The Calcutta High Court clarified that a separate suit to set aside a consent decree passed under Order 23 Rule 3 of the Code of Civil Procedure is not maintainable; the court that recorded the decree must itself decide questions of validity, including allegations of fraud.
Background & Facts
The Dispute
The original suit (C.S. No. 309 of 2012) was filed by Sudhi Ranjan Das & Anr. (plaintiffs) against Surajit Das (defendant) concerning title and possession of the residential property at No. 77F, Karaya Road, Kolkata - 700019. During pendency of the suit, the parties allegedly reached a settlement, but the defendant contends that the purported consent decree dated 8th September 2015 was obtained by fraud.
Key Facts
- On 13th March 2015, during a hearing for settlement, the plaintiffs’ nephew informed the court that parties were ready for settlement except for the dwelling house at 77F Karaya Road.
- On 29th August 2015, the defendant was informed that a deed of conveyance for a Howrah property would be executed; he proceeded to 44 Karaya Road at 1 P.M. and, being told other documents were required, signed papers in haste without verification.
- Immediately after signing, the Registrar of the District Registry Office, Howrah, left with the original deed of conveyance; the other signed papers were retained by plaintiff no. 1 for handover to the intended purchaser.
- On 2nd February 2016, the defendant lodged a police complaint alleging forceful entry into the Karaya Road premises by miscreants taking advantage of his absence.
- On 11th February 2016 and 23rd February 2016, the Defendant received notices from the Decree Department regarding a draft decree dated 8th September 2015 to be settled in the suit.
- The defendant’s advocate-on-record stated he had no knowledge of any decree dated 8th September 2015 being passed and had not received notice for the matter to appear before Justice Arijit Banerjee on 8th September 2015.
- On 15th March 2016, the advocate-on-record secured an adjournment before the Registrar-in-Insolvency, with the matter adjourned to 17th March 2016.
- Subsequent enquiries revealed that the suit appeared in the ‘To Be Mentioned’ list of Justice Arijit Banerjee on 8th September 2015 without notice to the defendant or his advocate-on-record, while the plaintiffs’ advocate-on-record was listed.
- The defendant contends that plaintiffs fraudulently concealed: (i) that he did not knowingly sign the settlement; (ii) that his advocate-on-record did not sign the terms; (iii) that he never agreed to relinquish his share in the dwelling house; (iv) that no notice was given to his advocate-on-record; and (v) that the decree was obtained behind his back to deceive him.
- The defendant further states that he moved out of the Karaya Road property in 2009, sold his flat in South City Complex, and now resides in Rosedale Garden Complex, New Town, Rajarhat.
- The plaintiffs allege the defendant’s petition is fraudulent, vexatious, and malafide, accusing him of suppressing documents and making false allegations about his residence and counsel.
- An intervenor, seeking to purchase the property, obtained a deed of conveyance from the defendant on 2nd August 2024 but was directed to vacate by police acting on the court’s order.
Procedural History
- 13.03.2015: Settlement hearing where parties indicated readiness except for the dwelling house.
- 29.08.2015: Date alleged for signing of terms of settlement and execution of deed.
- 08.09.2015: Date of the purported consent decree passed by Justice Arijit Banerjee.
- 02.02.2016: Police complaint lodged by defendant regarding trespass.
- 11.02.2016 & 23.02.2016: Notices from Decree Department about draft decree dated 08.09.2015.
- 15.03.2016: Adjournment secured by defendant’s advocate-on-record before Registrar-in-Insolvency.
- 19.04.2016: Present application (I.A. No. GA 6 of 2016) filed to set aside the consent decree.
- 22.09.2025: Matter referred to mediation by judgment and order.
- 18.09.2026: Judgment delivered by Justice Biswarup C Howdhury.
Relief Sought
The defendant/applicant sought: (a) adjudgment that the terms of settlement dated 29th August 2015 be declared non-est and not binding; (b) declaration that the decree dated 08.09.2015 passed on the basis of said terms be a nullity; (c) cancellation and/or setting aside of the terms of settlement; (d) recall and/or setting aside of the decree dated 08.09.2015; (e) interim injunction restraining plaintiffs from giving effect to the terms of settlement and decree; (f) interim orders in terms of prayers (a) - (b); (g) costs to be borne by plaintiffs; and (h) such further orders as the court deems fit.
