DALJIT KAUR AND ANR.versusMUKTAR STEELS PVT. LTD.

                  [2013] 17 S.C.R. 1043


                DALJIT KAUR AND ANR.                          A
                            v.
              MUKTAR STEELS PVT. LTD.
            (Civil Appeal No. 10755 of 2013)
                  NOVEMBER 19, 2013
                                                              B
        [ANIL R. DAVE AND DIPAK MISRA, JJ.]

      Code of Civil Proce.dure, 1908- s. 96(3) and OrderXL/11
r. 1A. - Appeal against consent decree - Maintainability -
Held: When decree is passed on the basis of compromise 'C
without raising any dispute to the compromise, appea(.would
not be maintainable - But if the decree is passed after holding
an enquiry with regard to the validity of the compromise,
decree cannot be called consent decree, and hence appeal
would be maintainable - In the facts of the present case, the D
High Court rightly held that the decree was consent decree.
    'Appellant No.1-Plaintiff filed a suit against the
respondents-defendants. During pendency of the suit,
the parties entered into a compromise. Application for        E
re.cording the compromise and passing decree in terms
thereof was filed. The plaintiff disputed the compromise.
The trial court decreed the suit on the basis of the
compromise, The appeal against the decree was
d.ismissed by first appellate court, holding that no appeal
would lie u/s.96(3) CPC, against a consent decree. High       F
Court, in second appeal, upheld the view taken by the first
appellate court.. Hence __the present appeal. ·

    Dismissing the appeal, the Court
                                                              G
    HELD: 1. The defendants-respondents had raised a
dispute with regard to validity of the c.ompromise and the
concerned court had conducted an enquiry. Thus; a
decree had been passed on the basis of the compromise
                                  '
                           1043                               ~
    1044    SUPREME COURT REPORTS             (2013) 17 S.C.R.


A based on that enquiry and, therefore, it cannot be said
  to be a consent decree. When a decree is passed without
  any dispute being raised or contested in the court of first
  instance, the decree being passed on consent cannot be
  appealed against. [Para 17] [1052-H; 1053-A-C]
B
         Kishun alias Ram Kishun (dead) through LRs. vs. Behari
    (dead) by LRs. (2005) 6 SCC 300: 2005 (2) Suppl. SCR 383
    - relied on.

       Pushpa Devi Bhagat (dead) through LR. Sadhna Rai
C (Smt.) vs. Rajinder Singh and Ors. (2006) 5 SCC 566: 2006
  (3) Suppl. SCR 370 - distinguished.

        2. The High Court adverted to the facts relating to the
  manner in which the compromise decree had been
0 passed and opined that the enquiry conducted by the
  trial Judge related to the evidence brought on record had
  been rested on proper application of oral and
  documentary evidence. On the aforesaid analysis, the
  High Court has concurred with the conclusion of the first
E appellate court that the decree in question was a consent
  decree. Thus, the High Court, after stating the facts and
  referring to the documents by which it has been recorded
  and further taking note of the fact how the settlement had
  been acted upon by both the parties, has expressed its
  opinion and hence, it cannot really be found fault with.
F [Para 18] [1053-E-H; 1054-A]
                        Case Law Reference:
        2006 (3) Suppl. SCR 370 distinguished         Para 14
G       2005 (2) Suppl. SCR 383 relied on             Para 16
        CIVIL APPELLATE JURISDICTION : Civil Appeal No.
    10755 of 2013.

        From the Judgment & Order dated 07 .03.2013 of the High
H
   DALJIT KAUR v. MUKTAR STEELS PVT. LTD.                    1045

                        ' in SA No. 285 of 2008.
Court of A.P. at Hyderabad                                             A

    P. Vishwanatha Shetty, Venkat Reddy, Vijay Kumar
Paradesi, Anil Kumar Tandale for the Appellants.

    D. Bharathi Reddy for the Respondent.
                                                                       B
    The Judgment of the Court was delivered by

    DIPAK MISRA, J. 1. Delay condoned.

