Hemantha Kumar vs R. Mahadevaiah

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 4108 OF 2022

Hemantha Kumar …Appellant(s)

Versus

R. Mahadevaiah & Ors. …Respondent(s)

JUDGMENT

M.R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned judgment

and order passed by the High Court of Karnataka at Bengaluru in Writ

Petition No. 35073 of 2015 by which the High Court has set aside the

consent decree passed in the Lok Adalat and consequently has restored

the original suit, original plaintiff has preferred the present appeal.

2. The facts leading to the present appeal in a nutshell are as under:-

2.1 That the appellant herein – original plaintiff instituted Original Suit

No. 94 of 2006 in the Court of learned Civil Judge (Sr. Dn.) at Kunigal for

specific performance of the agreement to sell/contract. The suit

originally was filed against three defendants, however, one of the Signature Not Verified Digitally signed by SWETA BALODI Date: 2022.07.11 17:21:49 IST Reason:

defendants – defendant No. 3 came to be deleted by the plaintiff. The

1 suit came up for hearing before the learned Trial Court on 18.08.2007.

The plaintiff and the original defendant Nos. 1 and 2 submitted an

application under Order XXIII Rule 3 CPC, in which it was stated that the

parties have settled the dispute and it was requested to pass a consent

decree. The defendant Nos. 1 and 2 admitted execution of the

agreement to sell dated 26.04.2005 in favour of the plaintiff and also

admitted receipt of Rs. 30,000/- towards the part sale consideration. In

the application under Order XXIII Rule 3 CPC, it was specifically stated

that the defendant Nos. 1 and 2 have received the remaining sale

consideration amount of Rs. 70,000/- from the plaintiff. Therefore, it was

requested to pass the decree as prayed for in the suit as well as in terms

of the compromise petition.

2.2 The said consent compromise/compromise deed/compromise

petition was signed by the Advocates for the respective parties.

However, instead of decreeing the suit passing a consent decree though

requested, the learned Trial Court referred the matter to Lok Adalat.

Before the Lok Adalat, which was presided over by the very learned Civil

Judge (Sr. Dn.), Kunigal, the Advocates for the plaintiff as well as the

original defendant Nos. 1 and 2 remained present and prayed to pass a

consent decree as per the application under Order XXIII Rule 3 CPC.

Consequently, by judgment and decree dated 27.08.2007, the learned

Trial Court passed the consent decree.

2 2.3 That thereafter the original plaintiff filed the Execution Petition No.

88 of 2013 to execute the consent decree and for seeking execution of

the sale deed in his favour. That thereafter, the defendant Nos. 1 and 2

filed the writ petition before the High Court being Writ Petition No. 35073

of 2015 challenging the consent decree passed by the Court of Lok

Adalat on the ground that the consent decree was obtained by fraud.

2.4 By the impugned judgment and order, the learned Single of the

High Court has allowed the said writ petition and set aside the consent

decree passed by the learned Trial Court passed in the Lok Adalat. This

is mainly on the ground that looking to the compromise amongst the

parties and the dates and events, prima facie it is evident that counsel

for the plaintiff must have mislead the Trial Court in obtaining the decree

on 18.8.2007 while referring the matter to Lok-Adalat r/w the

compromise and drawing up of decree. By observing so, the High Court

has set aside the consent decree passed by the learned Trial Court

passed in the Lok Adalat and directed to restore the original suit to the

file and the learned Trial Court has directed to re-commence the

proceedings from the date of referring the matter to the Lok Adalat.

2.5 Feeling aggrieved and dissatisfied with the impugned judgment

and order passed by the High Court, the original plaintiff has preferred

the present appeal.

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3. Learned counsel appearing on behalf of the appellant – original

plaintiff has vehemently submitted that in fact the plaintiff and the

defendant Nos. 1 and 2 jointly submitted the application under Order

XXIII Rule 3 CPC before the learned Trial Court and requested the

learned Trial Court to pass a consent decree. It is submitted that,

however, instead of passing the consent decree, the learned Trial Court

referred the matter to the Lok Adalat. It is contended that merely

because the matter was referred to the Lok Adalat cannot be a ground to

doubt the genuineness of the consent decree/consent compromise and

also the filing of the application under Order XXIII Rule 3 CPC.

