Supreme Court: In a civil appeal arising from a challenge to a compromise decree passed in a partition suit nearly three decades earlier, a Division Bench of Sanjay Karol* and Nongmeikapam Kotiswar Singh, JJ., dismissed the appeal and upheld the orders of the Trial Court and the Patna High Court setting aside the compromise decree. The Court held that a compromise under Order 23 Rule 3 Civil Procedure Code, 1908 (CPC) must be in writing and signed by the parties or by a duly authorised representative acting with express authorisation or under exigent circumstances, and that a counsel cannot act merely on implied authority to bind a party to a compromise affecting valuable property rights.
Observing that the compromise petition had not been signed by Defendant 5 and that there was no material to establish either his express consent or any circumstance justifying his counsel’s execution of the compromise on his behalf, the Court held that the mandatory requirement of a voluntary and lawful compromise had not been fulfilled. The Court further held that although the challenge to the compromise decree had been brought after nearly twenty-five years, the law of limitation could not be invoked to perpetuate an illegality or defeat substantive rights where the compromise itself was contrary to law. Accordingly, the Court affirmed the setting aside of the compromise decree and directed that the partition suit be decided through a full-fledged trial on merits.
Background
The present appeal arises from the judgment of the Patna High Court dismissing Civil Revision No. 103 of 2024, thereby affirming the order of the Sub-Judge-I (East), Muzaffarpur, setting aside a compromise decree passed in a partition suit nearly three decades earlier. The original partition suit (Suit No. 128 of 1989) had been instituted by Dinbandhu Ojha seeking declaration of his one-fourth share in the ancestral properties of Thakur Ojha. During the pendency of the suit, a joint compromise petition was filed by the parties, including Defendant 5, Chaturbhuj Chaudhary, who had entered appearance through counsel. The Trial Court accepted the compromise on 22 February 1994 and, subsequently, a final decree was drawn on 27 May 1997 in terms thereof. After almost twenty-five years, the legal representatives of Defendant 5 instituted Miscellaneous Case No. 7 of 2022 seeking to set aside the compromise decree on the ground that it had been procured by fraud and that Defendant 5 had neither signed nor consented to the compromise. Accepting these allegations, the Trial Court set aside the compromise decree by order dated 7 February 2024, which was upheld by the High Court in revision. Aggrieved thereby, the legal heirs of the original plaintiffs and other co-sharers have preferred the present appeal before the Supreme Court.
Issue
Whether the compromise as accepted by the Civil Court on 22nd February 1994 was in accordance with Order 23 Rule 3 CPC or not?
Analysis
The Supreme Court examined the legal position governing compromise decrees under Order 23 Rule 3 CPC and reiterated that, after the 1976 amendment, a lawful compromise must be in writing and signed by the parties, the object being to prevent false or frivolous pleas of compromise. The Court observed that although a counsel or duly authorised representative may sign a compromise on behalf of a party, such authority must be founded on express authorisation or exigent circumstances.
In the present case, the compromise petition merely recorded the consent of Defendant 5 through his counsel, but there was nothing on record to show that the counsel had been expressly authorised to enter into the compromise or that any exigent circumstance justified acting without the client’s approval. Consequently, the mandatory requirement of a voluntary and lawful compromise under Order 23 Rule 3 CPC was not satisfied, rendering the compromise decree contrary to law.
On the question of delay, the Court acknowledged that the challenge to the compromise decree had been instituted nearly twenty-five years after its passing. However, it held that the law of limitation cannot be employed to perpetuate an illegality or defeat substantive rights, particularly where allegations of fraud are raised and the compromise itself does not satisfy the statutory requirements. The Court further noted that the foundational facts relating to the parties’ relationship, title, authority of counsel, knowledge of the proceedings and alleged fraud were all seriously disputed and required adjudication on evidence.
Decision
Agreeing with the reasoning of the Trial Court, the Supreme Court held that the extraordinary delay deserved to be overlooked in the peculiar facts of the case, while clarifying that such an approach would not apply as a matter of course in every case. Upholding the orders of the courts below, the Court affirmed the setting aside of the compromise decree and directed that the issues arising in the partition suit be adjudicated through a full-fledged trial, observing that the rights of the parties could not be determined without due process of collection and appreciation of evidence. Accordingly, the appeal was dismissed.
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[Krishna Kumar Ojha v. Jitendra Chaudhary, SLP(C) Nos.13671 of 2025, decided on 1-7-2026]
*Judgement authored by: Justice Sanjay Karol
