Sunday, 9 September 2018

Whether compromise decree passed by appellate court can be challenged on ground of fraud?

 In this case, we prefer to follow this course
keeping in view the bar contained in Order 23 Rule
3A
of the Code of Civil Procedure, 1908 (for short
‘the CPC’) for filing the suit in a case of this nature
and also another bar created under Section 96 (3) of
the CPC, which prohibits filing of any appeal,
though in this case it does not apply because the
dispute arose in second appeal filed under Section
100 of the CPC.
8) The purpose in making reference to these two
provisions is to show the legislative intent which
does not allow the parties to take recourse to these
legal remedies to challenge the compromise once it
is arrived at in the suit/appeal. The only exception

being if the challenge is founded on the ground of
fraud committed by the parties in obtaining any
judicial orders, the suit, in appropriate case, may
lie.
9) In this case, we find that the High Court did
not examine the plea of the appellants properly
keeping in view the facts alleged in the application
and while negativing the attack observed that the
appellants are free to take recourse to any other
legal remedies. Since the second appeal was
disposed of affecting the rights of the parties in the
light of compromise, the proper Forum to reexamine
the issue, in our opinion, is the High
Court, which disposed of the second appeal rather
than any other Forum to examine the issue at this
stage. It is more so when we find that the High
Court did not go into the details in the proceedings
filed by the appellants in its correct perspective.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No.8353 OF 2014

Ved Pal (D) Prem Devi (D) through LRs

Dated:August 10, 2018
Abhay Manohar Sapre, J.

1) This appeal is directed against the final
judgment and order dated 26.09.2006 passed by
the High Court of Punjab & Haryana at Chandigarh
in R.S.A. No.4576 of 2003 whereby the High Court
disposed of the second appeal in terms of the
compromise arrived at between the parties and
decreed the suit. Against the said order, the

appellants herein filed Review Application No.75C
of 2006 in R.S.A. No.4576 of 2003 which was
dismissed by the High Court by order dated
29.01.2007.
2) Few facts need to be mentioned for the
disposal of this appeal.
3) Respondent Nos.4 to 7 herein filed second
appeal before the High Court challenging the
judgment and decree dated 01.02.2003 passed by
the First Appellate Court which arose out of
judgment/decree dated 31.03.2001 passed by the
Civil Judge (Junior Division) in a civil suit filed for a
declaration and permanent injunction. The
appellants herein were arrayed as respondent Nos.4
to 6 in the second appeal out of which this appeal
arises.
4) The Single Judge of the High Court, however,
by impugned order dated 26.09.2006 disposed of
2
the second appeal in the light of compromise, which
is said to have been arrived at between the parties.
In other words, the second appeal was not decided
on merits but disposed of in the light of compromise
arrived at between the parties.
5) The appellants herein felt aggrieved by the
disposal of the second appeal and filed review
petition but it was dismissed which has given rise to
filing of the present appeal by way of special leave
against the order of disposing of the appeal and
dismissing the review petition.
6) Having heard the learned counsel for the
parties and on perusal of the record of the case, we
are inclined to allow the appeal in part and set aside
the order passed in the review petition and permit
the appellants to file an application before the High
Court for amending their review petition, filed in
disposed of second appeal, raising all their

grievances against the manner in which the second
appeal came to be disposed of in the light of alleged
compromise to enable the High Court to decide the
review petition afresh.
7) In this case, we prefer to follow this course
keeping in view the bar contained in Order 23 Rule
3A
of the Code of Civil Procedure, 1908 (for short
‘the CPC’) for filing the suit in a case of this nature
and also another bar created under Section 96 (3) of
the CPC, which prohibits filing of any appeal,
though in this case it does not apply because the
dispute arose in second appeal filed under Section
100 of the CPC.
8) The purpose in making reference to these two
provisions is to show the legislative intent which
does not allow the parties to take recourse to these
legal remedies to challenge the compromise once it
is arrived at in the suit/appeal. The only exception

being if the challenge is founded on the ground of
fraud committed by the parties in obtaining any
judicial orders, the suit, in appropriate case, may
lie.
9) In this case, we find that the High Court did
not examine the plea of the appellants properly
keeping in view the facts alleged in the application
and while negativing the attack observed that the
appellants are free to take recourse to any other
legal remedies. Since the second appeal was
disposed of affecting the rights of the parties in the
light of compromise, the proper Forum to reexamine
the issue, in our opinion, is the High
Court, which disposed of the second appeal rather
than any other Forum to examine the issue at this
stage. It is more so when we find that the High
Court did not go into the details in the proceedings
filed by the appellants in its correct perspective.
5
10) It is for this reason, we decline to examine the
several factual and legal issues urged by the parties
in this appeal and leave these issues for the High
Court to examine afresh on merits in accordance
with law and dispose of the same.
11) The appeal thus succeeds and is allowed in
part. The impugned order dated 29.01.2007 passed
in Review Petition is set aside and the High Court is
requested to decide the matter afresh on merits in
accordance with law without being influenced by
any of our observations on merits which we have
refrained from entering into them having formed an
opinion to remand the case to the High Court for its
disposal.
12) Needless to observe, in case, the learned
Judge, who disposed of the second appeal, is not
available to decide the matter, as directed by this
Court, the matter be placed before the appropriate

Bench keeping in view the provisions of Order 47
Rules 1 and 5 of the CPC read with the High Court
Rules governing disposal of the review cases.
13) The appellants are at liberty to amend the
review petition or/and file fresh application raising
all legally permissible grounds to attack the order
impugned therein. The respondents too are at
liberty to raise objections in accordance with law.
………...................................J.
[ABHAY MANOHAR SAPRE]
…...……..................................J.
[S. ABDUL NAZEER]
New Delhi;
August 10, 2018

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