Seetharama Reddy, J.
1. This Civil Miscellaneous Appeal brought in by the petitioning 1st defendant is against an order made by the Subordinate Judge, Ongole, rejecting an interlocutory application, I. A. No. 241 of 1980 in O. S. No. 67 of 1980, filed under Order XXIII, Rule 3, Civil P. C. to record compromise in terms of the affidavit to the petition and to pass a compromise decree.
2. The averments set out in the affidavit, in brief, are: The respondent-plain-tiff, who filed the suit for partition, is the step-brother of the petitioner (1st defendant). In the suit, the purchasers of certain lands from the 1st defendant were also impleaded. In the written statement, it is averred that there was a family settlement under which the plaint A and B Schedule properties are not liable for partition as they were allotted to the 1st defendant, and that the plaint C Schedule property and other properties were allotted to the plaintiff. Pending the suit, at the intervention of certain relatives, the matter was settled. As per their advice, the plaintiff and the 1st defendant agreed on 17-4-1977 and arrived at a compromise in the following terms:
(a) That the petitioner (1st defendant) should get all the properties of A and B Schedule in China Obunapalli and the respondent (plaintiff) will get the C Schedule properties situated in Jamapala Cheruvu;
(b) That for giving up the claim of the respondent in A and B Schedule properties, the petitioner should pay Rs. 22,000/-in cash, out of which Rs. 12,000/- was to be paid within one month and fifteen days and the remaining Rs. 10,000/- after one year and for that the petitioner should give security for Rs. 10,000/- and in default, the respondent should enforce acharge and realise the amount. Accordingly both the parties accompanied by the elders went to the office of Sri Bontha Ranga Reddy, Advocate, Giddalur and executed a Kharar and signed and it was duly attested by Vijaya China Chenchireddi; and
(c) That they agreed that compromise petition should be filed on payment of Rs. 12,000/- in the Court and decree to be obtained with the said term and Kharar should be kept with Sri Bontha Ranga Reddy, advocate, Giddalur and on payment of Rs. 12,000/- on or before the agreed date, the Kharar should be filed into Court and compromise decree obtained.
3. On 12-5-1977, the petitioner sold some land for Rs. 4,000/- and borrowed Rs. 8,000/- from Kamareddi Masthan Reddy and Subbasani Mahandi Reddy and went to Giddalur on 25-5-1977 and paid Rs. 12,000/- to B. Rangareddy, advocate, and obtained a receipt from him. The advocate promised to send for the respondent and pay the amount and arrange for the filing of the compromise. It is further averred that subsequently, the petitioner came to know that the respond-dent went to Giddalur on 9-6-1977 and met Sri B. Ranga Reddy and took the original Kharar from him stating that ha would take a copy for his information and actually copied and when one Yerukala Reddy called out B. Ranga Reddy, advocate, he went out to talk to him and his brother came out of the house and ultimately the respondent escaped and while the copy fell into the hands of Sri B. Ranga Reddy, the respondent took away the original. Thereafter, the advocate lodged a complaint to the Police, and the copy left by the respondent is reported to have been given to the Police, keeping for himself a copy. The respondent is, therefore, bound by the agreement and the petitioner is willing to pay the balance of Rs. 10,000 at the end of the year as agreed and the petitioner is also taking steps to request Sri B. Ranga Reddy to deposit the amount into Court.
4. The respondent (plaintiff) filed a counter denying all the allegations, by stating that it is all make-believe and is a result of concoction.
5. After appreciating the oral evidence let in on behalf of the petitioner and the respondent, and after a careful consideration of the question whether there was a compromise and the same could be recorded, the learned Subordinate Judge concluded that there was no satisfactoryevidence establishing the case of compromise and the agreement being kept with the advocate and the same being taken away by the respondent, and so rejected the interlocutory application. Hence this Civil Miscellaneous Appeal by the petitioner.
6. In the appeal, a preliminary objection with regard to the maintainability of the appeal has been raised by Sri Ramakrishna Raju, learned counsel for the respondent (plaintiff). The question, therefore, which falls for consideration is whether the appeal is maintainable against an order rejecting to record a compromise and to pass a decree under Order XXIII Rule 3, Civil P. C.
