The Supreme Court held that in cases of non-compliance with compromise terms, a party has the statutory right to seek restoration of an appeal. The High Court erred in denying restoration despite non-compliance with the agreed terms.

1. Case Background (Paras 1-2):

• The appellant filed a suit for declaration and injunction against alleged forgery of power of attorney and sale deeds.
• The Trial Court dismissed the suit, prompting a first appeal before the Rajasthan High Court.

2. Compromise During Appeal (Paras 5-7):

• A compromise was recorded during the pendency of the first appeal.
• Terms included financial obligations, with specific remedies in case of dishonor of cheques.
• High Court disposed of the appeal based on the compromise but denied liberty for restoration of the appeal.

3. Application for Restoration (Paras 8-9):

• Cheques issued under the compromise were dishonored.
• Appellant sought restoration of the appeal, alleging fraud and non-compliance with compromise terms.
• High Court rejected the application solely because the earlier order denied liberty for restoration.

Legal Provisions Discussed:

• Order 23, Rule 3 & 3A, CPC: Governing compromise decrees and the bar on suits to set aside such decrees.
• Section 19, Contract Act: Voidability of agreements induced by fraud.
• Section 28, Contract Act: Prohibits agreements that restrain legal remedies.

Ratio Decidendi:

1. Statutory Remedy Cannot Be Denied (Paras 10-14):
   • A statutory right to seek restoration under Order 23, Rule 3 exists when fraud or non-compliance is alleged.
   • The High Court's denial of restoration based on its earlier order was incorrect.
2. Public Policy on Access to Justice (Paras 15-16):
   • Agreements that prevent parties from approaching courts violate Section 28 of the Contract Act.
   • Compromise deed itself allowed restoration in case of non-compliance, supporting appellant's remedy.

Subjects:

Compromise decree, restoration of appeal, statutory remedies.
Compromise, fraud, restoration, Order 23 Rule 3, access to justice, void agreements.