TaxTMI 
TaxTMI 
2014 (8) TMI 1124
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.... 3. It so happened that the Appellant, who is an Engineering Contractor, was awarded three contracts by the Respondents herein particulars whereof are as under: (i) For the rehabilitation and modernization of Gundar Reservoir system in Tirunelveli District the bids were called and in which the Petitioner became the successful bidder to execute the work for a contract price of Rs. 80,14,605/- under registered Agreement dated 02.04.1998 within a period of 15 months to complete the contract work. (ii) For the rehabilitation and modernization of Karuppanadhi Reservoir system in Tirunelveli District the bids were called and in which the Petitioner became the successful bidder to execute the work for a contract price of Rs. 55,82,633/- under the Registered Agreement dated 20.07.1998 within a period of 18 months to complete the contracts work. (iii) For the rehabilitation and modernization of Kannadian Anicut and Channel Reach-1 in Tirunelveli District the bids were called and in which the Petitioner became the successful bidder to execute the work for a contract price of Rs. 69,24,038/- under registered agreement 28.07.1998 within a period o....
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....e three works, particularly with reference to interest in respect of the three works, which worked out to 12.81% towards the principal award amount covered under the three Awards. However, the Superintending Engineer insisted for further reduction of the principal amount. Ultimately in the meeting held in the Chamber of the Superintending Engineer on 9.1.2009, the contractor was asked to offer 10% reduction in the principal award amount, besides 40% offer made on the interest amount accrued. The Appellant, however, agreed to only 5% reduction in the principal amount, in addition to 40% reduction in the interest amount. Because of the aforesaid position taken by the parties, the negotiation could not be fructified and fell through. The Principal Secretary to the Government wrote a letter dated 9.1.2009 to the officials concerned, directing them to pursue the applications Under Section 34 of the Act in respect of the three awards pending before the Court. 6. The matters, however, lingered on in the Courts for some reason or the other. When they were listed in the Court on 09.04.2011, the Appellant came forward with a memorandum to the effect that, apart from the offer made during ....
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....d by the Government Pleader, in as much as, he was never authorised for this purpose. It was argued that in the absence of any authorisation in favour of the Government Pleader, endorsement of the compromise given by him was not binding on the Government. 9. When the matter was heard by the High Court, even the High Court suggested that the State should once again consider the possibility of compromise and the matter was adjourned for this purpose. However, on the next date of hearing, the counsel for the Respondents made a statement that Government was not interested in the settlement and wanted the matter to be heard on merits. The High Court, accordingly, heard the matter and vide impugned judgment, set aside the orders of the Principal District Judge passed in the three petitions, directing it to decide on merits the applications filed by the Respondents Under Section 34 of the Act. From the perusal of the order of the High Court, it is clear that the High Court has accepted the plea of the Respondents that in the absence of any material to show that Government Pleader was authorised to record the compromise, such a compromise was not binding on the Respondents. It is in thi....
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.... 12. We have bestowed our careful consideration to the respective arguments advanced by the counsel for the parties. The Appellant has produced on record the copies of the 3 memos dated 06.04.2011 which were filed by the Appellant before the Principal District Court on which endorsement was made by the Government Advocate as well. All these memos filed by the Appellant are identically worded and the relevant extract thereof makes the following reading: Now in consideration of the exigencies and in deference to the suggestion by this Hon'ble Court apart from the above offer made during negotiations on 09.01.2009 this Respondent is offering to forgo further interest accrued on the award after 09.01.2009, provided the Petitioner observes the following and acts accordingly: 1. The payment is made in lump sum and in one single installment. 2. The payment is made within three months from today. It is humbly submitted that the Respondent is making the above offer due to his acute financial crisis and need for satisfying his creditors including his bankers. Therefore the above offer is without prejudice to the right of the 1....
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....ment. On the perusal of the grounds of appeal submitted before the High Court by the Respondents and even in the counter affidavit filed in this appeal, there is no allegation of any sort against the Government pleader. On the contrary, a categorical statement has been made that "the action of the Respondent was fair and just in this regard as the Respondent has not initiated any proceeding against the District Government Pleader." Furthermore, and most importantly, there is not even an iota of a pleading explaining as to how the Government Pleader was not authorised to record consent or that he in any manner lacked authority. It is not even remotely suggested in any of these grounds that the Government Pleader he acted improperly. On the contrary, what is sought to be suggested is that there was a failure of compromise, or that no compromise was recorded or agreed upon before the Court, which is contrary to the record of the Court and the statements recorded in the judgment of the District Court, and therefore impermissible as a ground of challenge. In this behalf, we would like to reproduce the following discussion in the judgment of this Court in the case of State of Maharashtra....
