S.B. Sinha
The petitioner is a multi service operator. The respondent is a Content Aggregator. They had entered into an agreement in terms whereof the respondent was to supply signals of the channels of various broadcasters. The first of such agreement was entered into on or about 5.11.2003, and the last of them being for the period 2009-10, a copy whereof has allegedly not been served on the petitioner.
The petitioner has filed this petition claiming inter alia for the following reliefs :-
“(i) Issue direction to the respondent no.1 and 2 not to disconnect the signals of petitioner network in view of illegal public notice dated 18.2.2010 and direct them to enter into fresh validation agreement for year 2010-11 on the basis of actual number of subscribers disclosing the terms of agreement and with entire bouquet in respondent network.
(ii) Issue direction to the respondent no.1 and 2 not to illegally overcharge the subscription rates increasing it indiscriminately without following norms laid down by law and direct them to sign fresh Affiliation/ validation agreement substantially reducing the subscription charges of the petitioner network considering presence of competing LCO established under conspiracy by the respondents in the vicinity of petitioner network and
(iii) Issue direction to the respondent no.1 to produce copies of affiliation/ validation agreements from 2005-06 to 2009-10 and to produce copies of statements of accounts for the period 2005-06, 2006-07, 2007-08, 2008-99, 2009-10 so that payments made to respondent by the petitioner may be clarified and undue loss caused to the petitioner may be determined; and
(iv) Restrain the respondent no.3 from illegally interfering with petitioner cable lines and not to enter into unreasonable price war with the petitioner causing serious loss to the interest of small cable operators like petitioner.
(v) Issue direction to the respondent no.1 to give explanations on letters attached to the petitioner those were written to them and to explain the reasons for not answering the representations and for not reducing the subscription/ royalty despite clear proof of loss of subscriber base.
(vi) Pass such other order as this Hon’ble Tribunal may deem fit and proper in the interest of justice.”
During pendency of this petition, the parties with a view to resolve their disputes and differences entered into a Memorandum of Understanding on or about 19.8.2010, the relevant portions whereof read as under :-
“1. Parties have held a Meeting on the 19th of August 2010 whereas Mr.Prashant Kumar Jha, Director Sales and Mr.Asifur Rehman, Area Manager have attended the Meeting on behalf of MSMD and Mr.Mahendra Chourasia and Mr.Bhupendra Chourasia have attended the Meeting on behalf of Jeet Enterprises.
2. Both parties have unanimously and mutually agreed that this meeting was called to settle all the issues/ disputes between the parties pending before the Hon’ble TDSAT and to finalize the commercial terms for the execution of the commercial agreement/ arrangement between the Parties for the period starting from July 01, 2010 to December 31, 2010 (“the Term”)
3. Jeet Enterprises agrees to enter into an affiliation agreement (s) with MSMD and has agreed to pay monthly subscription fees of Rs.17,400/- (Rs. Seventeen thousand four hundred only) from July 01, 2010. Jeet Enterprises has also proposed that it agrees to be unconditionally bound to pay the subscription fees and applicable taxes to MSMD within the agreed timeframe, whether or not it is able to recover/ collects monies/ subscription fees from its system/ subscriber.
4. Jeet Enterprises agrees to clear its old outstanding subscription fees of Rs.30,010/- at the time of the signing of the agreement.
5. Consequent to the signing of this MOU both the Parties unconditionally agree to immediately withdraw the respective petitions filed against each other before the Hon’ble TDSAT and thereby relinquishes all the claims raised therein and all proceedings arising therefore.
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9. Mr.Bhupendra Chourasia of Jeet Enterprises, acknowledges that this meeting has been concluded amicably to his satisfaction and that now both Parties have resolved all pending issues amicably and that no further disputes exist on this date and that all issues now stand settled between both Parties. Both Parties acknowledge the same.”
