The position that emerges from the amended provisions of   Order 23, can be summed up thus : 

(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 recording the compromise (or refusing to record a compromise) in view of the deletion of 

clause (m) Rule 1 Order 43. 

(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 3A. 

(iv) A consent decree operates as an estoppel and is valid and binding unless it is set aside by the court 

which passed the consent decree, by an order on an application under the proviso to Rule 3 of Order 23. 

                                                                                                 - REPORTED IN AIR 2006 SC 2826

Read as follows:

CASE NO.:
Appeal (civil)  2896 of 2006

PETITIONER:
Pushpa Devi Bhagat (D) Th. LR.Smt. Sadhna Rai

RESPONDENT:
Rajinder Singh & Ors.

DATE OF JUDGMENT: 11/07/2006

BENCH:
B P Singh & R V Raveendran

JUDGMENT:
J U D G M E N T
(Arising out of S.L.P. (C) No. 13894/2004)


R. V. Raveendran, J.

Leave granted.
This appeal is directed against the judgment dated 3.3.2004
passed by learned Single Judge of Delhi High Court in FA No.247 of
2003.

2. Respondents 1 & 2 are the landlords of the suit property (front
portion of residential premises no. C-25, Friends Colony, New Delhi).
Respondents 1 & 2 and their father Late Brig. S. Rameshwar let out
the suit property with the fittings and fixtures to M/s Usha Fisheries
Agriculture and Dairy Farm, a partnership firm (third respondent
herein) for a period of three years under a registered lease deed dated
6.6.1979, the purpose being the residential use of a partner of the
firm. Pushpa Devi (mother of the appellant) and respondents 4, 5 & 6
were its partners. The suit property was being used by Pushpa Devi
for her residential use. The tenancy was continued after the lease term
of three years.

3.     The landlords (Respondents 1 & 2 and their father) terminated
the said tenancy as at the end of 31.3.1989 by notice dated 9.2.1989
and filed a suit against the firm and Pushpa Devi in the court of the
District Judge, Delhi on 10.4.1989 for recovery of the possession of
the suit property. It was originally numbered as RC Suit No. 265 of
1989 and later, transferred to the court of the Sub-Judge, New Delhi
(later, Civil Judge, Delhi) and renumbered as Suit No. 52 of 1993.
Pushpa Devi, second defendant, resisted the suit inter alia on the
ground that the first defendant firm had been dissolved and as a
consequence all its partners including herself became the co-tenants
and the suit was not maintainable without impleading the other
partners. Subsequently, M.L. Wadhwa, S. K. Mittal and Badan Singh
(the other three partners of the firm), were impleaded as defendants 3
to 5. During the pendency of the suit, the first plaintiff S. Rameshwar
died, and the suit was continued by showing his two sons (original
plaintiffs 2 & 3) as plaintiffs 1 & 2. The fifth defendant also died and
his son Chaman Lal Gahlot was brought on record in his place as the
fifth defendant.

4.     Two witnesses were examined on behalf of the plaintiffs and their
evidence was closed on 16.9.1998. Thereafter, the case was adjourned
a number of times for defendants' evidence. Shri Dinesh Garg, counsel
for defendants stated that as the first defendant firm was dissolved, he
will not appear for the firm. In view of it, after issuing court notice, the
first defendant was placed ex parte on 24.4.2000. The order-sheet
dated 7.7.2000 shows that as defendants 2 & 3 did not let in any
evidence, their evidence was closed and the matter was listed for
evidence of defendants 4 & 5. On 19.5.2001, the court made the
following order :-

"The case was filed in the year 1989. Keeping in view the fact
that it has already been delayed, defendant no. 4 and newly
added defendant no.5 are given only one (more) opportunity to
lead their evidence otherwise the same will be closed on the
next date of hearing i.e. 23.5.1991."

On 23.5.1991, the two plaintiffs and their counsel and Shri Dinesh
Garg, counsel for the Defendants were present. On the basis of the
submissions made, the court recorded the following submissions in the
order sheet :
"It is stated that the matter has been compromised between the
parties. The defendants undertakes to vacate the suit premises
by 22.1.2002 and will keep on paying the rent/damages of the
suit premises @ Rs.4800/- with effect from 1.5.2001, till the
time of vacation of the suit premises. Let the statement of
both the parties be recorded." (emphasis supplied)

Thereafter, the following statement of Shri Dinesh Garg, counsel for
defendants was recorded by the court :
"Statement of Shri Dinesh Garg, Adv. for the defendants.
W. O.
I have instructions on behalf of the defendants to make the
present statement that the defendants undertake to vacate the
suit premises by 22.1.2002 and will keep on paying the
rent/damages @ Rs.4800/- w.e.f. 1.5.2001, till the vacation of
the suit premises. The rent upto 30.4.2001 already stands paid.