    2. Leave granted.
                              .                                        c
      3. This appeal, by special leave, is directed against the
judgment and decree dated 7.3.2013 passed in Second •.
Appeal No. 285 of 2008 by the High Court of Andhra Pradesh
whereby the learned single Judge has affirmed the judgment
and decree passed by the first appellate court concurring with D
the view that the decree being a consent decree was not
assailable in appeal, and further giving the stamp of approval
to the conclusion that the learned trial Judge, after conducting
due enquiry as envisaged under the proviso to Order XXlll Rule
 3 of the Code of Civil Procedure (CPC), had passed a consent E
 decree.

     4. The broad essential facts giving rise to the appeal are
that the first respondent instituted OS No. 2261 of 1988 in the
Court of IVth Additional Judge, City Civil Court, Hyderabad for
declaration to the effect that the agreements and arrangements. F
between the parties are in the nature of "Industrial Licence" and
not "Leave and Licence" in respect of the suit premises situate
in private industrial estate Sanathnagar, Hyderabad and also
for permanent injunction. The suit was originally filed against
the defendant No. 1, the Managing Partner of the firm but after G
his death defendant Nos. 2 to 6 were brought on record.

     5. The firm filed its written statement contending, inter alia,
that the terms and conditions of the agreement entered into
between the plaintiff and the defendant clearly indicate that the      H
    1046     SUPREME COURT REPORTS                  [2013] 17 S.C.R.


A parties had entered into a "Leave and Licence" agreement and
  the licensor is the absolute owner. It is worthy to mention here
  that the facts with regard to the stand put forth in the plaint and
  the stance taken ir:i the written statement may not be stat~d in
  detail, because the real fulcrum of the lis is whether the parties
B had entered into a lawful compromise and whether the learned
  trial Judge had followed the mandate as postulated under Order
  XXlll Rule 3 of the CPC.

          6. Suffice it to state that during the pendency of the suit at
    the intervention of the elders both the parties, as alleged,
C entered into a compromise. As noted by the trial court as well
    as by the appellate court, the parties entered into a settlement
    which were reflectible from Exts. A-8, A-9 and A-14. I.A No.
    966 of 2001 was filed before the learned trial Judge for
    recording the compromise and passing a decree in terms of
 D the settlement. It was urged before the trial court that as the
    defendant had disputed the compromise,~itwas imperative to
    conduct .an enquiry. For the said purpose I.A No. 490 of 2002
    was filed by the plaintiff. The said application was resisted by
    the defendant on many a ground. The learned trial Judge
 E rejected the said application solely on the base that the plaintiff
    had not carried out the amendments in the plaint by complying
• · with the order passed in I.A No. 1015 of 1998 for amendment
    and hence, his claim for getting an enquiry done was not
    maintainable.
 F
          7. After completion of due formalities the suit was taken
    up and evidence was addu,ced. The learned trial Judge, at that
    juncture, adverted to the oral and documentary evidence brought
    on record, including Exts. A-8 and A-9. The learned trial Judge,
 G relying on the letters exchanged between the parties, namely,
    Exts. A-15, A-16 and A-25 and discussing the.contents of the
     letters in extenso, came to hold that the compromise deeds
     Ext. A-8, A-9 and A-14 had been acted upon with the
     understanding between plaintiff and defendant No.4 because
    the defendant No. 4 had sold away the portions of the land to
 H different persons under sale deeds, Exts. B-3, B-12 and B-22,
    DALJIT KAUR v. MUKTAR STEELS PVT. LTD.                1047
               [DIPAK MISRA, J.]
which apparently took place subsequent to Ext. A-8 and A-9 A
and A-14. The trial court further held that had there been no
compromise between the plaintiff and the defendant No. 4,
there could have been any scope entitling the defendant No. 4
to sell portions of the land to the third parties under Exts. B-3,
B-8, B-12 and B-22 during the pendency of the suit. The court B
also took note of the fact that possession had been handed
over to the third parties. The learned trial Judge analyzing the
oral and documentary evidence recorded a finding to the effect
that in the compromise deed the terms and conditions
contained about the sharing of the amount, taking possession C
of the machinery by defendant No. 4 through Gate passes and
Exts. A-18 to A-23 clearly showed that the machinery was in
the shed of the plaintiff who was put in possession of the
schedule property in the year 1980. The learned trial Judge
further opined that the defendants had no access or possibility
 to enter icto the plaintiff's premises as there was an injunction D
 ope.rating, but because of the compromise deed between the
 parties it could materialize without any obstruction. For arriving
 at th said conclusion the learned trial Judge took support from
 Exts. A-15, A-16 and A-25 written by the counsel for D.W. 1 to
 the plaintiff and his counsel. This position was admitted by E
 P.W.3, the counsel then defending the defendants. It also
 weighed with the trial court that the defendants had continued
 P.W.3 as their advocate for about 2 years after the compromise
 without making any allegations against him. That apart, it
 observed that it was evident from Exts. A-18 to A-22 that the F
 defendant No.4 took away the machinery and plaintiff installed
 new furnace after taking over the suit schedule premises and
  selling the old furnace under Ext. A-27 after effecting the
 compromise in the presence of defendant No. 4 who was a
 witness to the sale document Ex. A-27. On the basis of G
  aforesaid [easoning the learned trial Judge opined that the
 compromise had been legally entered into between the parties
 and the same had ,been acted upon by both the parties to a
 major extent. Being of this view, he accepted the deed of
 compromise and decreed the suit accordingly.                       H
     1048        SUPREME COURT REPORTS              [2013] 17 S.C.R.


