Compromise Decree Under CPC Order 23 Rule 3 And 3b
Written by Vaishnavi Bandhakavi
Abstract:
Decree means a formal expression of an adjudication which so far regards the court expressing it, conclusively determines the rights of the parties in the suit may be either preliminary or final,[1] depending on the court’s formal expression of an adjudication. The rejection of the plaint will be included.
Compromise of suits: 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 subject-matter of the suit, the court shall pass a decree in accordance therewith so far as it relates to the parties to the suit.
INTRODUCTION:
The withdrawal and compromise of suits under rule 1, 2, and 4 are dealt with in Order 23 CPC. Compromise is the settlement of disputes by mutual consent. Sometimes a compromise is arrived by the parties that will end the litigation battle and allow good sense to get it resolved. We can say that. A compromise decree is not a court order, but it is only something that parties had agreed on themselves.[2]
A compromise decree is not a court order, but it is something that both parties agreed on. The court will record statements, arguments, agreements, compromise or satisfaction. A compromise decree of the court is satisfied that the parties are willing to mutually set up wholly or in part by any lawful agreement in writing and signed by both of them.
COMPROMISE DECREE:
The general rule is that the compromise or agreement is presented to the court by the parties. The court checks the legality and then passes the decree or recalls it. The compromise decree is a seal of the court on the agreement between the parties. The court’s acceptance of something agreed by the parties is not the decision of the court.
ORDER 23 Rule 3-A:
The compromise decree once passed cannot be set aside on the grounds of its legality. No suit can be filed against the compromise decree, questioning its legality or lawfulness.
ORDER 23 Rule 3-B:
In the case of a representative suit, the agreement or compromise can never be entered into with the consent of the court. The court must have a word with all the parties of the representative suit and must consider the interest of them.
Conditions:
There are some conditions which must be satisfied before a consent decree is passed:
- There must be an agreement or compromise
- It must be in writing and signed by the party
- It must be lawful
- It must be recorded by the court
- A compromise decree must have been passed
Under provisions of rule 3, a party to the compromise may be challenged if the above stated conditions are not fulfilled by the parties. [3]
LEGAL PROVISIONS
Applicability to other proceedings:
Order 23 rule 3 of the code applies to civil suits. But the underlying principle of the said provision applies to other proceedings as well.
Satisfaction of courts:
The court has the duty to satisfy itself regarding the terms and agreements. The court must be satisfied that the agreements or compromise is according to the conditions stated above and it can pass a decree in accordance with it. A court passing a compromise decree performs a judicial act and not a ministerial act. Therefore, the court must satisfy itself taking evidence or an affidavit or otherwise that the agreement is lawful or fulfilled the above-stated conditions.
Compromise on behalf of a minor
Order 32 rules 6,7 provide that no next friend or guardian of the minor shall, without the leave of the court, enter into an agreement or compromise on behalf of the minor with reference to the suit, unless that leave is expressly recorded in the proceedings.
Execution of compromise:
A compromise decree is executable in the same manner as an ordinary degree. But in some conditions where the degree gives effect to an unlawful compromise or is passed by the court without jurisdiction to pass it, it is a nullity and its validity can be set up even in execution.
CASE LAWS:
In the case of Subba Rao V Jgannandha:
A compromise decree is not a decision of the court, nor can it be said that a decision of the court was implicit in it. It is acceptance by the court of something to which the parties agreed. Such a decree cannot operate in areas of judicata
In the case of Justice Rama Rao in New Miraj café V ramakaran :
It was observed that section 2(2) C.P.C defines decree as the final culmination of the rights of the parties in a suit. Order XXIII Rule 3 C.P.C formulates the procedure of providing a legal seal to the adjustments arrived at by the parties by passing a decree in consonance with the terms of such adjustment and such decree is designated as a compromise decree.
In the case of “Byram Pestonji Ganwala VS Union of India :
The court held that a judgement by consent is intended tostop litigation between the parties just as much as a judgement resulting from a decision of the court at the end of a long drawn out fight. A compromise decree creates an estoppel by judgement and states that “ Any judgement or order which in other respects answers to the description of area judicatais nonetheless so because it was made in pursuance of the consent and agreement of the parties.Accodingly, judgements, orders, and awards by consent have always been held no less efficacious as estoppels than other judgements, orders, or decisions, though doubts have been occasionally expressed
CONCLUSION:
The parties have the right to file a suit against the disputed matter and also to settle it mutually at any point of the suit. The adjustment or settlement has to be done with the consent of the parties. The necessary conditions have to be fulfilled. The decree will be passed if the court is satisfied with the compromise.
REFERENCE :
Order 23 Rule 3 CPC, January 4, 2023
R. Rajanna vs. S.R. Venkataswamy & Ors.]
(SC, 20.11.2014)
Ruchitha Bafna, 08 February 2022, understanding-a-compromise-decree-in-the-light-of-banwari-lal-vs-chando-devi-1993
[1] Naeemullah Azeem, Compromise Decree: A Detailed Overview, LSI e-Journal, https://www.legalserviceindia.com/legal/article-311-compromise-decree-a-detailed-overview.html#:~:text=Order%20XXIII%20Rule%203%20C.P.C.,is%20designated%20as%20compromise%20decree.
[2] Naresh Kumar, Compromise of suit | Order 23 Rules 3, 3-B Under CPC,
February 2, 2019, https://www.lawnotes4u.in/compromise-of-suit-order-23-rules-3-3-b-under-cpc/
[3] Drishti Miglani, Order XXIII Rule 3: Detailed Analysis, Bn’W journal , 20th July, 2021. https://bnwjournal.com/2021/07/20/order-xxiii-rule-3-detailed-analysis/
