Do consent decrees put an end to further litigation between parties in all cases? Not a blanket rule, holds Supreme Court

Supreme Court: The bench of MM Shantanagoudar* and Vineet Saran, JJ has lucidly explained the law governing consent decree and has held that the well settled law that consent decrees are intended to create estoppels by judgment against the parties, thereby putting an end to further litigation between the parties, does not apply as a blanket rule in all cases.

In Gupta Steel Industries v. Jolly Steel Industries Pvt. Ltd.,  (1996) 11 SCC 678 and Suvaran Rajaram Bandekar v. Narayan R. Bandekar, (1996) 10 SCC 255, it has been held by the Supreme Court that it would be slow to unilaterally interfere in, modify, substitute or modulate the terms of a consent decree, unless it is done with the revised consent of all the parties thereto.  

However, in Byram Pestonji Gariwala v. Union Bank of India, (1992) 1 SCC 31, it has been held that a consent decree would not serve as an estoppel, where the compromise was vitiated by fraud, misrepresentation, or mistake. Further, this Court in the exercise of its inherent powers may also unilaterally rectify a consent decree suffering from clerical or arithmetical errors, so as to make it conform with the terms of the compromise.

Hence, keeping in line with the Court’s jurisprudence in the above mentioned cases, the Court said that it would be cautious in exercising it’s inherent power to interfere in this consent decree, except where there is any exceptional or glaring error apparent on the face of the record.

[Compack Enterprises India (P) Ltd. v. Beant Singh, 2021 SCC OnLine SC 97, decided on 17.02.2021]


Judgment by: Justice MM Shantanagoudar

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