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PETITIONER:

BYRAM PESTONJI GARIWALA

Vs.

RESPONDENT:

UNION BANK OF INDIA AND ORS.

DATE OF JUDGMENT20/09/1991

BENCH:

THOMMEN, T.K. (J)

BENCH:

THOMMEN, T.K. (J)

SAHAI, R.M. (J)

CITATION:

1991 AIR 2234 1991 SCR Supl. (1) 187

1992 SCC (1) 31 JT 1991 (4) 15

1991 SCALE (2)625

ACT:

Code of Civil Procedure, 1908--Order XXIII Rule 3

-Compromise --Counsel's role--Pre and Post 1976 CPC Amend-

ment--Object of amendment-Legislative intention indicated.

Code of Civil Procedure, 1908--Order XXIII read with

Order XXI, Rule 22--Compromise entered into by the Counsel

of defendant in High Court-Compromise decree on 18.6.1984

Execution--Notice under Order XXI, Rule 22 to defendant made

absolute on 23.1.1990--Questioning the compromise after six

years by chamber summon-- Effect of.

HEADNOTE:

Before this Court, the appellant-defendant challenged

the judgment of the High Court which held that the decree

made against the defendant 'in terms of a compromise in

writing and signed by the counsel representing the parties

was valid and binding on the parties, and that in the ab-

sence of any challenge against the order made under Order

XXI, rule 23, Civil Procedure Code, allowing execution of

the decree, the defendant was no longer entitled to resist

execution by recourse to Chamber Summons.

The appellant contended that the High Court was wrong in

holding that, notwithstanding the amendment of 1976 insert-

ing the words 'in writing and signed by the parties', it was

still sufficient if the terms of compromise were reduced to

writing and signed by counsel representing the parties, and

not necessarily by the parties in person, and that a decree

based on a compromise not signed by the parties in person

was a nullity and was incapable of execution.

The respondents submitted that it was always under-

stood that the expression 'party' included his pleader in

matters relating to appearance in court, and his counsel in

the cause, therefore, had express or implied authority,

unless specifically withdrawn or limited by the party, to

represent him in court and do whatever was necessary in

connection with the conduct of his suit including adjustment

of the suit by agreement or compromises.

188

Dismissing the appeal, this Court,

HELD:. 1. Counsel's role in entering into a compromise

has been traditionally understood to be confined to matters

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within the scope of the suit. However, a compromise decree

may incorporate not only matters failing within the subject

matter of the suit, but also other matters which are collat-

eral to it. The position before the amendment in 1976 was

that, in respect of the former, the decree was executable,

but in respect of the latter, it was not executable, though

admissible as judicial evidence of its contents. [199 C-D]

2. After the amendment of 1976, a consent decree, is

executable in terms thereof, even if it comprehends matters

failing outside the subject-matter of the suit, but concern-

ing the parties. [201 E]

3. The object of the amendment of Order XXIII, Rule 3,

C.P.C. was to provide an appropriate remedy to expedite

proceedings in Court. That object must be borne in mind by

adopting a purposive construction of the amended provisions.

The legislative intention being the speedy disposal of cases

with a view to relieving the litigants and the Courts alike

of the burden of mounting arrears, the word 'parties' must

be so construed as to yield a beneficent result, so as to

eliminate the mischief the legislature had in mind. [202 D-

E]

4. There is no reason to assume that the legislature

intended to curtail the implied authority of counsel, en-

gaged in the thick of proceedings in court, to compromise or

agree on matters relating to the parties, even if such

matters exceed the subject matter of the suit. The relation-

ship of counsel and his party or the recognised agent and

his principal is a matter of contract; and with the freedom

of contract generally, the legislature does not interfere

except when warranted by public policy, and the legislative

intent is expressly made manifest There is no such declara-

tion of policy or indication of intent in the present case.

The legislature has not evinced any intention to change the

well recognised and universally acclaimed common law tradi-

tion of an ever alert, independent and active Bar with

freedom to manoeuvre with force and drive for quick action

in a battle of wits typical of the adversarial system of

oral heating which is in sharp contrast to the inquisitorial

traditions of the 'civil law'of France and other European

and Latin American countries where written submissions have

the pride of place and oral arguments are

189

considered relatively insignificant. [202 E-H]

5. Considering the traditionally recognised role of

counsel in the common law system, and the evil sought to be

remedied by Parliament by the C.P.C. (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 com-

prehend 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 counsel in their cause or by their duly autho-

rised agents. Any such presumption would be inconsistent

with the legislative object of attaining quick reduction of

arrears in Court by elimination of uncertainties and en-

largement of the scope of compromise. [205 F-H]

6. A judgment by consent is intended to stop litigation

between the parties just as much as a judgment resulting

from a decision of the court at the end of a long drawn out

fight. A compromise decree creates an estoppel by judgment.

