SUPREME COURT OF INDIA
M.R. SHAH, B.V. NAGARATHNA, JJ.
Hemantha Kumar - Appellant
Versus
R. Mahadevaiah & Ors. - Respondents
Civil Appeal No. 4108 of 2022
Decided On : 11-07-2022
Fraud - Consent Decree - Order XXIII Rule 3 CPC - Lok Adalat - 18.08.2007 - 30.11.2020
Fact of the Case:
The plaintiff filed a suit for specific performance of an agreement. The trial court referred the matter to Lok Adalat, which passed a consent decree. The High Court set aside the consent decree on the ground of fraud.
Finding of the Court:
The High Court's decision to set aside the consent decree was based on doubt regarding the genuineness of the consent compromise and the events leading to the passing of the decree. The Supreme Court found no grounds for doubting the genuineness of the consent decree and held that the High Court erred in its observations.
Issues: The main issue was the genuineness of the consent decree and the alleged fraud in obtaining the decree.
Ratio Decidendi: The Court held that the mere referral of the matter to Lok Adalat by the trial court cannot be a ground to doubt the genuineness of the consent decree. The Court also emphasized that the High Court's observations regarding fraud were not based on any material and were not prima facie in nature.
Final Decision: The Supreme Court quashed the High Court's judgment and restored the consent decree passed by the trial court in the Lok Adalat.
JUDGMENT :
M.R. Shah, J.
1. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court of Karnataka at Bengaluru in Writ Petition No. 35073 of 2015 by which the High Court has set aside the consent decree passed in the Lok Adalat and consequently has restored the original suit, original plaintiff has preferred the present appeal.
2. The facts leading to the present appeal in a nutshell are as under:-
2.1 That the appellant herein – original plaintiff instituted Original Suit No. 94 of 2006 in the Court of learned Civil Judge (Sr. Dn.) at Kunigal for specific performance of the agreement to sell/contract. The suit originally was filed against three defendants, however, one of the defendants – defendant No. 3 came to be deleted by the plaintiff. The suit came up for hearing before the learned Trial Court on 18.08.2007. The plaintiff and the original defendant Nos. 1 and 2 submitted an application under Order XXIII Rule 3 CPC, in which it was stated that the parties have settled the dispute and it was requested to pass a consent decree. The defendant Nos. 1 and 2 admitted execution of the agreement to sell dated 26.04.2005 in favour of the plaintiff and also admitted receipt of Rs. 30,000/- towards the part sale consideration. In the application under Order XXIII Rule 3 CPC, it was specifically stated that the defendant Nos. 1 and 2 have received the remaining sale consideration amount of Rs. 70,000/- from the plaintiff. Therefore, it was requested to pass the decree as prayed for in the suit as well as in terms of the compromise petition.
2.2 The said consent compromise/compromise deed/compromise petition was signed by the Advocates for the respective parties. However, instead of decreeing the suit passing a consent decree though requested, the learned Trial Court referred the matter to Lok Adalat. Before the Lok Adalat, which was presided over by the very learned Civil Judge (Sr. Dn.), Kunigal, the Advocates for the plaintiff as well as the original defendant Nos. 1 and 2 remained present and prayed to pass a consent decree as per the application under Order XXIII Rule 3 CPC. Consequently, by judgment and decree dated 27.08.2007, the learned Trial Court passed the consent decree.
2.3 That thereafter the original plaintiff filed the Execution Petition No. 88 of 2013 to execute the consent decree and for seeking execution of the sale deed in his favour. That thereafter, the defendant Nos. 1 and 2 filed the writ petition before the High Court being Writ Petition No. 35073 of 2015 challenging the consent decree passed by the Court of Lok Adalat on the ground that the consent decree was obtained by fraud.
2.4 By the impugned judgment and order, the learned Single of the High Court has allowed the said writ petition and set aside the consent decree passed by the learned Trial Court passed in the Lok Adalat. This is mainly on the ground that looking to the compromise amongst the parties and the dates and events, prima facie it is evident that counsel for the plaintiff must have mislead the Trial Court in obtaining the decree on 18.8.2007 while referring the matter to Lok-Adalat r/w the compromise and drawing up of decree. By observing so, the High Court has set aside the consent decree passed by the learned Trial Court passed in the Lok Adalat and directed to restore the original suit to the file and the learned Trial Court has directed to re-commence the proceedings from the date of referring the matter to the Lok Adalat.
2.5 Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court, the original plaintiff has preferred the present appeal.
3. Learned counsel appearing on behalf of the appellant – original plaintiff has vehemently submitted that in fact the plaintiff and the defendant Nos. 1 and 2 jointly submitted the application under Order XXIII Rule 3 CPC before the learned Trial Court and requested the learned Trial Court to pass a consent decree. It is submitted
AI
The genuineness of a consent decree cannot be doubted solely based on the referral of the matter to Lok Adalat, and allegations of fraud must be substantiated with evidence.
(1) Compromise of suit – To recall a compromise that has been recorded would call for strong reasons. Terms of a compromise decree cannot be avoided, unless allegation of fraud has been proved.(2) Wh....
An appeal against a consent decree is barred under Section 96(3) of the CPC; aggrieved parties must contest the decree's validity in the same court that issued it.
(1) When fraud is alleged same is required to be pleaded and established by leading evidence. Mere allegation that there was a fraud is not sufficient.(2) Where any immovable property has been sold i....
A writ petition challenging a compromise decree entered before Lok Adalat by non-impleaded necessary parties is maintainable due to allegations of fraud and procedural irregularity.
Challenges to compromise decrees based on fraud must be made in the court that issued the decree, and such allegations require substantial proof.
Objection to execution of decree – Statutory finality attached to Lok Adalat award leaves no room for appellate or plenary civil remedy against the award treated as a decree – Award may be executed a....
Lok Adalat compromise decrees, though final under Section 21, can be set aside in writ jurisdiction if vitiated by fraud like non-service of summons and misrepresentation to illiterate disabled party....
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