Indisputably the said MOU was signed by Mr.Bhupendra Chaurasia and witnessed by his brother Mr.Mahendra Chaurasia; whereas on behalf of the respondent herein one Mr.Prashant Kr. Jha signed the said MOU and witnessed by one Mr. Asifur Rehman. We may place on record that the petitioner after completion of the pleadings has filed an affidavit affirmed by Mr.Mahendra Chaurasia alleging that he was the Proprietor of the petitioner firm.
The petitioner, however, before us on 10.9.2010, when a submission was made by the learned counsel appearing on behalf of the respondent that a Memorandum of Settlement has been arrived at, contended that the same was not binding on it as the petitioner could not understand the terms thereof at that point of time and as such is not agreeable thereto.
This Tribunal in view of the aforementioned statements made by the learned counsel for the petitioner, by an order dated 10.9.2010 directed as under :-
“…..Keeping in view the fact that the respondent alleges and the petitioner denies that any amicable settlement to its satisfaction has been arrived at, this Tribunal is inclined to decide the question in terms of Order 23 Rule 3 of the CPC. As the proprietor of the petitioner firm is present before us, we intend to examine him on that issue.
The petitioner files evidence by way of affidavit of its witness. Let the affidavit be taken on record. Mr. Mahendra Chaurasia has been examined in chief and cross examined.
For examination in chief and cross examination of Mr. Bhupendra Chaurasia as also the witness on behalf of the respondent and for arguments, put up the matter on 20.9.2010.
If this Tribunal thinks that merit of the matter need be gone into, the learned counsel for the respondent has cross examined the witness of the petitioner.”
However, on 20.9.2010, the learned counsel appearing on behalf of the petitioner stated that it would not be necessary to examine Mr.Bhupendra Chaurasia, whereupon the respondent examined Mr. Asifur Rehman and Mr.Pradeep Kr. Jha. They were examined and cross-examined on the same date.
The question, which would arise for consideration, is as to whether in the facts and circumstances of this case the said Memorandum of Understanding is binding on the petitioner.
Order 23 Rule 3 of the Code of Civil Procedure, 1908 (in short `the CPC’) and the proviso appended thereto read as under :-
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3. Compromise of suit - Where it is proved to the satisfaction of the Court that a suit has been adjusted wholly or in part by any lawful agreement or compromise [in writing and signed by the parties] or where the defendant satisfied the plaintiff in respect of the whole or any part of the subject-matter of the suit, the Court shall order such agreement, compromise satisfaction to be recorded, and shall pass a decree is accordance therewith [so far as it relates to the parties to the suit, whether or not the subject-matter of the agreement, compromise or satisfaction is the same as the subject-matter of the suit:]
1 [Provided that where it is alleged by one party and denied by the other that an adjustment or satisfaction has been arrived at, the Court shall decide the question; but no adjournment shall be granted for the purpose of deciding the question, unless 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;]
[3A. 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.
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The said provision was amended by reason of CPC Amendment Act, 1976 being Act No.104 of 1976, in terms whereof, it has been made imperative that adjustment by way of lawful agreement or compromise must be in writing and signed by the parties.
What would constitute a lawful agreement has been explained by the `explanation’ appended to Order XXIII Rule 3 of the Code to mean an agreement or compromise which is void or voidable under the Indian Contract Act, 1872, to be deemed not to be lawful within the meaning of the said Rule.
The proviso appended to the said provision is self-explanatory. In terms of the proviso appended to the said Rule, what is absolutely necessary is the satisfaction of the Court that the agreement is lawful and has been entered into by both the parties thereto.
Indisputably, it is the duty of a Court to come to a finding as to whether a compromise has been arrived at or not, where it is alleged by one of the parties that the compromise is vitiated by illegality, fraud, undue influence and misrepresentation etc. upon making an investigation in this behalf.
