Law Web: Whether party can deny contents of compromise recorded by court?

The aforesaid statements were recorded in a Court of law by a Judicial

Officer who would have taken all care and caution before recording such

statements. The statements were recorded in the presence of respective

counsel of the parties and who had duly identified them in the Court. Such

statements recorded before a Judicial Officer in a Court of law cannot be

said to have lesser sanctity then an instrument of Compromise drawn

outside the Court attested by some Oath Commissioner/Notary Public or

any other authority. A certain sanctity is attached to a statement made by a

party in the Court and it has to be presumed that the same was recorded

voluntarily. In case a party is permitted to wriggle out of such statements

by conveniently raising some frivolous allegations against his counsel or

against opposing counsel, then it will virtually lead to mockery of the

Court.

21. It is apparent that the very purpose of incorporating that a compromise

should be in writing was to ensure that everything is there in black-andwhite

and that there is no ambiguity in respect of the terms of compromise

so that either of the party does not turn round at a later stage to back out on

some terms or tries to misinterpret some terms and conditions of

settlement, as is seen in the present case. The purpose was to avoid undue

harassment and wastage of precious time of Court lest the parties would

keep on agitating matter time and again. The Hon'ble Supreme Court in

Pushpa Devi Bhagat's case (supra), went further ahead to hold that

attempts of tenants in such matters to protract the litigation indefinitely by

raising frivolous and vexatious contentions regarding the compromise and

going back on the solemn undertaking given to Court, should be

deprecated.

22. Examining the aforesaid factual position in light of the legal position laid

down on in Jineshwardas's case (supra), Byram Peston j i Gariwa l 's case

(supra), Pushpa Devi Bhagat's case (supra) and Bakshi Dev Raj's case

(supra), as has been discussed above and upon finding that there is nothing

to suggest that there was any collusion between the counsel of the

petitioner and the opposite party, this Court does not find any ground to

interfere with the impugned order.

IN THE HIGH COURT OF PUNJAB AND HARYANA

AT CHANDIGARH.

CR-6310-2019 (O & M)

Date of decision : 06.10.2020

Lachhman Dass Vs Amarjit Singh Sahni

CORAM : Hon'ble Mr. Justice Gurvinder Singh Gill

1. The petitioner assails order dated 9.9.2019 passed by Appellate Authority

under the Haryana Urban (Control of Rent & Eviction) Act 1973, Yamuna

Nagar at Jagadhri, whereby an application filed by the petitioner seeking

disposal of his appeal on merits has been dismissed.

2. A few facts, necessary to notice for disposal of this petition are that

respondents/landlords filed an application under Section 13 of the Haryana

Urban (Control of Rent & Eviction) Act 1973, seeking ejectment of the

petitioner/tenant from residential premises situated in Yamuna Nagar on

grounds of non-payment of rent and personal necessity. The Rent

Controller, Jagadhri passed an order dated 8.8.2018 assessing the

provisional rent and directed the petitioner/tenant to pay the arrears of

rent. The petitioner/tenant, however, preferred an appeal against the

aforesaid order dated 8.8.2018 of Rent Controller, Jagadhri before the

Appellate Authority (Additional District Judge). During the pendency of

the aforesaid appeal before the Appellate Authority, the parties settled the

matter amongst themselves and got their statements recorded before the

Appellate Authority on 25.3.2019 leading the Appellate Authority to pass

the following order on 25.3.2019:

" Both the parties have settled the matter as per their

statements recorded separately. Now, the case is

adjourned to 20.4.2019 for further proceedings.

Sd/-

Date : 25.3.2019 ADJ/ Jagadhri”

3. After the aforesaid settlement, the matter was adjourned to 20.4.2019 by

the Appellate Authority for further proceedings. However, on the next

date, the petitioner/tenant instead of taking any step for honouring the

statement made by him earlier towards compromise, moved an application

seeking disposal of his appeal on merits while taking a plea that he was

allured into making a statement qua compromise by the landlords and his

counsel in collusion with petitioner/tenant's counsel whereas he never

intended to make any such statement. The averments to this effect made in

paras 2 to 4 of the application (Annexure P-3) read as follows:

“2. That previously on 25.03.2019, the appellant was allured

by the respondents for making some statement in the

Court and the previous counsel of the appellant got

obtained the signature of the appellant on statement in the

Court on 25.3.2019.

