REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 776 OF 2012    (Arising out of S.L.P(Civil )No.6632 of 2006)

HORIL             … APPELLANT VERSUS

KESHAV & ANR.            … RESPONDENTS

J U D G M E N T

Aftab Alam, J.

1. Leave granted. 2. This appeal is directed against the judgment  and order dated November 11, 2003 passed by the  Allahabad High Court by which it allowed the writ  petition  filed  by  respondent  nos.  1  and  2,  set  aside  the  order  passed  by  the  District  Judge,

affirming the order of the Munsif, and held that  the  suit  filed  by  the  appellant  was  not  maintainable being barred in terms of Order XXIII  Rule 3-A of the Code of Civil Procedure. 3. The appellant filed a suit (No. 43 of 1980) in  the  court  of  Munsif,  Karwi  (Banda)  seeking  a  declaration that the decree passed by the Assistant  Collector, Class-I, in a suit under sections 176,  178 and 182 of the U.P. Zamindari Abolition & Land  Reforms  Act  was  fraudulent,  inoperative  and  not  binding upon him. According to the appellant, the  defendants  had  instituted  the  suit  before  the  Assistant  Collector  in  which  his  father  namely  Chunkai was made as one of the opposite party.  In  that  suit,  a  compromise  petition  was  filed  on  October 7, 1971 with the fake signature of Chunkai  and on that basis a compromise decree finally came  to be passed on April 25, 1979. It is the case of  the appellant that no notice of the suit was ever  served upon his father Chunkai.  He never appeared  

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in the proceeding and was not even aware of it. He  did  not  sign  any  compromise  petition  and  his  alleged signature on the compromise petition dated  October 7, 1971 was faked. He had died much earlier  and was not even alive in 1979 when the decree was  passed.  The  appellant,  accordingly,  sought  a  declaration that the decree dated April 25, 1979  passed by the Assistant Collector, Class-I, Karwi,  may be cancelled or it may be declared as void ab  initio, inoperative and not binding upon him.      4. The defendants (respondents 1 and 2 before this  Court)  filed  a  written  statement  in  which  they  questioned the maintainability of the suit as well.  It was contended on their behalf that as the suit  related  to  agricultural  lands  it  was  beyond  the  jurisdiction and competence of the civil court and  it could only be tried by the revenue authorities.  The  Munsif  by  his  order  dated  October  1,  1985  upheld the defendants’ objection and held that the  suit  was  not  maintainable  before  a  civil  court.  

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Against  the  order  passed  by  the  Munsif,  the  appellant preferred an appeal (M.C.A.No.21 of 1985)  which was allowed by the judgment and order dated  April 14, 1987 passed by the Additional District  Judge,  Karwi,  (Banda).  The  Additional  District  Judge rightly pointed out that the suit filed by  the appellant was based on the allegation that the  decree passed by the Assistant Collector was based  on a fraudulent compromise petition and it did not  involve any adjudication of rights or interests in  the  agricultural  lands.  Hence,  the  suit  was  maintainable before a civil court. It, accordingly,  set  aside  the  order  passed  by  the  Munsif  and  directed him to proceed with the suit in accordance  with law. 5. When  the  matter  came  before  the  Munsif  on  remand, the defendants once again objected to the  maintainability of the suit, this time raising the  contention that it was barred under the provisions  of  Order  XXIII  Rule  3-A  of  the  Code  of  Civil  

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Procedure. The Munsif by his order dated January 7,  1988  dismissed  the  objection  and  found  and  held  that  the  suit  was  maintainable.  The  defendants- respondents  took  the  matter  in  revision  (Civil  Revision No. Nil of 1988) which was dismissed by  the  District  Judge,  Banda,  by  his  order  dated  February 17, 1988.  Against the orders passed by  the Munsif and the District Judge, the defendants  preferred a writ petition before the High Court and  the High Court, as noted above, allowed the writ  petition  holding  that  the  suit  was  not  maintainable.  It is a brief order in which the  High  Court  referred  to  the  provisions  of  Order  XXIII Rule 3-A, and relying upon a decision of the  Allahabad High Court allowed the writ petition. 6. It is true that a compromise forming the basis  of the decree can only be questioned before the  same court that recorded the comprise and a fresh  suit  for  setting  aside  a  compromise  decree  is  expressly barred under Order XXIII Rule 3-A. It is  

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equally true the expression “not lawful” used in  Rule 3-A of Order XXIII also covers a decree based  on a fraudulent compromise hence, a challenge to a  compromise  decree  on  the  ground  that  it  was  obtained by fraudulent means would also fall under  the provisions of Rule 3-A of Order XXIII.  7. In  Banwari Lal Vs.  Chando Devi (1993) 1 SCC  581, this Court examined the provisions of Order  XXIII Rule 3-A in some detail and in light of the  amendments introduced in the Code and in paragraph  7 of the judgment came to hold as follows:

“7. By adding the proviso along with an  explanation the purpose and the object of  the amending Act appears to be to compel  the  party  challenging  the  compromise  to  question the same before the court which  had recorded the compromise in question.  That  court  was  enjoined  to  decide  the  controversy  whether  the  parties  have  arrived  at  an  adjustment  in  a  lawful  manner. The explanation made it clear that  an agreement or a compromise which is void  or voidable under the Indian Contract Act  shall not be deemed to be lawful within  the  meaning  of  the  said  rule.  Having  introduced  the  proviso  along  with  the  explanation in Rule 3 in order to avoid  multiplicity  of  suit  and  prolonged  

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litigation, a specific bar was prescribed  by Rule 3-A in respect of institution of a  separate suit for setting aside a decree  on basis of a compromise saying:

“3-A. Bar to suit.- No suit shall lie  to set aside a decree on the ground that  the  compromise  on  which  the  decree  is  based was not lawful.”  

