IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOMAS P.JOSEPH WEDNESDAY, THE 30TH JUNE 2010 / 9TH ASHADHA 1932 WP(C).No. 20239 of 2010(O) -------------------------- OS.152/2001 of SUB COURT, PATHANAMTHITTA .................... PETITIONER(S): --------------- K.V.RAJAN, AGED 52 YEARS, S/O.LATE P.C.VARGHESE, SNEHA BHAVAN, ULLANNUR MURI,KULANADA VILLAGE,KOZHENCHERRY TALUK, PATHANAMTHITT DISTRICT FORMERLY MANAGING DIRECTOR OF BEST HOME CONTRACT- ING LLC,P.B.NO.25668,UAE, REP.BY HIS P/AT SIJO.K.R AGED 35,S/O.RAPHEAL.K.T, KADAVIL HOUSE,CHEERACHI BY ADV. SRI.R.D.SHENOY, SENIOR ADVOCATE SMT.S.SIKKY SRI.P.HARIDAS RESPONDENT: --------------- SABAH ENGINEERING AND MARINE SERVICES, UAE, SOLE PROPRIETORSHIP CONCERN, OWNED BY MOHAMMED RAMDAN MOUSA AL SAWJANI, REP.BY KOOTTUMEL JOB JOSEPH, AGED 57, HOLDER OF INDIAN PASSPORT NO.Z.1179424, KALARICKAL HOUSE, INDUSTRIAL NAGAR P.O., VEROOR,CHANGANACHERRY TALUK, KOTTAYAM DIST. 686001 ADV. SRI. K.SHAJ SRI.SAJJU.S THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 30/06/2010, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: THOMAS P JOSEPH, J. ---------------------------------------- W.P.C.No.20239 of 2010 --------------------------------------- Dated this 30th day of June, 2010 JUDGMENT Respondent, a company established and functioning in UAE (United Arab Emirates) represented by an Arab National alleged that there was breach of contract on the part of petitioner resulting in loss of Rs.1.5 crores to the company. The company represented by its proprietor (who is said to be represented by a power of attorney holder) filed O.S.No.152 of 2001 against petitioner in the court of learned Sub Judge, Pathanamthitta for realisation of the said amount. Petitioner had his own defence to the claim but on 28-06-2003 parties entered into a compromise based on which a decree was passed enabling respondent to realise the sum of Rs.45 lakhs from the petitioner as against its claim of Rs.1.5 crores. The decree stipulated the manner in which petitioner was to pay the amount less the sum of Rs.5 lakh paid to the respondent at the time of compromise itself. The balance amount has to be paid on or before 21-12-2005. On 05-12-2005 petitioner requested further time for payment of the amount and on 21-12-2006, he made a further payment of Rs.1 lakh to the respondent but there was no payment thereafter. In February, 2008 respondent launched execution of the compromise decree (in W.P.C.No.20239 of 2010 : 2 : O.S.No.152 of 2001). In April, 2008 petitioner filed O.S.No.103 of 2008 in the same court challenging the compromise decree on the ground of fraud. The allegation made in that suit as revealed from the submission made by counsel on both sides is that though it is averred in the plaint in O.S.No.152 of 2001 that respondent is being represented by its power of attorney holder, enquiry conducted by petitioner sometime in the year 2008 revealed that no such power of attorney was executed in favour of the person who represented respondent in O.S.No.152 of 2001, that amounted to fraud on the court and hence the decree obtained in O.S.No.152 of 2001 is vitiated. O.S.No.103 of 2008 was dismissed for default. At that stage petitioner filed E.A.No.106 of 2010 in E.P.No.30 of 2008 in O.S.No.152 of 2001 seeking stay of execution of the decree until disposal of O.S.No.103 of 2008, taking recourse to Order 21 Rule 29 of the Code of Civil Procedure (for short, “the Code”). That application was opposed by the respondent on various grounds including that O.S.No.103 of 2008 was not pending as on the day E.A.No.30 of 2008 was filed as that suit had been dismissed for default. It was also contended that the said suit is not maintainable on the face of Order 23 Rule 3A of the Code which barred institution of a separate suit on the ground that the decree obtained was not lawful. The executing court upheld W.P.C.No.20239 of 2010 : 3 : objection raised by the respondent and dismissed E.A.No.106 of 2010. That order is under challenge in this writ petition. Learned Senior Advocate appearing for petitioner contended that O.S.No.103 of 2008 though dismissed for default has been restored to file and hence one of the limbs on which the order of E.A.No.106 of 2010 stands no more exists. It is also contended by learned Senior Advocate that executing