What the Judge has pointed out is legally correct, and it is good that this issue has been flagged now rather than after an adverse decree.
The appeal pending before the appellate court is only against rejection of the plaint in a suit where the original and only substantive relief was a declaration that the registered gift deed is null and void. The appellate court’s jurisdiction is therefore confined to either affirming or setting aside the rejection of the plaint. It is not a fresh original suit, nor can it travel beyond the scope of the original cause of action.
When a compromise is recorded under Order XXIII Rule 3 CPC, the court is required to pass a compromise decree in terms of the subject-matter of the suit/appeal. Even if the compromise contains additional terms, execution of the decree will still be anchored to the original relief claimed in the suit unless the suit itself is withdrawn. This is the exact risk the Judge is cautioning you about.
In your case, the original relief was cancellation / declaration of nullity of the gift deed. If a compromise decree is passed in the appeal, the appellant can later attempt execution by saying that the appeal stood allowed and the dispute relating to the gift deed was compromised, thereby reopening the very title you are trying to protect. Even if you ultimately succeed in resisting such execution, you will be dragged into avoidable execution litigation with uncertainty.
The judge is therefore right in saying that a compromise decree under Order XXIII Rule 3, in this factual matrix, is against your interest, because:
- The appeal is not about enforcement of a future promise of flats.
- The compromise introduces obligations outside the original suit.
- Execution proceedings may be misused to indirectly attack your title.
What you actually want is:
- Your title under the registered gift deed to remain untouched and unquestioned.
- The appeal to come to an end without any adjudication or decree affecting the gift deed.
- Your promise to gift flats to be contingent, future-oriented, and enforceable only after specific conditions are met.
The correct procedural route to achieve this is withdrawal of the appeal, not a compromise decree.
The legally safe course is as follows. The appellant (your sister) should file an application to withdraw the appeal under Order XXIII Rule 1 CPC, stating that the dispute has been amicably settled out of court. The appellate court will then dismiss the appeal as withdrawn. Once this happens, the rejection of the plaint by the trial court attains finality, and the challenge to the gift deed dies permanently.
Simultaneously, you and your sister may execute a separate settlement document / family arrangement / MOU, clearly recording:
- That she accepts the validity of the gift deed and your absolute title.
- That she has withdrawn the appeal voluntarily.
- That you will gift two flats only after specific conditions are fulfilled (patta in your name, building approval, JV documents registered, construction completed, etc.).
- That the obligation is independent of the concluded litigation and does not affect title.
This document should not be made part of the court decree. It should stand on its own as a contractual/family settlement obligation, enforceable only if and when conditions are satisfied.
You should not agree to a compromise decree under Order XXIII Rule 3 in the appeal. You should also not consent to any decree language that refers to the gift deed, title, or declaration relief. The judge’s concern about execution proceedings is well-founded.
To answer your specific doubts clearly:
- A compromise decree in this appeal is risky and can expose your title.
- The belief that only the terms in the affidavit will be executable is unsafe in this context.
- Withdrawal of the appeal is the correct and safest option.
- Your promise to gift flats should be outside court, conditional, and not decree-based.
In short, tell the court that settlement has been reached and seek dismissal of the appeal as withdrawn, not a compromise decree. This preserves your title fully and still allows you to honour your future promise without legal jeopardy.