Sd/-  Dinesh Garg, Adv. R.O.A.C.
          (Sd. Civil Judge)

Thereafter, the following statement of Shri B. Khan, counsel for the
plaintiffs was recorded :

"Statement of Shri B. Khan, Counsel for both the plaintiffs.
W.O.
I have instructions on behalf of plaintiffs to make the present
statement that in view of the statement made by the counsel for
the defendants, on behalf of the defendants, the suit may kindly
be disposed of accordingly. I accept the terms of the statement
of counsel for defendants. The plaintiffs are also present today
in the court and will countersign this statement.

Sd/-  B. Khan, Adv.      R.O.A.C.
(Sd/- Civil Judge)


In addition to the learned counsel for plaintiffs and defendants signing
the order sheet, plaintiffs 1 & 2 who were present in court, also signed
the order sheet. Thereafter, the court made the following order :-

"ORDER
In view of the statement made by the counsel for parties in the
presence of both the plaintiffs, the suit stands disposed off as
settled. Parties to be bound by their statements made today.

File be consigned to R/R. Decree sheet in terms of said
compromise be prepared.

23.5.2001      Sd/Savita Rao
Civil Judge, Delhi"


5. It was subsequently found that Shri Dinesh Garg though
appearing for all defendants, had not filed Vakalatnama for defendants
3 & 4 and one Shayam Kishore had entered appearance for them.
Therefore, an application under sections 151 and 152 CPC was moved.
Shri Dinesh Garg filed the Vakalatnama on behalf of the defendants 3
& 4 on 18.7.2001. In view of it, the trial court made the following
order on 18.7.2001 :


"Reply to application under section 151 and 152 filed. Copies
given.
As stated Vakalatnama on behalf of the defendants 1, 2, & 5 is
already on record  but inadvertently, the Vakalatnama on behalf
of the defendants 3 & 4 was not filed which the counsel Shri
Dinesh Garg is filing today. It be taken on record. Counsel for
defendant states that when he gave the statement, he was duly
authorized on behalf of the defendants for making statement.
He further states that defendant no. 1 is a partnership firm
which has now been dissolved and is not in existence and even
if the decree is passed against defendant no.1 then also it will
be executable against defendents 2 to 5 only. However, I pass a
decree against all the defendants. Let the decree be modified
and a fresh decree sheet be prepared mentioning therein that
the defendants will vacate the suit premises by 22.1.2002 and
will keep on paying the rent/damages @ Rs.4800/- with effect
from 1.5.2001 till the vacation of the suit premises, i.e., front
portion forming part of premises No.C-25, Friends Colony, New
Delhi as shown red in the site plan annexed with the plaint. File
be sent to RR.

Sd/Civil Judge"

Accordingly,  a fresh decree was drawn on 18.7.2001 in terms of
the final order dated 23.5.2001.

6.     On 21.8.2001, second defendant (Pushpa Devi) filed an
application under section 151 CPC for setting aside the decree
dated 18.7.2001 alleging that she had not instructed her counsel
Shri Dinesh Garg to enter into any compromise on her behalf
that there was no "written compromise between the parties duly
signed by the parties", and therefore, there was no lawful
agreement or compromise. The court issued notice of the said
application to Shri Dinesh Garg, counsel for the defendants as
also the plaintiffs. Shri Dinesh Garg filed a detailed statement
dated 7.12.2001. We extract below the relevant portions of the
said statement :

"The counsel had represented the defendant no. 2
for about 12 years in the aforesaid matter. The
counsel was getting the instructions from the
defendant no. 2 most of times through her daughter
Ms. Sadhna Rai or her son in law, Shri Vinay Rai or
through Group Head of Law Department Dr. M.C.
Gupta. All the proceedings were always
communicated to the defendant no.2.

After the closing of evidence by the plaintiff, the case
was listed for the defendant's evidence time and
again and under instructions of the defendant no. 2,
the counsel took adjournments for evidence for
several years. The adjournment were taken on
4.12.1998, 5.4.1999 and 21.5.1999. When the case
fixed for 12.7.1999 for evidence of defendant no. 2,
she again did not come and sent her medical
certificate which was placed on record and case was
adjourned to 8.9.1999. Again adjournment  was
sought and the case was adjourned to 22.10.1999 as
last and final opportunity for her evidence. A written
communication dated 20.9.1999 was sent by
registered post to defendant no. 2, but she did not
appear. Again adjournment was sought as per her
instructions and this time the case was adjourned for
30.11.1999 for her evidence subject to cost of
Rs.500/- which was paid by her but still she did not
appear in witness box. Even thereafter case was
adjourned on 13.1.2000, 24.4.2000, 7.7.2000,
4.9.2000, 16.10.2000, 20.12.2000 and 26.4.2001
for evidence of remaining defendants but none
appeared in witness box.