3.1 It is further submitted by the learned counsel appearing on behalf

of the appellant – original plaintiff that in fact the defendant Nos. 1 and 2

received the balance sale consideration of Rs. 70,000/- as mentioned in

the consent application/application under Order XXIII Rule 3 CPC.

3.2 It is further submitted that before the learned Trial Court as well as

the Lok Adalat, which was presided over by the very learned Presiding

Judge, learned Advocates appearing on behalf of the respective parties

appeared and prayed to pass a consent decree on the basis of the

application filed under Order XXIII Rule 3 CPC and only thereafter the

learned Trial Court in the Lok Adalat passed the consent decree. It is

submitted that therefore, there was no reason for the High Court to doubt

4 the genuineness. It is submitted that as such while passing the

impugned judgment and order and quashing and setting aside the

consent decree passed in the Lok Adalat, the High Court has observed

that looking to the compromise amongst the parties and the dates and

events, prima facie it is evident that counsel for the plaintiff must have

mislead the Trial Court in obtaining the decree on 18.8.2007 by referring

the matter to the Lok-Adalat r/w the compromise and drawing up of

decree. It is submitted that as such, such observations are not

warranted at all. That even otherwise the observations were not prima

facie in nature. The High Court has observed that the counsel for the

plaintiff mislead the Trial Court, however, what about the Advocates for

the defendant Nos. 1 and 2, who signed the application under Order

XXIII Rule 3 CPC and appeared before the learned Trial Court and even

appeared before the Lok Adalat. It is submitted that there are no

allegations and/or observations against the Advocates for the defendant

Nos. 1 and 2. It is submitted that in that view of the matter, the High

Court has erred in setting aside the consent decree passed by the

learned Trial Court passed in the Lok Adalat.

4. Present appeal is vehemently opposed by Shri S.N. Bhat, learned

Senior Advocate appearing on behalf of the respondents – original

defendant Nos. 1 and 2. It is vehemently submitted by Shri Bhat,

learned Senior Advocate, appearing on behalf of the defendant Nos. 1

5 and 2 that as such the chronology of dates and events creates serious

doubt about the genuineness of the consent compromise/consent

decree. It is contended that first of all, the plaintiff deleted the defendant

No. 3 and the suit came to be dismissed qua defendant No. 3. That

immediately thereafter Order XXIII Rule 3 application was submitted.

That as such once there was an application under Order XXIII Rule 3

CPC and the parties agreed and requested to pass the consent decree,

there was no reason for the learned Trial Court to refer the matter to Lok

Adalat. It is submitted that therefore, the decree not being passed by

the learned Trial Court and referring of the matter to the Lok Adalat itself

creates serious doubt. It is submitted that therefore when the defendant

Nos. 1 and 2 alleged fraud, the defendant Nos. 1 and 2 should have

been given the opportunity to prove the alleged fraud.

4.1 Making above submissions, it is submitted that the High Court has

not committed any error in quashing and setting aside the consent

decree obtained by the plaintiff in the Lok Adalat. Therefore, it is

requested to dismiss the present appeal.

5. We have heard the learned counsel appearing for the respective

parties at length and perused the impugned judgment and order passed

by the High Court. We have also gone through the relevant material on

record. We have minutely considered the dates and events, which led to

6 the passing of the consent decree in the Lok Adalat presided over by the

learned Trial Court.

