The court cannot examine fraud in a compromise agreement under Order 23 Rule 3, but it can inquire into allegations of fraud practiced upon the court in obtaining its sanction under Order 32 Rule 7.

( 1 ) THIS is an application by one Ram Asrey appellant for review of my order dated the 23rd august, 1960: It may be of use to mention a few facts.

( 2 ) A suit for partition, was commenced by Rameshwar Prasad claiming a third share in certain properties including a house which had been purchased by Rani Asrey applicant. One of the questions before the court below was as regards the legality of the sale deed in favour of Ram asrey. One allegation was that the same had been procured through exercise of fraud and misrepresentation. The trial Court accepted this contention and held against Ram Asrey in the matter of purchase of the house by him. Ram Asrey not satisfied with that judgment has come up in appeal. One of the points which thus presented itself for decision was about the effective nature of the sale deed in favour of Rani Asrey.

( 3 ) WHILE the appeal was pending the appellant,. e. Ram Asrey and respondent Rameshwar prasad settled their differences and presented a compromise here on the 15th of April, 1960. In presenting this compromise it also was asked that the dispute between the appellant and the first respondent might be decided in terms of the compromise and that it should not be necessary to issue notice to respondents 2 and 3 as they were not affected by the same. Along with the compromise an application was also made to the Court, since the first respondent was represented in the case through a guardian, for its permission to enter into the compromise agreement. The requisite permission was then granted the same day. Later, Ram Saran respondent No. 3 appeared and challenged the action of the appellant and the first respondent and claimed that the sanction of the Court had been obtained by practising fraud upon it. He, therefore, wanted that the order granting sanction to the applicant passed under Order XXXII Rule 7 might be revoked.

( 4 ) THE above application was opposed by Ram Asrey who maintained that no fraud had been practised either in the making of the compromise with the first respondent or his guardian, or upon the Court in procuring its sanction. When this application and the reply came to be heard by me I made the order, which is now sought to be reviewed, remitting two issues to the lower court for a finding on them. 1-A. Whether the compromise dated l5-4-1960 was collusive and had been obtained by practising fraud as per particulars given in the petition No. 57 (F) of 1960 on Rameshwar Prasad and his guardian, and 1-B. Whether the order dated 15-4-1960 by which sanction had been given to Rameshwar Prasad and Ram Asrey sanctioning the compromise was induced by fraud practised upon Court. The review application which is directed aganist the above order has raised the question that the court while seized of the matter under Order 23 Rule 4 of the Code of Civil Procedure cannot enter into the question whether the compromise or adjustment, in accordance with which the suit or the appeal is asked to be disposed of, was the outcome of any coercion, undue influence or fraud practised upon a party. This contention has been founded on a Division Bench decision of this Court in Mirza Husain-Yar Reg v. Radha Kishan, AIR 1935 All 137 where the true effect of rule 3 as respects this question was examined. It laid down that

"the word lawful in Order 23 Rule 3 refers to agreements which in their very terms or nature are not unlawful and may therefore include agreements which are voidable at the option of one of the parties thereto because they have been brought about by undue influence, coercion or fraud. Hence a party alleging fraud cannot be allowed to avoid the compromise admittedly executed by it in proceedings started by an application under Order 23 Rule 3".

I have no hesitation in confessing that this decision or the said aspect of Rule 3 was not brought to my notice when I made the order sought to be reviewed. I have further no hesitation in admitting and I do so with profound respect, t