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Friday, August 8, 2014

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


                                                                REPORTABLE


                        IN THE SUPREME COURT OF INDIA


                        CIVIL APPELLATE JURISDICTION


                     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.                                  |                      |



                               J U D G M E N T

A.K. SIKRI, J.


      Leave granted.

2.    By the common judgment dated 29.02.2012, the  Madras  High  Court  has
decided three Civil Miscellaneous Appeals filed under Section 37 (1) (b)  of
the Arbitration and Conciliation Act, 1996 (hereinafter referred to as  'the
Act').   Those  three  appeals  were  filed  by   the   respondents   herein
challenging the orders dated 28.04.2011 which were passed by  the  Principal
District Judge, Tirunelveli, Tamil Nadu. The reasons for  disposing  of  the
appeals by one single order was the commonality of the parties  as  well  as
the issue involved in the said three appeals.

3.    It so happened that the appellant, who is an  Engineering  Contractor,
was awarded three contracts by the respondents  herein  particulars  whereof
are as under:

      (i)  For the rehabilitation  and  modernization  of  Gundar  Reservoir
system in Tirunelveli District  the  bids  were  called  and  in  which  the
Petitioner became the successful bidder to execute the work for  a  contract
price of Rs.80,14,605/- under registered Agreement dated  02.04.1998  within
a period of 15 months to complete the contract work.


       (ii)   For  the  rehabilitation  and  modernization  of  Karuppanadhi
Reservoir system in Tirunelveli District the bids were called and  in  which
the Petitioner became the successful  bidder  to  execute  the  work  for  a
contract price  of  Rs.55,82,633/-  under  the  Registered  Agreement  dated
20.07.1998 within a period of 18 months to complete the contracts work.


      (iii) For the rehabilitation and  modernization  of  Kannadian  Anicut
and Channel Reach – 1 in Tirunelveli District the bids were  called  and  in
which the Petitioner became the successful bidder to execute the work for  a
contract price  of  Rs.69,24,038/-  under  registered  agreement  28.07.1998
within a period of 26 months to complete the contract work.


4.    Certain disputes and differences arose between  the  parties  relating
to all these contracts.   According to the appellant, delays were caused  by
the Department in handing  over  the  sites  where  the  works  were  to  be
undertaken by the appellant and in addition,  various  other  breaches  were
committed by the Department in not  fulfilling  its  obligations  under  the
three contracts.  The appellant raised his claims  in  respect  of  all  the
three contracts.  The Department appointed Mr. Velu  as  the  Arbitrator  in
one case and Mr. S. Krishnamurthy was appointed as Arbitrator in  other  two
cases.  After adjudication of the disputes, awards were passed  in  all  the
three cases to the following effect:-

(i)  Award dated 09.06.2006 by Mr. Velu in favour of the  appellant  in  the
sum of Rs.52,90,776/- together with interest at the rate of  18%  p.a.  from
09.06.2006 until payment or realisation.


(ii)  Award dated 25.04.2006 vide which  appellant  was  awarded  a  sum  of
Rs.39,74,964/- together with interest at the rate of 18% p.a. from the  date
of  award until payment or realisation.


(iii)  Award dated 25.04.2006 in favour of the appellant whereby  respondent
No.1 was directed to pay an amount of Rs.42,56,419/- together with  interest
at the rate of 18% p.a.  from  the  date  of  the  award  until  payment  or
realisation.