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....lso, no application was filed by the Respondents before the District Court immediately after the passing of decrees in compromise terms, or even thereafter, for recall of the compromise order with the plea that such a compromise was unacceptable as the Government Pleader was not authorised to enter into any such settlement. Instead appeals were filed before the High Court. We are of the opinion that Respondents should have approached the trial court in the first instance as it is the trial judge before whom the compromise was recorded and as he was privy to events that led to the compromise order, he was in a better position to deal with this aspect. 17. That apart, we find that as per the provisions of Order III Rule 4, once the counsel gets power of attorney/authorisation by his client to appear in a matter, he gets a right to represent his client in the Court and conduct the case. Further, in the case of Bakshi Dev Raj v. Sudhir Kumar (2011) 8 SCC 679, this Court held that though Order XXIII Rule 3 of the Code of Civil Procedure requires a compromise to be in writing and signed by parties, the signature of the advocate/counsel is valid for the said purposes. Detailed discussi....
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.... comprehend even matters falling outside the subject-matter of the suit, but relating to the parties, the legislature cannot, in the absence of express words to such effect, be presumed to have disallowed the parties to enter into a compromise by the counsel in their cause or by their duly authorised agents. Any such presumption would be inconsistent with the legislative object of attaining quick reduction of arrears in court by elimination of uncertainties and enlargement of the scope of compromise. 39. To insist upon the party himself personally signing the agreement or compromise would often cause undue delay, loss and inconvenience, especially in the case of non-resident persons. It has always been universally understood that a party can always act by his duly authorised representative. If a power-of-attorney holder can enter into an agreement or compromise on behalf of his principal, so can counsel, possessed of the requisite authorisation by vakalatnama, act on behalf of his client. Not to recognise such capacity is not only to cause much inconvenience and loss to the parties personally, but also to delay the progress of proceedings in court. If the legislature....
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....y terminated. The counsel, therefore, has power to make a statement on instructions from the party to withdraw the appeal. The question then is whether the court is required to pass a reasoned order on merits against the decree appealed from the decision of the Court of the Subordinate Judge? Order 23 Rules 1(1) and (4) give power to the party to abandon the claim filed in the suit wholly or in part. By operation of Section 107(2) Code of Civil Procedure, it equally applies to the appeal and the appellate court has coextensive power to permit the Appellant to give up his appeal against the Respondent either as a whole or part of the relief. As a consequence, though the appeal was admitted under Order 41 Rule 9, necessarily the court has the power to dismiss the appeal as withdrawn without going into the merits of the matter and deciding it Under Rule 11 thereof. 4. Accordingly, we hold that the action taken by the counsel is consistent with the power he had under Order 3 Rule 4 Code of Civil Procedure. If really the counsel has not acted in the interest of the party or against the instructions of the party, the necessary remedy is elsewhere and the procedure adopted ....
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....rson. 20. There is another very important aspect in this case which cannot be sidetracked and needs to be highlighted by us At the time of arguments, on a pertinent query from the learned Counsel for the Respondents as to whether any action was taken against the Government Pleader, the learned Counsel was candid in accepting that not only no action was taken, the said counsel continued to be on the panel of the Government and was entrusted in with further briefs of Court cases. This itself shows that the Respondents have tried to wriggle out of a valid compromise by taking such spacious plea which cannot be countenanced. 21. Here is a case where arbitral awards were given in favour of the Appellant way back in April and June, 2006. However, the Appellant is yet to reap the benefits thereof. Respondent No. 1 challenged these awards by filing applications Under Section 34 of the Act. When these proceedings were pending, the Respondents themselves came out with the proposal to negotiate and try to amicably settle the matters, keeping in view the otherwise laudable decision taken by PWD to settle such disputes as is clear from the letter dated 02.08.2008. Negotiations took place ....