Civil Revision Application (CRA) No.1 of 2016

29th June, 2017.

Petitioner Counsel: Shri P.J. MEHTA
Respondent Counsel: Shri M.V. MOHOKAR, Shri A.J. GILDA

Cases Cited:
State of Punjab and anr. Vs. Jalour Singh and ors., 2008 ALL SCR 692=(2008) 2 SCC 660 [Para 16]
Dr Ashish Ranjan Vs. Dr Anupama Tandon and Anr., 2010 ALL SCR 2896=2010(12) Scale 577 [Para 18]
Banwari Lal Vs. Chando Devi and anr, (1993) 1 SCC 581 [Para 24]
R. Rajanna Vs. S.R. Venkataswamy and ors, 2015 ALL SCR 171=(2014) 15 SCC 471 [Para 24]

JUDGMENT

Judgment :- This revision raises some interesting questions of law relating to applicability of principles of res judicata, provisions of Section 47 CPC and Section 21 of the Legal Services Authority Act, 1987.

Revision is directed against the order dated 21/11/2015 passed by the Jt. Civil Judge (SD) Amravati in Spl. C.S.No.337/2010 thereby rejecting the contention raised by the petitioner that the suit was not maintenable as it was barred by res-judicata and various other provisions of law.

2. Facts, necessary for deciding this revision, can be stated as follows :

Respondent No.1 herein, has agreed to sell the area admeasuring 2149 sq. ft. with the construction thereon, to the petitioner by executing agreement for sale dated 16/11/2004 for valuable consideration of Rs.10,00,000/-. On the date of agreement itself, petitioner has paid Rs.5,00,000/- to respondents as earnest money. The sale deed was to be executed on or before 16/10/2005. The said agreement was confirmed by executing a supplementary agreement between the parties, at the time of which additional amount of Rs.1,00,000/- was paid to the respondent on 16/11/2004. Another supplementary agreement dated 15/03/2005 also came to executed between the parties under which the petitioner herein paid the balance consideration also. However, the respondent failed to execute the sale deed as per the agreement. Hence the petitioner was constrained to file Spl. C.S. No.206 of 2005 for specific performance of the contract against the respondent.

3. When respondent received the summons of the said suit, he appeared in the Court and engaged his counsel. At that time respondent and his counsel proposed the petitioner to amicably settle the dispute. Accordingly joint pursis came to be filed by both the parties before the Court and matter was put up before the Lok Adalat on 16/10/2005.

Accordingly on 16/10/2005 both the parties appeared before Lok Adalat and the matter was settled and compromised between them on the terms and conditions that the respondent shall pay Rs.6,50,000/- to the petitioner vide two cheques of Rs.3,25,000/- each drawn on HDFC Bank Ltd., Amravati. It was further agreed that if the said cheques are dishonoured and the amount of Rs.6,50,000/- was not paid by respondent to the petitioner on or before 26/03/2006, then petitioner shall be entitled to get the sale deed executed through the Court. He was also held entitled to get possession of the suit property from the Court.

4. According to the petitioner, dispute between the parties thus came to be settled finally before the Lok Adalat. Accordingly, the joint compromise pursis, bearing signatures of both the parties and their respective counsels came to be filed before the Lok Adalat. After ascertaining the terms of settlement of the joint pursis to its satisfaction, the Lok Adalat passed the compromise decree on 16/10/2005.

5. The petitioner thereafter presented both the cheques for encashment, however they were dishonoured. Respondent also failed to pay amount of Rs.6,50,000/- on or before 26/03/2006. Hence petitioner filed Special Darkhast No.31/2006 for execution of sale deed of the suit property and for possession thereof. When respondent received notice of execution proceedings, he appeared before the Executing Court and filed various applications, contending that, at the time of compromise before Lok Adalat, his mental condition was not proper. His counsel was also not present before the Lok Adalat. Moreover he had no knowledge of English and therefore he was not aware about the contents of compromise pursis and hence decree passed on the basis of compromise pursis is not binding on him and it should be accordingly declared null and void.

6. The executing Court considered his application and after hearing learned counsels for the parties thereon, was pleased to reject the same, vide its order dated 22/11/2007, not accepting the contention raised by respondent No.1 that his mental condition was not proper at the time of compromise. The executing Court also considered the provisions of Section 21 of the Legal Services Authorities Act 1987 and held that the award passed by the Lok Adalat is final and arrived at with the consent of both the parties to the dispute hence it cannot be challenged in appeal or otherwise. The Executing court also took into consideration the provision of Section 96(3) of CPC which states that no appeal shall lie from a decree passed by the Court with the consent of the parties. On the basis of this finding, the Executing Court held the petitioner entitled for execution of the sale deed and accordingly passed the order directing respondent to execute the sale deed of the property in favour of the petitioner. As respondent did not execute the sale deed, it came to be executed in favour of the petitioner on 24/12/2007 thorugh officer of the Court. The petitioner was also put in possession of the suit property through Court on 14/07/2008.

