In Manjunath Tirakappa Malagi vs. Gurusiddappa Tirakappa Malagi (D) 2025 INSC 517, Supreme Court dealt with Irder XXIII Rule 3 CPC and concluded that "Once the Court passes a compromise decree after such a satisfaction, the decree cannot be challenged in an appeal as no appeal lies against a compromise decree'. Also, a compromise decree cannot be challenged by filing a fresh suit as there is a bar on filing a fresh suit challenging.... The only remedy against a compromise decree Is to file a recall application."
This appeal arose out of pure civil proceedings initiated at the hands of the appellants in the year 2003. The appellants had filed a suit for declaring a compromise decree entered into between the respondents (defendants) as null and void, and not binding on the appellants.
The law governing a consent decree is Order 23 Rule 3 of CPC, which deals with compromise decree. It reads as follows:
“3. Compromise of suit.— Where it is proved to the satisfaction of the Court that a suit has been adjusted wholly or in part by any lawful agreement or compromise, in writing and signed by the parties or where the defendant satisfies the plaintiff in respect of the whole or any part of the subject-matter of the suit, the Court shall order such agreement, compromise or satisfaction to be recorded, and shall pass a decree in accordance therewith so far as it relates to the parties to the suit, whether or not the subject-matter of the agreement, compromise or satisfaction is the same as the subject-matter of the suit:
Provided that where it is alleged by one party and denied by the other that an adjustment or satisfaction has been arrived at, the Court shall decide the question; but no adjournment shall be granted for the purpose of deciding the question, unless the Court, for reasons to be recorded, thinks fit to grant such adjournment.
Explanation.—An agreement or compromise which is void or voidable under the Indian Contract Act, 1872 (9 of 1872), shall not be deemed to be lawful within the meaning of this rule” Thus, a reading of the above provision makes it clear that before passing a decree on the basis of a compromise, the Court has to satisfy itself that the suit has been adjusted by a 7 lawful compromise. Once the Court passes a compromise decree after such a satisfaction, the decree cannot be challenged in an appeal as no appeal lies against a compromise decree.
A compromise decree cannot be challenged by filing a fresh suit as there is a bar on filing a fresh suit challenging the consent decree on the ground of the legality of the compromise under Order 23 Rule 3A of CPC. It reads as follows:
“3-A. Bar to suit.— 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 only remedy against a compromise decree is to file a recall application. The Supreme Court in Pushpa Devi Bhagat v. Rajinder Singh, (2006) 5 SCC 566 summed up the position of law as follows:
“17. The position that emerges from the amended provisions of Order 23 can be summed up thus:
(i) No appeal is maintainable against a consent decree having regard to the specific bar contained in Section 96(3) CPC.
(ii) No appeal is maintainable against the order of the court recording the compromise (or refusing to record a 1 Section 96(3) of CPC: No appeal shall lie from a decree passed by the Court with the consent of parties.
(iii) No independent suit can be filed for setting aside a compromise decree on the ground that the compromise was not lawful in view of the bar contained in Rule 3-A.
(iv) A consent decree operates as an estoppel and is valid and binding unless it is set aside by the court which passed the consent decree, by an order on an application under the proviso to Rule 3 Order 23. Therefore, the only remedy available to a party to a consent decree to avoid such consent decree, is to approach the court which recorded the compromise and made a decree in terms of it, and establish that there was no compromise. In that event, the court which recorded the compromise will itself consider and decide the question as to whether there was a valid compromise or not. This is so because a consent decree is nothing but contract between parties superimposed with the seal of approval of the court. The validity of a consent decree depends wholly on the validity of the agreement or compromise on which it is made…” (Emphasis Provided) Thus, even if we accept the contention of the appellants that their father was coerced by his brothers and father (appellants’ grandfather) to enter into a compromise, which led to the passing of the consent decree, a fresh suit is still not a valid remedy. In that situation, the appellants’ father should have 9 filed a recall application before the Court that had passed the decree. The appellants’ father has never done so! Moreover, he had admitted the consent decree and never questioned its validity.
The appellants' argument that the suit property is not a joint family property but was purchased by their grandmother in the name of the appellants’ father and that he is now trying to deprive the appellants from the suit property as their relations have turned sour, was of no help to them. This is because if the appellants’ grandmother had purchased the suit property in the name of the appellants’ father, and it is not a part of the ancestral property then in that case it would be the property of the appellants’ father as of now, since he is alive, and he is at full liberty to dispose of the same as per his wishes. Be that as it may, if the father of the appellants has no grievance against the consent decree, then we are unable to understand how the appellants can be allowed to challenge it.
The Court observed that "the appellants’ case has no merits. The appellants’ suit is also barred under Order 2 Rule 2 of CPC as it did not include all the properties which were part of their earlier suit. The present suit is also hit by the principles of res judicata or 10 by constructive res judicata as the appellants cannot re-agitate their claim regarding the partition of the suit property, which has already been partitioned as a result of previous litigations. The Trial Court and High Court have dealt with these issues in detail. We are not required to go into the same as we have already given our reasons above for holding that the appellants’ suit is bereft of any merits."
The Court concluded:"we see no reason to interfere with the impugned order dated 23.09.2022 passed by the High Court. Accordingly, this appeal is dismissed."