It  further  held  in  paragraphs  13  and  14  as  follows:-

“13.  When  the  amending  Act  introduced  a  proviso along with an explanation to Rule  3  of  Order  23  saying  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”,  the  Court  before  which  a  petition  of  compromise  is  filed  and  which  has  recorded  such  compromise,  has  to  decide  the  question  whether  an  adjustment  or  satisfaction  had  been  arrived  at  on  basis  of  any  lawful  agreement.  To make the enquiry in respect  of  validity  of  the  agreement  or  the  compromise  more  comprehensive,  the  explanation  to  the  proviso  says  that  an  agreement or compromise “which is void or  voidable under the Indian Contract Act….”  shall not be deemed to be lawful within  the meaning of the said Rule.  In view of  the proviso read with the explanation, a  Court which had entertained the petition  of compromise has to examine whether the  

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compromise was void or voidable under the  Indian Contract Act.  Even Rule 1(m) of  Order 43 has been deleted under which an  appeal was maintainable against an order  recording a compromise.  As such a party  challenging  a  compromise  can  file  a  petition under proviso to Rule 3 of Order  23, or an appeal under Section 96(1) of  the Code, in which he can now question the  validity of the compromise in view of Rule  1-A of Order 43 of the Code.”

14.  ……………..The  court  before  which  it  is  alleged  by  one  of  the  parties  to  the  alleged compromise that no such compromise  had been entered between the parties that  court has to decide whether the agreement  or compromise in question was lawful and  not  void  or  voidable  under  the  Indian  Contract  Act.   If  the  agreement  or  the  compromise  itself  is  fraudulent  then  it  shall  be  deemed  to  be  void  within  the  meaning of the explanation to the proviso  to Rule 3 and as such not lawful.  The  learned  Subordinate  Judge  was  perfectly  justified in entertaining the application  filed  on  behalf  of  the  appellant  and  considering  the  question  as  to  whether  there  had  been  a  lawful  agreement  or  compromise on the basis of which the court  could  have  recorded  such  agreement  or  compromise on February 27, 1991.  Having  come  to  the  conclusion  on  the  material  produced  that  the  compromise  was  not  lawful within the meaning of Rule 3, there  was no option left except to recall that  order.”         

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8. In  light  of  the  decision  in  Banwari  Lal it  would  prima facie appear that the High Court was  right in holding that the appellant’s suit was hit  by the provisions of Order XXIII Rule 3-A and was  not  maintainable.  But  the  significant  distinguishing  feature  in  this  case  is  that  the  compromise decree which is alleged to be fraudulent  and which is sought to be declared as nullity was  passed not by a civil court but by a revenue court  in a suit under section 176 of the U.P. Zamindari  Abolition & Land Reforms Act, 1950 (hereinafter the  Act).  9. Section  331   of   the   Act    bars   the  jurisdiction of the civil court and provides that a  suit under the Act can be entertained by no court  other than that the courts specified in Schedule II  to the Act. A reference to Schedule II would show  that the court of original jurisdiction for a suit  under section 176 of the Act for division of a  holding  of  a  Bhumidhar  is  Assistant  Collector,  

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First  Class  and  the  courts  of  First  Appeal  and  Second  Appeal  are  Commissioner  and  the  Board  of  revenue respectively. Section 341 of the Act, of  course,  provides  that  unless  otherwise  expressly  provided by or under the Act, the provisions of the  Indian  Court  Fee  Act,  1870,  the  Code  Of  Civil  Procedure,  1908  and  the  Limitation  Act,  1963,  including  section  5  thereof  would  apply  to  the  proceedings under the Act.  10. Though  the  provisions  of  the  Code  Of  Civil  Procedure  have  been  made  applicable  to  the  proceedings under the Act but that would not make  the authorities specified under Schedule II to the  Act as ‘court’ under the Code and those authorities  shall  continue  to  be  “courts”  of  limited  and  restricted jurisdiction.  11. We  are  of  the  view  that  Revenue  courts  are  neither  equipped  nor  competent  to  effectively  adjudicate  on  allegations  of  fraud  that  has  overtones  of  criminality  and  the  courts  really  

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skilled and experienced to try such issues are the  courts  constituted  under  the  Code  of  Civil  Procedure. 12. It is also well settled that under section 9 of  the  Civil  Procedure  Code,  the  civil  court  has  inherent  jurisdiction  to  try  all  types  of  civil  disputes  unless  its  jurisdiction  is  barred  expressly  or  by  necessary  implication,  by  any  statutory  provision  and  conferred  on  any  other  tribunal  or  authority.  We  find  nothing  in  Order  XXIII Rule 3-A to bar the institution of a suit  before the civil court even in regard to decrees or  orders  passed  in  suits  and/or  proceedings  under  different  statutes  before  a  court,  tribunal  or  authority of limited and restricted jurisdiction. 13. In  our  view  in  the  facts  of  the  case  the  provision of Order XXIII shall not act as a bar  against  the  suit  filed  by  the  appellant.  We,  accordingly set aside the order of the High Court.  As a consequence, the suit will be restored before  

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the Munsif who is directed to accord it priority  having regard to the fact that for the last 31  years  it  is  stuck  up  on  the  issue  of  maintainability.  The  trial  court  should  try  to  dispose of the suit without any delay, and in any  case, not later than one year from the date of  receipt/production of a copy of this order. 14. In the result, the appeal is allowed but with  no order as to costs.  

………………………………………………………J. (Aftab Alam)

………………………………………………………J. (Ranjana Prakash Desai)

New Delhi; January 20, 2012.  

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