[207 B]

7. In the present case, the notice issued under Order

XXI rule 22 was personally served on the defendant, but he

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did not appear or show cause why the decree should not be

executed. The notice was accordingly made absolute by order

dated 23.1.1990 and leave was granted to the plaintiff to

execute the decree. The decree passed by the High Court on

18.6.1984 in terms of the compromise was a valid decree and

it constituted res judicata. [206 F-G]

8. The consent decree made on 18.6.1984 remained unchal-

lenged. None questioned it. The appellant never raised any

doubt as to its validity or genuineness. He had no case that

the decree was vitiated by fraud or misrepresentation or his

counsel lacked authority to enter into a compromise on his

behalf. Nevertheless, after six years he questioned its

validity by means of chamber summons. This was an unsuc-

cessful challenge by reason of delay, estoppel or res judi-

cata. [207 E-F]

Halsbury's. Laws of England, 4th Ed. Vol.3, Paras 1181 &

1183; Francis Bennion's Statutory Interpretation, Butter-

worths, 1984, para 133; Crawford's Statutory., Construction,

Para 254; Rene David, English Law and French Law--Tagore Law

Lectures, 1980; Spencer-Bower to Turner in Res

190

Judicata, Second Edition, Page 37; The Common Law in India

1960-The Hamlyn Lectures, Twelfth Series. pp 1-4, referred

to.

Patience Swinfen v. Lord Chelmsford, [1860]5 H & N 890

at 912; S.C.(Ex.) 382; Mathews v. Munster, [1887] 20 Q.B.

141 at 144; Rondel v. Worsley, [1965] 1 Q.B. 443,502; (Babu)

Sheonandan Prasad Singh &Ors. v. Hakim Abdul Fateh Mohammed

Reza & Anr., AIR 1935 P.C. 119,121; Sourendera Nath Mitra &

Ors. v. Tarubala Dasi, AIR 1930 P.C. 158; Hemanta Kumari

Debi v. Midnapur Zamindari Co., AIR 1919 PC 79; Jamilabai

Abdul Kadar v. Shankerlal Gulabchand & Ors., [1975] Supp.

SCR 336; Monoharbahal Colliery, Calcutta v. K.N. Mishra &

Ors., AIR 1975 SC 1632; National Assistance Board v. Wilkin-

son, [1952] 2 Q.B. 648; Sailendra Narayan Bhania Deo v. The

State of Orissa, AIR 1956 SC 346; Mohanlal Goenka v. Benoy

Kishna Mukherjee & Ors., AIR 1953 SC 65, Shankor Sitaram

Sontakke & Anr. v. Balkrishna Sitaram Sontakke & Ors. AIR

1954 SC 352, referred to.

Ram Juwan v. Devendra Nath Gupta, AIR 1960 M P. 280;

Vishnu Sitaram Auchat v. Ramchandra Govind Joshi, AIR 1932

Bombay 466; Jasimuddin Biswas v. Bhuban Jelini, ILR 34

Calcutta 456; Ganganand Singh & Ors. v. Rameshwar Singh

Bahadur & Anr, AIR 1927 Patna 271; Chengan Soun, Nayakam v.

A.N. Menon, AIR 1968 Kerala 213; Jiwibai v. Ramkumar Shrini-

was Murarka Agarwala, AIR 1947 Nagpur 17; Govindamreal v.

Marimuthu Maistry & Ors., AIR 1959 Mad 7; Laxmidas Ranchhod-

das & Ors. v. Savitabai Hargovindas Shah, AIR 1956 Bombay

54; Mohan Bat v. Jai Kishan, AIR 1983 Rajasthan 240; Smt.

Mohan Bat v. Smt. Jai kishan & Ors., AIR 1988 RaJasthan 22,

Nadirsha Hirji Bana & Ors. v Niranjanlkumar alias Nireshku-

mar Dharamchand Shah & Ors., 1983 (1) G.L.R. 774, approved.

Kesarla Raghuram v. Dr. Narsipalle Vasundara, A.I.R.

1983 A .P. disapproved.

JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3698 of

1991.

From the Judgment and Order dated 1.11.1990 of the

Bombay High Court in Chamber Summons No. 838 of 1990 in

Execution Application No. 242 of 1989 in Suit No. 309 of

1972.

Arun Jaitley, R.F. Nariman, R. Karanjawala, Mrs. M.

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Karanjawala, Ms. Nandini Gore and Ms. Aditi Choudhary for

the appellant.

191

V.A. Bobde, U.A. Rao and B.R. Agarwala for the respondents.

The Judgment of the Court was delivered by

THOMMEN, J. Leave granted.

The appellant who is the defendant in Suit No. 309 of

1972 challenges the judgment of the Bombay High Court in

Chamber Summons No. 838 of 1990 in Execution Application No.

242 of 1989 whereby the High Court held that the decree made

against the defendant in terms of a compromise in writing

and signed by counsel representing the parties, but not

signed by the parties in person, was valid and binding on

the parties, and in the absence of any challenge against the

order made under Order XXI rule 23, Civil Procedure Code

allowing execution of the decree, the defendant was no

longer entitled to resist execution by recourse to Chamber

Summons. The High Court found that the decree was valid and

in accordance with the provisions of Order XXIII rule 3, as

amended by the C.P.C. (Amendment) Act, 1976.

