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Whether suit filed by appellant was barred in terms of Order XXIII Rule 3-A CPC – Held: A compromise forming the basis of the decree can only be questioned before the same court that recorded the compromise and a fresh suit for setting aside a compromise decree is expressly barred under Order XXIII Rule 3-A – However, in the instant case, the compromise decree alleged to be fraudulent was passed not by a civil court but by a revenue court in a suit u/s.176 of the Land Reforms Act – Revenue courts are neither equipped nor competent to effectively adjudicate on allegations of fraud that has overtones of criminality and the courts really skilled and experienced to try such issues are the courts constituted under the CPC – Further, under s.9 of CPC, the civil court has inherent jurisdiction to try all types of civil disputes unless its jurisdiction is barred expressly or by necessary implication, by any statutory provision and conferred on any other tribunal or authority – Nothing in Order XXIII Rule 3-A bars the institution of a suit before the civil court even in regard to decrees or orders passed in suits and/or proceedings under different statutes before a court, tribunal or authority of limited and restricted jurisdiction – In the facts of the case, provision of Order XXIII not a bar against the suit filed by the appellant – Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950 – ss. 176, 178, 182, 331 and 341 and Schedule II. = HORIL … APPELLANT VERSUS KESHAV & ANR. … RESPONDENTS = published in http://judis.nic.in/supremecourt/helddis.aspx

Code of Civil Procedure, 1908 – Or.XXIII, r.3-A – Suit – Maintainability –

English: The supreme court of india. Taken abo...

English: The supreme court of india. Taken about 170 m from the main building outside the perimeter wall (Photo credit: Wikipedia)

Appellant filed suit seeking declaration that decree passed by the
Assistant Collector, Class-I, in a suit u/ss.176, 178 and 182 of the Land
Reforms Act was fraudulent, inoperative and not binding upon him –
Allegation that decree passed by Assistant Collector was based on a
fraudulent compromise petition – Defendants-respondents questioned the
maintainability of the suit – Whether suit filed by appellant was barred in
terms of Order XXIII Rule 3-A CPC – Held: A compromise forming the basis of
the decree can only be questioned before the same court that recorded the
compromise and a fresh suit for setting aside a compromise decree is
expressly barred under Order XXIII Rule 3-A – However, in the instant case,
the compromise decree alleged to be fraudulent was passed not by a civil
court but by a revenue court in a suit u/s.176 of the Land Reforms Act –
Revenue courts are neither equipped nor competent to effectively adjudicate
on allegations of fraud that has overtones of criminality and the courts
really skilled and experienced to try such issues are the courts
constituted under the CPC – Further, under s.9 of CPC, the civil court has
inherent jurisdiction to try all types of civil disputes unless its
jurisdiction is barred expressly or by necessary implication, by any
statutory provision and conferred on any other tribunal or authority –
Nothing in Order XXIII Rule 3-A bars the institution of a suit before the
civil court even in regard to decrees or orders passed in suits and/or
proceedings under different statutes before a court, tribunal or authority
of limited and restricted jurisdiction – In the facts of the case,
provision of Order XXIII not a bar against the suit filed by the appellant
Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950 – ss. 176,
178, 182, 331 and 341 and Schedule II.

The appellant filed suit seeking a declaration that the decree passed by
the Assistant Collector, Class-I, in a suit under sections 176, 178 and 182
of the U.P. Zamindari Abolition & Land Reforms Act, 1950 was fraudulent,
inoperative and not binding upon him. It was alleged that the decree passed
by the Assistant Collector was based on a fraudulent compromise petition.
The defendants-respondents questioned the maintainability of the suit
raising the contention that it was barred under the provisions of Order
XXIII Rule 3-A of CPC. The trial court dismissed the objection and held
that the suit was maintainable. The defendants-respondents took the matter
in revision which was dismissed by the District Judge. The respondents
thereafter filed writ petition before the High Court which allowed the same
holding that the suit filed by the appellant was not maintainable being
barred in terms of Order XXIII Rule 3-A CPC.

