IN THE HIGH COURT OF JUDICATURE AT PATNA C.R. No.1 of 2011 Srimati Sushila Gupta Versus Rabindra Kumar Gupta ----------- For Petitioner : Mr. Binod Kumar Singh, Advocate For Opposite Party : Mr. Pushakar Narain Shahi, Advocate Mr.Patanjali Rishiv, Advocate Mr. Atal Bihar Pandey, Advocate 5 18.08.2011 Heard learned counsel appearing on behalf of the petitioner and learned counsel appearing on behalf of the opposite parity. This application has been filed assailing the order dated 16.11.2010 passed by Sub-Judge IV, Ara, holding that the Misc. Case No. 41/2007 filed for challenging the compromise decree is maintainable. The necessary facts, as disclosed from the revision petition is that the petitioner Smt. Sushila Gupta had instituted Money Suit No. 18 of 2005 against the opposite party Rabindra Kumar Gupta for the main relief of payment of Rs. 80, 000/-. The parties to the suit entered into compromise and filed a compromise petition dated 14.02.2007 which was accepted by the Court by its order dated 15.02.2007 and the suit was disposed of in terms of the said compromise. Subsequently, however, the opposite party Rabindra Kumar Gupta (defendant in the suit) filed a Misc. Case No. 41 of 2007 praying to set aside the compromise decree. The petitioner Smt. Sushila Gupta(plaintiff in the suit) appeared and filed a petition dated 01.10.2010 raising objection regarding the maintainability of the Miscellaneous Case asserting that a compromise decree could be challenged only by filing an appeal under Order 43 Rule 1 (A) (2) 2 C.P.C. and there was no other remedy open to the aggrieved party. The learned Court below after hearing the parties has, by the impugned order, held that the Misc. Case was maintainable and there by rejected the petition dated 01.10.2010 field by the petitioner. The learned counsel for the petitioner has strenuously made the submission that after the acceptance of the compromise in a suit and passing of a decree in accordance with the same, the Court which passes the decree becomes functus officio and cannot thereafter entertain a petition challenging the validity of the compromise. By referring to the proviso to Order 23 Rule 3 C.P.C. the learned counsel for the petitioner has led emphasis upon the portion of the proviso which prohibits the Court from granting adjournment and by drawing cue from the same it has been submitted that the proviso is meant to be applicable only at a stage before the acceptance of the compromise and passing of the compromise decree and not thereafter. The further proposition of the learned counsel for the petitioner is that the intention of the legislature to curtail litigation is manifest from the wordings of the proviso and also from the absence of any other provision in the Code of Civil Procedure except the appellate forum in Order 43 Rule 1 (A) (2). The reliance has been placed upon Guru Charan Singh & Ors. Versus Mahatam Singh & Anr. 2006 Vol. 3 PLJR Page 345 holding that the only remedy against a compromise decree is by way of filing an appeal. The learned counsel appearing on behalf of the opposite party has submitted that the ouster of jurisdiction of a court to reconsider / recall its order, alleged to have been illegally and 3 unlawfully obtained, must not be readily inferred unless the intention of the legislature is clear and specific in this regard. It has further been submitted that the Court which has passed a compromise decree always has the inherent power to reconsider and recall its order for recording of the compromise if it is satisfied on the basis of materials produced before it that there are substantial reasons for doing so. Dwelling upon the proviso of Order 23 Rule 3 of the Code of Civil Procedure, the learned counsel has submitted that a conservative and narrow interpretation of this proviso would defeat the mandate of legislature which has taken care even to add an explanation clause to the proviso to elaborate the meaning of lawful agreement. The jurisdiction of the Court which has passed the compromise decree to recall the order recording the compromise in appropriate cases must always be upheld. The learned counsel has placed his reliance upon in the case of Banwari Lal Vs. Smt. Chando Devi & Another (AIR 1993 Supreme Court 1139) and Pushapa Devi Bhagat Vs. Rajinder Singh & Ors.[(2006) 5 SCC 566)]. After hearing the parties and considering the facts and circumstances of this case, it is clear that the compromise decree passed in the Money Suit No. 18 of 2005 has been challenged by the sole defendant on the ground that the alleged compromise had been obtained by playing fraud upon him. From the rejoinder filed by the defendant/opposite party, which is Annexure-2 to the revision application, it appears that the details of the fraud and manner in which the fraud had been allegedly practised had been mentioned which includes allegations of forging the signature of defendant / opposite 4 party on Vakalatnama, compromise petition and written statement. All these alleged illegalities have been committed before the Court where the money suit was pending and that Court would always be in a better position to appreciate the facts and evaluate the allegations and counter allegations. The proviso has been clearly inserted to reiterate the power of the Court, which it has always inherently possessed, to recall its order in case of fraud. The interpretation of the proviso, as ventured by the learned counsel for the