The only question which arises for consideration is as

regards the construction of Order XXIII rule 3, C.P.C. We

shall read this provision, as amended by the C.P.C. (Amend-

ment Act, 19%, bracketing the newly added words:

23., R. 3 - Compromise of suit where it is proved

to the satisfaction of the court that a suit has been ad-

justed wholly or in part by any lawful agreement or compro-

mise, (in writing and signed by the parties) or where the

defendant satisfied 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 had 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.]

[Explanation. - An agreement or compromise which is void or

voidable under the Indian Contract Act, 1872, shall not be

192

deemed to be lawful within the meaning of this rule.

Mr. Arun Jaitley, appearing for the appellant, says that

the High Court was wrong in holding that, notwithstanding

the amendment of 1976 inserting the words 'in writing and

signed by the parties', it was still sufficient if the terms

of compromise were reduced to writing and signed by counsel

representing the parties, and not necessarily by the parties

in person. Any such construction would do violence to the

provision as amended in 1976. He says that the object of the

amendment was to provide that no agreement or compromise

adjusting wholly or in part a pending suit was valid unless

such compromise was evidenced in writing and signed by the

parties in person. The expression 'parties', he contends,

means only parties and none else. To read 'counsel' into

that expression, as done by the High Court, is to presume

that the legislature failed to say what it intended to say

and to attempt to supply the omission by correcting the

deficiency. This cannot be done. The legislature, on the

other hand, made its intention explicit by providing that an

agreement or compromise would form the basis of a decree

only if the consensus was reduced to writing and signed by

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the parties. Neither an agent nor a pleader could act as a

substitute for a party to sign the agreement or compromise.

A decree based on a compromise not signed by the parties in

person is a nullity and is incapable of execution.

Mr. Jaitley submits that if the legislature had intended

to authorise counsel independently to sign the memorandum

containing the terms of settlement, and allow a decree to be

passed in terms thereof, the legislature would have said so

by further adding the words 'or their counsel'. In the

absence of any such expression, it cannot be presumed that

the legislature intended more than what it said and that

'party' included counsel. This argument, Mr. Jaitley says,

is fortified by the fact that for the first time the legis-

lature has allowed a decree to be passed on the basis of

compromise relating to matters concerning the parties, but

extending beyond the subject matter of the suit. Such a wide

power to compromise was most unlikely to be left in the

hands of counsel, and it is, therefore, necessary to read

the provision narrowly so as to read it as it now stands by

adopting a strictly literal construction.

Mr. V.A. Bobde appearing for the respondents, on the

other hand, submits that it was always understood that the

expression 'party' included his pleader in matters relating

to appearance in court, and his counsel in the cause, there-

fore, has express or implied authority, unless specifically

withdrawn or limited by the party, to represent him in court

and do

193

whatever is necessary in connection with the conduct of his

suit including adjustment of the suit by agreement or com-

promise. In the absence of any such limitation or restric-

tion of his authority, 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 as it

now stands. Any such decree, he says, is perfectly valid.

Mr. Bobde submits that in the absence of express words

to the contrary, 'party', in the context of proceedings in

court, must necessarily include his recognised agent or

pleader. This construction is warranted by the provisions of

Order III, C.P.C. That this has been the consistent view

adopted by courts in the construction of the expression

'party' in the context of proceedings in court is clear from

the decisions of courts, and it is most unlikely that the

legislature would have, by the amendment of 1976, limited

the scope of 'party' so as to exclude the traditional role

of the recognised agent or counsel. The legislative drafts-

men are presumed to know the law of the land as it stood

then, and, if they had intended to deviate therefrom, they

would have explicitly stated so rather than leave it to

future judicial construction. The Statement of Objects and

Reasons for the amendment, he says, does not support the

view canvassed by the appellant.

Sub-clause (iii) of clause 77 of the Statement of Ob-

jects and Reasons concerning the C.P.C. (Amendment) Act,

1976 states:-

is provided that an agreement or

compromise under rule 3 should be in writing

and signed by the parties. This is with a view

to avoiding the setting up of oral agreements

or compromises to delay the progress of the

suit.

............................................

In view of the words 'so far as it re-

lates to the suit' in rule 3, a question

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arises whether a decree which refers to the

terms of a compromise in respect of

matters beyond the scope of the suit is

executable or whether the, terms of the decree

relating to the matters outside the suit

can be enforced only by a separate suit.

The amendment seeks to clarify the position."

The Statement of Objects and Reasons

indicates that the amendment is intended to

clarify that a compromise has to be in writing

signed by the parties to avoid delay which

might arise from the uncertainties of oral

agreements. The amendment has also clarified

that the terms of compromise are permitted to

include all matters relating to the parties to

the

194

suit even if such matters fall outside the

subject matter of the suit. The legislature

has thus sought to attain certainty and clari-

ty and widen the scope of compromise. The

fundamental question is, in the absence of any

contrary indication in the Statement of Ob-

jects and Reasons, can it be stated that the

legislature has intended to exclude a pleader

or a recognised agent from the expression

'party' when it has always been understood, as

explicitly stated in Order 1II rule 1, that

appearance of a party in court may be in

person or by his recognised agent or pleader.

In the absence of any provision to the con-

trary, can it be stated that the legislature,

when using the expression 'parties' in rule 3

of Order XXIII, limited it to parties in

person and excluded their duly recognised

agents or counsel ?