Allowing the appeal, the Court

HELD: 1.1. A compromise forming the basis of the decree can only be
questioned before the same court that recorded the compromise and a fresh
suit for setting aside a compromise decree is expressly barred under Order
XXIII Rule 3-A. The expression “not lawful” used in Rule 3-A of Order XXIII
also covers a decree based on a fraudulent compromise hence, a challenge to
a compromise decree on the ground that it was obtained by fraudulent means
would also fall under the provisions of Rule 3-A of Order XXIII. [Para 6]
[6-H; 7-A]

1.2. However, a significant distinguishing feature in this case is that the
compromise decree which is alleged to be fraudulent and which is sought to
be declared as nullity was passed not by a civil court but by a revenue
court in a suit under section 176 of the U.P. Zamindari Abolition & Land
Reforms Act, 1950. [Para 8] [9-B-C]

Banwari Lal v. Chando Devi (1993) 1 SCC 581: 1992 (3) Suppl. SCR 524 –
distinguished.

2.1. Section 331 of the U.P. Zamindari Abolition & Land Reforms Act, 1950
bars the jurisdiction of the civil court and provides that a suit under the
Act can be entertained by no court other than that the courts specified in
Schedule II to the Act. A reference to Schedule II would show that the
court of original jurisdiction for a suit under section 176 of the Act for
division of a holding of a Bhumidhar is Assistant Collector, First Class
and the courts of First Appeal and Second Appeal are Commissioner and the
Board of revenue respectively. Section 341 of the Act, of course, provides
that unless otherwise expressly provided by or under the Act, the
provisions of the Indian Court Fee Act, 1870, the Code of Civil Procedure,
1908 and the Limitation Act, 1963, including section 5 thereof would apply
to the proceedings under the Act. [Para 9] [9-D-F]

2.2. Though the provisions of the Code of Civil Procedure have been made
applicable to the proceedings under the U.P. Zamindari Abolition & Land
Reforms Act, 1950 but that would not make the authorities specified under
Schedule II to the Act as `court’ under the Code and those authorities
shall continue to be “courts” of limited and restricted jurisdiction. [Para
10] [9-F-G]

2.3. Revenue courts are neither equipped nor competent to effectively
adjudicate on allegations of fraud that has overtones of criminality and
the courts really skilled and experienced to try such issues are the courts
constituted under the Code of Civil Procedure. [Para 11] [9-H; 10-A]

3. It is also well settled that under section 9 of CPC, the civil court has
inherent jurisdiction to try all types of civil disputes unless its
jurisdiction is barred expressly or by necessary implication, by any
statutory provision and conferred on any other tribunal or authority. There
is nothing in Order XXIII Rule 3-A to bar the institution of a suit before
the civil court even in regard to decrees or orders passed in suits and/or
proceedings under different statutes before a court, tribunal or authority
of limited and restricted jurisdiction. In the facts of the case, the
provision of Order XXIII shall not act as a bar against the suit filed by
the appellant. The order of the High Court is accordingly set aside. As a
consequence, the suit will be restored before the trial court. [Paras 12,
13] [10-B-D]

Case Law Reference:

1992 (3) Suppl. SCR 524 distinguished Para 7

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 776 of 2012.

From the Judgment & Order dated 11.11.2003 of the High Court of Judicature
at Allahabad in Civil Misc. Writ Petition No. 8107 of 1988 and order dated
16.02.2005 in Civil Misc. (Review) Application No. 40253 of 2004 in Civil
Misc. Writ Petition No. 8107 of 1988.

Virag Gupta, Pallavi Sharma, (for Praveen Swarup) for the Appellant.

Ujjal Singh, J.P. Singh, Parvinderjit Singh (for R.C. Kaushik) for the
Respondents.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 776 OF 2012

(Arising out of S.L.P(Civil )No.6632 of 2006)

HORIL … APPELLANT

VERSUS

KESHAV & ANR. … RESPONDENTS

J U D G M E N T

Aftab Alam, J.

1. Leave granted.

2. This appeal is directed against the judgment

and order dated November 11, 2003 passed by the

Allahabad High Court by which it allowed the writ

petition filed by respondent nos. 1 and 2, set

aside the order passed by the District Judge,
2

affirming the order of the Munsif, and held that

the suit filed by the appellant was not

maintainable being barred in terms of Order XXIII

Rule 3-A of the Code of Civil Procedure.

