Counsel for the respondents seemed to place
much reliance on Bryant, Powis, and Bryant,Limited v. La
Banque De Peuple [(1893) AC 170, 177, 179] , where it was
observed (at p. 177):

¶87

“Nor was it disputed that powers of attorney are to be
construed strictly — that is to say, that where an act
purporting to be done under a power of attorney is
challenged as being in excess of the authority conferred by
the power, it is necessary to show that, on a fair construction
of the whole instrument, the authority in question is to be
found within the four corners of the instrument either in
express terms or by necessary implication.”

¶88

It was also held there (at p. 179):

¶89

“To put it shortly, the power of attorney authorized Davies
to enter into contracts or engagements for three specified
purposes: (1) the purchase or sale of goods; (2) the
chartering of vessels; and (3) the employment of agents and
servants; and, as incidental thereto, or consequential
thereon, to do certain specified acts and other acts of the
same kind as those specified. If the instrument be read fairly,
it does not, in Their Lordships’ opinion, authorise the
attorney to borrow money on behalf of the company, or to
bind the company by a contract of loan. It appears to Their
Lordships that the words quoted in the judgment of the
Court of Queen's Bench are to be read in connection with the
introductory words of the sentence to which they belong, ‘for
all or any of the purposes aforesaid’. So read, the words in
question do not confer upon the agent powers at large, but
only such powers as may be necessary in addition to those
previously specified, to carry into effect the declared
purposes of the power of attorney.”

¶90

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¶92

16.We think that the passages quoted above correctly lay
down the law which is applicable in this country as well and
which we are applying here. The method of construing a
power of attorney indicated above fully supports our view
that the document we have to construe confers a power to
sell iron ore on behalf of the Sequeiras.

¶93

17. The conspectus of the decisions relied upon on behalf of the
petitioners is that the power of attorney must be strictly construed
giving only such authority as it expressly or by necessary
implication confers. In case of ambiguity, the operative part of the
deed is controlled by recitals. Where an authority is conferred to
do a particular act by general words, the general words need to be
restricted to see what is necessary for the proper performance of a
particular act. The general words do not confer general powers.
The deed must conclude all incidental powers necessary for its
effective execution.

¶94

18. I have scrutinized the power of attorney executed by the
petitioners in favour of respondent No.1. As observed earlier, the
execution of power of attorney has been expressly admitted by the
petitioners in their petitions. Moreover, the petitioners have
cancelled said power of attorney by public notice dated 24th July
2016. All suit properties are the subject matter of Power of
Attorney. Clause (3) of page 51 confers power on defendant No.1
to resolve dispute in relation to properties mentioned in it, it also
confers the right to compromise, to institute suit, to appear on
behalf of defendant No.3 in Court, to depose, to appear in Appeal,
to institute proceedings before the Revenue Authority, to institute
proceedings in Civil Court, to conduct it. Clause (3) of power of

¶95

¶96

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¶97

attorney executed in favour of Defendant No. 1 specifically confers
the right on him to compromise a dispute about properties
mentioned in it. In my opinion, such a right to compromise cannot
be interpreted to mean disputes only with third parties. The said
clause contains express terms authorising defendant No.1 to
compromise on behalf of defendant No.3 and, therefore, I am
satisfied that the compromise terms followed by defendant No.1
on behalf of defendant No.3 cannot be construed as an act beyond
the authority conferred under the power of attorney. The power to
compromise includes the power to distribute shares to maintain
the peace in the family. The power to compromise cannot be given
restricted meaning to appear on behalf of the person and to sign
on behalf of such person. Had the petitioners intended to confer
authority to appear but not to sign on behalf of the petitioners, the
deed in question would have been differently worded. However,
specific recital in the power of attorney to compromise disputes
about properties takes within its fold power to distribute share. It
also appears that a major share in properties has been allocated to
the mother of defendant No.1 and 3. It also appears that the
petitioner on 19th September 2014 executed another power of
attorney in favour of respondent no.1 for the transfer of shares in
the name of the mother and accordingly shares were transferred in
the name of the mother. Therefore, I am satisfied that the
petitioners have failed to make out a case of fraud for entertaining
a petitions under Articles 226 and 227 of the Constitution of India.

¶98

19. The next limb of submission on behalf of the petitioners is an
infraction of Section 20 of the Act. To consider the said submission

¶99

¶100

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¶101

it is necessary to set out Section 20 of the Legal Services
Authorities Act, 1987 which reads as under:

¶102

“20. Cognizance of cases by Lok Adalats.—(1) Where
in any case referred to in clause (i) of sub-section (5) of
section 19,—

¶103

(i)(a) the parties thereof agree; or

¶104

(b) one of the parties thereof makes an application to
the Court, for referring the case to the Lok Adalat for
settlement and if such court is prima facie satisfied that
there are chances of such settlement; or

¶105

(ii) the court is satisfied that the matter is an
appropriate one to be taken cognizance of by the Lok
Adalat, the Court shall refer the case to the Lok Adalat:

¶106

Provided that no case shall be referred to the Lok
Adalat under sub-clause (b) of clause (i) or clause (ii) by
such court except after giving a reasonable opportunity of
being heard to the parties.

