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Compromise Deed

 

Team LawDocs

Compromise Deed : There are various instances wherein to put an end to a dispute the parties in dispute. Choose to resort to alternate dispute resolution mechanisms such as arbitration, conciliation or mediation etc. The objective of the parties to choose alternate means to resolve disputes arises. Out of the need to save the time, money and other resources among other reasons. One of the most commonly occurring scenarios that the parties witness is to achieve a “compromise” by adhering to certain terms and conditions mutually agreeable to all the parties in dispute with each other.

Pursuant to the rounds of negotiations when parties reach a conclusive agreement, the same is recorded by way of a compromise deed and is presented before the court or any other relevant authority adjudicating the dispute in that point in time. Once the consent of the authority is received, an order is passed and the compromise deed becomes a decree binding the parties signatory to it.

Compromise deed

Recently, in one judgment dated 13th February 2020, Mohammade Yusuf and Ors. Vs Rajkumar and Ors. the Hon’ble Apex Court was pose with the question of requirement of registration of a compromise decree. The decision of trial court and High Court challenge by way of a an appeal filed before the Apex Court.

The main dispute in question arises out of the ownership and possession of land. Hereinafter refer to as “suit property” which was record in the name of the defendant and was in the ownership of the plaintiff. The parties pursuant to a mutual agreement record in the compromise decree that the suit property was declare in the favour of the plaintiff while the rest of the property vested with the defendant. Another dispute arose and a suit by Respondent No. 1 and 2 was file claiming their right over two distinct parts of land within the suit property.

Appellant

To its response, a written statement and counter claim was file by the Appellant. Claiming their peaceful right and possession over the said area. During the evidence the Appellants rely upon and exhibit the compromise decree. Which was object by the opposite party on the grounds of non-registration of the same. The Learn Judge pass the order in favour of the opposite party and that the registration is mandate in view of Section 17(e) of the Registration Act.

The same was challenge by way of an appeal before the High Court. And the court upheld the decision of the trial court. Aggrieved with this the Plaintiff filed an appeal before the Supreme Court of India. Which upon a conjoint reading of Section 17(1) and 17(2) (b) and (c) that the compromise decree doesn’t require registration. And that the lower courts erred in passing their orders. Therefore set aside the orders passed by the lower court and the High Court.

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