Supreme Court: Unsigned Compromise Decree Invalid; 25-Year Delay No Bar To Challenge In Exceptional Cases

The Supreme Court has upheld the setting aside of a 1994 compromise decree in a partition suit, holding that a compromise not signed by the affected party, as required under Order XXIII Rule 3 of the Code of Civil Procedure (CPC), is contrary to law and cannot be sustained.

A Bench of Justices Sanjay Karol and Nongmeikapam Kotiswar Singh dismissed an appeal filed by the legal heirs of the original plaintiffs, affirming the orders of the trial court and the Patna High Court that had set aside a compromise decree passed more than three decades ago.

The dispute arose from a partition suit in which a compromise petition was accepted by a civil court in 1994. The legal heirs of one of the defendants challenged the decree in 2022, alleging that their predecessor had neither signed the compromise petition nor authorized his counsel to surrender his rights in the property.

Examining the requirements of Order XXIII Rule 3 CPC, the Supreme Court reiterated that a valid compromise must be in writing and signed by the parties. While an advocate may sign on behalf of a client in certain circumstances, such authority must be expressly granted or justified by exceptional circumstances.

The Court found no material showing that the defendant had authorized his lawyer to enter into the compromise on his behalf. In the absence of such authorization, the mandatory requirement of voluntary consent could not be established, rendering the compromise decree legally unsustainable.

Addressing the issue of delay, the Court acknowledged that the challenge was brought nearly 25 years after the decree. However, it held that limitation principles cannot be used to perpetuate an illegality, particularly where substantial property rights are affected and allegations of fraud and lack of consent are raised.

The Bench observed that the case involved serious disputes regarding family relationships, ownership rights, the authenticity of signatures, and knowledge of the original proceedings. Given these contested facts and the invalidity of the compromise itself, the Court held that the extraordinary delay deserved to be overlooked in the interests of justice.

Accordingly, the Supreme Court upheld the decision setting aside the compromise decree and directed that the partition suit be decided through a full-fledged trial, despite the passage of nearly 37 years since its institution.

Case: Krishna Kumar Ojha & Ors. v. Jitendra Chaudhary & Ors. (2026 INSC 662)
Decision Date: July 1, 2026.