Ajanta LLP Vs. Casio Keisanki Kabushiki Kaisha d/b/a Casio Computer Co. Ltd. & Another - (Supreme Court) (04 Feb 2022)

Consent decree cannot be modified/ altered unless the mistake is a patent or obvious mistake

MANU/SC/0143/2022

Civil

Present appeal is against impugned judgment passed by High Court, dismissing the application filed by the Appellant under Sections 152 and 153 read with Section 151 of the Code of Civil Procedure, 1908 (“the CPC”) seeking modification of the judgment.

The Appellant submitted that, the High Court committed an error in dismissing the Application by considering the same to have been filed only under Section 152 of the CPC. It was submitted that, the High Court ought to have considered the Application by referring to Order 23 Rule 3 read with Section 151 of the CPC. The learned Senior Counsel argued that misunderstanding between the parties is a valid ground to interfere with a consent decree.

A consent decree would not serve as an estoppel, where the compromise was vitiated by fraud, misrepresentation, or mistake. The Court in exercise of its inherent power may rectify the consent decree to ensure that, it is free from clerical or arithmetical errors so as to bring it in conformity with the terms of the compromise. The Court can entertain an Application under Section 151 of the CPC for alterations/ modification of the consent decree if the same is vitiated by fraud, misrepresentation, or misunderstanding.

There is no allegation either of fraud or misrepresentation on the part of the Respondent. Present Court is unable to agree with the Appellant that there was a mistake committed while entering into a settlement agreement due to misunderstanding.

Correspondence between the advocates for the parties who are experts in law would show that there is no ambiguity or lack of clarity giving rise to any misunderstanding. Even assuming there is a mistake, a consent decree cannot be modified/ altered unless the mistake is a patent or obvious mistake. Or else, there is a danger of every consent decree being sought to be altered on the ground of mistake/ misunderstanding by a party to the consent decree. The judgment of the High Court is upheld. Appeal dismissed.

Tags : CONSENT DECREE ALTERATION MISTAKE