7. The contention of Sri M. Chandrasekhara Rao, learned Counsel for the appellant (1st defendant) is twofold: (1) that the impugned order rejecting to record a compromise amounts to a decree within the meaning of Section 2(2) of the Code of Civil Procedure, and (2) that notwithstanding the deletion by the Amendment Act, 104 of 1976, of Clause (m) of Rule 1 of Order XLIII, Civil Procedure Code, which provides for an appeal against an order under Order XXIII Rule 3 recording or refusing to record a compromise, the right of appeal under Section 96, Civil Procedure Code, still subsists as the impugned order is a decree.
8. The adjudication, therefore, in the main turns upon the interpretation of the provisions of Section 2(2), which define 'decree'. The relevant statutory provisions may now be extracted. Section 2(2) reads:
' 'Decree' means the formal expression of an adjudication which, so far as regards the Court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit and may be either preliminary or final. It shall be deemed to include the rejection of a plaint and the determination of any question within Section 144, but shall not include--
(a) any adjudication from which an appeal lies as an appeal from an order, or
(b) any order of dismissal for default.
Explanation.-- A decree is preliminary when further proceedings have to be taken before the suit can be completely disposed of. It is final when adjudication completely disposes of the suit. It may be partly preliminary and partly final.' Order XXIII, Rule 3 reads:
'Where it is proved to the satisfaction of the Court that a suit has been adjustedwholly or in part by any lawful agreement or compromise, in writing and sign-ed by the parties or where the defendant satisfies the plaintiff in respect of the whole or any part of the subject-matter of the suit, the Court shall order such agreement, compromise or satisfaction to be recorded, and shall pass a decree in accordance therewith so far as it relates to the parties to the suit, whether or not the subject-matter of the agreement, compromise or satisfaction is the same as the subject-matter of the suit:
Provided 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; but no adjournment shall be granted for the purpose of deciding the question, unless the Court, for reasons to be recorded, thinks fit to grant such adjournment.'
Clause (m) of Rule 1 of Order XLIII, as it stood before the Amendment Act, 104 of 1976, reads,
'1. An appeal shall lie from the following orders under the provisions of Section 104, namely:--XX XX XX
(m) an order under Rule 3 of Order XXIII recording or refusing to record an agreement, compromise or satisfaction.' Section 96(1) reads:
'Save where otherwise expressly provided in the body of this Code or by any other law for the time being in force, an appeal shall lie from every decree passed by any Court exercising original jurisdiction to the Court authorised to hear appeals from the decisions of such Court.'
9. What is now, therefore, to be resolved is, whether rejection to record a compromise amounts to a decree within the meaning of Section 2(2), Civil Procedure Code. While laying emphasis on the words 'conclusively determines the rights of the parties with regard to all or any of the matters in controversy' in Section 2(2), learned counsel for the appellant submits that they are comprehensive enough to take in all the matters pertaining to the suit and not necessarily confining to the pleadings, and since the alleged compromise conclusively determined the rights of the parties, the appeal is competent within the meaning of Section 96. For this proposition, reliance was placed on the following decisions.
10. In Adaikappa v. Chandrasekhara, AIR 1948 PC 12, a final decree was passed on 15-9-1925 in a mortgage suit. In execution proceedings taken out in 1933, the mortgage properties were advertised for sale, but before the sale, the Madras Agriculturists' Relief Act was passed in March, 1938. On 8-7-1938, the judgment-debtor filed an Execution Application questioning the extent of liability for the debt under Section 19 of the Act, and pending that application, the auction-sale was asked to be stayed. On 25-7-1938, the Execution Application was dismissed on the ground that the judgment-debtor was not an agriculturist. Against that order, an appeal was brought to the High Court and it directed the learned Subordinate Judge to submit a finding whether the judgment-debtor was an agriculturist. On remand, the Subordinate Judge delivered a judgment on 9-2-1939 holding that the judgment-debtor was not an agriculturist. The judgment-debtor presented an appeal from the order of 9-2-1939 and the High Court, in view of its earlier decision by a Full Bench in Nagappa Chettiar v. Annapoorani Achi (ILR (1941) Mad 261): (AIR 1941 Mad 235), held that the appeal was incompetent, though it allowed the application of the judgment-debtor to convert his appeal into a Civil Revision Petition and allowed it. When this was questioned before the Privy Council, the Privy Council held:
'The question therefore to be considered in the present case is whether a right of appeal from the orders in question was conferred by the Civil P. C. the order of 9th February, 1939 was not made in execution proceedings but it was made in a suit and, in their Lordships' opinion, it amounted to the formal expression of an adjudication which so far as regards the Court expressing it, conclusively determined the rights of the parties with regard to one of the matters in controversy in the suit, namely, whether the judgment-debtor was an agriculturist and entitled therefore to have his debt discharged or reduced under the Act. In their Lordships' opinion the order was a decree within the meaning of Section 2(2), Civil P. C., and an appeal lay under Section 96 of the Code.'
