ORDER
S.R. Singharavelu, J.
1. This is an application filed under Order XIV Rule 8 of O.S. Rules r/w Proviso to Order XXIII Rule 3(A)C.P.C. to set aside the compromise decree dated 27-1-2003 arrived in C.S. No. 49 of 2003 filed by the respondent against this petitioner claiming a money decree for Rs. 2.50 crores and interest of Rs. 45 lakhs and it is at such claim a compromise was arrived at on 27-1 -2003, whereby a decree for 3.00 crores was passed and which is not sought to be set aside.
2. This petitioner company was managed by a Board of Directors originally headed by one Mr. G. Venkateswaran (known as G.V.), who ended his life on 3-5-2003 probably under financial pressure, thereupon all the Directors, Statutory Auditor and Company Secretary resigned and there was a total vacuum. Subsequently there was a Scheme approved by this Court order dated 29-4-2004 in C.P. Nos. 89 and 90 of 2004 and a new Board of Directors took over the management, who upon scrutiny found that several creditors played influence upon G.V. and inflated their claims by alleged unreasonable methods and one such incident is the present compromise decree in C.S. No. 49 of 2003, which was a suit for recovery of money based upon exorbitant-claim than the original and real one of Rs. 1,38,80,000/-payable by the plaintiff company to the defendant as on 14-1-2003. According to the applicant the respondent had advanced a total sum of Rs. 1,53,80,000/- on various dates till 9-1-2003 in connection with the release of a picture titled, 'Sokka Thangam' and the applicant company had repaid a sum of Rs. 15.00 lakhs to the respondent by cheque dated 12-7-2002 and thus it was only Rs. 1,38,80,000/- that was due by the applicant to the respondent as on 14-1 -2003 and the inflated claim of Rs. 2.95 crores was made by the respondent in C.S. No. 49 of 2003 and a compromise decree was made for a further inflated sum of Rs. 3.00 crores.
3. In the mean time another Company viz., Asian Capital Consolidates & Holdings Private Limited had filed a suit in C.S. No. 523 of 2001 against the applicant company for recovery of a sum of Rs. 1,14,46,685/-which according to the applicant was untenable and time barred and that suit was rejected by this Court as time barred by a judgment dated 14-8-2001. Against the rejection of the plaint, Asian Capital Consolidates & Holdings Private Limited filed O.S.A.No. 295 of 2001 and sought for restraint on release of the above said picture 'Sokka Thangam' produced by the applicant company. There was an interim order on 9-1-2003 directing the Laboratory to deposit the net realisations into Court and permitted release of the said picture. This respondent got himself impleaded in O.S.A. (C.M.P. No. 808 of 2003) on 13-1-2003 and sought for restraint of release of the said film till his due is paid. The film was proposed to be released for the Pongal festival day on 15-1-2003. Due to such obstacles the erstwhile Chairman of the applicant company Mr. G.V. was under stress, pressure and mental agony. Therefore, it is said that he was thus forced to sign the compromise memos which culminated into a decree for 3.00 crores, which is now sought to be set aside. It was by then, the applicant company at the instance of the compromise decree paid a sum of Rs. 75.00 lakhs and agreed to make further payment of Rs. 25.00 lakhs on or before 25-1 -2003 and the entire balance was agreed to be paid on or before 31-3-2003.
4. A second charge was also created over the Shanthi and Kamala theatres at Tanjore belonging to the applicant company. Thus, a sum of Rs. 75.00 lakhs on 14-1-2003, Rs. 65.00 lakhs thereafter was received by the respondent from the applicant company. The respondent also received Rs. 59,99,985 from and out of the sum deposited by the Prasad Laboratory on behalf of the applicant company in O.S.A. No. 295 of 2001; whereas after deducting repayment of Rs. 15.00 lakhs by cheque dated 12-7-2002 from the real amount of advance made by the respondent viz., Rs. 1,53,80,000/-, while the balance was only Rs. 1,38,80,000/- and out of which receiving a sum of Rs. 75.00 lakhs, Rs. 65.00 lakhs and Rs. 59,99,985/- by the respondent, making a total of Rs. 1,99,99,985/- is an excess payment. Thus, (1,99,99,985 -1,38,80,000 makes out an excess payment of Rs. 61,19,985/-). After adjusting with interest it is contended at the end of para 7 of the plaint in C.S. No. 822 of 2005 as if the respondent still owes the plaintiff company a sum of Rs. 46,07,726/-. Besides this amount, relief of cancellation of compromise decree was also worked out to Rs. 1,56,96,984/-.