The role of counsel in Court in England

is described in Halsbury's Laws of England,

4th Ed. Vol.3, paras 1181 & 1183, as follows:-

"1181. Counsel's authority. At the trial of an

action, counsel's authority extends, when it

is not expressly limited, to the action and

all matters incidental to it and to the con-

duct of the trial, such as withdrawing the

record, challenging a juror, calling or not

calling witnesses, cross-examining or not

cross-examining witnesses, consenting to a

reference to arbitration, a compromise, or a

verdict, undertaking to appear, or, on the

hearing of a motion for a new trial, consent-

ing to a reduction of damages.

The client's consent is not needed for a

matter which is within the ordinary authority

of counsel: thus if, in court, in the absence

of the client, a compromise or settlement is

entered into by counsel whose authority has

not been expressly limited, the client is

bound. If an action is settled in court in the

presence of the client, his consent will be

inferred, and he will not be heard to say that

he did not understand what was going

on ....... "

The implied authority of counsel in England is, howev-

er, confined to matters failing within the subject matter of

the suit. In the absence of express authority, counsel

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cannot enter into compromise on collateral matters.

"The authority of counsel to compromise is

limited to the issues in the action: a compro-

mise by counsel affecting collateral matters

will not bind the client, unless he expressly

assents; and it may be that a barrister has

no authority to reach a binding settlement or

compromise out of court. "(Halsbury ibid)

195

A compromise is, however, not binding and is liable to

be set aside in circumstances which would invalidate agree-

ments between the parties.

"A compromise by counsel will not bind the

client, if counsel is not apprised of facts

the knowledge of which is essential in refer-

ence to the question on which he has to exer-

cise his discretion, for example that the

terms accepted had already been rejected by

the client. Where counsel enters into a com-

promise in intended pursuance of terms agreed

upon between the clients, and, owing to a

misunderstanding, the compromise fails to

carry out the intentions of one side, the

compromise does not bind the client, and the

court will allow the consent to be withdrawn.

Where, acting upon instructions to compromise,

counsel consents under a misunderstanding to

certain terms which do not carry into effect

the intentions of counsel and the terms are

thought by one party to the more extensive

than the other party intends them to be, there

is no agreement on the subject-matter of the

compromise, and the court will set it aside.

But a person who has consented to a compromise

will not be allowed to withdraw his consent

because he subsequently discovers that he has

a good ground of defence? (Halsbury, ibid,

para 1183).

Counsel's consent in certain circumstances such as

duress or mistake may not bind the client.

"If counsel's consent is given under duress,

the client will not be bound, as when counsel,

acting for a client alleged to be of unsound

mind but believing him to be of sound mind,

consented to certain terms for the withdrawal

of Court of Protection proceedings against the

client because of his fear of the inconven-

ience and iII-health likely to arise to the

client from confinement.

A compromise or order made by consent by

counsel for a minor or other person under

disability is not binding on the client,

unless it is sanctioned by the court as being

for the benefit of the client. The court

cannot, however, enforce a compromise on a

minor against the opinion of his counsel."

(Halsbury, ibid)

One of the early English authorities on this point is Pa-

tience Swinfen

196

v. Lord Chelmsford [1860] 5 H & N 890 at 922; S.C. 29 L. J.

(E.x) 382. Delivering the judgment of the Court, Pollock,

C.B., stated:

"....We are of opinion, that although a coun-

sel has complete authority over the suit, the

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mode of conducting it, and all that is inci-

dent to it - such as withdrawing the record,

withdrawing a juror, calling no witnesses, or

selecting such as,. in his discretion, he

thinks ought to be called, and other matters

which properly belong to the suit and the

management and conduct of the trial - we think

he has not, by virtue of his retainer in the

suit, any power over matters that are collat-

eral to it ....... ".

In Matthews v. Munster, [1887] 20 Q.B. 141 at 144, Lord

Esher M.R. stated:

.. The instances that are given shew that one of the things

that counsel may do, so long as the request

of the client to him to act as advocate is in

force, is to assent to a verdict for a partic-

ular amount and upon certain conditions and

terms; and the consent of the advocate to a

verdict against his client and the withdrawing

of imputations is a matter within the expres-

sion 'conduct of the cause and all that is

incidental to it.' If the client is in Court

and desires that the case should go on and

counsel refuses, if after that he does not

withdraw his authority to counsel to act for

him, and acquaint the other side with this, he

must be taken to have agreed to the course

proposed. This case is a still stronger one,

for the client was not present, and it is not

pretended that he ever withdrew his authority

to counsel, but he now comes forward and asks

that because he does not like what has been

done it should be set aside as between himself

and his opponent. This the Court will not do,

and this appeal must be dismissed."

See also Rondel v. Worsley, [1965] 1 Q. B. 443, 502, Per

Lord Denning M.R.

If this is the position of counsel in England, Scotland

and Ireland, is his position the same in India in the con-

duct of cases in Court ? That the answer is affirmative,

there is high judicial authority.