·A     8. On appeal being preferred, the learned Additional Chief
  Judge, City Civil Court, Hyderabad, reappreciated the evidence
  and came to hold that both the parties had entered into a
  compromise vide agreements, namely, Exts. A-8 and A-9 and
  the learned trial Judge had correctly placed reliance on the
B same. The learned appellate Judge opined that a.s it was a
  consent decree, no appeal would lie under Section 96(3) of the
  CPC.

      9. Being grieved by the dismissal of the appeal the
  appellant preferred a second appeal. The learned single Judge
C addressed the following two substantial questions of law:-

            "1. Whether the appenate Court was justified in holding
                 that the appeal against a consent/ compromise
                 decree is not maintainable in view of bar created
D                under Section 96(3) of CPC, Order 23 Rule 3-A
                 while ignoring Order 43 Rule 1-A which is inserted
                 simultaneously while deleting Order 43 Rule 1(m).

            2.    Whether the law laid down by this Honourable Court
                  in AIR 2006 SCC 2626 is contrary to Order 43 Rule
E
                  1A? If so, what is the effect of the law laid down by
                  the Supreme Court?"

          10. Analyzing Section 96(3) of the CPC, Order XLlll Rule
     1A and placing reliance on Pushpa Devi Bhagat (dead)
 F   through LR. Sadhna Rai (Smt.) v. Rajinder Singh and others',
     the learned single Judge came to hold that the decree in
     question was a consent decree and hence, the appeal was not
     maintainable. However, it adverted to the facts and eventually
     dismissed the appeal.
 G
          11. We have heard Mr. P. Vishwanath Shetty, learned
     senior counsel appearing for the appellants and Mr. D. Rama
     Krishn·a Reddy, learned counsel appearing for the respondents.


 H 1. (2006) 5 sec 566.
    DALJIT KAUR v. MUKTAR STEELS PVT. LTD.                  1049
               [DIPAK MISRA, J.]

      12. Assailing the defensibility of the judgment passed by      A
the High Court affirming the view expressed by the courts below,
the learned senior counsel for the appellants has contended that
an erroneous conClusion has been arrived at that the appeal
was not maintainable on the assumption that it was a consent
decree. It is urged that the decision rendered in Pushpa Devi        B
Bhagat (supra) had not considered Order XLlll Rule 1A of the
CPC and hence, the said decision could not have been placed
reliance upon. It is contended that Section 96(3) and Order XLlll
Rule 1A of the CPC should have been harmoniously construed
by the High Court as it is open to the appellant to take a stand     c
that the compromise should not have been recorded. It is his
further submission that the High Court has failed to appreciate
the perversity of approach by the courts below and concurred
with the findings recorded by them baldly stating that it is a
question of fact and such an approach has resulted in                0
 miscarriage of justice, and, more so, when the learned single
 Judge had already opined that the appeal was not maintainable.