5. The respondent in para 13 of his common counter dated 18-7-2006 disputed the calculation and computation of accounts showing that a sum of Rs. 75.00 lakhs was paid by the applicant company on 14-1-2003. He would admit as per the orders of the Division Bench of this Court in O.S.A. No. 295 of 2001 that respondent had received a sum of Rs. 32,99,985/- only. According to the respondent the decree passed in C.S.No. 49 of 2003 is a judgment of admission coupled with a decree in terms of compromise memo, which cannot be questioned or set aside by the new management of the company on the ground of fraud or coercion after having utilised the amount lent by the respondent for the purpose of production of the film titled as 'Sokka Thangam' produced by the applicant company, and that it is futile on the part of the latter to go against the terms of compromise. The respondent would further contend that the settled principle of law is that even in case where the borrowals are for ultra vires purpose, in cases where the Managing Director of the company had signed the promissory notes, the company is liable to repay the said amounts to the creditors. According to the respondent the present management of the applicant company is attempting to take advantage of the said tragic demise of its erstwhile Managing Director, makes an attempt to evade its creditors. The respondent would further contend that it is the duty of the applicant company to produce the resolution book or the minutes book and show that there was no such delegation of powers by the company to the Managing Director, failing which adverse inference shall be drawn against the company. According to the respondent he is a bona fide creditor advanced huge sums of money to the applicant company for the purpose of production of a film titled as 'Sokka Thangam' and after enjoying the benefits of the compromise decree by realising the said film the petitioner cannot give a go-bye.
6. So far as the legal aspect of maintainability of the suit in C.S. No. 49 of 2003 for setting aside compromise decree is concerned it has been settled in case law reported in Banwari Lal v. Smt. Chando Devi and Anr. : AIR1993SC1139 in the following lines:
A party challenging a compromise can file a petition under proviso to Rule 3 of Order 23, or an application under Section 96(1) of the Code, in which he can now question the validity of the compromise in view of Rule 1A ofOrder 43 of the Code.
7. It was further held in Durga Prasad Tandon and Ors. v. Gaur Bramhan Sabha, Zila Nainital and Ors. 2001 AIHC 3402, it was held that apart from the application under Order 23 Rule 3 C.P.C. on consideration of the provisions of Rule 3-A that suit challenging the compromise decree as invalid and illegal was barred by provisions of Rule 3-A. For arriving at such conclusion the view of the Supreme Court was followed, which is in the following lines:
as such a party challenging a compromise can file a petition under the proviso to Rule 3 of Order 23 or appeal under Section 96(1) of the Code in which he can now question the validity of the compromise in view of Rule 1-A of Order 43 of the Code.
Thus, Application No. 3339 of 2006 in C.S. No. 49 of 2003 was correctly preferred by the applicant company seeking the relief to set aside the compromise decree on the allegation that it was arrived at by pressure, influence and taking advantage of the mental agony of the erstwhile Chairman of the applicant company.
8. From the narration of the facts mentioned above, it is made clear that there was an agreement on 19-3-2002 in and by which the respondent agreed to lend Rs. 2.50 crores. Now as admitted by the respondent himself and as also found in the letter dated 17-1-2005 of the Government of India, Office of the Deputy Director of the Income Tax, Chennai, that for the film 'Sokka Thangam' regarding which alone the agreement contemplated the respondent offered a loan of Rs. 1,87,20,000/-; out of which according to the respondent 1.00 crore was paid by him by cash and the remaining by instruments.
9. It is pertinent to mention here that there is no statement of account nor details of the instruments under which money was shown to have been paid, that was filed along with the plaint in C.S. No. 49 of 2003; nor was there any details inside the pleadings about the dates and quantum of payment; in the absence of which it would be just and necessary to analyse and verify as to whether the respondent had at all paid a loan of Rs. 1,87,20,000/- as claimed by him. It is also to be verified if that be the case why should there be a compromise arrived at for a sum of Rs. 3.00 crores. It is not mentioned in the compromise memo as if due to certain other reasons, there was a premium amount that was agreed to be paid, apart from the actual loan that was raised and the amount of interest thereon. The memo, of compromise never contemplated upon any premium amount and to proceed as if the subject matter of loan itself was Rs. 2.50 crores and interest of Rs. 45.00 lakhs and costs.