The stand of the petitioner, however, had been different at different point of time. As noticed hereinbefore, on 10.9.2010, the only submission made by the learned counsel for the petitioner was that the petitioner in fact had not understood the terms of the MOU on the day on which the same has been entered into. Mr.Mahendra Chaurasia, who although was present at the time, when the said MOU was executed and although claimed himself to be the proprietor of the petitioner -concern, did not execute the agreement, and merely witnessed the execution thereof. In that view of the matter although ordinarily a witness to a document is not presumed to have gone into the contents thereof, in the facts and circumstances of this case such a presumption cannot be drawn in his favour. We may notice that the said witness in his examination-in-chief and cross-examination took different stands and furthermore deviated from the stand taken by his learned Advocate before us.
The execution of the document is not in dispute. The said witness, however, contended as under :-
“…This MOU is wrong as no decoder was supplied to me from the last two years.
I was being forced to hand over my concern to one MSO by the name of DIGICOM.
In 2008, they forced me to pay a sum of Rs.60,000/- by way of outstanding. But no statement of account was furnished to me.
No statement of accounts was given to me for the period of 2006 to 2010.
Although all payments were given by me through Demand Draft.
So far as the MOU is concerned Mr.Jha told me that I have to pay a sum of Rs.15,000/- p.m. from July, 2009. But charges were levied at the rate of Rs.27,000/- p.m. from July, 2009 till date.
This MOU is to remain valid only for four months. But I apprehend that after four months I will be troubled again by the respondent…..”
The last paragraph of his deposition is crucial inasmuch as he has admitted and acknowledged that the period of the said MOU was to be four months only.
In his cross-examination, however, he made out a third story. According to him, the settlement was written in three hand written paragraphs only but after three hours a different draft had been handed over to him and DW-2 Mr.Jha, Regional Manager of the respondent forced him to sign thereupon.
There was no pleading of any undue influence or coercion by Mr.Jha as alleged by the said witness. He accepted that a sum of Rs.12,000/- was paid by a demand draft dated 25.8.2010, pursuant to the said MOU. He however, changed the said statement at the next moment to say that whatever payments he had made, were paid by way of subscription fee but he did not resile from his earlier statement that the payments had been made in terms of the MOU.
He stated as under in his cross-examination:-
“…Q : Will it be correct to say after this MOU was executed by the parties; no letter was written by you or your brother to the respondent.
A : Yes
Q : I put it you that you have made the said payment of Rs.12,000/- as against the outstanding of Rs.30,000/- that you had agreed to pay as per the MOU.
A : I deny.
Q : I put it to you that you have deposed falsely.
A : I deny.
Questions by the Tribunal
Q : Does your younger brother know English ?
A : No.
Q : Would you examine your younger brother ?
A : Yes.”
We have noticed heretobefore that Mr.Bhupendra Chaurasia, who had signed for and on behalf of the petitioner concern for reasons best known to the petitioner did not examine himself.
The respondent examined Mr. Asifur Rehman as also Mr.Prashant Kr. Jha.
We may notice some statements from the cross-examination of Mr.Rehman:-
“…. It is correct to state that the petitioner at the time of signing of the MOU did not request the respondent to reduce the outstanding of Rs.30,010/-
Q : Why did you enter into an agreement for a period of six months from July, 2010 to December, 2010?
A : As per the new policy of the company the current subscription agreement we are signing with the affiliates is till 31st December, 2010.
Mr.Bhupendra Chaurasia is well conversant with English.
Volunteers : As Mr.Bhupendra Chaurasia was accompanied with Mr.Mahendra Chaurasia who is his elder brother and he is a merchant Navy Officer. Before Signing the MOU both of them together read and understood the same.
It is incorrect to state that after completion of talks at the time of signing of the MOU, a sheet of paper containing three paragraphs was prepared and got signed by Mr.Mahendra Chaurasia and Mr.Bhupendrda Chaurasia.
Volunteer : All legal documents are drafted by our legal persons…”
Sofar as Mr.Jha is concerned, he in his cross-examination stated as under :-
“Q : Is it correct that monthly subscription fee of Rs.15,000/- was agreed during talks with respect to present MOU ?
