Dispute can be revived after settlement

The Supreme Court last week set aside a judgment of the Punjab and Haryana High Court and stated that even after a settlement between two rival parties, a new dispute over it could be revived in the court. In this case, Punjab Financial Corporation vs Paulbro Leathers Ltd, the firm could not repay the loan taken from the corporation. They arrived at a one-time settlement, in which a chartered accountant was appointed to calculate the balance of dues. The corporation disputed the CA’s calculation and demanded ~50 lakh from the debtor. The firm moved the high court arguing that once a settlement was signed, there could not be a further dispute. The high court agreed with it and quashed the demand, asserting that since the parties had consented to the settlement, the corporation was not justified in raising the demand. Therefore, the financial corporation appealed to the Supreme Court. It held that the high court was wrong and stated that there is a new dispute outside the settlement, which could be decided on its own merit by a new CA. The case was remanded to the high court for quick disposal as public money is involved.