Courts will only interfere in a ‘Consent Decree’ if there exists ‘Exceptional Circumstances’ [Read Judgement]

What is a Consent Decree?

A consent decree is a settlement that is contained in a court order. It creates estoppels by judgment against the parties, thereby putting an end to further litigation between the parties.

Court’s Analysis

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, this Court has held that it would 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.

However, this formulation is far from absolute and does not apply as a blanket rule in all cases.

Supreme Court in the case of Byram Pestonji Gariwala v. Union Bank of India & Ors., has held that a consent decree would not serve as estoppel, where the compromise was vitiated by fraud, misrepresentation, or mistake.

The 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.