1. This appeal challenges an order passed by the Subordinate Judge in two particulars. The Subordinate Judge has refused to accept a compromise filed by the parties in a civil suit and he has also ordered a third party, Shiam Sunder, to be made a co-plaintiff in the suit after the original parties had filed the compromise.
2. A man named Basant Rai died in the month of August 1922 and his widow Mt. Lareti applied for a succession certificate. Her application was opposed by one Kishun Sarup who pleaded, first, that he and Basant Rai were members of a joint Hindu family; and, secondly, that Basant Rai had executed an unregistered will in his favour on 8th August 1922; Kishun Sarup was unsuccessful in these proceedings and the District Judge called upon him to show cause why he should not be prosecuted in a criminal Court. Criminal proceedings were dropped because Kishun Sarup, who was at the time little more than a youth, threw himself on the mercy of the Court. These proceedings terminated on 23rd March 1929 and on 10th July 1929 Kishun Sarup filed a suit against Mt. Lareti based on the same allegations as he had made before the District Judge on Mt. Lareti's application for a succession certificate. Three days later (on 13th July 1929) Kishun Sarup executed a document purporting to transfer his rights for a sum of Rs. 7,000 in cash to one Shiam Sunder. This Shiam Sunder did not become a party to the suit. The suit was contested, evidence was recorded and arguments heard in the month of February 1930. On 8th February at the close of the arguments, the Court reserved judgment. On 10th February Kishun Sarup and Mt. Lareti who were the only contesting parties in the suit filed a compromise that the suit should he dismissed. The Court directed that Kishun Sarup should verify the compromise in its presence on the following day and on that day, namely, 11th February 1930, Shiam Sunder presented an application asking that he should be made a party to the suit and that the compromise should not be to accepted. The Court took evidence as to the execution of the sale deed in Shiam Sundar's favour, made Shiara Sunder a party, refused to accept the compromise and decided the suit on its merits in favour' of Shiam Sunder.
2. Order 23, Rule 3, Civil P.C. runs as follows:
Where it is proved to the satisfaction of the Court that a suit has been adjusted wholly or in part by any lawful agreement or compromise, 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 suit.
3. From the wording of the section it appears that as long as a Court is satisfied that the suit has been adjusted between the parties wholly or in part and that the compromise is a lawful compromise, a decree must be passed in accordance with the compromise. It has been argued before us that this compromise was not a lawful compromise because it was entered into in fraud of Shiam Sunder, the purchaser of the plaintiff's rights. Now, when this compromise was filed there was nothing to indicate that Shiam Sunder claimed to be the purchaser of the plaintiff's right and he himself had abstained from being made a party in the suit. It appears to us to be most improper to hold a compromise to be unlawful because it is alleged by some third person that his rights are infringed by the compromise. This High Court has never accepted such an argument. On the contrary, it was held in the case of Qadri Jahan Begam v. Fazal Ahmad : AIR1928All494 that the word 'lawful' in Rule 3, Order 23 refers to agreements which in their very terms or nature were not 'unlawful' and might therefore include agreements which were voidable at the option of one of the parties on the ground of undue influence, coercion or fraud. A fortiori a compromise will be lawful if the only charge brought against it is that it is voidable at the instance of a third party on the ground of fraud. We need not concern ourselves with the rulings of other High Courts where persons who were already parties to the suit have successfully objected to the acceptance, by the Court, of a compromise. In this case clearly, when the compromise was filed, Shiam Sunder was no party to the suit and his right to be made a party to the suit was open to question. In our opinion therefore the application of Shiam Sunder that the compromise should not be accepted should have been rejected by the Court in limine. This being so the compromise was bound under the law to be accepted by the Court for there is no question that as between Kishun Sarup and Mt. Lareti it is a lawful compromise. This being so the case was at an end and the Court should not and could not have made Shiam Sunder a party to the suit.
4. In so doing the Court acted wrongly, and the order of the Court is one which can be set aside in appeal. It was represented to us by the learned Counsel for the respondents that in view of certain judicial decisions, notably the case of Basappa Budappa v. Bhimangowda Shiddangoivda A.I.R. 1928 Bom. 65 the fact that a decree will be passed in the terms of this compromise may debar the respondent as a purchaser pendente lite from any future suit. This may or may not be so, but if the respondent suffers this disability it will only be because in his excess of caution he failed to become a party to the suit before the compromise was filed. We note that the learned Subordinate Judge has not come to any conclusion that the respondent actually paid any money for the sale deed executed in his favour and we cannot help observing that the respondent when he purchased this litigation was on somewhat delicate ground. His vendor was a man who had previously set up this will and had only escaped a prosecution for perjury by throwing himself on the mercy of the Court and it may well be that having regard both to the character of his vendor and to the nature of the suit, the respondent thought it advisable to keep his name out of it as long as possible. Over-caution is often fatal to gamblers. In our opinion this appeal must be decreed. We therefore set aside the order of the Subordinate Judge and direct that a decree be passed as between Kishun Sarup and Mt. Lareti in the terms of the compromise. The appellant will receive her costs throughout.