'Parties resiling from settlement must be encumbered,' Supreme Court rejects wife's claim for Rs 120 crore jewellery, Rs 50 crore biscuits

New Delhi: The Supreme Court has said once the parties have entered into a settlement agreement duly authenticated by the mediator, and then any party resiles from the terms agreed upon in the settlement, the resiling party must be encumbered with high costs.

A bench of Justices Rajesh Bindal and Vijay Bishnoi said any deviation from the terms of the settlement arrived at in mediation and later confirmed by the court should be dealt with strictly, as such deviation undermines the foundational basis of the entire mediation process.

The court strongly disapproved of a wife's claim that her husband promised her jewellery worth Rs 120 crore and gold biscuits worth Rs 50 crore, as an out-of-court settlement agreement for divorce to evade his wealth tax liability, terming it “highly egregious”, and an audacious submission before a court of law.

The bench said, while a spouse may withdraw consent for divorce by mutual agreement, such withdrawal is impermissible once both parties have settled all disputes and agreed to dissolve the marriage.

Allowing the husband's plea against Delhi High Court's judgment in a case related to domestic violence, the court dissolved the marriage by invoking Article 142 of the Constitution, after noting that the marriage had irretrievably broken down.

In its judgment on April 13, 2026, the bench said, “Though it is well within the law for any party to withdraw consent at any stage before grant of divorce by mutual agreement, however, in case a compromise deed or a settlement agreement has been entered in between the parties, regarding the full and final settlement of their disputes, then, in that case, it is not open for the party to step back from the terms and conditions so arrived between them.”

The parties got married in 2000. In 2023 due to temperamental issues, the husband filed for divorce.

The husband agreed to withdraw the first divorce petition, and to pay the wife Rs 1.5 crore in two instalments, to purchase a car for Rs 14 lakh, and to hand over certain jewellery items. The wife agreed to execute a gift deed to transfer Rs 2.5 crore from their joint business account to the husband. But, before the second motion, the wife withdrew consent for mutual divorce.

The wife alleged that the appellant-husband assured her that apart from the considerations specified in the settlement agreement, he would give her jewellery worth Rs 120 crore, along with gold biscuits worth Rs 50 crore, in lieu of the stri dhan, apart from those mentioned in the settlement agreement, before signing the second motion petition.

She contended she only agreed to exclude these terms from the settlement agreement upon being asked so by the husband in order to avoid alerting the Income Tax department, and to evade any liability towards wealth tax.

Finding it highly egregious, the bench said, ''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 quashed the domestic violence complaint, saying the parties to a long-standing marital dispute are often fueled by emotions. But, the bench said, ''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.”