A : No.
Q : Is it correct that issue of supplying of decoders was actively discussed during the discussion and this was agreed that this term of supplying decoders will be included in the present MOU
A : No.
Q : Had you supplied the copy of MOU to Mr.Mahendra Chaurasia and Mr.Bhupendra Chaurasia after signing ?
A : Yes.
Q. Is it correct that you have changed the pages and the contents after signing of the MOU ?
A : No.
Q : It is incorrect to suggest that the MOU on record is different from the one signed by Mr.Bhupendra Chaurasia, Mr.Mahendra Chaurasia, Mr.Asifur Rehman and myself.
It is incorrect to state that the term of agreement as agreed by the parties as per the MOU was to be from March, 2010 to February, 2011.
It is incorrect to suggest that I have deposed falsely.”
It is thus evident that the suggestion given to the DW-1 himself was that `no’ request was made to reduce the amount of the outstanding of Rs.30,010/-.
The fact that there was some outstanding, thus, was accepted. The said witness furthermore explained the reason as to why the said MOU was executed for a period of 6 months only. It was furthermore explained that Mr.Mahendra Chaurasia was a Merchant Navy Officer and therefore, he must be knowing English. Mr.Jha also in his evidence categorically stated as to what sort of discussions had preceded the signing of the agreement. He furthermore denied and disputed that the terms of the agreements was from March 2010 to February 2011.
Mr.Mishra, learned counsel appearing on behalf of the petitioner would submit:-
(i) Having regard to the fact that Mr.Mahendra Chaurasia is the proprietor of the petitioner concern and he having not signed the Minutes of Meetings, the same is not binding on him.
(ii) In the facts and circumstances of the case, the respondent must be held to have not been able to satisfy this Tribunal so far as the legality of the said MOU is concerned.
(iii) Having regard to the prayers made in the petition and the Minutes of Meeting having been entered into in respect of different subject matter, the same must be held to be wholly illegal and unlawful as the entire dispute is not covered thereby.
(iv) The dispute between the parties being relating to subscriber base and the MOU being not related thereto, the same cannot be said to have come to an end.
(v) Sofar as the lawfulness of the agreement is concerned, from the cross-examination of the witnesses examined on behalf of the respondents, it would appear that all the pages of the MOU were not signed.
(vi) Pages 2 and 3 of the MOU had been changed.
(vii) The original draft had been amended.
(viii) As the petitioners have been sitting in the office of the respondent it may be held that there was some undue influence.
(ix) The MOU is hit by the doctrine of non est factum.
(x) Although the petitioner has signed the document, there was absolutely no reason as to why the hand written document had not been produced.
Mr.Harsh Kaushik, learned counsel appearing on behalf of the respondent, on the other hand, urged:-
(i) Having regard to the provisions contained in Sections 91 and 92 of the Evidence Act, no oral evidence is admissible for variation of the terms of the contract.
(ii) The proprietor of the petitioner -concern having made payments in terms of the MOU, the respondent had the authority to appropriate the same towards the arrears in terms of Sections 60 and 61 of the Indian Contracts Act.
(iii) The petitioner having not raised any pleading of undue influence and/or the lawfulness or otherwise of the agreement, the oral evidence adduced in this behalf must be held to be inadmissible.
(iv) The brother of Mr.Mahendra Chaurasia had signed on various documents claiming/ purporting to claim the proprietorship of the petitioner -concern and/or otherwise authorized to represent it as would appear from the letter dated 30.9.2009 issued by the petitioner, as also letters dated 22.2.2010, 24.2.2010 and 5.4.2010 and in that view of the matter, it is incorrect to contend that Mr.Bhupendra Chaurasia could not have represented the petitioner -concern.
(v) No pleading with regard to undue influence having been raised, the evidence of Mr.Mahendra Chaurasia must be held to be by way of an after thought.
