A compromise decree found to be vitiating by fraud, collusion, or undue influence cannot be considered lawful and can be challenged under Order 23 Rule 3-A of the C.P.C.

Appellant in S.A.833 of 1988 is the plaintiff in O.S.663 of 1979 of the Munsiff's Court, Kozhikode-II. Defendants 1 and 3 in O.S.543 of 1979 are the appellants in S.A.883 of 1988. Plaintiff in O.S.663 of 1979 and first defendant in O.S.543 of 1979 are sisters. Defendants 2 and 3 in O.S.543 of 1979 are the first defendant's daughter and husband. O.S.543 of 1979 is a suit for injunction filed by the sister of the plaintiff in O.S.663 of 1979. O.S.663 of 1979 was filed to set aside a compromise decree in A.S.340 of 1976 of the Additional District Court, Kozhikode which was an appeal filed against the judgment and decree in O.S.434of 1974 of the Munsiff's Court, Kozhikode-II. Both O.S.543 of 1979 and O.S.663 of 1979 were tried together, the leading case being O.S.663 of 1979. O.S.543 of 1979 was decreed in favour of the plaintiff in that suit, whereas O.S.663 of 1979 was dismissed.

2. The position of the parties as it stood in O.S.663 of 1979 is followed in the discussion hereunder.

Plaintiff in O.S.663 of 1979 contended that the plaint schedule properties originally belonged to Sankaran who died in 1963, that there was oral partition of the properties left behind by Sankaran in 1965 through the intervention of three mediators viz. Achuthan, Appu and Mammad, that as per oral partition the plaint schedule properties were allotted to her share and that when she received injunction notice in O.S.543 of 1979 she came to know of a compromise having been recorded in A.S.340 of 1976. According to the plaintiff, she is completely unaware of the compromise, she has not signed the compromise and she did not engage any advocate in A.S.340 of 1976. Plaintiff contends that she is in possession of the plaint schedule properties on the strength of oral partition.

3. Defence contention in O.S.663 of 1979 and the averments in the plaint in O.S.543 of 1979 are to the effect that really a compromise was recorded in A.S.340 of 1976 and so O.S.663 of 1979 seeking to set aside the compromise decree is hit by Order 23 R.3-A of the C.P.C.

4. The lower appellate Court upheld the defence contention that O.S.663 of 1979 is not maintainable in view of Order 23 R.3-A. Contention of the plaintiff is that 0.23 R.3-A cannot have any application in view of the averments in the plaint to the effect that the compromise decree cannot be sustained as it is vitiated by fraud. Learned counsel for the defendants submitted that the aforesaid contention is not tenable in view of the specific mandatory provision contained in 0.23 R.3-A which makes the position clear 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.

5. Order 23 R.3-A envisages 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. Order 23 Rule 3 enables the Court to pass decree in accordance with the compromise entered into between the parties. Explanation to the proviso to R.3 states that an agreement or compromise which is void or voidable under the Indian Contract Act shall not be deemed to be lawful within the meaning of this rule. As an agreement or compromise which is vitiated by fraud, coercion or undue influence would really come under the aforesaid explanation, plaintiff's contention that in a case where fraud is alleged against the compromise decree it would not be hit by R.3-A is not tenable. A compromise decree if found to be based on fraud, collusion or undue influence cannot be considered to be lawful. Merely because R.3-A does not specifically mention that a compromise decree found to be vitiated by fraud, undue influence or coercion cannot be challenged by a separate suit it cannot be given a very narrow interpretation as suggested by the plaintiff's counsel.

6. Order 23 Rule3-AwasinsertedbytheC.P.C.AmendmentAct, 1976. The said amendment was introduced in 0.23 with a view to avoid multiplicity of suits. Often the Courts were plagued with suits