Full Judgment
21. t August”
1. 18 IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR JUDGMENT (1) S.B. CIVIL FIRST APPEAL NO.109/2000 (SMT. ARCHANA SABHARWAL VS. BAL MUKUND & ANR.) (2) S.B. CIVIL FIRST APPEAL NO.11/2000 (RAKESH SABHARWAL VS. BAL MUKUND & ORS.) DATE OF JUDGMENT :
21. 08.2012 PRESENT HON'BLE DR. JUSTICE VINEET KOTHARI Mr.R.K. Thanvi, Senior Advocate assisted by Mr.Narendra Thanvi for defendant appellant Shri Rakesh Sabharwal. Mr.Prabhat Ojha, for defendant appellant Smt. Archana Sabharwal. Mr. Suresh Shrimali, for plaintiff respondent Mr. Bal Mukund. REPORTABLE :
1. The present two first appeals have been filed by the defendants appellants against a compromise decree dated 25.08.1999 passed by learned Additional District Judge, Abu Road, district Sirohi in Civil Suit No.52/96 (34/95) Bal Mukund s/o Shri Chiranji Lal Agrawal S.B. CIVIL FIRST APPEAL NO.109/2000 Smt. Archana Sabharwal vs. Bal Mukund & anr. S.B. CIVIL FIRST APPEAL NO.11/2000 Rakesh Sabharwal vs. Bal Mukund & ors. DATE OF JUDGMENT:
21. t August”
2. 18 vs. Smt. Archana Sabharwal & Shri Rakesh Sabharwal. The facts giving rise to the present two appeals in brief are as under :
2. Plaintiff Bal Mukund filed a civil suit for eviction against both the defendants (1) Smt. Archana Sabharwal wife of Shri Girish Sabharwal and (2) Shri Rakesh Sabharwal son of Shri J.N. Sabharwal,, in respect of the suit premises a Cinema Hall situated at Abu Road, district Sirohi known as Mahaveer Talkies, which was let out to the partnership firm known as M/s. Marudhara Exhibitors, in which Smt. Archana Sabharwal was stated to be a partner and Mr. Rakesh Sabharwal had a separate firm known as M/s. Sudesh Pictures, Jaipur. Both the defendants are close relatives being Devar and Bhabhi. The said premises were let out to the defendants on 13.08.1990. The period of license under the said agreement commenced w.e.f. 01.02.1991 to 31.01.1996 @ Rs.18,000/- monthly rent and it was agreed that on 1.2.1996, the suit premises shall be handed over back to the plaintiff - landlord Bal Mukund. Since according to the plaintiff, the rent was not paid for S.B. CIVIL FIRST APPEAL NO.109/2000 Smt. Archana Sabharwal vs. Bal Mukund & anr. S.B. CIVIL FIRST APPEAL NO.11/2000 Rakesh Sabharwal vs. Bal Mukund & ors. DATE OF JUDGMENT:
21. t August”
3. 18 quite some time, the arrears of rent of Rs.4,37,809.37p was due and therefore the suit was filed for eviction and recovery of arrears of rent and the said suit was registered on 17.10.1995. Both the defendants engaged one common Lawyer, namely, Advocate Shri Amrit Lal Shah and power on behalf of defendant Smt. Archana Sabharwal was filed on 14.11.1995, whereas on behalf of defendant No.2 Shri Rakesh Sabharwal, it was filed on 19.12.1995. Both the defendants even filed an application under Section 34 of the Arbitration Act and claimed that both the agreements dated 13.08.1990 and 08.01.1991 were executed by the defendant No.2 Rakesh Sabharwal, as power of attorney holder of defendant No.1 Smt. Archana Sabharwal and, therefore, by the said application under Section 34 of Arbitration Act dated 19.12.1995, it was prayed on behalf of the defendants that the dispute between the parties may be resolved by appointing an Arbitrator.
3. During the pendency of the said suit, the parties entered into a compromise and an application was filed by the parties before the court below on 25.01.1996 in which the defendants admitted the claims made by the plaintiff S.B. CIVIL FIRST APPEAL NO.109/2000 Smt. Archana Sabharwal vs. Bal Mukund & anr. S.B. CIVIL FIRST APPEAL NO.11/2000 Rakesh Sabharwal vs. Bal Mukund & ors. DATE OF JUDGMENT:
21. t August”
4. 18 that there was a default of more than six months in payment of rent and that there was nuisance caused by the defendants and the change of use was there and also that the plaintiff needed the suit premises for bonafide need and against the arrears of rent up to the period dated 31.01.1996, the parties agreed that a sum of Rs.6,11,879/- was due to be paid to the plaintiff Bal Mukund, against which a Cheque of Rs.40,000/- drawn on State Bank of Bikaner and Jaipur, Abu Road Branch namely Cheque No.0050322 dated 30.01.1996 was given by defendant Rakesh Sabharwal to the plaintiff and the remaining sum of Rs.5,71,879/- was agreed to be paid in monthly installments and the first installment of Rs.15,000/- was to be paid on 20.02.1996. The possession of the suit premises namely, the Cinema Hall is said to have been handed over to the plaintiff on 01.02.1996 itself. However, the said cheque of Rs.40,000/- of Rakesh Sabharwal is said to have been dishonoured by the bank.