11. In Desikachariar v. Ramachandra, : AIR1951Mad56 (FB), a Full Bench of the Madras High Court, while dealing with the Madras Agriculturists' Relief Act, held, in the words of the head-note:
'On a combined reading of Sections 47, 2(2) and 96, Civil P. C., it is apparent that an appeal from an order in execution would lie only if the following three conditions are complied with: (1) the order must relate to execution, discharge or satisfaction of the decree between the parties to the suit; (2) it shall conclusively determine the rights of the parties with regard to all or any of the matters in controversy; (3) such conclusive determination of the rights is with reference to the Court in which such rights are decided.
An order under Section 20, Madras Agriculturists' Relief Act, dismissing an application for stay of execution, complied with the above conditions and hence an appeal lies against such an order.' It may, however, be stated that in this case the Full Bench was adjudicating in the light of the provisions of Sections 2(2), 47 and 96(1), Civil P. C. In fact, the Full Bench further observed (at p. 57):
'No doubt, the definition of 'decree'in Section 2, lends support to an argument thatif an order is covered by Section 47, CivilP. C. it will be deemed to be a decree forthe purpose of an appeal. But if this construction be accepted it will make everyorder made in execution proceedings,whether interlocutory or otherwise, appealable, and the result would be thatthe execution proceedings would bearrested at every step. x x x
XX XX XX XX I cannot accept such a construction unless the words used in the section are clear and unambiguous. When a formal expression of an adjudication in a suit would be a decree only if it conclusively determines the rights of the parties, I do not see any principle by which an order under Section 47, Civil P. C, should be a decree without complying with that necessary condition. Orders under Section 47, Civil P. C. have been brought in under the extended meaning of the decree as they otherwise would not be covered by the main definition as the said orders are not made in a suit. But to attain the status of a decree such orders must possess the characteristics of a decree as defined in the main part of the section. If the meaning of the provisions is as I have indicated, the order under Section 20, Madras Agriculturists' Relief Act certainly complies with the characteristics of a decree. As it is an order relating to the execution of a decree between the parties to the suit, it is covered by Section 47 of the Code.'
After referring to a catena of cases, the Full Bench further observed (at p. 60):--
'...... I have referred to them only in support of the position that unless an order under Section 47, Civil P. C. conclusively determines the rights of the parties, sofar as that Court is concerned no appeal lies against that order.' The Full Bench also observed (at p. 62); 'Though there is an apparent conflict of authority on the question to be decided, the Judges accepted the principle that an appeal lies against an order staying or refusing to stay execution of a decree if the order conclusively determines the rights of the parties. They differed only in regard, to the application of the principle to the facts of each case
XX XX XX XXIn the present case, as I have already stated, very valuable rights of the parties are decided, in one contingency the temporary stay granted would be extended till the disposal of the application under Section 19. If the decree is satisfied after scaling down under Section 19, no question of further execution of the decree would arise. If amended, only the amended decree will be executed. Only if the application under Section 19 is dismissed can the decree, as it stands, be executed.'