¶107

(2) Notwithstanding anything contained in any other law
for the time being in force, the Authority or Committee
organising the Lok Adalat under sub-section (1) of section 19
May, on receipt of an application from any one of the parties
to any matter referred to in clause (ii) of sub-section (5) of
section 19 that such matter needs to be determined by a Lok
Adalat, refer such matter to the Lok Adalat, for
determination:

¶108

Provided that no matter shall be referred to the Lok
Adalat except after giving a reasonable opportunity of being
heard to the other party.

¶109

(3) Where any case is referred to a Lok Adalat under sub-
section (1) or where a reference has been made to it under
sub-section (2), the Lok Adalat shall proceed to dispose of

¶110

¶111

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¶112

the case or matter and arrive at a compromise or settlement
between the parties.

¶113

(4) Every Lok Adalat shall, while determining any
reference before it under this Act, act with utmost expedition
to arrive at a compromise or settlement between the parties
and shall be guided by the principles of justice, equity, fair
play and other legal principles.

¶114

(5) …………………

¶115

(6) …………………

¶116

(7) ………………..”

¶117

20. Section 20 confers power on the Court to refer proceedings
to the Lok Adalat for settlement: if, i) parties to the suit agree; ii)
the Court is prima facie satisfied that there are chances of
settlement; and iii) the Court is satisfied that it is an appropriate
case to be taken cognizance by the Lok Adalat.

¶118

21. It is true that the satisfaction of the Court referring
proceeding to the Lok Adalat is mandatory; however, the
satisfaction contemplated is in relation to i) chances of settlement;
ii) The Court think it appropriate to be taken cognizance by the
Lok Adalat; iii) proviso to Sub-Section (1) requires Court to give
opportunity of hearing to the parties being heard.

¶119

22. In the context of Section 20, according to the petitioners,
prima satisfaction of the possibility of settlement under Clause (1)
(i)(b) has not been recorded and the opportunity of hearing as
required under proviso to Sub-Section (1) was not given.

¶120

23. The Roznama in the suit is placed on record by way of
affidavit in reply by defendant No.1. The Roznama dated 4th April

¶121

¶122

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¶123

2015 indicates that the plaintiff and defendant filed a joint pursis
for placing the matter before the Lok Adalat. Hence, the entry in
the Roznama indicates that the Court noted as under:

¶124

“Hence, place the suit for compromise before Lok Adalat.”

¶125

24. In my opinion, the remark quoted above satisfies the
requirement of Sub-Section (1) of Section 20 where the said
remark indicates the satisfaction of the Court that it is appropriate
to be taken cognizance by the Lok Adalat. In so far as giving the
opportunity of hearing to the parties is concerned, the petitioners
were represented by defendant No.1 the said requirement is also
fulfilled.

¶126

25. Once it is held that defendant No.1 was within his power to
enter into a compromise on behalf of defendant No.3 giving
opportunity to the parties would mean giving opportunity only to
defendant No.1. Therefore, in my opinion, the order passed by the
Lok Adalat granting the compromise need not be interfered on the
ground of non-compliance of mandatory provisions of Section 20
of the Act.

¶127

26. The petitioners submitted that the context of mandatory
procedure under Section 20, the procedure under Rule 5 and Rule
13(4) of Regulation has been violated. Regulation (5) requires the
Principal Secretary or Secretary, Legal Service Committee to
inform every party concerned to grant him an opportunity to
prepare himself for Lok Adalat. Proviso to Rule 5 contemplates
dispensing of such notice if the Court while referring the case to
Lok Adalat fixes the date and time of the Lok Adalat in the

¶128

¶129

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¶130

presence of parties or their advocates. The Roznama placed on
record indicates that 11th April 2015 was the date fixed by the
Court for the purpose of compromise and the compromise was
recorded by the Lok Adalat on 11th April 2015. Therefore, the
requirement of notice to individual parties was deemed to have
been dispensed with. Moreover, as held also defendant No.1 was
representing defendant No.3 through their power of attorney and,
therefore, for the purpose of expression "party", defendant No.1
needs to be treated as an authorized representative of defendant
No.3 (petitioner).

¶131

27. Regulation (13)(4) requires Members of Lok Adalat to be
guided by principles of natural justice, equity, fairplay, objectivity,
giving consideration to, among other things, the rights and
obligations of the parties. As held earlier, the scope of the petitions
challenging the Award of the Lok Adalat is restricted on the
grounds of fraud/collusion or non-compliance with Section 20 of
the Act.

¶132

28. Therefore, in my opinion, the petitioners have failed to make
out a case of fraud, collusion or breach of mandatory provisions of
Section 20.

¶133

29. Hence, both the writ petitions stands disposed of. No costs.

¶134

30. At this stage, learned advocate for the petitioners in Writ
Petition No.9063 of 2022 requests for a stay for the continuation of
stay of the settlement made on behalf of the Respondent. However,
considering the facts of the case, no case of continuation of stay is
made out. The application for stay is rejected.

¶135

¶136

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¶137

31. In view of disposal of the writ petitions, all pending
interlocutory application(s), if any, stands disposed of as
infructuous.

¶138

(AMIT BORKAR, J.)

¶139

Mrs. Shradha Prashant Kumbhar v. Smt. Jayanti Bhaskar Shirsat and Ors.

Case brief

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What the court decided

Mrs. Shradha Prashant Kumbhar v. Smt. Jayanti Bhaskar Shirsat and Ors.

Case brief

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