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Bar on further litigation after a consent decree is not absolute

In COMPACK ENTERPRISES INDIA (P) LTD. ...PETITIONER vs  BEANT SINGH, the Supreme Court  once again summarised the law governing further litigation after a consent decree.

The Court said that it is well­ settled that consent decrees are intended to create estoppels by judgment against the parties, thereby putting an end to further litigation between the parties. Resultantly, any court be slow to unilaterally interfere in, modify, substitute or modulate the terms of a consent decree, unless it is done with the revised consent of all the parties thereto. For this the Court referred to Gupta Steel Industries v. Jolly Steel Industries Pvt. Ltd. & anr.,; Suvaran Rajaram Bandekar & ors. v. Narayan R. Bandekar & ors., (1996) 10 SCC 255).

However, the court further observed that this formulation is far from absolute and does not apply as a blanket rule in all cases. Supreme Court, in Byram Pestonji Gariwala v. Union Bank of India & ors., (1992) 1 SCC 31, has held that a consent decree would not serve as an estoppel, where the compromise was vitiated by fraud, misrepresentation, or mistake. Further, this Court in the exercise of its inherent powers may also unilaterally rectify a consent decree suffering from clerical or arithmetical errors, so as to make it conform with the terms of the compromise.

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