In a significant judgment delivered on December 13, 2024, the Supreme Court ruled that an aggrieved party has a statutory right to file a recall application seeking the restoration of proceedings under Order 23 Rule 3 of the Code of Civil Procedure (CPC) if the terms of a compromise agreement are violated, even after a decree is passed. This ruling came in the appeal filed against the Rajasthan High Court’s decision, which had dismissed a recall application seeking the restoration of compromise proceedings.
The case involved Navratan Lal Sharma, who sought to restore the compromise proceedings after the opposing party allegedly failed to adhere to the agreed terms. The High Court had initially rejected the application, reasoning that the recording of the compromise did not explicitly grant the liberty to restore the appeal.
The Supreme Court bench, consisting of Justices PS Narasimha and Manoj Misra, disagreed with the High Court’s reasoning. The Court emphasized that the right to file a recall application is a statutory right under the CPC and cannot be curtailed simply because the compromise decree does not explicitly mention the restoration of the appeal. The Court reaffirmed that only the court that recorded the compromise is competent to consider its legality, and no other remedy—such as an appeal or a fresh suit—can be pursued to challenge a compromise decree. The judgment underscored that when a statutory remedy exists, it is the court’s responsibility to allow the litigant to avail of it.
The ruling also highlighted that, from a public policy standpoint, courts should avoid curtailing remedies provided by law. It was pointed out that the statutory remedy for challenging a compromise decree cannot be restricted merely because it wasn’t explicitly granted in the order recording the compromise.
As a result, the appeal was allowed, and the case was remanded back to the Rajasthan High Court for a reconsideration of the restoration application on its merits. This decision strengthens the legal position that parties to a compromise have the right to seek restoration if the terms of the compromise are not met.
Case Title: Navratan Lal Sharma v. Radha Mohan Sharma & Ors.
Legal Principle: Statutory rights under Order 23 Rule 3 of the CPC for recall applications are protected, and parties may seek restoration of proceedings if compromise terms are violated.
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