Facts: The Petitioner, Asvas Homes LLP, and the Respondents entered into a settlement in Regular Civil Suit No. 25/2025/A. Both parties filed "Consent Terms" before the Trial Court at Mapusa on November 5, 2025, signifying a valid compromise. Despite the parties being present and agreeing to execute these terms, the Trial Court refused to pass a decree based on the settlement. Instead, the Trial Court directed the Plaintiff to lead evidence in the matter, effectively ignoring the compromise agreement filed by the parties.
Procedural Posture: The Petitioner approached the High Court of Bombay at Goa by filing a Writ Petition challenging the Trial Court's order dated November 5, 2025. During the hearing, the Respondents' counsel confirmed they had no objection to the passing of a decree based on the filed Consent Terms.
Issue: Whether a Trial Court can legally refuse to pass a decree in terms of a lawful compromise agreement filed by the parties and instead direct them to lead evidence?
Holding: No, the Trial Court cannot refuse to record a lawful compromise. The High Court quashed the impugned order and directed the Trial Court to pass a decree in terms of the Consent Terms.
Reasoning: The Court relied on the mandatory provisions of Order 23 Rule 3 of the Code of Civil Procedure, 1908. It reasoned that when a suit has been settled by a lawful agreement or compromise to the satisfaction of the Court, the Court is duty-bound to record such agreement and pass a decree accordingly. Citing the Supreme Court's decision in "M/s Silver Screen Enterprises v. Devki Nandan Nagpal", the Court emphasized that these provisions are mandatory. The Court found that since the Consent Terms were signed by the parties and were not contrary to law, there was no cause for the Trial Court to demand evidence or refuse the decree.