1. This is an appeal against an order made under Order XXIII, Rule 3, of the Civil Procedure Code. In the course of a suit in the Court of the First Class Subordinate Judge, Poona, an application was put in purporting to be signed by all the parties to the suit, the applicants being represented by their pleader and a mukhtyar. The application was to the effect that the dispute between the parties had been compromised, and requested the Court to pass a decree in terms of the compromise. The Court's order was 'Granted. Decree accordingly.' Strictly speaking, the learned Judge should have made an order recording the compromise and then passed a decree in its terms. But the actual words used are, more or less, a formality, and I think that the word 'Granted' means the same thing. A decree was accordingly passed.
2. Thereupon, the applicants came to this Court challenging the decree On the ground that it had not been a compromise with the consent and authority of the defendants, i.e., the applicants, and contending that the Court below should have held that the mukhtyar had no authority to compromise the suit, putting him to strict proof of his authority, and similarly in the case of the pleader, who represented applicants in that Court. An affidavit has been filed in this Court making these allegations and challenging the propriety of the order recording the compromise in the Court below.
3. Mr. Thakor for the respondents has raised a preliminary objection, and his contention is that no appeal lies against an order of this nature. He has relied on the decision of a bench of this Court in an unreported case, Gulabchand v. Ramsukh. In that matter, it was held by the learned Chief Justice, in deciding such a preliminary point, that no appeal lay, his reasons being :-
An appeal from a decree passed by the Court with the consent of parties is barred by Section 96, Sub-section (3). The appellant urges that the Court has passed an order under Order XXIII, Rule 3, and that an appeal lies under Order XLIII, Rule 1, Clause (m), from such an order. But in this case there was no question whether an agreement had been arrived at, the terms were signed by the parties and all that the Court had to do was to pass a decree according to the terms to which the parties had agreed. There was no adjudication, therefore, on the question whether a lawful agreement had been arrived at, because it was never disputed that the parties before the Court had come to an agreement. It was open to any of the parties before the decree was passed to contend that a lawful agreement had not been arrived at.
Under these circumstances we think that no appeal is competent. There are other remedies open to the appellant if he thinks fit to pursue them.
4. The ratio decidendi of that case, which binds us, is that where there has been no contest in the Court below, but an application for compromise has been put in and recorded and a decree passed in its terms, no appeal lies, either against the decree itself, an appeal therefrom being barred under Section 96(3), or against the order under Order XLIII, Rule 1(m), since there are no materials for an adjudication. What the learned Chief Justice meant was that before there can be an appeal under Order XLIII, Rule 1(m), there must have been some contest in the original Court, a contest which might be brought about, conceivably by one party alleging that there was a compromise and the other not, or, where the circumstances are similar to those in the present case, where one of the parties is disowning the authority of his agent or pleader to compromise for him, either by an application for a review, or under Section 151 of the Civil Procedure Code, which would open the whole matter and allow an adjudication from which an appeal might lie. A direct appeal was not possible on the facts in that case, and in the present one as there was and is no material before the Court on which a decision can be come to. The ruling is of a division bench and binds us.
5. But the case has also been argued on a wider basis, and we have been referred to numerous cases, which I will do no more than name. These are : The Bengal Coal Company, Ltd. v. Apcar Collieries, Ltd. (1924) 29 C.W.N. 928 which is based on Madhu Sudan Sen v. Kamini Kanta Sen I.L.R. (1905) Cal. 1023 Thenal Ammal v. Sokkammal I.L.R. (1917) Mad. 233 Satyanarayanamoorthi v. Butchayya (1924) 48 M.L.J. 249 Muhammad Rashid v. Rahmatullah (1914) 24 I.C. 630 which is a Lahore decision, Paban Sardar v. Bhupendra Nath Nag I.L.R. (1915) Cal. 85 Sreemati Sabitri Thakurain v. F.A. Savi I.L.R. (1926) Pat. 108 Uman Kunnari v. Jarabandhan I.L.R. (1908) All. 479 and Lakshmi v. Maru Devi I.L.R. (1911) Mad. 29 The difficulty raised in the argument was that where the appeal is against the order and not against the decree, even if the appeal against the order were entertained, it would not affect the decree, which has not been appealed against, the rival contention being that the vacation of the order would, in itself, have the effect of setting aside the terms oft he decree. It may be noted that of these cases, Satyanarayanamoorthi v. Butchayya and Muhammad Rashid v. Rahmatullah were revision applications, as was that of Sreemati Sabitri Thakurain v. F.A. Savi. The other cases were nearly all not on similar facts. One, Lakshmi v. Maru Devi, was in the matter of an execution application, where a remand had been ordered, which in fact only carried out the terms of the first order, which was appealed against; and the only two cases decided in appeal were the ones in Thenal Ammal v. Sokkammal and Paban Sardar v. Bhupendra Nath Nag. The ratio decidendi in Thenal Animal v. Sokkammal was that an appeal lies against a decree passed in accordance with a compromise, where the authority to enter it is impeached, and in Paban Sardar v. Bhupendra Nath Nag it appears that there had been a contest in the original Court, though the decision was sot aside on the ground that a consent decree under Rule 3 of Order XXIII of the Civil Procedure Code can be passed only after there has been an order that the compromise be recorded, this not being a mere matter of form, as the aggrieved party has a right of appeal against this order, and Section 96(3) of the Code is net otherwise a bar to an appeal from such a decree.