court has gone wrong in deciding on the maintainability of O.S.No.103 of 2008. At any rate, it cannot be said that O.S.No.103 of 2008 is not maintainable in view of Order 23 Rule 3A of the Code in so far as fraud pleaded by petitioner in O.S.No.103 of 2008 is not between the parties in O.S.No.152 of 2001 but, a fraud played by the respondent on the court which vitiated even the solemn proceeding of the court and the compromise decree passed in O.S.No.152 of 2001. Learned counsel has placed reliance on the decision of the Jammu and Kashmir Hight Court in AIR 2003 Jammu and Kashmir 6 (Ghulam Rasool Reshi Vs. Ghulam Hassan Reshi and Ors.) where compromise decree was passed in a case involving a minor who was not represented by a next friend/guardian as the case may be and it was held that the suit challenging the decree as invalid is not barred under Order 23 Rule 3A of the Code. Learned Senior Advocate also contended that at no point of time the W.P.C.No.20239 of 2010 : 4 : alleged power of attorney was produced in O.S.No.152 of 2001 and enquiry conducted by petitioner revealed that there was no such power conferred on the person who represented respondent in O.S.No.152 of 2001. Learned counsel for respondent in response contended that power under Order 21 Rule 29 of the Code is discretionary in nature, rather it is directory and not mandatory and it was well within the power of executing court to decide prima facie whether circumstances stated thereunder existed which includes whether the suit, said to be pending is prima facie maintainable. In that view of the matter there was nothing wrong in the executing court, for the purpose of disposal of E.A.No.106 of 2010 considering whether O.S.No.103 of 2008 was maintainable. Learned counsel also contends that at any rate, going by Order 21 Rule 29 of the Code, O.S.No.103 of 2008 ought to have been pending at the time E.A.No.106 of 2010 was filed and it is not disputed that at the time when E.A.No.106 of 2010 was filed, O.S.No.103 of 2008 was not pending it having been dismissed for default even prior to that but, notwithstanding that a statement was made in support of the affidavit filed in E.A.No.106 of 2010 that the said suit is pending. According to the learned counsel on the facts and circumstances executing court was justified in exercising discretion not to grant stay and there is no reason to W.P.C.No.20239 of 2010 : 5 : interfere under Article 227 of the Constitution. Reliance is placed on the decision in 1994(1) KLT 156 (Meenakshi Vs. Manikkam) and 2003(2) KLT 906 (Kamalakshi Amma Vs. Chitta Aleya). It is also the argument of learned counsel that even a written authority is not necessary for institution of the suit which can be based on an oral authority as held by this court in the decision in 1988(1) KLT 673 (Narayanan Nair Vs. John Kurian). 2. There can be no doubt that power under Order 21 Rule 29 of the Code is discretionary in nature of course, to be exercised as in the case of any other discretionary power in accordance with the principles regulated by law. Question is whether executing court having exercised the discretion not to grant stay this court is required to interfere under Article 227 of the Constitution. Decisions on the point informs me that interference under Article 227 of the Constitution is required only when court below has exercised a jurisdiction which it did not have, has not exercised the jurisdiction it has or, exercised the jurisdiction it has in an improper or illegal manner or when the decision is perverse. It is not disputed that there was compromise decree in favour of respondent on 28-06-2003 and pursuant to that compromise decree, petitioner did make certain payments though it did not W.P.C.No.20239 of 2010 : 6 : wipe off the entire liability under the decree. The decree was passed on 28-06-2003 and the present execution petition was launched in February, 2008. It is in March, 2008 that petitioner filed O.S.No.103 of 2008 challenging the compromise decree on the ground of fraud in that, the so called power of attorney holder had no power to represent the respondent in O.S.No.152 of 2001. This court in Narayanan Nair Vs. John Kurian (supra) has held that for the institution of the suit, it is not necessary that the agent should have produced a