No separate suit to question a compromise decree
No fresh or separate suit can be filed to set aside a decree, which was passed by a court on compromise between the parties of a suit, on the ground that the compromise was not based on free consent or lawful. The only remedy available to the party is to approach the court which recorded the compromise.
The Supreme Court (SC) reiterated the aforesaid position in R.Jankiammal v S.K.Kumaraswamy (D) Thr.Lrs.( 2021 SAR (Civ) 737) based on a few judgements in the past.
Court cannot record a voidable agreement
The Order 23 Rule 3 of the Civil Procedure Code, 1973 (CPC) makes it clear that the court cannot record an agreement or compromise which is void or voidable. If such a compromise is recorded, the court which recorded the compromise alone can decide the question of lawful nature of the compromise, when it is challenged by a party to the suit.
A contract without free consent is voidable
A conjoint reading of the Sections 10, 13 & 14 of the Contract Act, 1882 indicates that when consent is obtained by coercion, undue influence, fraud, misrepresentation, or mistake, such consent is not free consent and the contract arrived at without free consent is voidable at the option of the party whose consent was caused due to coercion, fraud or misrepresentation.
An agreement which is void or voidable shall not be lawful agreement as per Order 23 Rule 3 of CPC.
Other case laws on this issue
In Banwari Lal v Chando Devi (Dead) Through LRs & Anr [ (1993) 1 SCC 581] the SC considered the issue in the light of Order 23 Rules 3 & 3A of CPC.
The judgement says that the object of the rules appears to be to compel the party challenging the compromise only before the court which recorded it. The court has to decide whether the compromise arrived at by the parties and recorded by it, was a lawful one or not.
In Pushpa Devi Bhagat (D) Through LR Sadhna Rai v Rajinder Singh & Ors [(2006) 5 SCC 566] the SC reiterates the position and states as follows:
- No appeal is maintainable against a consent decree (Section 96(3) of CPC)
- No appeal is maintainable against an order of the court recording a compromise (in view of the deletion of clause (m), of the Order 43, R1 of CPC). The aggrieved party can however take the point in an appeal against the decree.
- No independent suit can be filed for setting aside a compromise decree on the ground that the compromise was not lawful (Order 23 R 3A of CPC)
- A consent decree operates as an estoppel. It is valid and binding unless it is set aside by the court which passed the consent decree, by an application under Order 23 R 3 of CPC.
The SC in R Rajanna v S R Ventakataswamy & Ors [(2014) 15 SCC 471] the same issue was considered.
The court says that in every case where the question arises whether or not there has been a lawful agreement or compromise in writing and signed by the parties, the question whether the agreement or compromise is lawful has to be determined by the court concerned.
The Order 23 Rule 3A clearly prohibits a fresh suit to set aside a decree on the ground that the compromise on which the decree is based was not lawful. The court which recorded the compromise and issued the decree alone can examine and determine whether the compromise was lawful or not.
In Triloki Nath Singh v Anirudh Singh(D) Through LRs & Ors [ (2020) 6 SCC 629] the SC reiterates that by introducing O 23 R 3A of CPC the legislature creates a bar to institute a fresh suit to set aside a consent decree on ground that the compromise was not lawful.
Conclusion
In short, the party to a consent decree which was issued by the court based on a compromise between parties to the case, can challenge the decree, on the ground that the compromise was not lawful, only in the court which recorded the compromise.
Such a decree cannot be questioned in a separate suit or by an appeal in the appellate court.
