A compromise decree operates as estoppel by judgment, effectively binding the parties and precluding them from challenging the admitted facts in a subsequent legal proceeding.

JUDGMENT :- This is defendants second appeal against the concurrent decisions of the two lower Courts decreeing the plaintiffs suit for a declaration that he is the validly adopted son of one Jogi Chakra and as such entitled to inherit all his properties. The defendants are the agnates of the said Jogi Chakra and they challenged the alleged adoption of the plaintiff by Jogi Chakra.

2. Hence, the main question for decision by both the Courts was whether the plaintiff was validly adopted by Jogi Chakra. The lower appellate Court after full discussion of the oral evidence held that the evidence was somewhat unsatisfactory and if the case had rested entirely on oral evidence his conclusion would have been against the case of adoption. But he thought that the defendants were estopped from raising this question in view of a compromise decree passed by a competent Court in O. S. no. 67 of 1946.

That suit was brought by the plaintiff himself against the said Jogi Chakra for a declaration that he was the validly adopted son of Jogi. The suit ended in a compromise wherein Jogi unambigously admitted that the plaintiff was his adopted son and a decree was also passed on the basis of the compromise. The defendants claimed title to the disputed property through Jogi Chakra and consequently ordinarily they would be bound by the said compromise decree.

3. It is now well-settled by a series of decisions (both English and Indian) that though a compromise decree may not operate as res Judicata under S. 11, Civil P.C. it would operate as estoppel by judgment which will be as effective between the parties as a judgment passed on contest. This principle has been laid down with great emphasis in In re South American and Mexican Co.; Ex parte Bank of England, 1895-1 Ch 37 at p. 50 (A) in the following words of Lord Herschell : -

"..... a judgment by consent is intended to put a stop to litigation between the parties just as much as is a judgment which results from the decision of the Court after the matter has been; fought out to the end. And I think it would be very mischievous if one were not to give a fair and reasonable interpretation to such judgments, and were to allow questions that were really involved in the action to be fought over again in a subsequent action."

In a later decision reported in Hoystead v. Commr. of Taxation, 1926 AC 155 (B), it was further pointed out that where a decision by a competent Court has been reached on the basis of an admission by a party, that party would be estopped from questioning it in a new legal proceeding in respect of matters which were fundamental to the decision.

In a later Privy Council decision repotted in C.H. Kinch v. E.K. Walcott, AIR 1929 PC 289 (C), it was pointed out that there was in essence, no distinction between a decision on contest operating as res judicata and a decision by consent operating as estoppel except as regards the method of setting it aside. A compromise decree may be set aside in a proper proceeding on the ground of fraud or other considerations; but so long as it is not set aside it is as effective as a decision on merits.

4. These principles have been followed in innumerable Indian decisions and I need refer only to Ramrao v. Dattadayal, AIR 1948 Nag 304 (D) and Raja of Venkatagiri v. Madras Province, AIR 1947 Mad 5 (2) (E).

5. So far as the present case is concerned, the admission by Jogi that the respondent was his validly adopted son was fundamental to the decision in the previous suit inasmuch as that suit was itself brought for a declaration that the plaintiff was the adopted son of Jogi. Hence, the compromise decree would completely bind the parties to the suit and the persons claiming through them and the defendants would be clearly estopped from raising this question.

6. Mr. Das on behalf of the appellants urged that in view of the finding of the lower appellate Court to the effect that the actual giving and taking, which is essential to prove adoption, was not satisfactoril