* 1 * Appeal-58-09 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION APPEAL NO. 58 OF 2009 IN NOTICE OF MOTION NO. 2399 OF 2007 IN SUIT NO. 3896 OF 1990 Jhambivali Estate Agricultural and Allied Products Pvt. Ltd, Mumbai .... Plaintiffs V/S. 1. Ashford Developers Pvt.Ltd, Mumbai and 3 Ors. .... Defendants W I T H APPEAL NO. 140 OF 2010 IN NOTICE OF MOTION NO. 3507 OF 2007 IN SUIT NO. 3896 OF 1990 Pravin Dalpatram Desai ..... Plaintiff V/S. Ashford Developers Pvt. Ltd ...... Defendants. W I T H APPEAL NO. 141 OF 2010 IN NOTICE OF MOTION NO. 2399 OF 2007 IN SUIT NO. 3896 OF 1990 Rachana Foundation Pvt.Ltd, Mumbai ..... Plaintiff V/S. Ashford Developers Pvt. Ltd ...... Defendants. * 2 * Appeal-58-09 * * * * Mr. S.G. Anney, Senior Advocate with Mr. V. Krishnan i/by. Juris Consillis Advocate for the appellant in Appeal No. 58 of 2009 Mr. M.P.S. Rao, Senior Advocate i/by. Mr. A.G. Damle, Advocate for the appellant in Appeal No. 140 of 2009. Mr. Chirag Balsara i/by. Shashikant Parab, Advocate for the appellant in Appeal No. 141 of 2009. Mr. Aspi Chinoy, Senior Advocate with Mr. S.U. Kamdar, Senior Advocate, Mr. Chetan Kapadia, Mr. P.K. Shroff and Mr. D.V. Deokar i/by. P.K. Shroff & Co., for the defendants in all appeals. CORAM : D.K. DESHMUKH, & SMT. R.P. SONDURBALDOTA, JJ. DATED : 6th JULY, 2010. P.C. :- 1. These Appeals take exception to the same order passed by the learned Single Judge dated 29th August, 2008. That order was passed on three Notices of Motions being Notice of Motion No. 2399 of 2007, 3507 of 2007 and 2399 of 2007, for setting aside consent terms dated 8th June, 1998 and an order passed by the court dated 8th June, 1998 disposing off the suit in terms of the consent terms. The Notices of Motions were taken out by defendant no.1, defendant no.2 and defendant no.4. The consent terms were signed by the advocate for * 3 * Appeal-58-09 the plaintiff as also by the advocate for defendants no.1 to 4. It was signed by defendant no.1 for himself. He had also signed it on behalf of defendant no.2 which is a private limited company. The consent terms were signed by Director of defendant no.4 which also is a private limited company. Though the decree was passed in the year 1998, the Notices of Motions were taken out in the year 2007. The learned Single Judge disposed off the Notices of Motions by his order dated 29th August, 2008. The learned Single Judge dismissed the Notices of Motions by his detailed order. 2. Perusal of the order of the learned Single Judge shows that he has considered all the circumstances in detail. He has referred to the circumstances and development leading to the preparation of the consent terms, the presentation of the consent terms as also, submission of the precipe in the court for fixing the matter on the board of the court for taking the consent terms on record, as also, the letter dated August, 1997 addressed by defendant no.1 to the plaintiff in relation to his authority to sign the consent terms on behalf of defendant no.4 in court. The learned Single Judge after referring to each and every circumstance in detail, held that the defendants have approached the court with a false case that they did * 4 * Appeal-58-09 not desire that court should pass a decree in terms of the consent terms. These three appeals have been filed by original defendant no. 1, defendant no.2 and defendant no.4. 3. So far as defendant no.2 is concerned, it was urged on behalf of defendant no.2 that defendant no.2 being a company, unless there is a resolution passed by the board of directors of defendant no.2 authorising defendant no.1 to sign consent terms on behalf of defendant no.2, defendant no.1 could not have signed the consent terms and therefore signing of the consent terms on behalf of defendant no.2 by defendant no.1 is unauthorised. It was also contended that before passing the decree, as per the provisions of Order 23, the court has to record its satisfaction that the decree is lawful. According to the learned counsel, the learned Single Judge who has passed the decree in terms of the consent terms has not recorded that satisfaction and therefore the decree passed in terms of the consent terms is invalid. It is clear that the defendant no.1 is a Director of defendant no.2. He is the husband of the person who has filed affidavit on behalf of the 2nd defendant. 2nd defendant is a private limited company and we have been told that defendant no.1, Pravin Desai, his wife and the person who has filed affidavit on * 5 * Appeal-58-09 behalf of defendant no.4 are the shareholders of the 2nd defendant company and they are all related to each other. Before signing the consent terms, the defendant no.1 had delivered a letter to the plaintiffs stating that he has been authorised by the board of Directors of defendants no.2, 3 and 4 to sign the consent terms on their behalf and he has also promised to supply copies of the resolutions. This letter has been referred to by the learned Single Judge in paragraph-11 of his order. It is further to be seen that the consent terms have been signed by the advocate appearing for defendants no.1 to 4. Thus, the advocate appearing for defendant no. 2 has signed the consent terms. The Supreme Court in its judgment in the case of Byram Pestonji Gariwala V/S. Union Bank of India reported in 1992 1 S.C.C 31 has held that a counsel has an authority to sign compromise on behalf of his client. The observations of the Supreme Court found in paragraph-38 read as under :- 38. “ Considering the traditionally recognized 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 * 6 * Appeal-58-09 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.” 