compromise

Under Order XXIII Rule 3 CPC, if the court is satisfied that a suit has been adjusted wholly or partly by a lawful agreement in writing signed by the parties, it records the compromise and passes a decree in its terms. An agreement that is void or voidable under the Contract Act is not “lawful” for this purpose.

No appeal lies from a decree passed with the consent of the parties (s.96(3)), and no separate suit lies to set aside a compromise decree on the ground that the compromise was not lawful (Rule 3A); the challenge must be made before the court that recorded it. A compromise on behalf of a minor needs the court's leave (Order XXXII Rule 7). In criminal cases the equivalent is compounding.

Example

The parties' signed compromise dividing the property was recorded under Order XXIII Rule 3 CPC and a decree passed in its terms, from which no appeal lies.

In Indian law

• Order XXIII Rules 3 and 3A, Code of Civil Procedure, 1908
• Section 96(3), CPC (no appeal from consent decree)
• Order XXXII Rule 7, CPC (leave of court for compromise on behalf of a minor)

See also

decree · lok adalat · compounding of offences · mediation

Read more in the study notes

• Methods of dispute resolution: adversarial, inquisitorial and ADR (Alternative Dispute Resolution Systems)
• Need for ADR, international commitments and suitability of disputes (Alternative Dispute Resolution Systems)
• ADR and the Civil Procedure Code: section 89 and Afcons (Alternative Dispute Resolution Systems)
• Lok Adalats and Permanent Lok Adalats (Alternative Dispute Resolution Systems)
• Arbitration: meaning, kinds and salient features of the 1996 Act (Alternative Dispute Resolution Systems)
• Principal steps in arbitration and interim measures (Alternative Dispute Resolution Systems)