5.    The  respondent  No.1  challenged  all  the  awards  by  filing  three
petitions under Section 34 of the Act, seeking to set  aside  these  awards.
The appellant filed his  replies  contesting  those  petitions.   All  these
petitions were listed before  the  Principal  District  Judge,  Tirunelveli.
While these proceedings were pending before the  Principal  District  Judge,
the Government  Public  Works  Department  issued  letter  dated  02.12.2008
whereby it directed  its  officers  to  negotiate  with  the  appellant  for
settlement of arbitration awards amount.  Accordingly, there  were  meetings
between the parties on 19.12.2008 and 09.01.2009 to negotiate out  of  court
settlement.   Officials,  including   the   Superintending   Engineer,   had
discussions with the appellant,  wherein  the  appellant  was  requested  to
reduce 40% of the principal awarded amount for all the three  works  covered
under the independent arbitration  Awards.   The  contractor  instead,  came
forward to reduce 40% of the interest accrued on the  total  awarded  amount
for all the three works, particularly with reference to interest in  respect
of the three works, which worked out to 12.81% towards the  principal  award
amount  covered  under  the  three  Awards.   However,  the   Superintending
Engineer  insisted  for  further  reduction   of   the   principal   amount.
Ultimately in  the  meeting  held  in  the  Chamber  of  the  Superintending
Engineer on 9.1.2009, the contractor was asked to  offer  10%  reduction  in
the principal award amount, besides 40% offer made on  the  interest  amount
accrued.  The appellant,  however,  agreed  to  only  5%  reduction  in  the
principal amount, in addition to  40%  reduction  in  the  interest  amount.
Because of the aforesaid position taken  by  the  parties,  the  negotiation
could not be fructified and fell through. The  Principal  Secretary  to  the
Government wrote  a  letter  dated  9.1.2009  to  the  officials  concerned,
directing them to pursue the applications under Section 34  of  the  Act  in
respect of the three awards pending before the Court.

6.    The matters, however, lingered on in the Courts  for  some  reason  or
the other. When they were listed in the Court on 09.04.2011,  the  appellant
came forward with a memorandum to the effect  that,  apart  from  the  offer
made during the negotiations on 09.01.2009 for  foregoing  the  interest  at
40%, he was also willing to forgo further  accrued  interest  on  the  award
amount after 09.01.2009.  This offer appeared to be fair to  the  Government
Pleader. He made a written endorsement on the said memorandum, on behalf  of
the Government that it  had  no  objection  for  this  memo.   As  a  result
thereof, acting on this compromise, the petitions were  partly  allowed  and
the awards of the Arbitrators were modified whereby from the  award  amount,
5% reduction on the principal amount was ordered.  Further  apart  from  40%
reduction on the interest awarded till 09.01.2009; total  interest  accruing
beyond that period, was also waived.  However, from the date of  award  i.e.
25.04.2006 to 09.01.2009, interest was calculated at  18%  p.a.  from  where
the reduction of 40 % in interest amount was granted.

7.    To recapitulate the salient facts, 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.

9.    When the matter was heard by the  High  Court,  even  the  High  Court
suggested that the State should  once  again  consider  the  possibility  of
compromise and the matter was adjourned for this purpose.  However,  on  the
next date of hearing, the counsel for the respondents made a statement  that
Government was not interested in the settlement and wanted the matter to  be
heard on merits.  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.

10.   It was argued by the learned counsel for the appellant that he was  in
acute financial crisis and needed to satisfy  the  creditors  including  his
bankers and in view of the  said  circumstances,  he  filed  separate  memos
dated 06.04.2011 before the learned  District  Judge  stating  that  he  was
ready to forgo  further  interest  accrued  on  the  awarded  amounts  after
09.01.2009 apart from the earlier offer  made  during  the  negotiations  on
09.01.2009 provided that the amount so arrived at be paid in lump  sum  i.e.
in one single installment and the said  payment  should  be  made  within  3
months.  In the said memo the appellant made it clear that  the  said  offer
is made without prejudice to the rights of  the  appellant  to  contest  the
petition on merit.  In response to such  offer  to  forgo  further  interest
from 10.01.2009 for the three award amounts, on 09.04.2011,  the  Government
Pleader, on behalf of the respondent, made a written  endorsement  that  the
offer under the above said memos are in  accordance  with  the  negotiations
made  on  09.01.2009  and  offer  to  forgo  entire  interest  amount   from
09.01.2009 was beneficial to the  Government.  He  also  affirmed  that  the
Government has no objection for these memos.  It was thus argued  that  when
the Government Pleader made the aforesaid endorsement in the  manner  stated
above, and it resulted  into  passing  in  agreed  order  on  the  basis  of
settlement arrived between the parties, it was not open to  the  respondents
to back out therefrom.  It was further submitted that the  respondents  were
stopped from contending that the Government Pleader was  not  authorised  to
make such a statement.  It was also argued that  admittedly  no  action  was
taken by the respondents against  the  Advocate  who  had  appeared  on  its
behalf who continued as the Government Pleader.