4. The learned District Judge after verifying the said compromise between the parties on 25.01.1996, passed the decree in terms of the said compromise and in the order S.B. CIVIL FIRST APPEAL NO.109/2000 Smt. Archana Sabharwal vs. Bal Mukund & anr. S.B. CIVIL FIRST APPEAL NO.11/2000 Rakesh Sabharwal vs. Bal Mukund & ors. DATE OF JUDGMENT:
21. t August”
5. 18 dated 09.02.1996 noting therein that the possession of the suit premises has been handed over to the plaintiff on 01.02.1996 and, therefore, relief Nos. 2, 3, 4 and 6 in the plaint is not pressed by the plaintiff, however, for remaining reliefs about money decree for arrears of rent, the matter was posted on 24.02.1996. The application dated 25.01.1996 for compromise was signed by the plaintiff Bal Mukund, defendant No.2 Shri Rakesh Sabharwal in his personal capacity as well as in the capacity of Power of Attorney holder of defendant No.1 Smt. Archana Sabharwal and both the parties were duly identified and the compromise application was also signed by respective Advocates Mr. Amrit Lal Shah for both the defendants and Mr. Pramod Kumar Dave for plaintiff Bal Mukund.
5. On 24.02.1996, the defendant No.2 Shri Rakesh Sabharwal, however, filed an application before the Court below stating therein that the said compromise is not acceptable to the defendant No.2 and, therefore, money decree for arrears of rent to the aforesaid agreed extent may not be passed in the suit. The defendant No.1 Smt. Archana Sabharwal also filed an application on 24.02.1996 S.B. CIVIL FIRST APPEAL NO.109/2000 Smt. Archana Sabharwal vs. Bal Mukund & anr. S.B. CIVIL FIRST APPEAL NO.11/2000 Rakesh Sabharwal vs. Bal Mukund & ors. DATE OF JUDGMENT:
21. t August”
6. 18 signed by the same Advocate Shri Amrit Lal Shah that she had not entered into any compromise and was not bound by the application / compromise dated 25.01.1996. The plaintiff Bal Mukund filed a reply to the said application and refuted these contentions and submitted before the court below that the compromise was signed by Shri Rakesh Sabharwal on behalf of both the defendants in his personal capacity as well as Power of Attorney of Smt. Archana Sabharwal and, therefore, both the defendants were equally bound by the said compromise.
6. In his reply to the said application of the defendant No.2, the plaintiff - Bal Mukund submitted that the defendant No.2 Shri Rakesh Kumar had assured the plaintiff to repay the entire amount of arrears of rent by 20.01.1996 and may start exhibition of films again under a new agreement w.e.f. 01.02.1996. However, cancelling such oral agreement on 25.01.1996, the defendant had agreed to hand over the vacant suit premises and also to pay arrears for which the application under Order 23 Rule 3 CPC was filed by both the parties jointly and the only money decree to the extent of arrears of rent was to be S.B. CIVIL FIRST APPEAL NO.109/2000 Smt. Archana Sabharwal vs. Bal Mukund & anr. S.B. CIVIL FIRST APPEAL NO.11/2000 Rakesh Sabharwal vs. Bal Mukund & ors. DATE OF JUDGMENT:
21. t August”
7. 18 passed in favour of the plaintiff, however, the said application was filed by the defendant on 24.02.1996, which deserved to be rejected with costs.
7. The trial court rejected the said application of both the defendants vide impugned order dated 28.07.1999 holding that both the defendants were bound by the compromise dated 25.01.1996 and since Shri Rakesh Sabharwal himself had signed the compromise in both the capacities of his own and as power of attorney of defendant No.1 Smt. Archana Sabharwal also and the common Advocate Shri Amrit Lal Shah had also signed the said compromise, therefore, the defendants could not resile from the same and were bound by the compromise decree. Accordingly, the money decree to the extent of Rs.6,11,879/- was passed against the defendants on 25.08.1999. Against this decree, both the defendants have filed the present first appeals under Section 96 of Civil Procedure Code.
