Separate Suit Challenging Consent Decree Not Maintainable : Supreme Court

The Supreme Court has held that a separate suit challenging a consent decree is not maintainable.

A party to a consent decree based on a compromise to challenge the compromise decree on the ground that the decree was not lawful i.e., it was void or voidable has to approach the same court, which recorded the compromise, the bench comprising Justices MR Shah and Sanjiv Khanna observed.

In this case, the defendant to a suit filed an application under order VII Rule 11 CPC for rejection of the plaint on various grounds and mainly on the ground that the suit for setting aside the consent decree/Compromise Decree would be barred under Order XXIII Rule 3A of CPC. The Trial Court allowed the same and rejected the plaint on the ground that in view of Order XIII Rule 3A CPC, no independent suit would be maintainable against the Compromise Decree. Allowing the appeal filed by the plaintiff, the High court quashed and set aside the order passed by the Trial Court rejecting the plaint and remanded the matter to the Trial Court by observing that the effect of the provisions of Order XXXII Rules 1 to 7 CPC has not been considered by the Trial court, which would have a direct bearing on the validity of the Compromise Decree.

The issue raised in appeal before the Supreme Court was whether the Trial Court rightly rejected the plaint in exercise of powers under Order VII Rule 11 CPC on the ground that an independent suit challenging the Compromise Decree would be barred in view of Order XXIII Rule 3A CPC is concerned, on plain reading of Order XXIII Rule 3A CPC?

In this regard, the court noted the observations made in a recent judgment in R. Janakiammal Vs. S.K. Kumarasamy, (2021) 9 SCC 114 [LL 2021 SC 280]. The court said:

"It is observed and held by this Court that Rule 3A of Order XXIII bars the suit to set aside the decree on the ground that the compromise on which decree was passed was not lawful. It is further observed and held that an agreement or compromise which is clearly void or voidable shall not be deemed to be lawful and the bar under Rule 3A shall be attracted if compromise on the basis of which the decree was passed was void or voidable. In this case, this Court had occasion to consider in detail Order XXIII Rule 3 as well as Rule 3A.

"That thereafter it is specifically observed and held that a party to a consent decree based on a compromise to challenge the compromise decree on the ground that the decree was not lawful i.e., it was void or voidable has to approach the same court, which recorded the compromise and a separate suit challenging the consent decree has been held to be not maintainable"

Thus, the court concluded that the Trial Court was absolutely justified in rejecting the plaint on the ground that the suit for the reliefs sought challenging the Compromise Decree would not be maintainable.

Yet another contention raised by the plaintiff was that in suit the plaintiff has not specifically prayed for setting aside the Compromise Decree and what is prayed is to declare that the Compromise Decree is not binding on him and that for the other reliefs sought, the suit would not be barred and still the suit would be maintainable. To reject this contention, the bench noted that, in this case, the reliefs of declaration of title, recovery of possession, cancellation of revocation of Gift Deed, declaration for DGPA and Deed of Assignment-cum-DGPA have been sought in the plaint. The said reliefs can be granted only if the Compromise Decree  is set aside. 

As held by this Court in a catena of decisions right from 1977 that a mere clever drafting would not permit the plaintiff to make the suit maintainable which otherwise would not be maintainable and/or barred by law. It has been consistently held by this Court that if clever drafting of the plaint has created the illusion of a cause of action, the court will nip it in the bud at the earliest so that bogus litigation will end at the earlier stage...

...Therefore, by asking such multiple reliefs, the plaintiff by clever drafting wants to get his suit maintainable, which otherwise would not be maintainable questioning the Compromise Decree. All the aforesaid reliefs were subject matter of earlier suits and thereafter also subject matter of O.S. No.1750 of 2015 in which the Compromise Decree has been passed.

Allowing the appeal, the court also added that the High Court has erred in setting aside the said order by entering into the merits of the validity of the Compromise Decree on the ground that the same was hit by Order XXXII Rule 7 CPC.

"What was required to be considered by the High Court was whether the independent suit questioning the Compromise Decree would be maintainable or not. The aforesaid crucial aspect has not been dealt with by the High Court at all and High Court has gone into the validity of the Compromise Decree in view of Order XXXII Rule 7 CPC. At the stage of deciding the application under Order VII Rule 11 CPC, the only thing which was required to be considered by the High Court was whether the suit would be maintainable or not and that the suit challenging the Compromise Decree would be maintainable or not in view of Order XXIII Rule 3A CPC and at this stage, the High Court / Court was not required to consider on merits the validity of the Compromise Decree. "

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