3. That thereafter the respondents started harassing the

appellant and threatened him without any reason or rhyme

and stated that he has got made his statement regarding

ejectment of the appellant from the premises.

4. That then the appellant engaged another counsel and

inquired about the proceedings and came to know that the

respondents in collusion with their counsel have got

recorded the statement of appellant to the effect that the

matter has been compromised and the appellant will

vacate the premises upto 20.4.2019 after receipt of

Rs. 50,000/- from the respondents whereas the appellant

had never intended to make such statement and his

statement has been got recorded under influence and

allurement.”

4. The aforesaid application was, however, dismissed by the Appellate

Authority vide order dated 9.9.2019 which has been impugned by way of

filing the instant revision petition.

5. The learned counsel for the petitioner submits that although the

respondents claim that the matter stood compromised but infact there was

no written instrument regarding compromise brought on record and that it

is a case where at some stage the petitioner had been tricked into making

such a statement on 25.3.2019 by way of allurement and collusion of

counsel but the said statement was withdrawn on the very next date of

hearing before the same could be acted upon i.e. on 20.4.2019 and that in

these circumstances it cannot be said that there was any valid compromise amongst the parties. The learned counsel submits that Order 23, Rule 3 of the Civil Procedure Code [hereinafter referred to as the 'CPC'] has been

interpreted by Hon'ble Supreme Court in 1988(1) SCC 270 Gurpreet

Singh vs. Chatur Bhuj Goel, so as to hold that the requirement of a

written compromise is mandatory.

6. Opposing the petition, the learned counsel for respondents/landlords

submits that a statement made by a party or by his counsel in a Court of

law cannot be brushed aside lightly and that any such statement made by a

party towards compromise in the Court cannot be said to be having lesser

sanctity than the compromise entered into outside the Court before some

Oath Commissioner/Notary Public or before any other authority. It has

been submitted that Hon'ble Supreme Court in judgements delivered

subsequent to Gurpreet' Singh's case (supra) has clarified that not only a

statement made by the party towards compromise can be accepted but

even a statement made by counsel on behalf of his client is to be duly

honoured and accepted.

7. I have considered rival submissions addressed before this Court. Before

proceeding further it is apposite to bear in mind the provisions of Order 23

Rule 3 CPC, as amended, which read as under:

ORDER 23 - RULE 3 of CPC

3. Compromise of Suit –

"Where it is proved to the satisfaction of the Court that a suit

has been adjusted wholly or in part 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, 1972, (9 of 1972), shall

not be deemed to be lawful within the meaning of this rule."

( emphasis supplied )

8. It is worthwhile to notice that prior to 1976 there was no specific

requirement of a compromise to be taken down in writing and it was by

way of amendment in the year 1976 that the said requirement was

incorporated by way of insertion of words “in writing and signed by the

parties” in Rule 3 of Order 23 CPC. The relevant portion of the

Statement of Objects and Reasons for the 1976 amendment states that :

"It is provided that an agreement or compromise under

Rule 3 should be in writing and signed by the parties. This

is with a view to avoiding the setting up of oral agreements

or compromises to delay the progress of the suit."

9. The question posed before this Court is as to whether in a case which is

stated to have been compromised, it is mandatory, in all circumstances, that such compromise should be taken down in writing by way of an instrument and as to whether in the absence of a written instrument the compromise cannot be enforced or acted upon.

