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Showing contexts for: validity of compromise in Lilaben W/O Kantiji Nathaji Thakor vs Geetaben Ramanji on 28 August, 2019Matching Fragments
(v) Learned Advocate Mr.Vakil, therefore,
concluded that the remedy of the
"aggrieved party", which could be
either a party to the suit or a party which is not a party to the suit i.e. third party, against a decree passed by the trial Court passed upon a compromise between the parties would be (i) First Appeal under Section 96(1) of CPC, for which the appellant can question the validity of the compromise in view of Rule 1-A of Order 43 CPC, or (ii) an application under the proviso to Rule 3 of Order XXIII of CPC. Both the said remedies being concurrent, the aggrieved party cannot be compelled to avail any one of the said remedies. Further, the said concurrent remedies cannot be restricted only to the parties to the suit,but would be available also to the third party.
"6. The experience of the courts has been that on many occasions parties having filed petitions of compromise on basis of which decrees are prepared, later for one reason or other challenge the validity of such compromise. For setting aside such decrees suits used to be filed which dragged on for years including appeals to different courts. Keeping in view the predicament of the courts and the public, several amendments have been introduced in Order 23 of the Code which contain provisions relating to withdrawal and adjustment of suit by Civil Procedure Code (Amendment) Act, 1976. Rule 1 of Order 23 of the Code prescribes that at any time after the institution of the suit, the plaintiff may abandon his suit or abandon a part of his claim. Rule 1(3) provides that where the Court is satisfied
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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 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 1A of Order 43 of the Code.
27. It was sought to be submitted by the learned Advocates for the parties relying upon the decisions of the Supreme Court that there is an anomaly in the observations made by the Supreme Court in case of Banwarilal (supra) and in case of Pushpadevi (supra), inasmuch as in case of Banwarilal (supra), it has been observed that the party challenging the compromise can file a petition under the proviso to Rule 3 of Order XXIII or an appeal under Section 96(1) of the Code, in which he can question the validity of the compromise in view of Rule 1A of Order XLIII of the Code, whereas in case of Pushpadevi (supra), it has been held that the only remedy available to the party to a 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 compromise. In the opinion of the Court, there is hardly any anomaly in the observations made by the Supreme Court in the said two cases. The observations made by the Supreme Court in both the cases are required to be appreciated in the context in which they were made. In case of Banwarilal (supra) it has been held that Section 96(3) of the Code is applicable to the cases where the factum of compromise or agreement is not in dispute. It has also been held that when the amending Act introduced a proviso along with an explanation to Rule 3 of Order XXIII saying that where it is alleged by one party and denied by the other that the 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 had recorded such compromise, has to decide the question whether an adjustment or satisfaction had been arrived at on the basis of any lawful agreement. Similarly in case of Pushpadevi (supra) also it has been held that no appeal is maintainable against the consent decree having recorded to the specific bar contained in Section 96(3) of CPC and that a consent decree operates as an estoppal and is valid and binding unless it is set aside by the Court, which passed the consent decree, by an order on an application under the proviso to Rule 3 of Order XXIII. In any case, as per the settled legal position, if there is any anomaly or conflict in the decisions delivered by co-equal Benches of the Supreme Court the High Court should follow that decision which appears to it to state the law more elaborately and accurately. The Supreme Court in Pushpadevi's case has elaborately considered the provisions contained in Order XXIII, Rule 3 and Rule 3A, in the light of earlier judgements and thereof. The said principles have been followed in many subsequent judgements. The Court, therefore, has no hesitation in following the said principles and in holding that the only remedy available to a party to a consent decree to avoid such decree, is to approach the Court which recorded the compromise and made decree in terms of it, by filing an application under the proviso to Rule 3 of Order XXIII.