2006 (7) TMI 707 - SC - Indian Laws

Suit against the tenant for possession - Recovery of the possession of the suit property - Let out the suit property with the fittings and fixtures - tenancy continued after the lease term of three years - Rule 3 of Order 23 of CPC - agreement or compromise between the parties - HELD THAT - In this case, under the settlement, the tenant undertook to vacate the suit property on a future date (that is 22.1.2002) and pay the agreed rent till then. The decree in pursuance of such settlement was an 'executable' decree. Therefore the settlement did not fall under the second part, but under the first part of Rule 3. The High Court obviously committed an error in holding that the case fell under the second part of Rule 3. 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. 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'. The court, however, has to satisfy itself that the terms of the compromise are lawful. In this case we find from the trial court records that the second defendant had executed a vakalatnama empowering her counsel Sri Dinesh Garg to act for her in respect of the suit and also to enter into any compromise. Hence there can be no doubt that Sri Dinesh Garg was authorized by the second defendant to enter into a compromise. We also find that the counsel for the plaintiffs and counsel for the defendants made solemn statements on oath before the trial court specifying the terms of compromise, which were duly recorded in writing and signed by them. The requirements of the first part of Rule 3 of Order XXIII are fully satisfied in 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 dragged on for 3 years for defendant's evidence after the conclusion of plaintiff's evidence. It was noted on 19.5.2001 that no further adjournment will be granted for the evidence of defendants 4 and 5 (who are not contesting the matter), on the next date of hearing (23.5.2001). When the matter finally came up on 23.5.2001, no evidence was tendered. On the other hand, a statement was made agreeing to vacate the premises by 22.1.2002. The trial court took care to ensure that the statements of both counsel were recorded on oath and signed. Thereafter, it passed a consent decree. The attempts of tenants in such matters to protract the litigation indefinitely by raising frivolous and vexatious contentions regarding the compromise and going back on the solemn undertaking given to court, should be deprecated. Neither the second defendant nor her legal representative has attributed any improper motive to second defendant's counsel. The facts go to show nothing further could have been done for the defendants-tenants. All that the counsel for defendants had done was to get the maximum advantage to his clients in the circumstances after dragging on the matter to the extent possible. This appeal is, therefore, liable to be dismissed as being devoid of merit. The consent decree is upheld, though for reasons different from those which weighed with the High Court. The landlords (respondents) will be entitled to seek mesne profits for the period from 22.1.2002 to date of delivery of possession in accordance with law. The appeal is accordingly dismissed with costs. The costs payable by the appellant are quantified at ₹ 25,000/-.

Summary

Issues Involved:
1. Maintainability of the appeal against a consent decree under Section 96 of CPC.
2. Validity of the compromise under Order 23 Rule 3 CPC.

Detailed Analysis:

Re: Point No. (i) - Maintainability of the Appeal:

The landlords did not initially challenge the maintainability of the appeal against the consent decree before the lower courts. However, the Supreme Court permitted this contention to be raised as it pertains to the jurisdiction of the appellate court. Section 96(3) of CPC explicitly bars appeals from decrees passed with the consent of the parties. The deletion of Order 43 Rule 1(m) CPC and the addition of Rule 3A to Order 23 further reinforce that no appeal or independent suit can challenge a consent decree on the grounds of an unlawful compromise. The only remedy is to approach the court that recorded the compromise to establish its invalidity. The second defendant's appeal was thus not maintainable, as she should have pursued her application to set aside the decree before the trial court.

Re: Point No. (ii) - Validity of the Compromise:

Order 23 Rule 3 CPC consists of two parts:
- The first part requires a written and signed agreement or compromise.
- The second part deals with the defendant satisfying the plaintiff's claim, which does not require a written document.

In this case, the tenant agreed to vacate the premises on a future date, making the decree executable, thus falling under the first part of Rule 3. The High Court erred in categorizing it under the second part. The statements of the parties' counsel, recorded on oath by the trial court and signed by them, fulfill the requirement of a compromise "in writing and signed by the parties." The Supreme Court emphasized that the term "signed by parties" includes their authorized pleaders. The trial court records showed that the second defendant had authorized her counsel to enter into a compromise, making the agreement valid under Rule 3.

Additionally, the Supreme Court noted that the second defendant did not challenge her counsel's integrity or authorization, further supporting the validity of the compromise. The court also highlighted that the tenants' prolonged litigation tactics should be discouraged, and the consent decree, which was based on the tenants' admissions and the evidence presented, was upheld.

Conclusion:

The appeal against the consent decree was not maintainable under Section 96(3) CPC. The compromise recorded by the trial court was valid under Order 23 Rule 3 CPC, as it was in writing and signed by the parties' authorized counsel. The Supreme Court dismissed the appeal, upheld the consent decree, and awarded costs of Rs. 25,000 to the landlords.