10. If really it is found that what was actually paid by the respondent as loan to the applicant was actually lesser than Rs. 1,87,20,000/- as mentioned by the respondent himself before the Income Tax Department, as is evident from the letter dated 17-1-2005 of the Income Tax Department, then there is a possibility of mutilation of quantum of loan and distortion of facts in the memo of compromise and whether it was made known or not to this Court which issued the compromise decree.
11. These factors are to be verified especially in the following context, that is to say the film 'Sokka Thangam' was proposed to be released on the Pongal Festival which fell on 15-1-2003, as it was Star Value Movie. It is at that juncture pressure was mounted on the erstwhile Chairman of applicant company by Asian Capital Consolidates & Holdings Private Limited, which filed a suit on 9-1-2003 in C.S. No. 523 of 2001, which although ended in dismissal for lack of limitation, went on appeal in O.S.A. No. 295 of 2001 and injunction order was passed in releasing the film with a direction to the concerned laboratory to deposit the amount that was received by it on behalf of the applicant into Court. It is in this circumstance this respondent filedC.M.P. No. 808 of 2003 in that O.S.A. in order to get him impleaded and stated that he was also having a credit of Rs. 2.50 crores mounted pressure; there was only one intermediate day by then for releasing the film. It is on that day there was urgent compromise memo. It is in this circumstance the erstwhile Chairman of the applicant company seem to have signed in the compromise decree for an inflated amount of Rs. 3.00 crores.
12. Had this respondent paid actual sum of Rs. 3.00 crores to the applicant company, there may not be any problem in accepting the compromise decree. Had the respondent mentioned that due to various reasons premium amount was agreed by the applicant company and therefore there was inflation in the claim, then also the decree may be sustained. In the absence of any agreed premium, and in the absence of any satisfactory reasons for inflation of the claim, then if there is variation between the actual amount and the compromise decree, that variation in the above described circumstances of urgency of the release of the film and the subsequent conduct of the Chairman of the applicant company committing suicide, may throw light upon the case of the applicant company.
13. As mentioned earlier, there is no details of payment made by the respondent in the plaint, nor was there any details of dates and quantum that was paid and the instruments wherefrom it was paid. But the letter dated 17-1 -2005 of the Income Tax Department containing certain admissions made in the correspondence of respondent, may also throw light upon the actuality of the amount, that was paid by the respondent in pursuance of the agreement dated 19-3-2002.
14. What was mentioned in the above letter dated 17-1-2005 is in the following lines:
Shri Jaswant Chand Bhandari vide his statement dated 3-12-2004 had explained that he had paid M/s. G. V. Films Ltd., a total sum of Rs. 2,00,95,000/- for the film 'Chokkathangam' and 'Aai Nee Romba Alaga Irkka' (Rs. 1,87,20,000/- for the film 'Chokkathangam' and Rs. 13,75,000/- for the film 'Aai Nee Romba Alaga Irukka'). Shri Jaswant Chand Bhandari has also explained that for the film 'Chokkathangam', out of total sum of Rs. 1,87,20,000/-, he had paid a sum of Rs. 87,20,000/- in cheque and Rs. 1,00,00,000/- in cash to M/s. G. V. Films Ltd.
Shri Jaswant Chand Bhandari was asked to explain the above said discrepancies. In response to same vide his statement dated 3-12-2004 Shri Jaswant Chand Bhandari explained that 'As already explained by me for the film 'Chokkathangam' we have advanced 1,87,20,000/- to M/s. G.V. Films Ltd. for the year 2002-2003. Out of the abovesaid Rs. 1,87,20,000/-I have paid Rs. 87,20,000/- by way of cheque which is duly reflected in my books of accounts. The balance of Rs. 1,00,00,000/- was paid in cash to M/s. G. V. Films Ltd., for the year ending 31-3-2003 which has not been accounted in my books of accounts... If you go through my account as appearing in the books of G.V. Films Ltd., which have been submitted by them you can observe that as per M/s. G. V. Films Ltd., I have advanced only a sum of Rs. 1,53,80,000/- to them both for the films 'Chokkathangam' and 'Aai Nee Romba Alaga Irukka'. Whereas I have accepted before you of making an advance of Rs. 2,00,95,000/- (Rs. 1,00,95,000/- as per tally package and Rs. 1,00,00,000/- in cash) for both the films....