8. Mr. R.K. Thanvi, Senior Advocate assisted by Mr. Narendra Thanvi appearing for Mr. Rakesh Sabharwal defendant No.2 and Mr. Prabhat Ojha, learned counsel S.B. CIVIL FIRST APPEAL NO.109/2000 Smt. Archana Sabharwal vs. Bal Mukund & anr. S.B. CIVIL FIRST APPEAL NO.11/2000 Rakesh Sabharwal vs. Bal Mukund & ors. DATE OF JUDGMENT:
21. t August”
8. 18 appearing for the defendant No.1 Smt. Archana Sabharwal submitted that the compromise decree was not binding on Smt. Archana Sabharwal, since Smt. Archana Sabharwal never signed the compromise and the signatures of Shri Rakesh Sabharwal as her power of attorney, does not bind her. This was the submission of Mr. Prabhat Ojha appearing on behalf of Smt. Archana Sabharwal. On the other hand, Mr. R.K. Thanvi submitted that Shri Rakesh Sabharwal was also not bound by the said compromise since he was not party to the contract of lease between the plaintiff and defendant No.1 Smt. Archana Sabharwal and throughout he had been working as a power of attorney holder only of Smt. Archana Sabharwal and, therefore, the money decree does not bind him in his individual capacity and, therefore, the decree against the defendant No.2 Shri Rakesh Sabharwal deserves to be set aside. He also relied upon the decision in the case of Banwari Lal vs. Smt. Chando Devi (through L.R.) and another reported in 1993 AIR SC 113.and a Kerala High Court decision in the case of Sundara Gownder vs. Balachandran reported in 1990 AIR Kerala 324. S.B. CIVIL FIRST APPEAL NO.109/2000 Smt. Archana Sabharwal vs. Bal Mukund & anr. S.B. CIVIL FIRST APPEAL NO.11/2000 Rakesh Sabharwal vs. Bal Mukund & ors. DATE OF JUDGMENT:
21. t August”
9. 18 9. On the other hand, Mr. Suresh Shrimali, learned counsel appearing for the respondent plaintiff vehemently submitted that the contentions raised by the learned counsels for the appellants defendants are absolutely mis- conceived and not tenable and the compromise decree was just and proper based on a mutual settlement of the dispute and both the defendants are equally bound by the compromise decree and, therefore, the Court was perfectly justified in rejecting their objections filed on 24.02.1996 by the impugned order dated 28.07.1999, on the basis of which the decree under appeal was passed by the court below on 25.08.1999. He submitted that Shri Rakesh Sabharwal was throughout acting as power of attorney holder on behalf of defendant No.1 - Smt. Archana Sabharwal and being her agent, his acts would bind the principal Smt. Archana Sabharwal also and from the conduct of the parties and in the pleadings before the court below, at no point of time except for the first time on 24.02.1996, the defendant No.1 Smt. Archana Sabharwal had disowned the authority of the said agent Shri Rakesh Sabharwal to bind her. He submitted that both the S.B. CIVIL FIRST APPEAL NO.109/2000 Smt. Archana Sabharwal vs. Bal Mukund & anr. S.B. CIVIL FIRST APPEAL NO.11/2000 Rakesh Sabharwal vs. Bal Mukund & ors. DATE OF JUDGMENT:
21. t August”
10. 18 defendants desparately tried to wriggle out of the decree passed on their compromise and, therefore, they cannot escape the liability to pay the arrears of rent also, which is a money decree passed on compromise between the parties and the objections raised on their behalf are absolutely unsustainable. He relied upon the following judgments in support of his submissions: (1) Jineshwardas (D) by LRs and others vs. Smt. Jagrani and another reported in 2003 AIR SCW 5385.(2) Byram Pestonji Gariwala vs. Union Bank of India and others reported in 1991 SC 2234.(3) Salkia Businessmen's Association and others vs. Howrah Municipal Corporation and others reported in 2001 AIR SC 2790.(4) Mahaveer Uchchya Prathmik Vidyalaya, Sardar Shahar vs. Babu Lal reported in 1996 DNJ (Raj.) 355, (5) Hari Singh vs. Ram Kumar and others reported in 1993 AIR Rajasthan 204, (6) Sh. Chamal Lal Jain vs. Shri Arun Kumar Jain and others reported in 1996 AIR Delhi 108, (7) Jayandra Prasad Sinha vs. Nand Kishore Jha and S.B. CIVIL FIRST APPEAL NO.109/2000 Smt. Archana Sabharwal vs. Bal Mukund & anr. S.B. CIVIL FIRST APPEAL NO.11/2000 Rakesh Sabharwal vs. Bal Mukund & ors. DATE OF JUDGMENT:
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11. 18 others reported in 1985 Air Patna 310, (8) Katikara Chintamani Dora vs. Guntreddi Annamanaidu and others reported in 1974(1) SCC 567.
