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Supreme Court Allows Appeal on Compromise Decree

The Supreme Court allowed an appeal challenging an order that did not interfere with a revision petition against an order rejecting an application to recall a compromise decree for fraud and collusion. The Court held that the appellants had the right to challenge the compromise decree by way of appeal or application before the court granting the decree. The Court set aside the High Court's order and remitted the matter back for fresh decision on the application on merits.
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0% found this document useful (0 votes)
87 views4 pages

Supreme Court Allows Appeal on Compromise Decree

The Supreme Court allowed an appeal challenging an order that did not interfere with a revision petition against an order rejecting an application to recall a compromise decree for fraud and collusion. The Court held that the appellants had the right to challenge the compromise decree by way of appeal or application before the court granting the decree. The Court set aside the High Court's order and remitted the matter back for fresh decision on the application on merits.
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IN THE SUPREME COURT OF INDIA


CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.3492 OF 2022


(@ SLP(C) No.20075/2021)

VIPAN AGGARWAL & ANR. APPELLANT(S)

VERSUS

RAMAN GANDOTRA & ORS. RESPONDENT(S)

O R D E R

Leave granted.

The challenge in the present appeal is to an order

dated 30.07.2021 whereby the revision petition filed by the

appellant against the order dated 17.10.2012 passed by the

2nd Additional Munsiff, Jammu was not interfered with.

A compromise decree is said to have been passed on

13.09.2008. The appellants filed an application for recall

of the said compromise decree for the reasons that such

decree suffers from fraud and collusion. Such application

was filed before the Court which granted the decree. The

trial Court returned a finding that such application is not

maintainable and such view was affirmed by the High Court.

This Court in a judgment reported in ‘Banwari Lal V.


Signature Not Verified
Chando Devi (Smt.) (Through LRS.) & Anr.’ (1993) 1 SCC 581
Digitally signed by
SWETA BALODI
Date: 2022.05.02
16:52:28 IST
Reason: held the question as to whether an aggrieved person against

the compromise decree has a right to file an application

before the Court which granted the decree or an appeal in


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terms of Order 43 Rule 1A of the Code of Civil Procedure,

1908 (for short, ‘the CPC’). It was held as under:-

“13. When the amending Act introduced a proviso along with


an explanation to Rule 3 of Order 23 saying that where it
is alleged by one party and denied by the other that an
adjustment or satisfaction has been arrived at, "the Court
shall decide the question", the Court before which a
petition of compromise is filed and which has recorded
such compromise, has to decide the question whether an
adjustment or satisfaction had been arrived at on basis of
any lawful agreement. To make the enquiry in respect of
validity of the agreement or the compromise more
comprehensive, the explanation to the proviso says 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 the said Rule. In view of the
proviso read with the explanation, a Court which had
entertained the petition of compromise has to examine
whether the compromise was void or voidable under the
Indian Contract Act. Even Rule 1(m) of Order 43 has been
deleted under which an appeal was maintainable against an
order recording a compromise. As such a party challenging
a compromise can file a petition under proviso to Rule 3
of Order 23, or an appeal under Section 96(1) of the Code,
in which he can now question the validity of the
compromise in view of Rule 1-A of Order 43 of the Code.”

The appellants had thus the right to avail either the

remedy of appeal in terms of Order 43 Rule 1A CPC or by way

of an application before the court granting decree.

Therefore, the application filed by the appellants before

the Court which granted the decree cannot be said to be

without jurisdiction.

Consequently, the order passed by the High Court is

set aside. The matter is remitted back to the High Court for

fresh decision on the application and the same will be

decided on merits in accordance with law.


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With the aforesaid observations, the appeal is

allowed.

Pending application(s), if any, also stand disposed

of.

……………………………………………………J.
[HEMANT GUPTA]

……………………………………………………J.
[V. RAMASUBRAMANIAN]

NEW DELHI;
29th APRIL, 2022
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ITEM NO.37 COURT NO.11 SECTION XVI-A

S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS

Petition(s) for Special Leave to Appeal (C) No(s). 20075/2021

(Arising out of impugned final judgment and order dated 30-07-2021


in OW104 No. 46/2013 passed by the High Court of Jammu & Kashmir
and Ladakh at Jammu)

VIPAN AGGARWAL & ANR. Petitioner(s)

VERSUS

RAMAN GANDOTRA & ORS. Respondent(s)

(FOR ADMISSION and I.R. )

Date : 29-04-2022 This petition was called on for hearing today.

CORAM : HON'BLE MR. JUSTICE HEMANT GUPTA


HON'BLE MR. JUSTICE V. RAMASUBRAMANIAN

For Petitioner(s) Mr. Ninad Laud, Adv.


Mr. Sahil Tagotra, AOR
Mr. Rahul Sharma, Adv.
Mr. Ivo D’Costa, Adv.
Mr. Avniash Mathews, Adv.

For Respondent(s) Mr. Anupam Raina, AOR


Mr. B.S. Jamwal, Adv.
Mr. Sunando Rana, Adv.

UPON hearing the counsel the Court made the following


O R D E R

Leave granted.
The appeal is allowed in terms of the signed order.
Pending application(s), if any, also stand disposed of.

(SWETA BALODI) (RENU BALA GAMBHIR)


COURT MASTER COURT MASTER (NSH)
(Signed order is placed on the file)

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