4. Thus, the signature of the advocate on the consent terms would bind the defendant no.2 and there will be no need for a separate resolution authorising the advocate to enter into the consent terms. What is pertinent to be noted, is that there is no denial on the part of the 2nd defendant that the advocate engaged by the 2nd defendant has signed the consent terms. It is also not urged that the Advocate had no power to sign the consent terms on behalf of the 2nd defendant. 5. So far the second contention urged on behalf of the 2nd defendant is concerned, the observations of the Supreme Court in its judgment in the case of Amteshwar Anand V/S. Virender Mohan Singh and Others reported in (2006) 1 S.C.C. page 148 found in paragraph-25 of that judgment, in our opinion, are a complete * 7 * Appeal-58-09 answer. The Supreme Court observes : Order 23 Rule 3 casts an obligation on the court to be “ satisfied that a suit has been adjusted wholly or in part by a lawful agreement or compromise in writing and signed by the parties. On the material before it, the High Court would have had no reason to hold that the suits had not been adjusted as affirmed by the parties to the application. It was not necessary for the court to say in express terms that it was satisfied that the compromise was a lawful one. There is presumption that the Court was so satisfied unless the contrary is proved. (emphasis supplied) ” 6. So far as the appeal filed on behalf of the 1st defendant is concerned, the only contention urged on his behalf is that though he signed the consent terms and was duly authorised by defendants no.2 and 4 to sign the consent terms, the consent terms were signed by him for some other purpose and they were not to be filed in court. In short, the submission of the 1st defendant is that the consent terms were filed in court and decree obtained in terms of the consent terms contrary to the understanding between the parties. The learned counsel appearing for the 1st defendant wanted us to draw an inference in support of his case from the alleged conduct of the plaintiff of not acting on the basis of the decree passed pursuant to * 8 * Appeal-58-09 the consent terms for a long time. What is however pertinent to be noted here is, that the learned counsel appearing for the 1st defendant could not explain if it was the intention of the 1st defendant to sign the consent terms for some purpose other than filing them in court and obtaining the consent decree, then why signature of the advocate appearing for defendant no.1 to 4 in the civil suit was obtained on the consent terms. What the learned counsel appearing for the 1st defendant also could not explain was, if it was the intention of the 1st defendant that the consent terms are not to be filed in the court, why advocate of the 1st defendant who was served with the precipe requesting the court to take the matter on board so that the consent terms can be filed before it and to which a copy of the consent terms was annexed, did not object though about one month s period intervened between the filing of ’ the precipe and the actual date on which the court took the matter on board. What is to be noted here is that, not only that the advocate for the 1st defendant did not object to the presentation of the precipe for taking the consent terms on record, but he records his agreement that the court should take the matter on board for taking the consent terms on record. In our opinion, this conduct of * 9 * Appeal-58-09 the 1st defendant and his lawyer falsifies the case of the 1st defendant that though he has authority to sign the consent terms and he actually signed the consent terms, they were not to be presented in court and decree was not to be obtained in terms of the consent terms. We are also in agreement with the reasons given by the learned Single Judge for rejecting these contentions. 7. So far as the 4th defendant is concerned, we do not find that there is any substance in his case in view of the fact that the consent terms are admittedly signed in addition to the then Director of the 4th defendant, by the advocate appearing for the 4th defendant. What is further pertinent to be noted is that, though it is the case of defendant no.4 that the lawyer signed the consent terms unauthorisedly, he did not bother though be became aware of the court passing a decree in terms of the consent terms to write to the lawyer ever asking him as to why he signed the consent terms. 8. Taking overall view of the matter, we find that the consent terms were signed by the parties and their advocate who had authority to do so and these Notices of Motions were taken out by the defendants merely to avoid compliance of the decree passed in terms of the consent terms. The appeals, in our opinion, have no * 10 * Appeal-58-09 merit and are disposed off. 9. At the request of the appellant, it is directed that proceedings for execution of the decree will not be proceeded with, for a period of 6 weeks from today. [D.K. DESHMUKH, J] [SMT. R.P. SONDURBALDOTA, J]