12. In Parashuram v. Hirabai, : AIR1957Bom59 . There was a preliminary decree in a partition suit. By an application, the plaintiff claimed that by reason of his father's death, his share was augmented and the share which was 1/3th Was increased to 1/7th. The Court refused the application. Against this, an appeal was preferred and the Bombay High Court held, in the words of the head-note,
'Until there is a final decree in a partition suit the suit is pending and thus the application by the plaintiff was made in a pending suit. The order of the Court would mean that the Court below refused to award the plaintiff his augmented share and, therefore, there was dearly a determination of his right which was refused. The order of the Court would amount, therefore, to a decree, and would be appealable.'
In Phoolchand v. Gopal Lal, : 3SCR153 , the Supreme Court held (at p. 1473):
'So far therefore as partition suits are concerned we have no doubt that if an event transpires after the preliminary decree which necessitates a change in shares, the court can and should do so; and if there is a dispute in that behalf, the order of the Court deciding that dispute and making variation in shares specified in the preliminary decree already passed is a decree in itself which would be liable to appeal.'
The Supreme Court, however, cautioned (at p. 1473):
'We should, however, like to point out that what we are saying must be confined to partition suits, for we are not concerned in the present appeal with other kinds of suits in which also preliminary and final decrees are passed.' In Ram Chand Spg. and Wvg, Mills v. Bijli Cotton Mills, : 2SCR301 , an auction sale was held in pursuance of execution proceedings taken out by the judgment-creditor and the order passed by the executing court. Until the decree is satisfied or discharged the execution proceedings cannot be said to have been completed. It is by the payment of sale proceeds resulting from such sale that the decree is satisfied either in part or in whole. It is in the format the Supreme Court held (at p. 1348):
'That being clearly the position, it is difficult to comprehend as to why......... an order declaring an auction sale as a nullity cannot be said to be one relating to the execution, discharge or satisfaction of the decree within the meaning of Section 47, C.P.C.'
The Supreme Court further observed (at p. 1347):
'If the Court sets aside the auction sale there is an end of the matter and no further question remains to be decided so far as he and the judgment-debtor are concerned. Even though a resale in such a case is ordered such an order cannot be said to be an interlocutory order as the entire matter is finally disposed of. It is thus manifest that the order setting aside the auction sale amounts to a final decision relating to the rights of the parties in dispute in that particular civil proceeding, such a proceeding being one in which the rights and liabilities of the parties arising from the auction sale are in dispute.........'
13. In State of Bombay v. L.D. Narayanpure, AIR 1960 Bom 334, the Bombay High Court, while dealing with an order made on an application filed under Section 24 of the Bombay Money-lenders Act, which enables the Court to grant or refuse to grant instalments for payment of decretal amount, held (at pp. 325, 336).
'...... an order under Section 24 of the Bombay Money-lenders Act is a decree even if it is an order rejecting the application so that the order leaves the original decree unaffected. This is because, in our view, an application under Section 24 is not an application for the amendment of the original decree. The application seeks a fresh decision of the Court on the question whether the decretal amount should or should not be made payable by installmerits and whether its payment should be subject to any conditions. Being a fresh decision on one of the matters in controversy in the suit, the order is appealable whether the application is rejected or allowed.'
14. In Vishnumoorthi v. Rudra Shedthi, AIR 1974 Kant 41, Malimath, J., of the Karnataka High Court held (at p. 43):
'As the expression 'abatement' has been loosely employed, as can be seen from the various decisions of the Courts in India, what has to be looked into is the real substance of the matter and not the expression employed by the Courts. Though the Court below has held that the suit has abated as against defendants 2 and 3, the clear effect of the same is of dismissal of the petitioners' suit for want of necessary parties, viz., the legal representatives of the deceased defendant No. 1, the right to sue not having survived in favour of defendants 2 and 3. If the order under revision is so construed as having the effect of a dismissal of the petitioner's suit for want of necessary parties, the decision of the Court below would be a decree which is appealable under Section 96, Civil Procedure Code. In that view of the matter, the proper remedy of the petitioners was to prefer an appeal against the decision of the court below, in the Court of the Civil Judge under Section 96, Civil Procedure Code.'