10. A reading of amended provisions of Order 23 Rule 3 CPC, as reproduced

above, does suggest that a compromise should be in writing. Hon'ble

Supreme Court in Gurpreet Singh's case (supra), where a statement

towards compromise had been made by a counsel held as follows:

“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 there must be a complete 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 of 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. However, the Supreme Court, in a subsequent case in 2003(11) SCC 372

Jineshwardas (D) through L.Rs. and others Vs. Smt. Jagrani and another,

observed in categoric terms that if the counsel representing a party makes

a statement towards compromise, then the party would be equally bound

by it. In the said case, the parties were litigating in respect of a suit for

specific performance, wherein during the pendency of appeal (RSA)

before High Court, the respective counsel made statements expressing that

the matter had been settled amongst the parties. The order recorded by the

High Court on 9.5.2002 in Jineshwardas's case (supra) reads as follows:

"Both the counsel are in agreement to settle the matter. The

learned counsel for the respondents submits that respondents will

pay an amount of Rs. 25,000/- to the appellant within a period of

one month, otherwise it will carry interest at the rate of 12% per

annum from the date of today. On this agreed submission, this

appeal is decided and judgment and decree passed by the Court

below is modified to this extent.

1. The respondents will pay Rs. 25,000/- (Rupees twenty five

thousand) to the appellants within a period of one month.

2. If this amount is not deposited in the court on or before

10th June, 2002, the above amount will carry interest @

12% per annum till its realization.

3. Cost of the litigation will be borne by both the parties.

The appeal is disposed of in view of the above said agreed

submissions."

12. However, subsequently, the appellants therein in Jineshwardas's case

(supra) filed an application for review of order 9.5.2002 on the ground that

since the appeal had primarily been disposed of on the basis of

compromise, the compromise was required to be taken down in writing in

terms of provisions of Order 23 Rule 3, Civil Procedure Code, and the

same not having been done in writing and signed by the parties, such

compromise could not be made a basis for disposal of the appeal. It was

also contended therein that submission, if any, made in this regard by the

counsel appearing for the appellants in the High Court was without any

instructions of the appellants. It was, thus, submitted before the High

Court that the order dated 9.5.2002 disposing off the appeal ought to be

reviewed. However, the review application was rejected vide order dated

15.7.2002 leading to filing of SLP in Supreme Court wherein strong

reliance was placed upon Gurpreet Singh's case(supra) to contend that in

the absence of compliance with the provisions contained in Order 23 Rule

3, Civil Procedure Code, regarding a written compromise, the judgment of

the High Court could not sustain.

13. Hon'ble Supreme Court, however, dismissed the appeal while relying upon

its earlier judgment i.e. 199 2(1) SCC 31 Byram Peston j i Gariwal vs. Union Bank of India. The relevant extract from the judgement rendered in

Jineshwardas's case(supra) reads as follows:

“ 7. We have carefully considered the submissions of the learned

counsel appearing on either side. Though, in Gurpreet Singh's

case (supra) this Court explained the object and purport of Rule

3 Order 23 Civil Procedure Code, by laying emphasis on the

words, "in writing and signed by parties", to be necessitated in

order to prevent false and frivolous pleas that a suit had been

adjusted wholly or in part by any lawful agreement or

compromise with a view to protract or delay the proceedings in

the suit itself. It was also observed therein that as per Rule 3

Order 23 Civil Procedure Code, when a claim in the suit has

been adjusted wholly or in part by any lawful agreement or

compromise, such compromise, must be in writing and signed by

the parties and there must be complete agreement between them

and that to constitute an adjustment the agreement or

compromise must itself be capable of being embodied in a

decree. The fact that the parties entered into a compromise

during the hearing of the suit or appeal was considered not to be

sufficient, to do away with the requirement of the said rule and

that courts were expected to insist upon the parties to reduce the

terms into writing. In Byram Pestonji Gariwala v. Union Bank of

India & Others [(1992) 1 SCC 31), this Court while adverting to

the very amendment in 1976 to Rule 3 Order 23 Civil Procedure

Code, noticed also the effect necessarily to be given to Rule 1

Order 3, Civil Procedure Code, as well and on an extensive

review of the case law on the subject of the right of the counsel

engaged to act on behalf of the client observed as follows:

' 37.We may, however, hasten to add that it will be

prudent for counsel not 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.

38. Considering the traditionally recognised role of

counsel in the common law system, and the evil

sought to be remedied by Parliament by the C.P.C.

