Parvathiyammai vs Sivathanu Pillai and Others

N. Krishnaswami Reddy, J.—This appeal has been filed by Parvathiyammai, the third defendant in O.S. No. 10 of 1123(1947) against the

order of the Subordinate Judge, of Nagercoil, dismissing the application E.A. No. 230 of 1968 which was filed for assessment of the value of

improvements in item 1 and for assessing the mesne profits regarding item 2 of the suit properties u/s 5, Clauses 1 and 3 of the Trayancore-Cochin

Compensation for Tenants Improvements Act, 1956.

To appreciate the contentions raised by the appellant, it is necessary to state briefly the relevant facts: Items 1 and 2 of the suit property belong

to a village trust founded in the name of the Sasta temple of Eathamozhy Village. Item 1 is about 161/2 acres of waste land and item 2 is a building

site. Item 1 was originally a waste land full of wild growth. In 1112 M.E. (1936), the trusteeshad entrusted the property to the defendant

Arumukam Pillai for improving the said property by converting it into garden land or paddy land. The said Arumukam Pillai spent a considerable

amount for reclamation and planted trees such as coconuts, mangoes, cashew etc., and he also constructed buildings in the property for

accommodating the watchmen. He was enjoying the usufructs of the property in lieu of reclamation and improvements so made by him on the land.

In the year, 1123 M.E. (1947), the trustees filed a suit O.S. No. 10 of 1123 against Arumukam Pillai for recovery of items 1 and 2 on the file of

the Subordinate Judge, Nagercoil. The suit was compromised and a compromise petition was filed embodying the terms of the compromise. The

suit was decreed, in terms of the compromise. By the terms of the said compromise, Arumukam Pillai was entitled to continue to be in possession

and enjoyment of the properties in lieu of the improvements made by him on the property without paying any amount to the trust and he should

deliver possession of the properties with all the improvements made by him without any objection whatsoever, excepting the standing crops on 1st

December, i960. It was also provided in the compiomise that he shall not make any further improvements, and the plaintifts would not be liable for

such improvements made by the defendant Arumukam Pillai. The defendant, did not deliver possession of the properties on 1st December, i960 as

per the terms of the compromise. The plaintiffs filed E. P. No. 47 of 1961, against the defendant. It was contended by the defendant that the

compromise decree was not executable, that the plaintifts had not allowed the defendant to enjoy item No. 2 and that the defendant was entitled to

the value of improvements under the Travancore-Cochin Compensation for Tenants Improvements Act, (X of 1956). The learned Subordinate

Judge held that the compromise decree was not executable as the entire terms of the compromise were not recorded in the decree. He further held

that item 2 was not put in possession of the defendant and that the compromise was not given full effect. Against the order of the Subordinate

Judge, the plaintiffs preferred an appeal before the District Judge. The District Judge held that the compromise decree was executable and

remanded the petition to the Subordinate Judge for the purpose of making enquiry under Sections 5 and 8 of Act X of 1956 for the assessment of

the value of improvements and to give a finding about the claim made by the defendant for improvements subsequent to the date of the

compromise decree or for revaluation of any improvements already valued to the extent to which the defendant was entitled to make any such

claim u/s 5(3) of the said Act.

Against the judgment and order made by the District Judge, Kanyakumari, the defendant filed an appeal to this Court and this Court confirmed

the order of remand made by the District Judge and dismissed the appeal.

The learned Subordinate Judge of Nagercoil, after the judgment of this Court confirming the order of the District Judge, took up the matter for

enquiry. While the enquiry was pending, Arumukam Pillai died and his legal representatives were impleaded. The present appellant Parvathiyammai

was impleaded as one of the legal representatives and as third defendant.

