Compromise decree

The most important question in relation to this subject is whether a ‘Compromise decree’ is an ordinary decree as defined under Section 2(2) of Code of Civil Procedure 1908, or it is merely an arrangement/settlement or a lawful agreement between the parties with the seal of Court super-added to it.

Referring to Section 375 of the CPC (Act XIV of 1882), (similar to Order XXIII Rule 3 CPC as it stood prior to the amendment of 1976),Lord Buckmaster,inHemanta Kiimari Debi v. Midnapur Zamindari Co.,states:
... In the first place, it is plain that the agreement or compromise, in whole and not in part, is to be recorded, and the decree is then to confine its operation to so much of the subject-matter of the suit as is dealt with by the agreement...although the operative part of the decree would be properly confined to the actual subject-matter of the then existing litigation the decree taken as a whole would include the agreement. This, in fact, is what the decree did in the present case. It may be that as a decree it was incapable of being executed outside the lands of the suit, but that does not prevent it's being received in evidence of its contents".

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 the acceptance by the Court of something to which the parties agreed. Such a decree cannot operate asres judicata. (Subba Rao v. Jagannadha)

The question which arose before this Court was whether the High Court was right in directing the appellant to seek redress in a separate suit. The Court observed that as soon as a question relating to the lawfulness of the agreement/ compromise is raised before the Court that passed the decree on the basis of any such agreement or compromise, it is that Court and that Court alone who can examine and determine that question.

The Court concluded that the High Court in the process remained oblivious of the provisions of the Order 23 of Rule 3 and 3 A of CPC, as it cannot direct the parties to file a separate suit on the subject for which no such suit will lie in view of the provision of Order 23 Rule 3 A of CPC.. The Court allowed the appeal and set aside the Order of the High Court and remitted the matter back to the High Court for disposal in accordance with the law. (R. Rajanna v. S.R. Ventakaswamy)

Regards,

Anaita Vas