Wife Cannot Retract from Mediation Settlement After Husband Pays Rs 35 Lakh, Rules Jharkhand High Court

The Jharkhand High Court held that a signed court-annexed mediation settlement cannot be unilaterally withdrawn after one party has partially performed its obligations and derived benefits under it.

A Division Bench of the Jharkhand High Court at Ranchi, comprising Justice Sujit Narayan Prasad and Justice Sanjay Prasad, has disposed of a first appeal in a matrimonial dispute by directing both parties to adhere to a mediation settlement reached in August 2025. The husband, Shashi Gurung, had already paid Rs 35 lakh to his wife, Shweta Gupta, in two instalments under the settlement. The wife subsequently sought to resile from the agreement. The Court held that once a court-annexed mediation settlement is signed and partially acted upon, a unilateral retraction by one party is legally unsustainable. The judgment was pronounced on 20 July 2026, after the matter was heard on a consultative basis (cav) on 18 June 2026.

The Dispute Before the High Court

The marriage between Shashi Gurung and Shweta Gupta was performed on 18 June 2011 at Vaishno Devi Mandir, Jammu, and registered on 24 July 2019 at Ranchi on the direction of the High Court. The couple has a son, Aayansh @ Chandra Vardhan Gurung, born on 4 June 2013, who resides with the wife.

Gurung filed Original Suit No. 41 of 2023 before the Principal Judge, Family Court, Dumka, seeking a decree of divorce under Section 13(1)(i-a) and (i-b) of the Hindu Marriage Act, 1955, on grounds of cruelty and desertion. He alleged that the wife had deserted him without reasonable cause since May 2014, used abusive language towards him and his family, consistently demanded that he become a gharjamai, and lodged a false dowry complaint against him in 2015 that resulted in FIR No. 10/2015 at Mahila P.S., Dumka.

The wife contested the suit, stating that the plaintiff had initially concealed the marriage from his family, that his relatives had misbehaved with her, that he had physically assaulted her and their child on 17 April 2014, and that his family had demanded Rs 20 lakh and a four-wheeler from her mother on 7 March 2015. She further stated that the trial court in the 498A case had convicted Gurung by judgment dated 29 February 2024, and that his conduct in the divorce proceedings contradicted his position in the criminal case.

The Supreme Court had earlier transferred the matter from Jalandhar to Dumka on the wife's application. The Family Court, Dumka, dismissed the divorce suit on 14 November 2024. Gurung then filed F.A. No. 23 of 2025 before the Jharkhand High Court under Section 19(1) of the Family Courts Act.

Referral to Mediation and Terms of Settlement

On 9 July 2025, the High Court referred the appeal, on the joint prayer of both parties, to the Special Mediation Drive — Mediation “For the Nation.” Both parties appeared in person before the learned Mediator of the High Court Legal Services Committee on 19 August 2025 and arrived at a settlement, which was reduced to writing.

The key terms of the settlement were:

• The husband agreed to pay Rs 35 lakh as permanent alimony to the wife.
• The husband agreed to pay Rs 40 lakh for the child's studies and other expenses.
• The husband agreed to pay Rs 5 lakh towards the child's medical expenses, subject to the wife sharing verified medical bills.
• The wife agreed to file a petition to compromise the criminal appeal (Criminal Appeal No. 21/2024, Shashi Gurung v. State of Jharkhand) pending before the Sessions Judge, Dumka, arising from the 498A conviction.
• The wife agreed to withdraw Criminal Revision No. 179/2025 pending before the High Court for enhancement of maintenance.
• Both parties agreed to file a joint petition before the High Court in F.A. No. 23/2025 to dissolve the marriage by mutual consent under Section 13-B of the Hindu Marriage Act, 1955.
• Visitation rights of the father were not to be restricted or curtailed.
• Neither party would file fresh cases against the other arising out of the marriage.
• The husband would not seek custody of the child.

The payment schedule provided that Rs 1 lakh would be paid by 10 September 2025, the remaining Rs 34 lakh by 10 December 2025, and Rs 40 lakh in February 2026 or at the time of final dissolution of marriage, whichever was later. In compliance with Clause 6 of the settlement, both parties filed a joint compromise petition, I.A. No. 14390 of 2025, before the High Court on 17 October 2025.

