1974 (7) TMI 129

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....rties were partners. (3) On December 6, 1968 the parties filed a compromise petition before Jagjit Singh, J. praying that the terms of the compromise thereof be recorded by the Court. Thereupon, the learned Judge passed the following order : "THE compromise,as arrived at between the parties and embodied in the application Ex. P/A, is recorded. (4) In terms of the compromise between the parties the suit is dismissed but the defendant shall pay Rs. 2000.00 as cons to the plaintiff. The parties will also be bound by all the other terms contained in the application. Ex. P/A. The plaintiff shall also be entitled to withdraw the amount of Rs. 15,000.00 which is lying in deposit in the court and had been deposited by the defendant." (5) Briefly the compromise gave to the appellant the following three reliefs in place of the original three reliefs which had been claimed in the suit, namely: (1) the partnership between the parties was to continue for 5 years from December 15, 1967 to December 14, 1972, on which date it was to stand dissolved automatically; (2) the share of the appellant in the profits of the partnership was fixed and it was agreed that it would be paid to ....

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....promise ; and (3) that the respondent was not precluded from raising the objections regarding the unexecutability of the decree inasmuch as no final decision between the parties had been given by the court holding that the decree was executable. E.F.A. (O.S.) 8 of 1971 has been filed by the appellant against this decision of P. N. Khanna, J. During the pendency of the E.F.A. (OS) 8 of 1971 two Interlocutory Applications No. 595 and 745 of 1972 were made by the appellant. The first praying that from the draft of the compromise decree prepared by the Registrar, the words "suit is otherwise dismissed" should be deleted and the second praying that the terms of the compromise should form part of the compromise decree. I.A. 595 of 1972 was dismissed and I.A. 745 of 1972 was partly dismissed and partly accepted by Jagjit Singh, J. who held that (1) the words suit is dismissed would have to form part of the compromise decree inasmuch as the suit of the appellant was dismissed when in the compromise the appellant gave up all the reliefs for which the suit had been originally brought, and (2) that "the terms of the compromise regarding matters beyond the scope of the suit do not become part ....

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....ich may not relate to the suit. In so far as it does not relate to the suit the compromise, though lawful and binding between the parties, shall remain only a contract between the parties. Such a contract will not, however, be a part of the decree to be passed by the Court. The rights of the parties arising out of such a contract will not be the subject matter of the decree for compromise but will have to be worked out separately by the parties. The Court has thus to find out the intention of the parties. Did the parties intend the compromise to be worked out by a decree in the same suit or did they intend it to be only a new contract between the parties to be worked out separately ? Such intention can be gathered on the one hand from the reliefs claimed in the suit and on the other hand from the reliefs given by the compromise. If these reliefs are identical then the compromise would merely amount to an admission of the whole claim and the decree would rather be called one on admission and not one on compromise. A compromise, properly speaking, would Therefore result in reliefs which would be somewhat different from the reliefs claimed in the suit. What has to be seen. Therefore, ....

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....dissolution should be fixed and the rendition of accounts should also be avoided by fixing the share of the profits of the appellant. We are of the view, Therefore, that the fixing of the date of the dissolution of the partnership was a term which related to the suit inasmuch as the relief claimed by the suit was also the dissolution of the partnership. (11) The second relief claimed in the suit was rendition of accounts. This would have meant the appointment of a Commissioner to take accounts and the disputes between the parties as to the amount of profits payable to the appellant. The respondent could even have pleaded that the partnership made no profits at all. The parties decided to end the delay and the disputes by agreeing that fixed amount should be paid to the appellant as his shares of the profits of the partnership for the past years as well as the current years. This part of the compromise, Therefore, completely related to the relief for the rendition of accounts. (12) The third relief was an injunction that the respondent should quit the premises of the appellant given to the partnership and should not use it. This relief was also virtually granted by the comprom....

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....e order recording the compromise gave the appellant a cause of action for filing an appeal under Order Xliii rule 1(m) Civil Procedure Code and that because of these words either the compromise could not be recorded or if so recorded a decree could not be passed according to it. To take such a view would be hypertechnical and unjust. After all, parties enter into compromise with some purpose and to shorten the process of litigation. The Court should be, Therefore, sympathetic to the purpose of the compromise and try to effectuate it rather than take a technical view which would result in defeating the purpose. In our view, the words "suit is dismissed" used by Jagjit Singh, J. can have only one meaning. It was that the reliefs originally claimed in the suit were denied to the plaintiff and in that sense or to that extent the suit was dismissed. The Registrar so understood their meaning in preparing the draft decree and, Therefore, in the draft decree he used the words "suit is otherwise dismissed". If the words were intended to mean that the appellant was to be out of Court and was to get no relief from the Court, then the learned Single Judge would have regarded the whole of the c....

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....lusion is supported by the following provisions of the Civil Procedure Code:- (1) Order XXIII rule 3 makes it mandatory for the Court to pass a decree on the compromise insofar as it relates to the suit. (2) Section 2(2) certainly defines "decree" to mean the formal expression of an adjudication, but this does not mean that the right of the decree-holder to execute a decree is defeated after the Court fails to do its duty in drawing up a decree. (3) Section 33 also says that on the delivery of a Judgment "a decree shall follow". (4) Order XX rule 6(1) says that "the decree shall agree with the judgment". (5) Order XX rule 7 says that "the decree shall bear the date of the day on which the judgment was pronounced". (6) Order XXI rule 10, unlike Order XLI rule 1, does not require that an execution application shall be accompanied by a copy of the decree to be executed. (7) Order XXI rule 11(1) expressly states that where a decree is for the payment of money the Court may, on the oral application of the decree-holder, order immediate execution thereof at the time of the passing of the decree by the judgment debtor prior to....