The Supreme Court in the case Vipan Aggarwal vs Raman Gandotra observed on the ground that if it suffers from fraud and collusion can be filed before the Court which granted the decree. an application can be made seeking recall of a compromise decree.
The court observed that the application filed by the appellants before the Court which granted the decree cannot be said to be without jurisdiction. The appellants had thus the right to avail either the remedy of appeal in terms of Order 43 Rule 1A CPC or by way of an application before the court granting decree.
Whether an aggrieved person against the compromise decree has a right to file an application before the Court which granted the decree was the issue being raised before the Apex Court.
In Banwari Lal V. Chando Devi (Smt.) (Through LRS.) & Anr. The issue has already been settled in the said case that a party challenging a compromise can file a petition under proviso to Rule 3 of Order 23, or an appeal under Section 96(1) of the Code, in which he can question the validity of the compromise in view of Rule 1-A of Order 43 of the Code, was held by the court in the said judgement. In this case the court came to the conclusion on the material produced that the compromise was not lawful within the meaning of Rule 3, there was no option left except to recall that order. within the meaning of the explanation to the proviso to Rule 3 and as such not lawful. The learned Subordinate Judge was perfectly justified in entertaining the application filed on behalf of the appellant and considering the question as to whether there had been a lawful agreement or compromise on the basis of which the Court could have recorded such agreement or compromise on 27.2.1991, if the compromise or the agreements itself is fraudulent then it shall be deemed to be void. In the circumstances of the case, there shall be no order as to costs while setting aside the order passed by the High Court.
The plaintiff contended before the court that they had not executed any compromise nor appeared before the court in support thereof and that the Advocate appearing on their behalf has shown complete ignorance about the same and that the defendant has committed a fraud upon the plaintiffs. Furthermore, the court dismissed the application. An application is filled under Order 23 Rule 3 read with Section 151 of the Code of Civil Procedure before the court which passed the Compromise Decree by the plaintiff. Under the said provision and that the remedy is envisaged under Order 43 Rule 1-A. the Jammu and Kashmir High Court held that plaintiff could not seek recalling of compromise decree, the court ordered while dismissing the petition filled by the petitioner.
The bench comprising of Justice Hemant Gupta and the Justice V. Ramasubramanian observed these circumstances while setting aside the High court judgment.