JAYWANTRAJ PUNAMIYA AND ORS.versusM/S. H. CHOKSI AND CO. PVT. LTD.

A                       JAYWANTRAJ PUNAMIYA AND ORS.
                                              v.
                         M/S. H. CHOKSI AND CO. PVT. LTD.

                                    FEBRUARY 3, 199T
                                                                                    -
B                   (K. RAMASWAMY AND G.T. NANAVATI, JJ.]

               Code of <;ivil Procedure 1908 : Order 23-'-Rule 3.

               Compromise decree-En[orceability of-Application for recording com-
e promise filed by parties during pendency 'of appeal-Refusal by appellate
  Court to record compromise-High Court recording a finding that it being a
  compromise contingent upon the parties appointing a mediator, it cannot be
  recorded under Order 23 Rule 3-Appea~eld the compromise was a
  contingent contract dependel!f upon action of third party-Hence it cannot be
D said that there was complete agreement-Thus the very object of recording the
  compromise was to ensure that the dispute 'reaches its finality and does not
  lead to further litigatiort-ln this case, since the dispute was not finally
  resolved, but the compromise was contingent upon action by third party, it
  did not receive finality-The High Court was right in holding that the matter
  had not received finality and though it was apart of the decree, it cannot be
E recorded untf.er Order XX/I/, Rule 3, CPC.

            Mt. Akbati Begum v. Rahmat Husain &Ors., AIR (1973) All. 861 F.B.
       and Katikarll Chilltamani Dora & Ors. v. Guntreddi Annamnaidu & Ors.,
       [1974) 2 SCR ·655, distinguished.

 F             CIVIL APPELLATE JURISDICTtON : Civil Appeal No. 702 of
       1997.         .

            From the Judgment and Order dated 10.1.97 of the Bombay High
       Court in C.R.A. No. 9 of 1997.
 G
            C. Sitaramiah, A.M. Khanwilkar and Mrs. V.D. Khanna for the
       Appellants.

               The following Order of the Court was delivered :

·H ·           Leave granted.
                                             862
            JAYWAN1RAJ PUNAMIA v. H.CHOKSI AND CO.                    863

      This appeal by special leave arises from the judgment and order A
dated January 10, 1997 passed by the Bombay High Court in Civil Revision
Application No. 9/97. It is not in dispute that while the appeal was pending
an application under Order XXIII, Rule 3, CPC was filed for recording
the compromise. The appellate Court refused to record the compromise
and on revision, it was dismissed. Thus, this appeal by special leave.
                                                                            B
       The compromise memo annexed as Annexure A at page 21 of the
paper book records that 'We, the undersigned Shri Harshan A. Mehta,
Director of H. Choksey & Co. Pvt. Ltd. and Mr. Jayavantraj Punamiya,
Director of M/s. Sundeep Plastics Pvt. Ltd. do hereby appoint Shri Mohan-
lal S. Mehta to sell 2 galas being No. D/8 and AB/i4, situate at Nandanvan C
Co-operative Industrial Estate Ltd. at Thane." The High Court recorded
the finding that it being a compromise contingent upon the parties appoint-
ing Shri Mohanlal S. Mehta as a mediator, it cannot be recorded under
Order XXIII, Rule 3, CPC. Shri Sitaramaih, learned senior counsel for the ·
appellants contends that once parties have agreed to refer the matter to D
a third party to settle their dispute, it can be enforced wider Order XXIII,
Rule 3, CPC. In support of his contention, he relies upon a decision of the
Allahabad High Court in Mt. Akbari Begum v. Rahmat Husain & Ors., AIR
(1973) Allahabad 861 F.B. He also relied upon the judgment of this Court
is Katikara Chintamani Dora & Ors. v. Guntreddi Annamnaidu & Ors.,
[1974] 2 SCR 655. Having given consideration to the contention of the E
learned counsel, we think that in the facts and circumstances of this case,
he is not right. It is seen that no doubt the parties have settled the terms
of the compromise for reference of the matter to Mohanlal S. Melita, and
as agreed upon, he will dispose of the two galas and after adjusting the
outstanding and deducting· the expenses, the balance would be given in F
equal shares to the parties. Shri Sitaramaih has placed before us the
evidence of Shri Mehta wherein he has suggested that he is willing to sell
the property. It has been noted by the learned District Judge that Shri
Mohanlal S. Mehta did not take steps to sell the disputed flats. Hence it
cannot be said that there is complete agreement. The compromise is a
contingent contract dependent upon action of third party, i.e., making G
adjustment. Thus, the very object of recording the compromise is to ensure
that the dispute reaches its finality and does not lead to further· litigation.
In this case, since the dispute was not finally resolved, but the compromise
was contingent upon action by Shri Mohanlal S. Mehta, it did not receive
finality in that perspective. The Allahabad High Court had to consider the H
    864                   SUPREME COURT REPORTS                 [1997) 1 S.C.l,l.
A question in tlie context of reference to an arbitration for settlement of the
    dispute pending in the suit. In that context, a Full Bench came to lay down
    the law as extracted herein :

              "When both parties make such admission simultaneously it
              amounts to an offer by one and acceptance by the other. Such
B             reciprocal admissions would therefore, be a valid agreement be-
              tween them. Consideration is good because there is reciprocity.
              The statement of the referee would then be the admission of both
              the parties binding upon them. No doubt admissions are not
              conclusive; but where there has been mutuality of this kind any
C             they have matured into an agreement, their conclusiveness follows
              from the principle of estoppel."

           Equally, this Court in Katikana Chintamani Dora's case had to con-
    sider the point in the. context of the dispute having arisen between the
    parties who had agreed to abide by the decision of the court on the
D   question whether a particular village notified by the State Government is       t
    'estate' within the meaning of Section 3(2)(d) of the Madras Estate Lands
    Act, 1908 and whether the decision was appealable once there was a
    compromise. In that context, this Court had considered and held that the
    High Court had misunderstood the scope of controversy and though a part
E   of the decree had been settled, an appeal would lie. In view of the facts
    and circumstances and the observations mentioned hereinbefore, we think
    that the High Court was right in holding that the matter had not received
    finality and though it is a part of the decree, it cannot be recorded under
    Order XXIII, Rule 3, CPC.

F         The appeal is accordingly dismissed. No costs.

     T.N.A.                                                  Appeal dismissed.