As already explained by me I have never paid any DDs to M/s. G. V. Films Ltd., which had been shown to be received from me in their books of accounts. I have only given cash of Rs. 1,00,00,000/- to them, other than the cheques payments reflected in my books of accounts....
15. As the said agreement is only in respect of the film 'Chokkathangam' and not in respect of 'Aai Nee Romba Alaga Irukka', we are concerned only with the admission of Jaswant Chand Bandari that he has lent the applicant company a sum of Rs. 1.00 crore in cash and Rs. 87,20,000/- otherwise.
16. Without going into the details of payment of Rs. 87,20,000/-, the very fact of cash payment of Rs. 1.00 crore is disputed by the applicant company. There is no proof for the payment of Rs. 1.00 crore by the respondent to the applicant company nor is there admission on the part of the latter.
17. In case if that 1.00 crore was not shown to have been paid to the applicant company, then the respondent was not fair in making a claim over the sum in the compromise without explaining any reason for making a claim more than the actual loan. It is not surprise for the non disclosure of this fact by the G.V. because the latter was at that time in a critical position and was so ready to do anything in order to release the film by the next day viz., 15-1-2003. Had the respondent disclosed this fact to the Court at the time of passing decree upon compromise memo, the Court would have felt reluctant in passing decree as there was no satisfactory element of the claim as a whole. By indicating this, Mr. Ravi, the learned senior counsel for the applicant company submitted that there was a fraud committed and therefore the decree is nullity and non-est.
18. It was further argued by the learned senior counsel for the applicant company that even assuming for the sake of argument that the respondent has paid Rs. 1.00 crore as claimed by him, that is hit by Section 269SS of the Income-tax Act as well as Section 292 of the Companies Act and therefore, the subject matter of the compromise which is an agreement in so far as it is concerned in respect of payment of Rs. 1.00 crore in cash is opposed to public policy and therefore the agreement of compromise is hit by Section 23 of the Contract Act; and that there cannot be a valid decree upon an unlawful agreement of compromise.
19. Mr. Thiageswaran, learned Counsel appearing for the respondent relied upon a case law reported in Salkia Businessmen's Association and Ors. v. Howrah Municipal Corporation and Ors. : AIR2001SC2790 and culled out the following portion of the judgment made in the above case:
If Courts are not to honour and implement their own orders and encourage party litigants -- be they public authorities, to invent methods of their own to short circuit and give a go-bye to the obligations and liabilities incurred by them under orders of the Court -- the rule of law will certainly become a casualty in the process -- a costly consequence to be jealously averred by all and at any rate by the highest Courts in States in the Country.
That was a case where the proceedings were initiated by an association the members of whom were carrying on business as traders on the Grand Trunk Road in and around Salkia Chowrasta, apprehending displacement and demolition of the places of their business for the construction of a fly-over, against Howrah Municipal Corporation, Howrah, a particular mode of allotment of sites was agreed as alternative accommodation and that was subsequently violated by the authorities. The issue by then was as to whether the authorities are bound by the orders passed by the Court on the basis of the compromise memorandum. It is in that context the above observation was made as Rule of law will become certainly casualty in the process of giving go-bye to the applicants and liabilities incurred by the authorities under the orders of Court. There was no allegation of fraud or any other invalidating element urged upon the compromise agreement.
20. Mr. Thiageswaran, learned Counsel for the Respondent further submitted that the agreement of compromise was a document of admission on the part of either parties and therefore any decree passed on admission under Order 12, Rule 6 is to be upheld. Therefore it was argued that compromise memo, dated 14-1-2003 entered into by both parties contending about the actual quantum that transpired between the parties in pursuant to the agreement dated 19-3-2002 may be taken as a covenant of admission and any decree passed thereon should be given due credence. In this connection reliance was placed upon in Uttam Singh Duggal & Co. Ltd. v. United Bank of India and Ors. : AIR2000SC2740 , wherein the objects and reasons of Order 12, Rule 6 was relied upon in the following lines:
where a claim is admitted, the Court has jurisdiction to enter a judgment for the plaintiff and to pass a decree on admitted claim. The object of the Rule is to enable the party to obtain a speedy judgment at least to the extent of the relief to which according to the admission of the defendant the plaintiff is entitled.