In (Babu) Sheonandan Prasad Singh & Ors. v. Hakim Abdul

Fateh Mohammad Reza & .Anr., AIR 1935 PC 119, 121, Lord

Atkin, speaking for

197

the Board, states:

"...... As was laid down by this Board in 57

IA 133 (AIR 1930 PC 158) counsel in India have

the same implied authority to compromise an

action as have counsel in the English Courts.

But if such authority is invoked to support an

agreement of compromise the circumstances must

be carefully examined. In the first instance

the authority is an actual authority implied

from the employment as counsel. It may however

be withdrawn or limited by the client: in such

a case the actual authority is destroyed or

restricted; and the other party if in igno-

rance of the limitation could only rely upon

ostensible authority. In this particular class

of contract however the possibility of suc-

cessfully alleging ostensible authority has

been much restricted by the authorities such

as (1902) AC 465 and (1919) 1 KB 474 which

make it plain that if in fact counsel has had

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his authority withdrawn or restricted the

Courts will not feel bound to enforce a com-

promise made by him contrary to the restric-

tion even though the lack of actual authority

is not known to the other party."

Lord Atkin emphasises the need to rely on express au-

thority, rather than implied authority, particularly because

of easier and quicker communication with the client. He

says:

"....In their Lordships' experience both in

this country and in India it constantly hap-

pens, indeed it may be said that it more often

happens, that counsel do not take upon them-

selves to compromise a case without receiving

express authority from their clients for the

particular terms; and that this position in

each particular case is mutually known between

the parties.

In such cases the parties are relying not on

implied but on an express authority

given adhoc by the client ......... ".

(ibid, page 121)

However, collateral matters were understood to be beyond

the scope of compromise. Lord Atkin says:

"If the facts are as their Lordships assume,

the matter compromised was in their opinion

collateral to the suit and not only would it

not be binding on the parties, but it would in

any case be a matter in respect of which the

Court in pursuance of

198

O. 23, R. 3, should not make a decree." (Page 122)

Referring to the role of counsel in India and comparing

him with his counterpart in Britain, Lord Atkin in Sourendra

Nath Mitra & Ors. v. Tarubala Dasi, AIR 1930 PC 158, says:

" ..... Their Lordships regard the power to

compromise a suit as inherent in the position

of an advocate in India. The considerations

which have led to this implied power being

established in the advocates of England,

Scotland and Ireland, apply in equal measure

to India. It is a power deemed to exist be-

cause its existence is necessary to effectuate

the relations between advocate and client, to

make possible the duties imposed upon the

advocate by his acceptance of the cause of his

client."

Counsel's power to compromise is vital to the defence of

his party while engaged on his behalf in the thick of a

legal battle in Court. Lord Atkin observes:

"The advocate is to conduct the cause of his

client to the utmost of his skill and under-

standing. He must in the interests of his

client be in the position, hour by hour,

almost minute by minute, to advance this

argument, to withdraw that; he must make the

final decision whether evidence is to be given

or not on any question of fact; skill in

advocacy is largely the result of discrimina-

tion. These powers in themselves almost amount

to powers of compromise: one point is given up

that another may prevail. But in addition to

these duties, there is from time to time

thrown upon the advocate, the responsible task

of deciding whether in the course of a case he

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shall accept an offer made to him, or on his

part shall make an offer on his client's

behalf to receive or pay something less than

the full claim or the full possible liability.

Often the decision must be made at

once ....... "(ibid, page 161)

Emphasising the apparent authority of counsel, and the

raison d'etre of such authority being the paramount interest

of his client, and not an appandage of office, Lord Atkin

states:

"The apparent authority is derived from the

known existence of the implied

authority ..........

199

First, the implied authority of counsel is

not an appandage of office, a dignity added by

the Courts to the status of barrister or

advocate at law. It is implied in the inter-

ests of the client, to give the fullest bene-

ficial effect to his employment of the advo-

cate. Secondly, the implied authority can

always be countermanded by the express direc-

tions of the client. No advocate has actual

authority to settle a case against the ex-

press instructions of his client. If he con-

siders such express instructions, contrary to

the interests of his client, his remedy is to

return his brief.

Their Lordships are unable to see why the

above considerations should not apply to an

advocate in India, whose duties to his client

in the conduct of a suit in no wise differ

from those of advocates in England, Scotland

and Ireland .......... ". (Page 161)

Counsel's role in entering into a compromise has been

traditionally understood to be confined to matters within

the scope of the suit. However, a compromise decree may

incorporate not only matters failing within the subject

matter of the suit, but also other matters which are collat-

eral to it. The position before the amendment in 1976 was

that, in respect of the former, the decree was executable,

but in respect of the latter, it was not executable, though

admissible as judicial evidence of its contents.

Referring to section 375 of the Code of Civil Procedure

(Act XIV of 1882), (similar to Order XXIII rule 3 CPC as it

stood prior to the amendment of 1976), Lord Buckmaster, in

Hemanta Kumari Debi v. Midnapur Zamindari Co., AIR 1919 PC

79, states:

" ........ In the first place, it is plain

that the agreement or compromise, in whole and

not in part, is to be recorded, and the decree

is then to confine its operation to so much of

the subject-matter of the suit as is dealt

with by the agreement ............although

the operative part of the decree would be

properly confined to the actual subject-matter

of the then existing litigation the decree

taken as a whole would include the agreement.