11.   Learned counsel for the respondents, on the other hand, justified  the
impugned orders passed by the High Court submitting that it was not open  to
the Government Pleader to accept the offer  of  the  appellant  without  any
authorisation, more particularly, when it had already been  decided  by  the
Government, vide letter dated 09.01.2009, to contest the  cases  on  merits.
Therefore, such an endorsement made by the Government Pleader on  behalf  of
the respondents was not binding upon the respondents.

12.    We  have  bestowed  our  careful  consideration  to  the   respective
arguments advanced by the  counsel  for  the  parties.   The  appellant  has
produced on record the copies of the 3 memos  dated  06.04.2011  which  were
filed by  the  appellant  before  the  Principal  District  Court  on  which
endorsement was made by the Government Advocate as well.   All  these  memos
filed by the appellant are  identically  worded  and  the  relevant  extract
thereof makes the following reading:

      “Now in consideration of  the  exigencies  and  in  deference  to  the
suggestion by this Hon'ble Court apart from  the  above  offer  made  during
negotiations on 09.01.2009 this respondent  is  offering  to  forgo  further
interest accrued on the award  after  09.01.2009,  provided  the  petitioner
observes the following and acts accordingly:

1.    The payment is made in lump sum and in one  single installment.

2.    The payment is made within three months from      today.

      It is humbly submitted that the respondent is making the  above  offer
due to his acute financial crisis and  need  for  satisfying  his  creditors
including his bankers.  Therefore the above offer is  without  prejudice  to
the right of the 1st respondent to contest the petition pending before  this
Court completely on merit.  It is submitted accordingly.


      Dated this 6th day of April 2011.”


13.   The endorsement of the Government Pleader on these 3 memos,  which  is
also identically worded, reads as under:

             “Received  Copy.   This  Memo  Offer  is  in  accordance   with
09.01.2009 negotiation.  Moreover interest benefit for the  Government  from
09.01.2009.  Hence no objection for this memo.


                       09-04-2011
                       Government Pleader”


14.   It is clear from the above that the Government advocate  who  appeared
for the respondents, had not only found the offer of the appellant to be  in
the interest of the Government and beneficial to  the  Government,  but  the
same was also in accordance with the negotiations held earlier  between  the
parties on 09.01.2009.  As noted  above,  the  parties  had  on  an  earlier
occasion entered into negotiations  to  find  an  amicable,  out  of  Court,
resolution of the disputes.  At that stage, the  petitioner  had  agreed  to
forgo substantial part of the benefit which had accrued  to  him  under  the
awards. However, the respondents/Government wanted  more  concessions  which
was not agreed to by the appellant at that time.  This resulted in  impasse'
and the respondents decided to press its objections under Section 34 of  the
Act, on merits.  No doubt about this.  However,  when  the  matter  came  up
before the Court on 09.04.2011 and the  appellant  gave  an  offer  to  even
forgo further interest accrued under the award  after  09.01.2009,  and  the
same was discussed in the Court, this offer was found to  be  attractive  to
the Government pleader who was of the view that such an  offer  was  in  the
interest of the respondents and was also  in  accordance  with  negotiations
held earlier on 09.01.2009.  He accepted  the  same  and  the  Court  passed
orders in terms of the settlement between the parties.

15.   The only ground which has prevailed with the High Court  in  accepting
the appeals of the respondents against the aforesaid  orders  are  that  the
Government pleader was not authorised by the respondents to enter into  such
a settlement.  It is difficult to accept this  reasoning,  in  the  scenario
which prevails on the record. In the first instance, it is  to  be  kept  in
mind that nothing has been brought out by the respondents which  would  show
that advocate was not authorised to enter into such a  settlement.   On  the
perusal of the grounds of appeal submitted before  the  High  Court  by  the
respondents and even in the counter affidavit filed in  this  appeal,  there
is no allegation of  any  sort  against  the  Government  pleader.   On  the
contrary, a categorical statement has been made  that  “the  action  of  the
respondent was fair and just in  this  regard  as  the  respondent  has  not
initiated  any  proceeding  against  the   District   Government   Pleader.”
Furthermore, and most importantly, there is not even an iota of  a  pleading
explaining as to how the Government Pleader was  not  authorised  to  record
consent or that he in any manner lacked authority.  It is not even  remotely
suggested in any of these grounds  that  the  Government  Pleader  he  acted
improperly.  On the contrary, what is sought to be suggested is  that  there
was a failure of compromise, or that no compromise was  recorded  or  agreed
upon before the Court, which is contrary to the record of the Court and  the
statements recorded in the judgment of the  District  Court,  and  therefore
impermissible as a ground of challenge.  In this behalf, we  would  like  to
reproduce the following discussion in the judgment  of  this  Court  in  the
case of State of Maharashtra v. Ramdas Nayak, (1982) 2 SCC 463.

