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TMI Blog2022 (2) TMI 1364X X X X Extracts X X X X X X X X Extracts X X X X ..... on which decree was passed was not lawful. It is further observed and held that an agreement or compromise which is clearly void or voidable shall not be deemed to be lawful and the bar Under Rule 3A shall be attracted if compromise on the basis of which the decree was passed was void or voidable. In this case, this Court had occasion to consider in detail Order XXIII Rule 3 as well as Rule 3A. The Trial Court was absolutely justified in rejecting the plaint on the ground that the suit for the reliefs sought challenging the Compromise Decree would not be maintainable. As held by this Court in a catena of decisions right from 1977 that a mere clever drafting would not permit the Plaintiff to make the suit maintainable which otherwise would not be maintainable and/or barred by law. It has been consistently held by this Court that if clever drafting of the plaint has created the illusion of a cause of action, the court will nip it in the bud at the earliest so that bogus litigation will end at the earlier stage. It is not in dispute that as such the Respondent No. 1-original Plaintiff has already moved an appropriate application before the concerned Court, which passed the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Defendant No. 3 in O.S. No. 537 of 2018) filed a suit being O.S. No. 1750 of 2015 as the next friend of then minor Respondent No. 1 herein seeking for declaration that revocation of Gift Deed dated 10.04.2004 as being illegal and not binding on the Plaintiff therein and also for perpetual injunction. Subsequently, a compromise was arrived at between the parties to O.S. No. 1750 of 2015 vide Compromise Deed Dated 30.12.2015. Under the Compromise, it was agreed that the Respondent No. 1 herein - original Plaintiff would be entitled to entire 35,000 sq. ft. of the constructed area, which was agreed to be allocated to the grandmother under the Development Agreement. It was further agreed as per the Compromise Decree that the Developer would be entitled to assign the development rights accrued to it under the said Development Agreement to the third parties. In furtherance of the compromise, I.A. No. 31 of 2016 Under Order XXIII Rule 3 Code of Civil Procedure came to be filed alongwith the Compromise Memo praying for passing of decree in terms thereof. The father of the Respondent No. 1 (Respondent No. 3 herein - original Defendant No. 3) filed I.A. in the said suit Under Rule 172 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and has remanded the matter to the Trial Court by observing that the effect of the provisions of Order XXXII Rules 1 to 7 Code of Civil Procedure has not been considered by the Trial court, which would have a direct bearing on the validity of the Compromise Decree dated 13.01.2016 in O.S. No. 1750 of 2015. 2.8 Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High court, the original Defendant Nos. 2 and 4-Developer and its Assignee have preferred the present appeals. 3. Shri Mukul Rohatgi, learned Senior Advocate appearing on behalf of the Appellant-Developer has vehemently submitted that in the facts and circumstances of the case, the High Court has committed a grave error in quashing and setting aside the order passed by the Trial court rejecting the plaint in exercise of powers Under Order VII Rule 11 Code of Civil Procedure holding that in view of Order XXIII Rule 3A Code of Civil Procedure, no independent suit would be maintainable against the Compromise Decree. 3.1. It is submitted that Order XXIII Rule 3 Code of Civil Procedure provides for compromise of suit. It is submitted that by way of amendment in 1976 made by Act No. 104 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ged Under Order XXIII Rule 3A of Code of Civil Procedure, which in other words is mere clever drafting. It is submitted that as held by this Court in a catena of decisions by mere clever drafting of the plaint, the Plaintiff cannot be permitted to maintain the suit, which otherwise would not be maintainable and/or barred by any law. It is further observed and held by this Court that if clever drafting of the plaint has created the illusion of a cause of action, the court will nip it in the bud at the earliest so that bogus litigation will end at the earlier stage. Reliance is placed on the decisions of this Court in the case of T. Arivandandam v. T.V. Satyapal and Anr., (1977) 4 SCC 467; Madanuri Sri Rama Chandra Murthy v. Syed Jalal, (2017) 13 SCC 174; Canara Bank v. P. Selathal and Ors., (2020) 13 SCC 143; and Raghwendra Sharan Singh v. Ram Prasanna Singh, (2020) 16 SCC 601. 3.5. Shri Rohatgi, learned Senior Advocate has further submitted that even otherwise the impugned judgment and order passed by the High Court is unsustainable. It is submitted that in the entire judgment, there is no discussion by the High Court on the maintainability of the suit and/or any discussion on O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned Senior Advocate appearing on behalf of the Respondents-original Plaintiff(s) is not disputing that the Plaintiff has already filed an application Under Order XXIII Rule 3A before the same Court, which passed the Compromise Decree. He is also not in a position to dispute that in the said application, the Plaintiff can very well make submission on the validity of the Compromise Decree on whatever grounds, which may be available to him including non-compliance of Order XXXII Rule 7 Code of Civil Procedure. 5. We have heard the learned Counsel appearing on behalf of the respective parties at length. 