10. In Jineshwardas (D) by LRs and others vs. Smt. Jagrani and another reported in 2003 AIR SCW 5385.the Hon'ble Supreme Court held that compromise 'in writing and signed by parties' under Order 23 Rule 3 does not exclude authority of Counsel to enter into compromise on behalf of party and it can be even a 'judgment on admission of the parties'. In the aforesaid case of Jineshwardas (supra), the Hon'ble Supreme Court considering the C.P.C. (Amendment) Act 1976 and substitution of Order 23 Rule 3 held in para 38 of the judgment that the evil sought to be remedied by Parliament by the CPC (Amendment) Act, 1976 namely attainment of certainty and expeditious disposal of cases by reducing the terms of compromise to writing signed by the parties, and allowing the compromise decree to comprehend even matters falling outside the subject matter of the suit, but relating to the parties, the legislature cannot, in the absence of express words to such effect be presumed to S.B. CIVIL FIRST APPEAL NO.109/2000 Smt. Archana Sabharwal vs. Bal Mukund & anr. S.B. CIVIL FIRST APPEAL NO.11/2000 Rakesh Sabharwal vs. Bal Mukund & ors. DATE OF JUDGMENT:
21. t August”
12. 18 have disallowed the parties to enter into a compromise by counsel in their cause or by their authorized agents. Any such presumption would be inconsistent with the legislative object of attaining quick reduction of arrears in Court by elimination of uncertainties and enlargement of the scope of compromise.
11. Likewise, in the present case, if the parties are now allowed to wriggle out of the signed compromise dated 25.01.1996 for which no fraud or mischief can be attributed to the plaintiff Bal Mukund, it would make mockery of the compromise decree passed by the court below. It is well settled that the agent can bind the principal by his acts and throughout the proceedings, if the defendant No.1 Smt. Archana Sabharwal has held out Shri Rakesh Sabharwal to be her agent and both of them have engaged a common Lawyer, who has also signed the compromise / consent terms, the parties cannot be heard to say that they were not bound by the said compromise to allow to be done. It would make a mockery of the compromise document duly verified by the Court which was led to pass the compromise decree. Therefore, the aforesaid clear legal position S.B. CIVIL FIRST APPEAL NO.109/2000 Smt. Archana Sabharwal vs. Bal Mukund & anr. S.B. CIVIL FIRST APPEAL NO.11/2000 Rakesh Sabharwal vs. Bal Mukund & ors. DATE OF JUDGMENT:
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13. 18 supports the plaintiff respondent Bal Mukund in the present case.
12. Similarly, the Hon'ble Supreme Court in Byram Pestoni Gariwala vs. Union Bank of India and others reported in 1991 SC 223.held that the words in writing and signed by the parties inserted in Order 23 Rule 3 by the CPC (Amendment) Act, 1976 necessarily mean and include duly authorised representative and counsel. Thus a compromise in writing and signed by the parties in person, is valid and binding on the parties and is executable even if the compromise relates to matters concerning the parties, but extending beyond the subject matter of the suit. A judgment by consent is intended to stop litigation between the parties just as much as a judgment resulting from a decision of the Court at the end of a long drawn out fight. A compromise decree creates an estoppel by judgment. This judgment also clearly supports the case of the respondent plaintiff Bal Mukand before this Court and the appellants defendants cannot be allowed to wriggle out of the said compromise. S.B. CIVIL FIRST APPEAL NO.109/2000 Smt. Archana Sabharwal vs. Bal Mukund & anr. S.B. CIVIL FIRST APPEAL NO.11/2000 Rakesh Sabharwal vs. Bal Mukund & ors. DATE OF JUDGMENT:
21. t August”
14. 18 13. A co-ordinate Bench of this Court in Mahaveer Uchchya Prathmik Vidyalaya, Sardar Shahar vs. Babu Lal reported in 1996 DNJ (Raj.) 355 also held that a compromise decree shall always be presumed to be lawful unless contrary is proved and the Court even negatived the locus standi to file appeal from the decree, if passed with consent of the parties.
14. Similarly in Hari Singh vs. Ram Kumar and others reported in 1993 AIR Rajasthan 204, where the compromise duly signed by the parties was filed before the Court and counsel for the parties identified their signatures and the defendants pleaded that no compromise was ever arrived at, was found to be not proper by the court and decree on behalf of the compromise, was upheld.