“4. When we drew the attention  of  the  learned  Attorney  General  to  the
concession made before the High Court, Shri A.K. Sen, who appeared  for  the
State of Maharashtra before the High Court and led  the  arguments  for  the
respondents there and who appeared for Shri  Antulay  before  us  intervened
and protested that he never made any  such  concession  and  invited  us  to
peruse the written submissions made by him in the High Court. We are  afraid
that we cannot launch into an inquiry as to  what  transpired  in  the  High
Court. It is simply not  done.  Public  Policy  bars  us.  Judicial  decorum
restrains us. Matters of judicial record are unquestionable.  They  are  not
open to doubt. Judges cannot be dragged into the  arena.  "Judgments  cannot
be treated as mere counters in the game of litigation".  Per  Lord  Atkinson
in Somasundaran v. Subramanian We are bound to accept the statement  of  the
Judges recorded in their judgment,  as  to  what  transpired  in  court.  We
cannot allow the statement of the judges to be  contradicted  by  statements
at the Bar or by affidavit and other evidence. If the judges  say  in  their
judgment that something was done, said or admitted before them, that has  to
be the last word  on  the  subject.  The  principle  is  well  settled  that
statements of fact as to what transpired at the  hearing,  recorded  in  the
judgment of the court, are conclusive of the facts so stated and no one  can
contradict such statements by  affidavit  or  other  evidence.  If  a  party
thinks that the  happenings  in  court  have  been  wrongly  recorded  in  a
judgment, it is' incumbent, upon the party, while the matter is still  fresh
in the minds of the judges, to call attention of the very  judges  who  have
made the record to the fact that the  statement  made  with  regard  to  his
conduct was a statement that had been made in error. Per Lord Buckmaster  in
Madhusudan v.  Chanderwati   That  is  the  only  way  to  have  the  record
corrected. If no such step is taken, the matter must necessarily end  there.
Of course a party may resile and an Appellate Court may permit him  in  rare
and appropriate cases to resile from a concession on  the  ground  that  the
concession was made on a wrong appreciation of the law and had led to  gross
injustice; but, he may not call in question the  very  fact  of  making  the
concession as recorded in the judgment.”


16.   It is also pertinent to point out that here also, no  application  was
filed by the respondents before the District  Court  immediately  after  the
passing of decrees in compromise terms, or even thereafter,  for  recall  of
the compromise order with the plea that such a compromise  was  unacceptable
as the Government  Pleader  was  not  authorised  to  enter  into  any  such
settlement. Instead appeals were filed before the High  Court.   We  are  of
the opinion that respondents should have approached the trial court  in  the
first instance as it is the trial  judge  before  whom  the  compromise  was
recorded and as he was privy to events that led to the compromise order,  he
was in a better position to deal with this aspect.