(vi) The petitioner having not issued any letter protesting the correctness or otherwise of the MOU, it is estopped and precluded from doing so.
(vii) Although, the petitioner has denied or disputed the receipt of statement of account and/or validation bond, having itself annexed the copies thereof, no credence can be given to the said statement.
(viii) The MOU having been entered into on 19.8.2010, and the petitioner having deposited a sum of Rs.12,000/- on 25.8.2010, by way of demand draft and a further sum of Rs.15,000/- each on 28.9.2010 and 31.10.2010; it must be held that the same in fact had been entered into by the parties bonafide and, thus, it cannot now resile therefrom as it has acted thereupon.
(ix) The petitioner having issued a letter acknowledging payment and the respondent also having issued the letter dated 16.9.2010 and no response thereto having been sent to the respondent by the petitioner, it must be held to be bound by its conduct.
(x) The petitioner having claimed to have only 100 subscribers and a sum of Rs.17,400/- + 10.3% tax having been agreed to be payable under the MOU, the same must be found to be near about the agreed amount as keeping in view the rate for supply of signals in respect of various channels of which the respondent is a content aggregator, namely, a sum of Rs.17065 + 10.63% of tax, the total amount comes to about Rs.18,825/-.
In a case of this nature, the past controversy between the parties assumes importance so as to understand the subject matter of the compromise as well as for the purpose of its legality.
It has to be borne in mind that the petitioner contended:-
(i) The Respondent had been charging higher subscription fees.
(ii) A copy of the Validation Agreement had not been supplied.
(iii) The respondent obtained signature of the petitioner in a blank copy of the Agreement.
(iv) Although, various letters were sent for supply of decoders, the same had not been complied with.
(v) The respondents have set out all the terms unilaterally.
(vi) In any event the copy of the MOU having not been given, no reliance can be placed thereupon.
The petitioner in its petition contended that it had a subscriber base of 100 besides 5 cable operators. Admittedly earlier, the petitioner had a subscriber base of 824 and eight cable operators were attached to its network.
However, in ground `k’ of the petition, the petitioner contended that its subscriber base has been reduced to merely 20% of its earlier business i.e. 20% of the 824 subscribers which would come to about 165 subscribers.
The signature on the MOU is not in dispute. As noticed by us heretobefore, the fact that Mr.Bhupendra Chaurasia had put his signature for and on behalf of Jeet Enterprises is also not in dispute.
The burden of proof, thus, was on the petitioner to show that the said MOU had either not been entered into and/or the same is not lawful.
The petitioner has taken various stands before us. According to it, the terms of the MOU are burdensome. It has also pleaded coercion and undue influence by the respondent and in particular by Mr.Prashant Jha in support of which statement neither any pleading has been raised nor Mr.Mahendra Chaurasia stated anything in his examination-in-chief.
The Supreme Court of India in Afsar Sheikh and Anr. vs. Soleman Bibi and Ors. reported in (1976) 2 SCC 142 stated the law thus :-
“20 - It is well settled that a question whether a person was in a position to dominate the will of another and procured a certain deed by undue influence, is a question of fact, and a finding thereon is a finding of fact and if arrived at fairly, in accordance with the procedure prescribed, is not liable to be reopened in second appeal (Satgur Prasad v. Har Narain Das AIR 1932 PC 89; Ladli Parshad v. Karnal Distillery Company Ltd. (1964) 1 SCR 270 .
21 - Bearing in mind the provisions of Section 103 read with Section 100(1) the further question to be considered is: Was the finding of the first appellate Court on the point of undue influence vitiated by an illegality, omission, error or defect such as is referred to in Section 100(1)? For reasons to be stated presently, the answer to this question must be in the negative.