      13. Mr. D. Rama Krishna Reddy, learned counsel for the
respondents, resisting the aforesaid submissions, urged that
the appellants had entered into a lawful compromise with the         E
respondents and the same had been duly acted upon to a great
extent and hence, the acceptance of the same by the learned
trial Judge on the basis of material brought on record canno
  be found fault with. It is further submitted that because of the
said conclusion, the decree had earned the status of a consent       F
decree and hence,,,the conclusion arrived at by.the High Court
 is absolutely i111peccable.

      14. The pivotal issue that arises for consideration is
 whether in the present case· the appeal could have been
_pr.eferred against the judgmen~ and decree passed by the            G
 learned trial Judge. As is evincible, the lower appellate court
 as well as the High Court has placed reliance on Pushpa Devi
 Bhagat (supra) to come to hold that the appeal was not
 maintainable. In Pushpa Devi Bhagat (supra), a _two-Judge           H
    1050     SUPREME COURT REPORTS                 [2013] 17 S.C.R.


A Bench, dealing with a contention canvassed for the first time
  before this Court that the appeal before the first appellate court
  or before the High Court was not maintainable as there was a
  consent decree, permitted the contention to be raised and
  heard both parties on that score. In the context, it referred to
B Rules 3 and 3-A of Order XXlll and analyzing the said provisions
  summed up the statement of law emerging from Order XXlll that
  (i) no appeal is maintainable against a consent decree having
  regard to the specific bar contained in Section 96(3) CPC; (ii)
  no appeal is maintainable against the order of the court
c recording the compromise (or refusing to record a
  compromise) in view of the deletion of clause (m) of Rule 1
  Order XLlll; (iii) no independent suit can be filed for setting aside
  a compromise decree on the ground that the compromise was
  not lawful in view of the bar contained in Rule 3-A; and (iv) a
  consent decree operates as an estoppel and is valid and
0
  binding unless it is set aside by the court which passed the
  consent decree, by ;:;n order on an application under the proviso
  to Rule 3 Order XXlll. Thereafter the learned Judges proceeded
  to state thus:-

E       "... the only remedy 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
F       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
G       of the agreement or compromise on which it is made. The
        second defendant, who challenged the consent
        compromise decree was fully aware of this positiqn as she
        filed an application for setting aside the consent decree
        on 21.8.2001 by alleging that there was no valid
H       compromise in accordance with law. For reasons best
     DALJIT KAUR v. MUKTAR STEELS PVT. LTD.                1051
                [DIPAK MISRA, J.]

     known to herself, the second defendant within a few days        A
     thereafter (that is on 27 .8.2001) filed an appeal and chose
     not to pursue the application filed before the court which
     passed the consent decree. Such an appeal by the second
     defendant was not maintainable, having regard to the
     express bar contained in Section 96(3) of the Code."            B

      15. The analysis made in the aforesaid decision and the
dictum laid down therein has to be appositely understood. In
fact, the Court was adjudicating a controversy pertaining to
assail of a consent decree where the parties concerned had           C
filed an application before the Court that had passed the
consent decree alleging that there was no valid compromise
but chose not to pursue the same and filed an appeal. In that
factual context the Court had ruled that in view of the express
bar under Section 96(3) the appeal was not maintainable. Thus,
we are inclined to think that the view expressed therein only        D
conveys the principle that a consent decree is not appealable
bt-.ng barred under Section 96(3) of CPC. Be it noted, what
weighed with the court was that the application filed for setting
 aside the compromise was not pursued. Therefore, the said
 decision has to be confined to the facts exposited therein, for     E
 the fundamental factum was that the facet of consent was not
 contested.

      16. In Kishun alias Ram Kishun (dead) through LRs. v.
Behari {dead) by LRs2., a three-Judge Bench was dealing the          F
maintainability of appeal in the backdrop of Section· 96 (3) of
the Code which provide that no appeal shall lie from a decree
passed by the Court with the consent of the parties. In that case,
tbe High court had allowed the second appeal holding that the
first appellate court could not have entert<1ined an appeal          G
against a compromise decree. In the said case, one of the
facets that arose for consideration whether the High Court was
justified in holding that the appeal preferred against the decree


2.   c2oosi 6 sec 300.                                               H
    1052    SUPREME COURT REPORTS                (2013] 17 S.C.R.