6. At the outset, it is required to be noted that as such the plaintiff and

the defendant Nos. 1 and 2 and their Advocates filed the application

before the learned Trial Court under Order XXIII Rule 3 CPC and

requested to pass a consent decree submitting that the parties have

settled the disputes. Filing of the application under Order XXIII Rule 3

CPC is not disputed by the defendant Nos. 1 and 2. That thereafter

instead of passing the consent decree on the basis of the application

filed under Order XXIII Rule 3 CPC as requested and prayed, for

whatever reason, the learned Trial Court referred the matter to the Lok

Adalat. Before the Lok Adalat, the learned Advocates appearing on

behalf of the plaintiff and defendant Nos. 1 and 2 appeared and they

requested to pass the consent decree and accordingly in the Lok Adalat,

which was presided over by the very learned Judge, a consent decree

came to be passed. Merely because the learned Trial Court, before

whom the application was presented, referred the matter to the Lok

Adalat, cannot be a ground to doubt the genuineness of the consent

decree. Many a time, it happens that for whatever reason, instead of

passing the decree/consent decree in the Court, the matter is referred to

the Lok Adalat and directed to be placed before the Lok Adalat and

therefore, a consent decree was passed as prayed by the parties. The

7 aforesaid procedure adopted in the instant case cannot be a ground to

doubt the genuineness of the consent decree. From the aforesaid, it

cannot be said that there was a fraud committed and/or the counsel on

behalf of the plaintiff to mislead the Court to refer the matter to the Lok

Adalat. The matter was referred to the Lok Adalat by the Court and even

the Lok Adalat was presided over by the very same learned Trial Court

Judge. Therefore, as such, the High Court has committed a

grave/serious error in doubting the consent decree.

7. Even otherwise, it is required to be noted that while setting aside

the consent decree passed in the Lok Adalat, the High Court has

observed in paragraph 6 as under:-

“6. Writ petition could not have been entertained in view of the fact that O.S. No. 94/2006 was referred to Lok- Adalath and ordered to draw decree on 18.8.2007 while referring to the Lok-Adalath on 30.7.2007. However, compromise among the parties and dates and events prima-facie it is evident that counsel for the plaintiff must have mislead the trial Court in obtaining decree on 18.8.2007 with reference to referring the matter to Lok-

Adalath r/w the compromise and drawing up of decree…..”

8. Therefore, the High Court has observed that the counsel for the

plaintiff must have mislead the Trial Court in obtaining the decree on

18.8.2007 with reference to referring the matter to Lok-Adalat r/w the

compromise and drawing up of decree. On what basis and/or the

8 material, the High Court has observed so and that too ‘prima facie’,

cannot be appreciated by us. Though, the High Court has commented

about the counsel for the plaintiff, however, the High Court has not at all

appreciated the fact that the application under Order XXIII Rule

3/consent application was presented and signed by the Advocates for

the defendant Nos. 1 and 2 also the parties, who had also appeared

before the learned Trial Court as well as before the Lok Adalat. There

are no allegations at all against the counsel appearing on behalf of the

defendant Nos. 1 and 2.

9. It is also to be noted that neither are there any observations by the

High Court that on submitting the application under Order XXIII Rule 3

CPC before the learned Trial Court and requesting for passing the

consent decree, defendant Nos. 1 and 2 had objected to submitting the

application under Order XXIII Rule 3/consent application in which it was

requested to pass a consent decree. It is to be noted that in the

application under Order XXIII Rule 3 CPC, it was further stated that

defendant Nos. 1 and 2 have been paid the balance sum of

Rs. 70,000/-. It is not the case on behalf of the defendant Nos. 1 and 2

that they have not received the balance sale consideration of

Rs. 70,000/- as mentioned in the consent application / application under

Order XXIII Rule 3 CPC.

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10. In view of the above, the High Court has committed a

grave/serious error in setting aside the consent decree dated 18.08.2007

passed in the Lok Adalat, which was presided over by the very learned

Trial Court Judge. The impugned judgment and order passed by the

High Court is unsustainable, both in law as well as on facts.

Under the circumstances, the impugned judgment and order dated

30.11.2020 passed by the High Court in Writ Petition No. 35073 of 2015

is hereby quashed and set aside. The consent decree passed by the

learned Trial Court passed in the Lok Adalat is hereby restored.

Present Appeal is Allowed accordingly. However, in the facts and

circumstances of the case, there shall be no order as to costs.

………………………………….J. [M.R. SHAH]

NEW DELHI; ………………………………….J. JULY 11, 2022. [B.V. NAGARATHNA]

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