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Can’t accept settlement benefits then initiate fresh legal proceedings: Supreme Court
The Supreme Court ruled that parties in matrimonial disputes can't withdraw from mediated settlements without valid reasons, emphasizing the importance of upholding agreements.
The Supreme Court on Monday ruled that parties cannot casually walk away from a mediated settlement in matrimonial disputes after accepting its benefits and then initiate fresh legal proceedings, unless they establish “force, fraud, undue influence or non-compliance” by the other side.
A bench of justices Rajesh Bindal and Vijay Bishnoi said that while a party can legally withdraw consent to divorce by mutual consent before the final decree, it cannot back out of a mediated settlement that resolves all disputes between the parties.
Once such a settlement is reached and authenticated by a mediator, its terms bind both sides and if a party resiles from the agreement without valid grounds such as fraud or coercion, courts must treat the deviation seriously, even imposing “heavy costs,” since such conduct undermines the very foundation and “credibility of the mediation process,” the bench said. “It is trite law that once the parties have entered into a settlement agreement which was duly authenticated by the mediator, in case of any resilement from such terms as agreed upon in the settlement, the resiling party must be encumbered with heavy costs,” the Court added.
It also took strong exception to the wife in the present case withdrawing from a settlement agreement after having acted on it. The bench was hearing a case pertaining to a dispute where the husband and wife had entered into a detailed mediated settlement to dissolve their marriage by mutual consent. The husband was represented through advocate Prabhjit Jauhar.
Under the agreement, the husband agreed to pay the woman ₹1.5 crore, pay an additional amount of ₹14 lakh for a new car, and return her jewellery, or ‘stree dhan.’ Both parties also moved the first motion for divorce before the family court. However, the wife later withdrew her consent before the second motion and initiated proceedings against her husband and her mother-in-law under the Domestic Violence Act.
The Delhi high court permitted the DV proceedings to continue as long as the wife deposited the amount she had already received as part of the settlement. It was then that the husband moved the Supreme Court seeking quashing of the order of the Delhi high court and also seeking grant of divorce.
The Supreme Court then framed three central questions–whether a party can back out of a mediated settlement, whether such a party can continue domestic violence proceedings, and whether the Court can invoke its powers under Article 142 to grant divorce on the ground of irretrievable breakdown of marriage.
It went on to say that while it was a settled legal position that a party can withdraw consent to a mutual consent divorce at any stage before the decree, such change of mind cannot be based on frivolous grounds.
In the present case, the Court noted, the wife had refused to honour the terms of the settlement agreement and had withdrawn her consent from the divorce wife contending that the husband had gone back on his ‘oral assurance’ of returning jewellery worth ₹120 crore and gold biscuits worth ₹50 crore outside the Settlement Agreement. She claimed she was told that including these in the agreement would alert the Income Tax Department.
The Supreme Court expressed strong disapproval of the wife’s argument that some financial aspects, including the alleged assurance to return the gold biscuits and jewellery were deliberately kept outside the settlement to avoid tax scrutiny, calling the submission “highly egregious” and reflective of disregard for the legal system.
“We are appalled at the sheer audacity of such a submission being advanced before a court of law and deplore the evident
disregard exhibited towards the legal system,” the Court said.
The Court also cautioned against allowing matrimonial disputes to escalate into criminal litigation driven by emotion.
“While we are conscious of the fact that the parties to a long standing marital dispute are often fuelled by emotions, we cannot allow such emotions to take a drastic turn in as much as allowing the bursts of emotions to form the basis of criminal prosecution. Such criminal prosecution, if allowed, would lead to an abuse of law and cause harassment,” it said.
The Supreme Court ultimately invoked its powers under Article 142(1) and granted divorce to the couple after holding that their marriage had broken down “irretrievably.”
It also set aside the high court’s order, quashed the pending domestic violence proceedings against the husband and the mother-in-law.
