LI Network
Published on: February 14, 2024 at 16:35 IST
The Bombay High Court addressed the issue of the applicability of Order 23 Rule 3A of the CPC in cases where a compromise is recorded but the suit is still pending.
The Court observed that the bar under Order 23 Rule 3A against a suit challenging a compromise decree is not triggered when a compromise is merely recorded in the earlier suit, but the suit has not been disposed of.
A division bench, comprising Justice AS Chandurkar and Justice Jitendra Jain, allowed an appeal against a trial Court order that declared a suit non-maintainable, emphasizing that although a compromise had been recorded in the earlier suit, it had not been decreed.
The Court stated, “If the earlier suit itself was pending and no decree therein had been passed, there would be no question of the provisions of Rule 3A of Order XXIII of the Code being attracted.”
The case involved Firoz Aspandiar Irani and Dinshaw Khikhushroo Irani, who filed a special civil suit in 1978 claiming ownership of a property and seeking possession from the defendants.
Despite a compromise being recorded during the suit, it had not been decreed when the trial court held the subsequent suit, filed in 1994, not maintainable under Order 23 Rule 3A.
Order 23 Rule 3A of the CPC restricts suits to set aside a compromise decree if it is based on an unlawful compromise.
The Court noted that when the trial Court declared the 1994 suit not maintainable in 1995, the 1978 suit was still pending, and no decree had been drawn based on the compromise.
The Court clarified that Rule 3A doesn’t apply when the suit is pending and no decree has been issued based on the compromise.
The Court pointed out that the plaintiffs in the 1994 suit were challenging the alleged partition, not seeking to set aside any decree. As a result, Rule 3A did not bar the 1994 suit.
The High Court held that the trial Court had erred in declaring the suit not maintainable under Order 23 Rule 3A and quashed the order, allowing the 1994 suit to proceed for adjudication on merits.
Case Title: Moti Dinshaw Irani and Anr. v. Phiroze Aspandiar Irani and Ors.