2020 (5) TMI 743 - SC - Indian Laws

Property buyer cannot challenge compromise decree after 25 years under Order 23 Rule 3A CPC

Triloki Nath Singh Versus Anirudh Singh (D) thr. L. Rs. and Ors.

The SC dismissed an appeal challenging a compromise decree passed by Patna HC in a partition suit. The appellant, who purchased property from one party ... Right of a stranger to challenge a decree passed on a compromise - challenge to the proceedings in a separate suit - restraint from entering into peaceful possession of the suit property - whether the suit filed by the Appellant-Plaintiff in seeking a declaration against the decree of compromise dated 15th September, 1994 passed by the High Court of Patna in Second Appeal was maintainable in view of the provisions of Order 23 Rule 3 and Rule 3A Code of Civil Procedure? - HELD THAT:- By introducing the amendment to the Code of Civil Procedure (Amendment) 1976 w.e.f. 1st February, 1977, the legislature has brought into force Rule 3A to Order 23, which create bar to institute the suit to set aside a decree on the ground that the compromise on which decree is based was not lawful. The purpose of effecting a compromise between the parties is to put an end to the various disputes pending before the Court of competent jurisdiction once and for all. Rule 3A of Order 23 Code of Civil Procedure put a specific bar that no suit shall lie to set aside a decree on the ground that the compromise on which the decree is based was not lawful. The scheme of Order 23 Rule 3 Code of Civil Procedure is to avoid multiplicity of litigation and permit parties to amicably come to a settlement which is lawful, is in writing and a voluntary act on the part of the parties. The Court can be instrumental in having an agreed compromise effected and finality attached to the same. The Court should never be party to imposition of a compromise upon an unwilling party, still open to be questioned on an application under the proviso to Rule 3 of Order 23 Code of Civil Procedure before the Court. In the present case, the partition suit was filed in 1978 and after the decision of the trial Court, the matter went in first appeal and eventually, Second Appeal No. 495/86 before the High Court. During the pendency of first appeal being continuation of the suit as stated, one of the parties to the pending proceedings, namely, Sampatiya allegedly entered into a sale deed with the Appellant on 6th January, 1984. It is well settled that the compromise decree passed by the High Court in the second appeal would relate back to the date of institution of the suit between the parties thereto. In the suit now instituted by the Appellant, at the best, he could seek relief against Sampatiya, but cannot be allowed to question the compromise decree passed by the High Court in the partition suit - The trial Court in any case would not be competent to adjudicate the grievance of the Appellant herein in respect of the validity of compromise decree dated 15th September, 1994 passed by the High Court in the partition suit. In the instant case, the suit was instituted in the year 1995 and 25 years have rolled by now and after the finding has been recorded in reference to issue No. 7 regarding the right, title and interest of the suit property against the Appellant by the learned trial Judge devolved on the basis of a stated sale deed dated 6th January, 1984 and not interfered by the Court of Appeal preferred at the instance of the Appellant, in the given circumstances, remitting the matter back to the learned trial Court to examine the suit filed at the instance of the Appellant-Plaintiff independently for protection of his right, title or interest being devolved on the basis of the stated sale deed dated 6th January, 1984 which as alleged to have been executed by one of the party to the compromise (Sampatiya) in the changed circumstances may not serve any purpose more so after the concurrent finding of Courts below have been recorded against the Appellant-Plaintiff. The appeal is without substance and the same is accordingly dismissed. Issues Involved:1. Whether a decree passed on a compromise can be challenged by a stranger to the proceedings in a separate suit.2. Validity and impact of the compromise decree dated 15th September 1994.3. Applicability of Order 23 Rule 3A of the Code of Civil Procedure (CPC).4. Rights of the appellant-plaintiff based on the sale deed dated 6th January 1984.5. Legal implications of the compromise decree on the appellant's claim.6. The maintainability of the appellant's suit challenging the compromise decree.Detailed Analysis:1. Whether a decree passed on a compromise can be challenged by a stranger to the proceedings in a separate suit:The Supreme Court examined whether a decree passed on a compromise could be challenged by a stranger to the proceedings in a separate suit. The appellant-plaintiff sought to declare the compromise decree dated 15th September 1994, passed by the High Court, as illegal, inoperative, and obtained by fraud and misrepresentation. The appellant-plaintiff argued that the compromise decree was obtained by fraud, concealing the fact that the sale deed was executed before the compromise. However, the respondents-defendants contended that the suit was not maintainable under Order 23 Rule 3A CPC, which bars suits to set aside a decree based on an unlawful compromise.2. Validity and impact of the compromise decree dated 15th September 1994:The compromise decree, executed between Sampatiya and Salehari, was challenged by the appellant-plaintiff on the grounds of fraud and misrepresentation. The compromise decree acknowledged Salehari as the daughter of Kunjan Mahto and invalidated the gift deed executed by Kunjan Mahto in favor of Sampatiya. The trial court, district court, and High Court dismissed the appellant's claims, upholding the compromise decree. The Supreme Court reiterated that the compromise decree, being a lawful agreement between the parties, could not be questioned by a stranger in a separate suit.3. Applicability of Order 23 Rule 3A of the Code of Civil Procedure (CPC):Order 23 Rule 3A CPC explicitly bars suits to set aside a decree on the ground that the compromise on which the decree is based was not lawful. The Supreme Court referred to the legislative intent behind this provision, emphasizing that it aims to avoid multiplicity of litigation and ensure finality of decisions. The Court cited precedents, including Pushpa Devi Bhagat v. Rajinder Singh and R. Rajanna v. S.R. Venkataswamy, to underscore that the only remedy available to a party to a consent decree is to approach the court that recorded the compromise and establish that there was no valid compromise.4. Rights of the appellant-plaintiff based on the sale deed dated 6th January 1984:The appellant-plaintiff claimed rights over the suit property based on a sale deed executed by Sampatiya on 6th January 1984. However, the Court noted that the issue of right, title, and interest in the land was still pending in the partition suit when the sale deed was executed. Therefore, the appellant's claim was subject to the outcome of the pending proceedings, which culminated in the compromise decree. The Court held that the appellant could seek relief against Sampatiya but could not question the compromise decree.5. Legal implications of the compromise decree on the appellant's claim:The Supreme Court held that the compromise decree passed by the High Court in the partition suit would relate back to the date of the suit's institution. The appellant, claiming through Sampatiya, could not independently challenge the compromise decree. The Court emphasized that the appellant's remedy lay in seeking protection of his rights based on the sale deed, but not in questioning the validity of the compromise decree.6. The maintainability of the appellant's suit challenging the compromise decree:The Supreme Court concluded that the appellant's suit challenging the compromise decree was not maintainable due to the specific bar under Order 23 Rule 3A CPC. The Court noted that the appellant could only claim through Sampatiya and could not independently challenge the compromise decree. The Court dismissed the appeal, affirming the concurrent findings of the lower courts against the appellant.Conclusion:The Supreme Court dismissed the appeal, holding that the appellant-plaintiff's suit challenging the compromise decree was not maintainable under Order 23 Rule 3A CPC. The appellant could seek protection of his rights based on the sale deed but could not question the validity of the compromise decree. The Court emphasized the legislative intent to avoid multiplicity of litigation and ensure finality of decisions.