Charitable Trust Trustee’s Execution Plea Dismissed as Court Finds No Executable Decree in Settlement; Mere Withdrawal of Suit After Compromise Not Enforceable : Delhi High Court
Isabella Mariam
The High Court of Delhi, Single Bench of Justice Purushaindra Kumar Kaurav held that the execution petition filed to enforce a consent order relating to a charitable trust property was not maintainable, as the earlier order merely dismissed the suits as withdrawn and did not amount to a formal decree. The Court clarified that withdrawal of a suit, even following a compromise, does not by itself create an executable decree unless the compromise is formally recorded and a decree is drawn under Order XXIII Rule 3 of the Code of Civil Procedure, which empowers courts to pass a decree on a lawful settlement between parties.
The case arose from an execution petition filed by a trustee of a charitable trust seeking enforcement of a prior consent order concerning a property located in New Friends Colony, New Delhi. The decree holder sought implementation of an earlier order through which one of the trustees was to transfer her ownership and possession rights in the property to all trustees for operating a hospital under the trust’s name. It was alleged that despite this understanding, the judgment debtors failed to execute the transfer or permit the hospital’s operation, instead relying on an alleged oral family arrangement to avoid compliance.
The decree holder contended that the settlement recorded by the Court on February 7, 2020, amounted to a binding consent decree enforceable in execution. It was argued that the judgment debtors had violated undertakings given to the Court and continued to obstruct the trust’s functioning. The decree holder further maintained that the application filed by one of the judgment debtors under Section 151 of the Code of Civil Procedure (CPC) to dismiss the execution petition was frivolous and amounted to abuse of process.
The judgment debtors opposed the execution proceedings, asserting that the consent order was not executable in law. They argued that the original suits had been withdrawn under Order XXIII Rule 1 CPC, without the Court passing a decree under Order XXIII Rule 3, and that the order merely recorded a compromise without adjudication of rights. According to them, no formal decree had been drawn as defined under Section 2(2) CPC, and therefore the execution petition was not maintainable.
The Court examined the statutory scheme of Sections 2(2), 47, 151, and Orders XX, XXI, and XXIII of the CPC, along with several precedents. It concluded that the order dated February 7, 2020, did not constitute a decree or executable direction, and therefore the execution petition could not be sustained in law.
The Court observed, "mere withdrawal of a suit, even pursuant to a compromise, does not ipso facto culminate into an executable decree unless the compromise is expressly recorded by way of an order and a decree is drawn under Order XXIII Rule 3 of the CPC."
Relying on precedents such as Sanjay Goel v. Lions Club International and Mohd. Amin v. Mohd. Iqbal, the Court recorded that withdrawal of suits based on settlement does not create an executable decree unless the Court formally passes such a decree. It further noted the Supreme Court’s decision in Kandapazha Nadar v. Chitraganiammal, where it was held that a withdrawal order without adjudication on merits does not amount to a decree.
The Court distinguished between a mere procedural withdrawal and a substantive compromise decree. Referring to Sir Sobha Singh and Sons Pvt. Ltd. v. Shashi Mohan Kapur, the Court stated that Order XXIII Rule 3 CPC prescribes two mandatory steps—first, recording of a lawful compromise, and second, simultaneous passing of a decree. Justice Kaurav quoted: “The expression ‘and shall pass a decree in accordance therewith’ is a clear indication that after the compromise is recorded by the Court, it shall proceed to pass a decree.” The Court observed that the requirement of drawing a formal consent decree is mandatory.
Further, Justice Kaurav clarified that even though an execution may be maintainable temporarily without a formal decree by virtue of Order XX Rule 6A(2), such a situation would arise only when the order records a lawful compromise satisfying the conditions of Order XXIII Rule 3 CPC. In the present case, the Court found that the order dated February 7, 2020, did not meet this standard. The Court noted, "There was no formal consideration of the terms of the compromise, lawfulness of the settlement, and no order recording the satisfaction of the Court qua the compromise or directing the drawing up of any decree was passed."
The Court further referred to the plaintiffs’ application I.A. No. 18067/2018, which had sought a consent decree, but observed that during the hearing on February 7, 2020, the suits were only dismissed as withdrawn, and the prayer for a consent decree was not considered. The judgment recorded: "The suit was permitted to be withdrawn on the basis of submissions made by the parties and no direction was made to the parties to abide by the terms of compromise." Consequently, there was no executable direction in the order except for ancillary matters such as the release of documents.
The Court also noted that the decree holder had attempted to correct this procedural gap by seeking modification through I.A. 8698/2022, which initially succeeded on May 30, 2022, but was later recalled on December 19, 2022, as being without jurisdiction. Justice Kaurav observed that once the suit had been dismissed as withdrawn, the Court became functus officio and could not subsequently modify its judgment except under review or clerical correction provisions.
The Court also addressed the decree holder’s reliance on Salahuddin Mirza v. Mohd Qamar and found the facts distinguishable. In that case, the suit was expressly disposed of as settled, and the Court had directed that a decree be drawn, unlike the present matter where the order was a plain dismissal as withdrawn.
Justice Kaurav recorded: “Without the sanction of the Court, that too in the manner required by the CPC, a simpliciter order directing dismissal on the basis of withdrawal, for whatever reason, cannot be construed to be of an executable nature so as to enable an execution petition.” The Court stated that the executing court’s powers under Section 47 CPC are “microscopic” and confined strictly to the decree as drawn, not to statements or settlements recorded incidentally.
The judgment stated: “The order permitting the withdrawal of the suits did not result in a formal decree being passed and even by implication, it cannot have the effect of a decree.” The Court held that in the absence of a formal adjudication or compliance with Order XXIII Rule 3 CPC, the order was non-executable under Order XXI.
“The present petition is held to be not maintainable, and the instant application for dismissal of the execution petition holds merit. Therefore, the instant application stands allowed.” The execution petition, EX.P. 65/2021, and all pending applications were consequently dismissed. The Court, however, granted liberty to the decree holder to pursue “any other appropriate remedy if available in law.” No order as to costs was made.
Advocates Representing the Parties
For the Decree Holder: Mr. Rajat Aneja, Mr. Kunal Gosain, Mr. Aditya Sharma, Ms. Anamika Bag, and Mr. Kartikey Sikka, Advocates.
For the Judgment Debtors: Mr. Gaurav Gupta and Mr. Rupal Gupta, Advocates; Mr. Desh Raj and Mr. Gaurav Gupta, Advocates.
Case Title: Sh. Pritpal Singh v. Mrs. Jupinder Kaur Maker & Anr.
Neutral Citation: 2025: DHC:8846
Case Number: EX.P. 65/2021 and EX.APPL.(OS) 1341/2025
Bench: Justice Purushaindra Kumar Kaurav
