Consent orders can be challenged when assent is not free, informed and voluntary, especially if the settlement is incomplete and unfair.

A consent or compromise order is not immune from challenge where the party signing it promptly repudiates the settlement and shows that assent was not free, informed and voluntary. The High Court noted that the recorded terms were incomplete, left several disputes unresolved, and appeared materially one-sided; in that setting, the usual bar against questioning a consent order did not apply. Principles governing compromise orders do not protect a document vitiated by fraud, misrepresentation or a fundamental mistake as to its character and effect. The order was therefore open to interference and the challenge succeeded.

---

---

Issues: Whether the consent terms recorded by the Company Law Board could be recalled or set aside on the ground that the appellant's consent was not voluntary and informed, and whether the resulting order could be treated as an unassailable consent order barring appellate interference.

Analysis: The appeal arose out of proceedings under section 10F of the Companies Act, 1956 in a petition under sections 397 and 398. The settlement recorded by the Company Law Board was challenged promptly by the appellant, who asserted that the terms were recorded in circumstances showing pressure, unfairness and lack of real understanding of the effect of the document. The record showed that the settlement did not fully resolve the disputes, left several matters open, and produced terms that were heavily one-sided. In such circumstances, the usual bar against questioning a consent order was held inapplicable. The principles governing consent decrees and compromise orders do not protect an agreement where the signature is not the product of free and informed consent, or where the document is vitiated by fraud, misrepresentation or a fundamental mistake as to its character and effect.

Conclusion: The consent order could be interfered with, and the challenge to it succeeded in favour of the appellant.

Ratio Decidendi: A compromise or consent order is vulnerable where the party signing it immediately repudiates it and establishes that the assent was not free, informed and voluntary, particularly when the settlement is incomplete and materially unfair.

---