Therefore, it was held as follows:
Even without referring to the expression 'otherwise' in Rule 6 of Order 12 CPC, we can draw an inference in the present case on the basis of the pleadings raised in the case in the shape of the applications under that Rule and the answering affidavit which clearly reiterates the admission. If that is so, interpretation of the expression 'otherwise' becomes unnecessary.
But in the above cited case the application of Order 23, Rule 3, CPC was not contemplated and what was applied as per the circumstance existing in that case was only Order 12, Rule 6, CPC.
21. While Order 12, Rule 6 proceeds to give a decree only 'having regard to such admissions', 'without waiting for the determination of any other question between the parties', what Order 23, Rule 3 deals with is that a suit claim has been adjusted wholly or in part by any lawful agreement, to the satisfaction of the Court. Then only a decree of compromise is to be passed. Under Order 12, Rule 6, CPC the Court's duty is to see if there is any admission and to pass a decree thereupon. But under Order 23, Rule 3, CPC the Court should see that it is satisfied with the suit claim by the compromise agreement. Therefore, in order to satisfy the judicial conscience of the Court, verification of the suit claim is essential; and that would depend upon verification of the actual amount that was lent and whether it could be tallied with the suit claim or not. In this process of satisfaction one of the parties viz., G.V. was in a pressing circumstance not to disclose anything and the other person viz., respondent had also suppressed. There is also no element of proof for payment of Rs. 1.00 crore in cash. Now also by reopening the same it becomes evident that there is no proof. Therefore, it goes to support the case of the applicant that the compromise memo contained an unreasonably inflated amount more than what was actually lent by the respondent. The non-disclosure by respondent who is the gainer may amount to fraud, is the bone of contentions of the argument advanced by the applicant company. In this connection reliance was placed by the applicant company upon a case law reported in (1994) I SCC 531 : AIR 1994 SCW 528, wherein it is observed that 'A compromise decree does not stand on a higher footing than the agreement which preceded it. A consent decree is a mere creature of the agreement on which it is founded and is liable to be set aside on any of the grounds which will invalidate the agreement'.
22. Now a different question arises as to whether the payment to the individual G.V. will bind the company. According to the observation found in P. Rangaswami Reddiar and Anr. v. R. Krishnaswami Reddiar and Anr. 1973 (43) Com Cas 232 in the following lines:
When a person is appointed managing director by a resolution of the board of directors vesting in him full powers of the management of the company's affairs and authorising him to sign all papers of the company, he has full powers to borrow moneys on promissory notes even without a resolution of the board of directors as envisaged under Section 292(c) of the Companies Act, 1956.
Suppose G.V. had received it and brought to the coffer of the applicant company, then the company will be liable. This is so stated in Kumar Krishna Rohatgi and Ors. v. State Bank ofIndia 1980 Comp Cas (50) 722 in the following lines:
Under the general principle of law, when an agreement borrows money for a principal without the authority of the principal, but the principal takes the benefit of the money so borrowed or when the money so borrowed has gone into the coffers of the principal, the law implies a promise to pay by the principal.
23. Suppose if G.V. had received the amount and committed default in bringing out to the coffer of the applicant company also the company is bound against a bona fide creditor. This is so found in the following lines in Sri Kishan Rathi v. Mondal Bros. and Co. (P) Ltd. and Anr. : AIR1967Cal75 :
If a Director or a Manager of a company will ostensible authority under the Memorandum and the Articles of Association of the Company practises a fraud upon the company by not placing the money in the coffer of the company, this failure will not defeat a bona fide creditor's claim against the company.
24. Suppose if G.V. neither took the amount for himself nor entrusted to the coffer of the applicant company, then the only conclusion would be that no such amount of Rs. 1.00 crore was paid by the respondent in furtherance of the suit agreement.
25. Mr. Ravi, learned senior counsel appearing for the applicant company would submit that the respondent in pursuance of the suit agreement has not paid a sum of Rs. 1.00 crore to the erstwhile Chairman of the applicant company; but had suppressed the fact and represented before this Court in arriving at the compromise decree as if he has paid so. That is why no particulars of payment was given in the suit nor any account of statement was filed. The letter dated 17-1 -2005 of the Income Tax Department would only indicate the statement of respondent as per which only a lesser sum were shown to have been paid. As per account dated 13-1-2003 only a sum of Rs. 1,53,80,000/- was paid by the respondent through cheque and Demand Draft out of which a repayment was made for Rs. 15.00 lakhs, that the actual due for the respondent would be Rs. 1,38,80,000/- and no other amount was shown to have been paid. To say that Rs. 2.50 crores paid was a fraud played upon the Court.