This in fact is what the decree did in the

present case. It may be that as a decree it

was incapable of being executed outside the

lands of the suit, but that does not prevent

its being received in evidence of its con-

tents". (Page 81)

In Ram Juwan v. Devendra Nath Gupta, AIR 1960 Madhya Pradesh

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280, the High Court states:

"Where a consent decree contains terms that do

not relate to the suit ..... such terms

cannot be enforced in execution of the decree

but they may be enforced as a contract by a

separate suit". (Page 282)

See also Vishnu Sitaram Auchat v. Ramachandra Govind

Joshi, AIR 1932 Bombay 466 and Jasimuddin Biswas v. Bhuban

Jelini, ILR 34 Calcutta 456.

In Ganganand Singh & Ors. v. Rameshwar Singh Bahadur &

Anr., AIR 1927 Patna 271, the High Court points out that a

consent decree does not stand on a higher footing than a

contract between the parties. The Court always has the

jurisdiction to set aside a consent decree upon any ground

which will invalidate an agreement between the parties. In

the absence of any such ground, the consent decree is bind-

ing on the parties.

Courts in India have consistently recognised the tradi-

tional role of lawyers and the extent and nature of their

implied authority to act on behalf of their clients. Speak-

ing for a Full Bench of the Kerala High Court in Chengan

Souri Nayakam v. A.N. Menon, AIR 1968 Kerala 213, K.K.

Mathew, J. (as he then was) observed:

"The construction of a document appointing an

agent is different from the construction of a

vakalat appointing counsel. In the case of an

agent the document would be construed strictly

and the agent would have only such powers as

are conferred expressly or by necessary impli-

cation. In the case of counsel the rule is

otherwise because there we are dealing with a

profession where well-known rules have crys-

tallised through usage. It is on a par with a

trade where the usage becomes an additional

term of the contract, if not contrary to the

general law or excluded by express agreement."

(p.215).

About the special position of the advocate, the learned

Judge stated:

Counsel has a tripartite relationship; one with the pub-

lic, another with the court, and the third with his client.

That is a unique feature. Other professions or callings may

include one or two of these relationships but no other has

the triple duty. Counsel's duty to the public is unique in

that he has to accept all work from all clients in courts in

which he holds himself out

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as practicing, however, unattractive the case or the

client." (p. 216)

See also Jiwibai v. Ramkumar Shriniwas Murarka Agarwala,

AIR 1947 Nagpur 17; Govindammal v. Marimuthu Maistry & Ors.,

AIR 1959 Mad. 7 and Laxmidas Ranchhoddas & Ors. v. Savitabai

Hargovindas Shah, AIR 1956 Born. 54.

These principles were affirmed by this Court in Jamila-

bai Abdul Kadar v. Shankerlal Gulabchand & Ors. [1975] Supp.

SCR 336. Referring to a number of decisions on the point,

V.R. Krishna Iyer, J. observes:

" .......... Those who know how courts and

counsel function will need no education on the

jurisprudence of lawyer's position and powers.

Of course, we hasten to enter a caveat. It is

perfectly open to a party, tike any other

principal, to mark out in the vakalat or by

particular instructions forbidden areas or

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expressly withhold the right to act in sensi-

tive matters, the choice being his, as the

master. If the lawyer regards these fetters as

inconsistent with his position, he may refuse

or return the brief. But absent speaking

instructions to the contrary, the power to act

takes in its wings the right and duty to save

a client by settling the suit if and only if

he does so bona fide in the interests and for

the advantage of his client ....... "(Page

346)

See also Monoharbahal Colliery Calcutta v. K.N. Mishra &

Ors., AIR 1975 SC 1632.

After the amendment of 1976, a consent decree, as seen

above, is executable in terms thereof even if it comprehends

matters falling outside the subject-matter of the suit, but

concerning the parties. The argument of the appellant's

counsel is that the legislature has intended that the

agreement or compromise should be signed by the parties in

person, because the responsibility for compromising the

suit, including matters falling outside its subject-matter,

should be borne by none but the parties themselves. I1 this

contention is valid, the question arises why the legislature

has, presumably being well aware of the consistently fol-

lowed practice of the British and Indian Courts, suddenly

interfered with the time-honoured role of lawyers in the

conduct of cases without specifically so stating, but by

implication? Can the legislature be presumed to have funda-

mentally altered the position of counsel or a recognised

agent, as traditionally understood in the system of law and

practice followed in India and other 'common law countries'

without expressly and directly so stating? There is,

202

no indication in preparatory work such as the 54th Report of

the Law Commission dated 6.2.1973 or in the Statement of

Objects and Reasons or in the words employed by the legisla-

ture that the concept of 'agents and pleaders' of Order III,

C.P.C. was in any manner altered. There is no warrant for

any such presumption.

