The Delhi High Court has held that when a suit is dismissed as withdrawn pursuant to a settlement between the parties, such an order does not constitute an executable decree unless the Court formally records the compromise and passes a decree in terms of Order XXIII Rule 3 of the Code of Civil Procedure, 1908 (CPC).
The case arose from an execution petition seeking enforcement of an order dated 7 February 2020 passed in connected civil suits involving the transfer of a trust property. The petitioner contended that the 2020 order, which recorded the parties’ settlement and undertakings, operated as a compromise decree enforceable under Section 2(2) CPC.
The judgment debtors, however, argued that the suits were simply dismissed as withdrawn under Order XXIII Rule 1 CPC and that no decree had ever been passed in terms of the settlement. Hence, the execution petition was not maintainable.
Upon examining the record, Justice Purushaindra Kumar Kaurav held that although the order of 7 February 2020 referred to the settlement terms, it did not reflect judicial satisfaction regarding the lawfulness of the compromise, nor did it contain any direction decreeing the suits. The Court found that subsequent attempts to convert the order into a consent decree, including a modification order passed on 30 May 2022, had been recalled on jurisdictional grounds, restoring the position that no decree existed.
The Court distinguished the decisions in Salahuddin Mirza v. Mohd Qamar, 2021 SCC OnLine Del 5019 and Sir Sobha Singh & Sons Pvt. Ltd. v. Shashi Mohan Kapur (2020) 20 SCC 798, observing that unlike those cases, where the courts had recorded compromises and directed the drawing of formal consent decrees, the present case involved only a withdrawal order without any executable direction, and hence, no decree could be said to exist.
Accordingly, the Court dismissed the execution petition as not maintainable. The decree holder was granted liberty to seek appropriate independent remedies in law.
Appearances
Mr. Rajat Aneja, Mr. Kunal Gosain, Mr. Aditya Sharma, Ms. Anamika Bag and Mr. Kartikey Sikka, Advocates.
Mr. Gaurav Gupta and Mr. Rupal Gupta, Advocates for JD No.1. Mr. Desh Raj and Mr. Gaurav Gupta, Advocates for JD No.2.