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26 - In Subhas Chandra's case (supra), this Court quoted with approval the observations of the Privy Council in Raghunath Prasad v. Sarju Prasad AIR 1924 PC 60 which expounded three stages for consideration of a case of undue influence. It was pointed out that the first thing to be considered is, whether the plaintiff or the party seeking relief on the ground of undue influence has proved that the relations between the parties to each other are such that one is in a position to dominate the will of the other. Upto this point, 'influence' alone has been made out. Once that position is substantiated, the second stage has been reached - namely, the issue whether the transaction has been induced by undue influence. That is to say, it is not sufficient for the person seeking the relief to show that the relations of the parties have been such that the one naturally relied upon the other for advice, and the other was in a position to dominate the will of the first in giving it. "More than mere influence must be proved so as to render influence in the language of the law, 'undue' ", (Poosathurai v. Kappanna Chettiar AIR 1920 PC 65). Upon a determination of the issue at the second stage, a third point emerges, which is of the onus probandi." If the transaction appears to be unconscionable, then the burden of proving that it was not induced by undue influence is to lie upon the person who was in a position to dominate the will of the other.
27 - Error is almost sure to arise if the order of these propositions be changed. The unconscionableness of the bargain is not the first thing to be considered. The first thing to be considered is the relations of the parties. Were they such as to put one in a position to dominate the will of the other
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31 - In the context of the first-stage consideration, the District Judge found on the basis of the evidence on record, that although the plaintiff was an old man- and he had intentionally, far overstated his age- yet he was quite fit to look after his affairs. On this point, the District Judge accepted the version of the plaintiffs' own witness (PW 7) which was to the effect, that the plaintiff himself yokes the bullocks, and unaided by anybody else, ploughs his lands. In the face of such evidence, the District Judge was right in holding that Ebad plaintiff, though old, was physically fit to carry on his affairs. There was no evidence to show that the mental capacity of the donor was temporarily or permanently affected or enfeebled by old age or other cause, so that he could not understand the nature of deed or the effect and consequences of its execution. The mere fact that he was illiterate and old, was no proof of such mental incapacity. None of the circumstances mentioned in Sub-section (2) of Section 16, had been proved from which an inference could be drawn that the donee was in a position to dominate the will of the donor.”
Mr.Bhupendra Chaurasia in a number of documents had represented himself to be the owner of the petitioner concern.
He in the letter dated 30.9.2009, addressed to the Officer Incharge of PS Ganj Basoda lodged a FIR as a representative of the petitioner –concern, stating as under:-
“…….. That I Bhupendra Chaurasia of Meet Cable Vision and Sanjay Yadav made this written complaint in the Police Station Ganj Basoda today on 30th September, 2009 against above said three persons and other two persons who have given threats. Hence, it is requested to Thana Incharge ji that kindly take penal action against above said three and other two persons holding independent enquiry so that no dispute may be created and law and order of Basoda town may be maintained and we can serve the people of town.”
In a letter dated 22.2.2010 addressed to Mr.Prashant Jha, he stated:-
“……..I have sent the demand draft for the month of December on 18th December 2009 through Speed Post at the address of “M/s Z- Vision, Distributor – MSM Discovery, IInd Floor -11, Metro Plaza, Bhopal” but your distributor has under conspiracy with object to close the signals returned back the Speed Post, hence I had to pay the DD to the Distributor going personally at Bhopal.
Today on 18th February 2010 according to News Paper “Raj Express dated 18th February 2010” under the Public Notice for disconnection name of my network Jeet Enterprises is also shown among “non payment of outstanding dues”. It is, therefore, requested that kindly inform me how much amount I have to pay till this month so that channels of One Alliance Group may run on our network uninterrupted.
From the month of March in the year 2009 since the days of fresh agreement with me with 40% growth I am continuously making request for providing boxes of “Aaj Tax, Nicklodeon and Set Pix” but till date boxes are not made available to me. Hence for the said boxes I have already deposited amount of Rs.3000/- through DD in your office in month of November 2009. It is therefore, requested that kindly settle my above said grievances.
Thanking you,
Applicant
Sd/-
Bhupendra Chaurasia
Jeet Enterprises”
In a letter addressed to the District Excise Officer being dated 24.2.2010, he signed on behalf of the Jeet Cable Vision.
