HC-KAR NC: 2026:KHC:9369 WP No. 12978 of 2020 - 1 - IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 16TH DAY OF FEBRUARY, 2026 BEFORE THE HON'BLE MS. JUSTICE TARA VITASTA GANJU WRIT PETITION NO. 12978 OF 2020 (GM-CPC) BETWEEN: NEW CONSOLIDATED CONSTRUCTIONS COMPANY LIMITED, PRESTIGE ROYAL WOODS, KISMATPUR, RAJENDRA NAGAR, MANDAL, HYDERABAD, RR DISTRICT-500 086, REPRESENTED BY ITS AUTHORIZED REPRESENTATIVE. …PETITIONER (BY SRI. AJAY J N AND AJAY J NANDALIKE., ADVOCATE) AND: 1. NATIONAL INTERIORS, HAVING OFFICE AT NO.23, (OLD NO 10/A) GROUND FLOOR, 7TH CROSS, PAPANNA BLOCK, BENGALURU-560 032, REPRESENTED BY ITS PROPRIETOR. 2. AATHMALAKSHMI TRADERS NO.274/9, NEW GUDDAHAHALLI, N.T.Y.LAYOUT, MYSORE ROAD, BANGALORE-560 026. …RESPONDENTS (BY SRI. IRISHAD AHMED B M.,ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLE 227 OF THE CONSTITUTION OF INDIA, PRAYING TO CALL FOR THE RECORDS OF COM.O.S.101/2019 WHICH HAS BEEN DISPOSED OF IN TERMS OF THE COMPROMISE PETITION RECORDED IN HC-KAR NC: 2026:KHC:9369 WP No. 12978 of 2020 - 2 - THE JUDGEMENT AND DECREE DATED 25.04.2019 PASSED BY THE HONBLE LXXVII ADDITIONAL CITY CIVIL AND SESSIONS JUDGE (LOK ADALATH) AT BANGALORE SET ASIDE THE COMPROMISE ENTERED INTO BETWEEN THE PLAINTIFF AND DEFENDANT IN COM O.S.101/2019, RECORDED IN THE JUDGMENT AND DECREE DATED 25.04.2019 PASSED BY THE HONBLE LXXVII ADDITIONAL CITY CIVIL AND SESSIONS JUDGE (LOK ADALATH) AT BANGALORE PRODUCED AT ANNEXURE-AINSERTED AS PER ORDER DTD 31.08.2023. THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MS. JUSTICE TARA VITASTA GANJU ORAL ORDER 1. The present petition seeks to challenge an order dated 25.04.2019 passed by the learned LXXXII Additional City Civil and Sessions Judge at Bangalore City (CCH-83) in Com.O.S.No. 101/2019 [hereinafter referred to as the "Impugned Order"]. By the Impugned Order, a challenge to a suit which was filed for recovery of money by the respondent No.1, was decreed along with interest in terms of a Compromise Petition as settled before the Lok Adalat, was repelled. HC-KAR NC: 2026:KHC:9369 WP No. 12978 of 2020 - 3 - 2. This Court, had, on 19.01.2026, passed the following order: "1. On the last date of hearing, an adjournment was sought on behalf of the learned counsel for petitioner. On that day, the Court had passed the following direction: "The learned counsel for the petitioner submits that Sri.Ajay J. Nandalike is in a medical emergency and requests for an adjournment. The learned counsel for the respondent fairly does not oppose the request. The record reflects that an interim order staying the execution proceedings was granted on 30.11.2020. Given the fact that the stay has been pending for last six years, the petitioner is granted a final opportunity to argue the matter. The parties at liberty to file their written submissions in a brief note of contentions in the matter, not exceeding three pages, along with judgments in support thereof. List on 19.01.2026. " 2. The order dated 05.01.2026 has not been complied with by either party. 3. Today, the learned counsel for respondents seeks an adjournment on account of the arguing counsel being unwell. 4. It seems clear that neither party is interested in prosecuting the matter. 5. Let the authorized signatory of both the petitioner as well as the respondents be present in the Court on the next date of hearing. 6. List this matter on 16.02.2026. 7. Interim order granted on 30.11.2020 is extended till the next date of hearing." HC-KAR NC: 2026:KHC:9369 WP No. 12978 of 2020 - 4 - 3. The learned counsels for the respondents appeared today along with the respondents before the Court. 4. The learned counsel for the petitioner/defendant contends that the compromise decree was obtained fraudulently and hence he has challenged this before the Court. 5. The principal ground of challenge before the Court is that the respondent No.1 and respondent No.2 are ‘hand- in-glove' with each other and are attempting to extort money from the petitioner/defendant and that the compromise was obtained by fraud. 5.1. The learned counsel for the petitioner/defendant further submits that because the respondent No.2 who has colluded with respondent No.1 has filed a separate suit, the proceedings in that suit cannot also be allowed to continue, in view of such collusion. 