In Parshava Properties Ltd, v. A.K. Bose, 0065/1979 : AIR1979Pat308 , a Division Bench of the Patna High Court held, that the order of the executing Court under Section 47 amounted to a decree within Section 2(2) as amended by Act 104 of 1976 and being appealable as a decree, no revision was maintainable.
15. Learned counsel for the respondent cited the following cases:
In Nandesam v. Balakrishnamma, AIR 1939 Mad 897, in a partition suit between A and B, a preliminary decree was passed declaring B as entitled to a half share in the items of family property which had been allotted to his rather C under partition. After the preliminary decree, an application by A asking the Court to allot to C certain items winch C had sold to A during the pendency of the suit, was rejected. In those circumstances, the Madras High Court held, that as those items were never in controversy, the order rejecting the application was not a decree and was therefore notappealable The Madras High Court further observed, in the words of the head-note.
'In order that a matter should be a decree it is not enough that there is a determination, or even a conclusive determination of the rights of parties but that that determination must be on matters in controversy in the suit The expression 'matter in controversy in the suit' means such matters as have been brought up for adjudication by the Court by the pleadings in the case so framed as to include them either in the beginning or by amendment made later with the sanction of the Court'
In Baliram Genpatrao v. Mamohar Damodar, AIR 1943. Nag 204 (FB), a Full Bench of the Nagpur High Court held, in the words of the head-note.
'Unless a finding is of such a nature as to be sufficient for the decision of the suit and gives formal expression to its adjudication in the form of a decree, it cannot give rise to a right of appeal in view of the plain terms of Section 96, that is no finding or interlocutory order which is not sufficient to dispose of the suit as a whole can in itself give rise to a right of appeal except where an appeal is expressly provided. In no case can a party come up in appeal unless a formal decree as outlined above is drawn up and signed If the Court refuses to draw up a decree on an application made by the pasty aggrieved a wrong omission to do so could be set right in revision. Hence the words 'formal expression of an adjudication-used in Section 2(2) do not cover an interlocutory order which does not finally settle the suit so far as the Court making the order is concerned and which cannot at that stage be formally drawn up in the form of decrees illustrated in Appendix D, even though the order may (so far as the Court making it is concerned) finally settle some of the matters in controversy in the suit.'
16. In Uaman Saheb v. Sivaramaraju, : AIR1950Mad463 (FB); a Full Bench of the Madras High Court held that an order for restitution or refund passed under Section 151 is not appealable either as a decree or an appealable order if it does not fall either under Section 47 or under Section 144, Civil Procedure Code.
17. In Sheonandan Prasad v. Hakim Abdul, AIR 1935 PC 119, where a compromise collateral to suit offered by one party in the course of the appeal was accepted by karpardz of the other party,but the document of compromise was not recorded and a decree was merely drawn up and it was the only document brought into existence, the Privy Council held that the provisions of Order XXIII were not complied with and that the Court should not in pursuance of Rule 3 make a decree.
18. In D. Bhushayya v. K. Ramakrishnayya, : 2SCR499 , the Supreme Court explained the meaning and comprehension of 'suit' as under (at p. 1891),
'Order XXXII, Rule 7, is one of the provisions designed to safeguard the interests of a minor during the pendency of a suit against hostile, negligent or collusive acts of a guardian. The scope of the provisions is implicit in the phraseology used therein. The crucial words are 'any agreement or compromise......... with reference to the suit'. The words 'with reference to the suit', if taken out of the context, are of the widest import. They may take in every procedural step in the conduct of a suit, such as adjournment, admission of documents, interlocutories, inspection etc., and obviously it could not have been the intention of the Legislature that agreements in respect of such procedural steps should conform to the requirements of the rule. If that be not so, the rule instead of protecting the interests of a minor would easily become a major obstacle in disposing of suits, in which a minor is ranged as party on one side or the other. So consistent with the purpose of the rule the words 'with reference to the suit' must be limited to the rights put in issue in the suit.'
19. In K.G.R. Chettiar & Co. v. R. R. E. Goundar, : AIR1954Mad1053 (FB), a Full Bench of the Madras High Court has held that where the appellate Court acts under Order 41, Rule 5, and refuses to stay or stays the execution of a decree, pending the appeal before it, the order does not amount to a decree within the meaning of Section 2(2).
