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PETITIONER: JAYWANTRAJ PUNAMIYA & ORS.

       Vs.

RESPONDENT: M/S. H. CHOKSI & CO. PVT. LTD.

DATE OF JUDGMENT:       03/02/1997

BENCH: K. RAMASWAMY, G.T. NANAVATI

ACT:

HEADNOTE:

JUDGMENT:                          O R D E R      Leave granted.      This appeal  by special  leave arises from the judgment and order  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.      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 Mohanlal S. Mehta to sell 2 galas being  No.D/8 and  AB/14,  situate  at  Nandanvan  Co- operative Industrial  Estate Ltd.  at Thane." The High Court recorded the  finding that  it being a compromise contingent upon the  parties appointing  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 o refer the matter to a third party to settle their disputes, it can be enforced  under Order  XXIII, Rule  3, CPC. In support of his contention,  he relies  upon a decision of the Allahabad High Court in Mt. Akbari Begum vs. Rahmat Husain & Ors. [AIR 1973 Allahabad  861 F.B.].  He also relied upon the judgment of this  Court  in  Katikara  Chintamani  Dora  &  Ors.  vs. Guntreddi Annamnaidu & Ors. [(1974) 2 SCR 655]. Having given consideration to  the contention  of the 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.  Mehta, 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 equal shares  to the  parties. Shri  Sitaramaiah 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

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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  dependant  upon action of  third party,  i.e., making  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 question  in the 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   reciprocal      admissions would  therefore,  be  a      valid   agreement   between   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  and  they  have  matured      into    an     agreement,     their      conclusiveness  follows   from  the      principle of estoppel."      Equally, this Court in Katikana Chintamaani Dora’s case had to  consider the  point in  the context  of the  dispute having arisen between the parties how had agreed to abide by the  decision  of  the  court  on  the  question  whether  a particular village  notified  by  the  State  Government  is ‘estate’ within the meaning of Section 3(2)(d) of the Madras Estate  Lands   At,  1908   and  whether  the  decision  was appealable once  there was  a compromise.  In that  context, this Court  had misunderstood  the scope  of controversy and though a  part 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.      The appeal is accordingly dismissed. No costs.