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CASE NO.: Appeal (civil)  6326 of 2005

PETITIONER: Amteshwar Anand                          

RESPONDENT: Virender Mohan Singh. & Ors              

DATE OF JUDGMENT: 07/10/2005

BENCH: Ruma Pal & Dr.AR. Lakshmanan

JUDGMENT: J U D G M E N T WITH  CA No. 6327 OF 2005 @ S L P (C) No. 17856 of 2003)

(Arising of S L P(C)  No. 11884 of 2003) RUMA PAL, J.

       Leave granted. Sir Datar Singh (described as DS) was a wealthy man  owning several properties.  When he died in 1973, his family  consisted of his wife and four children. The present appeals  originated in a legal tussle between the heirs over the  properties of DS. During the various litigations DS’s widow,  whom we will call Lady DS, died.  Their two sons, Mahinder and  Maninder are also dead.  The disputes were continued between  the two daughters of DS and Lady DS viz. Amteshwar Anand  (AA), Kirpal Kaur (KK) and KK’s daughter, Guneeta,  on the one  hand and the heirs of Maninder and Mahinder on the other.  It is  unnecessary to burden this judgment with the names of all the  parties except to note the name of the main respondent in  these appeals.  He is Virender Mohan Singh (VMS) and is the  son of Maninder. He is supported by the other heirs of  Maninder who are also respondents before us, including  Maninder’s eldest son, Anand Deep Singh (ADS).  Although  Mahinder’s heirs are separately represented they also support  VMS. The basic question to be decided in these appeals is  whether the disputes between the parties were set at rest by a  valid consent  decree dated 25th August, 1993 disposing  of Suit  No.63 of 1975 and Suit No.1495 of 1989. Suit No.63 of 1975 had been filed by Maninder, against   Lady DS, Mahinder, AA, KK and KK’s daughter, Guneeta.  Suit   No.1495 of 1989 was filed by ADS against AA, KK and  Guneeta, the heirs of Mahinder and the other heirs of Maninder.  Basically, both the suits were filed for partition of the properties  of DS, portions of which were already in occupation and  enjoyment of the different heirs of DS. The impugned consent decree was the culmination of a  process of settlement which was recorded at three stages in  three agreements.  The first agreement was entered into  between VMS, KK and Guneeta on 18th March, 1993.  This  agreement provided inter alia  that VMS surrendered all his  rights in the house in Bhopal in favour of KK and Guneeta.  In  addition he would pay a total sum of Rs. 50 lakhs to KK and  Guneeta,  of which Rs.5 lakhs would be paid at the time of the  signing of the application under Order XXIII Rule 3 of the Code  of Civil Procedure and the balance Rs. 45 lakhs in instalments

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by cheques drawn by VMS in favour of KK or Guneeta as  specified in clause (b) of the agreement. A further sum of Rs. 5  lakhs would be payable under clause (c) at the "time of such  final partition of suit properties for the shares of the other  parties", if VMS was unable to obtain a release from the other  co-sharers of their claims in the Bhopal House in favour of KK  and Guneeta.  The  remaining clauses are partly confirmatory,  partly operative  in praesenti and partly executory. The clauses  read:  (c )   That Shri V.M. Singh relinquishes and  releases the share that would devolve upon  him on partititon in house in Bhopal known as  Sir Datar Singh house with outhouse and  appurtenant area to the said building  approximately 1 Acre in favour of Smt. Kirpal  Kaur and Kumari Guneeta, Shri V.M. Singh  shall endeavour to obtain rights in the said  properties completely in favour of Smt. Kirpal  Kaur and  Kumari Guneeta at  the time of final  partitition.  In case of the same not being  successful, Shri V.M. Singh shall pay an  amount of Rs. 5 lakhs to Smt. Kirpal Kaur and  Kumari  Guneeta collectively at the time of  such  final partition of suit properties for the  shares of the other parties.  Apart from this  house, out house and appurtenant land, Smt.  Kirpal and Kumari Guneeta will not have any  right,  title or interest in any other property in  Bhopal or otherwise.

