Judgment:
S.K. Gangele, J.
1. The appellant has filed this appeal under Order 43 Rule 1(u) of the Code of Civil Procedure 1908, against the Judgment and decree dated 29-9-2006, passed by the II Additional District Judge (FastTrack), Sheopur, in Civil Miscellaneous Appeal No. 31-A/2006, quashing the compromise order dated 10-9-2000 passed by the Lok Adalat in Case No. 1/2000 in Civil Suit No. 186-A/1998.
2. The plaintiffs Kashmir Singh, Ummed Singh, Sarvan Kumar Singh and Ramkrishna Singh filed a suit for declaration and permanent injunction. In the aforesaid suit initially the State of M.P. Tahsildar, one Sundara and Mahila Bhanwari Bai were defendants. Mahila Bhanwari Bai was the defendant No. 4. Subsequently, the name of defendant No. 3 Sundara, S/o Keshara, has been deleted. The plaintiffs pleaded in the suit that father of the plaintiffs Kalyan Singh had been in possession of the suit land and his possession was recorded up to Samvat 2027. He died on 6th June, 1991 and thereafter name of Devalya alias Douja has been recorded as Bhumiswami of the land from Samvat 2026-2030. Devalya sold the land by a Registered Sale Deed dated 22-2-1969 in favour of Sundara. The name of Sundara was also got mutated as Bhumiswami over the land vide order dated 13-9-1982, however, the father of the plaintiffs and Devalya had been in possession of the land and thereafter the plaintiffs had been in possession of the land. The Tahsildar, Sheopurkala, District Morena defendant No. 2 issued a proclamation with regard to auction of the land on 31-8-1991. On the basis of aforesaid pleadings, the plaintiffs claimed a relief for declaration and permanent injunction. On behalf of defendants No. 1 and 2. State of Madhya Pradesh, through Collector and Tahsildar, a separate written statement has been filed before the Court. In the aforesaid written statement, it has been pleaded that the name of Devalya alias Douja was recorded as Bhumiswami of the land from Samvat 2026-2030, however, thereafter the defendant No. 4 has been recorded as Bhumiswami of the land in the revenue record. It has further been denied that the plaintiffs and father of the plaintiffs had been in possession over the land. It has further been stated that after Devalya, the land was acquired by the State Government and it had been given to the Krishi Upaj Mandi Samiti, Sheopur and the land was also auctioned for agriculture purpose by the Tahsildar. The defendant No. 4 filed a separate written statement and she pleaded that the plaintiffs have no right over the land. The matter was listed before the Lok Adalat for compromise. The issues have also been framed by the trial Court and one of the issue was that whether the plaintiffs and father of the plaintiffs were in possession over the suit land? or whether they are the owner of the suit land? In the Lok Adalat the case was compromised between the plaintiffs and defendant No. 4. Mahila Bhanwari Bai and as per the aforesaid compromise, the Lok Adalat. passed an order dated 10-9-2000. As per the aforesaid order, the suit filed by the plaintiffs was rejected. The defendant No. 4 Manila Bhanwari Bai has been declared as owner of the suit land and it has also been declared that she was entitled to have mutation in her favour of the land and a further order was passed that nobody would interfere in her possession.
3. After passing of the order, appellants No. 1, 2 & 3, who are plaintiffs No. 1, 3 & 4, filed an appeal before the appellate Court against the order of compromise of the Lok Adalat, which was presided by one Civil Judge. It has been mentioned in the appeal that the appellants did not authorize the Advocate to sign the compromise application before the Lok Adalat. The land was sold to Sundara by Registered Sale Deed and the defendant No. 4 was never in possession over the land, hence, the order and compromise of the Lok Adalat is void and illegal. The learned appellate Court vide impugned judgment and decree set aside the order passed by the Lok Adalat.
4. The learned Counsel for the appellant has submitted that the judgment and decree passed by the first appellate Court is bad in law and the first appeal is not maintainable against the order of compromise passed by the Lok Adalat and the Advocate, who entered into compromise on behalf of the plaintiffs was authorised to enter into a compromise, hence, the compromise was valid. In support of his contentions, learned Counsel for the appellant relied on the following judgments:
1. : 1992 (1) SCC 31 : AIR 1991 SC 2234 (Byram Pestonji Gariwala v. Union Bank of India);
2. : (2003) 11 SCC 372 : AIR 2003 SC 4596 (Jineshwardas (D) by LRs. v. Jagrani (Smt.) and;
3. : AIR 2005 SC 3575 (P.T. Thomas v. Thomas Job).
5. Contrary to this, learned Counsel for the respondents No. 1 & 2 has submitted that the judgment and decree passed by the lower appellate Court is as per law. The order passed by the Lok Adalat is void ab initio and an appeal is maintainable against the aforesaid order. The respondents have never instructed the counsel to enter into compromise and the compromise is void ab initio and against the law. In support of his contentions, learned Counsel relied on the following judgments:
1. : 1993 MPLJ 469 : AIR 1993 SC 1139 (Banwari Lal v. Smt. Chando Devi (through L.R.);
2. : (2004) 1 SCC 287 : AIR 2003 SC 3789 (Rafique Bibi (Dead) by LRs. v. Sayed Waliuddin (Dead) by LRs.) and;
3. : (2008) 2 SCC 660 : AIR 2008 SC 1209 (State of Punjab v. Jalour Singh).