After contesting the matter for about 10 years when
it was not possible to take any further date for
recording of the evidence of the defendants, the
counsel advised the defendant no. 2 to lead evidence
and made it clear that it will not be possible the
counsel to meet any further adjournment.

However, she requested for getting her some time to
enable her to find an alternative accommodation.
The counsel took her oral instructions under good
faith and because of level of confidence developed
after representing Usha Group for about 18 years,
started negotiations with the plaintiff which went on
for several months, during which period there were
several offers and counter offers duly communicated
to the defendants. Ultimately when plaintiff came out
with plea to first clear the arrears of rent with effect
from 01.10.1999, the counsel asked defendant no. 2
to clear the arrears which were sent to counsel vide
communication of their Law Officer dated 9.4.2001
through the Head of Law Department Dr. M.C.
Gupta.

After that, the term are negotiated and ultimately,
with prior approval of defendant no. 2 a statement
was made on behalf of the defendant no. 2 as well
on behalf of the other defendants and the decree
was obtained based on admission. Pursuant to
request of the counsel, the plaintiff as well as this
Hon'ble Court was pleased to allow time upto
22.1.2002 to the defendants to vacate the premises.
Immediately after recording of the statement, a
written communication dated 24.5.2001 was sent to
the defendant no. 2 as well as to Dr. M.C. Gupta,
Head of the Law Department of Usha Group of
Companies was sent by Registered A.D. post clearly
indicating therein that a statement has been made
as per the instructions and that the decree has been
passed. This communication was duly received by
the defendant no. 2 as well as Dr. M.C. Gupta. The
copy of the letter, postal receipts and the AD card
duly signed by the defendant as received are
annexed."


7. The second defendant did not, however, pursue her
application dated 21.8.2001 for setting aside the consent decree.
On 27.8.2001, within six days of filing the application dated
21.8.2001 before the trial court for setting aside the decree, the
second defendant filed an appeal against the said consent decree
before the District Judge, Delhi. The appellate court by judgment
dated 21.12.2002 set aside the consent decree on the ground
that there was no agreement or compromise reduced to writing
and signed by the parties. The matter was remanded to the trial
court with a direction to proceed with the trial of the suit in
accordance with the law by ignoring the statement of the counsel
made on 23.5.2001.

8.     The said judgment of the Appellate Court was challenged
by the landlords in FAO No. 247 of 2003 on the file of the Delhi
High Court, under Order 43 Rule (1)(u) of CPC. During the
pendency of the said appeal before the High Court, Pushpa Devi
died, and her daughter (the Appellant) came on record and
pursued the appeal. The High Court allowed the landlords' appeal
by judgment dated 3.3.2004. The High Court held that the
consent decree in question did not fall under the first part of
Rule 3 of Order 23 (requiring an agreement or compromise
between the parties to be in writing and signed by the parties),
but fell under the second part of Rule 3 of Order 23 (relating to
satisfaction of the claim of the plaintiff, which did not require any
document in writing signed by the parties), and that there was a
valid compromise under Order 23 Rule 3 CPC and the second
defendant "could not repudiate the consensus by attempting to
challenge their satisfaction". From the fact that the second
defendant did not pursue the application dated 21.8.2001 filed
before the trial court, and from the fact that she did not
challenge the integrity of her counsel (who entered into the
compromise) either before the appellate court or before it, the
High Court drew an inference that second defendant's counsel
Sri Dinesh Garg, had the authority on her behalf to make the
statement leading to the consent decree.

