TaxTMI 
TaxTMI 
2006 (7) TMI 707
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....g used by Pushpa Devi for her residential use. The tenancy was continued after the lease term of three years. 3. The landlords (Respondents 1 & 2 and their father) terminated the said tenancy as at the end of 31.3.1989 by notice dated 9.2.1989 and filed a suit against the firm and Pushpa Devi in the court of the District Judge, Delhi on 10.4.1989 for recovery of the possession of the suit property. It was originally numbered as RC Suit No. 265 of 1989 and later, transferred to the court of the Sub-Judge, New Delhi (later, Civil Judge, Delhi) and renumbered as Suit No. 52 of 1993. Pushpa Devi, second defendant, resisted the suit inter alia on the ground that the first defendant firm had been dissolved and as a consequence all its partners including herself became the co-tenants and the suit was not maintainable without impleading the other partners. Subsequently, M.L. Wadhwa, S. K. Mittal and Badan Singh (the other three partners of the firm), were impleaded as defendants 3 to 5. During the pendency of the suit, the first plaintiff S. Rameshwar died, and the suit was continued by showing his two sons (original plaintiffs 2 & 3) as plaintiffs 1 & 2. The fifth defendant als....
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....that in view of the statement made by the counsel for the defendants, on behalf of the defendants, the suit may kindly be disposed of accordingly. I accept the terms of the statement of counsel for defendants. The plaintiffs are also present today in the court and will countersign this statement. Sd/- B. Khan, Adv. R O.A.C. (Sd/- Civil Judge) In addition to the learned counsel for plaintiffs and defendants signing the order sheet, plaintiffs 1 & 2 who were present in court, also signed the order sheet. Thereafter, the court made the following order :- "ORDER In view of the statement made by the counsel for parties in the presence of both the plaintiffs, the suit stands disposed off as settled. Parties to be bound by their statements made today. File be consigned to R/R. Decree sheet in terms of said compromise be prepared. 23.5.2001 Sd/Savita Rao Civil Judge, Delhi" 5. It was subsequently found that Shri Dinesh Garg though appearing for all defendants, had not filed Vakalatnama for defendants 3 & 4 and one Shayam Kishore had entered appearance for them. Therefore, an application under sections 151 and 152 CPC was moved. S....
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....ays communicated to the defendant no.2. After the closing of evidence by the plaintiff, the case was listed for the defendant's evidence time and again and under instructions of the defendant no. 2, the counsel took adjournments for evidence for several years. The adjournment were taken on 4.12.1998, 5.4.1999 and 21.5.1999. When the case fixed for 12.7.1999 for evidence of defendant no. 2, she again did not come and sent her medical certificate which was placed on record and case was adjourned to 8.9.1999. Again adjournment was sought and the case was adjourned to 22.10.1999 as last and final opportunity for her evidence. A written communication dated 20.9.1999 was sent by registered post to defendant no. 2, but she did not appear. Again adjournment was sought as per her instructions and this time the case was adjourned for 30.11.1999 for her evidence subject to cost of Rs. 500/- which was paid by her but still she did not appear in witness box. Even thereafter case was adjourned on 13.1.2000, 24.4.2000, 7.7.2000, 4.9.2000, 16.10.2000, 20.12.2000 and 26.4.2001 for evidence of remaining defendants but none appeared in witness box. After contesting the matter for about 10 years....
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.... compromise reduced to writing and signed by the parties. The matter was remanded to the trial court with a direction to proceed with the trial of the suit in accordance with the law by ignoring the statement of the counsel made on 23.5.2001. 8. The said judgment of the Appellate Court was challenged by the landlords in FAO No. 247 of 2003 on the file of the Delhi High Court, under Order 43 Rule (1)(u) of CPC. During the pendency of the said appeal before the High Court, Pushpa Devi died, and her daughter (the Appellant) came on record and pursued the appeal. The High Court allowed the landlords' appeal by judgment dated 3.3.2004. The High Court held that the consent decree in question did not fall under the first part of Rule 3 of Order 23 (requiring an agreement or compromise between the parties to be in writing and signed by the parties), but fell under the second part of Rule 3 of Order 23 (relating to satisfaction of the claim of the plaintiff, which did not require any document in writing signed by the parties), and that there was a valid compromise under Order 23 Rule 3 CPC and the second defendant "could not repudiate the consensus by attempting to challenge their....
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....itting the claim of the plaintiffs, and, therefore, the consequential decree is valid and binding. On the contentions raised, the following two questions arise for consideration : (i) Whether the appeal filed by Pushpa Devi under section 96 of the Code of Civil Procedure, against the consent decree was maintainable. (ii) Whether the compromise on 23.5.2001 resulting in a consent decree dated 18.7.2001 was not a valid compromise under Order 23 Rule 3 CPC. Re : Point No. (i) 10. It is no doubt true that the landlords did not contend either before the first appellate court or before the High Court that the appeal against the consent decree was not maintainable. This contention is urged for the first time in this Court. The contention relates to jurisdiction of the appellate court and is evident from the record. Such a plea does not require any evidence. Further, being a contention relating to the jurisdiction of the appellate court, it does not require any 'pleading'. Though this Court will not normally permit a new plea to be raised at the hearing of the special leave petition or an appeal under Article 136, where such plea does not involve any question of fact o....
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....ree operates as an estoppel and is valid and binding unless it is set aside by the court which passed the consent decree, by an order on an application under the proviso to Rule 3 of Order 23. Therefore, the only remedy available to a party to a consent decree to avoid such consent decree, is to approach the court which recorded the compromise and made a decree in terms of it, and establish that there was no compromise. In that event, the court which recorded the compromise will itself consider and decide the question as to whether there was a valid compromise or not. This is so because a consent decree, is nothing but contract between parties superimposed with the seal of approval of the court. The validity of a consent decree depends wholly on the validity of the agreement or compromise on which it is made. The second defendant, who challenged the consent compromise decree was fully aware of this position as she filed an application for setting aside the consent decree on 21.8.2001 by alleging that there was no valid compromise in accordance with law. Significantly, none of the other defendants challenged the consent decree. For reasons best known to herself, the second defendan....
