A party who signs and participates in a settlement cannot later invoke Order IX Rule 13 alleging non-service.

The petitioners, defendant nos. 2, 3, 4 and 7, were guarantors for credit facilities availed by M/s Majestic Hotels Ltd. from Tourism Finance Corporation of India Ltd. (“TFCI”). Following default, TFCI instituted O.A. No. 715/2017 before DRT-I, Delhi for recovery of approximately ₹242.17 crores; the debt was subsequently assigned to UV Asset Reconstruction Company Ltd. (“UVARCL”), which was substituted in the proceedings.

The borrower, the petitioners and certain other defendants entered into a One Time Settlement (“OTS”) with UVARCL. The settlement was recorded through a Memorandum of Understanding dated 29 December 2017 and I.A. No. 1602/2018. By order dated 26 October 2018, DRT-I recorded the OTS and directed issuance of a Recovery Certificate as security, to remain in abeyance while instalments were paid, but to become enforceable for the entire original claim upon default.

On 26 October 2021, the petitioners sought recall of the order dated 26 October 2018 under Order IX Rule 13 of the Code of Civil Procedure, 1908, alleging want of service and fraud. The application, later renumbered as TMA No. 1/2024 before DRT-III, was dismissed on 27 August 2024. The DRAT dismissed the petitioners’ appeal on 6 July 2026.

The petitioners thereafter invoked Articles 226 and 227 of the Constitution challenging the orders of DRT-III and the DRAT.

Whether the concurrent orders of DRT-III and the DRAT declining to recall the order dated 26 October 2018 suffered from jurisdictional error, perversity or any other defect warranting interference under Articles 226 and 227 of the Constitution.

Whether the petitioners could invoke Order IX Rule 13 CPC on the grounds that they had not been served and that the OTS order had been obtained by fraud, despite having signed and participated in the settlement proceedings.

Whether the alleged absence of an advocate’s signature or initials on every page of the settlement application invalidated the OTS or the consequential Recovery Certificate.

Whether the petitioners could challenge issuance of the Recovery Certificate against defendant nos. 5, 6 and 8, who allegedly had not signed the OTS.

The Court applied the limited and supervisory scope of jurisdiction under Articles 226 and 227 of the Constitution, holding that interference is justified only where a subordinate tribunal acts beyond its jurisdiction, commits a serious dereliction of duty, violates fundamental principles of law or justice, or reaches a finding unsupported by evidence or so perverse that no reasonable tribunal could have reached it; Article 227 is not an appellate jurisdiction for correcting ordinary errors of fact or law, as explained in Estralla Rubber v. Dass Estate (P) Ltd., (2001) 8 SCC 97.

The Court also relied on Shalini Shyam Shetty v. Rajendra Shankar Patil, (2010) 8 SCC 329, which holds that the High Court cannot substitute its own assessment merely because another view is possible and may interfere only in cases of clear unreasonableness or serious abuse of process causing real injustice.

Order IX Rule 13 CPC provides a remedy to a defendant against an ex parte decree passed in the defendant’s absence; it does not ordinarily apply where the party appeared, participated in the proceedings and signed the compromise.

A vague allegation of fraud, raised after substantial delay, must contain particulars of the person committing the fraud, the manner in which it was committed and its effect, supported by cogent evidence.

The Court found that the petitioners had themselves signed I.A. No. 1602/2018, negotiated the OTS with UVARCL, participated in the proceedings and accepted the benefits of the settlement.

In those circumstances, they could not plausibly contend, years later and after breach of the OTS, that they had neither been served nor participated in the proceedings.

Since the order dated 26 October 2018 was acted upon and remained unchallenged for more than two years, the delayed application under Order IX Rule 13 was not maintainable on the basis asserted.

The objections regarding absence of an advocate’s signature or initials on every page were rejected because the petitioners did not dispute the genuineness or terms of the signed settlement, which had also been partly performed.

The allegation of fraud was considered vague and unsupported by particulars or cogent evidence.

The objection concerning the Recovery Certificate against other defendants could not be raised by the petitioners on their behalf.

Applying the restrained standard under Articles 226 and 227, the Court found no jurisdictional error, perversity or serious injustice in the concurrent findings of DRT-III and the DRAT.

The allegations of non-service and fraud, as well as the objections concerning execution formalities and the Recovery Certificate, were rejected.

Finding no jurisdictional error or perversity in the orders of DRT-III dated 27 August 2024 and the DRAT dated 6 July 2026, the Court dismissed the writ petition and disposed of all pending applications.