(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 have disallowed

the parties to enter into a compromise by counsel in

their cause or by their duly authorised 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.

39. To insist upon the party himself personally signing

the agreement or compromise would often cause

undue delay, loss and inconvenience, especially in

the case of non-resident persons. It has always been

universally understood that a party can always act by

his duty authorised representative. If a power-ofattorney

holder can enter into an agreement or

compromise on behalf of his principal, so can

counsel possessed of the requisite authorisation by

vakalatnama, act on behalf of his client. Not to

recognise such capacity is not only to cause much

inconvenience and loss to the parties personally, but

also to delay the progress of proceedings in court. If

the legislature had intended to make such a

fundamental change, even at the risk of delay,

inconvenience and needless expenditure, it would

have expressly so stated.

40. Accordingly, we are of the view that the words 'in

writing and signed by the parties', inserted by the

C.P.C. (Amendment) Act, 1976, must necessarily

mean, to borrow the language of Order 3 Rule 1

Civil Procedure Code.

"any appearance, application or act in or to

any court, required or authorised by law to

be made or done by a party in such court,

may except where otherwise expressly

provided by any law for the time being in

force, be made or done by the party in

person, or by his recognised agent, or by a

pleader, appearing, applying or acting as the

case may be, on his behalf.

Provided that any such appearance shall, if

the court so directs, be made by the party in

person.'

(emphasis supplied)

8. We are in respectful agreement with the above statement of law.

Consequently it is not permissible for the appellant, to contend to

the contrary. That apart we are also of the view that a judgment or

decree passed as result of consensus arrived at before court,

cannot always be said to be one passed on compromise or

settlement and adjustment. It may, at times, be also a judgment on

admission, as in this case.”

14. In other words, the Hon'ble Supreme Court reiterated the position of law

that a counsel could compromise a dispute on behalf of his client and that

the decree that followed could be the result of a consensus arrived at

before the Court and that consensus may not necessarily be a compromise

or settlement and adjustment and the same, in a given case, could be a

judgement on admission.

15. In yet another case i.e. 2006(5) SCC 566 Pushpa Devi Bhagat (D)

through LR. Smt. Sadhna Rai Vs. Rajinder Singh & others , where a tenant

during the course of ejectment application agreed to vacate the premises

by a certain date and the trial Court recorded statements of both the

counsel and thereafter passed a consent decree which was later challenged

by the tenant, the Hon'ble Supreme Court held that statements recorded by

the Court will amount to a compromise in writing. The relevant extract

reads as such:

“24. Let us now turn to the requirement of 'in writing' in Rule

3. In this case as noticed above, the respective statements

of plaintiffs' counsel and defendants' counsel were

recorded on oath by the trial court in regard to the terms of

the compromise and those statements after being read over

and accepted to be correct, were signed by the said

counsel. If the terms of a compromise written on a paper

in the form of an application or petition is considered as a

compromise in writing, can it be said that the specific and

categorical statements on oath recorded in writing by the

court and duly read over and accepted to be correct by the

person making the statement and signed by him, can be

said to be not in writing ? Obviously, No. We may also in

this behalf refer to Section 3 of the Evidence Act which

defines a document as any matter expressed or described

upon any substance by means of letters, figures or marks

or by more than one of those means intended to be used or

which may be used for the purpose of recording the

matter. The statements recorded by the court will,

therefore, amount to a compromise in writing.

25. Consequently, the statements of the parties or their

counsel, recorded by the court and duly signed by the

persons making the statements, would be 'statement in

writing signed by the parties'. The court, however, has to

satisfy itself that the terms of the compromise are lawful.

In this case we find from the trial court records that the

second defendant had executed a vakalatnama

empowering her counsel Sri Dinesh Garg to act for her in

respect of the suit and also to enter into any compromise.

Hence there can be no doubt that Sri Dinesh Garg was

authorised by the second defendant to enter into a

compromise. We also find that the counsel for the

plaintiffs and counsel for the defendants made solemn

statements on oath before the trial court specifying the

terms of compromise, which were duly recorded in

writing and signed by them. The requirements of the first

part of Rule 3 Order 23 are fully satisfied in this case.”