6. At the outset, it is required to be noted that in the present case, the Trial Court rejected the plaint of O.S. No. 537 of 2018 in exercise of powers Under Order VII Rule 11 Code of Civil Procedure on the ground that the said suit would not be maintainable in view of specific bar Under Order XXIII Rule 3A Code of Civil Procedure. The High Court by the impugned judgment and order has set aside the said order and has remanded the matter to the Trial Court by observing that while passing the order rejecting the plaint, the Trial Court had not considered the provisions of Order X ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved and held that an agreement or compromise which is clearly void or voidable shall not be deemed to be lawful and the bar Under Rule 3A shall be attracted if compromise on the basis of which the decree was passed was void or voidable. In this case, this Court had occasion to consider in detail Order XXIII Rule 3 as well as Rule 3A. The earlier decisions of this Court have also been dealt with by this Court in paragraphs 53 to 57 as under: 53. Order 23 Rule 3 as well as Rule 3-A came for consideration before this Court in large number of cases and we need to refer to a few of them to find out the ratio of judgments of this Court in context of Rule 3 and Rule 3-A. In Banwari Lal v. Chando Devi, (1993) 1 SCC 581, this Court considered Rule 3 as well as Rule 3-A of Order 23. This Court held that the object of the Amendment Act, 1976 is to compel the party challenging the compromise to question the court which has recorded the compromise. In paras 6 and 7, the following was laid down: (SCC pp. 584-85) 6. The experience of the courts has been that on many occasions parties having filed petitions of compromise on basis of which decrees are prepared, later for one reason or other c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to decide the controversy whether the parties have arrived at an adjustment in a lawful manner. The Explanation made it clear that an agreement or a compromise which is void or voidable under the Contract Act shall not be deemed to be lawful within the meaning of the said Rule. Having introduced the proviso along with the Explanation in Rule 3 in order to avoid multiplicity of suit and prolonged litigation, a specific bar was prescribed by Rule 3-A in respect of institution of a separate suit for setting aside a decree on the basis of a compromise saying: 3-A. Bar to suit.--No suit shall lie to set aside a decree on the ground that the compromise on which the decree is based was not lawful. 54. The next judgment to be noted is Pushpa Devi Bhagat v. Rajinder Singh, (2006) 5 SCC 566, R.V. Raveendran, J. speaking for the Court noted the provisions of Order 23 Rule 3 and Rule 3-A and recorded his conclusions in para 17 in the following words: (SCC p. 576) 17. The position that emerges from the amended provisions of Order 23 can be summed up thus: (i) No appeal is maintainable against a consent decree having regard to the specific bar contained in Section 96(3) Code of Civ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the parties, the Court before whom such question is raised, shall decide the same. What is important is that in terms of Explanation to Order 23 Rule 3, the agreement or compromise shall not be deemed to be lawful within the meaning of the said Rule if the same is void or voidable under the Contract Act, 1872. It follows that in every case where the question arises whether or not there has been a lawful agreement or compromise in writing and signed by the parties, the question whether the agreement or compromise is lawful has to be determined by the court concerned. What is lawful will in turn depend upon whether the allegations suggest any infirmity in the compromise and the decree that would make the same void or voidable under the Contract Act. More importantly, Order 23 Rule 3-A clearly bars a suit to set aside a decree on the ground that the compromise on which the decree is based was not lawful. This implies that no sooner a question relating to lawfulness of the agreement or compromise is raised before the court that passed the decree on the basis of any such agreement or compromise, it is that court and that court alone who can examine and determine that question. The cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of further litigation should never be the basis of a compromise between the parties. Rule 3-A Order 23 Code of Civil Procedure put a specific bar that no suit shall lie to set aside a decree on the ground that the compromise on which the decree is based was not lawful. The scheme of Order 23 Rule 3 Code of Civil Procedure is to avoid multiplicity of litigation and permit parties to amicably come to a settlement which is lawful, is in writing and a voluntary act on the part of the parties. The court can be instrumental in having an agreed compromise effected and finality attached to the same. The court should never be party to imposition of a compromise upon an unwilling party, still open to be questioned on an application under the proviso to Order 23 Rule 3 Code of Civil Procedure before the court. That thereafter it is specifically observed and held that a party to a consent decree based on a compromise to challenge the compromise decree on the ground that the decree was not lawful i.e., it was void or voidable has to approach the same court, which recorded the compromise and a separate suit challenging the consent decree has been held to be not maintainable. 9. In view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fting so as to avoid mention of those circumstances, by which the suit is barred by law of limitation. 11. If we consider the reliefs of declaration of title, recovery of possession, cancellation of revocation of Gift Deed, declaration for DGPA and Deed of Assignment-cum-DGPA, the said reliefs can be granted only if the Compromise Decree dated 13.01.2016 passed in O.S. No. 1750 of 2015 is set aside. Therefore, by asking such multiple reliefs, the Plaintiff by clever drafting wants to get his suit maintainable, which otherwise would not be maintainable questioning the Compromise Decree. All the aforesaid reliefs were subject matter of earlier suits and thereafter also subject matter of O.S. No. 1750 of 2015 in which the Compromise Decree has been passed. Therefore, it is rightly held by the Trial Court that the suit in the present form and for the reliefs sought would be barred Under Order XXIII Rule 3A Code of Civil Procedure and therefore the Trial Court rightly rejected the plaint in exercise of powers Under Order VII Rule 11(d) of the Code of Civil Procedure. The High Court has erred in setting aside the said order by entering into the merits of the validity of the Compromise ..... X X X X Extracts X X X X X X X X Extracts X X X X
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