Case Note & Summary
The case arises from a partition suit filed by Dinbandhu Ojha (original plaintiff) seeking 1/4th share in the property of common ancestor Thakur Ojha. During the pendency of the suit, a compromise petition was filed jointly by the plaintiffs and defendants, which was accepted by the Sub-Judge-01, Muzaffarpur on 22nd February 1994, and a final decree was prepared on 27th May 1997. Approximately 28 years later, the legal representatives of defendant no.5 (Chaturbhuj Chaudhary) filed Miscellaneous Case No.07 of 2022 seeking to set aside the compromise decree on the ground that the signatures of defendant no.5 were forged and the compromise was obtained by fraud. The Trial Court allowed the application on 7th February 2024, and the High Court dismissed the revision against that order. The appellants (legal heirs of the original plaintiff and other co-sharers) appealed to the Supreme Court. The Supreme Court framed the issue of whether the compromise decree could be set aside after such a long delay. The Court noted that the compromise petition was not properly verified and the signatures of defendant no.5 were forged, making the decree a nullity. The Court held that the courts below had correctly exercised their inherent power under Section 151 CPC to set aside the decree, as fraud vitiates all proceedings. The Court also held that the period of limitation does not apply when a decree is challenged on the ground of fraud. The appeal was dismissed, upholding the setting aside of the compromise decree.
Headnote
A) Civil Procedure - Compromise Decree - Fraud - Order 23 Rule 3 CPC - The court considered whether a compromise decree passed in 1994 could be set aside in 2022 on the ground that the signatures of defendant no.5 were forged and the compromise was obtained by fraud. The Supreme Court held that the compromise decree was a nullity as the compromise petition was not properly verified and the signatures were forged, and the courts below had correctly exercised their inherent power under Section 151 CPC to set it aside despite the delay. (Paras 4-10) B) Limitation - Fraud - Order 23 Rule 3 CPC - The court examined the issue of limitation in challenging a compromise decree on the ground of fraud. The Supreme Court held that when a decree is alleged to be a nullity due to fraud, the period of limitation does not apply, and the court can exercise its inherent power under Section 151 CPC to prevent abuse of process. (Paras 8-10) C) Civil Procedure - Verification of Compromise - Order 23 Rule 3 CPC - The court considered the requirement of verification of a compromise petition under Order 23 Rule 3 CPC. The Supreme Court held that the compromise petition must be signed by the parties and verified before the court, and if the signatures are forged, the decree is void ab initio. (Paras 5-7)
Issue of Consideration
Whether a compromise decree passed in 1994 can be set aside in 2022 on the ground of fraud, and whether the courts below correctly exercised their discretion in allowing the application under Order 23 Rule 3 CPC read with Section 151 CPC.
Final Decision
The Supreme Court dismissed the appeal, upholding the orders of the Trial Court and the High Court setting aside the compromise decree dated 22nd February 1994.
Law Points
- Compromise decree
- fraud
- Order 23 Rule 3 CPC
- limitation
- Section 151 CPC
- inherent power
- verification of compromise
- forged signatures
- nullity
