Case Note & Summary
The writ petition arose from a challenge to an interim order of a Civil Judge staying a consent decree and restoring a disposed suit at the instance of third parties. The background involved a property dispute over assets of deceased Dara Irani. In 2004, Dara Irani had executed a Deed of Assignment in favour of Anwar Liyakat Khan (petitioner No.1) and a Power of Attorney in favour of Arvindkumar C. Rao (petitioner No.2). After Irani's death, disputes emerged. Arvindkumar Rao filed RCS/2546/2022 on 2nd December 2022 to restrain Anwar Khan from alienating the properties. The suit was settled through Consent Terms on 15th December 2022, and a decree was passed on 23rd December 2022. Subsequently, an application was filed claiming certain properties were inadvertently omitted, leading to supplementary Consent Terms accepted on 4th May 2023, which included Survey No.82 among others. The respondents, claiming to be holders of Survey No.82, filed an application under Section 151 read with Order I Rule 10 of the Code of Civil Procedure, 1908, to recall the consent decree, alleging fraud. The Civil Judge, by order dated 6th November 2023, stayed the decree and restored the suit to file, allowing the respondents to seek impleadment. The petitioners then invoked the writ jurisdiction of the Bombay High Court. The primary legal issue was whether third parties to a consent decree could maintain such an application in a disposed suit. Petitioners argued it was not maintainable and the proper remedy was a separate suit, also contending that inherent powers under Section 151 cannot be invoked when other remedies exist. They relied on precedents including Triloki Nath Singh v. Anirudh Singh and Gulam Nabi Khanday v. Mushtaq Ahmad. Respondents countered that the decree was collusive and obtained by fraud, which vitiates all acts, citing Ganpatbhai Mahijibhai Solanki v. State of Gujarat. The court examined the scope of Order XXIII Rule 3 (as amended in 1976) which allows compromise on matters beyond the suit, and considered whether allegations of fraud could be determined in a summary proceeding. It noted that a finding of fraud requires a proper adjudication. The judgment, pronounced on 9th June 2025, did not provide a final operative decision in the available excerpt.
Headnote
A) Civil Procedure - Consent Decree - Third Party Challenge - Code of Civil Procedure, 1908, Order XXIII Rules 3, 3A; Section 151 - The question was whether strangers to a consent decree can apply for its recall in the disposed suit. The petitioners contended that such application is not maintainable and the proper remedy is a separate suit. The respondents relied on fraud. The court considered precedents and noted that inherent powers under Section 151 cannot be exercised when other remedy is available. (Paras 6-12, 17) B) Civil Procedure - Compromise of Suit - Scope of Order XXIII Rule 3 - Code of Civil Procedure, 1908, Order XXIII Rule 3 - The amendment to Order XXIII Rule 3 permits a compromise between parties even concerning matters not the subject matter of the suit. Thus, the mere inclusion of properties not originally in the suit in consent terms does not per se invalidate the compromise. (Paras 17) C) Fraud on Court - Allegation in Consent Decree - Fraud vitiates all solemn acts but must be proved in a properly constituted proceeding - Code of Civil Procedure, 1908, Section 151 - The respondents alleged that the consent decree was obtained by fraud by including their property. The court noted that a finding of fraud must be arrived at objectively after adjudication in a properly constituted suit, not in a summary manner in an application for impleadment in a disposed suit. (Paras 12)
Issue of Consideration
Whether the respondents, who are strangers to the consent decree, can be permitted to file an application in a disposed off suit and seek recall of the consent decree.
Final Decision
Decision not clearly stated
Law Points
- Legal points not extracted
- Order XXIII Rule 3 of Code of Civil Procedure
- 1908 permits compromise covering subjects not part of the suit
- a third party to a consent decree cannot apply for recall but must file a separate suit
- Section 151 CPC inherent powers cannot be used if other remedy exists
- fraud vitiates all solemn acts but must be proved in a properly constituted proceeding