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.... writing and signed by the parties. The said agreement or compromise is placed before the court. When the court is satisfied that the suit has been adjusted either wholly or in part by such agreement or compromise in writing and signed by the parties and that it is lawful, a decree follows in terms of what is agreed between the parties. The agreement/compromise spells out the agreed terms by which the claim is admitted or adjusted by mutual concessions or promises, so that the parties thereto can be held to their promise/s in future and performance can be enforced by the execution of the decree to be passed in terms of it. On the other hand, the second part refers to cases where the defendant has satisfied the plaintiff about the claim. This may be by satisfying the plaintiff that his claim cannot be or need not be met or performed. It can also be by discharging or performing the required obligation. Where the defendant so 'satisfies' the plaintiff in respect of the subject-matter of the suit, nothing further remains to be done or enforced and there is no question of any 'enforcement' or 'execution' of the decree to be passed in terms of it. Let us illustrat....
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....r other form of writing signed by the parties, there is no such requirement in regard to settlements or satisfaction falling under the second part. Where the matter falls under second part, it is sufficient if the plaintiff or plaintiff's counsel appears before the court and informs the court that the subject matter of the suit has already been settled or satisfied. 15. In a suit against the tenant for possession, if the settlement is that the tenant will vacate the premises within a specified time, it means that the possession could be recovered in execution of such decree in the event of the defendant failing to vacate the premises within the time agreed. Therefore, such settlement would fall under the first part. On the other hand, if both parties or the plaintiff submit to the court that the tenant has already vacated the premises and thus the claim for possession has been satisfied or if the plaintiff submits that he will not press the prayer for delivery of possession, the suit will be disposed of recording the same, under the second part. In such an event, there will be disposal of the suit, but no 'executable' decree. 16. In this case, under the settlement, th....
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.... by the pleader was considered by this Court in Byram Pestonji Gariwala v. Union Bank of India [1992 (1) SCC 31] with reference to Order 3 of CPC : "30. There is no reason to assume that the legislature intended to curtail the implied authority of counsel, engaged in the thick of proceedings in court, to compromise or agree on matters relating to the parties, even if such matters exceed the subject matter of the suit. The relationship of counsel and his party or the recognized agent and his principal is a matter of contract; and with the freedom of contract generally, the legislature does not interfere except when warranted by public policy, and the legislative intent is expressly made manifest. There is no such declaration of policy or indication of intent in the present case. The legislature has not evinced any intention to change the well recognized and universally acclaimed common law tradition x x x x x 35. So long as the system of judicial administration in India continues unaltered, and so long as Parliament has not evinced an intention to change its basic character, there is no reason to assume that Parliament has, though not expressly, but impliedly reduced co....
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.... counsel and defendants' counsel were recorded on oath by the trial court in regard to the terms of the compromise and those statements after being read over and accepted to be correct, were signed by the said counsel. If the terms of a compromise written on a paper in the form of an application or petition is considered as a compromise in writing, can it be said that the specific and categorical statements on oath recorded in writing by the court and duly read over and accepted to be correct by the person making the statement and signed by him, can be said to be not in writing? Obviously, no. We may also in this behalf refer to Section 3 of the Evidence Act which defines a document as any matter expressed or described upon any substance by means of letters, figures or marks or by more than one of those means intended to be used or which may be used for the purpose of recording the matter. The statements recorded by the court will, therefore, amount to a compromise in writing. 20. Consequently, the statements of the parties or their counsel, recorded by the court and duly signed by the persons making the statements, would be 'statement in writing signed by the parties'....
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....g of the second appeal, that the respondents will pay Rs. 25,000/- within a period of one month with interest in the manner stipulated. The appellant subsequently filed an application for review, contending that the said order disposing of the appeal was a compromise decree, and as it was not in writing and signed by the parties, the appeal could not have been disposed of on the basis of the submissions. The High Court, however, refused to entertain such objections. This Court while upholding the decision of the High Court and holding that there was a valid compromise, also observed : "That apart, we are also of the view that a judgment or decree passed as a result of consensus arrived at before court, cannot always be said to be one passed on compromise or settlement and adjustment. It may, at times, be also a judgment on admission, as in this case." 22. Strong reliance was placed by the appellant on the following observations of this Court in Gurpreet Singh v. Chatur Bhuj Goel [1988 (1) SCC 270] to contend that a compromise should be reduced into writing in the form of an 'instrument' and signed by the parties to be valid under Order 23 Rule 3. He submitted that record....
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....f the appeal in terms of the compromise. It is in this factual background, that is, where there was no consent decree, the question was considered by this Court. The distinguishing feature in that case is that though the submissions made were recorded, they were not signed by the parties or their counsel. Nor did the court treat the submissions as a compromise. In this case, the court not only recorded the terms of settlement but thereafter directed that the statements of the counsel be recorded. Thereafter, the statements of counsel were recorded on oath, read over and accepted by the counsel to be correct and then signed by both counsel. Therefore in this case, there is a valid compromise in writing and signed by the parties (represented counsel). The decision in Gurpreet Singh (supra) is therefore of no assistance to the appellant. 23. At the cost of repetition, we may recapitulate the facts of this case. The suit was a simple suit for possession by a landlord against a tenant filed in the year 1993. Plaintiff's evidence was closed in 1998. The contesting defendant (defendant No. 2) did not lead any evidence, and her evidence was treated as closed. The matter was dragg....