JAMMU AND KASHMIR BANK LTD Vs. PACKART

JUDGEMENT

(1.) In a suit for the recovery of Rs. 19,12,174.38 pending in this Court from 10-11-1987, defendants 1 and 2 filed this Civil Misc. Petition on 3-5-1989 under O. XXIII R. 3, C.P.C. for deciding the case in terms of the compromise allegedly entered into between the parties. It is submitted that during the pendency of the suit the defendants approached the plaintiff for adjustment of the suit outside the court and offered them that some of the partners of defendant No. 1 may be allowed to retire so that defendant No. 2 becomes the sole proprietor of the concern of defendant No. 1 and that defendant No. 2 may be permitted to make available better surety for the money payable to the plaintiff and that the unit of defendant No. 1 be rehabilitated by re-scheduling the payments which are to be made by the defendants. The request of the defendant is stated to have come up for consideration before the board of Directors of the plaintiff-Bank on 10-5-1988 wherein it was resolved to accept the offer of the defendants. It is submitted that after the decision of the board of directors of the plaintiff bank dated 10-5-1988, lower func-tionaries of the bank sought legal advice for implementation of the decision of the board of directors and the legal advisor of the bank vide his letter dated 14-7-1988 opined that on the day when the compromise decree is to be obtained from the court in the suit if Shri Magotra furnishes sound security/guarantee in favour of the bank for the outstanding amount then the bank shall agree to the schedule for repayment of the outstanding amounts due in three accounts including the costs and interest thereon. The re-schedule can be fixed amicably by the bank and Shri Magotra. It is submitted that on receipt of the letter the defendants under the overall super-vision of the plaintiff bank got the partner-ship of defendant No. 1 dissolved and as required by the Board of Directors of the plaintiff-bank and other functionaries, de-fendant No. 2 became the sole proprietor of defendant No. 2. The defendant further offered fresh security to the bank as was required. The Chief Manager (Advances), Central Officer, however, vide his letter dated 23-1-1989 directed defendant No. 2 to furnish better securities than the existing ones so that compromise is fully implemented. It is sub-mitted that defendant No. 2 furnished better securities on 31-3-1989 and complied with all the requirements of law and the decision of the Board of Directors. It is submitted that the suit between the parties stands compromised and settled on the following terms :

(2.) In the objections filed on behalf of the plaintiff-bank it is submitted that the applica-tion of the plaintiff was misconceived and mala fide in nature filed with a view to get adjournment from the Court for filing the written statement. No compromise or settle-ment was ever finalised between the parties justifying to filing of the application. It is admitted that defendant No. 1 approached the plaintiff-bank for the re-schedule of the loan amount on the condition precedent for the grant of said request of the defendants could not be satisfied by them with the result that no settlement was finally arrived at between the parties which could be made a basis for any compromise decree in the Court. The very fact that certain compromise talks had taken place between the parties for finalising a settlement did not amount to be the composition of the suit. It is submitted that the provisions of O. XXIII R. 4, C.P.C. were inapplicable to the situation like the present and it is prayed that the application of defendants 1 and 2 be dismissed.

(3.) I have heard learned counsel for the parties and perused the record. Rule 3 of Order XXIII C.P.C. provides :