Sunday 2 April 2023

Can the court declare the compromise decree invalid if consideration for the alleged compromise was inadequate and there was variance between the agreement and compromise petition?


We shall now look into the circumstances, as highlighted by the learned Senior Counsel appearing for the Defendant No. 2, rendering the settlement agreement dated 28.03.1991 invalid and not binding Under Order XXIII Rule 3 of the Code of Civil Procedure:

First, the alleged compromise agreement has admittedly not been signed by the Plaintiff who concededly has a share in the property as a coparcener. A written consent of all parties is necessary.

Secondly, a coparcenary undivided property in specie (Plot No. 140) has been allotted to Defendant 2 by Defendant No. 1 over which the Plaintiff also has an interest.

Thirdly, there is variance between the agreement and the compromise petition producing the agreement.

The Variance noted is as follows-

(a) The compromise petition takes in consideration yet another property already purchased by Defendant No. 2 by her own income (Schedule B property) which was not a part of compromise agreement.

(b) The sketch map appended to the petition shows plot No. 1086 and 1085 which for part of plot No. 141 instead of plot No. 140 mentioned in Clause 3 of compromise agreement, and does not indicate any consensus ad idem, therefore, the execution of the compromise agreement becomes unenforceable.

(c) The species of suit property, which was given/provided to Defendant No. 2 in Clause 3 (page 141) of agreement was changed to will be allotted to her in final decree proceeding.

(d) The payment of Rs. 12000 which was to be deposited to court without any caveat in agreement (See para 4 @ 141) was made subject to further orders of the Court in the petition.

(e) There is no express mentioning about the mesne profits in agreement whereas a definite Clause was inserted in the compromise petition.

(f) The easement rights to property of Defendant No. 2 were recognised in agreement and later in petition was altered to that Defendant No. 2 along with others have to file and take steps to easement rights for which the Defendant 1 shall not object.

(h) The agreement provided that the Defendant No. 2 shall sign the compromise petition which was later altered to signing and swearing the affidavit in compromise petition.

Fourthly, the judgment dated 01.08.2000 of the first appellate court accepting the compromise does not make allotment of the property allotted in specie to the Defendant No. 2. The first appellate court has proceeded on the wrong premise that the Defendant No. 2 has surrendered her rights to the Defendant No. 1. The first appellate court was further wrong in specifically noting that the compromise agreement does not cause any prejudice to the rights of the Plaintiff and therefore can be given effect.

Fifthly, the compromise agreement was entered into by beckoning a smaller share to the Defendant No. 2, while she has a larger share in view of Vineeta Sharma (supra). The consideration for the alleged compromise/settlement was therefore inadequate and whole agreement has to fall to the ground due to changed and supervening circumstances effectuated by change in law. {Para 92}


Civil Appeal Nos. 2913-2915 of 2018

Prasanta Kumar Sahoo and Ors.  Vs.  Charulata Sahu and Ors.

Hon'ble Judges/Coram:

A.S. Bopanna and J.B. Pardiwala, JJ.

Author: J.B. Pardiwala, J.

Decided On: 29.03.2023

Citation: MANU/SC/0326/2023.

Read full Judgment here: Click here

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