Several contentions were raised by the defendants before the Subordinate Judge. The main contention which was raised before the Subordinate

Judge was that the defendants were entitled to the value of improvements made by them in respect of item 1 of the suit property, that item 2 was

not handed over to the defendants as per the terms of the compromise and that, therefore, the defendants were entitled to Rs. 6,4oo as

compensation. The learned Subordinate Judge held that according to the terms of the compromise, the defendants were not entitled to the value of

improvements in respect of item 1 and that the defendants were not entitled to mesne profits in respect of item 2 as, according to the learned judge,

it was clear from the evidence that Arumukam Pillai was put in possession of item 2 also. On this view the learned Judge took, he did not go into

the question of assessment of improvements made in respect of item 1 or the mesne profits in respect of item 2. This appeal has been preferred by

the third defendant against the said order of the learned Subordinate Judge.

It is contended by Sri Parasaran, the learned Counsel for the appellant that by virtue of Section 17 of the Travancore-Cochin Compensation for

Tenants Improvements Act, 1956 (hereinafter called ''the Act"") the appellant would be entitled to make improvements as a tenant and to claim

compensation for them in spite of the contract between the appellant''s predecessor Arumukam Pillai and the plaintiffs. The learned Counsel further

contended that the learned Subordinate Judge did not comply with the directions made by the District Judge directing the learned Subordinate

Judge to assess the value of the improvements made by Arumukam Pillai under the provisions of the Act.

To appreciate the first contention raised by the learned Counsel, it is necessary to consider the scope and effect of Section 17 of the Act, which

is as follows:

Contracts affecting compensation for improvements to be invalid. Nothing in any contract entered into before the commencement of this Act shall

take away or limit the right of a tenant to make improvements and to claim compensation for them in accordance with the provisions of this Act:

Provided that nothing herein contained shall affect any agreement in writing registered and made after the effecting of the improvements settling the

amount of compensation due therefore at the date of such agreement:

Provided further that this section shall not operate against any contract whereby the tenant''s right to make improvements in the nature of buildings

or to claim value of improvements therefore has been taken away or limited.

The purport of this section is that any contract subsisting before the commencement of the Act shall not take away the right of the tenant to make

improvements and to claim compensation for them This Act came into force on 31st October, 1966. In this case, the contract was entered

between the parties by way of a compromise in O.S. No. 10 of 1123 (1947) on the file of the Subordinate Judge, Nagercoil, in 1947, long before

the Act came into force. We have already observed that there was a decree by the Court in terms of the compromise. By virtue of the compromise

decree, the tenant namely, Arumukam Pillai was prohibited from making any improvements subsequent to the date of the compromise decree and

even if he had made improvements in spite of the prohibition, he was not entitled to any compensation. This compromise between the parties has

certainly taken away the right of the tenant making improvements in the property. The question is whether the contract between the parties, namely,

the compromise memo, filed by the parties in Court subsisted or was in force before the commencement of this Act. The compromise entered into

between the parties was not one which was made outside the Court. The parties had agreed for a decree in terms of the compromise. Once the

decree has been passed by the Court in terms of the compromise, the compromise merges in the decree of the Court and it loses its identity as a

compromise or contract immediately after the passing of the decree. The decree becomes executable where a; the compromise or the contract

without a decree is not executable. Once a decree has been passed in terms of the compromise, the parties to the compromise are bound by the

decree and not by the terms of the compromise. I am, therefore, of the view that before the commencement of the Act, there was no subsisting

contract between the parties. The appellant cannot claim the benefits provided u/s 17 of the Act as there was no subsisting contract before the

commencement of the Act.

The learned Counsel for the appellant relied on a decision of the Supreme Court in Pulavarthi Venkata Subba Rao and Others Vs. Valluri

Jagannadha Rao and Others, . He relied upon the following passage in the said decision:

A compromise decree is not a decision by the Court. It is the acceptance by the Court of something to which the parties had agreed. A

compromise decree merely sets the seal of the Court on the agreement of the parties. The Court does not decide anything. Nor can it be said that

a decision of the Court was implicit in it. Only a decision by the Court can be res judicata, whether statutory u/s 11 of the Cede of Civil Procedure,

or constructive as a matter of public policy on which the entire doctrine rests. Such a decree cannot strictly be regarded as a decision on a matter

which was heard and finally decided and cannot operate as res judicata. Such a decree might create an estoppel by conduct between the parties,

but such an estoppel must be specifically pleaded.