(d)    That Smt. Kirpal and Kumari Guneeta  have relinquished, released, given up,  assigned all their rights, title and interest in all  the movable and immovable properties which  are the subject matter of the present  suit or  such properties which are the subject matter of  the Suit No.63 of 1975.  all these properties to  the extent of the share of Smt. Kirpal Kaur and  Kumari Guneeta shall deem to vest, be the  exclusive properties of the defendant Shri V.M.  Singh subject to the payments being made as  specified aforesaid.  Shri V.M. Singh shall be  the owner of all interests, rights and benefits  that have accrued or may accrue in favour of  Smt. Kirpal and Kumari Guneeta and shall  deem to vest with all the benefits accruing to  Shri V.M. Singh and would deem to have been  assigned in his favour and he shall be treated  the exclusive owner to the extent of shares  devolving on her from late Sir Datar Singh, late  lady Satwant Datar Singh, HUF or otherwise.  Smt. Kirpal and Kumari Guneeta also release,  relinquish and assign their rights in 4.3 acres of  land situated in Khasra No.128 of Village  Behta, Bairagarh Bhopal standing in the names  of Smt. Kirpal Kaur and Kumari Guneeta.

(e) All the liabilities, litigations,  consequential proceedings before the revenue  authorities or otherwise shall be carried on by  Shri V.M. Singh entirely at his responsibility  and risk.  Smt. Kirpal and Kumari Guneeta  shall not be liable or responsible directly or  indirectly for any acts, deeds that Shri V.M.  Singh may do in regard to the property in

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question and he further assures that he shall  do all lawful acts and deeds under the law and  assures that no liability of any kind, civil or  criminal, is attributed or taken against Smt.  Kirpal and Kumari Guneeta.

(f)  That in order to facilitate and implement  his right under this agreement and of course  subject to the aforementioned terms and  conditions, a general power of attorney shall  also be executed by Smt. Kirpal and Kumari  Guneeta in favour of Shri V.M. Singh and he  shall be solely responsible as owner of the  property, but this deed is being executed only  to facilitate if there is any technical hitch in  implementing this compromise in favour of Shri  V.M.Singh who may get himself recorded as  owner of the share of Smt. Kirpal and Kumari  Guneeta.  Further, it is specifically agreed that  by the parties who undertake to this Hon’ble  Court that the agreement shall be binding upon  the parties and the cheques shall be honoured  on presentation.

(g)    Smt. Kirpal and Kumari Guneeta shall  execute all legal documents as may be  required by Shri V.M. Singh at  the risk and  cost of Shri V.M. Singh in his name or the  name of his nominee as and when required  without any liability whatsoever on Smt. Kirpal  and Kumari Guneeta.

(h)      Smt. Kirpal and Kumari Guneeta  shall also withdraw FAO (OS) No.82 of   1992 pending in the Delhi High Court and  all applications in the present Suit No.63 of  1975  directed  against Shri  V.M. Singh  shall be treated as withdrawn."

Clause (d) contains apparent contradictions but the   overall intention was to record a relinquishment of rights in the  properties which were the subject matter of the two pending  suits by KK and Guneeta in favour of VMS in exchange for  VMS giving up his rights in the Bhopal properties and assuming  all liabilities in respect of the suit properties and making  payment  in future of the sum of Rs. 50 lakhs. A common application (I.A.No.1860 of 1993) was filed  before the High Court jointly by VMS, KK and Guneeta under  Order XXIII, Rule 3 of the Code of Civil Procedure, 1908  (referred to as ’the Code’) and an order was passed on 18th  March, 1993 by the Court directing the settlement to be taken  on record.  Although VMS has paid a sum of Rs. 18 lakhs to KK  and Guneeta pursuant to the settlement his cheques for the  balance amount of Rs 32 lakhs have not been honoured.  The second agreement was entered into on 21st April,  1993 between AA and VMS. Briefly stated, this agreement also  dealt with the interest claimed by AA and VMS in the estate of  DS. Its provisions were partly confirmatory of certain actions  already taken by the respective parties in connection with such  properties, some clarificatory, some operative in praesenti and  others executable in future. The relevant clauses of the  agreement provided as follows:- "a.  That it is agreed that Defendant V.M.Singh  shall pay a sum of Rs. 15 lakhs to Smt. Amteshwar

