No separate suit allowed seeking revocation of consent decree allegedly based on compromise obtained through fraud: Rajasthan HC

High Court of Rajasthan has reiterated that notwithstanding Order 23, Rule 3A constitutes a strong barrier to challenging the compromise decrees, if there is evidence that the compromise was obtained by deception or coercion, even though it cannot be pursued as an independent suit, it within the section can be charged 151, CPC.

Order 23, Rule 3A, CPC, provides that no lawsuit may set aside a decree on the grounds that the compromise on which the decree was based was not lawful.

The bank of Judge Manoj Kumar Garg relied on the Supreme Court case Ajanta LLP vs. Casio Keisanki Kabushiki Kaisha d/b/a Casio Computer Co. Ltd. and another (“Ajanta LLP Case”) to note that if the compromise decree was tainted with fraud, misrepresentation or error, the Court may use the inherent powers conferred under Article 151, CPC, to correct the decree for amendments/amendments to the consent decree.

A compromise decree was entered between the petitioner and the respondent in a civil suit. The defendant filed an application under Article 151, CPC, for revocation of the compromise decree, alleging that the decree was obtained on the basis of fraud.

The petitioner filed an application with a prayer to dismiss the application filed by the respondent, but the petitioner’s application was dismissed by the court. The applicant has filed a request for review with the court against this decision of the court.

Counsel for the petitioner submitted that the compromise decree could not be set aside on an application filed under Section 151, CPC, and the only remedy available was to file a civil suit to set aside the decree.

This argument was rejected by the Court, which referred to Order 23, Rule 3A and held that the primary purpose of the provision was to increase the finality of compromise decrees and prevent further litigation based on claims of the illegality of the compromise, thus the burden of compromise was reduced. litigate in court.

The Court further noted that this clause did not mean, however, that a compromise could not be questioned if evidence showed that it had been obtained by deception or coercion. The Court referred to the Supreme Court case R. Rajanna Vs. S. R. Venkataswamy and others where it was held that Order 23, Rule 3A implied that a question as to the legality of a compromise could be considered only by the court which passed the decree on the basis of that compromise. And the court cannot ask the parties to file a separate lawsuit on this subject.

Furthermore, reference was made to the Ajanta LLP casewhich held that,

“A consent decree would not serve as an estoppel where the compromise was tainted by fraud, misrepresentation or error. The Court, in the exercise of its inherent jurisdiction, may rectify the consent decree to ensure that it is free from clerical or arithmetic errors so as to bring it into conformity with the terms of the compromise. Undoubtedly, the Court will entertain an application under Article 151 of the Code of Civil Procedure for amendment/amendment of the consent decree if it has been tainted by fraud, misrepresentation or misunderstanding.”

In this backdrop, it was held that the trial court had not erred in dismissing the petitioner’s application and the application was therefore dismissed.

Title: Umesh Kumar & Anr. against Lila Bai & Anr.

Quote: 2024 LiveLaw (Raj) 332

Click here to read/download the order