6. The brief facts are that, a Commercial Suit in Com.O.S.No.1366/2017 [hereinafter referred to as the HC-KAR NC: 2026:KHC:9369 WP No. 12978 of 2020 - 5 - "First Suit"] was filed by the respondent No.2 against the petitioner/defendant. The respondent No.2 in the suit has stated that they are in the field of Timber trading and had supplied Timber to the petitioner/Company for various projects. It was further stated in the suit that since the petitioner/defendant and respondent No.2 were doing business together and a running account was maintained between them and since the petitioner/defendant has defaulted in payments of Rs.1,81,46,168/-, therefore, the suit has been filed. The invoice credit bills raised by the respondent No.2 in the name of the petitioner/defendant have also been placed on record. The suit, thus was filed seeking the following reliefs: "a) To grant a Judgment and Decree against the Defendant for a sum of Rs.2,73,10,388/- (Rupees Two Crore Seventy Three Lakhs Ten Thousand Three Hundred and Eighty Eight Only) along with future interest at the rate of 24% per annum from the date of the suit till payment on Rs.1,81,46,168/- (Rupees One Crore Eighty One Lakhs Forty Six Thousand One Hundred and Sixty Eight Only); b) To grant such other relief/s as this Hon'ble Court deem fit under the circumstances of the case in the interest of justice and equity and c) To award cost of the suit." HC-KAR NC: 2026:KHC:9369 WP No. 12978 of 2020 - 6 - 7. The respondent No.1 has also filed a suit against the petitioner/defendant being Com.O.S.No.101/2019 [hereinafter referred to as the "Second Suit"]. The respondent No.1 has also claimed that the respondent No.1 was supplying Timber to the petitioner/defendant for various projects and was also sending invoices and bills to the petitioner/defendant. However, the payment of the petitioner/defendant remained outstanding and thus in terms of various bills raised between the period 18.01.2013 and 11.03.2015, the respondent No.1 also filed the Second Suit for recovery of money against the petitioner/defendant. The prayers in this suit are set out below: “(i)Direct the Defendant to pay a sum of Rs.1,12,69,349/- (Rupees one crore twelve lakhs sixty nine thousand three hundred forty nine) together with future interest at the rate of 12% p.a. from the date of filing of this suit till realization; (ii) Cost of this suit; (iii) To grant such other relief/s as this Hon'ble Court may deem fit to grant in the interest of justice." HC-KAR NC: 2026:KHC:9369 WP No. 12978 of 2020 - 7 - 8. During the pendency of the Second Suit, the petitioner/defendant and the respondent No.1 arrived at a settlement. In pursuance thereon, a Compromise Petition under Order XXIII, Rule 3 of the Code of Civil Procedure, 1908 [hereinafter referred to as the "CPC"] was filed. The Compromise Petition sets out that the petitioner/defendant had admitted the transaction between the parties and that he has no objection to the decree of the suit. It further sets out that the petitioner/defendant undertakes to pay the claim of the respondent/plaintiff in a sum of Rs.1,12,69,349/- within a period of three months from the date of the Compromise Petition. It also sets out that the compromise is executed by free will and without undue influence or coercion. The relevant extract of the Compromise Petition is set out below: - “COMPROMISE PETITION UNDER ORDER XXIII RULE 3 OF THE CODE OF CIVIL PROCEDURE The plaintiff and defendant jointly submits as follows:- 1. The plaintiff has filed the above suit for the relief of recovery of Rs. 1,12,69,349/- (Rupees-one crore twelve lakhs sixty nine thousand three hundred forty nine) together with future interest at the rate of HC-KAR NC: 2026:KHC:9369 WP No. 12978 of 2020 - 8 - 12% p.a. from the date of filing of this suit till realization and other relief/s against the defendant. That with the intervention of the counsels for the respective parties, the parties to the suit have amicably settled the dispute among themselves and have arrived at a conclusion to settle the matter by way of compromise under the following terms and conditions:- 1) The defendant has admitted the transaction taken place between the plaintiff and defendant company and has no objection to decree the suit as prayed for in the plaint. 2) All the transactions in respect of the work orders placed to the plaintiff from the date of transaction between the plaintiff and defendant and the materials received by the defendant is only through the plaintiff. 