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Anand, Defendant No.8 on or before 30.6.1994.

b.      That Smt. Amteshwar Anand will have a  lien over 8 acres of land  falling to the share of Shri  V.M. Singh by succession on the death of Sardar  Maninder Singh the father of Shri V.M. Singh who  was the owner of 41.2 acres of land.  The lien will be  till the said payment of Rs. 15 lakhs is made by Shri  V.M. Singh to Smt. Amteshwar Anand.

c.      That Smt. Amteshwar Anand shall continue to  remain in possession of 11 acres of land situated at  Punjab Khor which is in her possession in pursuance  of the order of the Revenue Authority dated  28.5.1975.  It is clarified that Smt. Amteshwar Anand  was in possession of 13 acres of land at the said  village Punjab Khor and had sold two  acres of land.

d.      That Smt. Amteshwar Anand hereby  acknowledges that she has already received  consideration from Shri V.M. Singh in respect of her  rights which would have accrued on partition in  respect of the entire properties situated at Village  Behta, Borbau and Laukheri, Tehsil and District  Bhopal and also Village Pipal Kheria, District Raisen  (M.P.).

e.      That it is clarified that in view of the present  settlement the rights, title and interest in the land  consisting of 44 acres of land at Village Pipal Kheria,  Raisen, standing in the name of Shri Virendra Singh  Anand son of Smt. Amteshwar Anand who had  purchased the said land from Mrs. Aparna Bajpai  shall devolve on Shri V.M. Singh.  Smt. Amteshwar  Anand being a duly authorized power of attorney  holder of Shri Virendra Singh Anand, is authorized to  give the said consent.

f.      That Smt. Amteshwar Anand has relinquished,  released, given up, assigned all her rights, title and  interest in all the moveable and immoveable  properties which are the subject matter of the present  suit or such properties which are the subject matter of  the Suit No.63 of 1975, subject to clause (e)  aforesaid.  All these properties to the extent of the  share of Smt. Amteshwar Anand shall deem to vest,  be the exclusive properties of the Defendant Shri V.M.  Singh subject to the payments being made as  specified aforesaid.  Shri  V.M. Singh shall be the  owner of all interests, rights and benefits that have  accrued or may accrue in favour of Smt. Amteshwar  Anand and shall be deem (sic) to have been assigned  in his favour and he shall be treated as the exclusive  owner to the extent of share owned by Smt.  Amteshwar Anand including the shares devolving on  her from late Sir Datar Singh, Late Lady Satwant  Datar Singh, HUF or otherwise.

g.      All the liabilities, litigations, consequential  proceedings before the revenue authorities or  otherwise shall be carried on by Shri V.M. Singh  entirely at his responsibility and risk. Smt. Amteshwar  Anand shall not be liable or responsible directly or  indirectly for any acts, deeds that Shri V.M. Singh  may do in regard to the property in question and the

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further assures that he shall do all lawful acts and  deeds under the law and assures that no liability of  any kind, civil or criminal, is attributed or taken against  Smt. Amteshwar Anand".

Following the same procedure adopted in connection with  the first agreement, an application was made by AA and VMS  being I.A. No.4252 of 1993 in Suit No.1495 of 1989 under  Order XXIII Rule 3 of the Code asking the Court to accept the  compromise arrived at between the applicants.  The application  was disposed of on 27th May 1993 by directing the agreement "  be taken on record". On the very next day i.e. on 28th May, 1993 a third  agreement was executed reflecting an oral settlement  between the heirs of Maninder, including VMS (who were  referred to as the second party)  on the one hand and the  heirs of Mahinder (referred to as the first party) on the other.   AA, KK and Guneeta were included  as the third and fourth  parties to the deed "through their assignee____ appellant  Virender Mohan Singh." It is not necessary to record the terms  of the deed as they are not relevant to the issues raised in this  appeal except to note clause (8) which provides: "That it is expressly agreed and undertaken  by S. Virender Mohan Singh of the Second   Party that he alone shall be responsible and  liable to satisfy any present or future claim that  may be made on the share falling to the first  party under the present settlement/compromise  by either the other members of the Second  party, members/heirs and assignees of the  third party and/or the Fourth Party.  The shares  of the First Party shall in no way be disturbed  and affected by any such claims that may be  raised by the second party, third and the fourth  party.  If the second  third or the fourth party  attempts to disturb and/or claim any right, title  or interest in the share of the first party under  the present settlement, it shall be the liability of  S. Virender Mohan Singh and shall be satisfied  from the share and/or properties of the said S.  Virender Mohan Singh.  Similarly it is expressly  agreed and undertaken by Smt.  Ranjit Kaur of  the first party that she alone shall be  responsible and liable to pay present or future  claim that may be made by other members of  the first party and/or any member of the  Confirming Party".

