S. 96(3) CPC- Bar On Appeal Against Compromise Decree Not Applicable Where Court Declines To Record Some Part Of Compromise: Allahabad HC

Dismissing a petition filed under Article 227 of the Constitution on account of availability of an alternate remedy, the Allahabad High Court has held that the bar against appeal from a compromise decree shall not apply in cases where the court records some part of the compromise while declines to record the remaining part.

The petition was filed by Sri Ram Krishna Vivekanand Shishu Niketan impugning the order of first appellate court whereby the court held that the Petitioner had failed to prove its possession over the concerned property and was not entitled to the declaration as owner on basis of adverse possession. In this view, the court passed a composite order recording compromise, entered into between the parties, in part and refusing to record other part of compromise in so far as it related to the Petitioner.

In the high court, the Petitioner invoked the court's jurisdiction under Article 227 of the Constitution under an impression that no appeal was available from the said compromise decree.

The Respondents contended that the bar contained under Section 96(3) of CPC regarding filing of appeal against consent decree was only applicable to first appeals and not to second appeals filed under Section 100 CPC. Thus the petition was not maintainable as the remedy of filing a second appeal under Section 100 CPC was un-availed. It was categorically submitted that second appeal would lie against the impugned order/judgment in view of Order 43 Rule 1-A (2) of CPC.

Order 43 Rule 1-A (2) states that in an appeal against a decree passed in a suit after recording a compromise or refusing to record a compromise, it shall be open to the appellant to contest the decree on the ground that the compromise should, or should not, have been recorded.

The Petitioner on the other hand submitted through Advocates Nirvikar Gupta and Tosh Kumar Sharma, that an order recording or refusing to record an agreement, compromise or satisfaction was no more appealable; in view of Act No. 104 of 1976 which omitted Rule 1(m) of Order 43 of CPC. He also submitted that since rights of parties had not been decided under the impugned order, it would not amount to a judgment nor would result in a decree and thus Order 43 Rule 1-A (2), invoked by the Respondent, will have no application.

Findings

On a consideration of the aforementioned arguments, Justice Manoj Kumar Gupta refuted the applicability of Section 100 in the case and instead held that "bar under Section 96(3) CPC will not get attracted where the compromise is disputed. In my considered opinion, the same would also be the position where the court refuses to record compromise or part of it on the ground that it is not lawful, as in the instant case". Reliance was placed on the Supreme Court's verdict in Kishun alias Ram Kishun v. Behari, (2005) 6 SCC 300.

The court found the argument raised by the Petitioner that the order passed by the appellate court would not qualify to be a decree as there had been no adjudication of its rights, bereft of any substance. It followed the law laid down by the Apex Court in Rana Narang v. Ramesh Narang, (2006) 11 SCC 114, that a compromise decree is as much a decree as a decree passed on adjudication.

The court further added that preparation of decree or formal order in terms of the impugned judgment is a ministerial act. "Even if a formal order has been prepared and not decree in pursuance of the impugned judgment of the appellate court, it would not detract from the true nature of the order nor would denude the petitioner of its right to avail the statutory remedy of filing second appeal", the court held.

The Respondent parties were represented by Advocates Shariq Shamim, Rajneesh Tripathi, Tarun Agrawal and Tarun Varma. 

Click here to download the Judgment