A compromise decree based on a frustrated contract of partnership is not necessarily a nullity and can be enforced if the parties have entered into a new agreement to settle their disputes.

Manmohan Sarin, J.

( 1 ) THE appellant has filed the present appeal against the order dated 23. 5. 1995, by which the learned Single Judge dismissed the application I. A. 1784/91 filed by the appellant for setting aside the comrpomise decree passed vide orders dated 20. 5. 1988.

( 2 ) THE main plank of the appellant s argurnent is that the compromise decree was based on a partnership which stood frustrated and any compromise based on a frustrated contract of partnership, was a nullity and could not be enforced.

( 3 ) FOR a proper appreciation of the contentions raised in appeal, the facts culminating in the present appeal may be briefly noted :-

(I) The applicant Sh. J. P. Gupta and his father and Sh. Dal Chand Gupta, had entered into a registered partnership with Sh. Chaman Lal Jain, Arun Kumar Jain, Naveen Kumar Jain and Sumat Prasad Jain, respondent herein.

(II) Sh. Dal Chand Jain had contributed to! he partnership his property and land No. 4378/4 Ansari Nagar, Daryaganj admeasuring 407 sq. yds valued at Rs. 3,25,000. 00 to the partnership. The applicant had contributed property No. 4378/4 admeasuring 517 sq. yds. , valued at Rs. 5,00,000. 00, to the partnership. The other partners i. e. the respondents, who may for convenience sake be refer red to as Jain Group, had agreed to invest money for constructions on the above land. The firm was to carry on the business and complete construction under the name and style of Rajdhani Nirman Udyog.

(III) The Jain Group was to contribute the funds required for raising the construction. The building was to be rented out after completion of construction. The Jain Group was required to submit the plans for construction to the Municipal Corporation of Delhi. The shares in profit of the appellant and his father were 28% and 12% respectively, while the shares of the Jain Group was 30% and of Shri. N. K. Jain and 10 per cent each of the remaining partners.

(IV) The plans submitted to the Municupal Corporation of Delhi were rejected on 10. 12. 1979. The joint representation submitted by the parties on 20. 3. 1980 against the rejection of plan was also rejected on 22. 4. 1980.

(V) In these circumstances, Shri Dal Chand. Jain, sold the plot admeasuring 407 sq. yards vide a regeistered sale deed dated 30. 5. 1980, duly signed by the other partners as consenting party, and opted out of the partnership.

(VI) Finally in April 1986, Shri Chaman La, Jain, respondent herein filed a. suit for dissolution of partnership and rendition of accounts. This suit was contested by the appellant who filed a written statement raising several objections on the maintainabilny of the suit. A specific preliminary objection was also raised that the partnership between the parties had come to an end especially when Shri Dal Chand Gupta father of the appellant was permitted to sell the property, which had been pooled in partnership for the purpose of raising construction thereon. It was contended that the partnership which was for specific purpose has thus come to an end. The very purpose of the partnership stood frustrated. The written statement was filed in November, 1987. It was in December 1988, that the parties settled the disputes between them and an application under Order XXIII Rule 3 Civil Procedure Code was filed. The compromise application was duly signed by Counsel for the parties. Statement of the parties was recorded and the appellant admittedly in terms of the compromise received a sum of Rs. 2 lacs

(VII) The salient terms of the compromise may also be briefly noted. The partnership was dissolved w. e. f. the date of the filing of the suit i. e. 1st May, 1986 and the Registrar of the Firm was to be notified of the dissolution. Accounts of the partnership -vere taken and settled between the parties. The divisible assets of the firm were divided and dues of each partner were ascertained. The. ompromise deed provided that each of the parties assigned, released and relinquished interest in the property not allo

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