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Consent Decree Would Not Serve As An Estoppel Where The Compromise Was Vitiated By Fraud, Misrepresentation, Or Mistake: Supreme Court
Yesterday the supreme court observed that a consent decree will not serve as estoppel, where the promise was vitiated by means of mistake, fraud or misrepresentation. This is a case where a complaint was filed against Compack Enterprises for ownership and mesne profits brought by one Beant Singh with regard to the ground floor of the property owned by the former. The High Court granted a decree of consent directing that 'the petitioner compensate the respondent an additional sum of Rs.1,00,000/p.m. by way of mesne income, with a 10 percent rise' after every 12 months, i.e. from 1.10.2009, 1.10.2011, etc. with effect from 1.10.2008 (i.e. the date on which the 2006 Arrangement expired) until the date on which the petitioner hands over actual possession of the property. It was contended by the petitioner that the high court has mistakenly recorded that the petitioner has consented to hand over the possession of the entire property to the respondent. The high court also recorded a mesne profit of 10% every 24 months instead of 12 months
The bench comprising Justices Mohan M. Shantanagoudar and Vineet Saran observed that through judgment against the parties, consent decrees are meant to establish estoppels, thus ending further lawsuits between the parties. It will then be slow to intervene, alter, change or modulate the terms of a consent decree arbitrarily, provided this is achieved with the revised consent of all the parties to the consent decree. However, the bench observed:
“This formulation, however, is far from absolute and does not in all cases apply as a blanket rule.”
The bench held that in upholding the terms of the consent decree ordering the petitioner to hand over custody of all the property in the matter, the High Court was right. With respect to the Mesne Profits issue, the bench noted that the recording of a 10 percent rise in the consent decree every 12 months was an inadvertent mistake on the part of the High Court. The court then disposed of the appeal.
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