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Civil Law
Order 43 Rule 1A of CPC
28-Apr-2025
Source: Supreme Court
Why in News?
A bench of Justice Vikarm Nath and Justice PB Varale held that Order XLIII Rule 1A of CPC does not create a new right to appeal, it merely enables an appellant already before the Appellate Court to attack the decree on the ground that compromise should not have been recorded.
- The Supreme Court held this in the case of Sakina Sultanali Sunesara (Momin) v. Shia Imami Ismaili Momin Jamat Samaj & Ors. (2025).
What was the Background of Sakina Sultanali Sunesara (Momin) v. Shia Imami Ismaili Momin Jamat Samaj & Ors. (2025) Case?
- Three parcels of land in Siddhpur originally belonged to Moosabhai Mooman and were inherited by his family members after his death.
- Various family members executed Powers of Attorney (PoAs), including one by Mumtaz in favor of Hassan Ali Lad in 2002, and a joint one in 2005 signed by the appellant, Salma, Altaf, and Noorbanu.
- In March 2007, Shaukat Ali and Hassan Ali agreed to sell a large portion of the land to ten individuals calling themselves "Shia Imami Ismaili Momin Jamat, Siddhpur" for ₹2.51 crore, with only ₹15 lakh paid upfront.
- The sale agreement was terminated in August 2011, and in January 2013, the surviving eight purchasers executed a deed cancelling the agreement.
- In 2013, several family members relinquished their interests in favor of the appellant, making her the sole recorded owner of the property.
- In August 2015, the appellant sold portions of the land through three registered sale deeds to Platinum Tradex Private Limited and four individuals.
- Later in 2015, Hassan Ali and some original vendees convinced Kurban Momin to revive the terminated transaction, leading to legal challenges against the appellant's ownership.
- Three civil suits were filed between January and November 2016, with two resulting in consent decrees based on compromises signed by Shaukat Ali and Hassan Ali without the appellant's knowledge.
- The appellant filed appeals against both consent decrees, claiming they were procured by fraud and without her notice.
- The High Court dismissed all appeals, ruling that a party must first invoke the proviso to Order XXIII Rule 3 before using Rule 1-A of Order XLIII of Civil Procedure Code, 1908 (CPC).
- The appellant has now filed a civil appeal, arguing that Section 96 of the CPC permits a direct First Appeal even when the compromise itself is disputed.
What were the Court’s Observations?
- The question that the Court aimed to answer in this judgment was whether a litigant who was already a party to the suit, yet contests the very fact or legality of a compromise embodied in a decree, is restricted to an application before the Trial Court under the proviso to Order XXIII Rule 3 or may, at her election, maintain a first appeal under Section 96 of the CPC notwithstanding Section 96(3).
- For this purpose the Court dived deep into the changes brought by Amendment Act of 104 of 1976 to the CPC. In 1976 the following changes were made:
- An order “recording or refusing to record” a compromise was no longer made appealable.
- Proviso and Explanation to Order XXIII Rule 3 – obliging the Trial Court to decide, forthwith and itself, any objection to the fact or lawfulness of a compromise
- Rule 3-A of Order XXIII – barring a separate suit to avoid a compromise decree
- Order XLIII Rule 1-A – permitting an appellant who is already in a competent appeal against a decree to contend that the compromise “should, or should not, have been recorded”
- Section 96(3) (as renumbered) – prohibiting an appeal from a decree “passed with the consent of parties”.
- The Court held that the interpretation of these provisions is quite clear and coherent. A party that accepts the compromise is bound by it and cannot appeal (Section 96(3)).
- A party that denies the compromise must first raise that dispute before the Trial Court (proviso to Order XXIII Rule 3).
- A fresh suit is no longer possible (Order XXIII Rule 3-A).
- If, and only if, the Trial Court decides the objection and passes a decree adverse to the objector, a first appeal lies under Section 96(1);
- in that appeal the appellant may, by virtue of Order XLIII Rule 1-A(2), challenge the recording of the compromise.
- In the case of Banwari Lal v. Chando Devi and another (1993) the Court held that the aggrieved party possesses two concurrent but sequential remedies:
- an application under the proviso to Order XXIII Rule 3 before the Trial Court; or
- a first appeal under Section 96(1) after the Trial Court has recorded its finding.
- The Court thus held that the path is clear that the proviso to Order XXIII Rule 3 of CPC is not optional, it is in fact a first port of call for any party on record that denies the compromise.
- Order XLIII Rule 1 A does not create a new right of appeal it merely enables the appellant already in appeal to attack the decree on the ground that the compromise should not have been recorded. Thus, when the fact is not disputed the bar of Section 96 (3) of CPC is absolute.
