1. This civil revision application has been placed before us as a result of reference having been made by one of us (S.N. Hussain, J).
2. The reference has been made on the point as to whether when a decree passed on the basis of compromise is challenged on the ground of fraud etc. by filing a suit, the same is maintainable or not in view of clear bar created under Order XXIII Rule 3A of the Code of Civil Procedure (hereinafter referred to as 'the Code').
3. The factual matrix of the case is that the plaintiff-opposite party filed a suit challenging the decree based on compromise recorded in Partition Suit No. 17 of 1956 on the ground of fraud. The defendant petitioner appeared in the suit and challenged the maintainability of the suit in view of the provision contained under Order XXIII Rule 3 and 3A of the Code. The trial court held that the suit is maintainable and negatived the objection raised by the defendant petitioner.
4. The said order of the court below has been challenged by the defendant petitioner in the instant civil revision application and when the matter was placed before one of us (S.N. Hussain, J), the judgments of this Court taking contrary view were placed and thereafter the matter has been referred to for decision on the aforesaid point.
5. It appears that judgments directly on the point were not referred to before one of us (S.N. Hussain, J) as a result of which reference was necessitated.
6. The point raised in this case has already been answered by a Division Bench of this Court in the case of Lagandeo Singh v. Satyadeo Singh and Ors. reported in 1992 (2) PLJR 184 and the judgment of the Supreme Court in the case of Banwari Lal v. Smt. Chando Devi (through L.R.) and Anr. reported in 1993 (1) PLJR (SC) 21.
7. Prior to amendment of the Code of Civil Procedure, there was remedy of appeal against an order passed with regard to adjustment of compromise under Order XLIII Rule (1)(m) of the Code, Now after amendment of the Code, by Code of Civil Procedure (Amendment) Act, 1976 (Act No. 104 of 1976), the same has been deleted and Order XLIII Rule 1-A , Sub-rule (2) has been inserted which provides that in an appeal against a decree passed in a suit after recording a compromise or refusing to record a compromise, it shall be open to the appellant to contest the decree on the ground that the compromise should or should not have been recorded. It is relevant to quote Order XXIII Rule 3 and 3A of the Code.
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 satisfies the plaintiff in respect of the whole or any part of the subject-matter of the suit, the Court shall order such agreement, compromise or satisfaction to be recorded, and shall pass a decree in 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].
[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.
8. According to proviso to Rule 3 of Order XXIII of the Code, if it is alleged by one party or denied by other that an adjustment or satisfaction has been; arrived at, the Court shall decide the question and the explanation provides that an agreement or compromise which is void or voidable shall not be deemed to be lawful within the meaning of Rule 3 of Order XXIII of the Code. Rule 3A of Order XXIII of the Code provides that no suit shall lie to set aside the decree on the ground that the compromise on which the decree is based was not lawful. Dealing with the said provision, a Division Bench of this Court, to which one of us (Nagendra Rai, J ) was a party, in the case of Lagandeo Singh (supra) held that all the question with regard to compromise has to be raised where the matter is in issue and not by filing a separate suit and the remedy available to the person is to prefer an appeal under Section 96 of the Code in case a challenge is made to a decree which has been recorded on the basis of a compromise. For coming to the said conclusion, this Court has taken note of the specific provision contained under Rule 1-A Sub-rule (2) of Order XLIII of the Code. In that case, it was also held that the intention of the legislature appears to be that the entire matter with regard to compromise should be set at rest in the same very suit and the question whether the compromise is vitiated or not due to undue influence, fraud, coercion, misrepresentation etc. is required to be decided in the very same suit if it is so alleged.
9. The same question was considered by the Apex Court in the case of Banwari Lal (Supra). In this connection it is relevant to mention paragraph 7 of the judgment.
By adding the proviso along with an explanation the purpose and the object of the amending Act appears to be to compel the party challenging the compromise, to question the same before the Court which had recorded the compromise in question. That Court was enjoined 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 Indian 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 3A in respect of institution of a separate suit for setting aside a decree on basis of a compromise saying.-
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.
10. The Apex Court further held in paragraph 9 of the judgment that when the decree based on compromise is challenged on the ground that the compromise was not lawful the remedy is available under Rule 1A(2) of Order 43 of the Code. It is relevant to quote paragraph 9 of the judgment.
Section 96(3) of the Code says that no appeal shall lie from a decree passed by the court with the consent of the parties. Rule 1A(2) has been introduced saying that against a decree passed in a suit after recording a compromise, it shall be open to the appellant to contest the decree on the ground that the compromise should not have been recorded. When Section 96(3) bars an appeal against decree passed with the consent of parties, it implies that such decree is valid and binding on the parties unless set aside by the procedure prescribed or available to the parties. On such remedy available was by filing the appeal under Order 43, Rule 1(m). If the order recording the compromise was set aside, there was no necessity or occasion to file an appeal against the decree. Similarly, a suit used to be filed for setting aside such decree on the ground that the decree is based on an invalid and illegal compromise not binding on the plaintiff of the second suit. But after the amendments which have been introduced, neither an appeal against the order recording the compromise nor remedy by way of filing a suit is available in cases covered by Rule 3A of Order 23. As such a right has been given under Rule 1A(2) or Order 43 to a party, who challenges the recording of the compromise, to question the validity thereof while preferring an appeal against the decree; Section 96(3) of the Code shall not be a bar to such an appeal because Section 96(3) is applicable to cases where the factum of compromise or agreement is not in dispute.
11. However, learned Counsel appearing for the opposite party has relied upon a judgment of a learned Single Judge of this Court rendered by Hon'ble Mr. Justice S.B. Sinha, as he then was, in the case of Noor Mohammad Khan and Ors. v. Mrs. Mary Khan and Ors. reported in 1993(2) PLJR 725 to show that contrary view has been taken.
12. In our view, the question arises in this case has been settled by the Supreme Court referred to above. The view taken by the learned Single Judge is not a correct view in the eye of law.
13. Coming to the merit of the case, now it is clear that the decree was passed on the basis of compromise and in view of the provision referred to above, the only remedy open to the plaintiff to challenge the said decree is to prefer an appeal under Section 96 of the Code. The suit is not maintainable.
14. Accordingly, the Civil Revision application is allowed and it is held that the suit filed by the plaintiff/ opposite party is not maintainable.