17.   That apart, we find that as per the provisions of Order  III  Rule  4,
once the counsel gets power  of  attorney/authorisation  by  his  client  to
appear in a matter, he gets a right to represent his  client  in  the  Court
and conduct the case.  Further, in the case of  Bakshi  Dev  Raj  v.  Sudhir
Kumar, (2011) 8 SCC 679, this Court held that though Order XXIII Rule  3  of
the CPC requires a compromise to be in writing and signed  by  parties,  the
signature of the advocate/counsel is valid for the said purposes.   Detailed
discussion on this aspect which ensues in the said judgment and is  relevant
for our purpose, reads as under:

      “25. Now, we have to consider the role of  the  counsel  reporting  to
the Court about the settlement arrived at. We have  already  noted  that  in
terms of Order 23 Rule 3 CPC, agreement or compromise is to  be  in  writing
and signed by the parties. The impact of the above provision  and  the  role
of the counsel has been elaborately  dealt  with  by  this  Court  in  Byram
Pestonji Gariwala v. Union Bank of India and observed that courts  in  India
have consistently recognised the traditional role of lawyers and the  extent
and nature of implied authority to  act  on  behalf  of  their  clients.  Mr
Ranjit Kumar, has drawn  our  attention  to  the  copy  of  the  vakalatnama
(Annexure  R-3)  and  the  contents  therein.  The  terms  appended  in  the
vakalatnama enable the counsel to perform several  acts  on  behalf  of  his
client including withdraw or compromise suit or matter  pending  before  the
court. The various clauses in the vakalatnama  undoubtedly  gives  power  to
the counsel to act with utmost interest  which  includes  to  enter  into  a
compromise or settlement.

26. The following observations and conclusions in paras 37, 38  and  39  are
relevant:

“37. We may, however, hasten to add that it will be prudent for counsel  not
to act on implied  authority  except  when  warranted  by  the  exigency  of
circumstances  demanding  immediate  adjustment  of  suit  by  agreement  or
compromise and the signature of the party cannot be obtained  without  undue
delay.  In  these  days  of  easier  and  quicker  [pic]communication,  such
contingency may seldom arise. A wise and careful counsel will no  doubt  arm
himself in advance with the necessary  authority  expressed  in  writing  to
meet all  such  contingencies  in  order  that  neither  his  authority  nor
integrity is ever doubted. This  essential  precaution  will  safeguard  the
personal reputation of the counsel  as  well  as  uphold  the  prestige  and
dignity of the legal profession.

38. Considering the traditionally recognised role of counsel in  the  common
law system, and the evil sought to be remedied  by  Parliament  by  the  CPC
(Amendment) Act, 1976,  namely,  attainment  of  certainty  and  expeditious
disposal of cases by reducing the terms of compromise to writing  signed  by
the parties, and allowing the compromise decree to comprehend  even  matters
falling outside  the  subject-matter  of  the  suit,  but  relating  to  the
parties, the legislature cannot, in the absence of  express  words  to  such
effect, be  presumed  to  have  disallowed  the  parties  to  enter  into  a
compromise by the counsel  in  their  cause  or  by  their  duly  authorised
agents. Any such presumption would  be  inconsistent  with  the  legislative
object of attaining quick reduction of arrears in court  by  elimination  of
uncertainties and enlargement of the scope of compromise.

39. To insist upon the party himself personally  signing  the  agreement  or
compromise  would  often  cause  undue  delay,   loss   and   inconvenience,
especially  in  the  case  of  non-resident  persons.  It  has  always  been
universally understood that a party can always act by  his  duly  authorised
representative. 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 authorisation by vakalatnama, act on behalf of his client. Not  to
recognise such capacity is not only to cause much inconvenience and loss  to
the parties personally, but also to delay the  progress  of  proceedings  in
court. If the legislature had intended to make such  a  fundamental  change,
even at the risk of delay, inconvenience and needless expenditure, it  would
have expressly so stated.”

27. In Jineshwardas v. Jagrani this Court, by approving the  decision  taken
in Byram Pestonji case held:

“8. … that a judgment or decree passed as a result of consensus  arrived  at
before court, cannot always be said  to  be  one  passed  on  compromise  or
settlement and  adjustment.  It  may,  at  times,  be  also  a  judgment  on
admission….”

28. In Jagtar Singh v. Pargat Singh it was held that  the  counsel  for  the
appellant has power to make a statement on instructions from  the  party  to
withdraw the appeal. In that case, Respondent 1 therein,  elder  brother  of
the petitioner filed a suit  for  declaration  against  the  petitioner  and
three brothers that the decree dated 4-5-1990 was null and  void  which  was
decreed  by  the  [pic]Subordinate  Judge,  Hoshiarpur  on  29-9-1993.   The
petitioner therein filed an appeal in the Court of the  Additional  District
Judge, Hoshiarpur. The counsel  made  a  statement  on  15-9-1995  that  the
petitioner did not intend to proceed with the appeal. On the basis  thereof,
the appeal was dismissed as withdrawn. The petitioner challenged  the  order
of the appellate court in the revision. The High Court  confirmed  the  same
which necessitated the filing of SLP before this Court.

