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Issues involved: Appeal against order allowing appeal, validity of compromise decree, legality of compromise agreement, maintainability of appeal under Section 96 C.P.C.
The plaintiff filed a suit against the defendant seeking relief for injunction and declaration regarding a property transaction. A compromise was reached between the parties during the trial, leading to a decree in favor of the plaintiff. The defendant appealed against this decree, claiming the compromise was unlawful and obtained by impersonation. The Court below allowed the appeal, setting aside the decree and remanding the matter for fresh consideration. The High Court heard arguments on the legality of the compromise and the maintainability of the appeal under Section 96 C.P.C. The Court analyzed the validity of the compromise agreement in light of Section 23 of the Contract Act, which prohibits agreements against public policy. It was observed that the plaintiff sought to transfer ownership of the disputed property without a registered instrument, which is impermissible under the Transfer of Property Act. The Court concluded that the compromise was not a lawful agreement and the trial court erred in deciding the suit based on this compromise. Regarding the maintainability of the appeal under Section 96 C.P.C., the Court referred to the decision in Banwari Lai v. Smt. Chando Devi, which clarified that challenges to compromise petitions can be raised through applications under Order XXIII Rule 3 proviso or appeals under Section 96(1) C.P.C. The Court emphasized that the mere mention of a wrong section does not affect the jurisdiction of the Court to decide the appeal. Therefore, the Court dismissed the appeal, upholding the decision of the Court below to set aside the compromise decree and remand the matter for fresh consideration.
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