9.     The judgment of the High Court is challenged by the
appellant (second defendant's legal representative) in this
appeal. Learned counsel for the appellant contended that the
High Court having held that the case did not fall under the first
part of Rule 3 of Order 23, committed a serious error in holding
that the case fell under the second part of the said Rule. It is
contended that the second part applies only where the defendant
satisfies the plaintiff in regard to the whole or part of the subject
matter of the suit. It is pointed out that the second part refers to
completed acts, that is acts which have been already executed
or performed, where nothing more remains to be done in future
by a defendant. He submitted that in this case when the counsel
for the defendants agreed to vacate the suit premises on a
future date,  that is on or before 22.1.2002, it was  a promise or
an agreement to do an act in future to satisfy the suit claim, and
not a case where "defendant satisfies the plaintiff in respect of
the subject matter of the suit". He pointed out that if the
defendants had vacated and delivered the premises to the
plaintiffs and thereafter the counsel for the defendants had
confirmed the same and the suit had been disposed of recording
the said submission, then it would fall under the second part.
The appellant contends that the High Court having held that the
case did not fall under the first part of Rule 3, and the case
demonstrably not falling under the second part of Rule 3, it has
to be held that there was no lawful agreement or compromise. It
is submitted that the first appellate court was justified in setting
aside the consent decree and remanding the matter to the trial
court. On the other hand, the learned counsel for the landlords
contended that the District Court had no jurisdiction to entertain
the appeal against a consent decree. It is also contended that
there was a compromise by admitting the claim of the plaintiffs,
and, therefore, the consequential decree is valid and binding. On
the contentions raised, the following two questions arise for
consideration :

(i) Whether the appeal filed by Pushpa Devi under
section 96 of the Code of Civil Procedure, against the
consent decree was maintainable.
(ii) Whether the compromise on 23.5.2001 resulting in a
consent decree dated 18.7.2001 was not a valid
compromise under Order 23 Rule 3 CPC.

Re : Point No. (i)

10.     It is no doubt true that the landlords did not contend
either before the first appellate court or before the High Court
that the appeal against the consent decree was not
maintainable. This contention is urged for the first time in this
Court. The contention relates to jurisdiction of the appellate
court and is evident from the record. Such a plea does not
require any evidence. Further, being a contention relating to the
jurisdiction of the appellate court, it does not require any
'pleading'. Though this Court will not normally permit a new plea
to be raised at the hearing of the special leave petition or an
appeal under Article 136, where such plea does not involve any
question of fact or amendment of pleading and is purely one of
law, particularly relating to jurisdiction of the appellate court, it
can be entertained by this Court. (See Shanti Devi vs. Bimla
Devi - AIR 1988 SC 2141 and Zahoor vs. State of U.P - AIR 1991
SC 41). In Hiralal vs. Kasturi Devi [AIR 1967 SC 1853], this
Court observed :

" . though the question of jurisdiction had not
been urged before the High Court, it stares one in the
face of the judgment of the appellate court. We are
satisfied that the appellate court had no jurisdiction
though this point was not raised in the High
Court, it is so obvious that we have permitted the plea to
be raised before us."


In this case, the contention raised being one relating to
jurisdiction of the appellate court, we have permitted the said
contention and heard both sides thereon.

11.     Section 96 provides for appeals from original decrees.
Sub-section (3) of section 96, however, provided that no appeal
shall lie from a decree passed by the court with the consent of
the parties. We may notice here that Order 43 Rule 1 (m) of CPC
had earlier provided for an appeal against the order under Rule 3
Order 23 recording or refusing to record an agreement,
compromise or satisfaction. But clause (m) of Rule 1 Order 43
was omitted by Act 104 of 1976 with effect from 1.2.1977.
Simultaneously, a proviso was added to Rule 3 Order 23 with
effect from 1.2.1977. We extract below the relevant portion of
the said proviso :

"Provided that where it is alleged by one party and
denied by the other that an adjustment or
satisfaction has been arrived at, the court shall
decide the question "

Rule 3A was also added in Order 23 with effect from 1.2.1977
barring any suit to set aside a decree on the ground that the
compromise on which the decree is based was not lawful.

12.     The position that emerges from the amended provisions of
Order 23, can be summed up thus :

(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 recording the compromise (or refusing to
record a compromise) in view of the deletion of
clause (m) Rule 1 Order 43.
(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 3A.
(iv) A consent decree operates as an estoppel and is
valid and binding unless it is set aside by the court
which passed the consent decree, by an order on an
application under the proviso to Rule 3 of Order 23.

Therefore, 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 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. The second defendant, who
challenged the consent compromise decree was fully aware of
this position as she filed an application for setting aside the
consent decree on 21.8.2001 by alleging that there was no
valid compromise in accordance with law. Significantly, none
of the other defendants challenged the consent decree. For
reasons best known to herself, the second defendant within a
few days 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 second
defendant was not maintainable, having regard to the express
bar contained in section 96 (3) of the Code.