This passage may not be of any use for the contention raised by the learned Counsel for the appellant. In considering the scope and the extent of

the principle of res judicata in contrast to the principle of estoppel, the Supreme Court had made the observation that a decree passed in terms of a

compromise is next a decision of the Court after contest and, therefore, the principle of res judicata will not apply; but, however, the principle cf

estoppel may apply in a case where such estoppel has been specifically pleaded.

But the problem in the present case is different. The question which we have to consider in this case is whether the comprmoise subsists

between the parties after the decree was passed by the Court in terms of the compromise. In the same decision, the Supreme Court has stated that

no distinction can be made between decrees passed after contest and decrees passed en compromise and both the kinds of decrees are

amendable and executable. The latter observation supports the view that once a decree is passed, whether after contest or in terms of a

compromise, such a decree is an act of the Court and the parties are bound by the decree and not by the compromise.

The learned Counsel also relied upon the decision in Raja Kumara Venkata Perumal Raja Bahadur v. Thatha Rama swamy Chetty ILR (1913)

Mad. 75. In that case, a Division Bench consisting of Benson and Sundara Ayyar, JJ, made the following observation:

The basis of a compromise decree is a contract between the parties to the litigation and the principles applicable to contracts would often have to

be considered in determining the rules of estoppel applicable to such decrees; at the same time such a decree cannot be regarded as a mere

contract, and has got a sanction far higher than an agreement between the parties. The parties to the decree cannot therefore put an end to it at

their pleasure in the manner that they could rescind a mere contract. Nor can it be impeached on some grounds on which a mere contract could be

impeached such as absence of consideration or mistake.

This passage far from supporting the case of the appellant, tends to the view that a decree passed on the basis of a compromise is something higher

than the compromise itself as the parties to a compromise or contract get sanction by virtue of a decree of the Court and such a decree cannot be

rescinded at their pleasure in the manner that they could rescind a mere contract. It is clear from this decision that once a decree is passed On a

compromise, though the terms of the decree based on the compromise can be looked into on a question of estoppel, the parties are bound by the

decree and not by the compromise or the contract. On the first contention, I hold that as there was no subsisting contract before the Travancore-

Cochin Compensation for Tenants Improvements Act, 1956 came into force, the appellant will not be entitled to get the benefit of the provisions of

the said Act.

In respect of the second contention that item 2 was not handed over to the appellant as per the terms of the compromise decree and that,

therefore, he was entitled to Rs. 6,400 as compensation, the lower Court held on the evidence and the materials available before it that item 2 was

also handed Over to the appellant. I do not find any reason to interfere with the finding of the lower Court based On facts and the evidence. The

learned Council for the appellant also contended that the learned Subordinate Judge must have complied with the direction made by the District

Judge while ordering the remand for fresh disposal that the Subordinate Judge should go into the question of assessing the value of improvements.

A careful perusal of the judgment of the learned District Judge doe? not show that such a direction was given to the lower Court. What the learned

District Judge has stated is this:

As it is necessary that the Court should give a finding about the claim made by the defendant for improvements made subsequent to the date of the

compromise decree or for the revaluation of any improvement already valued to the extent to which he is entitled to make any such claim u/s 5 (3)

of the Act, these petitions are remanded to the lower Court for further enquiry.

After having held that the compromise decree was executable and reversing the judgment of the lower Court which held that it was not executable,

he remanded the matter to the lower Court for further proceedings. The learned District Judge did not give a finding that the appellant was entitled

to claim the value of improvements made by him subsequent to the date of the compromise decree. This point was left open. The learned

Subordinate Judge, after the matter was remanded to him for further enquiry, held that the appellant Was not entitled to claim the value of the

improvements made subsequent to the date of the compromise decree and, therefore, there was no necessity for him to make an enquiry in respect

of the value of the said improvements. In the result, I find no substance in this appeal.

The appeal is dismissed. No costs.