3) The defendant in respect of the work orders placed to the plaintiff, the defendant is liable to pay the balance amount as stated in the suit is only to the plaintiff and the defendant is not liable to pay any person/company/institution/traders, as the transaction taken place only between the plaintiff and defendant for which the plaintiff has also agreed with the same; 4) The defendant undertakes to pay the suit claim of Rs. 1,12,69,349/- (Rupees one crore twelve lakhs sixty nine thousand three hundred forty nine) to the plaintiff within a period of 3 months from the date of this compromise petition, the plaintiff has agreed for the same; 5) It is agreed by both the parties that, there is no any other dues payable by the defendant to the plaintiff or through the plaintiff, except the above said suit claim. 6) It is agreed by both the parties that with regard to the transactions taken place between the plaintiff and defendant from the date of business, it was mutually agreed that except the plaintiff, no one HC-KAR NC: 2026:KHC:9369 WP No. 12978 of 2020 - 9 - else through the plaintiff have any right to claim the dues payable to the plaintiff in respect of transaction taken place between the plaintiff and defendant as claimed in the suit. 7) This compromise is entered into between the parties on their own free will and volition and not under any undue influence or coercion. 3. The plaintiff prays this Hon'ble court to direct the office to refund the entire court fee paid by the plaintiff to the plaintiff in the above case. WHEREFORE, the plaintiff and defendant most respectfully prays that this Hon'ble court may be pleased to permit the parties to compromise the suit and decree the suit as per the terms of the above compromise petition, in the interest of justice and equity.” [Emphasis Supplied] 9. The Compromise Petition has been signed by the petitioner/defendant and the respondent No.1/plaintiff by the counsel for both parties. It is also signed by their respective authorized signatories. The order sheet dated 24.04.2019 which has been passed of the learned Trial Court in the Second Suit also records that defendant No.3 a representative of the petitioner (defendant No.3 in the Second suit), is a senior citizen. The learned Trial Court has also examined the Aadhar cards of both the representatives, which were placed on record. The order HC-KAR NC: 2026:KHC:9369 WP No. 12978 of 2020 - 10 - sheet, however, records that with the consent of parties, the matter be referred to Lok Adalat. The order dated 24.04.2019 is set out below: "Case called. Plaintiff counsel is present. Heard. Case advanced from 12.06.2019. Plaintiff Counsel filed Memo for delete defendant no. 1,2,4 & 5 from the suit. Heard. Plaintiff is permitted to delete defendant no.1,2,4 & 5 from the suit as prayed. Plaintiff Counsel to effect deletion of defendants no.1,2,4 & 5 as requested in the Memo suit. AAS advocate filed Vakalath for defendant No. 3. Plaintiff and defendant No.3 are present. Defendant No.3 is Senior Citizen as per the age mentioned in the Aadhaar Card provided for perusal. Both the Counsel submit that the matter be referred before the Lok-Adalath as there is chance of settlement. With the consent of the both the parties and on the submission of both the Counsel, and taking into consideration of a nature of the suit, case is referred before Lok-Adalath scheduled on 25.04.2019 for senior citizens. Office is directed to place the file before Lok-Adalath on 25.04.2019. Sd/- 24/4" [Emphasis Supplied] 10. Subsequently, the petitioner/defendant has challenged the compromise decree passed by the Lok Adalath, by filing an application under Order XXIII Rule 3A read with Section 151 of the CPC to recall the compromise before the learned Trial Court itself. By its order dated HC-KAR NC: 2026:KHC:9369 WP No. 12978 of 2020 - 11 - 25.04.2019, the challenge came to be dismissed by the learned Trial Court, setting out that since a suit came to be disposed of by a compromise reported in the Lok Adalat, the remedy of the plaintiff/defendant is not before the said Court. The extract of the order dated 24.02.2020 is set out below: "Case is called out. Heard learned advocate for defendant. Perused the records. Suit came to be disposed off as per the compromise reported by the parties before the Lok-Adalath held on 25.04.2019. Therefore, these