Second appeal against a compromise decree in a boundary-fixation and possession suit where the appellant-defendant was not a signatory. Held that counsel's signature without express authority is unlawful, but a party who acts upon a compromise, as shown by affidavit claiming benefits, is bound by it. Appeal dismissed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE A. BADHARUDEEN
WEDNESDAY, THE 3RD DAY OF JANUARY 2024 / 13TH POUSHA, 1945
RSA NO. 247 OF 2023
AGAINST THE DECREE AND JUDGMENT DATED 31.1.2023 IN AS.NO.10/2020 OF SUB COURT, PUNALUR, KOLLAM.
AGAINST THE DECREE AND JUDGMENT DATED 16.1.2019 IN
OS.NO.108/1999 OF MUNSIFF COURT, PUNALUR
APPELLANT/APPELLANT/1ST DEFENDANT:
ASHIYA UMMAL AGED 70 YEARS D/O ABDUL RAZAK RAWTHER, MANGALATHU BUNGLOW, NADUKKUNNU, PATHANAPURAM VILLAGE, PATHANAPURAM, KOLLAM DISTRICT, PIN – 689695.
BY ADVS. K.S.HARIHARAPUTHRAN PINKU MARIAM JOSE ANIL KUMAR T.P.
RESPONDENTS/1ST RESPONDENT AND RESPONDENTS 5 TO 8, 10 &
11/PLAINTIFF AND ADDL.DEFENDANTS 5 TO 8 AND 10 TO 11:
1 S.N. SATHY AGED 68 YEARS D/O NARAYANAN VAIDYAN, NARAYANA VILASOM, PATHIRICKKAL MURI, PATHANAPURAM VILLAGE, PATHANAPURAM TALUK, KOLLAM DISTRICT, PIN – 689695. 2 ABDUL NAVAZ AGED 77 YEARS
S/O LATE ABDUL RAHMAN RAWTHER, MANGALATHU BUNGLOW, NADUKKUNNU, PATHANAPURAM VILLAGE, PATHANAPURAM TALUK, KOLLAM DISTRICT, PIN – 689695.
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3 ABDUL NAJEEB S/O LATE ABDUL RAHMAN RAWTHER, KANJIRAMVILA VEEDU, MANJALLOOR , PATHANAPURAM TALUK, KOLLAM DISTRICT, PIN – 689695. 4 ABDUL RAFEEK S/O LATE ABDUL RAHMAN RAWTHER, KANJIRAMVILA VEEDU, MANJALLOOR , PATHANAPURAM TALUK, KOLLAM DISTRICT, PIN – 689695. 5 ABDUL NEJUMAN S/O LATE ABDUL RAHMAN RAWTHER, KANJIRAMVILA VEEDU, MANJALLOOR , PATHANAPURAM TALUK, KOLLAM DISTRICT, PIN – 689695. 6 SHAMLA BEEGUM D/O LATE ABDUL RAHMAN RAWTHER, KANJIRAMVILA VEEDU, MANJALLOOR MURI, PATHANAPURAM TALUK, KOLLAM DISTRICT, PIN – 689695. 7 SHAMEEM BEEGUM D/O LATE ABDUL RAHMAN RAWTHER, KANJIRAMVILA VEEDU, MANJALLOOR, PATHANAPURAM TALUK, KOLLAM DISTRICT, PIN – 689695. R1 BY ADVS. ATUL SOHAN BIBIN JOHN R.REJI SREEJA SOHAN K. K.V.SOHAN
THIS REGULAR SECOND APPEAL HAVING BEEN FINALLY HEARD ON 08.12.2023, THE COURT ON 3.1.2024 DELIVERED THE FOLLOWING:
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"C.R"
A. BADHARUDEEN, J.
================================
R.S.A No.247 of 2023
================================ Dated this the 3 rd day of January, 2024
J U D G M E N T
The 1 st defendant in O.S.No.108/1999 on the files of Munsiff
Court, Punalur, who is aggrieved by the decree and judgment in A.S.No.10/2020 dated 31.01.2023 on the files of the Sub Court,
Punalur, assails the same in this Second Appeal filed under Order XLII Rule 1 read with Section 100 of the Code of Civil Procedure. The 1 st defendant in the above Suit is the appellant and the plaintiff and other defendants are the respondents in this case.
2 . I shall refer the parties in this appeal with reference to
their status before the trial court, as plaintiff’ and defendants’
hereafter for easy reference.
