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2020 Supreme(SC) 366

A.M.KHANWILKAR, AJAY RASTOGI
TRILOKI NATH SINGH – Appellant
Versus
ANIRUDH SINGH(D) THR. LRS – Respondent


Advocates Appeared:
For the Appellant(s) :S. K. Bhattacharya, Advocate

Judgement Key Points

What is the maintainability of a suit filed by a stranger to the proceedings seeking a declaration that a compromise decree is illegal, inoperative, and obtained by fraud? What are the rights of a party who was not a party to a compromise decree but claims rights through a predecessor in relation to challenging the validity of that decree? What is the bar under Order 23 Rule 3A of the Civil Procedure Code regarding instituting a suit to set aside a decree based on an unlawful compromise?

Key Points: - The scheme of Order 23 Rule 3 CPC is to avoid multiplicity of litigation and permit parties to amicably come to a lawful, written, and voluntary settlement. (!) (!) - Rule 3A of Order 23 CPC creates a specific bar that no suit shall lie to set aside a decree on the ground that the compromise on which the decree is based was not lawful. (!) (!) (!) - After the amendment, neither an appeal against the order recording a compromise nor a remedy by way of filing a separate suit is available for cases covered by Rule 3A. (!) (!) - A stranger to the compromise proceedings cannot question the validity of the decree in a separate suit and can only claim through their predecessor to the extent of rights available to that predecessor. (!) (!) - The only remedy available to challenge a compromise decree is to approach the court that recorded the compromise via an application under the proviso to Rule 3 of Order 23 CPC, not by filing a suit. (!) (!) - Section 96(3) CPC does not bar an appeal where a party contests the recording of the compromise itself, as this falls under the exception provided in Order 43 Rule 1A(2). (!) (!) - The compromise decree is final and binding unless set aside by the court that passed it on an application challenging the existence of a valid compromise. (!) (!) - In the present case, the appellant's suit to declare the compromise decree fraudulent was not maintainable because the appellant was not a party to the decree and was barred by Rule 3A. (!) (!) - The appellant could potentially seek relief against the predecessor (Sampatiya) for protection of rights devolved via the sale deed, but could not challenge the High Court's compromise decree directly. (!) (!) - The appeal was dismissed as the suit was instituted in 1995 and the findings against the appellant were based on concurrent findings of lower courts regarding the validity of the sale deed. (!)

What is the maintainability of a suit filed by a stranger to the proceedings seeking a declaration that a compromise decree is illegal, inoperative, and obtained by fraud?

What are the rights of a party who was not a party to a compromise decree but claims rights through a predecessor in relation to challenging the validity of that decree?

What is the bar under Order 23 Rule 3A of the Civil Procedure Code regarding instituting a suit to set aside a decree based on an unlawful compromise?


JUDGMENT

Ajay Rastogi, J.

1. The question arises in the appeal for our consideration is as to whether the decree passed on a compromise can be challenged by the stranger to the proceedings in a separate suit.

2. The seminal facts which are relevant for the present purpose and the circumstances in which it arises for our consideration are that the appellantplaintiff filed suit before 4th subjudge, Chapra seeking a declaration that the compromise decree dated 15th September, 1994 passed in Second Appeal No. 495/86 by the High Court is illegal, inoperative and obtained by fraud and misrepresentation and also prayed for injunction against the respondents­defendants restraining them from entering into peaceful possession of the suit property.

3. The case in shorn of the appellant­plaintiff is that the land described in Schedule 1 of the plaint originally belonged to Lakhan Singh who died leaving behind three sons, namely, Din Dayal Singh, Jalim Singh and Kunjan Singh. Din Dayal Singh is said to have died issueless during lifetime of his father and his other brother, namely, Jalim Singh also died leaving behind a son Ram Nath Singh and two daughters Sampatiya and Soniya. As regards the third


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