14 April 2026 Legal Updates

“Cannot Back Out After Settlement”: Supreme Court Bars Withdrawal of Consent in Mutual Divorce After Full & Final Settlement

Case Details

(a) Case Title:

• Dhananjay Rathi v. Ruchika Rathi

(b) Court:

• Supreme Court of India

(c) Bench:

• Justice Rajesh Bindal & Justice Vijay Bishnoi

Facts of the Case

Marriage solemnised in 2000

In 2023, husband filed for divorce

Parties went for mediation and entered into a settlement agreement, which included:

• Mutual consent divorce
• ₹1.5 crore payment by husband
• ₹14 lakh for car
• Transfer of jewellery
• Wife transferring ₹2.5+ crore from joint account

Both parties:

• Performed part of obligations
• Filed mutual divorce petition

However:

• Before second motion → Wife withdrew consent
• Filed Domestic Violence (DV) case

Husband approached Supreme Court:

• To quash DV case
• For divorce under Article 142

Issues Raised

• Whether: A spouse can withdraw consent for mutual divorce after settlement?
• Whether: Court-approved mediation settlement is binding?
• Whether: DV proceedings can continue after full settlement?

Contentions of the Husband

• Wife: Breached settlement
• He: Performed obligations (paid ₹75 lakh + ₹14 lakh)
• DV case: Malicious and afterthought
• Sought: Divorce under Article 142, Quashing of DV case

Contentions of the Wife

1. Claimed

Husband promised additional:

• ₹120 crore jewellery
• ₹50 crore gold

2. Alleged

• Non-compliance by husband

3. Justified

• Withdrawal of consent
• Filing DV case

Court’s Reasoning & Key Findings

1. Right to Withdraw Consent – Not Absolute

Court clarified:

• Generally: Consent can be withdrawn before decree
• BUT NOT when: Parties entered full & final settlement

2. Binding Nature of Mediation Settlement

• Court held: Settlement:
  - Authenticated by mediator
  - Approved by court
• Becomes: Final binding agreement
• Settlement “subsumes the original dispute”

3. Sanctity of Mediation

• Court emphasized: Mediation = foundation of dispute resolution
• Allowing withdrawal: Undermines system, Encourages misuse

4. Exceptions to Settlement Binding

Withdrawal allowed ONLY if: Settlement obtained by:

• Fraud
• Coercion
• Misrepresentation
• Other party breaches terms

5. Court Criticises Wife’s Conduct

• Strong observation: Called argument “Sheer audacity”
• Allegation of ₹170 crore: Unsupported, Unbelievable

6. DV Case = Afterthought

• Court found: Filed After contempt notice, After settlement
• Therefore: Malicious & strategic litigation

7. Article 142 Applied

• Marriage: Irretrievably broken
• Court: Dissolved marriage

Final Verdict

Supreme Court Held:

• Divorce Granteda: Under Article 142
• DV Proceedings Quashed: Declared Afterthought, Abuse of process
• Settlement Enforced: Husband directed to complete remaining payment

Legal Principles Established (VERY IMPORTANT FOR CLAT)

1. Mutual Consent Divorce (Section 13B HMA)

• General Rule: Consent can be withdrawn before final decree
• Exception: Cannot withdraw after: Full & final settlement

 2. Binding Nature of Mediation

• Settlement: Legally enforceable, Replaces original dispute

3. Sanctity of Alternative Dispute Resolution (ADR)

• Courts protect: Mediation, Settlement agreements
• Prevent misuse

4. Abuse of Legal Process

• Filing cases after settlement: Considered mala fide

5. Article 142 Power

Supreme Court can:

• Dissolve marriage
• Ensure complete justice

6. Exceptions to Settlement

Can withdraw ONLY if:

• Fraud
• Coercion
• Non-performance