SC Again Remands Matter To HC As It Erred In Interpreting Earlier Remand Order [Read Judgment]

Civil litigation is akin to a snake and ladder game. It may take quite a time for the game to end, and one may have to face not only appeals to higher courts but also remands to lower courts. This is a case where the Supreme Court has twice remanded a civil matter to the high court on more or less the same issue.

A suit filed in 1990 was decreed in 1997. The district court upheld the decree and the second appeal reached the high court in 2001. The high court, in 2002, disposed of the appeal in terms of compromise arrived at between the parties. Application by one of the defendants to revive the appeal on the ground that compromise is not binding him was dismissed by the high court. Against this, the defendant approached the apex court.

In 2003, the apex court allowed the appeal observing that the high court did not inquire whether the compromise had really been entered into between the parties. It then remitted the matter to the high court for fresh consideration in accordance with law including to decide the question of consideration of the compromise petition.

The judge interpreted this order like this: “If the matter is to be examined on merits, there is no need for going into the genuineness of the compromise petition or otherwise and therefore I do not propose to look into the contents of the affidavit itself which if at all looked into and is to be accepted requires the necessity for cross-examination.”

The high court then proceeded to examine the matter on merits and dismissed the second appeal. This was again assailed before the apex court.

The bench of Justice Abhay Manohar Sapre and Justice S Abdul Nazeer observed that the high court erred in not considering the question of genuineness and legality of the compromise. It said: “On mere reading of the order dated 03.08.2003, it is clear that this Court remanded the matter to the High Court with a request to decide it afresh in accordance with law including the question of consideration of the compromise petition. This implied that the question of consideration of compromise petition was required to be decided first. It is for the simple reason that if the compromise was held to be legal and proper, there was no need to decide the second appeal on merits. In other words, the need to decide the second appeal on merits would have arisen only if the compromise would have been held illegal and not binding on the parties concerned.”

The bench then explained as follows:

• High Court while deciding the question of the genuineness of the compromise application, as directed by this Court’s order dated 04.08.2003, may consider it proper to remit the matter to the Trial Court for the purpose of recording evidence of the parties in time bound period.


• On receiving the evidence from the Trial Court, the High Court would proceed to decide the question in the light of the evidence adduced by the parties.


• In case the compromise is held legal and proper, there will be no need to decide the second appeal on merits. It is for the reason that in such eventuality, the order dated 10.04.2002 disposing of the second appeal in terms of compromise would continue to hold the field as being legal and proper.


• However, if the compromise is held illegal, the order dated 10.04.2002 will stand set aside. As a consequence thereof, the second appeal will revive for being heard on merits. The High Court will then proceed to decide the second appeal on merits in accordance with law.

Author’s Note

But the irony in this order is this: In 2003, the Supreme Court set aside the compromise decree by the high court. Today, it set aside its judgment on merits.  If the compromise is found to be genuine, the compromise decree will be restored. But if a compromise is found illegal, the high court is directed to again examine the matter on merits, the same which it has already done, but set aside by the apex court now. So the high court will have to again enter a fresh finding on merits.

Read the Judgment Here