6. As is stated above in the order, the plaintiffs themselves in the plaint stated that Devalya alias Douja sold the suit land vide Registered Sale Deed dated 22-2-1969 in favour of Sundara S/o Keshara and the name of Sundara had also been recorded in the revenue record vide order dated 13-9-1982. The plaintiffs further pleaded that Tahsildar issued a notice on 31-8-1991 with regard to auction of the land. The defendant No. 1 and 2 in the written statement specifically pleaded that the land was acquired by the State Government and it has been given to Krishi Upaj Mandi Samiti, Sheopur and thereafter the land was auctioned for agriculture.
7. From the aforesaid pleadings, it is clear that the defendant No. 4 Bhanwari Bai, prima facie, has no right of ownership over the suit land even plaintiffs have claimed their rights on the basis of adverse possession. In such circumstances, the plaintiffs and defendant No. 4 have no right to enter into a compromise before the Lok Adalat with regard to ownership of the suit land, hence, the compromise was illegal. Apart from this, it is also a fact that the compromise application has been signed by Advocate of the plaintiffs. The appellants in the present appeal have specifically stated that they did not authorize the Advocate to enter into a compromise.
8. Order 23, Rule 3 of Civil Procedure Code prescribes procedure with regard to compromise of the suit which is as under:
Order XXIII, Rule 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.)
(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.
3-B. No agreement or compromise to be entered in a representative suit without leave of Court.-- (1) No agreement or compromise in a representative suit shall be entered into without the leave of the Court expressly recorded in the proceedings; and any such agreement or compromise entered into without the leave of the Court so recorded shall be void.
9. The Hon'ble Supreme Court in the case of Ragique Bibi (Dead) by LRs. v. Sayed Waliuddin (Dead) by LRs. reported in : (2004) 1 SCC 287 : AIR 2003 SC 3789, has held as under with regard to the word 'void':
What is 'void' has to be clearly understood. A decree can be said to be without jurisdiction, and hence a nullity, if the Court passing the decree has usurped a jurisdiction which it did not have; a mere wrong exercise of Jurisdiction does not result in a nullity. A distinction exists between a decree passed by a Court having no Jurisdiction and consequently being a nullity and not executable and a decree of the Court which is merely illegal or not passed in accordance with the procedure laid down by law. (Paras 6 and 8)
10. From the above principle of law laid down by the Hon'ble Supreme Court it is clear that if the Court passing the decree has usurped a jurisdiction which it did not have; that order or decree is void and nullity. In the present case, the compromise was not lawful because it is stated earlier that the plaintiffs and defendant No. 4 Mahila Bhanwari Bai, who entered into a compromise, had no legal rights to compromise the matter. Apart from this,' the appellants did not authorise the Advocate to enter into a compromise, hence, in such circumstances, the compromise order passed by the Lok Adalat is void ab initio.
11. The Hon'ble Supreme Court in the case of Byram Pestonji Gariwala v. Union Bank of India reported in : 1992 (1) SCC 31 : AIR 1991 SC 2234 held as under with regard to compromise which is not binding:
11. A compromise is, however, not binding and is liable to be set aside in circumstances which would invalidate agreements between the parties:
A compromise by counsel will not bind the client, if counsel is not apprised of facts the knowledge of which is essential in reference to the question on which he has to exercise his discretion, for example that the terms accepted had already been rejected by the client. Where counsel enters into a compromise in intended pursuance of terms agreed upon between the clients, and, owing to a misunderstanding, the compromise fails to carry cut the intentions of one side, the compromise does not bind the client, and the Court will allow the consent to be withdrawn. Where, acting upon instructions to compromise, counsel consents under a misunderstanding to certain terms which do not carry into effect the intentions of counsel and the terms are thought by one party to be more extensive than the other party intends them to be, there is no agreement on the subject-matter of the compromise, and the Court will set it aside. But a person who has consented to a compromise will not be allowed to withdraw his consent because he subsequently discovers that he has a good ground of defence.
12. The Hon'ble Supreme Court further in the case of Byram Pestonji Gariwala (supra) cautioned the lawyer not to act on implied authority which is as under:
37. We may, however, hasten to add that it will be prudent for counsel not to act on implied authority except when warranted by the exigency of circumstances demanding immediate adjustment of suit by agreement or compromise and the signature of the party cannot be obtained without undue delay. In these days of easier and quicker communication, such contingency may seldom arise. A wise and careful counsel will no doubt arm himself in advance with the necessary authority expressed in writing to meet all such contingencies in order that neither his authority nor integrity is ever doubted. This essential precaution will safeguard the personal reputation of counsel as well as uphold the prestige and dignity of the legal profession.
Hence, in my opinion, the compromise was null and void.
