The main legal point established in the judgment is that a compromise decree can be set aside if it is found to have been obtained through fraud or suppression of material facts.

ORDER :- This is an application filed under Order XIV Rule 8 of O.S. Rules r/w Proviso to Order XXIII Rule 3 (A) C.P.C. to set aside the compromise decree dated 27-1-2003 arrived in C.S. No. 49 of 2003 filed by the respondent against this petitioner claiming a money decree for Rs. 2.50 crores and interest of Rs. 45 lakhs and it is at such claim a compromise was arrived at on 27-1-2003, whereby a decree for 3.00 crores was passed and which is not sought to be set aside.

2. This petitioner company was managed by a Board of Directors originally headed by one Mr. G. Venkateswaran (known as G.V.), who ended his life on 3-5-2003 probably under financial pressure, thereupon all the Directors, Statutory Auditor and Company Secretary resigned and there was a total vacuum. Subsequently there was a Scheme approved by this Court order dated 29-4-2004 in C.P. Nos. 89 and 90 of 2004 and a new Board of Directors took over the management, who upon scrutiny found that several creditors played influence upon G.V. and inflated their claims by alleged unreasonable methods and one such incident is the present compromise decree in C.S. No. 49 of 2003, which was a suit for recovery of money based upon exorbitant-claim than the original and real one of Rs. 1,38,80,000/- payable by the plaintiff company to the defendant as on 14-1-2003. According to the applicant the respondent had advanced a total sum of Rs. 1,53,80,000/- on various dates till 9-1-2003 in connection with the release of a picture titled, "Sokka Thangam" and the applicant company had repaid a sum of Rs. 15.00 lakhs to the respondent by cheque dated 12-7-2002 and thus it was only Rs. 1,38,80,000/- that was due by the applicant to the respondent as on 14-1-2003 and the inflated claim of Rs. 2.95 crores was made by the respondent in C.S. No. 49 of 2003 and a compromise decree was made for a further inflated sum of Rs. 3.00 crores.

3. In the mean time another Company viz., Asian Capital Consolidates and Holdings Private Limited had filed a suit in C.S. No. 523 of 2001 against the applicant company for recovery of a sum of Rs. 1,14,46,685/- which according to the applicant was untenable and time barred and that suit was rejected by this Court as time barred by a judgement dated 14-8-2001. Against the rejection of the plaint, Asian Capital Consolidates and Holdings Private Limited filed O.S.A.No. 295 of 2001 and sought for restraint on release of the above said picture "Sokka Thangam" produced by the applicant company. There was an interim order on 9-1-2003 directing the Laboratory to deposit the net realisations into Court and permitted release of the said picture. This respondent got himself impleaded in O.S.A. (C.M.P. No. 808 of 2003) on 13-1-2003 and sought for restraint of release of the said film till his due is paid. The film was proposed to be released for the Pongal festival day on 15-1-2003. Due to such obstacles the erstwhile Chairman of the applicant company Mr. G.V. was under stress, pressure and mental agony. Therefore, it is said that he was thus forced to sign the compromise memos which culminated into a decree for 3.00 crores, which is now sought to be set aside. It was by then, the applicant company at the instance of the compromise decree paid a sum of Rs. 75.00 lakhs and agreed to make further payment of Rs. 25.00 lakhs on or before 25-1-2003 and the entire balance was agreed to be paid on or before 31-3-2003.

4. A second charge was also created over the Shanthi and Kamala theatres at Tanjore belonging to the applicant company. Thus, a sum of Rs. 75.00 lakhs on 14-1-2003, Rs. 65.00 lakhs thereafter was received by the respondent from the applicant company. The respondent also received Rs. 59,99,985 from and out of the sum deposited by the Prasad Laboratory on behalf of the applicant company in O.S.A. No. 295 of 2001; whereas after deducting repayment of Rs. 15.00 lakhs by cheque dated 12-7-2002 from the real amount of advance made by the respondent viz., Rs. 1,53,80,000/-, w

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