Re : Point No. (ii)

13.     Order XXIII deals with withdrawal and adjustment of
suits. Rule 3 relates to compromise of suits, relevant portion of
which is extracted below :


"3. Compromise of suit. Where it is proved to the
satisfaction of the Court that a suit has been
adjusted wholly or in part by any lawful agreement
or compromise in writing and signed by the parties,
or where the defendant satisfies the plaintiff in
respect of the whole or any part of the subject-
matter of the suit, the Court shall order such
agreement, compromise or satisfaction to be
recorded, and shall pass a decree in accordance
therewith so far as it relates to the parties to the
suit, whether or not the subject-matter of the
agreement, compromise or satisfaction is the same
as the subject-matter of the suit."



The said Rule consists of two parts. The first part provides that
where it is proved to the satisfaction of the court that a suit has
been adjusted wholly or in part by any lawful agreement or
compromise in writing and signed by the parties, the court shall
order such agreement or compromise to be recorded and shall
pass a decree in accordance therewith. The second part provides
that where a defendant satisfies the plaintiff in respect of the
whole or any part of the subject matter of the suit, the court
shall order such satisfaction to be recorded and shall pass a
decree in accordance therewith. The Rule also makes it clear that
the compromise or agreement may relate to issues or disputes
which are not the subject-matter of the suit and that such
compromise or agreement may be entered not only among the
parties to the suit, but others also, but the decree to be passed
shall be confined to the parties to the suit whether or not the
subject matter of the agreement, compromise or satisfaction is
the same as the subject matter of the suit. We are not, however,
concerned with this aspect of the Rule in this appeal.


14. What is the difference between the first part and the
second part of Rule 3 ? The first part refers to situations where
an agreement or compromise is entered into in writing and
signed by the parties. The said agreement or compromise is
placed before the court. When the court is satisfied that the suit
has been adjusted either wholly or in part by such agreement or
compromise in writing and signed by the parties and that it is
lawful, a decree follows in terms of what is agreed between the
parties. The agreement/compromise spells out the agreed terms
by which the claim is admitted or adjusted by mutual
concessions or promises, so that the parties thereto can be held
to their promise/s in future and performance can be enforced by
the execution of the decree to be passed in terms of it. On the
other hand, the second part refers to cases where the defendant
has satisfied the plaintiff about the claim. This may be by
satisfying the plaintiff that his claim cannot be or need not be
met or performed. It can also be by discharging or performing
the required obligation. Where the defendant so 'satisfies' the
plaintiff in respect of the subject-matter of the suit, nothing
further remains to be done or enforced and there is no question
of any 'enforcement' or 'execution' of the decree to be passed in
terms of it. Let us illustrate with reference to a money-suit filed
for recovery of say a sum of Rupees one lakh. Parties may enter
into a lawful agreement or compromise in writing and signed by
them, agreeing that the defendant will pay the sum of Rupees
one lakh within a specified period or specified manner or may
agree that only a sum of Rs.75,000 shall be paid by the
defendant in full and final settlement of the claim. Such
agreement or compromise will fall under the first Part and if
defendant does not fulfil the promise, the plaintiff can enforce it
by levying execution. On the other hand, the parties may submit
to the court that defendant has already paid a sum of Rupees
one lakh or Rs.75,000/- in full and final satisfaction or that the
suit claim has been fully settled by the defendant out of court
(either by mentioning the amount paid or not mentioning it) or
that plaintiff will not press the claim. Here the obligation is
already performed by the defendant or plaintiff agrees that he
will not enforce performance  and nothing remains to be
performed by the defendant. As the order that follows merely
records the extinguishment or satisfaction of the claim or non-
existence of the claim, it is not capable of being 'enforced' by
levy of execution, as there is no obligation to be performed by
the defendant in pursuance of the decree. Such 'satisfaction'
need not be expressed by an agreement or compromise in
writing and signed by the parties. It can be by a unilateral
submission by the plaintiff or his counsel. Such satisfaction will
fall under the second part. Of course even when there is such
satisfaction of the claim or subject matter of the suit by
defendant and the matter falls under the second part, nothing
prevents the parties from reducing such satisfaction of the
claim/subject matter, into writing and signing the same. The
difference between the two parts is this : Where the matter falls
under the second part, what is reported is a completed action or
settlement out of court putting an end to the dispute, and the
resultant decree recording the satisfaction, is not capable of
being enforced by levying execution. Where the matter falls
under the first part, there is a promise or promises agreed to be
performed or executed, and that can be enforced by levying
execution. While agreements or compromises falling under the
first part, can only be by an instrument or other form of writing
signed by the parties, there is no such requirement in regard to
settlements or satisfaction falling under the second part. Where
the matter falls under second part, it is sufficient if the plaintiff
or plaintiff's counsel appears before the court and informs the
court that the subject matter of the suit has already been settled
or satisfied.

