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Order XXIII Rule 3 and Order III Rule 1 of Civil Procedure Code- Arbitration proceedings – Arbitrator passed awards – challenged in District court – Compromise signed by Govt. Pleader on behalf of Govt. – Compromise decree was challenged by Govt. as Govt. Pleader is not authorised – High court set aside the decrees – Apex court held thatOrder XXIII Rule 3 and Order III Rule 1 of Civil Procedure Code as held in Jineshwardas (D) through L.R.s and Ors. v. Smt. Jagrani and Anr., (2003) 11 SCC 372, has held as under: “If a power-of-attorney holder can enter into an agreement or compromise on behalf of his principal, so can counsel, possessed of the requisite authorization by vakalatnama, act on behalf of his client.” We find that in the present case the Government Pleader was legally entitled to enter into a compromise with the appellant and his written endorsement on the Memo filed by the appellant can be deemed as a valid consent of the Respondent itself. Hence the Counsel appearing for a party is fully competent to put his signature to the terms of any compromise upon which a decree can be passed in proper compliance with the provisions of Order XXIII Rule 3 and such decree is perfectly valid.= CIVIL APPEAL NOS.7164-7166 OF 2014 (arising out of SLP (C) Nos. 23016-23018 of 2012) |Y. SLEEBACHEN ETC. |…..APPELLANT(S) | | | | |VERSUS | | |SUPERINTENDING ENGINEER |…..RESPONDENT(S) | |WRO/ PWD & ANR. | | = 2014 -Aug.part – http://judis.nic.in/supremecourt/filename=41803

Order XXIII Rule 3 and Order III  Rule  1 of Civil Procedure Code- Arbitration proceedings – Arbitrator passed awards – challenged in District court – Compromise signed by Govt. Pleader on behalf of Govt. – Compromise decree was challenged by Govt. as Govt. Pleader is not authorised – High court set aside the decrees – Apex court held that Order XXIII Rule 3 and Order III  Rule  1 of Civil Procedure Code as held in Jineshwardas  (D)  through  L.R.s  and Ors. v. Smt. Jagrani and Anr., (2003) 11 SCC 372, has held as under:

“If a power-of-attorney holder can enter into an agreement or compromise  on

behalf of  his  principal,  so  can  counsel,  possessed  of  the  requisite

authorization by vakalatnama, act on behalf of his client.”

 We find that in the present case the Government  Pleader  was  legally

entitled to enter into a compromise  with  the  appellant  and  his  written

endorsement on the Memo filed by the appellant can  be  deemed  as  a  valid

consent of the Respondent itself.  Hence the Counsel appearing for  a  party

is fully competent to put his signature to the terms of any compromise  upon

which a decree can be passed in proper compliance  with  the  provisions  of

Order XXIII Rule 3 and such decree is perfectly valid.=

the  compromise  talks  took  place

between  the  parties  at  the  instance  of  the   respondents   themselves

expressing their intention to explore the possibility of settlement  as  per

its letter dated 02.12.2008.  

Certain meetings were held for  this  purpose.

The appellant had agreed to forgo substantial part of interest and  also  5%

of the principal amount.  

The Superintending Engineer, however,  wanted  10%

reduction in the principal sums awarded in favour of the appellant.   

It  is

because of this difference the settlement talks failed at that time and  the

Government decided to pursue the applications under Section 34  of  the  Act

on merits. 

 However, when the matter came up before the  District  Judge  on

9.4.2011, the appellant agreed to forgo the entire  interest  accrued  after

09.01.2009 as well, in addition to the concessions which were already  given

by the appellant and  recorded  above.   

When  the  Government  Pleader  was

confronted with this offer given by the appellant, he took a  view  that  it

was a very fair offer and made an endorsement on the offer  itself,  to  the

effect that the Government had no objection for accepting  the  same.   

This

resulted in modifying the award by the District Judge  in  terms  of  agreed

conditions, vide his orders dated 28.04.2011 in all the three petitions.

8.    The  respondents,  however,  challenged  the  orders  of  the  learned

District Judge by filing appeals under Section 37 of the  Act  in  the  High

Court, primarily on the ground that the Government had never agreed  to  the

terms as endorsed by the Government Pleader, in as much  as,  he  was  never

authorised for this purpose.  