3. The appellant filed a suit (No. 43 of 1980) in

the court of Munsif, Karwi (Banda) seeking a

declaration that the decree passed by the Assistant

Collector, Class-I, in a suit under sections 176,

178 and 182 of the U.P. Zamindari Abolition & Land

Reforms Act was fraudulent, inoperative and not

binding upon him. According to the appellant, the

defendants had instituted the suit before the

Assistant Collector in which his father namely

Chunkai was made as one of the opposite party. In

that suit, a compromise petition was filed on

October 7, 1971 with the fake signature of Chunkai

and on that basis a compromise decree finally came

to be passed on April 25, 1979. It is the case of

the appellant that no notice of the suit was ever

served upon his father Chunkai. He never appeared
3

in the proceeding and was not even aware of it. He

did not sign any compromise petition and his

alleged signature on the compromise petition dated

October 7, 1971 was faked. He had died much earlier

and was not even alive in 1979 when the decree was

passed. The appellant, accordingly, sought a

declaration that the decree dated April 25, 1979

passed by the Assistant Collector, Class-I, Karwi,

may be cancelled or it may be declared as void ab

initio, inoperative and not binding upon him.

4. The defendants (respondents 1 and 2 before this

Court) filed a written statement in which they

questioned the maintainability of the suit as well.

It was contended on their behalf that as the suit

related to agricultural lands it was beyond the

jurisdiction and competence of the civil court and

it could only be tried by the revenue authorities.

The Munsif by his order dated October 1, 1985

upheld the defendants’ objection and held that the

suit was not maintainable before a civil court.
4

Against the order passed by the Munsif, the

appellant preferred an appeal (M.C.A.No.21 of 1985)

which was allowed by the judgment and order dated

April 14, 1987 passed by the Additional District

Judge, Karwi, (Banda). The Additional District

Judge rightly pointed out that the suit filed by

the appellant was based on the allegation that the

decree passed by the Assistant Collector was based

on a fraudulent compromise petition and it did not

involve any adjudication of rights or interests in

the agricultural lands. Hence, the suit was

maintainable before a civil court. It, accordingly,

set aside the order passed by the Munsif and

directed him to proceed with the suit in accordance

with law.

5. When the matter came before the Munsif on

remand, the defendants once again objected to the

maintainability of the suit, this time raising the

contention that it was barred under the provisions

of Order XXIII Rule 3-A of the Code of Civil
5

Procedure. The Munsif by his order dated January 7,

1988 dismissed the objection and found and held

that the suit was maintainable. The defendants-

respondents took the matter in revision (Civil

Revision No. Nil of 1988) which was dismissed by

the District Judge, Banda, by his order dated

February 17, 1988. Against the orders passed by

the Munsif and the District Judge, the defendants

preferred a writ petition before the High Court and

the High Court, as noted above, allowed the writ

petition holding that the suit was not

maintainable. It is a brief order in which the

High Court referred to the provisions of Order

XXIII Rule 3-A, and relying upon a decision of the

Allahabad High Court allowed the writ petition.

6. It is true that a compromise forming the basis

of the decree can only be questioned before the

same court that recorded the comprise and a fresh

suit for setting aside a compromise decree is

expressly barred under Order XXIII Rule 3-A. It is
6

equally true the expression “not lawful” used in

Rule 3-A of Order XXIII also covers a decree based

on a fraudulent compromise hence, a challenge to a

compromise decree on the ground that it was

obtained by fraudulent means would also fall under

the provisions of Rule 3-A of Order XXIII.

7. In Banwari Lal Vs. Chando Devi (1993) 1 SCC

581, this Court examined the provisions of Order

XXIII Rule 3-A in some detail and in light of the

amendments introduced in the Code and in paragraph

7 of the judgment came to hold as follows:

“7. By adding the proviso along with an

explanation the purpose and the object of

the amending Act appears to be to compel

the party challenging the compromise to

question the same before the court which

had recorded the compromise in question.

That court was enjoined to decide the

controversy whether the parties have

arrived at an adjustment in a lawful

manner. The explanation made it clear that

an agreement or a compromise which is void

or voidable under the Indian Contract Act

shall not be deemed to be lawful within

the meaning of the said rule. Having

introduced the proviso along with the

explanation in Rule 3 in order to avoid

multiplicity of suit and prolonged
7

litigation, a specific bar was prescribed

by Rule 3-A in respect of institution of a

separate suit for setting aside a decree

on basis of a compromise saying:

“3-A. Bar to suit.- No suit shall lie

to set aside a decree on the ground that

the compromise on which the decree is

based was not lawful.”