Yet again in a letter addressed to the SHO, Police Station Ganj Basoda dated 5.4.2010, he signed on behalf of the Jeet Cable Vision.
We would, however, assume that Mr.Mahendra Chaurasia was the Proprietor. Would that mean that the MOU is not binding on the petitioner? The answer to the question aforementioned must be rendered in the negative. The proprietor of the petitioner was present during discussions. He was accompanied by his brother. For one reason or the other, he allowed his brother to sign on behalf of the petitioner concern. He, therefore, must in the peculiar facts of the case be held to have made out a representation that it was his brother who was authorized to sign on behalf of the petitioner concern.
It is not a case where Mr.Mahendra Chaurasia acted innocently. He came to this Tribunal fully prepared to raise a contention that the said MOU was not binding on it. No application in support thereof, however, was filed.
Only when learned counsel appearing on behalf of the respondent raised a contention that a MOU had been executed between the parties, the learned counsel for the petitioner raised the contention that the terms and conditions thereof would cause hardship to his client.
The nature of enquiry required to be made by a Court of law in terms of Order XXIII Rule 3 CPC read with the proviso appended thereto is limited and in terms thereof this Tribunal is concerned either with the lawfulness of the agreement and/or the genuineness thereof. It is true that a satisfaction is required to be arrived at. However, from a bare perusal of said provision, it would be evident that the same is in two parts. The first part relates to adjustment of a claim or an agreement or a settlement and the second part relates to the satisfaction of an Order passed by a Court of law.
Whereas in the case of applicability of first part of Order XXIII Rule 3 CPC, an agreement in writing is imperative, the second part relates to the satisfaction of the Tribunal wherefor the Order need not be in writing. Evidence may also be adduced for the said purposes. It has been so held by the Supreme Court of India in Gurpreet Singh vs.Chaturbhuj Goel 1988 Vol 2 SCC 270 in the following terms :-
“10. Under Rule 3 as it now stands, when a claim in suit has been adjusted wholly or in part by any lawful agreement or compromise, the compromise must be in writing and signed by the parties and there must be a completed agreement between them. To constitute an adjustment, the agreement or compromise must itself be capable of being embodied in a decree. When the parties enter into a compromise during the hearing of a suit or appeal, there is no reason why the requirement that the compromise should be reduced in writing in the form of an instrument signed by the parties should be dispensed with. The Court must therefore insist upon the parties to reduce the terms into writing.
11. In our considered opinion, the view to the contrary expressed by the High Court in Manohar Lal and Anr. v. Surjan Singh and Anr. [1983] Pun LJ 402 that the first part relates to a lawful agreement or compromise arrived at by the parties out of Court, does not seem to be correct. Sandhawalia, CJ speaking for himself and' Tewatia, J. observes that the word 'or' makes the two parts disjunctive and they visualise two distinct and separate classes of compromise. According to the learned Judges, the first part relates to a lawful agreement or compromise arrived at by the parties out of Court, while the second is applicable where the defendant satisfies the plaintiff in respect of the whole or any part of the subject matter of the suit. Such a restricted construction is not warranted by the language used in Rule 3. The word 'satisfies' denotes satisfaction of the claim of the plaintiff wholly or in part, and for this there need not he an agreement in writing signed by the parties. It is open to the defendant to prove such satisfaction by the production of a receipt or payment through bank or otherwise. The satisfaction of the claim could also be established by tendering of evidence. It is for the Court to decide the question upon taking evidence or by affidavits as to whether there has in fact been such satisfaction of the claim and pass a decree in accordance with Order XXIII, Rule 3 of the Code.
