A compromise decree concerning coparcenary property cannot bind a person whose legal interest in the property was never represented in the proceedings, the Supreme Court has held.
A bench of Justices Vikram Nath and Sandeep Mehta ruled that where a necessary party is left out of a partition dispute and a compromise decree is subsequently passed, the omitted party can approach the same court seeking recall of the decree.
The ruling arose from a property dispute involving the legal heirs of a deceased daughter of a man who died intestate. The appellants claimed a one-fourth share in their maternal grandfather’s property, contending that it had devolved equally upon his four children, including their mother.
The dispute had travelled through the courts before the parties eventually arrived at a compromise. A decree was then passed by the Telangana High Court on the basis of that settlement.
The appellants, however, had never been made parties to the proceedings despite claiming an interest in the property through their deceased mother.
They subsequently sought recall of the compromise decree. The High Court declined to entertain that request and indicated that the appellants could instead pursue a separate suit or approach a higher court after obtaining leave.
The Supreme Court disagreed with that approach.
It held that the compromise decree was legally ineffective because it had been obtained without impleading a party whose presence was necessary for an effective adjudication of the dispute.
The Court observed that the compromise decree entered into by the plaintiffs and defendants, without impleading the deceased daughter or her legal heirs, was a nullity in the eyes of law.
The bench also rejected the argument that Order XXIII Rule 3A of the Code of Civil Procedure prevented the appellants from challenging the decree.
The provision generally bars a separate suit challenging a decree on the ground that the compromise forming its basis was unlawful. However, the Supreme Court said this restriction could not be used to shut out persons who were themselves necessary parties to the original proceedings and whose rights were affected without their participation.
The Court noted that the deceased daughter and her legal heirs could not be regarded as strangers to the dispute. Consequently, they could challenge a compromise reached behind their back and seek recall of the resulting decree.
The Supreme Court allowed the appeal and sent the matter back to the Telangana High Court for fresh consideration of the recall applications in accordance with its observations.