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3 . Heard the learned counsel for the appellant/1 st
defendant as well as the learned counsel appearing for S.N.Sathy, the original plaintiff in the above Suit.
4 . Perused the judgments under challenge and the documents placed by the learned counsel for the 1 st defendant and the learned counsel for the original plaintiff.
5 . The plaintiff instituted the Suit for fixation of boundary, recovery of possession and consequential injunction. During pendency of the Suit, a compromise was entered into and accordingly the decree was passed on 16.01.2019 in terms of the compromise.
6 . The learned counsel for the 1 st defendant assails the said compromise on the ground that the 1 st defendant did not sign in the compromise which led to passing of the decree. According to the learned counsel for the 1 st defendant, since the 1 st defendant did not sign the compromise, the same should not bind the 1 st defendant and as such, the compromise could not be acted upon. It is
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submitted that as per Order 43 Rule 1A(2) of the Code of Civil Procedure (`C.P.C' for short hereafter for easy reference), in an appeal against a decree passed in a Suit after recording a compromise or refusal to record a compromise, it shall be open to the appellant to contest the decree on the ground that the compromise should or should not have been incorporated. Therefore, the learned counsel pressed for setting aside the compromise decree passed in the above Suit, where the 1 st defendant is not a signatory.
7 . The learned counsel for the plaintiff submitted that in the compromise entered into between the parties, the signatories are the plaintiff and the 5 th defendant. The 5 th defendant is none other than the husband of the 1 st defendant. Apart from the plaintiff and the 5 th defendant, Advocate Y.Joykutty, signed on behalf of the plaintiff and Advocate L.Thomas, signed on behalf of the whole defendants. It is also pointed out by the learned counsel for the plaintiff that even though the 1 st defendant did not directly
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put signature in the compromise, the 1 st defendant thereafter acted upon the same and received benefit out of the same. Therefore, the 1 st defendant, in fact, accepted the compromise and in such view of the matter, the 1 st defendant could not succeed in opposing the finality of the compromise and, therefore, this appeal must fail.
8 . In view of the rival contentions, the substantial
questions of law arise for consideration are:
(i ) whether challenge against a compromise decree is permissible by way of an appeal ? If so, on what grounds ?
(ii) What is the legal effect of a compromise where a party did not sign ?
(iii) If a party, who did not sign a compromise, if acts upon the same subsequently, can he avoid the compromise decree thereafter merely on the ground that he did not put his signature in the compromise ?
9 . While answering the above substantial questions of law, it is relevant to note that compromise was entered into on
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16.01.2019 and the signatories in the compromise are the plaintiff, her counsel, 5 th defendant and the counsel for the whole defendants. In so far as the question as to legality and validity of settlement/compromise, it is relevant to refer paragraphs 93, 100 and 104 of the decision of the Apex Court in Prasanta Kumar
Sahoo v. Charulata Sahu, reported in [2023 (2) KLT 625 (SC)] , wherein it was held as under:
“93. It is now well settled that under Order XXIII Rule 3 of the CPC 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.
100 & 104: The third question that arises for our consideration in context with the legality and validity of the settlement is whether the learned advocate appearing for the cross-objector i.e., Defendant No.2 could have signed the compromise petition without an express consent. It is an imperative duty of the Court to ascertain the genuineness and lawfulness of the compromise deed. Indisputably, in the case on hand, the First Appellate Court had neither recorded the statements of the parties in the Court nor had made any inquiry into
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the terms of the settlement. It is in such circumstances that the High Court in its impugned order has observed that the Compromise Petition was signed by the advocate without any express authority or without special vakalatnama executed in favour of the advocate. In fact, the authority was expressly curtailed in the compromise deed. Thus, in view of the aforesaid discussion, we hold that the High Court committed no error in holding that the settlement between the Defendant Nos.1 and 2 resply was unlawful.”
10. Thus the law is clear that when the compromise is not signed by a party and signed by the concerned lawyer alone, without any express authority or without special vakalatnama executed in favour of the Advocate to sign in the compromise, the compromise signed by the Advocate for and on behalf of his client is unlawful. But the legality of such a compromise to be addressed by scanning the consent of the party from the attending circumstances, including the subsequent conduct of the party.