12. In any event, the present case clearly does not come within the ambit of the second part of Order XXIII, Rule 3 of the Code. Under the terms of the proposed compromise, the appellant was required to pay Rs. 2,25,000 by a bank draft on March 17, 1987, but the fact remains that the respondent before the due date resiled from the proposed compromise saying that it was detrimental to his interest. That being so, the appellant could only fall back on the first part. But in the absence of an agreement in writing, the learned Judges had no other alternative but to direct that the appeal be listed for hearing on merits.”
Moreover, as noticed heretobefore the petitioner itself has acted upon the said MOU. It had made three payments on three different dates. It had made payment by a demand draft.
The respondent has drawn our attention to the fact that the demand draft was received by it. The petitioner accepted the suggestion that the said payment has been made in terms of the MOU, but in the next sentence he resiled therefrom to say that it was by way of payment of the subscription fee.
We may notice that the respondent by its letter dated 16.9.2010 stated as under:-
“Sub : Payment of Outstanding as per MOU
dated 25.08.2010
Dear Sir,
In pursuant to the MOU signed by you with MSM Discovery Pvt. Ltd. dated 25.8.2010, a payment of Rs.12,000/- has been made by you vide cheque/ dd no.228297 dated 25.08.2010, against an overall outstanding of Rs.30,000/-. Therefore, it is requested that the balance payment of Rs.18,000/- should be made at the earliest. Besides the subscription fee payment is also to be made in accordance with the MOU dated 25.08.2010…….”
The petitioner neither responded to the said letter nor in fact made payment of the subscription fee for the months of July, August and September amounting to a sum of Rs.57,577/- which the respondent demanded of it by its letter dated 7.10.2010.
Once the agreement has been acted upon, in the opinion of this Tribunal, the MOU must be held to be binding on the petitioner. This Tribunal in ESPN Software India Pvt.Ltd.,Gurgaon vs/ M/s. Sai Darshan Media Network Pvt. Ltd., Petition No. 134 (C)/2008 held as under:-
“24. Mr. Handoo’s contention that the statement of account filed by the petitioner, is not supported by any document, need not be determined in view of our findings aforementioned. In a situation of this nature, the principles of ‘estoppel by conduct’ can also be invoked. The petitioner, thus, having accepted the terms of settlement and having acted thereupon is estopped and precluded from contending that no settlement had been arrived at.
25. It, therefore, can safely be presumed that the reduction of subscriber base took place in terms of the said settlement and upon further negotiation after the said letter dated 30.6.2007 was received by the petitioner.”
In a case of this nature, we are not concerned with the onerous nature of the terms and conditions laid down in the MOU. The same might not have subsequently been found to be acceptable to the petitioner. However, if pursuant to the negotiations held by and between the parties, the petitioner had signed the MOU, it cannot complain of the burdensome nature of it at a later stage. If it entered into a compromise it did so with its eyes wide open. Nobody forced it to do so. As the matter has been pending before this Tribunal and keeping in view the fact that the petitioner had approached this Tribunal earlier, it is difficult to accept that it would succumb to the alleged pressure of the respondent so easily. We have noticed heretobefore that the petitioner had earlier even lodged FIRs. Even in relation to the payment of the entertainment tax, it had taken up the matter with the respondent concern. All the letters were written in English. The petitioner does not deny or dispute that Mr.Mahendra Chaurasia was an officer of Merchant Navy. It is therefore, difficult for us to accept that both the brothers would not be knowing English.
We are, however, having regard to the provisions contained in Order XXIII Rule 3 CPC as also of the `Proviso’ and the `Explanation’ appended thereto are not in a position to agree with the contention of Mr.Harsh Kaushik that Sections 91 and 92 of the Indian Evidence act will have any application in a case of this nature.
For the reasons aforementioned, we are of the opinion that the settlement entered into by and between the parties hereto is lawful and is not vitiated by coercion, undue influence or fraud.
For the reasons aforementioned, we accept the settlement on record and dispose of the petition on the terms thereof.
In the facts and circumstances of the case, the petitioner shall pay and bear the costs of the respondents. Advocates fee assessed at Rs.10,000/-.