A compromise decree, once approved by the court, becomes binding on the parties until set aside in a proper proceeding, and must be enforced despite containing a term opposed to law or public policy.

CHANDRASHEKHAR, J.

( 1 ) THIS Letters Patent Appeal is from the decision of Hegde. J. who has granted leave to appeal under clause 15 of the Letters Patent on the ground that there is conflict of judicial opinion on the following question that arises in the appeal: where a compromises decree passed by a Court of competent jurisdiction contains a term which is opposed to law or public policy, and that decree has not been set aside in proper proceedings, can that decree be pleaded as constituting estoppel by res judicata in a subsequent proceeding between the same parties.

( 2 ) THE facts of the case have been fully set out in the judgment of the learned Judge and it is sufficient to state them briefly here. Land bearing S. No. 188 in Dyaberi village belonged to the plaintiff's uncle, Piraji, who had mortgaged the whole of that land. Subsequently he sold a portion of it bearing S. No. 188/2, to the plaintiff for Rs. 700/- under Exhibit 60 dated 12-9-1939. As Piraji failed to pay the mortgage debt in accordance with the directions of the decree in C. S. No. 133 of 1938 between him and the mortgagee, the Court transferred the decree to the collector for sale of the mortgaged property.

( 3 ) DURING the pendency of the Darkhast before the Collector, Piraji sold other portions of S. No. 188 to two other persons through one of whom the plaintiff purchased a portion bearing S. No. 188/1b. The plaintiff sold the suit property (S. No. 188/2) to the defendant under Exhibit 59 dated 11-7-1941.

( 4 ) PIRAJI instituted a suit--C. S. No. 1017 of 1945, against the present plaintiff and the present defendant and other alienees of different portions of S. No. 188, for a declaration that the alienations effected by him during the pendency of the Darkhast before the Collector, were illegal and void ab initio, as being in contravention of the provisions contained in para 11 of schedule III of C. P. C. That suit ended in a compromise and Piraji was paid a sum of Rs. 700/by the present plaintiff and a sum of Rs. 300/- by the present defendant. The compromise decree was made by the Court on 12-9-1945 (Exhibit 62) and the relevant portion of it reads:

"in order that there should not be any dispute between the parties with respect to the land, defendant No. 2 has paid Rs. 300 to the plaintiff Piraji out of Court. Therefore defendant No. 2 should make Wahivat of S. No. 188/2 as an absolute owner. To that either the plaintiff or the defendants Nos. 1 and 2 should not raise dispute of any nature. "

(The present plaintiff was defendant No. 1 and the present defendant was defendant No. 2 in that suit.)

( 5 ) THE plaintiff brought the present suit for a declaration that the sale of the suit land by him in favour of the defendant on 11-7-1941 was void ab initio and for possession of the suit land.

( 6 ) THE principal defence of the defendant was that the present suit was barred by principles of res judicata by reason of the compromise decree in C. S. No. 1017 of 1945. But the plaintiff pleaded that the compromise decree was a nullity and had not effect as it sought to validate an illegal transaction offending para 11 of Schedule III C. P. C. The plaintiff attempted to get rid of the compromise decree not on the ground that the compromise was opposed to law but on the ground that his consent was obtained by fraud and undue influence. He failed in that attempt in the Courts below and gave up that attempt in the second appeal.

( 7 ) HEGDE, J. held that when a Court puts its seal of approval to a compromise arrived between the parties, then it ceases to be contract simpliciter and becomes binding on the parties to it until it is set aside in an appropriate proceeding. The correctness of this view has been questioned in the present appeal before us.

( 8 ) AS stated by the Supreme Court in Shankar Sitaram v. Balakrishna Sitaram, AIR1954 SC 352 , (1955 )57 BOMLR1 , [1955 ] 1 SCR99 it is well settled that a consent decree is as binding up on the parties thereto

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