16. Taking the aforesaid legal position a step further, Hon'ble Supreme Court

in 2011(8) SCC 679 Bakshi Dev Raj and another Vs. Sudhir Kumar held

that a counsel making a statement upon instructions from client either for

withdrawal of appeal or for modification of the decree is well within his

competence, though it hastened to add that it is desirable to get such

instructions in writing from the client.

17. The position of law, as discerned from the above referred judgments of

Hon'ble Supreme Court, leaves no manner of doubt that a statement made

by a party or by his counsel towards compromise which is taken down in

writing is as good as a written compromise and would satisfy the

requirements of Order 23 Rule 3 CPC, particularly as regards the

provision in Rule 3 which was inserted by way of amendment in the year

1976 i.e. “in writing and signed by the parties”. It will not be out of

place to refer to a judgement of a Division Bench of our High Court also

wherein the same issue has been discussed in context of the definition of

the term 'document'. The relevant extract from 1987 AIR(Pb. & Hr.) 60

Smt. Raksha Rani vs. Ram Lal (DB) reads as under:

“5…… …… ……. ……. Admittedly, statements of the parties

were recorded by the trial Court containing the terms of the

compromise which were duly signed by them. Can it then be said

that the compromise should not be considered to be in writing

and signed by the parties? Should terms of the compromise

scribed on a piece of paper and signed by them be given

preference to their categoric statements made in writing before

the Court which they duly signed? In our candid opinion, the

requirements of the first part of rule 3 are adequately satisfied

when the parties make statements before the Court in writing and

sign the same. Such signed statements are covered by the

definition of ''document'' given in section 3 of the Indian

Evidence Act. Therein ''document'' has been defined as under :-

''Document' means any matter expressed or

described upon any substance by means of letters,

figures or marks, or by more than one of those

means, intended to be used, or which may be used,

for the purpose of recording that matter''.

A plain reading of the definition would show that any matter

expressed or described, upon any substance, by writing is a

document. The first illustration given under the definition of

''document'' also clarified that ''a writing is a document''. Thus,

by no stretch of reasoning the statements of the parties recorded

by the trial Court and signed by them can be considered to be

violating the requirement of ''in writing and signed by the

parties'' mentioned in the first part of rule 3.”

18. Perhaps the only exceptional circumstance under which a party may be

able to wriggle out from a statement made by him in the Court or by his

counsel could be wherein he is able to establish that such statement was

made by way of fraud or deception. Even in such a case he would ideally

be required to file a suit for getting such order/judgement/decree set aside

on the basis of alleged fraud by specifically pleading as well as by leading

cogent and convincing evidence to establish such fraud. No doubt in the

present case the plaintiff in his application on which the impugned order

was passed has pleaded therein that his statement came to be recorded on

account of allurement and collusion of his counsel but there is nothing on

record to establish the said assertions. Had the petitioner really been

sanguine about his stand regarding collusion of his counsel, then it

remains unexplained as to why he did not take any other action against his

counsel. There is nothing to show that the petitioner had ever filed any

complaint in the Bar Council regarding the alleged fraud and collusion by

his counsel. It is very convenient for any party to level such kind of

allegations against his counsel when he wishes to wriggle out of any such

situation which does not suit him. The statement regarding compromise

was made and signed by the petitioner/tenant in the Court of Law and in

the presence of his counsel. The translated gist of the statement made by

the tenant/petitioner Lakshman on 25.3.2019 before the Appellate

Authority is to the following effect:

“I have compromised the matter with the respondent.

As per compromise, I will hand over the vacant

possession of the demised premises to the landlord by

20.4.2019 and the landlord would pay me an amount

of ₹ 50,000/-. I will be bound by my statement.”

19. The respondents/landlords also suffered a statement to the following

effect:

“ I have heard and understood the statement made by

the tenant and admit the same to be correct. I will be

bound by my statement.”

20. The aforesaid statements were recorded in a Court of law by a Judicial