In other words, in keeping with the terms of the first two  agreements VMS assumed all the liabilities for any claim that  may be made against the other heirs of DS by AA, KK and  Guneeta in respect of their shares in the estate of DS. The third  agreement was signed by all the heirs of Mahinder and the  heirs of Maninder. VMS signed the deed on behalf of AA, KK  and Guneeta as their assignee.  For the third time a joint application was made under  Order XXIII Rule 3 read with  Section 151 of the Code of Civil  Procedure  praying, inter alia, for the Court to:-         "a) accept  the family settlement orally arrived  and reduced into writing subsequently on 28th May,  1993.(Annexure C);                  (b)  pass a decree in terms of the said family  settlement which is Annexure C to the present  application as also in terms of IA No.1860 of 1993

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and IA No.4252 of 1993 (Annexure A & B) which  compromises have been accepted on 18.3.1993 and  27.5.1993 by this Hon’ble Court and decree Suit  No.63 of 1975 and 1495 of 1989 in terms thereof; On 25th August, 1993 the High Court passed a decree in  terms of all three agreements. On 7th July 1995 KK and Guneeta made an application  under Section 151 of the Code of Civil Procedure in which they  claimed that though Suit No.1495 was decreed in terms of the  compromise between them and VMS, five cheques given by  VMS to them had been dishonoured on presentation.  It was  urged that VMS had committed  contempt of Court and,  therefore, the compromise was liable  to be cancelled.  It was  submitted that VMS should be directed to remit the amount of  the cheques or in the alternative the compromise and decree  passed by the Court should be cancelled. An agreed order was passed by the High Court of Delhi  on 8th November,1995 under which KK and Guneeta were  directed to execute a General Power of Attorney in favour of  VMS within 2 weeks and deposit the same in Court when VMS  would make payment of the balance amount as claimed by  them. Pursuant to the order, VMS brought bank drafts for the  balance amount but KK and Guneeta refused to accept the  same. On 27th May 1996, AA filed an application for setting  aside the second agreement and the decree dated 25th August  1993 on the ground that the agreement between AA and  VMS  was conditional upon VMS making payment of Rs.15 lakhs to  AA on or before 30th June 1994, that VMS had failed to pay the  amount of Rs.15 lakhs within that date or thereafter and had  thereby committed a fundamental breach of the compromise  and that the agreement stood repudiated.   It was also alleged  that the land over which AA was to have a lien by way of  security for payment of Rs.15 lakhs had also been mortgaged  to Punjab National Bank which was the subject matter of a suit.   This fact had been fraudulently suppressed by VMS.   Furthermore, it was claimed that the 44 acres of land at Raisen  referred to in Clause (e) was not the subject matter of the two  suits nor was AA’s son who owned the land, party to the suits;  that VMS had acquired no lawful right to any of the properties of  AA and that AA had not received any benefit in terms of the  settlement or the compromise decree, which decree had come  to the knowledge of AA recently.   In 1998, an application was made by KK and Guneeta  seeking to add supplementary grounds to the application made  by them in 1995 for setting aside the first agreement dated       18th March 1993 and decree dated 25th August 1993. Like AA,  they sought to allege that the compromise agreement entered  into between themselves and VMS was conditional upon  payment of the entire amount of Rs.50 lakhs within  stipulated  times, which condition had been violated by VMS.  The consent  decree was also challenged on the ground that the third  agreement entered into by VMS on 28th May 1993 was not  signed either by the applicant or by AA and was, therefore, not  binding on them.  It was alleged that no notice of the  compromise petition filed on the basis of the third agreement  had been issued to KK or Guneeta nor were their statements  recorded prior to the decree being passed.  According to them  VMS had committed breach of the order dated 18th March, 1993  and had failed to fulfill the undertaking given by him to Court in  that order to make payment of the full amount of Rs. 50 lakhs. It  was also sought to be claimed that the order dated 18th March  1993 taking the settlement on record was not a preliminary  decree nor a final decree and that in any event the decree  dated 25th August, 1993 was compulsorily registerable.  It was

