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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.

9. 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 preferring 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.

25. Now, so far as the proviso to the said Rule 3 of Order XXIII is concerned, it states that when it is alleged by one party and denied by the other that an adjustment or the satisfaction has been arrived at, the Court has to decide the question; but the Court should not grant adjournment for the purpose of deciding the question, unless the Court for the reasons to be recorded, thinks fit to grant such adjournment. The said proviso applies to both the parts of the said Rule namely where the suit has been adjusted wholly or in part by any lawful agreement or compromise, or where the defendant has satisfied the plaintiff in respect of the whole or any part of the subject matter of the suit. Thus, when such adjustment or satisfaction is disputed by either of the parties to the suit, the Court has to decide the question without granting any adjournment. It is further contemplates passing of a decree in the suit between the parties to the suit, and the proviso to the said Rule also contemplates the dispute to be raised by the parties to the suit, inasmuch as it states 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". Further, such question could be raised by either of the parties to the suit before or after the decree is passed by the Court under Order XXIII, Rule 3 and the Court is obliged to decide such question. When no such question is raised by either of the parties and the decree is passed, it assumes the character of "Consent Decree" but when the dispute is raised and the Court passes the decree after deciding such dispute or question, it could not be called a "consent decree", and therefore, not barred by Section 96(3) of CPC. As held by three-Judge Bench of Supreme Court in case of Kishun (supra), where there is a contest on the question whether there was a compromise or not, a decree accepting the compromise on resolution of that controversy can not be said to be a decree passed with the consent of the parties, and therefore, the bar under Section 96(3) of the Code would not have application. Thus, either of the parties who is aggrieved by such decree which is not a consent decree, could certainly file an Appeal under Section 96(1) of CPC. In such an appeal filed against the decree passed in the suit after recording 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.

30. Still there could be one more situation, where the third party who was not the party to suit or the party to the compromise but had an interest in the subject matter of the compromise, is aggrieved by the decree passed by the Court under Order XXIII, Rule 3 on the basis of the compromise arrived at between the parties to the suit. So what remedy would be available to him ? It cannot be gainsaid that the decree based on the compromise between the parties under Order XXIII, Rule 3, if remains unchallenged would be a "consent decree" binding to the parties to suit. However, when the person aggrieved is third party who was neither a party to the suit nor a party to the compromise on the basis of which the decree was passed by the Court in the suit, would not be bound by such decree. Such a decree could not be said to be a "consent decree" qua such third party, and therefore, neither the bar contained in Section 96(3) nor the bar under Rule 3A of Order XXIII would be application to him. Such an aggrieved party, with the leave of the Court can always file an appeal under Section 96(1) against the decree passed by the Court on the basis of the compromise, and can contest the decree on the ground that the compromise should, or should not have been recorded by the Court in view of Rule 1A(2) of Order XLIII of CPC. When the third party is vitally and adversely affected by the decree passed by the Court under Order XXIII, Rule 3 on the basis of the compromise arrived at between the parties to the suit on the subject matter or otherwise of the suit, he can certainly, with the leave of the appellate Court, prefer an appeal and can contest such a decree passed under Order XXIII, Rule 3. One of the grounds to contest the decree could be that such a compromise should or should not have been recorded by the Court.

31. At this juncture, the word "party" used in Sub-rule (1) and the word "appellant" used in Sub-rule (2) of Rule 1A of Order XLIII assume importance. The Sub-rule (1) of Rule 1A relates to the order passed against the 'party' to the suit, and the appeal filed by 'such party', whereas the Sub-Rule (2) of the said Rule 1A relates to the appeal filed by the 'appellant'.

Such appellant may or may not be a party to the suit. The Sub-rule (2) is not confined to the appeal filed by the "party" to the suit. Hence, the third party, in the appeal against the decree passed in the suit under Rule 3 of Order XXIII can also contest such decree on the ground that such a compromise should not have been recorded.