Does Consent Decree Bar Further Litigation Between Parties in all cases? Supreme Court Judgment

In a recent case, a Bench of the Supreme Court comprising Hon’ble Justice M Shantanagoudar and Hon’ble Justice Vineet Saran has clearly explained that law governing consent decree and ruled that as per well-settled law, consent decrees are intended to create an estoppel against parties by putting an end to further litigation between parties. Still, it does not work as a blanket rule.

In Suvaran Rajaram Bandekar vs Narayan R. Bandekar and Gupta Steel Industries vs Jolly Steel Industries Pvt. The Apex Court held that it would be slow to interfere or modify or substitute terms of a consent decree unless there is revised consent from all the parties.

However, in Byram Pestonji Gariwala vs Union Bank of India, the Court held that a consent decree would not serve as estoppel, where compromise was vitiated by mistake, representation or fraud. However, the Court clarified that it might rectify the arithmetical or clerical error by using its inherent powers to make the decree conform with terms of compromise.

After referring to precedents mentioned above, the Court stated that it has to be cautious while exercising its inherent powers to interfere in the instant consent decree unless there is a glaring and exceptional error apparent on its face.

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