20. In Central Brokers v. Ramnarayana Poddar & Co., : AIR1954Mad1057 (FB), a Full Bench of the Madras H. C., dealing with the distinction between a decree and a judgment, held (at p. 1059),
'Two tests have been laid down by their Lordships of the Supreme Court : 4SCR1159 to find out whether an adjudication in a particular proceeding is a judgment or not...... (1) whether it terminates the suit or proceeding, and (2) whether it affects the merits of the controversy between the parties in thesuit itself. If either of these conditions is complied with, then it is a judgment. But if it is only an adjudication on an application which is nothing more than a step towards obtaining a final adjudication in the suit, it is not a judgment at all.'
However, the Full Bench further observed (at p. 1063),
'We have next to deal with cases brought to our notice where various kinds of orders have been held to be non-appealable as they do not come within the meaning of the term 'judgment'. The most important case on the subject is the Full Bench decision of the Rangoon High Court reported in 'AIR 1935 Rang 267 (B)'. In our opinion the learned Judges in that case have put too narrow an interpretation than the meaning warrants, for in their view 'judgment' in Clause 13 means a 'decree'. That this cannot obviously be right is clear from what the Supreme Court has laid down in the most recent case and as such it does not require any elaboration or discussion for us to refuse to accept the narrow interpretation of the term 'judgment' in Clause Iv
21. In Dodla Malliah v. State of Andhra Pradesh, : AIR1964AP216 , a Bench of this Court, while dealing with the definitions of 'decree', 'order' and 'judgment', held (at p. 218):
'The definitions of 'decree', 'order' and 'judgment' in Sections 2(2), 2(14) and 2(9) respectively of the Civil Procedure Code make it manifest that both a decree as well as an order are formal expressions of any decision of a Civil Court. But a decree conclusively determines rights of the parties with regard to all or any of the matters in controversy in a suit and may be either preliminary or final which words do not occur in the definition of the word 'order'. The word 'judgment' may relate both to a decree as well as an order.'
22. In Varalakshmi v. Veerareddi, : AIR1961AP359 , a Division Bench of this Court, while dealing with the proposition whether adjudications under the Hindu Marriage Act can be regarded as 'decrees' within the meaning of Section 2(2) of the Code of Civil Procedure, and whether an appeal therefrom is competent, held, in the words of the head-note.
'An appeal is competent, under Section 96 of the Civil P. C. only from a decree passed by a Court in the exercise of its Original Jurisdiction. In other words, it should be a 'decree' within the connotation of Section 2(2) of the Code. The pre requisite of a decree is that the proceeding which results in an adjudication should start in a suit. Section 26 of the Code gives a clue to the problem as to what a suit is, namely, that it is a proceeding which is initiated by the filing of a plaint. A reference to some of the statutes would establish that a proceeding, though not started by a plaint, could be regarded as a suit, provided that a specific provision is made in that behalf (as in the case of Section 20(2) of the Arbitration Act, 1940). This shows that though some proceedings might be started in applications, they could still be regarded as suits for purposes of these enactments, provided it is specifically provided for therein. In the absence of such provision, any proceeding except the one started by presentation of a plaint and an adjudication given therein will not be a decree for purposes of Section 96 of the Code.
The adjudications under Sections 9, 10, 11 and 13 of the Hindu Marriage Act are regarded as decrees only for the purpose of those sections and they cannot be treated as decrees within the meaning of Section 2(2) of the Code. Section 96 of the Code is applicable only to decrees coming under Section 2(2). So decrees passed under Sections 9, 10, 11 and 13 of the Hindu Marriage Act are outside the purview of Section 96, Civil Procedure Code. Appeals filed under Section 96 of the Code alone can fall within the category of regular appeals and should be registered as such. If a decree is not one passed in a suit, an appeal that is competent from such a decree could only be registered as a Civil Miscellaneous Appeal and not as a First Appeal.'
23. The emerging principles, on a conspectus of a long catena of cases cited above, are:
(1) Any adjudication conclusively determining the rights of the parties with regard to any of the matters in controversy in the suit, is a decree within the meaning of Section 2(2), Civil P. C. and an appeal lies under Section 96, Civil P. C.
