Whether the compromise decree can be passed on such issues or properties which are not subject matter or issue?

Question: Whether the compromise decree can be passed on such issues or properties which are not subject matter or issue? [MPHJS 2016]

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Answer

Order 23 Rule 3 of Civil Procedure Code (hereinafter referred to as CPC), 1908 lays down provision for Compromise of suit. The provision lay down as under:

“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 satisfied the plaintiff in respect of the whole or any part of the subject-matter of the suit, the Court shall order such agreement, compromise satisfaction to be recorded, and shall pass a decree is 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 not 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, it is to be noted that a compromise decree can be passed even if the subject matter of the agreement, compromise of satisfaction is not the same as the subject-matter of the suit in terms of the provisions of Order XXIII Rule 3 of CPC.

In the recent case of Ripudaman Singh v. Tikka Maheshwar Chand (2021) the Hon’ble Supreme Court observed that the compromise decree entered into between the parties in respect of land which was not the subject matter of the suit is valid and is thus a legal settlement. It would be relevant to notice that the defendant-respondent has not disputed such settlement on any admissible grounds before any forum.

The object of the arrangement is to protect the parties from long-drawn litigation. Thus, a compromise decree can be passed even on such issues or properties which are not subject matter or issue because parties to the suit may agree otherwise to the subject matter of the suit.

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