7. Against this order, passed by the Executing Court, the respondent filed W.P. No.387/2008, before this Court. However it came to be dismissed as withdrawn on 11/02/2008, with liberty to take appropriate steps in accordance with law.

8. On the basis of the same, the respondent filed the present suit before the trial Court for cancellation of the sale deed of the suit property, which was executed on 24/12/2007 and for possession of the property with movables therein. The said suit was also filed two years after withdrawal of the writ petition from the High Court. The petitioner therefore filed an application under Order VII Rule 11(d) CPC thereby bringing to the notice of the trial Court that the suit is barred by law, in view of various provisions of law, like Section 11 and Section 47 CPC and Section 21 of Legal Services Authority Act, 1987. Reliance was also placed on the earlier order passed in Spl. Darkhast No.31/06, rejecting all the contentions raised by the respondent, and which were repeated in the suit. It was submitted that respondent has directly challenged the sale deed without challenging the compromise decree though he has earlier disputed the same. It was further submitted that as the sale deed was executed in his favour, by the learned trial Court, in pursuance of the compromise decree, in view of Section 21 of Legal Services Authorities Act, 1987, the suit is not maintainable. It was also submitted that the suit was barred by res judicata in view of Explanation VIII to Section 11 CPC, as all the contentions raised in the plaint were raised by respondent in Spl. Darkhast No.31/2006. They were dealt with by the executing Court and rejected on merits. The said order was also not challenged. Further it was also submitted that as the compromise decree was passed on 16/10/2005 and the present suit was filed on 04/12/2010, it was beyond the period of limitation of three years and hence, on this count also, it was barred by law.

9. The petitioner thereafter filed another application, for challenging maintainability of the suit itself and for framing preliminary issues on all these legal points.

10. On this application, after considering rival pleadings of both the parties, learned trial Court framed as many as seven preliminary issues for its consideration and on answering all of them in negative, held that suit was not barred by any law and directed the suit to proceed further.

11. This order of the trial Court is the subject matter of this revision, as its legality and validity is challenged by learned counsel for the petitioner by submitting that the trial Court has not properly appreciated the legal position and wrongly held that the opportunity of adducing evidence needs to be given to respondent/plaintiff to show that he was pressurised or compelled to compromise the matter before the Lok Adalat.

12. Per contra, learned counsel for the respnodent has supported the impugned order of the trial Court by submitting that if the compromise decree was not legal and valid, then respondent is entitled to challenge the same. Merely because it was presented before the Lok Adalat and award was passed on that basis, he can not be precluded from instituting the suit to challenge the same. It was submitted that there is no question of principle of res judicata being applied to the facts of the present case.

13. In view of these facts on record and in the light of rival submissions advanced by learned counsels for both the parties, the first and foremost question for consideration in this revision is whether the suit filed by the respondent can be considered to be barred by law in view of the provisions of Sections 21 and 22 of Legal Services Act, 1987?

14. In this case, it is an admitted fact that after the suit for specific performance was filed by the petitioner, respondent has appeared in the said suit and as the matter was likely to be compromised between the parties as per submissions made before the concerned Court, it was kept before the Lok Adalat on 16.10.2005. In the Lok Adalat, matter was settled amicably and a compromise pursis was filed. On the basis of this compromise pursis which was presented before Lok-Adalat, following order is passed by Lok-Adalat on 16/10/2005.

"Plaintiff and deft. No.1 are present, before Lok Adalat. Counsel for plaintiff is present. Counsel for deft. No.1 has signed tis pursis, however he is absent. Contents of prusis are read over and explained to parties by members of the panel. They admitted it and admitted their signatures also. Seen and filed".

15. On the basis of this compromise pursis, decree came to be passed. Now the question for consideration is whether the compromise decree which is passed on the basis of compromise arrived at before Lok Adalat, can be challenged, either by way of appeal or by way of separate suit or by way of any other proceeding? In this respect, provisions of Section 21 of Legal Services Authority Act, 1987, are relevant. This section deals with 'Award of Lok Adalat' and reads as follows :

21. Award of Lok Adalat

(1) Every award of the Lok Adalat shall be deemed to be a decree of a civil court or order of any other court or tribunal and where a compromise or settlement has been arrived at, by a Lok Adalat in a suit or proceeding transferred to it under sub-section (1) of section 20, the court-fee paid in such suit or proceeding shall be refunded in the manner provided under the Court fees Act, 1870 (7 of 1870).

