Moti Dinshaw Irani     (Appellants) Vs.  Phiroze Aspandiar Irani    ( Respondents)

FIRST APPEAL NO.92 OF 1996

(2JB, A.S. CHANDURKAR & JITENDRA JAIN, JJ., delivered by A.S. Chandurkar, J.)

Facts: The present First Appeal, filed under Section 96 of the Code of Civil Procedure, 1908, (for short, “the Code”), raises a challenge to the dismissal of Special Civil Suit No.611 of 1994 on 4th July 1995. The present proceedings have a checkered history and hence it would be necessary to refer to relevant factual events that have bearing on the adjudication of the present proceedings.

Issue: Whether bar under Order 23 Rule 3A of the CPC on a suit against a compromise decree is attracted when a compromise is merely recorded in the earlier suit but the suit is not yet disposed?

Arguments on behalf of counsel for appellants:

Mr. A.V. Anturkar, learned Senior Advocate for the appellants – original plaintiffs submitted that the Trial Court committed an error in holding SCS No.611/1994 to be not maintainable. According to him, there was no valid compromise entered into between the parties to the suit so as to attract the bar as contemplated by the provisions of Order XXIII Rule 3A of the Code. The compromise, as alleged, though shown to be between the plaintiffs and the defendant no.3, it could not be said that the same was a reason to hold that a substantive suit seeking to challenge the compromise was not maintainable. He submitted that the plaintiff no.2 had not authorized the Power of Attorney Holder to compromise the said proceedings and the Power of Attorney Holder acted beyond the power granted to him. Since the plaintiff no.2 had not signed the application at Exhibit-53 in SCS No.268/1978, the contents of that application could not bind the legal rights of the plaintiff no.2 as well as his legal representatives. It was then submitted that the provisions of Order XXIII Rule 3 of the Code would not be attracted in the facts of the case for the reason that in the said suit, the eviction of defendant nos.1 and 2 was sought.

Arguments on behalf of counsel for respondents:

Mr. R.D. Soni, the learned counsel appearing for respondent no.15 opposed the aforesaid contentions and supported the order passed by the Trial Court. He submitted that the respondent no.15 had stepped into the shoes of the original owners of the property and pursuant to the agreement entered into in the year 2005 after adjudication of SCS No.268/1978 had acquired title to the suit property. The said respondents were concerned with the property bearing Survey No.81. According to him, the plaintiffs were not justified in seeking to raise a challenge to the compromise inasmuch as the plaintiff no.2, who was their predecessor, did not take any steps whatsoever to resile from the compromise during his lifetime. The same was duly acted upon and hence the Trial Court was justified in holding the subsequent suit filed by the plaintiffs to be not maintainable. He pointed out that in the first appeal, the original defendant no.3 had been deleted from the array of parties by seeking such leave on 18th September 1996. This would indicate that the original plaintiffs were not interested in seeking eviction of the defendant no.3 and merely sought to challenge the compromise that was accepted by the predecessor of the plaintiff no.2 during his lifetime.

Held: The court allowed the present appeal and held that, “Coming to the decisions relied upon by the learned counsel for the parties, we find that in view of our conclusion that the bar under provisions of Order XXIII Rule 3A of the Code was not at all attracted in the facts of the present case for the reason that there was no decree passed based on compromise, it is not necessary to refer to the said decisions. The legal position that a subsequent suit questioning the lawfulness of a compromise decree is not maintainable, as held in the said decisions, is well settled. Accordingly, the point, as framed, is answered in the negative by holding that the Trial Court was not legally correct in holding the proceedings in SCS No.611/1994 to be not maintainable in view of the bar under provisions of Order XXIII Rule 3A of the Code”