- Thus, the Court held that in the facts of the present case in view of the law laid down above the civil appeals fails and are dismissed.
What is Order 43 Rule 1A of CPC?
- The provision for compromise is provided for under Order XXIII Rule 3 of CPC.
- Order XXIII Rule 3 of CPC provides:
- When it is proven to the Court's satisfaction that a suit has been adjusted through a lawful written agreement or compromise signed by the parties, the Court must record this agreement.
- Similarly, if a defendant has satisfied the plaintiff regarding the whole or part of the subject matter of the suit, the Court must record this satisfaction.
- In either case, the Court shall pass a decree in accordance with the agreement, compromise, or satisfaction as it relates to the parties in the suit.
- This applies regardless of whether the subject matter of the agreement matches the subject matter of the original suit.
- The proviso provides that if one party alleges that an adjustment or satisfaction has been reached and the other party denies it, the Court is required to decide this question.
- No adjournment shall be granted specifically to decide this question unless the Court, for reasons it must record, believes such an adjournment is necessary.
- Order XXIII Rule 3 A of CPC provides:
- A plain reading of this provision indicates that the earlier suit should have been disposed of by passing a decree in view of a compromise entered into between the parties. In such a contingency, a subsequent suit raising a challenge that the compromise recorded in the earlier suit was not lawful would not lie.
- Further, Order XLIII Rule 1A of CPC provides:
- When an order is made against a party under the Code, followed by a judgment and decree against that party, the affected party may appeal against the decree.
- In such an appeal, the party may argue that the original order should not have been made and the judgment should not have been pronounced.
- When appealing against a decree that was passed after recording a compromise, the appellant can contest the decree by arguing that the compromise should not have been recorded.
- Similarly, when appealing against a decree that refused to record a compromise, the appellant can contest the decree by arguing that the compromise should have been recorded.
- This provision creates a mechanism for parties to challenge aspects of non-appealable orders by incorporating those challenges into appeals against the resulting decrees.
Civil Law
Order of Dismissal for Default and Res Judicata
28-Apr-2025
Source: Supreme Court
Why in News?
A bench of Justice JB Pardiwala and Justice R Mahadevan held that after dismissal of the suit for default under Order IX Rule 2 or 3, a fresh suit is not barred by res judicata
- The Supreme Court held this in the case of Rajeev Gupta & Ors v. Prashant Garg & Ors. (2025).
What was the Background of Amruddin Ansari (Dead) Through Lrs & Ors v. Afajal Ali & Ors. (2025) Case?
- The petitioners (original defendants) are challenging a judgment from the High Court of Chhattisgarh that allowed a Second Appeal filed by the respondents (original plaintiffs).
- The father of the original plaintiffs first filed Civil Suit No.37A/1996 seeking declaration, cancellation of sale deed, and permanent injunction, but this suit was dismissed under Order IX Rule 2 of the Civil Procedure Code, 1908 (CPC).
- An application to restore this suit was filed under Order IX Rule 4 but was dismissed, and this dismissal attained finality as it was not challenged further.
- Later, the original plaintiffs (legal heirs) filed a fresh suit (No.27A/2001) seeking the same reliefs as the previous suit.
- The Trial Court ruled in favor of the plaintiffs after considering seven issues, including ownership rights, validity of the sale deed, and applicability of res judicata.
- The original defendants appealed this decision to the District Court (First Appeal), which allowed their appeal and set aside the Trial Court's judgment.
- The plaintiffs then filed a Second Appeal to the High Court, which formulated three substantial questions of law relating to court fees, res judicata, and evidence regarding a relinquishment document.
- The High Court allowed the Second Appeal, answering all three questions in favor of the plaintiffs, thereby setting aside the First Appellate Court's judgment and restoring the Trial Court's decree.
- The original defendants have now approached the Supreme Court with the current petition challenging the High Court's decision.
What were the Court’s Observations?
- The two questions to be answered in this case were:
- Whether after the dismissal of the petition for restoration of suit under Order IX Rule 4 of the CPC a fresh suit is maintainable?
- Whether after dismissal of the suit for default, a fresh suit is barred by res judicata?
- With Respect to Issue (i):
- The Court held that a plain reading of Order IX Rule 4 of CPC does not bar filing of a fresh suit. The Court contrasted this with Order IX rule 9 of CPC.
- From the bare reading of two provisions i.e. Rule 4 and Rule 9 of Order IX it is clear that under Rule 4 the legislature has not precluded the plaintiff from filing a fresh suit on the same cause of action in the event the suit is dismissed under Rule 2 and Rule 3 of Order IX, whereas Rule 9 debars the plaintiff from filing a fresh suit in case the suit is dismissed.