A   under Section 96 (3) was maintainable. After discussing the
    factual matrix the court opined thus :- ·

        "When on a dispute in that behalf being raised, an enquiry
        is made (now it has to b"e done in view of the proviso to
        Order 23 Rule 3 of the Code added by Act 104 of 1976)
B
        and the suit is decreed on the basis of a compromise
        based on that enquiry, it could not be held to be a decree
        passed on consent within the meaning of Section 96 (3)
        of the Code. Section 96 (3) contemplates non-
        appealability of a decree passed by the court with the
c       consent of parties. Obviously, when one of the parties sets
        up a compromise and the other disputes it and the court
        is forced to adjudicate on whether there was a
        compromise or not and to pass a decree, it could not be
        understood as a decree passed by the court with the
D       consent of the parties. As we have noticed earlier, no
        appeal is provided after 1.2.1977, against an order
        rejecting or accepting a compromise after an enquiry
        under the proviso to Order 23 Rule 3, either by Section
        104 or by Order 43 Rule 1 of the Code. Only when the
E       acceptance of the compromise receives the imprimatur of
        the court and it becomes a decree, or the court proceeds
        to pass a decree on merits rejecting the compromise set
        up, it becomes appeal~le, unless of course, the appeal
        is barred by Section 96  (3) of the Code. We have already
F       indicated that when there is a contest on the question
        whether there was a compromise or not, a decree
        accepting the compromise on resolution of that
        controversy, cannot be said to be a decree passed with
        the consent of the parties. Therefore, the bar under Section
G       96 (3) of the Code could not have application."

                                                [Emphasis added]

          17. The ratio laid down in the aforesaid case applies on
    all fours to the case at hand. The defendantsrespondents had
H
    DALJIT KAUR v. MUKTAR STEELS PVT. LTD.                 1053
               [DIPAK MISRA, J.]
raised a dispute with regard to validity of the compromise and      A
the concerned court had conducted an enquiry. Thus, a decree
had been passed on the basis of the compromise based on
that enquiry and, therefore, it cannot be said to be a consent
decree. The decision in Pushpa Devi Bhagat (supra) has to
be understood that when a decree is passed without any              B
dispute being raised or contested in the court of first instance,
the decree being passed on .consent cannot be appealed
against. As the present controversy is covered by the decision
 rendered in Kishun (supra), we are not required to dwell upon
the applicability of Order XLlll, Rule 1A of the CPC.               c
      18. Next aspect, that is highlighted by Mr. Shetty, is that
the High Court has really not dwelled upon the perversity of
approach of the courts below and cryptically given the stamp
of approval to the conclusion and it is manifest as the
fundamental premise, the Court was concerned with, pertained D
to the issue of maintainability of appeal. We have discussed
the analysis of the learned trial Judge who has discussed the
evidence while dealing with the dispute raised by the
defendants in the suit pertaining to entering of compromise. We
have also noticed the analysis made by the first appellate court. .E
On a careful perusal of the judgment of the High Court, lt is
 noticeable that it has, at the commencement of the judgment,
 adverted to the facts relating to the manner in which the
 compromise decree had been passed and opined that the
 enquiry conducted by the learned trial Judge related to the F
 evidence brought on record had been rested on proper
 application of oral and documentary evidence. On the. aforesaid
 analysis, the High Court has concurred with the conclusion of
 the first appellate court that the decree in question was a
 consent decree. To satisfy ourselves, we have discussed the G .
 approach of the learned trial Judge and that of the first appellate
 court and we find that the High Court, after stating the facts and
 referring to the documents by which it has been recorded and
 further taking note of the fact how the settlement had been
                                                                    H
    1054      SUPREME COURT REPORTS             (2013] 17 S.C.R.

A   acted upon by both the parties, has expressed its opinion and
    hence, it cannot really be found fault with.

        19. In view of the aforesaid 'analysis, We do not find any
    merit in this appeal and, accordingly, the same stands
    dismissed without any order as to costs.
8
    Kalpana K. Tripathy                           Appeal dismissed.