A compromise decree cannot stand when pending litigation makes its terms incapable of performance.

Smt. Rekha Hemant Magadum, since deceased and represented by her daughter, challenged a compromise decree dated 12 December 2011 in O.S. No. 150/2011, a suit for specific performance, recorded before a Mega Lok Adalat.

The petitioner contended that the conciliator had not signed the compromise or decree and that her mother’s signature on the compromise petition was forged.

The compromise itself referred to pending litigation concerning the property and stated that execution of the sale deed was not then possible.

Respondents 1 and 2 fairly accepted that, in light of that clause, the compromise could not have been entered into.

1. Whether the compromise decree could stand where the compromise acknowledged pending litigation over the property and the parties’ inability to execute the sale deed.

2. Whether the compromise decree was sustainable when the conciliator had not signed the compromise.

Order XXIII Rule 3 of the Code of Civil Procedure, 1908 requires the court, before recording a compromise, to be satisfied that the suit has been adjusted by a lawful agreement or compromise in writing and signed by the parties; the court must then record it and pass a decree in accordance with it.

The Rule’s Explanation provides that an agreement or compromise void or voidable under the Indian Contract Act, 1872 is not lawful for this purpose.

The court stated that the trial court must examine the compromise terms and be satisfied that they are lawful and capable of being acted upon.

It also treated the conciliator’s failure to sign the compromise as a ground on which the decree could not be sustained.

The compromise expressly recognised pending litigation concerning the same property and stated that the sale deed could not then be executed. The trial court therefore ought to have examined whether the compromise was lawful and capable of performance before recording it; instead, it accepted the compromise despite those terms.

The respondents’ concession reinforced the conclusion that the compromise should not have been entered into.

The court also relied on the conciliator’s failure to sign the compromise and noted the petitioner’s allegation that her mother’s signature had been forged.

It restored the suit to the trial court’s file for disposal in accordance with law.