Summary
The Supreme Court upheld the setting aside of a 1994 compromise decree in a partition suit. Defendant No. 5 never signed the compromise, and his counsel's endorsement of no objection was not backed by express authority or any exigency, so the voluntary, signed compromise that Order XXIII Rule 3 CPC requires was not shown. Given the disputed basic facts and the illegality of the decree, the 25-year delay was overlooked and the partition suit was left to go to full trial.
Issues
- Whether the compromise accepted by the Civil Court on 22.02.1994 complied with Order XXIII Rule 3 CPC when Defendant No. 5 had not signed it and only his counsel had recorded no objection.
- Whether the application to set aside the compromise decree, filed about 25 years later, should be rejected on the ground of delay.
Provisions considered
- Order XXIII Rule 3, Code of Civil Procedure, 1908The rule requires a lawful compromise in writing signed by the parties, and the Explanation excludes agreements that are void or voidable under the Contract Act. Without the party's signature, or express authority for counsel to sign or exigent circumstances, the voluntary acceptance the rule demands was not established, so the compromise was contrary to law. (¶¶ 4, 5, 5.1, 5.2, 5.6)
- Section 151, Code of Civil Procedure, 1908The application to set aside the decree was made under this provision. The Court approved the trial court's view that inherent power may be exercised for the ends of justice where fraud is alleged, and declined to let delay defeat it on the facts. (¶¶ 6, 6.3, 6.5, 6.6)
Held
- Since the 1976 amendment, a compromise under Order XXIII Rule 3 must be in writing and signed by the parties, and must be voluntarily accepted. The court must apply its judicial mind to see that the terms are lawful and does not merely record them. The remedy against a compromise decree is a recall application, not a fresh suit or appeal. (¶ 5.2)
- Counsel may sign a compromise for a client only with express authorisation or in exigent circumstances. Counsel has no implied authority to make concessions that surrender or conclude the client's substantial rights. (¶¶ 5.2, 5.3, 5.4, 5.5)
- There was no express authorisation from Defendant No. 5 to his counsel to sign the compromise and no record of exigent circumstances. The voluntary element required by Order XXIII Rule 3 was therefore not established, and the compromise decree was contrary to law. (¶ 5.6)
- Dismissing the application for delay would have perpetuated a decree that was not in accordance with law. Limitation cannot be used to defeat substantive rights where a party's significant property rights were directly affected by a compromise he did not sign. (¶ 6.5)
- Because the basic facts underlying the compromise were themselves disputed and the decree was not in accordance with law, the 25-year delay was overlooked on the facts of this case. Such a delay will not be excused in every case; that depends on a detailed examination of the record. (¶ 6.6)
- The compromise decree was rightly set aside, and the issues in the 1989 partition suit must be decided in a full trial on whatever evidence is available. (¶ 6.7)
Result
Appeal dismissed; the order setting aside the compromise decree affirmed and the partition suit left to be adjudicated by full trial; no costs.