2010 (4) TMI 1174 - SC - Indian Laws

Summary

Issues Involved:
1. Legality and validity of the High Court's order dismissing the appellants' applications for recall of an earlier consent decree.
2. Allegations of fraud and coercion in obtaining the consent decree.
3. Authority of the Power of Attorney holder to enter into the compromise.
4. Compliance with Order 23 Rule 3 of the Code of Civil Procedure, 1908.
5. Estoppel and binding nature of the consent decree.

Detailed Analysis:

1. Legality and Validity of the High Court's Order:
The appellants challenged the High Court's order dated 12.10.2007, which dismissed their applications seeking recall of an earlier order dated 13.06.2006. This earlier order was based on consent terms signed by all parties. The appellants argued that the consent decree was obtained fraudulently and without their knowledge or consent.

2. Allegations of Fraud and Coercion:
The appellants alleged that respondent no. 9 colluded with respondent no. 8 and coerced them into a compromise, which they strongly objected to. They claimed that fraud was played upon the High Court by filing the consent terms without their genuine consent. The appellants filed complaints with the police against respondents 8 and 9, alleging threats and coercion.

3. Authority of the Power of Attorney Holder:
Respondent no. 9, as the Power of Attorney holder, entered into consent terms with respondents 7 and 8. The appellants argued that this was beyond the scope of his authority. However, the court noted that the irrevocable Powers of Attorney executed by the appellants in favor of respondent no. 9 authorized him to act on their behalf, including entering into compromises. The court found that the appellants had confirmed and ratified the deeds and documents entered into by their predecessor-in-interest and respondent no. 9.

4. Compliance with Order 23 Rule 3 of the Code of Civil Procedure, 1908:
The appellants contended that the consent terms did not comply with Order 23 Rule 3, which requires the compromise to be in writing and signed by the parties. The court held that under Order 23 Rule 3, a compromise could be signed by the counsel or the Power of Attorney holder. The court cited the judgment in Byram Pestonji Gariwala Vs. Union Bank of India, which supported this interpretation.

5. Estoppel and Binding Nature of the Consent Decree:
The court emphasized that the appellants were estopped from questioning the acts of respondent no. 9, as they had executed irrevocable Powers of Attorney and affidavits confirming his authority. The court cited several precedents, including Jineshwardas (D) by LRs. Vs. Jagrani and Shankar Sitaram Sontakke v. Balkrishna Sitaram Sontakke, to assert that a consent decree is as binding as a decree passed by invitum and carries the binding force of res judicata.

Conclusion:
The Supreme Court dismissed the appeals, holding that the consent decree was valid and binding. The court found no merit in the appellants' allegations of fraud and coercion, noting that the appellants had failed to provide full and precise particulars of the alleged fraud. The court also ruled that the Power of Attorney holder acted within his authority, and the consent terms were just and reasonable. The appellants were estopped from challenging the consent decree, and the court upheld the High Court's order dismissing the applications for recall.