A suit may be decreed under Order XXIII Rule 3 on lawful settlement terms filed under seal.

The plaintiff, M/s. Vaishno Enterprises, and the defendant, M/s. Hamilton Medical AG, reached an out-of-court settlement recorded in a Settlement Agreement dated 1 August 2026.

The parties jointly sought permission to proceed under Order XXIII Rule 3 of the Code of Civil Procedure, 1908 (“CPC”), without placing the unredacted agreement on the public record because it contained confidentiality obligations.

The defendant agreed that the notarised original would be filed in a sealed cover, while a copy with paragraph G, paragraph 1.6, and the entirety of Clause 3 redacted would be filed in the proceedings.

The parties also sought refund of the court fee under Section 16 of the Court Fees Act, 1870.

The Settlement Agreement provided for full and final resolution of disputes relating to the parties’ consultancy agreements and past commercial relationship, waiver of future claims, release and discharge of claims, and withdrawal of pending proceedings.

Whether the Court could permit the settlement agreement to be filed in a sealed cover, with specified portions redacted from the copy placed on the public record, in view of the confidentiality obligations between the parties.

Whether the settlement terms were lawful and satisfied the requirements of Order XXIII Rule 3 of the CPC so as to justify recording the compromise and disposing of the suit.

Whether the plaintiff was entitled to refund of the court fee under Section 16 of the Court Fees Act, 1870 read with the Court Fees (Delhi Amendment) Act, 2026.

The Court applied Section 151 of the CPC to regulate the procedure and protect the confidentiality of the settlement agreement; Order XXIII Rule 3 of the CPC, under which a suit may be disposed of when the parties establish a lawful compromise in writing and signed by them; Section 16 of the Court Fees Act, 1870, read with Section 150 of the CPC and the Court Fees (Delhi Amendment) Act, 2026, concerning refund of court fees upon settlement; and the general principle that parties are bound by the terms of a lawful settlement once it is recorded by the Court.

No judicial precedent was cited or relied upon in the judgment.

The Court accepted the parties’ explanation that disclosure of the complete Settlement Agreement would compromise their contractual confidentiality obligations.

It therefore directed that the notarised original be preserved in a sealed cover and that a redacted copy be filed, balancing confidentiality with the need to place the operative settlement terms before the Court.

On examining the settlement, the Court found that it recorded a written compromise addressing the disputes between the parties, including termination of the dispute, waiver of claims, release and discharge, and withdrawal of proceedings.

Since the terms were lawful and fell within the scope of Order XXIII Rule 3 CPC, there was no impediment to decreeing the suit in accordance with them.

The Court also directed refund of the court fee in accordance with the applicable statutory provisions and formalities.

It recorded the settlement under Order XXIII Rule 3 CPC, held the parties bound by its terms, and directed that a decree sheet be drawn up in terms of the redacted agreement.

The suit and all pending applications were disposed of, the plaintiff was granted refund of court fees subject to completion of the prescribed formalities, and the date fixed for 16 September 2026 was cancelled.