26. In this connection reliance was placed upon in United India Insurance Co. Ltd. v. Rajendra Singh and Ors. : [2000]2SCR264 in the following lines:
Fraud and justice never dwell together' (fraus et jus nunquam cohabitant) is a pristine maxim which has never lost its temper over all these centuries. Lord Denning observed in a language without equivocation that 'no judgment of a Court, no order of a Minister can be allowed to stand if it has been obtained by fraud, for, fraud unravels everything' Lazarus Estates Ltd. v. Beasley 1956 (1) QB 72.
For a High Court in India to say that it has no power even to consider the contention that the awards secured are the byproducts of stark fraud played on a tribunal, the plenary power conferred on the High Court by the Constitution may become a mirage and people's faith in the efficiency of the High Courts would corrode....
27. In that case reliance was placed upon in Indian Bank v. Satyam Fibres, (India) (P) Ltd. : AIR1996SC2592 , wherein the following was mentioned:
Since fraud affects the solemnity, regularity and orderliness of the proceedings of the Court and also amounts to an abuse of the process of Court, the Courts have been held to have inherent power to set aside an order obtained by fraud practised upon that Court....
28. Reliance was also placed in Ramchandra Singh v. Savitri Devi and Ors. : (2003)8SCC319 , wherein the following was observed:
Fraud is a conduct either by letter or words, which induces the other person or authority to take a definite determinative stand as a response to the conduct of the former either by word or letter.
It is also well settled that misrepresentation itself amounts to fraud. Indeed, innocent misrepresentation may also give reason to claim relief against fraud.'
A fraudulent misrepresentation is called deceit and consists in leading a man into damage by wilfully or recklessly causing him to believe and act on falsehood. It is a fraud in law if a party makes representations which he knows to be false, and injury ensues therefrom although the motive from which the representations proceeded may not have been bad... The true and only sound principle to be derived from the cases represented by Slim v. Croucher is this: that a representation is fraudulent not only when the person making it knows it to be false, but also when, as Jessel, M.R., pointed out, he ought to have known or must be taken to have known, that it was false....
29. Reliance was also placed upon S.P. Chengalvaraya Naidu v. Jagannath : AIR1994SC853 , wherein it was observed as follows:
Fraud avoids all judicial acts, ecclesiastical or temporal' observed Chief Justice Edward Coke of England about three centuries ago. It is the settled proposition of law that a judgment or decree obtained by playing fraud on the Court is a nullity and non est in the eyes of law. Such a judgment/decree -- by the first Court or by the highest Court -- has to be treated as a nullity by every Court, whether superior or inferior. It can be challenged in any Court even in collateral proceedings....
That was a case wherein execution of a decree that Chunilal Sowcar obtained against the defendant the latter's property in execution was brought in Court auction in which Jagannath purchased it on behalf of Chunilal Sowcar and subsequently executed a release deed to Chunilal Sowcar. Suppressing this fact Jagannath filed a suit for partition of the property which he purchased in Court auction against the defendant. Preliminary decree was passed. It is in the final decree proceeding the suppression made by Jagannath about his release deed to Chunilal was brought to the notice of the Court....' Jagannath was non suited.
30. In this context the Supreme Court held as follows:
The principle of 'finality of litigation' cannot be pressed to the extent of such an absurdity that it becomes an engine of fraud in the hands of dishonest litigants. The Courts of law are meant for imparting justice between the parties...We have no hesitation to say that a person whose case is based on falsehood, has no right to approach the Court. He can be summarily thrown out at any stage of the litigation....Without disclosing all these facts, he filed the suit for the partition of the property on the ground that he had purchased the property on his own behalf and not on behalf of Chunilal Sowcar. Non-production and even non-mentioning of the release deed at the trial tantamounts to playing fraud on the Court....
31. Thus, the compromise decree suffers for the act of fraud of Respondents in suppressing the material fact about the nonpayment of Rs. 1.00 Crore in cash, which is now found out upon perusal of records and surrounding facts of the case. Therefore, the compromise decree is set aside. Application No. 3339 of 2006 is allowed and the compromise decree is set aside. Consequently, stay application in A.No. 3340 of 2006 is closed.