11. Coming to the question as to whether challenge against a compromise decree is permissible by way of an appeal ? If so, on what grounds ?, a detailed discussion is necessary. Under Order XLIII Rule 1A (2) in an appeal against a decree passed in a
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suit after recording a compromise or refusing to record a compromise, it shall be open to the appellant to contest the decree on the ground that the compromise should, or should not, have been recorded. At the same time, Section 96(3) of the C.P.C. provides that, no appeal shall lie from a decree passed by the court with the consent of parties. The Apex Court in Bryam Pestonji Gariwala v . Union Bank of India reported in [AIR 1991 SC 2234] (Civil Appeal No. 3698 of 1991, decided on 20.09.1991) stated in
paragraph 43 as follows:-
"43. A judgment by consent is intended to stop litigation between the parties just as much as a judgment resulting from a decision of the Court at the end of a long drawn out fight. A compromise decree creates an estoppel by judgment."
recording compromise. Order XXIII Rule 3 C.P.C runs as under:
"3. Compromise of suit. Where it is proved to the satisfaction of the Court that a suit has been adjusted wholly or in part by any lawful agreement or compromise[in writing or signed by the parties], or where the defendant satisfies the plaintiff in respect of the whole or any part of the subject-matter of the suit, the Court shall order such
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agreement, compromise or satisfaction to be recorded, and shall pass a decree in accordance therewith [so far as it relates to the parties to the suit, whether or not the subject-matter of the agreement, compromise or satisfaction is the same as the subjectmatter of the suit].
Provided 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; but no adjournment shall be granted for the purpose of deciding the question, unless the Court, for reasons to be recorded, thinks fit to grant such adjournment. [Explanation. An agreement or compromise which is void or voidable under the Indian Contract Act, 1872 (9 of 1872), shall not be deemed to be lawful within the meaning of this rule]"
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provisions of the Code including one applicable to compromise decrees. Prior to the said amendment, the prevailing practice was to file a separate suit to challenge a consent decree with prayer to set aside the same on various grounds, and the same led to multiplicity of litigations. In order to prevent the menace of multiplicity of litigations, Rule 3 of Order XXIII C.P.C. was amended. The Amendment Act inserted a requirement that all lawful agreements or compromise would be in writing and signed by the parties, to enable the court to satisfy itself about the authenticity of the compromise/agreement. The intent behind proviso to Order XXIII Rule 3 C.P.C is this. As per the proviso, 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; but no adjournment shall be granted for the purpose of deciding the question, unless the Court, for reasons to be recorded, thinks fit to grant such adjournment.
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Order XLIII, Rule 3, C.P.C. Further, at the same time a new provision was added to the C.P.C. by the same Amendment Act i.e. Order XLIII, Rule 1A, as already extracted herein above.
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against a compromise decree and Order XLIII, Rule 1A(2) C.P.C. which allows an appellant to question the validity of a compromise by preferring an appeal against a decree passed on the basis of such compromise, looms large. The fundamental principle of interpretation of Statute is that when there appears to be some conflict between two provisions of a statute, they must be harmoniously construed so as to give effect to the intent of the legislature. Each provision in a statute book has to be read to have been enacted with a definite purpose and the said legislative intent to be safeguarded. This controversy has been resolved by the Supreme Court in the decision in Banwari Lal v. Smt.Chando Devi reported in [1993 (1) SCC 581] : [AIR 1993 SC 1139] wherein the Supreme Court has observed as under:
"9. S.96(3) of the Code says that no appeal shall lie from a decree passed by the Court with the consent of the parties. R.1A(2) has been introduced saying that against a decree passed in a suit after recording a compromise, it shall be open to the appellant to contest the decree on the ground that the compromise should not have been recorded. When S.96 (3) bars an appeal against decree passed with
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the consent of parties, it implies that such decree is valid and binding on the parties unless set aside by the procedure prescribed or available to the parties. One such remedy available was by filing the appeal under 0.43, R.1(m). If the order recording the compromise was set aside, there was no necessity or occasion to file an appeal against the decree. Similarly a suit used to be filed for setting aside such decree on the ground that the decree is based on an invalid and illegal compromise not binding on the plaintiff of the second suit. But after the amendments which have been introduced, neither an appeal against the order recording the compromise nor remedy by way of filing a suit is available in cases covered by R.3A of O.23. As such a right has been given under R.1A(2) of 0.43 to a party, who challenges the recording of the compromise, to question the validity thereof while preferring an appeal against the decree. S.96(3) of the Code shall not be a bar to such an appeal because S.96(3) is applicable to cases where the factum of compromise or agreement is not in dispute."