6. There is a difference of opinion between several High Courts in India on this point. I think, myself, that the proper course in a case, such as the present, where the order for making the decree is passed practically simultaneously with the one recording the compromise, and where the compromise is challenged, on the ground that none has really been arrived at, would be to challenge the decree, either by an appeal, or, as suggested by Mr. Thakor, by an application for review, or one under Section 151 of the Civil Procedure Code in the original Court, when the matter could be gone into on the merits, the difficulty being that if we entertain Mr. Rao's argument, the setting aside of the order made under Order XXIII, Rule 3, would not have the effect of setting aside the decree which is based on it.
7. It is not, however, necessary to decide tins point, because in this appeal we are concluded by the previous decision of the Division Bench of this Court, which I have already referred to, Following that decision, we uphold the preliminary objection that no appeal is competent against the order in this case, and dismiss the appeal against the order with costs.
8. I agree. I think that where a compromise has been recorded, and it has not been challenged in any way in the lower Court, the recording of that compromise must be held to have been done by consent, and I think, Section 96(3) of the Civil Procedure Code read with Section 108 would bar the appeal.
9. Section 108 of the Civil Procedure Code lays down-
The provisions of this Part relating to appeals from original decrees shall, so far us may be, apply to appeals-
(a) from appellate decrees, and
(b) from orders made under this Code & c.,
and Section 96 is in the same part. Section 96(3) clearly lays down that-
No appeal shall he from a decree passed by the Court with the consent of parties.
10. It follows, therefore, that an order recording a compromise, if made with the consent of parties, would not be an order appealable, even though under Order XLIII, Rule 1, an appeal is provided against orders under Order XXIII, Rule 3.
11. It may be objected that if that be so, the party aggrieved by a fraudulent petition of compromise would have no remedy, but I do not think that it is correct. The party could ask for a review from the Court which recorded the compromise and set forth its grievance, and it could then have an opportunity of showing to the Court that the petition was not what it purported to be, or possibly it could make an application under Section 151 of the Civil Procedure Code, and it has always a remedy by a separate suit to prove fraud. But, if there is no contest before the Court which recorded the compromise on the point which is sought to be agitated in the appeal, the appellate Court is clearly at a great disadvantage, there being no evidence on which to base a decision. It seems to me, therefore, that the principle laid down in the unreported case referred to by my learned brother must govern our decision in the present case.
12. In that view of the matter, it is really unnecessary to consider the second point argued by Mr. Thakor, namely, that no appeal against the order could be entertained in the absence of an appeal against the decree following the order recording the compromise. However, as the question has been fully discussed, I should like to say that it seems to me that in a case of this nature, where a decree as a matter of course followed the order recording the compromise, it would be anomalous to permit an appeal on the order alone leaving the decree untouched. Once a decree is passed all previous orders in the case, whether good or bad, merge into the decree or become ancillary to it. The decree could only be set aside by means of an appeal against it, and the provisions permitting appeals from certain orders were not meant to provide a short and inexpensive cut to a person against whom a decree is outstanding to have it set aside by means of appealing against some order leading up to the decree. None of the reported cases cited before us lead necessarily to this result. The only case that may give some support to such a view is that of Satyanarayanamoorthi v. Butchayya (1924) 48 M.L.J. 249 Which is a decision of a single Judge. The weight of authority seems to be against that decision, for the learned Judge himself refers to a case of that High Court in which a Division Bench took the view that there could be no appeal against the order recording a compromise 'when it has become merged in the subsequent decree': Alamelu Ammal v. Rama Aiyar : (1922)43MLJ290 . That was also the view taken in The Bengal Coal Company, Ltd. v. Apcar Collieries, Ltd. (1924) 29 C.W.N. 928 where it was stated (p. 980) :-
If the decree follows the order it will be no straining of the language to say that the order, and for that matter all previous proceedings, get merged in the decree which is the final declaration of the Court's mind and decision and lose their separate existence.
13. See also Madhu Sudan Sen v. Kamini Kanta Sen I.L.R. (1905) Cal. 1023 where it was held that the right of appeal from interlocutory orders ceases with the disposal of the suit. I, therefore, think that in a case of this nature, if a party wishes to appeal against an order recording a compromise, and a decree has followed, he must, if at all, appeal against the decree, and challenge the order in such appeal.