15.     In a suit against the tenant for possession, if the
settlement is that the tenant will vacate the premises within a
specified time, it means that the possession could be recovered
in execution of such decree in the event of the defendant failing
to vacate the premises within the time agreed. Therefore, such
settlement would fall under the first part. On the other hand, if
both parties or the plaintiff submit to the court that the tenant
has already vacated the premises and thus the claim for
possession has been satisfied or if the plaintiff submits that he
will not press the prayer for delivery of possession, the suit will
be disposed of recording the same, under the second part. In
such an event, there will be disposal of the suit, but no
'executable' decree.

16.     In this case, under the settlement, the tenant  undertook
to vacate the suit property on a future date (that is 22.1.2002)
and pay the agreed rent till then. The decree in pursuance of
such settlement was an 'executable' decree. Therefore the
settlement did not fall under the second part, but under the first
part of Rule 3. The High Court obviously committed an error in
holding that the case fell under the second part of Rule 3.

17.     The next question is where an agreement or compromise
falls under the first part, what is the meaning and significance of
the words 'in writing' and 'signed by the parties' occurring in
Rule 3 ? The appellant contends that the words 'in writing' and
'signed by the parties' would contemplate drawing up of a
document or instrument or a compromise petition  containing
the terms of the settlement in writing and signed by the parties.
The appellant points out that in this case, there is no such
instrument, document or petition in writing and signed by the
parties.

18.     We will first consider the meaning of the words "signed by
parties". Order 3 Rule 1 of CPC provides that any appearance,
application or act in or to any Court, required or authorized by
law to be made or done by a party in such Court, may, except
where otherwise expressly provided by any law for the time
being in force, be made or done by the party in person, or by his
recognized agent, or by a pleader appearing, applying or acting,
as the case may be, on his behalf. The proviso thereto makes it
clear that the Court can, if it so desires, direct that such
appearance shall be made by the party in person. Rule 4
provides that no pleader shall act for any person in any Court,
unless he has been appointed for the purpose by such person by
a document in writing signed by such person or by his
recognized agent or by some other person duly authorized by or
under a power-of-attorney to make such appointment. Sub-rule
(2) of Rule 4 provides that every such appointment shall be filed
in Court and shall, for the purposes of sub-rule (1), be deemed
to be in force until determined with the leave of the Court by a
writing signed by the client or the pleader, as the case may be,
and filed in Court, or until the client or the pleader dies, or until
all proceedings in the suit are ended so far as regards the client.
The question whether 'signed by parties' would include signing
by the pleader was considered by this Court in Byram Pestonji
Gariwala v. Union Bank of India [1992 (1) SCC 31] with
reference to Order 3 of CPC :



"30. There is no reason to assume that the legislature
intended to curtail the implied authority of counsel,
engaged in the thick of proceedings in court, to
compromise or agree on matters relating to the parties,
even if such matters exceed the subject matter of the
suit. The relationship of counsel and his party or the
recognized agent and his principal is a matter of contract;
and with the freedom of contract generally, the legislature
does not interfere except when warranted by public
policy, and the legislative intent is expressly made
manifest. There is no such declaration of policy or
indication of intent in the present case. The legislature
has not evinced any intention to change the well
recognized and universally acclaimed common law
tradition

x x x x x

35. So long as the system of judicial administration in
India continues unaltered, and so long as Parliament has
not evinced an intention to change its basic character,
there is no reason to assume that Parliament has, though
not expressly, but impliedly reduced counsel's role or
capacity to represent his client as effectively as in the
past


x x x x x

37. We may, however, hasten to add that it will be
prudent for counsel not to act on implied authority except
when warranted by the exigency of circumstances
demanding immediate adjustment of suit by agreement of
compromise and the signature of the party cannot be
obtained without undue delay. In these days of easier and
quicker communication, such contingency may seldom
arise. A wise and careful counsel will no doubt arm
himself in advance with the necessary authority
expressed in writing to meet all such contingencies in
order that neither his authority nor integrity is ever
doubted

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 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 authorized agents.


39. To insist upon the party himself personally signing
the agreement or compromise would often cause undue
delay, loss and inconvenience, especially in the case of
non-resident persons. It has always been universally
understood that a party can always act by his duly
authorized representative. If a power-of-attorney holder
can enter into an agreement or compromise on behalf of
his principal, so can counsel, possessed of the requisite
authorization by vakalatnama, act on behalf of his
client .. If the legislature had intended to make such a
fundamental change, even at the risk of delay,
inconvenience and needless expenditure, it would have
expressly so stated."

