Source: Bombay High Court

Why in News?

Recently, the Bombay High Court in the matter of Moti Dinshaw Irani and Anr. v. Phiroze Aspandiar Irani and Ors., has held that if the earlier suit itself was pending and no decree therein had been passed, there would be no question of the provisions of Rule 3A of Order XXIII of the Code of Civil Procedure, 1908 (CPC).

What was the Background of Moti Dinshaw Irani and Anr. v. Phiroze Aspandiar Irani and Ors. Case?

• A special civil suit was filed Firoz Aspandiar Irani as plaintiff no.1 and Dinshaw Khikhushroo Irani as plaintiff no.2.
• The plaintiffs claim to be owners of the suit property by virtue of various sale deeds executed in their favor.
• They sought possession of the suit lands from defendant nos.1 and 2.
• Thereafter, an application for partition and compromise were made in the suit.
• During the pendency of the suit, original plaintiff Dinshaw Khikhushroo Irani passed away.
• His legal heirs were added to the suit, and they filed an application challenging the compromise recorded in the suit, alleging it to be illegal and void, which was later rejected.
• The legal heirs of Dinshaw Irani filed another special civil suit seeking to declare the alleged partition recorded in the first suit as illegal and void.
• The Trial Court held that the suit was not maintainable as per Order XXIII Rule 3A of the CPC.
• Thereafter, the present appeal has been filed before the Bombay High Court which was allowed by the Court.

What were the Court’s Observations?

• A division bench of Justices AS Chandurkar and Jitendra Jain observed that if the earlier suit itself was pending and no decree therein had been passed, there would be no question of the provisions of Rule 3A of Order XXIII of the CPC being attracted.
• The Court also clarified that Rule 3A bars suits to set aside a decree on the ground of compromise being unlawful. Since the suit was still pending and no decree had been drawn based on the compromise, Rule 3A was not applicable.

What is Rule 3A of Order XXIII of CPC?

About:

• Order XXIII of CPC deals with the withdrawal and adjustment of suits.
• Rule 3A of Order XXIII of CPC deals with the bar to suit.
• This rule was inserted in the year 1976.
• It states that no suit shall lie to set aside a decree on the ground that the compromise on which the decree is based was not lawful.
• This provision indicates that no suit shall lie to set aside a decree on the ground that the compromise on the basis of which the decree is passed was not lawful.
• A plain reading of this provision indicates that the earlier suit should have been disposed of by passing a decree in view of a compromise entered into between the parties. In such a contingency, a subsequent suit raising a challenge that the compromise recorded in the earlier suit was not lawful would not lie.

Case Law

• In Triloki Nath Singh v. Anirudh Singh (2020), the Supreme Court held that the suit for a declaration which was filed before the civil court was not maintainable in the light of Order 23 Rule 3A of CPC. The bar also applies to strangers to compromise proceeding.