(2) Evey award made by a Lok Adalat shall be final and binding on all the parties to the dispute, and no appeal shall lie to any court against the award.

16. Clause (2) of Section 21 is relevant for consideration because according to this provision, every award made by Lok Adalat shall be final and binding on the parties to the dispute and no appeal shall lie in any Court against such award. Therefore the Section itself provides that there can be no appeal against the award passed by the Lok Adalat. So what could be the remedy to the aggrieved party is laid down by the Apex Court in its decision in case of State of Punjab and anr. vs. Jalour Singh and ors. (2008) 2 SCC 660 : [2008 ALL SCR 692]. In paragraph 12 of it is judgment, the Apex Court was pleased to hold as follows :

"12. It is true that where an award is made by the Lok Adalat in terms of a settlement arrived at between the parties (which is duly signed by parties and annexed to the award of the Lok Adalat), it becomes final and binding on the parties to the settlement and becomes executable as if it is decree of a civil court, and no appeal lies against it to any court. If any party wants to challenge such an award based on settlement, it can be done only by filing a petition under Article 226 and/or Article 227 of the Constitution, that too on very limited grounds".

17. Thus the remedy to the aggrieved party is very much provided against the award passed by the Lok Adalat, in terms of settlement arrived at between the parties. However, the said remedy is only by way of filing a writ petition under Article 226 or Article 227 of the Constitution, that too on very limited grounds. Hence if at all the respondent was aggrieved of the award passed by the Lok Adalat, the proper remedy of quashing it was available to him either by filing writ petition under Article 226 and/or 227 of the Constitution. He has no right to file appeal as the award passed by the Lok Adalat is final and binding.

18. As regards submission of learned counsel for respondent that even in respect of the order passed in Lok Adalat, the applicant can approach the Court for seeking the relief against the said order and for which reliance is placed on the judgment of Apex Court in case of Dr Ashish Ranjan vs. Dr Anupama Tandon and Anr. 2010(12) Scale 577 : [2010 ALL SCR 2896] is misplaced. It has to be stated that facts of this authority are totally different. In that case, there was violation of the consent order passed by Lok Adalat in respect of custody of child. It was noticed by the honourable Supreme Court in paragraph 22 that from passing of said order, the circumstances have substantially changed, due to non-compliance of the terms of compromise order. Hence, it was held that applicant was fully justified seeking review/modification of the order.

19. In the instant case, the facts are totally different. It is not at all the case of Respondent that there is any substantial change in the circumstances subsequent to the order of compromise decree. Therefore this authority cannot be made applicable to the facts of the present case.

20. Even the provisions of Section 96(3) of CPC bars such appeal against the consent decree. Section 96(2) deals with the appeal from original decree and sub-section (3) of the said Section lays down that no appeal shall lie from a decree passed by the Court with the consent of the parties. Therefore this sub-section again bars the remedy of appeal to the respondent.

21. However, question for consideration is whether a separate suit can be tenable to challenge the decree passed with consent of the parties?

For deciding this question, the contentions raised by the respondent in the suit need to be taken into consideration. According to respondent, at the time of compromise, his mental condition was not good and his Advocate was not present in Lok-Adalat. Moreover he was not knowing the English language and therefore he was not aware of the contents of the compromise pursis. However, these contentions cannot be accepted on the face of it also as the endorsement on compromise pursis show that the contents thereof were read over and both the parties admitted those contents and also their signatures thereon. The endorsement on the compromise pursis also show that it was signed by Respondent's counsel. Therefore these very contentions which were raised by the respondent before the Executing Court also that as his counsel was not present and he had no knowledge of English and therefore the compromise decree needs to be set aside, were rejected by the Executing Court, being baseless and without any substance. The Executing Court had also dealt with his contention that his mental condition was not proper. In paragraph 6 of its order, the Executing Court found that the documents produced by the respondent to prove that his mental condition was not good are of the year 2000-01, 2003-04 whereas the matter was compromised between the parties before Lok-Adalat held on 16/10/2005. It was further held that respondent has not produced any documents of the year 2005 to show that his mental condition was not good at the relevant time. Hence the Executing Court held that it cannot be accepted that mental condition of the respondent was not good at the time of compromise.