[Emphasis supplied]



The above view was reiterated in Jineshwardas v. Jagrani [2003
(11) SCC 372]. Therefore, the words 'by parties' refer not only
to parties in person, but their attorney holders or duly authorized
pleaders.

19.     Let us now turn to the requirement of 'in writing' in Rule
3. In this case as noticed above, the respective statements of
plaintiffs' counsel and defendants' counsel were recorded on oath
by the trial court in regard to the terms of the compromise and
those statements after being read over and accepted to be
correct, were signed by the said counsel. If the terms of a
compromise written on a paper in the form of an application or
petition is considered as a compromise in writing, can it be said
that the specific and categorical statements on oath recorded in
writing by the court and duly read over and accepted to be
correct by the person making the statement and signed by him,
can be said to be not in writing? Obviously, no.  We may also in
this behalf refer to Section 3 of the Evidence Act which defines a
document as any matter expressed or described upon any
substance by means of letters, figures or marks or by more than
one of those means intended to be used or which may be used
for the purpose of recording the matter. The statements
recorded by the court will, therefore, amount to a compromise in
writing.

20.     Consequently, the statements of the parties or their
counsel,  recorded by the court and duly signed by the persons
making the statements, would be 'statement in writing signed by
the parties'. The court, however, has to satisfy itself that the
terms of the compromise are lawful. In this case we find from
the trial court records that the second defendant had executed a
vakalatnama empowering her counsel Sri Dinesh Garg to act for
her in respect of the suit and also to enter into any compromise.
Hence there can be no doubt that Sri Dinesh Garg was
authorized by the second defendant to enter into a compromise.
We also find that the counsel for the plaintiffs and counsel for
the defendants made solemn statements on oath before the trial
court specifying the terms of compromise, which were duly
recorded in writing and signed by them. The requirements of the
first part of Rule 3 of Order XXIII are fully satisfied in this case.


21. The matter can be viewed from a different angle also. After
the issues were framed by the trial court, the plaintiffs had
examined two witnesses and closed their evidence and
thereafter the matter was set down for the evidence of
defendants. The first defendant was treated as ex parte. As
defendants 2 and 3 did not lead any evidence in spite of
numerous opportunities, their evidence was treated as closed.
On 17.5.2001, the matter was finally adjourned to 23.5.2001 for
the evidence of defendants 4 and 5 with a condition that if they
do not lead evidence on that date there evidence will be closed.
On 23.5.2001, defendants 4 and 5 did not lead any evidence. On
the other hand, the counsel for defendants made a statement on
oath that the premises will be vacated on 22.1.2002. Thereafter,
counsel for the plaintiff also made a statement agreeing to grant
of time till 21.1.2002. There was also agreement that the
plaintiffs will be entitled to the payment of only Rs.4,800/- per
month (equivalent to the rent) and nothing more up to
22.1.2002. The effect of it is that the parties have gone to trial
on the issues and the only evidence led by defendants is that
they will vacate the premises on 22.1.2002. No other evidence
being led, the necessary conclusion is that the defendants
admitted the plaintiffs' claim and merely sought time to vacate.
Therefore, the suit can be said to have been decreed on the
basis of evidence and the admissions made by the defendants.
In  Jineshwardas (supra), such a situation was noticed. In that
case,  the High Court made an order on a consensus expressed
by both the learned counsel at the time of hearing of the second
appeal, that the respondents will pay Rs.25,000/- within a period
of one month with interest in the manner stipulated. The
appellant subsequently filed an application for review,
contending that the said order disposing of the appeal was a
compromise decree, and as it was not in writing and signed by
the parties, the appeal could not have been disposed of on the
basis of the submissions. The High Court, however, refused to
entertain such objections. This Court while upholding the
decision of the High Court and holding that there was a valid
compromise, also observed :


"That apart, we are also of the view that a judgment or
decree passed as a result of consensus arrived at before
court, cannot always be said to be one passed on
compromise or settlement and adjustment. It may, at
times, be also a judgment on admission, as in this case."


22. Strong reliance was placed by the appellant on the
following observations of this Court in Gurpreet Singh v. Chatur
Bhuj Goel [1988 (1) SCC 270] to contend that a compromise
should be reduced into writing in the form of an 'instrument' and
signed by the parties to be valid under Order 23 Rule 3.  He
submitted that recording of the statements of the parties or their
counsel, would not be an instrument of compromise. An
'instrument', according to him, connotes a regular document
drawn up in the form of an agreement. We extract below the
observations relied on by the appellant :

"10.  Under Rule 3 as it now stands, when a claim in suit
has been adjusted wholly or in part by any lawful
agreement or compromise, the compromise must be in
writing and signed by the parties and there must be a
completed agreement between them. To constitute an
adjustment, an agreement or compromise must itself be
capable of being embodied in a decree. When the parties
enter into a compromise during the hearing of a suit or
appeal, there is no reason why the requirement that the
compromise should be reduced in writing in the form of
an instrument signed by the parties should be dispensed
with. The court must therefore insist upon the parties to
reduce the terms into writing."


