TaxTMI 
TaxTMI 
1988 (7) TMI 421
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....ise decree against their brother Bur Singh for possession of 110 Kanals 14 Marias of land. In the plaint filed by Bur Singh and Kapur Singh, it was pleaded that Bur Singh had gifted the land to them 10/12 years ago and a week before the filing of the suit illegally took back the possession; hence the suit for possession was filed. A written compromise deed was filed before the Court in which Bur Singh agreed that the land belonged to the plaintiffs and the suit be decreed. 3. Bur Singh died on 8-7-1982 and on 26th Aug. 1982 his two daughters Gurdev Kaur and Mehar Kaur filed a suit to avoid the compromise decree dt. 19-10-1967 on the plea that it was obtained by undue influence; their father had not made any gift as was pleaded in the earlier suit; and they were the next heirs to succeed to their father. 4. The suit was contested and it was pleaded that Bur Singh had signed compromise deed and had made statement in the Court duly signed by him, wherein he admitted their claim and prayed that the suit be decreed. On the basis of the written compromise and the statement made by Bur Singh, the suit for possession was decreed and they became owners of the suit land. 5. The trial Cour....
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....e Privy Council was as follows : "17(2) Nothing in Clauses (b) and (c) Sub-section (1) applies to : -- 17(2)(i) : Any decree or order of a Court and any award." The compromise decree, which was subject matter of consideration before the Privy Council, included the properties which were subject matter of the suit as also the properties which were beyond the suit. The question arose, whether the compromise in regard to the properties which were beyond the scope of the suit, required registration or not. Privy Council answered the question in the following terms : "Turning now to the Indian Registration Act of 1908, and considering the meaning of the word "decree" in Section 17, Sub-section (2)(vi), this must be read in connection with the purpose of the statute, which is to provide a method of public registration of documents, and there is, therefore, no reason why a limit should be imposed upon the meaning of the word so as to confine it to the operative portion only of the decree." After the aforesaid decision in Rani Hemanta Kumari Debi's case (supra), by Transfer of Property (Amendment) Supplementary Act, 1929 (for short '1929 Act'), amendment was made in Sect....
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....Singh 1978 Rev LR 534 and by me in Balbir Singh v. Salwani Singh 1987 HR 127 and Harpal v. Smt. Ram Piari 1981 PLR 492 : AIR 1981 SC 210. 13. As against the above, the counsel, who appeared and argued for the proposition that the compromise decree required registration have relied upon the judgments of single Benches of Bombay High Court in Rakhmabai Ramkrishna Jadhav's case, AIR 1981 Bom 52 ( supra), S. P. Goyal, J. in Ranbir Singh's case 1984 PLR 562 (supra) and J. V. Gupta, J. in Nachhittar Singh's case (supra). 14. In Rakhmabai Ramkrishna Jadhav's case AIR 1981 Bom 52 (supra) in middle of para 19 of the judgment, the following observations have been made. : "Such a compromise cannot be described, except as a sham compromise brought about for the purposes of practising fraud upon the law relating to stamp duly and law relating to registration." In middle of para 21 after noticing the meaningful observations made in Hari Shankar v. Durga Devi, AIR 1977 All 455, which have been followed in Luxmi Narain Kapoor's case AIR 1986 All 244 (supra), the learned Judge observed as follows AIR 1981 Bom 57: "The Allahabad High Court was not called upon to consider a....
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.... The learned Judge then proceeded to observe in para No. 4 of the judgment as follows : "It is well established that a decree passed on compromise remains essentially a contract between the parties with seal of the Court superimposed thereon and is open to challenge on all grounds on which a contract can he vitiated. Consequently, the consent decree can be challenged not only on the grounds available under the Contract Act such as fraud, mistake or misrepresentation but also on any of the grounds available under any other law which prohibits such a contract or declares it to be ineffective so far as the transfer of any rights in Immovable property are concerned." Part of the observations in the aforesaid quotation seems to have been obtained from para 9 of the reported judgment in Shankar Sitaram Sonetekke's case (supra). To that extent the observations are all right. The learned Judge then proceeded to observe in para 5 of the judgment that if a compromise decree operates as an instrument of gift of Immovable property, it would not be exempt from registration because the learned Judge was of the view that exemption contained in Section 17(2)(vi) of the Act was applicable to....
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....ct, 1953. Section 10A(c) of the Act which fell for consideration was in the following terms (at p. 1000 of AIR) : " 10-A(c) For the purposes of determining the surplus area of any person under this section, any judgment, decree or order of a Court or other authority, obtained after the commencement of this Act and having the effect of diminishing the area of such person which could have been declared as his surplus area shall be ignored." If the scheme of the aforesaid Act is seen, in 1955 by virtue of Section 10-A(b), prohibition was imposed on the alienation of land with retrospective effect from 15th April, 1953 and in the year 1962 Section 10A (c) was inserted to ignore judgment, decree or order of a Court or other authority obtained after the commencement of the Act, and having the effect of diminishing the area of a person, which could be declared surplus area. In that context the consent decrees suffered by land-owners in favour of their wives and children or near relations were ignored by saying that these consent decrees were against the statutory provision. 18. The facts on which we are considering the case, there is no prohibition in suffering the consent decree. Rath....
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....ed Under Section 17 of the Registration Act. In that situation, the said decree violated the provisions of the T.P. Act and the defendant Nachhittar Singh could not claim himself to be the owner of the suit land on the basis of that decree alone or fraud as such alleged or proved by the plaintiff....." If transfer was to be made by a written instrument, then, of course, the same has to be stamped and got registered, but if transfer is made by a compromise decree, there is a specific exception contained in Section 17(2)(vi) which was not kept in view by the learned Judge while deciding the case and that is how the error has crept in. It is beyond pale of controversy that under a consent or compromise decree title can be created for the first time and the decree would not require registration provided it is subject matter of the suit. Hence, we are constrained to overrule Nachhittar Singh's case (supra) as well. 20. For the reasons recorded above, by agreeing with the view taken in the judgments cited above that a compromise decree does not require registration, provided the Immovable property is subject matter of the suit, we hold that a compromise decree regarding Immovable p....
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....nt, so far this law has not been enforced, but we do get the guidance that the law framers always intended that the settlements arrived at between the parties in Court are good and binding and have the legal force, and the matter can be reopened only on the grounds on which a contract can be reopened and not otherwise. The addition of Rule 3A to Order 23 of the Code has further added that even if it were to he shown that the compromise was unlawful, the suit would not lie. Therefore, unless a ground is established on which compromise or a contract can be avoided, the Courts will have no jurisdiction to reopen or go behind the compromise decrees merely on the basis that whether the facts stated in the plaint, which ultimately concluded by a compromise decree, were correct or not. This is more so because the facts stated in the plaint are admitted in the written statement. The defendant and his heirs would be bound by the admission and would be debarred from going back. Sometimes claim is admitted by the defendant by making a statement on oath before Court. He cannot be allowed to go back from his statement. Some other times, written compromise duly signed by the parties is filed in ....