two applications filed U/Sec.151 CPC and also U/O 23 Rule 3A CPC to recall compromise entered into between the parties, which was accepted by the Lok Adalath, are not maintainable by law. However, plaintiff is liberty to work out its remedy, if required, through proper course of law." [Emphasis Supplied] 10.1. The Order of 24.02.2020 passed by the learned Trial Court was not challenged by the petitioner/defendant. However, the petitioner/defendant has filed the present petition. HC-KAR NC: 2026:KHC:9369 WP No. 12978 of 2020 - 12 - 11. As stated above, the petitioner/defendant has contended that the matter was settled before the learned Trial Court and thereafter referred to the Lok Adalath. Since the respondent No.1/plaintiff had assured the petitioner/ defendant that he would be paying respondent No.2, paying both the respondents would be a duplication. Thus, the petitioner/defendant also sought for stay of the First Suit, which, as per the respondents, has no connection with the Second Suit. Since the compromise did not fructify in the petitioner/defendant making any payment, the respondent No.1 filed the execution proceedings, being Com. Execution No.201/2022. 12. This Court stayed the execution proceedings and also the proceedings in the First Suit by its order dated 18.11.2022. A perusal of the order sheet in the execution proceedings reflects that, the petitioner/defendant has only sought for adjournments in terms of orders dated 01.07.2022, 31.07.2022, 08.09.2022 and 22.09.2022. HC-KAR NC: 2026:KHC:9369 WP No. 12978 of 2020 - 13 - Subsequently, the petitioner/defendant has filed the present petition before this Court. 13. The claim in the First Suit filed by the respondent No.2/plaintiff and the claims in the Second Suit filed by the respondent No.1/plaintiff both set out that these respondents are Timber merchants and that they had transactions with the petitioner/defendant. The plaint does not refer to any kind of arrangement inter-se each other nor do they refer to any kind of interaction in each other. 14. The Compromise Petition executed before the learned Trial Court, was duly signed by both parties and their lawyers and the order sheet also records the presence of the authorized signatories of the parties. Thus, the compromise was complete before the Trial Court and there was no actual requirement to refer the matter to the Lok Adalat. HC-KAR NC: 2026:KHC:9369 WP No. 12978 of 2020 - 14 - 15. It is settled law that Order XXIII, Rule 3A of the CPC provides that no suit shall lie to challenge a compromise decree in the following terms: "3-A. Bar to suit.-No suit shall lie to set aside a decree on the ground that the compromise on which the decree is based was not lawful.” 16. The Supreme Court, in the case of Triloki Nath Singh v. Anirudh Singh (Dead) through Legal Representatives & Ors.1, while clarifying this provision, has held that a party seeking to challenge a compromise entered into between the parties is required to file an application before the Court where the compromise was executed and that no suit can be filed seeking to set aside a decree based on the contention that it is not lawful. Thus, it is further held that the compromise decree can be challenged only in the manner as aforesaid. The relevant extract of the Supreme Court judgment is set out below: "17. By introducing the amendment to the Civil Procedure Code (Amendment) 1976 w.e.f. 1-2-1977, the legislature has brought into force Order 23 Rule 3-A, which creates bar to institute the suit to set aside a decree 1 (2020) 6 SCC 629 HC-KAR NC: 2026:KHC:9369 WP No. 12978 of 2020 - 15 - on the ground that the compromise on which decree is based was not lawful. The purpose of effecting a compromise between the parties is to put an end to the various disputes pending before the court of competent jurisdiction once and for all. 18. Finality of decisions is an underlying principle of all adjudicating forums. Thus, creations of further litigation should never be the basis of a compromise between the parties. Rule 3-A or Order 23 CPC put a specific bar that no suit shall lie to set aside a decree on the ground that the compromise on which the decree is based was not lawful. The scheme of Order 23 Rule 3 CPC is to avoid multiplicity of litigation and permit parties to amicably come to a settlement which is lawful, is in writing a voluntary act on the part of the parties. The Court can be instrumental in having an agreed compromise effected and finality attached to the same. The court should never be party to imposition of a compromise upon an unwilling party, still open to be questioned on an application under the proviso Order 23 Rule CPC before the court.” [Emphasis Supplied] 17. Concededly, the remedy of the petitioner/defendant would have been before the learned Trial Court that has passed the decree itself. 