2003 (7) TMI 683 - SC - Companies Law

Whether settlement of a private dispute between the parties to a writ proceeding is permissible in law? Held that - It is now well-settled that an order passed by a court without jurisdiction is a nullity. Any order passed or action taken pursuant thereto or in furtherance thereof would also be nullities. In the instant case as the High Court did not have any jurisdiction to record the compromise for the reasons stated hereinbefore and in particular as no writ was required to be issued having regard to the fact that public law remedy could not have been resorted to the impugned orders must be held to be illegal and without jurisdiction and are liable to be set aside. All orders and actions taken pursuant to or in furtherance thereof must also be declared wholly illegal and without jurisdiction and consequently are liable to be set aside. They are declared as such. A party cannot be made to suffer adversely either indirectly or directly by reason of an order passed by any court of law which is not binding on him. The very basis upon which a judicial process can be resorted to is reasonableness and fairness in a trial. Appeal allowed.

Issues Involved:
1. Whether settlement of a private dispute between parties to a writ proceeding is permissible in law.
2. Legality and implications of the settlement agreement dated 29.6.1992.
3. The impact of the High Court's order dated 29.6.1992 on the rights of non-signatory parties.
4. Jurisdiction of the High Court in recording and enforcing the settlement agreement.
5. The effect of the High Court's refusal to review its order dated 29.6.1992.
6. Maintainability of the writ petition filed by Late Dwarka Prasad Agarwal under Article 32 of the Constitution of India.

Detailed Analysis:

1. Whether settlement of a private dispute between parties to a writ proceeding is permissible in law:
The Supreme Court held that a writ petition filed in public law remedy cannot be used for resolving a private dispute. The Court emphasized that judicial review under Article 226 of the Constitution is concerned with the legality, irrationality, and procedural impropriety of an order passed by the State or a statutory authority. The Court observed that the High Court erred in using a writ petition to settle private disputes between the parties.

2. Legality and implications of the settlement agreement dated 29.6.1992:
The Supreme Court noted that the settlement agreement dated 29.6.1992 was executed without the knowledge or consent of Dwarka Prasad Agarwal, who was a proforma respondent and not a signatory to the agreement. The Court found that the High Court failed to apply its mind to the legality of the settlement and did not issue notice to Dwarka Prasad Agarwal or allow sufficient time for his advocate to obtain proper instructions. The Court concluded that the settlement agreement was not lawful and could not bind non-signatory parties.

3. The impact of the High Court's order dated 29.6.1992 on the rights of non-signatory parties:
The Supreme Court observed that the High Court's order recording the settlement had significant consequences, including the alteration of the ownership of the title "Dainik Bhaskar" in the Registrar of Newspapers' register. The Court found that the order adversely affected the rights of Dwarka Prasad Agarwal and his legal heirs, who were not parties to the settlement. The Court held that the High Court's order was unjust and unreasonable as it deprived Dwarka Prasad Agarwal of his rights without his consent.

4. Jurisdiction of the High Court in recording and enforcing the settlement agreement:
The Supreme Court held that the High Court did not have jurisdiction to record and enforce the settlement agreement in a writ proceeding. The Court emphasized that a writ court cannot determine private disputes over property or partnership rights. The Court stated that the High Court's order amounted to a misdirection in law and was a nullity as it was passed without jurisdiction.

5. The effect of the High Court's refusal to review its order dated 29.6.1992:
The Supreme Court found that the High Court's refusal to review its order dated 29.6.1992 demonstrated a total non-application of mind. The Court noted that the High Court failed to address the issues of legality and fairness of the settlement agreement and did not consider the provisions of the Registration Act and the Press and Registration of Books Act, 1867. The Court held that the High Court's refusal to review its order was erroneous and without jurisdiction.

6. Maintainability of the writ petition filed by Late Dwarka Prasad Agarwal under Article 32 of the Constitution of India:
The Supreme Court held that the writ petition under Article 32 was maintainable as the High Court's order had resulted in the infringement of the fundamental rights of Dwarka Prasad Agarwal and his legal heirs. The Court observed that the right to publish a newspaper is a fundamental right under Article 19(1) of the Constitution, and the High Court's order had adversely affected this right. The Court emphasized that the right to a fair trial is a basic fundamental/human right and any procedure that deprives a party of this right is violative of Article 14 of the Constitution.

Conclusion:
The Supreme Court allowed the appeals and the writ petition, quashing the impugned orders dated 26.9.1992 and 13.11.1992 passed by the High Court and the order dated 3.9.1992 passed by the Registrar, Newspapers for India. The Court declared all actions and orders taken pursuant to these impugned orders as illegal and without jurisdiction. The parties were directed to revert to the position they were in immediately prior to the passing of the High Court's order dated 26.9.1992. The appeals and writ petition were disposed of with costs assessed at Rs. 25,000/-.

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