written authority. Instead, even an oral authority is sufficient. In this case, even going by the contention raised by petitioner it would appear that no written power of attorney was produced even at the time compromise decree was passed on 28-06-2003. In other words, petitioner agreed for a compromise decree even in the absence of a written authority produced by the alleged holder of power on behalf of the respondent. Now the contention is that sometime in March, 2008 petitioner learned that the so called power of attorney holder was not having any such authority. That is a matter which of course the petitioner has to establish in O.S.No.103 of 2008 if he is otherwise entitled to that course as provided under law. In Kamalakshi Amma Vs. Chitta Aleya (supra) this court held that Order 21 Rule 29 of the Code is only directory and unless the court W.P.C.No.20239 of 2010 : 7 : is convinced that the petitioners have a “reasonably strong case of enquiry in the new suit on the basis of which stay is sought for” the executing court will be justified in declining to grant stay. Therefore, even for the invocation of discretionary power under Order 21 Rule 29 of the Code executing court must be satisfied that there is reasonably strong case for enquiry in the new suit. The executing court was not satisfied about that strong case of petitioner in O.S.No.103 of 2008. It is a different question whether executing court ought to have gone to the extent of observing that O.S.No.103 of 2008 is not maintainable. That observation need only be understood as for the purpose of deciding whether discretion under Order 21 Rule 29 of the Code has to be exercised in favour of petitioner. There is some weight in the contention of learned counsel for respondent that any challenge to the validity of the compromise decree on whatever grounds urged could not have been by a separate suit. 3. Going by the submissions made before me, it is clear that on the date E.A.No.106 of 2010 was filed, O.S.No.103 of 2008 was not pending. Learned Senior Advocate has an argument that if that contention is accepted, necessarily petitioner must get an opportunity to file fresh application for stay under Order 21 Rule 29 of the Code after O.S.No.103 of 2008 was restored to file. But W.P.C.No.20239 of 2010 : 8 : subsequent restoration of O.S.No.103 of 2008 can be taken into account for disposal of this petition. Having regard to the facts and circumstances I am also not inclined to think that a further opportunity has to be given to the petitioner for the said purpose if on facts of the case I am satisfied that executing court notwithstanding the issue regarding pending of O.S.No.103 of 2008 was correct in holding that discretionary power is not to be exercised in favour of petitioner. Respondent filed the suit in the year 2001 and compromise decree was passed on 28-06-2003 even as per the version of petitioner, without a written authority having being brought on record. In such a situation, when the petitioner came up with a new case in 2008, having already paid some amount towards the amount due under the decree, and that enquiry in March, 2008 revealed that no such power was conferred on the power of attorney to institute O.S.No.152 of 2001, I am not inclined to think that the discretionary power had to be exercised in favour of petitioner. Having that aspect in mind I am of the view that executing court was correct in holding that the discretion ought not to be exercised in favour of the petitioner. As this court stated in Kamalakshi Amma Vs. Chitta Aleya (supra) I must bear in mind that the power under Order 21 Rule 29 of the Code is directory. That power, the executing court has W.P.C.No.20239 of 2010 : 9 : exercised against petitioner. I do not find anything illegal in the exercise of that discretionary power so that this court is required to interfere under Article 227 of the Constitution. It follows that order under challenge does not require interference. But I make it clear that any observation or finding made herein will be confined to denial of relief to the petitioner under Order 21 Rule 29 of the Code and for the disposal of this writ petition and shall not in any way affect parties seeking other remedies if any, available to them under law. (THOMAS P JOSEPH, JUDGE) Sbna/-