18. The learned counsel for the petitioner/defendant has placed on record, a rejoinder, attaching certain pleadings. The respondent No.1/plaintiff has also filed objections, placing on record the copies of the learned Trial Court HC-KAR NC: 2026:KHC:9369 WP No. 12978 of 2020 - 16 - proceedings and Execution Court proceedings which were not earlier placed on record. 19. The petitioner/defendant contends that in the First Suit, he had filed an application to implead respondent No.1 as a party to show the dealings inter-se the respondent No.1 and respondent No.2. The application is, however, still pending consideration before the learned Trial Court and since the proceedings in the First Suit have been stayed, the application is yet to be adjudicated. 20. This Court, by its order dated 30.11.2020, while ordering Emergent Notice, had granted stay of the proceedings in the Second Suit. 21. Given the aforesaid contentions of the parties, in the first instance, this Court deems it apposite to vacate the stay, insofar as it concerns the First Suit. The learned Trial Court is also directed to adjudicate upon I.A.No.4/2019, in accordance with the law, and proceed at the earliest. Insofar as it concerns the execution proceedings before HC-KAR NC: 2026:KHC:9369 WP No. 12978 of 2020 - 17 - this Court, the learned counsel for the petitioner/ defendant submits that he has already deposited in a sum of Rs.60,00,000/- [Rupees Sixty Lakhs] in pursuance of the stay granted by this Court on 18.11.2022 and as far as the balance amounts are concerned, he submits that the balance amount will be deposited before this Court within two weeks from today. 22. The learned counsel for the petitioner/defendant, today has filed a copy of the resolution dated 31.12.2025, and submits on instructions, that one Mr.Ajesh Narayanan has been authorised by the petitioner-Company in terms a Board resolution. He further submits that the entire balance awarded amount inclusive of interest will be deposited before this Court on or before 10.03.2026. 23. The registry is directed to intimate the Executing Court as soon as such deposit is made by the petitioner/ defendant not later than 13.03.2026. HC-KAR NC: 2026:KHC:9369 WP No. 12978 of 2020 - 18 - 24. The parties shall appear before the Executing Court on 16.03.2026, in Ex.No.201/2022, for further proceedings. 25. The petitioner/defendant is also at liberty to take appropriate steps, in accordance with the law, to challenge the order dated 24.02.2020, passed by the learned Trial Court in the Second Suit. 26. Accordingly, the petition is disposed of in the aforegoing terms. All pending applications stand closed. 27. The petitioner/defendant shall deposit costs in a sum of ₹5,000/- [Rupees Five Thousand] to the Advocates' Association, Bengaluru. 28. It is clarified that this Court has not examined the issue on merits. The rights and contentions of both parties shall be left open to be agitated respectively in the First Suit arising from the execution proceedings and any proceedings arising out of the Second Suit. HC-KAR NC: 2026:KHC:9369 WP No. 12978 of 2020 - 19 - 29. The Registry shall list this matter before the Court, in the event that the entire balance decretal amount along with upto date interest is not deposited by the petitioner/ defendant by 10.03.2026. The amounts already deposited inclusive of upto date interest shall be taken into consideration while calculating the decretal amount as on 28.02.2026. 30. The calculations shall be placed on record by the petitioner/defendant with an advance copy before this Court as well as the Executing Court with an advance copy being supplied to the respondents. 31. The copy of the order passed today will be sent to both the Executing Court and the learned Commercial Court, on an emergent basis. (TARA VITASTA GANJU) JUDGE BMV*/ PSJ List No.: 1 Sl No.: 12 Digitally signed by TARA VITASTA GANJU Location: HIGH COURT OF KARNTAKA