"13. When the amending Act introduced a proviso along with an explanation to R.3 of O.23 saying that where it is alleged by one party and denied by other that an adjustment or satisfaction has
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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 R.1(m) of O.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 R.3 of O.23, or an appeal under S.96(1) of the Code, in which he can now question the validity of the compromise in view of R.1A of O.43 of the Code."
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XLIII, Rule 1A of the Code. While discussing the ratio of law laid down in Banwari Lal 's case ( supra ), the Apex Court in the decision reported in [2021 (5) SCC 241 : AIR OnLine 2021 SC 269], H.S. Goutham v. Rama Murthy and another held that an appeal against a compromise decree in terms of Order XLIII, Rule 1A C.P.C. was maintainable. The Apex Court in the decision reported in [2014 (15) SCC 471 : AIR 2015 SC 706], R.Rajanna v. S.R.Venkataswamy and others held that a separate suit challenging a consent decree was not maintainable, however a party aggrieved by a decree passed on the basis of a compromise could apply before the same court which passed the decree to challenge the validity of the compromise.
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who challenges the recording of the compromise, to question the validity thereof while preferring an appeal against the decree. S.96(3) of the Code shall not be a bar to such an appeal because S.96(3) is applicable to cases where the factum of compromise or agreement is not in dispute .
“a) It is agreed between the plaintiff and the 1 st defendant that they shall mutually exchange their property (plaint item A property of the plaintiff and the plaint item B property of the 1 st defendant) by executing deed of exchange.
b ) It is agreed that one cent of the plaint item A property which is to be given to the 1 st defendant should be assigned with
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road frontage of 2.75 metres on the eastern side.
c ) After executing exchange deed the northern boundary of the plaint item A property shall be constructed by the 1 st defendant on the plaint item A property and the southern boundary f the plaint item B property shall be constructed by the plaintiff on the plaint item B property.
d ) Both the parties have agreed that after executing document the possession of the plaint item B property shall be given to the plaintiff and the possession of the plaint item A property (one cent) should be given to the possession of the 1 st defendant.
e ) Parties have agreed to execute the said document within one month of the date of compromise by bearing the expense equally. Further they have also agreed to put up boundaries of their respective properties.
f ) The plaintiff has agreed that the amount payable by her as per the decree in OS 471/15 shall be paid after adjusting the amount due to her as per the decree in OS.108/99 and also as per the order in BRC (OP) 9/05 and the 1 st defendant has agreed to accept the said amount.
g ) Both the parties have agreed to submit statement of account before the court with respect to the due amounts and to settle the account as per the decision of the court.
h ) The parties have agreed that after executing document the defendants will have no right over the boundary fixed by the plaintiff on the southern extremity of the plaint item B property and the plaintiff will have no right over the boundary constructed by the 1st defendant on the northern extremity of the plaint item A property.
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i ) The parties have also further agreed that the roof of the plaint item A property will not touch on the boundary structure of the plaintiff's property and likewise the roof of the plaint item B property shall not touch the boundary structure of the 1 st defendant's plaint item A property.
j ) Parties have agreed that at the time of renovation of the plaint item A and B properties the 1 st defendant shall not obstruct the construction of structures on the northern side of the northern boundary of the plaint item A property and likewise the plaintiff has agreed that she will not obstruct the construction of structure on the southern side of the southern boundary of the plaint item B property by the 1 st defendant. Both parties shall given consent for such constructions.
k ) After taking possession of the plaint item A and B properties by the respective parties and after settling the financial transaction between them the plaintiff' will have no right over the plaint item A property and the 1 st defendant will have no right over the plaint item B property.
l ) If any of the parties fails to comply the terms of the compromise the other party can seek the remedy through execution proceedings.
m ) Parties are directed to bear their respective cost. n ) The compromise petition shall form part of the decree."