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generally alleged that VMS had made false representations to  induce the applicants to enter into the compromise.              The learned Single Judge rejected the applications filed  by KK and Guneeta as well the applications filed by AA.  The  submissions were elaborately dealt with and it was held that the  three applications filed were misconceived and amounted to a  misuse of the process of the Court.  The applications were  accordingly dismissed with costs.         KK, Guneeta and AA preferred two separate appeals from  this order. The Division Bench, by a common judgment,  concurred with the findings of the learned Single Judge and  held that the learned Single Judge had rightly rejected the  applications filed by the appellants and accordingly dismissed  the appeals.  Two appeals have been preferred before us from the  decision of the Division Bench. We also propose to dispose of  them by this common judgment. Before us, learned counsel appearing on behalf of AA has  submitted that  no notice was given to AA of the alleged family  settlement or of the application for the compromise decree and  she had no knowledge of the decree dated 25th  August 1993.   It was submitted that the compromise  on which the decree was  passed was not signed by AA  and, therefore, was not binding  on her under the provisions of Order XXIII Rule 3 of the Code.   It was further submitted  that no right had been created under  the  second agreement in favour of VMS and that he had not  been assigned AA’s share in the suit properties.  It was said  that the third agreement dated 28th May,1993 was admittedly a  record of an earlier oral  agreement dated 1st May, 1993 to  which AA was not a party. It was contended that the purported  assignment was not an assignment in law: first, because the  agreement was a conditional one, namely the rights of AA were  to be transferred to VMS  subject to VMS  making payment;  second, the assignment was not registered  and finally, that the  assignment was not pursuant to any leave granted to VMS  under Order 22 Rule 10 of the Code of Civil Procedure.  It is  said that the omission to obtain such leave was deliberate in  order to keep the passing of the compromise decree a secret   from the appellants. KK and Guneeta have adopted AA’s arguments and have  also contended that the conditional right in their agreement with  VMS  was not complied with as VMS  had defaulted in making  payment in terms of their agreement with him. It was further  said that the non payment was an admitted fact and the  reasons as disclosed in VMS’ pleadings before the Court that  he did not pay  because of the non execution of the Power of  Attorney in his favour by KK and Guneeta was wrong, as the  execution of the Power of Attorney was also subject to all  payments having been made by VMS to these appellants.  It  was submitted that time was of the essence of the agreement.   It was also claimed that these appellants had no notice of any  kind of the passing of the final decree. VMS appeared in person.  He submitted that it was not  open to the appellants to challenge the agreements or the  compromise decree, because each of them had acted on the  basis of the agreements and derived benefits thereunder.  As  far as the Bhopal house was concerned,  KK and Guneeta had  sold the same on the basis that the property belonged to them.  It was also submitted that a sum of Rs. one lakh had been  received by KK from VMS as recently as on 11th July, 2001  towards the consideration amount. As far as AA was  concerned, she had also sold properties at Punjab Khor on the  basis of the agreement and the compromise decree as recently  as on 19th April, 2005. VMS also contended that AA had initially  filed a suit in respect of the Punjab Khor properties in 1974.

