P L D 1979 Karachi 620 (PLP)

The learned Advocate for the defendant has filed an application under Order XXIII, rule 3 read with section 151, C. P. C. for recording the compromise contained therein. The applicant states that parties have com promised the suit out of Court whereby the plaintiff has received a sum of Rs. 18,237 from the defendant in full and final settlement of his claim in the suit and that he has no claim against the defendant or its owner and that the parties shall bear their own costs and the ship be released from the arrest. According to the learned Advocate for the defendant the applica tion is signed only by the Master of m. v. Hannan the defendant and Mr. Mustafa Lakhani Advocate for the defendant. The plaintiff has refused to sign the application although according to the defendant he has received a sum of Rs. 18,237 on account of salary for the period from 24‑8‑1977 to May 1978 and the court‑fee in full and final settlement of the claim in the suit, and his Advocate has received Rs. 750 on account of his professional fee. The defendant has produced a receipt for Rs. 18.237 purporting to have been signed by the plaintiff in support of her claim that the suit has been compromised and the plaintiff has received the aforesaid amount in full and final settlement of the claim in suit. The receipt reads as follows :‑ "Received a sum of Rs. 18,237 ($‑ 1824) for salary and court‑fee from m. v. Hannan (Ahmed Bin Saleem, the owner of ship) for the period from 24‑8‑77 to May, 1978 with respect to full and final settlement in Admiralty Suit No. 908/78. " When the plaintiff was confronted with the receipt a photo stat copy whereof has been placed on record, he admitted its execution. The learned Advocate for the plaintiff also admits to have received Rs. 759 from the defendant. However, what the plaintiff pleads is that the defendant has agreed to re‑employ him on the vessel which agreement has not been fulfilled and accordingly the suit has not been wholly adjusted and therefore, the compromise cannot be recorded. Mr. Mustafa Lakhani Advocate states that the plaintiff continues to be in the service of the defendant and he has been signed off as yet. In this view of the matter the question of his re‑employment does not arise. But in reply the learned counsel for the plaintiff states that the plaintiff was to be employed for further period and that the defendant has yet to execute an agreement of service. On my questioning the plaintiff stated that period for which he was employed has not been agreed to. He further states that the terms on which be was to be further employed were also not settled. Under the provisions of rule 3 of Order XXIII, C. P.. C. he is bound to record an agreement, compromise, or satisfaction where it is proved to its satisfaction that the suit has been adjusted wholly or in partly by and lawful agreement or compromise, or where the defend4nt satisfies the plaintiff in respect of the whole or any part of the subject‑matter of the suit, for such an agreement or compromise need not be in writing, or if in writing, it is not necessary that it should be signed by both parties for an oral agreement for consideration is as much enforceble in law as a written agreement and further for recording such an agreement or compromise, it is not necessary that the agreement or the compromise should be embodied in a document signed by all the parties, even an oral agreement or compromise would come within the rule. If any precedent is needed reference can be had to Putto Lai v. His Highness Maharaja Dhiraj Sumersinghji of Kishengarh (A I R 1963 Raj. 63) wherein Modi, J. while sitting in D. B., observed at page 66, paragraph 12 of the report as under :‑-- "It is true that it is best if a compromise is embodied with all its terms in a document signed by all the parties and then a petition is filed to record the compromise and to pass a decree in terms thereof. But it would be going too far to hold that it is only compromise of this type which fall within the ambit of Order XXIII, rule 3 and which alone can be made the foundation of a decree. Strictly speaking, even an oral compromise would be enough to attract the provisions of the rule m question though it may be difficult to prove it in actual practice. Again, even if there is a document embodying the terms of a compromise and none of the parties has affixed his signatures to it, it would still be open to any of the parties to prove that a compromise had in fact been arrived at the terms embodied in the unsigned document and claim a decree on the footing thereof. See M. Hasnain v. Yousuf Hussain A I R 1956 All. 121 and Athappa v. Periasam A I R 1956 Mad. 344 the true rule, in our opinion, is that we must look to the substance of the matter and not to its shadow." However, the Court must find, whenever there is a dispute between the parties whether the agreement or the compromise has really been arrived at or not. Without this finding it will be impossible for the Court to record an agreement or a compromise, much less to pass a decree in accordance therewith. The whole purpose of rule 3 will be lost if the Court is deprived of the power to decide whether the agreement or the compromise pleaded by party has been reached or not. If it is held that the Court is not possessed of that power, it will enable any dishonest litigant to get away from an agreement or a compromise reached by him freely and lawfully merely be pleading that he had not done so. That could never be the intention of the Legislature. In the present case none of the parties has gone into the witness‑box. The plaintiff has not filed any counter‑affidavit denying the factum of entering into the compromise pleaded by the defendant. On the contrary, the plaintiff had admitted the execution of the receipt reproduced hereinabove in extenso which clearly proves the compromise. His Advocate also admitted at the Bar to have received Rs. 750 on account of his professional fee fro the defendant although it has not been so pleaded in the application under Order XXIII rule 3, C. P. C. Now, I would consider the agreement allegedly entered into by the defendant with the plaintiff that the defendant had agreed to re‑employ him for further period and on such terms as may be agreed upon, for such an agreement, if not otherwise invalid for any reasons, would also form part of the compromise and under Order XXIII, rule 3, C. P. C. as stated earlier, it is encumbent upon the Court before it proceeds to record the agreement or the compromise and pass a decree in accordance therewith, to be satisfied that the agreement or the compromise pleaded by any party has in fact been reached or not. Now, considering the pleas of the plaintiff firstly, I find no mention of any such agreement in the receipt admittedly executed by the plaintiff. He has not even proved the alleged agreement either by an affidavit or otherwise. On the contrary, the receipt executed by the plaintiff shows that the amount has been received in fu and final settlement of the claim in suit. Secondly the advocate for the defendant has stated at the Bar that the plaintiff continues to remain in the service of the defendant and his services have not been terminated. The was not denied by the plaintiff. Lastly, even if such an agreement was reached it would be hit by the rule of uncertainty and would not be enforce able for admittedly no period of further employment and the terms on which the plaintiff was to be further employed were agreed upon or settled. I, therefore, hold that the plaintiff has failed to prove' the agreement, which is even otherwise invalid. I would, therefore, record the compromise as pleaded by the defendant and also the satisfaction of the claim of the plaintiff in this suit. The vessel shall be released if not arrested in any other suit. S. A. H.