The Wife's Retraction and the Court's Inquiry

When the matter was taken up on 13 March 2026, the wife's counsel submitted that, upon reflection, she was no longer agreeable to disposing of the appeal in terms of the settlement. The Court immediately posed a direct question: whether, after arriving at a settlement, a party can retract from its terms and conditions.

On 23 April 2026, the wife proposed that the husband come to reside at her house in Hinoo, Ranchi, to strengthen the father-son relationship and improve the conjugal relationship. The husband agreed and assured that he would maintain regular communication with his son through video calls without affecting the child's education.

On 18 June 2026, when the matter was listed again, the wife was reported to be on her way but did not appear even after the Court waited approximately 35 minutes. The Court recorded that her conduct indicated she was not interested in further conversation on reunion, and reserved judgment.

The husband's counsel pointed out that Gurung had already paid the first two instalments totalling Rs 35 lakh through NEFT transactions, as evidenced by transaction confirmations annexed to I.A. No. 3037 of 2026. The wife, however, had not withdrawn Criminal Revision No. 179/2025 by 20 December 2025 as undertaken, nor had she filed the requisite application before the Sessions Judge, Dumka, for acquittal in Criminal Appeal No. 21/2024.

The Legal Question: Enforceability of a Mediation Settlement

The Court framed the central question as whether a settlement agreement reached through court-annexed mediation, filed as a joint compromise petition before the High Court, and partly acted upon, can be unilaterally withdrawn by one party.

The bench drew on the Mediation Act, 2023, which provides that a settlement agreement resulting from mediation is binding on parties and enforceable as if it were a judgment or decree of a court. The Court observed that the right to withdraw from mediation exists only during the active mediation process; once a formal settlement is signed by both parties and their counsel, the option to unilaterally walk away is extinguished.

The bench referred to Perry Kansagra v. Smriti Madan Kansagra, (2019) 20 SCC 753, where the Supreme Court noted that withdrawal from mediation is available only before a final agreement is reached. After execution of a formal agreement, no such right survives.

The bench also considered Dhananjay Rathi v. Ruchika Rathi, Crl.A. No. 1924 of 2026, where the Supreme Court held that the right to withdraw consent is not absolute when a comprehensive settlement has been partly acted upon, and that casual withdrawal would undermine the foundation of mediation. Similarly, in Trisha Singh v. Anurag Kumar, 2024 INSC 450, the Supreme Court described the wife's conduct as “recalcitrant” after she accepted Rs 50 lakh of an agreed Rs 1.15 crore and then attempted to resile, and invoked Article 142 of the Constitution to dissolve the marriage on the settlement terms.

Application of Estoppel

The Court held that the doctrine of estoppel squarely applied. Once a party has accepted benefits under a settlement or acted upon it, that party is precluded from subsequently denying, disputing, or revoking the arrangement. A mere change of mind or dissatisfaction with terms is not a valid ground for retraction.

The bench observed that the husband's partial performance — paying Rs 35 lakh in two instalments — strengthened the application of estoppel against the wife, making her unilateral retraction legally unsustainable. The Court also noted that withdrawal from a signed and court-recorded mediation settlement is permissible only under highly exceptional and strictly proven circumstances, none of which were present here.

The bench further noted that the wife's failure to comply with her undertakings filed before the Court in I.A. No. 14390 of 2025 — specifically to withdraw Criminal Revision No. 179/2025 by 20 December 2025 and to file an application before the Sessions Judge, Dumka, in Criminal Appeal No. 21/2024 — after already receiving the benefit of Rs 35 lakh, amounted to a deliberate breach of an undertaking given to the court.

Order

The Division Bench disposed of F.A. No. 23 of 2025 in terms of the mediation settlement dated 19 August 2025. It directed both the appellant-husband and the respondent-wife to strictly comply with all terms of the settlement within six months.

Within that period, the parties are directed to file a joint petition for dissolution of marriage by mutual consent before the Family Court having jurisdiction. The Family Court is directed to consider and pass appropriate orders in accordance with law upon such a petition.

Either party is at liberty to approach the appropriate forum if the other fails to adhere to the settlement terms. All pending interlocutory applications stand disposed of.