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That was why in 1975, Maninder had filed  Suit No.63 of 1975  claiming partition of the property of D.S. including the Punjab  Khor properties.  The suit remained ex-parte as far as AA was  concerned. However, on the basis of an alleged Power of  Attorney alleged to have been executed by Maninder in favour  of AA, AA had approached the Revenue Officer and the  Revenue Officer had passed an order in AA’s favour on 28th  May, 1975.  This order was challenged by ADS  by filing suit  No.1495 of 1989. It was this property at Punjab Khor, which  was inter alia the subject matter of the compromise decree and  which AA had sought to sell.  It was submitted that only   property which was the subject matter of the two suits had   been affected by the agreement or the family settlement.  The  property of forty four acres of land in Raisen  which were owned  by Virender Singh, AA’s son had already been sold to VMS by    Virender Singh  who had admittedly been paid the  full  consideration therefor. The conveyance could not be executed  because the necessary papers were with the first appellant,  who was at that time not in the country.  Our attention was  drawn to several documents in this connection.  Clause (e) in  the agreement between AA and VMS, according to VMS,  merely clarified the position. It was submitted that the  appellants had knowledge of the consent decree. Even after  knowledge of the decree they were interested only in receiving  the monies payable under their respective agreements and not  in setting aside the final consent decree.   Reliance was placed  on some correspondence as well as on the 1995 application of  KK and Guneeta. It was therefore submitted that the appeals  should be dismissed.   ADS has appeared through counsel and has supported  VMS. He has said that  the procedure followed in the present  case was fully in compliance of Order XXIII Rule 3. It is said  that all the three appellants had already received benefits under  the compromise decree. The heirs of Maninder have submitted that a conjoint   reading of all the paragraphs in the two agreements would  show that VMS was authorized to take steps as the assignee of  the appellants to achieve final partition. It was pointed out that it  is nobody’s case that VMS had not assumed  the legal liabilities  of AA, KK and Guneeta not only before the  Revenue  Authorities, but also the  responsibility of all proceedings. It was  said that the payment of the money under the first two  agreements was not a condition precedent and that their  conduct also showed that.  As far as the heirs of Mahinder were concerned, they say  that they had acted on the basis that VMS was duly authorized  to represent the appellants. It is urged that the agreements  arrived at between the parties were lawful and were freely   consented to by all parties.  It is further submitted that no  registration was required since the documents in question were  family settlements and there was only a rearrangement of  antecedent interests. It was stated that it would be extremely  inequitable if the compromise decree were set aside at this  stage after parties had long since acted on the same. We are of the view that the findings of fact arrived at  concurrently by the courts below do not require interference by  this Court.  It cannot be said that the conclusions were  unsupported by or were contrary to the evidence on record.  On  the legal issues also there has been no disagreement.  The first  issue is whether the  two agreements between the appellants  and VMS were conditional. Both the Courts below have  construed the agreements and answered the issue in the  negative.  As we have already said, each of the first two  agreements recorded  the relinquishment of rights by AA, KK  and Guneeta in the suit properties and assignment of such

