LexGURPREET SINGH versus CHATUR BHUJ GOEL
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GURPREET SINGH A • v. CHATUR BHUJ GOEL DECEMBER 15, 1987 B )I [A.P. SEN AND B.C. RAY, JJ.] .~ Civil .Procedure Code, 1908: Order XXJJJ Rule 3-Settlement . a"ived at between parties in appeal-Compromise not reduced in "writ- ing and signed by the parties"-Whether can be given effect to. ""' A suit filed by the respondent for the specific performance of a c contract entered into between him and the father of the appellant was , decreed by the trial court. A Single Judge of the High Court affirmed the decree. During the bearing of the Letters Patent Appeal filed by the D appellant, a settlement was arrived at between the parties, and state- ments were made by them to that effect before the court. The case was adjourned to the date on which payment in terms of the compromise was to be made. Though the statements formed part of the proceedings, ~ the compromise was not reduced in writing and signed by parties. Taking advantage of this, the respondent tried to resile from the corn- promise. When the case came up on the adjourned date, the Division E l '" Bench directed that since the respondent was not prepared to abide by the proposed compromise, the appeal would be decided on merits and , that the case should be placed before another Bench. In the appeal by special leave against the aforesaid decision, it was F contended on behalf of the appellant that the requirements of Order XXIII Rule 3 Civil Procedure Code were mandatory, that the claim in the suit for specific performance having been settled by a lawful corn- promise within the meaning of Rule 3, the High Court was not justified in directing that the appeal be placed before another Bench for decision r on merits, that the word "in writing and signed by the parties" quali- G ,+ fied the words "any lawful agreement or compromise" appearing in the first part and, therefore, where the parties made a statement before the Court that the dispute between them bad been settled on certain terms, and the settlement so made formed part of the proceedings of the Court, there was no legal requirement to have an agreement in writing embodying the terms of the compromise. H 401 402 SUPREME COURT REPORTS (1988] 2 S.C.R. A Dismissing the appeal, HELD: The whole object of the amendment of Rule 3 of the Civil Procedure Code, 1908 by adding the words "in writing and signed by the parties" is to prevent false and frivolous pleas that a suit has been adjusted wholly or in part by any lawful agreement or B compromise, with a view to protract or delay the proceedings in the suit. [408C-D) 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, .:J. the compromise must be in writing and signed by the parties and there must be a completed agreement between them. To constitute an C adjustment, the 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. 0 The Court must, therefore, insist upon the parties to reduce the terms into writing. [408D-F] The present case clearly does not come within the ambit of the second part of Order XXIII Rule 3 of the Code. Under the terms of the proposed compromise, the appellant was required to pay Rs.2,25,000 by a bank draft on March 17, 1987 but before the due date the respon- E dent resiled from the promised compromise, saying that it was detri- mental to his interest. That being so, that appellant could only fall back on the first part. But, in the absence of an agreement in writing, the High Court had no other alternative but to direct that the appeal be listed for hearing on merits. [409C-D] f Manohar Lal & Anr. v. Surjan Singh & Anr., (1983] Punj. LJ 402, overruled. CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2035 of 1987. G From the Judgment and order dated 23.4.1987 of the High Court of Punjab and Haryana in C.M.P. No. 19 of 1987. + S.N. Kacker and R.S. Sodhi for the Appellant. Mrs. Shyamla Pappu, A.M. Ashri, K.S. Thaper and V.K. Jain H for the Respondents. • GURPREET SINGH v. CHATUR BHUJ [SEN, J.I 403 The Judgment of the Court was delivered by A SEN, J. The controversy in this appeal by special leave centi•~s around the w
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