We have already referred to the definition of the term document.
The term instrument used in Gurpreet Singh (supra) refers to a
writing of a formal nature and nothing more. Further, we will
have to understand the observations in the context in which they
were made. In that case when the hearing of a Letters Patent
Appeal commenced before the High Court, the parties took time
to explore the possibility of a settlement. When the hearing was
resumed the appellant's father made an offer for settlement
which was endorsed by counsel for the appellant also. The
respondent who was present also made a statement accepting
the offer. Evidently, the said offer and acceptance were not
treated as final as the appeal was not disposed of by recording
those terms. On the other hand, the said 'proposals' were
recorded and the matter adjourned for payment in terms of the
offer. When the matter was taken up on the next date of
hearing, the respondent stated that he was not agreeable. The
High Court directed that the appeal will have to be heard on
merits as the respondent was not prepared to abide by the
proposed compromise. That order was challenged by the
appellant by contending that the matter was settled by a lawful
compromise by recording the statements of the appellant's
counsel and respondent's counsel, and the respondent could not
resile from such compromise and therefore, the High Court
ought to have disposed of the appeal in terms of the
compromise. It is in this factual background, that is, where there
was no consent decree, the question was considered by this
Court. The distinguishing feature in that case is that though the
submissions made were recorded, they were not signed by the
parties or their counsel. Nor did the court treat the submissions
as a compromise. In this case, the court not only recorded the
terms of settlement but thereafter directed that the statements
of the counsel be recorded. Thereafter, the statements of
counsel were recorded on oath, read over and accepted by the
counsel to be correct and then signed by both counsel. Therefore
in this case, there is a valid compromise in writing and signed by
the parties (represented counsel). The decision in Gurpreet
Singh (supra) is therefore of no assistance to the appellant.



23. At the cost of repetition, we may recapitulate the facts of
this case. The suit was a simple suit for possession by a landlord
against a tenant filed in the year 1993. Plaintiff's evidence was
closed in 1998. The contesting defendant (defendant No.2) did
not lead any evidence, and her evidence was treated as closed.
The matter was dragged on for 3 years for defendant's evidence
after the conclusion of plaintiff's evidence. It was noted on
19.5.2001 that no further adjournment will be granted for the
evidence of defendants 4 and 5 (who are not contesting the
matter), on the next date of hearing (23.5.2001). When the
matter finally came up on 23.5.2001, no evidence was tendered.
On the other hand, a statement was made agreeing to vacate
the premises by 22.1.2002. The trial court took care to ensure
that the statements of both counsel were recorded on oath and
signed. Thereafter, it passed a consent decree. The attempts of
tenants in such matters to protract the litigation indefinitely by
raising frivolous and vexatious contentions regarding the
compromise and going back on the solemn undertaking given to
court, should be deprecated. In this context, we may refer to the
observation made by this Court a similar situation in Smt.
Jamilabai Abdul Kadar v. Shankarlal Gulabchand [AIR 1975 SC
2202] :


"23. On the facts of the present case we have little doubt
the pleader has acted substantially with the knowledge of
and encouraged by his client.

x x  x x x

24. We feel no doubt that the broad sanction for the
compromise came from the tenant., that no shady action
is imputable to respondent 4 and that his conduct has
been motivated by the good of his client.

25. The last posting was for reporting the compromise.
But, on that date, the Court declined further adjournment
and the party being absent and away, the pleader for the
appellant had no alternative but to suffer an eviction
decree or settle it to the maximum advantage of his
party. "                


Similar are the facts here. Neither the second defendant nor her
legal representative has attributed any improper motive to
second defendant's counsel. The facts go to show nothing further
could have been done for the defendants-tenants. All that the
counsel for defendants had done was to get the maximum
advantage to his clients in the circumstances after dragging on
the matter to the extent possible.

24. This appeal  is, therefore, liable to be dismissed as being
devoid of merit. The consent decree is upheld, though for
reasons different from those which weighed with the High Court.
The landlords (respondents) will be entitled to seek mesne
profits for the period from 22.1.2002 to date of delivery of
possession in accordance with law. The appeal is accordingly
dismissed with costs. The costs payable by the appellant  are
quantified at Rs.25,000/-.