(A) Code of Civil Procedure, 1908 — O. XXIII R. 3 — Compromise decree — Essential requirements.
After the 1976 amendment to the Code, a lawful compromise can be recorded only if it is in writing and signed by the parties or by a duly authorised representative. Compliance with the mandatory requirements of Order XXIII Rule 3 is a condition precedent for passing a valid compromise decree. (Paras 5.1–5.2).
(B) Code of Civil Procedure, 1908 — O. XXIII R. 3 — Compromise by Advocate — Authority to compromise.
An advocate has no implied authority to surrender or conclude the substantive rights of the client by entering into a compromise unless expressly authorised or justified by exigent circumstances. In the absence of express authorisation or proof of necessity, a compromise signed or accepted on behalf of the client is invalid. (Paras 5.2(f), 5.3–5.6).
(C) Code of Civil Procedure, 1908 — O. XXIII R. 3 — Compromise decree — Duty of Court.
While recording a compromise, the Court is not a mere recording authority. It must apply its judicial mind to satisfy itself that the compromise is lawful, voluntary and in conformity with the requirements of Order XXIII Rule 3 before affixing its seal of approval. (Paras 5.2(e), (g), 5.6).
(D) Code of Civil Procedure, 1908 — O. XXIII R. 3 — Voluntary consent — Absence of signature of party.
Where the compromise petition does not bear the signature of the concerned party and there is no material establishing express authorisation to counsel, the voluntary consent contemplated by Order XXIII Rule 3 is absent and the compromise decree is contrary to law. (Paras 5.3–5.6).
(E) Code of Civil Procedure, 1908 — S. 151 — Compromise decree obtained by fraud — Recall — Delay.
The inherent power under Section 151 CPC may be exercised to recall a compromise decree alleged to have been obtained by fraud. Mere delay, however long, cannot be permitted to perpetuate an illegal or fraudulent decree where substantive rights are affected. (Paras 6.1–6.7).
(F) Limitation — Fraud — Delay of 25 years — Effect.
Though limitation is an important principle of law, it cannot be employed to defeat substantive rights or perpetuate an illegality. Where fraud is alleged, the compromise is prima facie contrary to law, and foundational facts remain seriously disputed, extraordinary delay may, in the facts of the case, be condoned. Such indulgence is not to be treated as a general rule but depends upon the facts of each case. (Paras 6.3–6.7).
(G) Partition Suit — Compromise decree set aside — Consequence.
Where the compromise decree is found to be invalid for non-compliance with Order XXIII Rule 3 and material factual disputes remain unresolved, the proper course is to set aside the compromise decree and direct adjudication of the partition suit by a full-fledged trial on evidence. (Para 6.7).