It is a rule of legal policy that law should be altered

deliberately rather than casually. Legislature does not make

radical changes in law by a sidewind, but only by measured

and considered provisions'. (Francis Bennion's Statutory

Interpretation, Butterworth, 1984, para 133). As stated by

Lord Devlin in National Assistance Board v. Wilkinson,

[1952] 2 Q.B. 648:--

"It is a well-established principle of con-

struction that a statute is not to be taken as

effecting a fundamental alteration in the

general law unless it uses words that point

unmistakably to that conclusion."

Statutes relating to remedies and procedure must receive

a liberal construction 'especially so as to secure a more

effective, a speedier, a simpler, and a less expensive

administration of law'. See Crawford's Statutory Construc-

tion, para 254. The object of the amendment was to provide

an appropriate remedy to expedite proceedings in Court. That

object must be borne in mind by adopting a purposive con-

struction of the amended provisions. The legislative inten-

tion being the speedy disposal of cases with a view to

relieving the litigants and the Courts alike of the burden

of mounting arrears, the word 'parties' must be so construed

as to yield a beneficent result, so as to eliminate the

mischief the legislature had in mind.

There is no reason to assume that the legislature in-

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tended to curtail the implied authority of counsel, engaged

in the thick of proceedings in court, to compromise agree on

matters relating to the parties, even if such matters exceed

the subject-matter of the suit. The relationship of counsel

and his party or the recognised agent and his principal is a

matter of contract; and with the freedom of contract gener-

ally, the legislature does not interfere except when war-

ranted by public policy, and the legislative intent is

expressly made manifest There is no such declaration of

policy or indication of intent in the present case. The

legislature has not evinced any intention to change the well

recognised and universally acclaimed common law tradition of

an ever alert, independent and active. Bar with freedom to

manoeuvre with force and drive for quick action in a battle

of wits typical of the adversarial system of oral hearing

which is in sharp contrast to the

203

inquisitorial traditions of the 'civil law' of France and

other European and Latin American countries where written

submissions have the pride of place and oral arguments are

considered relatively insignificant. (See Rene David,

English Law and French Law - Tagore Law Lectures, 1980).

'The civil law' is indeed equally efficacious and even

older, but it is the product of a different tradition,

culture and language and there is no indication,. whatever,

that Parliament was addressing itself to the task .of assim-

ilating or incorporating the rules and practices of that

system into our own system of judicial administration.

The Indian legal system is the product of history. It is

rooted in our soil; nurtured and nourished by our culture,

languages-and traditions; fostered and sharpened by our

genius and quest for social justice; reinforced by history

and heritage: it is not a mere copy of the English common

law; though inspired and strengthened, guided and enriched

by concepts and precepts of justice, enquiry and good con-

science which arc indeed the hallmark of the common law. In

the words of M.C. Setalvad:

" ........ the common law of England with

its statutory modifications and the doctrines

of the English courts of equity has deeply

coloured and influenced the laws and the

system of judicial administration of a whole

sub-continent inhabited by nearly four hundred

million people. The law and jurisprudence of

this vast community and its pattern of judi-

cial administration are in many matters dif-

ferent from those of England in which they had

their roots and from which they were nurtured.

Yet they bear the unmistakable impress of

their origin. The massive structure of Indian

law and jurisprudence resembles the height,

the symmetry and the grandeur of the common

and statute law of England. In it one sees

English law in the distant perspective of a

new atmosphere and a strange clime."

Speaking of the common law in the wider sense, the

learned author continues: -

"....But the English brought into India not

only the mass of legal rules strictly known as

the common law but also their

traditions, outlook and techniques in estab-

lishing, maintaining and developing the judi-

cial system. When, therefore, I speak of the

common law in India I have in view comprehen-

sively all that is of English origin in our

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system of law. In that wide meaning

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the expression will include not only what in

England is known strictly as the common law

but also its traditions, some of the princi-

ples underlying the English statute law, the

equitable principles developed in England in

order to mitigate the rigours of the common

law and even the attitudes and methods pervad-

ing the British system of the administration

of justice."

The Common Law in India, 1960 - The Hamlyn

Lectures, Twelth Series, pp.1-4.

After the attainment of independence and the adoption of

the Constitution of India, judicial administration and the

constitution of the law courts remained fundamentally un-

changed, except in matters such as the abolition of appeals

to the Privy Council, the constitution of the Supreme Court

of India as the apex court, the conferment of writ jurisdic-

tion on all the High Courts, etc. The concept, structure

and organisation of Courts, the substantive and procedural

laws, the adversarial system of trial and other proceedings

and the function of judges and lawyers remained basically

unaltered and rooted in the common law traditions in

contra-distinction to those prevailing in the civil law or

other systems of law.

In our own system of judicial administration, if strains

have developed and cracks have appeared by the stresses and

2pressures of the time; if aberrations have become too

obvious to be ignored or too deeprooted to be corrected by

an internal mechanism; if the traditional role of the legal

profession requires urgent legislative scrutiny with a view

to remedying the defects and strengthening and safeguarding

the system; it is a matter exclusively for Parliament to

consider; but the amendment in question is not addressed to

that purpose.

Aberrations there always have been in every system of

administration; but whether they are merely peripheral or

transient in character-mere ripples on a placid pool - or

symptomatic of deeper malady requiring structural modifica-

tion by prompt legislative intervention is a matter of grave

significance for the jurists, sociologists and political

scientists to ponder over.

