ANIL MADHAVDAS AHUJA Vs. MARVEL FRAGRANCES PVT. LTD.

JUDGEMENT

(1.) This is a Notice of Motion filed by Defendants Nos 2 to 6 to the suit. It seeks that the Court do record that the suit has been adjusted wholly by an agreement between the parties and that there has been a compromise, for a decree in those terms and a consequent dismissal of the suit. The submission made by Mr. Jain, learned Advocate for Defendants Nos. 2 to 6, is that under the provisions of Order 23 Rule 3 of the Code of Civil Procedure, 1908 ("CPC"), where it is proved to the satisfaction of the Court that there exists such an adjustment either in whole or in part by means of lawful agreement or compromise, the Court must order that agreement or compromise to be recorded and must pass a decree. He invites attention to Order 23 Rule 3:

(2.) Mr. Jain's submission is that this rule is in two parts. The first speaks of a situation where the existence of a lawful agreement that has the effect of an complete or partial adjustment of the suit is proved or established to the satisfaction of the Court. The second is where the applicants satisfy the plaintiff in respect of the whole or on part of the subject matter of the Suit. When either two of these eventualities occur, the Court must record that agreement or compromise and decree the suit in those terms. Crucial to this submission are the last two lines which say that such an order must be made even if the subject matter of the agreement, compromise, or satisfaction is not the same as the subject matter of the Suit.

(3.) The error in Mr. Jain formulation is, I think, in equating the second part in first. In the first part of Order 23 Rule 3, it is the Court that must be satisfied as to the existence of such adjustment, whole or partial. The second part of Order 23 Rule 3 requires the plaintiff's claim to have been satisfied in whole or in part. These are two different things. Mr. Jain's submission falls under the first part, not the second; for, according to him, there are, post-suit, several agreements in writing that have the effect of adjusting the suit. The proviso says that where there is dispute as to the adjustment, the Court must decide the question (i.e., whether or not there is an adjustment) and cannot adjourn a decision on that question without recording reasons. Now the first part of the rule itself has two implicit components. The applicant seeking an order under the rule must show (a) the existence of a lawful agreement or compromise in writing and signed by the parties concerned; (b) that this lawful agreement has the effect of adjusting the plaintiff's claim in suit; and (c) that the agreement or compromise has been effected and implemented, resulting in an adjustment of the suit. All three must be shown; it is not enough to show only one or even two of these essential ingredients.