23. In the case at hand, no dispute that the 1 st defendant is
not a signatory in the compromise and on her behalf her lawyer
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signed. At the same time, the husband of the 1 st defendant (5 th defendant) also signed in the compromise. But as already pointed out, when the lawyer on behalf of the client signs a compromise without express authority to do so, the same is unlawful. But the position would become different when the authority of the lawyer to sign the compromise for and on behalf of his client to be inferred or established by the subsequent conduct of the client acting upon the compromise where the parties did not sign. In this case, after passing decree in terms of the compromise as on 16.1.2019, subsequently the 1 st defendant filed an affidavit before the Munsiff Court on 02.03.2019 and claimed the amount in terms of clause 5 of the compromise petition. Annexure-R1.D placed by the learned counsel for the plaintiff is the copy of the said affidavit and the learned counsel for the 1 st defendant also did not dispute the said affidavit. The affidavit runs as under:
I ASHIYA UMMAL aged 64 years, W/o Abdul Navas,
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residing at Mangalathu House, Nadukunnu Muri, Pathanapuram Village, Pathanapuram taluk do hereby solemnly state on oath and affirm as follows:-
STATEMENT OF ACCOUNT
| 1) | The amount claimed in OS No.471/2015 : | Rs.73303 |
|---|---|---|
| 2) | Interest @ do -do | : Rs.25649 |
| 3) | Cost -do | : Rs.14891 |
| 4) | One half of the amount received by the plaintiff before 23.03.2012 = 79900 X ½ = |
: Rs.39950 |
| 5) | One half of the rent amount received by the plaintiff after the period covered under O.S.471/2015 = 25020 X ½ = |
: Rs.12510 |
| 6) | Interest for item No.4 | : Rs.16600 |
| 7) | Interest for item No.5 | : Rs. 2600 |
| 8) | Excess amount remitted | : Rs. 4039 |
| Total | ------------- : Rs.189542 ======== |
Additional statement is also filed showing the remittance of rent by
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challan/direct payment made by defendants. The plaintiff' may be directed to a total sum of Rs.189542/- as per the statement made here in above.
What all stated above are true and correct to the best of my knowledge, information and belief.
Sd/Deponent Ashiya Ummal”
24. Reading the affidavit, it is vivid that in paragraph No.2
thereof, the 1 st defendant affirmed that “the said case was settled in terms of compromise petition dated 16.1.2019 ”. In paragraph No.3 it is affirmed by the 1 st defendant that “as per clause 5 of the said compromise petition, the parties are directed to file separate statements of accounts. ”. Accordingly, statements of account claiming Rs.1,89,542/- was filed in the form of affidavit.
25. Similarly, the 5 th defendant, who is none other than the
husband of the 1 st defendant and signatory to the compromise, also filed an affidavit as Annexure-R1.C, in terms of the compromise. On perusal of Annexure-R1.D affidavit filed by Ashiya Ummal, the 1 st defendant herein, it is emphatically clear that Ashiya Ummal agreed and consented the compromise and subsequently
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acted upon the same though she did not sign the compromise. A relevant aspect forthcoming is the consent of the 1 st defendant in the compromise in view of filing of affidavit accepting and acting upon the same.
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appellate court rightly negatived the contentions raised to unsustain the compromise by filing appeal. Answering the substantial questions, as discussed herein above, this Second
Appeal is found to be meritless and is liable to be dismissed.
27. In the result, this Second Appeal stands dismissed .
28. All the interlocutory orders stand vacated and all
interlocutory applications pending in this Second Appeal, stand dismissed.
Registry shall inform this matter to the trial court as well as the appellate court, forthwith.
Sd/-
rtr/
3 issues framed by the court
Is challenge to a compromise decree permissible by appeal under Order XLIII Rule 1A(2) CPC notwithstanding Section 96(3), and on what grounds?
What is the legal effect of a compromise not signed by a party but signed by counsel without express authority?
Can a party who acted upon an unsigned compromise thereafter avoid the compromise decree?
Colour shows how this judgement treated each authority
Prasanta Kumar Sahoo v. Charulata SahuRelied on¶9
[2023 (2) KLT 625 (SC)]
Bryam Pestonji Gariwala v. Union Bank of IndiaRelied on¶11
[AIR 1991 SC 2234] · Who else cites this
Banwari Lal v. Smt. Chando DeviRelied on¶18
[1993 (1) SCC 581] : [AIR 1993 SC 1139] · Who else cites this
Vipan Aggarwal and another v. Raman Gandotra and othersRelied on¶19
[AIR OnLine 2022 SC 943] · Who else cites this
H.S. Goutham v. Rama Murthy and anotherRelied on¶20
[2021 (5) SCC 241 : AIR OnLine 2021 SC 269] · Who else cites this
R.Rajanna v. S.R.Venkataswamy and othersRelied on¶20
[2014 (15) SCC 471 : AIR 2015 SC 706] · Who else cites this
6 provisions across 1 enactments
Ashiya Ummal
S.N. Sathy
Abdul Navaz
Abdul Najeeb
Abdul Rafeek
Abdul Nejuman
A. Badharudeen
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
