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TMI Blog1987 (12) TMI 332X X X X Extracts X X X X X X X X Extracts X X X X ..... fter he had served the respondent with a notice dated July 11, 1979 forfeiting the amount of ₹ 40,000 paid by him by way of earnest money, alleging that he was in breach of the contract dated June 4, 1979 entered into between Colonel Sukhdev Singh, acting as guardian of the appellant, then a minor, and the respondent, for the sale of a residential house at 1577, Sector 18D, Chandigarh for a consideration of ₹ 2,85,000. In terms of the agreement, the respondent was to pay a further sum of ₹ 1,35000() to the appellant's father Colonel Sukhdev Singh by July 10, 1979 when the said agreement of sale was to be registered and vacant possession of the house delivered to him, and the balance amount of ₹ 1,10,000 on or before January 31, 1980 when the deed of conveyance was to be executed. The dispute between the parties was that according to Colonel Sukhdev Singh, there was failure on the part of the respondent to pay the amount of ₹ 1,35,000 and get the agreement registered, while the respondent alleged that he had already purchased a bank draft in the name of the appellant for ₹ 1,35,000 on July 7, 1979 but the appellant's father did not turn up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant's guardian Colonel Sukhdev Singh and not on the part of the respondent and accordingly decreed the suit for specific performance. Thereupon, the appellant preferred an appeal under cl. 10 of the Letters Patent. The hearing of the Letters Patent Appeal commenced before a Division Bench on January 14, 1987 and continued for three days. On January 16, 1987, the appellant's counsel had not concluded and therefore the hearing was adjourned to January 28, 1987. On that date, after the appellant's counsel had addressed the Court for a while, the parties took time to explore the possibility of a settlement. At the resumed hearing later in the day, the appellant's father Colonel Sukhdev Singh made a statement to the effect: I make an offer that I shall personally pay ₹ 2,25,000 to the respondent Chatur Bhuj Goel by way of full and final settlement of the dispute between him and the appellant. The said amount shall be paid by a bank draft in Court on 17.3.87. In the event of failure on my part to pay the amount as stipulated on that date, the Letters Patent Appeal No. 734 of 1983 shall stand dismissed and the appellant shall have no right to file an appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce, this appeal by special leave. In support of the appeal Shri S.N. Kacker, learned counsel for the appellant, contends that the requirements of order XXIII, r. 3 of the Code are mandatory and the claim in the suit for specific performance having been settled by a lawful compromise within the meaning of r. 3, the learned Judges were not justified in directing that the appeal be placed before another bench for decision on merits. The learned counsel submits that order XXIII, r. 3 of the Code is in two parts. According to him, the words 'in writing and signed by the parties' qualify the words 'any lawful agreement or compromise' appearing in the first part and these words cannot obviously be read into the second part at all. It is urged that the first part of order XXIII, r. 3 of the Code refers to an adjustment on settlement of the claim in suit by a lawful agreement or compromise outside the Court, meaning thereby that where the parties make a statement before the Court that the dispute between them has been settled on certain terms and the statements so made form part of the proceedings of the Court, there is no legal requirement to have an agreement in writing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... less the Court, for reasons to be recorded thinks fit to grant such adjournment. Explanation. An agreement or compromise which is void or voidable under the Indian Contract Act, 1872 (9 of 1872), shall not be deemed to be lawful within the meaning of this rule. According to the grammatical construction, the word 'or' makes the two conditions disjunctive. At first blush, the argument of the learned counsel appears to be plausible but that is of no avail. In our opinion, the present case clearly falls within the first part and not the second. We find no justification to confine the applicability of the first part of order XXIII, r. 3 of the Code to a compromise effected out of Court. Under the rule prior to the amendment, the agreement com promising the suit could be written or oral and necessarily the Court had to enquire whether or not such compromise had been effected. It was open to the Court to decide the matter by taking evidence in the usual way or upon affidavits. The whole object of the amendment by adding the words 'in writing and signed by the parties' is to prevent false and frivolous pleas that a suit had been adjusted wholly or in part by any lawful ..... X X X X Extracts X X X X X X X X Extracts X X X X
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