Person Who Did Not Affix Signature To Compromise But Subsequently Acts In Terms Of Same Is Bound By Compromise Decree: Kerala High Court

The Kerala High Court on Wednesday laid down that a person who did not sign a compromise which led to passing of a compromise decree, but subsequently acted upon the same, could not thereafter avoid the decree merely on the ground that he/she had not put his/her signature on it. 

"In law, nobody is allowed to approbate and reprobate. To put it differently, a person, who enjoys the benefit of a compromise, he did not sign, after filing an affidavit acting upon the same and obtained the money in terms of the compromise, cannot deviate from the said compromise on the ground that he or she did not sign the same after acting upon the same," the Single Judge Bench of Justice A. Badharudeen observed. 

The plaintiff had instituted the Suit for fixation of boundary, recovery of possession and consequential injunction. During the pendency of the suit, a compromise was entered into, on the basis of which a compromise decree was passed. 

The 1st defendant, who is the appellant herein, assailed the compromise on the ground that the party had not signed the compromise, and was accordingly, not bound by the same. The plaintiff however countered the argument, averring that although the 1st defendant had not directly put the signature, the latter had still acted upon, and received benefit from the same. 

The Court noted that the signatories to the compromise included the plaintiff and her counsel, the 5th defendant who expired subsequently, and the counsel for the whole defendants. 

At the very outset, relying upon the decision in Prasanta Kumar Sahoo v. Charulata Sahu (2023), the Court observed that the law was well-settled that where a compromise had not been signed by a party, but by the concerned lawyer alone without any express authority or without special vakalatnama executed in favour of the Advocate to sign in the compromise, the compromise signed by the Advocate for and on behalf of his client would be unlawful. It however added that the legality of the compromise would have to be addressed by scanning the consent of the party from the attending circumstances, including the subsequent conduct of the party. 

The Court at this juncture was posed with the question as to whether challenge against a compromise decree would be permissible by way of an appeal, and the grounds for the same.

It observed that as per Order XLIII Rule 1A (2) 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; while Section 96(3) of the C.P.C. provides that, no appeal shall lie from a decree passed by the court with the consent of parties. 

The Court ascertained that prior to the amendment of C.P.C. in the year 1976, an order recording or refusing to record an agreement, compromise or satisfaction was amenable to appeal under Order XLIII Rule 1(m) C.P.C., which in fact led to multiplicity of litigations.

It ascertained that it was in order to avoid such multiplicity of litigations that Rule 3 of Order XXIII C.P.C. was amended, by inserting a requirement that all lawful agreements or compromise ought to be in writing and signed by the parties, in order to enable the court to satisfy itself about the authenticity of the compromise.

Additionally, the Court took note that the Amendment Act of 1976 also deleted Order XLIII, Rule 1 (m) C.P.C. which provided for an appeal against such order, recording or refusing to record a compromise under Order XLIII, Rule 3, C.P.C., but introduced Rule 1A which is wider in scope and provided for a 'right to challenge non - appealable orders in appeal, against decrees.'

Perusing precedents such as Vipan Aggarwal & Anr. v. Raman Gandotra & Ors. (2022), Banwari Lal v. Smt.Chando Devi (1993), R.Rajanna v. S.R.Venkataswamy (2014), and  others, the Court observed,

"Thus the legal position can be summarised holding that after the amendments which have been introduced, neither an appeal against the order recording the compromise nor remedy by way of filing a suit is available in cases covered by R.3A of O.23. As such a right has been given under R.1A(2) of 0.43 to a party, who challenges the recording of the compromise, to question the validity thereof while preferring an appeal against the decree. S.96(3) of the Code shall not be a bar to such an appeal because S.96(3) is applicable to cases where the factum of compromise or agreement is not in dispute". 

As regards whether the 1st defendant would be bound by the compromise decree though it had not been signed by her, the Court observed that the 1st defendant had filed an affidavit before the Munsiff Court and claimed the amount in terms of the compromise petition. It further noted that the 5th defendant, who is the husband of the 1st defendant, had also filed an affidavit in terms of the compromise. 

"On perusal of Annexure-R1.D affidavit filed by Ashiya Ummal, the 1st defendant herein, it is emphatically clear that Ashiya Ummal agreed and consented the compromise and subsequently acted upon the same though she did not sign the compromise. A relevant aspect forthcoming is the consent of the 1st defendant in the compromise in view of filing of affidavit accepting and acting upon the same," it said. 

The Court thus held that the appellant/1st defendant would be bound by the compromise, and thereby dismissed the Second Appeal.

Counsel for the Appellant: Advocates K.S. Hariharaputhran, Pinku Mariam Jose, Anil Kumar T.P.

Counsel for the Respondents: Advocates Atul Sohan, Bibin John, R. Reji, Sreeja Sohan K., and K.V. Sohan

Citation: 2024 LiveLaw (Ker) 15

Case Title: Ashiya Ummal v. S.N. Sathy & Ors. 

Case Number: RSA No. 247 of 2023

Click Here To Read/Download The Judgment