The Legal Issue
The central question was whether a separate suit to set aside a consent decree passed under Order 23 Rule 3 of the Code of Civil Procedure is maintainable, or whether the court that recorded the decree must itself decide its validity, including allegations of fraud.
Arguments Presented
For the Applicant/Petitioner (Defendant in the Original Suit)
The applicant contended that the consent decree was obtained by fraud, citing specific instances: lack of knowledge of signing, absence of his advocate-on-record’s signature, non-relinquishment of share in the dwelling house, non-service of notice to his advocate, and procurement of the decree behind his back. He relied on affidavit allegations and argued that unless the decree was set aside, his interest in the valuable property would be lost. He also pointed to the plaintiffs’ suppression of documents and their motive to exploit his developmental share.
For the Respondents (Plaintiffs and Intervenor)
The plaintiffs denied all allegations of fraud, asserting that the terms of settlement were signed by the parties with intent to develop the premises, that the defendant was present with his counsel when the matter was taken up before Justice Arijit Banerjee on 8th September 2015, and that the decree was lawfully passed. They characterized the applicant’s petition as fraudulent, vexatious, and malafide, an abuse of process, and highlighted his failure to disclose his sale of ancestral shares and his meticulous nature as a practicing advocate. The intervenor stated she purchased the property in good faith based on documents provided by the defendant but was compelled to vacate pursuant to the court’s order.
The Court's Analysis
The Court examined Order 23 Rule 3 of the CPC, which mandates that where a suit is adjusted by a lawful agreement in writing signed by the parties, the court shall record such compromise and pass a decree therein. The Explanation clarifies that an agreement void or voidable under the Indian Contract Act 1872 shall not be deemed lawful. The Court noted judicial pronouncements holding that the court can facilitate an agreed compromise but must never impose it on an unwilling party; a consent decree is a contract between parties sealed with the court’s approval, and its validity depends wholly on the validity of the underlying agreement or compromise.
The Court then considered the Supreme Court’s decision in R. Rajanna v. S.R. Venkataswamy (AIR 2001 SC 3137), which held that the only remedy for a party challenging a consent decree is to approach the court that recorded the compromise and establish that there was no valid compromise; that court itself must then decide the question. The Court emphasized that the legislature’s intention, as reflected in Order 23 Rule 3 and the Supreme Court precedent, is to bar a separate suit to challenge a consent decree; the forum that recorded the compromise must retain jurisdiction to determine its validity.
Applying these principles, the Court observed that the compromise decree in question was passed by Justice Arijit Banerjee under Order 23 Rule 3 CPC. Consequently, the present application to set aside that decree ought to be placed before the judge who passed it (or, as a matter of judicial discipline, before the Hon’ble Chief Justice for necessary orders). The Court declined to decide the validity of the compromise itself, deeming it appropriate that the matter be heard by the court that originally recorded the decree.
The Verdict
The application I.A. No. GA 6 of 2016 was not decided on its merits; the matter was directed to be placed before the Hon’ble Chief Justice for necessary orders. No relief was granted, no costs were awarded, and no compliance timelines were set, as the court refrained from adjudicating the validity of the consent decree and instead referred the issue to the Chief Justice’s bench.
What This Means For Similar Cases
Consent Decrees Cannot Be Collaterally Attacked
A party seeking to set aside a consent decree must approach the court that recorded the decree; a separate suit is not maintainable. This prevents forum shopping and ensures that the court overseeing the compromise retains control over its validity.
Fraud Allegations Must Be Raised in the Original Proceeding
Allegations of fraud, misrepresentation, or lack of consent concerning the underlying agreement should be raised before the same court that passed the decree, either as objections during the recording process or via an application to set aside filed before that court.
Judicial Discipline in Referring Matters
Where a consent decree is challenged, the court before which the challenge is filed should, as a matter of comity and judicial propriety, transfer the matter to the judge who recorded the decree or to the Chief Justice for appropriate orders, rather than attempting to decide the validity itself.
Practitioners Must Verify Procedural Posture
Advocates should check whether a consent decree under Order 23 Rule 3 CPC has been passed and, if challenged, ensure the application is filed before the appropriate forum to avoid dismissal on maintainability grounds.