It further held in paragraphs 13 and 14 as

follows:-

“13. When the amending Act introduced a

proviso along with an explanation to Rule

3 of Order 23 saying that where it is

alleged by one party and denied by the

other that an adjustment or satisfaction

has been arrived at,”the Court shall

decide the question”, the Court before

which a petition of compromise is filed

and which has recorded such compromise,

has to decide the question whether an

adjustment or satisfaction had been

arrived at on basis of any lawful

agreement. To make the enquiry in respect

of validity of the agreement or the

compromise more comprehensive, the

explanation to the proviso says that an

agreement or compromise “which is void or

voidable under the Indian Contract Act….”

shall not be deemed to be lawful within

the meaning of the said Rule. In view of

the proviso read with the explanation, a

Court which had entertained the petition

of compromise has to examine whether the
8

compromise was void or voidable under the

Indian Contract Act. Even Rule 1(m) of

Order 43 has been deleted under which an

appeal was maintainable against an order

recording a compromise. As such a party

challenging a compromise can file a

petition under proviso to Rule 3 of Order

23, or an appeal under Section 96(1) of

the Code, in which he can now question the

validity of the compromise in view of Rule

1-A of Order 43 of the Code.”

14. ……………..The court before which it is

alleged by one of the parties to the

alleged compromise that no such compromise

had been entered between the parties that

court has to decide whether the agreement

or compromise in question was lawful and

not void or voidable under the Indian

Contract Act. If the agreement or the

compromise itself is fraudulent then it

shall be deemed to be void within the

meaning of the explanation to the proviso

to Rule 3 and as such not lawful. The

learned Subordinate Judge was perfectly

justified in entertaining the application

filed on behalf of the appellant and

considering the question as to whether

there had been a lawful agreement or

compromise on the basis of which the court

could have recorded such agreement or

compromise on February 27, 1991. Having

come to the conclusion on the material

produced that the compromise was not

lawful within the meaning of Rule 3, there

was no option left except to recall that

order.”
9

8. In light of the decision in Banwari Lal it

would prima facie appear that the High Court was

right in holding that the appellant’s suit was hit

by the provisions of Order XXIII Rule 3-A and was

not maintainable. But the significant

distinguishing feature in this case is that the

compromise decree which is alleged to be fraudulent

and which is sought to be declared as nullity was

passed not by a civil court but by a revenue court

in a suit under section 176 of the U.P. Zamindari

Abolition & Land Reforms Act, 1950 (hereinafter the

Act).

9. Section 331 of the Act bars the

jurisdiction of the civil court and provides that a

suit under the Act can be entertained by no court

other than that the courts specified in Schedule II

to the Act. A reference to Schedule II would show

that the court of original jurisdiction for a suit

under section 176 of the Act for division of a

holding of a Bhumidhar is Assistant Collector,
1

First Class and the courts of First Appeal and

Second Appeal are Commissioner and the Board of

revenue respectively. Section 341 of the Act, of

course, provides that unless otherwise expressly

provided by or under the Act, the provisions of the

Indian Court Fee Act, 1870, the Code Of Civil

Procedure, 1908 and the Limitation Act, 1963,

including section 5 thereof would apply to the

proceedings under the Act.

10. Though the provisions of the Code Of Civil

Procedure have been made applicable to the

proceedings under the Act but that would not make

the authorities specified under Schedule II to the

Act as `court’ under the Code and those authorities

shall continue to be “courts” of limited and

restricted jurisdiction.

11. We are of the view that Revenue courts are

neither equipped nor competent to effectively

adjudicate on allegations of fraud that has

overtones of criminality and the courts really
1

skilled and experienced to try such issues are the

courts constituted under the Code of Civil

Procedure.

12. It is also well settled that under section 9 of

the Civil Procedure Code, the civil court has

inherent jurisdiction to try all types of civil

disputes unless its jurisdiction is barred

expressly or by necessary implication, by any

statutory provision and conferred on any other

tribunal or authority. We find nothing in Order

XXIII Rule 3-A to bar the institution of a suit

before the civil court even in regard to decrees or

orders passed in suits and/or proceedings under

different statutes before a court, tribunal or

authority of limited and restricted jurisdiction.

13. In our view in the facts of the case the

provision of Order XXIII shall not act as a bar

against the suit filed by the appellant. We,

accordingly set aside the order of the High Court.

As a consequence, the suit will be restored before
1

the Munsif who is directed to accord it priority

having regard to the fact that for the last 31

years it is stuck up on the issue of

maintainability. The trial court should try to

dispose of the suit without any delay, and in any

case, not later than one year from the date of

receipt/production of a copy of this order.

14. In the result, the appeal is allowed but with

no order as to costs.

………………………………………………………J.

(Aftab Alam)

………………………………………………………J.

(Ranjana Prakash Desai)

New Delhi;

January 20, 2012.

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