15. Learned Single Judge of Delhi High Court in Sh. Chaman Lal Jain vs. Sh. Arun Kumar Jain and others reported in AIR 199.Delhi 108 also held that a compromise decree in a suit for dissolution of partnership and rendition of account would prevail and the same cannot be challenged on the ground that such agreement was S.B. CIVIL FIRST APPEAL NO.109/2000 Smt. Archana Sabharwal vs. Bal Mukund & anr. S.B. CIVIL FIRST APPEAL NO.11/2000 Rakesh Sabharwal vs. Bal Mukund & ors. DATE OF JUDGMENT:
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15. 18 contrary to the partnership deed or that the partnership was already frustrated and the court held that the parties were bound by the compromise decree.
16. On the other hand, the judgments relied upon by learned counsel for the appellant defendant, Mr. R.K. Thanvi and Mr. Prabhat Ojha are clearly distinguishable on facts.
17. In Banwari Lal's case (supra), the Hon'ble Supreme Court in para 13 and 14 held that when the Amending Act introduced a proviso along with an explanation to Rule 3 of Order 23 saying that where it is alleged by one party and denied by other that an adjustment or satisfaction has been arrived at, the Court shall decide the question, the Court before which a petition of compromise is filed and which has recorded such compromise, has to decide the question whether an adjustment or satisfaction had been arrived at on basis of any lawful agreement. This judgment is rather helpful to the plaintiff respondent rather than to the defendant appellant in the present case. S.B. CIVIL FIRST APPEAL NO.109/2000 Smt. Archana Sabharwal vs. Bal Mukund & anr. S.B. CIVIL FIRST APPEAL NO.11/2000 Rakesh Sabharwal vs. Bal Mukund & ors. DATE OF JUDGMENT:
21. t August”
16. 18 In the present case, on the basis of a compromise application dated 25.11.1996, the trial court had recorded the satisfaction on 09.02.1996 and to the extent of relief Nos. 2, 3, 4 and 6, the court below found that the same were not pressed by the plaintiff and to that extent, the satisfaction or adjustment was duly recorded by the learned trial court. This decree dated 09.12.1996 is not even challenged by the defendants. Therefore, to the extent of remaining part of relief to the extent of money decree for the arrears of rent, the same cannot be challenged on the aforesaid grounds and the learned court below was, therefore, perfectly justified in rejecting the objections dated 24.02.1996 of both the defendants by the impugned order dated 28.07.1999 on the basis of which the decree under appeal was passed by the learned trial court on 25.08.1999, which alone is under challenge in the first appeal. Both the defendants are jointly and severally liable to satisfy the said money decree in terms of compromise dated 25.01.1996 duly verified by the learned District Judge. S.B. CIVIL FIRST APPEAL NO.109/2000 Smt. Archana Sabharwal vs. Bal Mukund & anr. S.B. CIVIL FIRST APPEAL NO.11/2000 Rakesh Sabharwal vs. Bal Mukund & ors. DATE OF JUDGMENT:
21. t August”
17. 18 18. Similarly, the other citation of learned counsels for the defendants appellants in Sundara Gowner's case (supra) of Kerala High Court, dealing with a case of Abkari Shops (Disposal in Auction) Rules, the Court held that once the parties entering into agreement with object of defeating provisions of Rule 5(4A), such agreement being against law would be void and any action to realise the amount pursuant to agreement cannot be entertained by a court of law. The maximum in pari delicto potiorest conditio possidentis has its basis on the principles of public policy that the plaintiff who has paid money or handed over property pursuant to an illegal or immoral contract, cannot recover it as the Courts will not assist an illegal transaction in any manner. Such being not the facts in the present case, where the arrears of rent due to the plaintiff have been decreed against the defendants, this judgment cited at bar is of little avail to the defendants.
19. Consequently, this Court is of the considered opinion that both the first appeals filed by both the defendants are without any merit and the same deserve to S.B. CIVIL FIRST APPEAL NO.109/2000 Smt. Archana Sabharwal vs. Bal Mukund & anr. S.B. CIVIL FIRST APPEAL NO.11/2000 Rakesh Sabharwal vs. Bal Mukund & ors. DATE OF JUDGMENT:
21. t August”
18. 18 be dismissed with costs.
20. Accordingly, both these appeals are dismissed with costs, which are quantified at Rs.10,000/- for each of the defendant. The same would be paid along with the arrears of rent and interest @ 18% per annum thereon, as already directed in the decree, within three months from today, otherwise entire sum due including costs shall carry interest @ 9% per annum after three months i.e. 21.11.2012 till the actual date of payment to the plaintiff decree holder. (DR. VINEET KOTHARI)J.
Anil/ Item No.23