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rights to VMS. This was recorded in the agreements as already  having taken place. As far as the first agreement was  concerned, the relinquishment of VMS’ rights in the Bhopal  house was effected by clause (e). Clause (d) of the second  agreement recorded that AA had already received the   consideration in respect of the properties mentioned from VMS.  The further payments to be made by VMS to the three  appellants were, on the other hand, to be made in future. The  phrase "subject to the payments being made" in clause (d) of  the first agreement and clause (f) of the second agreement  does not operate as a precondition to the relinquishment of the  rights of KK, Guneeta and AA in the suit properties. According  to these clauses of the agreements, vesting had already  taken  place or was to take place with the  execution of the  agreements. In this context, to construe the phrase ’subject to’  as amounting to a pre-condition would be contrary to the body  of the clauses in which the phrase appears.  The only meaning  we can give to the phrase consistently with the other terms of  the agreement,  is that it imposed a personal obligation on VMS  to make the payments . By the agreement, as has been rightly  held by the courts below, the parties had finally resolved  disputes with regard to their shares in the suit properties.   Therefore, even if VMS had defaulted in making payment to the  appellants of the amounts as specified in the agreements that  would not give the appellants a ground to rescind the  agreements. The next question raised by the appellants relates to Order  XXIII Rule 3 of the Code.  According  to them the procedure  envisaged under that provision had not been complied with  either in passing the orders on 18th March, 1993 and 27th May,  1993 when the agreements were taken on record or when the  final decree was passed on 25th August, 1993.  It is a matter of  record that when the appellants filed applications (IA.No.1860  of 1993 and IA. No.4252 of 1993) for accepting the first two  agreements under Order XXIII Rule 3, the applications set out  the clauses of the agreements verbatim.  The applicants had  affirmed separate affidavits in support of their respective  applications, affirming on oath that they were fully conversant  with the facts and circumstances of the case and that the  applications had been drafted and filed under their instructions  and that the statements of facts contained in  the  applications  were  true   and  correct  to  their knowledge.  Order XXIII,      Rule 3  casts  an  obligation  on  Court  to  be  satisfied    that a  suit has been adjusted wholly or in part by a lawful agreement  or compromise in writing and signed by the parties.  On the  material before it, the High Court would have had no reason to  hold that the suits had not been adjusted as affirmed by the  parties to the application.   It was not necessary for the Court to  say in express terms that it was satisfied that the compromise  was a lawful one.  There is a presumption that the Court was so  satisfied unless the contrary is  proved .   No doubt in Ajad  Singh Vs. Chatra & Ors.   this Court has said that the suit  could not have been disposed of except by recording its  satisfaction as contemplated by Rule 3 of Order XXIII of the  Code.  However, in that case there was in fact no proceeding  under Order XXIII Rule 3 at all. There the suit was decreed by  the Trial Court on the basis of a compromise which had been  entered into during the pendency of the suit which was not only  on plain paper but was executed in a police station.  This Court  held that the suit could not have been disposed of except by  recording the compromise and by following the procedure   contemplated by Rule 3 of Order XXIII. The decision is  therefore distinguishable on facts.    The second obligation cast on Court  by Order XXIII  Rule  3 is to order the agreement to be recorded.  This is normally

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done simultaneously with the passing of the decree.  In the  present case the rights of the other parties to the suit in respect  of the suit properties  had not yet been agreed upon, the stages  were split into two.  This does not mean that the orders dated  18th March, 1993 and 27th May, 1993 were not in keeping with  the provisions of  Order XXIII Rule 3. What the High Court has  done by the two orders dated 18th March, 1993 and 27th May,  1993 is to comply with the mandate to record the agreements.  Finally the Court is required to pass decree in accordance  with the agreement or compromise.  The learned Single Judge  correctly came to the conclusion that no decree could  be  passed disposing of the suits at that stage as the other parties  in the suit had not yet entered into any settlement. When the  third agreement was also filed subsequently, the Court  recorded the statements of VMS who had also signed the third  agreement as the assignee of the appellants,  as well as the  statements of the representatives of the other heirs. All the  parties to the suits by this time had settled their differences in  the pending suits.  The submission of the appellants that their  statements were required to be recorded is unacceptable in  view of our finding that they had assigned their rights in the suit  properties  (except as provided in the two agreements) and  in  view of their  affidavits which were already on record.  The validity of the assignment was however questioned by  the appellants on the ground that the first two agreements were  not registered.  The submission is untenable.  Section 17(1) of  the Registration Act, 1908 in so far as it is relevant, requires  under Clause (b) thereof, registration of "non-testamentary  instruments which purport or operate to create, declare, assign,  limit or extinguish, whether in present or in future, any right, title  or interest, whether vested or contingent, of the value of one  hundred rupees and upwards, to or in immovable property".  Sub section (2) of Section 17 creates exceptions to the  mandatory requirements of Section 17(1) (b) and (c). One of  the exceptions made in Section 17(2) of the Registration Act  1908, is Clause (i).  This exception pertains to "any composition  deed."  In other words all composition deeds are exempt from  the requirement to be registered under that Act .  The  Composition Deed in this case was a transaction between the  members of the same family for the mutual benefit of such  members.   It is not the appellants’ case that the agreements  required registration under any other Act. Apart from this, there  is the principle that Courts lean in favour of  upholding a family  arrangement instead of disturbing the same on technical  or  trivial grounds particularly when the parties have mutually  received benefits under the arrangement . Both the courts  below had concurrently found that the parties had enjoyed  material benefits under the agreements. We have ourselves  also re-scrutinized  the evidence on record on this aspect and  have found nothing to persuade us to take a contrary view.  Furthermore, in this case the agreements had merged in the  decree of the Court which is also excepted  under Sub section  2(vi) of Section 17 of the Registration Act, 1908 .  The appellants then contended that the exception created    in respect of decrees and  orders of a Court would not apply in  this case because Clause (e) of the second agreement related  to immoveable properties other than those which were the  subject matter of the pending suits. The submission is  misconceived.  The only property which did not form part of the  suit properties were the forty four acres of land at  Raisen  belonging to AA’s son. Clause (e)  in the second agreement did  not seek to either create, declare, assign, limit or extinguish  either in present or in future, any right title or interest in the  property within the meaning of Section 17 (1)(b) of the  Registration Act.  All that  Clause (e) of the second Agreement

