Compromise decree challenge barred by separate suit; dispute must be raised before the court that recorded the compromise.

Order 23 Rule 3 CPC permits a lawful compromise to be recorded, while its proviso requires the court to decide disputes about the existence or lawfulness of the compromise. Order 23 Rule 3A bars a separate suit to set aside a compromise decree on the ground that the compromise was not lawful. The prescribed remedy is to challenge the compromise before the court that recorded it, or through other proceedings permitted by the Code. A stranger or purchaser claiming through a party cannot use an independent suit to nullify the compromise decree, though an independent claim to protect separate title or interest may still be available.

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Issues: Whether a stranger to a compromise decree can maintain a separate suit to challenge the decree as illegal, inoperative and vitiated by fraud and misrepresentation.

Analysis: Order 23 Rule 3 of the Code of Civil Procedure permits a lawful compromise to be recorded and a decree to be passed in terms thereof, while the proviso requires the court passing the decree to decide any dispute about the existence or lawfulness of the compromise. Order 23 Rule 3A creates an express bar against a separate suit to set aside a compromise decree on the ground that the compromise was not lawful. The remedy contemplated by the scheme of the Code is to approach the court that recorded the compromise, and, where available, to work out rights in the appropriate appeal or proceeding under the Code. A purchaser claiming through a party to the compromise cannot, by a separate suit, impeach the compromise decree itself; at best, such purchaser may pursue an independent claim to protect his own title or interest against the transferor, but not to nullify the compromise decree passed by the court.

Conclusion: The separate suit challenging the compromise decree was not maintainable, and the appeal failed.

Ratio Decidendi: A compromise decree cannot be assailed by a separate suit on the ground that the compromise was unlawful, and any challenge to the compromise must be pursued only before the court that recorded it or in the manner permitted by the Code.

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