(2) An appeal from an order in execution would lie only if the following three conditions are complied with: (a) the order must relate to execution, discharge or satisfaction of the decree between the parties to the suit, (b) it shall conclusively determine the rights of the parties with regard to all or any of the matters in controversy, and (c) such conclusive determination of the rights is with reference to the Court in which such rights are decided.
(3) An appeal lies against an order staying or refusing to stay execution of a decree if the order conclusively determines the rights of the parties.
An order under Section 20 of the Madras Agriculturists' Relief Act dismissing an application for stay of execution, complies with the above conditions, and hence an appeal lies against such an order.
Conversely, however, an order refusing stay or staying the execution of a decree pending the appeal before the Court under Order XLI, Rule 5, does not amount to a decree within the meaning of Section 2(2), and so is not appealable.
(4) In partition suits, after the preliminary decree, any order passed causing variation in shares is liable to appeal.
(5) An order declaring an auction sale as a nullity, is a final order and hence falls within the definition of 'decree' within the meaning of Section 2(2), Civil P. C. and an appeal, therefore, is maintainable under Section 96, Civil P. C.
(6) The expression 'matter in controversy in the suit' means such matter as has been brought up for adjudication by the Court by the pleading. Hence the! conclusive determination, in order to amount to a decree, must be on matters in controversy in the suit.
(7) A compromise collateral to suit offered by one party and accepted by the other but the document of compromise not being recorded though a decree is merely drawn up, cannot attract the provisions of Order XXIII, Rule 3, Civil P. C. and the Court should not make a decree.
(8) The words 'with reference to the suit' occurring in Order XXXII, Rule 7, Civil P. C. must be limited to the rights put in issue in the suit. A fortiori, the words 'with regard to all or any of the matters in controversy in the suit' must be limited to the rights put in issue in the suit.
(9) The pre-requisite of a decree is that a proceeding which results in an adjudication should start in a suit. However, a proceeding, though not started by a plaint, could still be regarded as a suit provided that a specific provision is made in that behalf in the statute e.g., Section 20(2) of the Arbitration Act. Conversely, adjudications under Sections 9, 10, 11 and 13 of the Hindu Marriage Act are regarded as decrees only for the purpose of those sections and they cannot be treated as decrees within the meaning ofSection 2(2), Civil P. C. and so are not appealable under Section 96, Civil P. C. and an appeal therefrom could be registered as a Civil Miscellaneous Appeal and not as a First Appeal.
24. Judged in the light of the above, it is manifest that the impugned order rejecting to record a compromise cannot be tantamount to a decree within the meaning of Section 2(2), Civil Procedure Code and so is not appealable under Section 96, Civil P. C.; for, the order cannot be held to be an adjudication which conclusively determines the rights of the parties with regard to any of the matters in controversy in the suit as it arises independent of and dehors the pleadings, nor can it be said to relate to execution, discharge or satisfaction of the decree, nor can it be said to be a compromise collateral to suit offered by one party and accepted by the other but the document of compromise not being recorded, which could be brought within the ambit of Order XXIII, Rule 3, Civil P. C. compelling the Court to make a decree.
25. The decisions relied on by the learned counsel for the appellant deal, in the main, with either the orders passed in the execution proceedings or the proceedings initiated with reference to a special enactment (Madras Agriculturists' Relief Act) after the determination of the liability of the judgment-debtor and, therefore, they are special and peculiar and should be circumscribed to such cases; and it will be scarce to give any extended meaning to the cases falling outside their orbit. Hence, the decisions cited will be of little or no assistance to the proposition posed by the learned counsel. We have, therefore, little or no hesitation in rejecting his contention.
26. The next main question of the appellant is whether the right of regular appeal is preserved, the deletion of Clause (m) of Rule 1 of Order XLIII by the Amendment Act of 1976 notwithstanding.
27. The observations of the Law Commission in its 54th report, while recommending the omission of Clause (m) are significant as they are the foundation for the deletion of the said Clause (m). The Law Commission observed.