- Further, teh Court held that it can be concluded that in case of dismissal of suit under Order IX Rule 4 of CPC the plaintiff has both the remedies of filing fresh suit or filing an application for restoration of suit.
- Both the above remedies are simultaneous and do not exclude each other.
- With Respect to Issue (ii):
- The Court discussed that the principle of res judicata is based on the maxim “nemo debet bis vexari pro una et eadem causa”, which means that no man shall be vexed twice for the same cause.
- According to this doctrine, an issue or a point once decided and attends finality, should not be allowed to be reopened and re-agitated in a subsequent suit. In other words, if an issue involved in a suit is finally adjudicated by a Court of competent jurisdiction, the same issue in a subsequent suit cannot be allowed to be re-agitated.
- It is, therefore, clear that for the application of principle of res judicata, there must be an adjudication of an issue in a suit by a court of competent jurisdiction.
- The Court then discussed as to what would constitute a decree or judgment.
- The Court observed that from a plain reading of the term “decree” it is manifestly clear that to constitute a decree, there must be a formal expression of an adjudication which conclusively determines the right of the parties with regard to all or any of the matters in controversy in the suit, but the decree shall not include any adjudication from which an appeal lies as an appeal from an order or any order of dismissal for default.
- It is, therefore, evidently clear that a dismissal of a suit or application for default particularly under Rule 2 or Rule 3 of Order IX of the C.P.C. is not the formal expression of an adjudication upon any right claimed or the defence set up in a suit.
- In view of the above the Court held that if a fresh suit is filed then such an order of dismissal shall not operate as res judicata.
- In view of the above facts the Court held that there are no good grounds to interfere with the judgment of the High Court and hence the petition in the facts of the present case failed.
What is an Order of Dismissal for Default?
- An order of dismissal for default can be passed in following circumstances:
- Order IX Rule 2 of CPC provides for dismissal of suit where summons not served in consequence of failure of plaintiff to pay costs:
- The court may dismiss a suit if on the fixed date it is found that summons has not been served on the defendant due to the plaintiff's failure to pay required court fees or postal charges.
- The court may also dismiss a suit if the plaintiff fails to present copies of the plaint as required by rule 9 of Order VII.
- However, the court cannot dismiss the suit under this provision if the defendant appears in person or through an authorized agent on the fixed date, despite the failure of service of summons.
- This rule provides a mechanism for courts to address procedural failures on the part of plaintiffs in the early stages of litigation.
- Order IX Rule 3 of CPC provides for dismissal of suit where neither party appears when the suit is called on for hearing.
- Order IX Rule 4 of CPC provides that the plaintiff may bring fresh suit or Court may restore suit to file:
- When a suit is dismissed under rule 2 or rule 3, the plaintiff has two options available as remedies.
- The plaintiff may file a fresh suit, subject to the applicable law of limitation.
- Alternatively, the plaintiff may apply to set aside the dismissal order by filing an application under this rule.
- If the plaintiff can demonstrate sufficient cause for the failure referred to in rule 2 (failing to pay court fees or provide plaint copies) or for non-appearance under rule 3, the court shall set aside the dismissal.
- Upon setting aside the dismissal, the court will appoint a new date for proceeding with the suit.
- This rule provides a mechanism for plaintiffs to revive suits that were dismissed on procedural grounds rather than on merits.
- Order IX Rule 2 of CPC provides for dismissal of suit where summons not served in consequence of failure of plaintiff to pay costs:
- Order IX Rule 8 of CPC provides for the procedure where only defendant appears:
- If the plaintiff fails to appear when the case is called for hearing, but the defendant appears, the court shall dismiss the suit.
- However, if the defendant admits the plaintiff's claim in full despite the plaintiff's absence, the court shall pass a decree against the defendant based on such admission.
- If the defendant admits only part of the claim, the court shall pass a decree against the defendant for the admitted portion.
- For any portion of the claim not admitted by the defendant, the court shall dismiss the suit.
- This rule addresses situations where the plaintiff abandons the proceedings while the defendant is ready to proceed, balancing judicial efficiency with the defendant's right to have admitted liability formally recognized.
- Further Section 2 (2) of CPC which defines decree provides that any order of dismissal for default does not fall under the definition of decree.
- Also, order of dismissal of a suit or application in default is also not appealable order as provided under Order XLIII of the C.P.C.
- Thus, it is clear that an order of dismissal of a suit or application in default under Rule 2 or Rule 3 of Order IX of the C.P.C. is neither an adjudication or a decree nor it is an appealable order.