22. Thus, the Executing Court has dealt with all contentions which were raised by the respondent for setting aside the compromise decree passed by Lok Adalat. Though that order was challenged by Respondent by filing W.P.No. 387/2008, he has withdrawn that writ petition. Hence, that order has become final. Hence even assuming, for the sake of argument that separate suit can be tenable and it should be filed before the same Court for challenging the compromise decree, that separate suit needs to be held as barred by the principles of res judicata, considering that in the execution proceedings, all these contentions were raised and dealt with by the Executing Court and admittedly this finding of the Executing Court has become final, as Writ Petition No. 387/2008 filed against it, being disposed of as withdrawn.

23. The principles of res judicata are well settled to the extent that even if a certain plea is raised and decided in execution proceedings and if the order thereon has attained finality, then the same plea cannot be allowed to be agitated again, by filing a separate suit. Here in the case therefore the bar of res judicata is definitely attracted so far as the present suit filed by the respondent is concerned, as it is filed on the same averments and contentions which were earlier rejected by the executing Court. It is pertinent to note that no new grounds are averred by the respondent in this suit to challenge the compromise decree and as all these contentions raised in the present suit are already decided and has attained finality, the present suit is required to be held as barred by law of res judicata.

In this respect learned counsel for petitioner has also rightly relied upon the provisions of Order 23, Rule 3-A of the Civil Procedure Code, which specifically bar a suit to set aside the decree passed on the basis of compromise arrived at between the parties on the ground that the compromise on which the decree is based was not lawful. The only ground on which this bar will not come in the way of the plaintiff is when there are allegations of fraud or collusion. Herein the case no such allegations of fraud or collusion are made again either the defendant or even again any other statutory authority.

24. Moreover if at all any such compromise decree is to be set aside on the ground it is obtained fraudulently and hence not lawful, then as held by the Apex Court in the case of Banwari Lal vs. Chando Devi and another, (1993) 1 SCC 581, such compromise decree needs to be challenged before the same Court under the provisions of Order 23, Rule 3 of the Civil Procedure Code; the same cannot be done by filing a separate suit. Hence on this ground also the suit of the present nature for challenging a compromise decree being barred, cannot be maintainable, as held by the Apex Court in the case of R. Rajanna vs. S.R. Venkataswamy and others (2014) 15 SCC 471 : [2015 ALL SCR 171] also. Therefore, on this ground also the suit filed by the respondent before the Trial Court was apparently barred by law.

25. The bar of limitation also becomes applicable in the instant case as by the present suit, the respondent/plaintiff is seeking the relief or cancellation of the sale-deed dated 24.12.2007 executed by the Court in favour of the petitioner. He has thus challenged the compromise decree on the basis of which the sale-deed was executed through Court. He is also seeking delivery of vacant possession of the suit house with movables taken therefrom. However, again this relief was also granted to the petitioner on the basis of the compromise decree and hence, indirectly again the respondent is challenging the compromise decree itself. The said compromise decree was passed on 16.10.2005, whereas the suit is filed seeking the consequential relief for cancellation of sale-deed and possession of the property in the year 2010. Hence, apparently in view of the provisions of Article 59 of the Limitation Act, which requires the suit to be filed within three years from the accrual of the cause of action, the suit is required to be held as barred by limitation.

26. There is one more aspect, which also needs to be considered and it pertains to Section 47 of the Civil Procedure Code. As per this section all the questions arising between the parties to the suit in which the decree was passed, or their representatives and relating to the execution, discharge or satisfaction of the decree shall be determined by the Court executing the decree and not by a separate suit. In the instant case, respondent is challenging the execution of the sale-deed and delivery of possession of the suit property, which was given to the petitioner in the execution proceeding of the compromise decree. Therefore, if at all he has any grievance about the same, the proper remedy for him was to challenge the same before the executing court itself under Section 47 of the Civil Procedure Code. As a matter of fact, he has tried to challenge the same in executing court, but has not become successful, and therefore, on this count also, suit cannot be tenable.

27. Thus inference is inevitable that the present suit filed by the respondent is not only barred by the provisions of res judicata, Section 47 of CPC, Order XXIII, Rule 3A, Section 21 of Legal Services Act, but also under the Limitation Act. The trial Court has not considered these legal provisions. The impugned order passed by the trial Court, therefore, needs to be set aside.

28. As a result, revision is allowed. The impugned order passed by the Court is set aside. In consequence, the plaint is rejected as it is barred by law.

Revision allowed.