Compromise deed acted upon by court cannot be cancelled through a separate civil suit after cheque dishonour proceedings end.

A compromise deed filed in a pending Section 138 NI Act proceeding, recorded on oath and acted upon by the court before dismissal of the complaint, could not be separately challenged by a civil suit for declaration and cancellation. The principle underlying Order XXIII Rule 3 and Rule 3A CPC was treated as applying in substance to such proceedings, so the proper forum to question the compromise was the same court that accepted it. A separate civil action would create parallel adjudication, permit collateral attack on the judicial order, and fail once the compromise had merged into that order. The suit was therefore barred by law and disclosed no cause of action.

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Issues: Whether a civil suit for declaration and cancellation of a compromise deed, which had been placed before and acted upon by the criminal court in a proceeding under Section 138 of the Negotiable Instruments Act, 1881, was maintainable or was barred by law.

Analysis: The compromise was not a mere private document; it was filed before the court seized of the cheque dishonour complaint, statements were recorded on oath, and the complaint was dismissed as withdrawn on the basis of the compromise. The governing principle drawn from Order XXIII Rule 3 and Rule 3A of the Code of Civil Procedure, 1908 was treated as applicable in substance to such quasi-civil proceedings under Section 138 of the Negotiable Instruments Act, 1881. The proper forum to question the validity of the compromise was therefore the same court that accepted it, since that court alone was competent to examine whether the compromise was lawful and whether the proceedings had been properly disposed of. A separate civil suit would amount to a parallel adjudication, encourage multiplicity of proceedings, and permit a collateral attack on a judicial order. The compromise deed, once acted upon by the criminal court, merged in the judicial order and could not be treated as a standalone instrument for cancellation in a civil suit under Section 31 of the Specific Relief Act, 1963.

Conclusion: The suit was not maintainable, disclosed no cause of action, and was barred by law. The dismissal was in favour of the defendants.

Ratio Decidendi: A compromise filed in a pending proceeding and acted upon by the court can be challenged only before that court, and not by a separate civil suit for cancellation or declaration.

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