petitioner, does not seem to be sound and logical. The portion of the proviso prohibiting the Court from granting adjournment cannot be stretched to mean that the proviso is applicable only at a pre-decree stage. If this would have been the intention of the legislature, there could have been better words and modes, making such intention clear and specific. This question has been considered by the Hon’ble Supreme Court in Banwari Lal Vs. Smt. Chando Devi & Another (A.I.R. 1993 S.C. 1139) as follows:- “Para 7………By adding the proviso along with an explanation, the purpose and the object of the amending Act appears to be to compel the party challenging the compromise to question the same before the Court which had recorded the compromise in question. That Court was enjoined to decide the controversy whether the parties have arrived at an adjustment in a lawful manner. The explanation made it clear that an agreement or a compromise which is void or voidable under the Indian Contract Act shall not be deemed to be lawful within the meaning of the said Rule. Having introduced the proviso 5 along with the explanation in Rule 3 in order to avoid multiplicity of suit and prolonged litigation, a specific bar was prescribed by R. 3A in respect of institution of a separate suit for setting aside a decree on basis of a compromise saying:- (emphasis supplied) Para 13………………To make the enquiry in respect of validity of the agreement or the compromise more comprehensive, the explanation to the proviso says that an agreement or compromise “which is void or voidable under the India Contract Act…...”shall not be deemed to be lawful within the meaning of the said Rule. In view of the proviso read with the explanation, a Court which had entertained the petition of compromise has to examine whether the compromise was void or voidable under the Indian Contract Act. Even R. 1(m) of O. 43 has been deleted under which an appeal was maintainable against an order recording a compromise. As such a party challenging a compromise can file a petition under proviso to R. 3 of O. 23, or an appeal under S. 96(1) of the Code, in which he can now question the validity of the compromise in view of R. 1A of O. 43 of the Code.” (emphasis supplied) This question again came up for consideration by the Apex Court in Pushpa Devi Bhagat Vs. Rajinder Singh and Others 2006 Vol. V SCC 566 and it was held as follows:- “17……….Therefore, the only remedy 6 available to a party to a consent decree to avoid such consent decree, is to approach the court which recorded the compromise and made a decree in terms of it, and establish that there was no compromise. In that event, the court which recorded the compromise will itself consider and decide the question as to whether there was a valid compromise or not. This is so because a consent decree is nothing but contract between parties superimposed with the seal of approval of the court. The validity of a consent decree depends wholly on the validity of the agreement or compromise on which it is made.” (emphasis supplied) The submission of the learned counsel for the petitioner that after passing of the compromise decree the only remedy is by way of appeal under Order 43 Rule 1 (A) (2) has no force in view of the wordings of the said provision which is only an enabling provision making it open to an appellant, who has filed an appeal against a decree passed in a suit after recording a compromise or refusing to record a compromise, to contest the said decree also on the ground that the compromise should or should not have been recorded. From the reading of the provisions of the Code of Civil Procedure as pointed out by the learned counsel for the petitioner it does not appear that the intention of the legislature has been to oust the jurisdiction of the Court which passes a decree after recording a compromise to reconsider / recall its order if substantial reasons for the same exists or has been demonstrated 7 to be existing. Moreover, it is well-settled that every Court has inherent power to recall its order in a case when the same is shown to have been obtained by fraud and reference in this regard, may be made to the law laid down in the judgment of the Apex Court in the case of Ram Chandra Singh Vs. Savitri Devi & Ors. 2003(4) PLJR (SC), 208. Examining this question from another angle also it appears that the remedy by way of appeal in a case where the factum of compromise is itself under challenge on the ground of fraud or other illegalities will be only an illusory remedy because the Appellate Court in such a case will not have sufficient material before it for deciding such a question and in such a case the provision for allowing additional evidence may not be available to a party. In such a situation, the Court which has passed a decree after recording or refusing to record a compromise will be better equipped to determine the issues of fraud or other illegalities and as such an application under Section 151 of the Code will, by all means, meet the necessities of the case. The learned Court below has rightly come to the conclusion that there are two options to challenge a compromise decree first by filing a miscellaneous case in the same Court and secondly by preferring an appeal in Higher Court and has correctly passed the order upholding the maintainability of the Miscellaneous Case. There is no merit in this Revision Application which is accordingly dismissed. Saif (V. Nath, J.)