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expressly did was to clarify a previous deal. It  did not affect any  change to any legal rights in the property and merely recited  what the existing rights were.  This clause would not therefore  serve to take the consent decree dated 25th August, 1993  outside the scope of the  exception in Section 17(2)(vi) of the  Registration Act, 1908.  The disputes in the two suits between all the parties were  resolved by the three agreements. But in concluding the three  agreements, care was taken to see that the terms and  conditions of one agreement did not conflict with the terms and  conditions of another.  Parties had separately signed their  agreements and approached  the Court (albeit at different   points of time) seeking to get a decree passed in terms of their  agreements. As such it was not necessary for the parties to one  agreement to sign the other two agreements.  It was thus also  not necessary for any of the appellants to have signed the third  agreement entered. The final  decree dated 25th August, 1993  was on the basis of all  three agreements each of which had  been signed by the concerned parties and their statements in  support thereof were on record in compliance with Order XXIII  Rule 3 of the Code.   The appellants made much of the fact that no leave was  obtained from the courts under Order 22 Rule 10 of the Code to  bring VMS on record as an assignee of their rights.  This  was  an argument which has been raised for the first time before us.   The Rule  gives an assignee  of a parties interest during the  pendency of the suit the option to apply for leave  to continue  the suit and is resorted to by an assignee when the assignee is  of the opinion that his interest would be better preserved  thereby.  There is no obligation on the assignee to come on  record.  Indeed, in Dhurandhar Prasad Singh Vs. Jai  Prakash University : (2001) 6 SCC 534,  this Court has held  that the prayer for leave could be made not only by the  assignee but also  by the assignor. The appellants, who were  the assignors in this case, were aware that they had assigned  their rights and liabilities in the suit properties to VMS.  They did  not choose to bring the fact of such assignment on record in the  pending suits. Furthermore, the suits were not being  "continued" but were being brought to an end as far as the  appellants were concerned.   For both these reasons, VMS’  choice not to apply for leave under Order 22 Rule 10 cannot be  construed as having been made with any ulterior motive to  defraud the appellants.   The pleadings of fraud in both the applications of the  appellants were in any event grossly inadequate.  Both the Trial  Court and the Division Bench have correctly held so.  In fact the  basic cause for which the  appellants initially came to the Court  was a non payment of amounts as specified under the  agreements by VMS.  We concur with the finding of the learned  Single Judge that the appellants could execute the decree for  the monies due under compromise decree dated 25th August  1993. Mere non-payment was certainly not supportive of  a  ground for setting aside the decree on the basis of an allegation  of fraud. The final submission of the appellants was that time for  payments under the agreements was of the essence.  But the  appellants themselves had never understood the agreements in  that manner. They had asked for payment much after the dates  had expired. As far as KK and Guneeta were concerned, in  their application made in 1995 what they had asked for was for  payments due in 1993. It was only as alternative that they had  pleaded for the decree to be set aside that too on the ground of  alleged contempt having been committed by VMS.  For the reasons stated, we are of the view that these  appeals m  ‘ust be, and they are hereby dismissed with costs.

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