13. The next question for determination before this Court is that whether an appeal is maintainable under Section 96 of Civil Procedure Code against the void order of Lok Adalat? Admittedly, before the Lok Adalat, the compromise has been entered between the parties under Order 23, Rule 3 of Civil Procedure Code.
14. Section 21 of the Legal Service Authority Act, 1987 which is as follows with regard to the award of Lok Adalat:
21. Award of Lok Adalat.-- (1) Every award of the Lok Adalat shall be deemed to be a decree of a Civil Court or, as the case may be, an order of any other Court and where a compromise or settlement has been arrived at, by a Lok Adalat in a case referred on it under Sub-section (1) of Section 20, the court fee paid in such cases shall be refunded; in the manner provided under the court-fees Act, 1870 (7 of 1870).
(2) Every award made by a Lok Adalat shall be final and binding on all the parties to the dispute, and no appeal shall lie to any Court against the award.
This Section prohibits the appeal against the award of the Lok Adalat, if the award has been passed by the authorities legally. The intention of legislature in prohibiting an appeal against the award of Lok Adalat is to give finality to the award so unnecessary further litigation could be saved, however, when the award as void an initio, the parties who entered into compromise had no power to enter into the compromise and the compromise has been entered by playing a fraud, in such circumstances, that award could be said to be a void and, admittedly, the compromise has been entered before the Lok Adalat in accordance with the provisions of Civil Procedure Code and when the order was void in that circumstances, an appeal could be maintainable under Section 96 of the Civil Procedure Code.
15. As per the judgment of the Hon'ble Supreme Court in the case of Banwari Lal v. Smt. Chando Devi (Through L.R.) reported in : 1993 MPLJ 469 : AIR 1993 SC 1139, where the Hon'ble Supreme Court has held as under:
9. 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. One 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 suit is available in cases covered by Rule 3-A of Order 23. As such a right has been given under Rule 1A(2) of 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.
16. In the present case, there was no compromise at all, because the compromise has been entered between the so-called parties by playing fraud, hence, the award passed by the Lok Adalat on the basis of compromise could not be said to be a settlement arrived at between the parties as held by the Hon'ble Supreme Court in the case of State of Punjab v. Jalour Singh reported in : (2008) (2) SCC 660 : AIR 2008 SC 1209, where the Hon'ble Supreme Court has held as under:
12. It is true that where an award is made by the Lok Adalat in terms of a settlement arrived at between the parties (which is duly signed by parties and annexed to the award of the Lok Adalat), it becomes final land binding on the parties to the settlement and becomes executable as if it is a decree of a Civil Court, and no appeal lies against it to any Court. If any party wants to challenge such an award based on settlement, it can be done only by filing a petition under Article 226 and/or Article 227 of the Constitution, that too on very limited grounds. But where no compromise or settlement is signed by the parties and the order of the Lok Adalat does not refer to any settlement, but directs the respondent to either make payment if it agreed to the order, or approach the High Court for disposal of appeal on merits, if it does not agree, is not an award of the Lok Adalat. The question of challenging such an order in a petition under Article 227 does not arise. As already noticed, in such a situation, the High Court ought to have heard and disposed of the appeal on merits.
In such circumstances, the appeal is maintainable under Section 96 of the Code of Civil Procedure.
17. It is also settled principle of law that any order obtained by the parties by playing fraud, is a nullity and it can be challenged in any collateral proceedings even at the stage of execution. The Hon'ble Supreme Court in the case of A.V. Papayya Sastry v. Government of A.P. reported in : AIR 2007 SC 1546, has held as under:
22. It is thus settled proposition of law that a judgment, decree or order obtained by playing fraud on the Court, Tribunal or Authority is a nullity and non est in the eye of law. Such a judgment, decree or prder -- by the first Court or by the final Court -- has to be treated as nullity by every Court, superior or inferior. It can be challenged in any Court, at any time, in appeal, revision, writ or even in collateral proceedings.
18. The Hon'ble Supreme Court further in the case of N. Khosla v. Rajlakshmi (Dead) reported in : (2006) 3 SCC 605 : AIR 2006 SC 1249 has held as under:
The respondents fraudulently obtained a mutation in the land records on 22-1-1977. Fraud cloaks everything. Fraud avoids all judicial acts. A decree obtained by playing fraud is a nullity and it can be challenged in any Court, even in collateral proceedings. Hence, it is open to the appellant to file a suit challenging the said fraudulent mutation against the legal heirs of the respondent, whose appeal has been abated. If the, suit is filed within two months from today, it shall not be dismissed as being barred by limitation.
19. Hence, looking to the facts of the case, in my opinion, the appeal is maintainable and the appellate Court has rightly entertained the appeal. The judgment cited by the learned Counsel for the respondents are not applicable in the present facts and circumstances of the case because in the present case, the so-called compromise has been entered by playing a fraud. The Presiding Civil Judge of the Lok Adalat completely ignored the legal provisions and permitted the parties to enter into the compromise which was beyond their power.
20. Consequently, I do not find any merit in this appeal, it is hereby dismissed. No order as to cost.