'Rule 1 (m) provides for appeal against an order under Order XXIII, Rule 3, recording or refusing to record an agreement, compromise or satisfaction.
Our views on this rule are as follows:
(1) No appeal should be allowed against an order recording or refusing to record a compromise. The trial should go on.
(2) But, in the appeal against the decree, the fact that a compromise ought to have been recorded or ought not to have been recorded, should be permitted to be taken, as a ground of appeal.
(3) The object behind the above amendment is to avoid successive appeals concerning the same suit.'
And it recommended,
'Accordingly, we recommend that the following rule should be added as Order XLIII, Rule 1-D:
'1-D. (1) In an appeal against the decree in a suit passed after recording a compromise, it shall be open to the appellant to contest the decree on the ground that a compromise ought not to have been recorded in the suit.
(2) In an appeal against the decree passed in suit in which the Court has refused to record a compromise, it shall be open to the appellant to contest the decree on the ground that a compromise ought to have been recorded.'
28. Order XLIII, Rule 1, deals essentially with orders against which provision for appeal has been made, as it is clear from the provisions enacted in Rule 1; it reads,
'An appeal shall lie from the following orders under the provisions of Section 104, namely:--XX XX XX'
Therefore, what is contained in Clause (m7 was treated and styled as an order and not as a decree within the meaning of Section 2(2) so that a regular appeal could be preferred under Section 96. In fact, the appeal contemplated under Order XLIII, Rule 1, is only a Civil Miscellaneous Appeal and not a First Appeal. Since it is obvious from the objects and reasons behind the deletion of Clause (m) by way of an amendment referred to above that it was deliberately done in order to avoid procrastination or delay by taking the matter in appeal against such orders, it is irresistible to conclude that the Legislature did put an embargo on preferring any appeal against an order contemplated under Order XXIII, Rule 3, Civil P. C. However, the correctness of such an order could be challenged by preferring a revision against it.
29. The argument of the learned counsel for the appellant is that merely because Clause (m) has been deleted the impugned order does not cease to be a decree if it is capable of being construed as such, particularly so in the absence of the Parliament enacting Rule 1-D as recommended by the Law Commission. The argument, though attractive, is, in our judgment, devoid of merit and substance in view of our categorical adjudication that the impugned order does not amount to a decree within the meaning of Section 2(2). It is obvious from the Law Commission's recommendation for deletion of Clause (m) that no appeal should lie against an order recording or refusing to record a compromise, in order to avoid successive appeals concerning the same suit. The Law Commission ex abundanti cautela recommended though for adding Rule 1-D to Order XLIII to the effect that in appeal against the decree in a suit passed either after recording a compromise or refusing to record a compromise, it shall be open to the appellant to contest the decree. But, in the absence of such amendment, it cannot, by any stretch of imagination, be held that such orders could be construed as decrees. What was explicitly sought to be taken away by the deletion of Clause (m), cannot be brought in by implication. In our judgment, therefore, the appeal from the impugned order is incompetent.
30. In the result, the appeal is dismissed with costs.
The facts in appeal are elaborately set out in the opinion of my learned brother Seetharama Reddy, J. I agree with the conclusion that the appeal has to be dismissed. The order under appeal, in my view, however, is a 'decree' within the meaning of Clause (2) of Section 2 of the Code of Civil Procedure (Code). Whether an appeal would lie against a decree under Section 96, the opening words of that section are apposite; 'save where otherwise expressly provided'. An appeal was provided till January 31, 1977 in Sub-clause (m) of Rule 1 of Order 43. That clause is now deleted in the amending Act 104 of 1976 of the Code. It is said that a right of appeal does not lie 'in the nature of things'; Rangoon Botatoung Co. Ltd. v. The Collector, Rangoon, (1912) 39 Ind App 197. It should be conferred. The dominant intention of the Parliament, therefore, is that no appeal would lie when a 'compromise' is recorded or rejected under Rule 3 of Order 23 of the Code. In that view, it is unnecessary, in this case, to state the reasons why the order under appeal is a decree within the meaning of the Code. I sustain the preliminary objection. The appeal fails.