It was argued  that  in  the  absence  of  any

authorisation in favour  of  the  Government  Pleader,  endorsement  of  the

compromise given by him was not binding on the Government.=

The High Court, 

accordingly, heard  the  matter  and  vide

impugned judgment, set aside the orders  of  the  Principal  District  Judge

passed in the  three  petitions,  directing  it  to  decide  on  merits  the

applications filed by the respondents under Section 34  of  the  Act.   From

the perusal of the order of the High Court, it is clear that the High  Court

has accepted the plea  of  the  respondents  that  in  the  absence  of  any

material to show that  Government  Pleader  was  authorised  to  record  the

compromise, such a compromise was not binding on the respondents.  It is  in

this backdrop, the appellant has preferred  these  appeals  questioning  the

validity of the judgment of the High Court.

Apex court held

 in Jineshwardas  (D)  through  L.R.s  and

Ors. v. Smt. Jagrani and Anr., (2003) 11 SCC 372, has held as under:

“If a power-of-attorney holder can enter into an agreement or compromise  on

behalf of  his  principal,  so  can  counsel,  possessed  of  the  requisite

authorization by vakalatnama, act on behalf of his client.”

19.   We find that in the present case the Government  Pleader  was  legally

entitled to enter into a compromise  with  the  appellant  and  his  written

endorsement on the Memo filed by the appellant can  be  deemed  as  a  valid

consent of the Respondent itself.  Hence the Counsel appearing for  a  party

is fully competent to put his signature to the terms of any compromise  upon

which a decree can be passed in proper compliance  with  the  provisions  of

Order XXIII Rule 3 and such decree is perfectly valid.  The authority  of  a

Counsel to act on behalf of a party is expressly given in Order III  Rule  1

of Civil Procedure Code which is extracted hereunder;

“Any appearance, application or act in or to any  court,  required  or

authorized by law to be made or done by a party in such  court,  may  except

where otherwise expressly provided by any law for the time being  in  force,

be made or done by the party in person, or by his recognized agent, or by  a

pleader, appearing, applying or acting as the case may be, on his behalf.

Provided that any such appearance shall, if the court so  directs,  be  made

by the party in person.”=

where arbitral awards  were  given  in  favour  of  the

appellant way back in April and June, 2006. However, the  appellant  is  yet

to reap the benefits thereof.  Respondent No.1 challenged  these  awards  by

filing applications under Section 34 of  the  Act.  When  these  proceedings

were pending, the respondents themselves  came  out  with  the  proposal  to

negotiate and try to amicably  settle  the  matters,  keeping  in  view  the

otherwise laudable decision taken by PWD  to  settle  such  disputes  as  is

clear from the letter dated 02.08.2008. Negotiations took place  thereafter.

Though the appellant had agreed to forgo substantial part of the  award  in

terms of interest etc., the talks failed at that  time  as  the  respondents

wanted 10% reduction in the principal amount as well, whereas the  appellant

was conceding to give up only 5% of the principal amount.  Be,  as  it  may,

the appellant agreed to give further  concessions  in  the  Court  when  the

matter came on 09.04.2011 vide his 3 memos  dated  6.4.2011  filed  on  that

date.  These memos show that the appellant had given the said offer  due  to

the acute financial crisis he was suffering from as  he  wanted  to  satisfy

his creditors including his bankers to whom  he  owed  substantial  amounts.

Alas, even after the settlement was fructified, resulting  into  passing  of

agreed orders, it has resulted into legal tangle even  thereafter,  and  the

appellant has not been able to get even the said  agreed  amount.   We  are,

therefore, of the opinion that the High Court was not justified  in  setting

aside the consent decree passed  by  the  learned  District  Judge.  Such  a

consent decree operates as an estoppel and was binding on the  parties  from

which the respondents could not wriggle out by taking an after thought  plea

that its lawyer was not authorised to enter into such a settlement.

22.   These appeals are accordingly allowed.  The impugned judgment  of  the

High Court is set aside and the consent decrees dated 28.04.2011  passed  by

the trial court are restored.  The  appellant  shall  also  be  entitled  to

costs which is quantified at Rs.25,000/- in each of these appeals.

2014 -Aug.part – http://judis.nic.in/supremecourt/filename=41803

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