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(2) In an appeal against a decree passed in a suit after recording a compromise or refusing to record a compromise, it shall be open to the appellant to contest the decree on the ground that the compromise should, or should not, have been recorded."

5.1.6 As per sub-rule (2) of Rule 1A above, it is provided that in an appeal against a decree passed in a suit where the compromise is recorded or compromise is refused to be recorded, it will be open for the appellant to contest decree on the ground that compromise should or should not have been recorded. 



                                                                                       NEUTRAL CITATION




  C/CA/506/2023                                   CAV JUDGMENT DATED: 08/11/2023

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5.2.9 Where factum of compromise is not in dispute, bar indicated under section 96(3) of the CPC would operate, it was clearly held, "Section 96(3) of the Code says that no appeal shall lie from a decree passed by the Court with the consent of the parties. Rule 1A(2) has been introduced saying that against a decree passed in a suit after recording a compromise, it shall be open to the appellant to contest the decree on the ground that the compromise should not have been recorded. When Section 96(3) bars an appeal against decree passed with the consent of parties, it implies that such decree is valid and binding on the parties unless set aside by the procedure prescribed or available to the parties. One such remedy available was by filing the appeal under Order 43, Rule 1(m). If the order recording the compromise was set aside, there was no necessity or occasion to file an appeal against the decree. Similarly a suit used to be filed for setting aside such decree on the ground that the decree is based on an invalid and illegal compromise not binding on the plaintiff of the second suit. But after the amendments which have been introduced, neither an appeal against the order recording the compromise nor remedy by way of filing a suit is available in cases covered by Rule 3A of Order 23. As such a right has been given under Rule 1A(2) of Order 43 to a party, who challenges the recording of the compromise, to question the validity thereof while prefering an appeal against the decree. Section 96(3) of the Code shall not be a bar to such an appeal because Section 96(3) is applicable to cases where the factum of compromise or agreement is not in dispute."

5.7.6 The Full Bench referred to the decisions in Pushpa Devi Bhagvat (supra) and R. Rajanna (supra) to explain the ratio thus, in para 26, "As held by Supreme Court in case of R. Rajanna (supra), no sooner a question relating to the lawfulness of the agreement or compromise is raised before the Court that passed the decree on the basis of the compromise, it is that Court and that Court alone who can examine and determine that question. In Pushpadevi's case also the Court has categorically summarized the legal position and held that the only remedy available to the party to the consent decree to avoid such consent decree, is to approach the Court which recorded the compromise and made a decree in terms of it, and establish that there was no lawful compromise or agreement. In that event, the Court which recorded the compromise will itself consider and decide the question as to whether there was a valid compromise or not. When the said question is decided by the Court which had passed the decree, the aggrieved party could file an appeal under Section 96(1), and the bar under Section 96(3) would not be attracted, as when the factum of compromise is disputed by either of the party, and such question is decided by the Court, it no longer remains a "consent decree" between the parties. In such an appeal filed against the decree passed in a suit after recording a compromise or refusing to record a compromise, the appellant can contest the decree on the ground that the compromise should, or should not have been recorded in view of Rule 1A(2) of Order XLIII of CPC."

5.9 Even if the parties have submitted settlement, there might be cases where the settlement is disputed and the contentions in that regard are raised. The court accepting the consent terms thereafter, would be passing the decree upon contest. The decree upon contest would have the element of application of mind and adjudication. Decree after such process upon compromise passed, that is upon contest, would become amenable to a separate appeal. However, in the present case, the compromise was arrived at between the parties and pursuant to terms submitted to the court, the decree was passed as agreement between the parties was shown. It was not open for them to prefer separate appeal simpliciter where the parties have submitted the compromise and requested the court to pass the decree. The aggrieved party has to approach the same court who has passed the compromise decree.