So long as the system of judicial administration in

India continues unaltered, and so long as Parliament has not

evinced an intention to change its basic character, there is

no reason to assume that Parliament has, though not express-

ly, but impliedly reduced counsel's role or capacity to

represent his client as effectively as in the past. On a

matter of such vital importance, it is most unlikely that

Parliament would have resorted

205

to implied legislative alteration of counsel's capacity or

status or effectiveness. In this respect, the words of Lord

Atkin in Sourendra (supra) comparing the Indian advocate

with the advocate in England, Scotland and Ireland, are

significant:

There are no local conditions which make it

less desirable for the client to have the full

benefit of an advocate's experience and judg-

ment. One reason, indeed, for refusing to

imply such a power would be a lack of confi-

dence in the integrity or judgment of the

Indian advocate. No such considerations have

been or indeed could be advanced, and their

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Lordships mention them but to dismiss

them ........ (Page 161)

Similar is the view expressed by the Rajasthan High

Court in Mohan Bai v. Jai kishan, AIR 1983 Rajasthan 240;

Smt. Mohan Bai v. Smtjai kishan & Ors., AIR 1988 Rajasthan

22 and by the Gujarat High Court in Nadirsha Hirji Baria &

Ors. v. Niranjankumar alias Nireshkumar Dharamchand Shah &

Ors., 1983 (1) G.L.R. 774. A contrary view has been ex-

pressed by the Andhra Pradesh High Court in Kesarla Raghu-

ram. v. Dr. Narsipalle Vasundara, AIR 1983 Andhra Pradesh

32, and it does not commend itself to us.

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 immedi-

ate 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 communication,

such contingency may seldom arise. A wise and careful coun-

sel will no doubt arm himself in advance with the necessary

authority expressed in writing to meet all such contingen-

cies in order that neither his authority nor integrity is

ever doubted. This essential precaution will safeguard the

personal reputation of counsel as well as uphold the pres-

tige and dignity of the legal profession.

Considering the traditionally recognised role of counsel

in the common law system, and the evil sought to be remedied

by Parliament by the C.P.C. (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 counsel

in their cause or by their duly authorised agents. Any

206

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.

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 funda-

mental change, even at the risk of delay, inconvenience and

needless expenditure, it would have expressly so stated.

Accordingly, we are of the view that the words 'in

writing and signed by the parties', inserted by the C.P.C.

(Amendment) Act, 1976, must necessarily mean, to borrow the

language of Order II1 rule 1 C.P.C.:

"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,

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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".

(emphasis supplied)

In the present case, the notice issued under Order XXI

rule 22 was personally served on the defendant, but he did

not appear or show cause why the decree should not be exe-

cuted. The notice was accordingly made absolute by Order

dated 23.1.1990 and leave was granted to the plaintiff to

execute the decree. The decree passed by the High Court on

18.6.1984 in terms of the compromise was a valid decree and

it constituted res judicata. As stated by this Court in

Shankar Sitaram Sontakke & Anr. v. Balkrishna Sitaram Son-

takke & Ors., AIR 1954 SC 352:-

"...... It is well settled that a consent

decree is as binding upon the parties thereto

as a decree passed by invitum. The com-

207

promise having been found not to be vitiated

by fraud, misrepresentation, misunderstanding

or mistake, the decree passed thereon has the

binding force of 'res judicata'." (Page 355)

S.R. Das, C.J., in Sailendra Narayan Bhanja Deo v. The

State of Orissa, AIR 1956 SC 346, states:

".... a judgment by consent or default is as

effective an estoppel between the parties as a

judgment whereby the court exercises its mind

on a contested case ...... ". (Page 351)

A judgment by consent is intended to stop litigation

between the parties just as much as a judgment resulting

from a decision of the court at the end of a long drawn out

fight. A compromise decree creates an estoppel by judgment.

As stated by Spencer-Bower & Turner in Res Judicata Second

Edition, page 37:

"Any judgment or order which in other respects

answers to the description of a res judicata

is nonetheless so because it was made in

pursuance of the consent and agreement of the

parties .... Accordingly, judgments, orders,

and awards by consent have always been held no

less efficacious as estoppels than other

judgments, orders or decisions, though doubts

have been occasionally expressed whether,

strictly, the foundation of the estoppel in

such cases is not representation by conduct,

rather than res

judicata ...................... ".

See also Mohanlal Goenka v. Benoy Kishna Mukherjee &

Ors., AIR 1953 SC 65.

The consent decree made on 18.6.1984 remained unchal-

lenged. None questioned it. The appellant never raised any

doubt as to its validity or genuineness. He had no case that

the decree was vitiated by fraud or misrepresentation or his

counsel lacked authority to enter into a compromise on his

behalf. Nevertheless, after six years he questioned its

validity by means of chamber summons. This was an unsuccess-

ful challenge by reason of delay, estoppel or res judicata,

and was rightly so held by the High Court.

Accordingly, we see no merit in this appeal. It is

dismissed. However, in the circumstances of the case, we do

not make any order as to costs.

V.P.R. Appeal

dismissed.

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