29. The learned counsel for the petitioner in Jagtar  Singh  case  contended
that the petitioner had not authorised the counsel to withdraw  the  appeal.
It was further contended that the court after admitting the  appeal  has  no
power to dismiss the same as  withdrawn  except  to  decide  the  matter  on
merits considering the legality of the reasoning of the trial court and  the
conclusions either agreeing or  disagreeing  with  it.  Rejecting  the  said
contention, the Court held as under:

“3.  The  learned  counsel  for  the  petitioner  has  contended  that   the
petitioner had not authorised the counsel to withdraw the appeal. The  court
after admitting the appeal has no power to dismiss  the  same  as  withdrawn
except to decide the matter  on  merits  considering  the  legality  of  the
reasoning of  the  trial  court  and  the  conclusions  either  agreeing  or
disagreeing with it. We find no force in the contention. Order 3 Rule 4  CPC
empowers the counsel to continue on record  until  the  proceedings  in  the
suit are duly terminated. The  counsel,  therefore,  has  power  to  make  a
statement on instructions  from  the  party  to  withdraw  the  appeal.  The
question then is whether the court is required to pass a reasoned  order  on
merits against the decree appealed from the decision of  the  Court  of  the
Subordinate Judge? Order 23 Rules 1(1) and (4) give power to  the  party  to
abandon the claim filed in the suit wholly  or  in  part.  By  operation  of
Section 107(2) CPC, it equally applies  to  the  appeal  and  the  appellate
court has coextensive power to permit the appellant to give  up  his  appeal
against the respondent either as a  whole  or  part  of  the  relief.  As  a
consequence,  though  the  appeal  was  admitted  under  Order  41  Rule  9,
necessarily the court has the power  to  dismiss  the  appeal  as  withdrawn
without going into the merits of the matter and deciding it  under  Rule  11
thereof.

4. Accordingly, we hold that the action taken by the counsel  is  consistent
with the power he had under Order 3 Rule 4 CPC. If really  the  counsel  has
not acted in the interest of the party or against the  instructions  of  the
party, the necessary remedy is elsewhere and the procedure  adopted  by  the
court below is consistent with the provisions of CPC. We  do  not  find  any
illegality  in  the  order  passed  by  the  Additional  District  Judge  as
confirmed by the High Court in the revision.”

30. The analysis of the above decisions make it clear that the  counsel  who
was duly authorised by a  party  to  appear  by  executing  the  vakalatnama
[pic]and in terms of Order 3 Rule 4, empowers the  counsel  to  continue  on
record until the proceedings in the suit are duly terminated.  The  counsel,
therefore, has the power to make a statement on instructions from the  party
to withdraw the appeal.  In  such  a  circumstance,  the  counsel  making  a
statement  on  instructions  either  for  withdrawal  of   appeal   or   for
modification of the decree is well within his competence and if  really  the
counsel has  not  acted  in  the  interest  of  the  party  or  against  the
instructions of the party, the necessary remedy is elsewhere.”


18.   Likewise in 2011, this Court 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.”


20.   There is another very important aspect in this case  which  cannot  be
sidetracked and needs to be highlighted by us At the time of  arguments,  on
a pertinent query from  the  learned  counsel  for  the  respondents  as  to
whether any action was taken against the  Government  Pleader,  the  learned
counsel was candid in accepting that not only no action was taken, the  said
counsel continued to be on the panel of the Government and was entrusted  in
with further briefs of Court cases.  This itself shows that the  respondents
have tried to wriggle out of a valid  compromise  by  taking  such  spacious
plea which cannot be countenanced.

21.   Here is a case 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.


                                   …......................................J.
                                                            (J. Chelameswar)



                                   …......................................J.
                                                                (A.K. Sikri)
New Delhi;
August 4, 2014.

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