Compromise decree challenges must be decided by the court that recorded the compromise, not through a separate suit.

Order XXIII Rule 3 of the Code of Civil Procedure requires the court to decide whether a lawful compromise existed when compromise is alleged and denied, and its Explanation treats void or voidable compromises under the Indian Contract Act, 1872 as unlawful. Order XXIII Rule 3A bars a separate suit to set aside a compromise decree on the ground that the compromise was not lawful. The aggrieved party must instead approach the court that recorded the compromise for determination of whether the compromise existed and was valid; a separate suit is not maintainable.

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Issues: Whether the validity of a compromise decree can be challenged in a separate suit, or whether the aggrieved party must approach the court that recorded the compromise.

Analysis: Order XXIII Rule 3 requires the court, when a compromise is alleged by one side and denied by the other, to decide whether there was a lawful compromise. Its Explanation makes a void or voidable compromise under the Indian Contract Act, 1872 unlawful. Order XXIII Rule 3A expressly bars a separate suit to set aside a decree on the ground that the compromise was not lawful. The proper course is therefore to approach the court that passed the compromise decree and seek a decision on whether the compromise existed and was valid. A party cannot be directed to pursue a separate suit when such a suit is barred in law, nor can rejection of the plaint on that ground defeat the remedy before the court that recorded the compromise.

Conclusion: A separate suit to challenge a compromise decree is not maintainable, and the challenge must be considered by the court that recorded the compromise.

Final Conclusion: The orders under appeal could not stand because the High Court wrongly directed recourse to a separate suit instead of allowing the compromise issue to be determined in accordance with Order XXIII Rule 3 and Rule 3A of the Code of Civil Procedure.

Ratio Decidendi: Where the lawfulness or existence of a compromise decree is disputed, the court that recorded the compromise has exclusive jurisdiction to decide the issue, and a separate suit to set aside such decree is barred.

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