The Supreme Court recently issued a sharp rebuke to litigants trying to exploit the legal system by walking away from mediated matrimonial settlements.
The Court ruled that a party cannot simply pocket the financial benefits of a mutual divorce agreement and then launch fresh criminal proceedings to extort more money.
The Court observed that,
“Any deviation from the terms of the settlement arrived in mediation and later confirmed by the Court should be dealt with strictly as such deviation harbors an attack to the foundational basis of the entire process of mediation.”
The said order was passed by a Division Bench comprising Justice Rajesh Bindal and Justice Vijay Bishnoi. They allowed an appeal filed by the husband, Dhananjay Rathi, against his estranged wife, Ruchika Rathi, putting an absolute end to the domestic violence proceedings she had initiated.
The couple married in 2000 and share two adult children. In 2022, the marriage had irretrievably strained, resulting in the husband filing for dissolution on allegations of cruelty and adultery.
The Family Court then referred the couple to mediation. There, they struck a comprehensive deal to part ways peacefully. The husband agreed to pay Rs. 1.5 crores in alimony, return her jewelry, and buy her a car.
In return, the wife was bound to sign the mutual consent divorce papers and transfer certain properties back to him. The husband upheld his end of the bargain. He paid the first installment of Rs. 75 lakhs, plus Rs. 14 lakhs for the car, and handed over the agreed-upon jewelry during the First Motion stage.
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However, when the time came for the Second Motion, the wife flipped the script. She flatly refused to sign. Worse, eight months later, she filed a Domestic Violence case against him and his elderly mother.
In this backdrop, the principal issue before the Court was whether a spouse can legally resile from a court-authenticated settlement and weaponize the DV Act after already enjoying the monetary benefits of the deal.
The wife offered a startling defense for her rebellion. She claimed the husband made a secret, off-the-books promise to give her extra jewelry worth Rs. 120 crores and gold biscuits worth Rs. 50 crores.
She asserted that the enormous sums were kept out of the written agreement to facilitate the husband’s alleged tax evasion. The Court, after scrutinizing the record, dismissed this claim in its entirety.
Relying on its major ruling in Gimpex Private Limited vs. Manoj Goel, reported as (2022) 11 SCC 705, the bench reiterated that once a settlement is signed with open eyes, reversing it through subsequent criminal complaints is legally impermissible.
The Court drew heavy parallels with its past ruling in Ruchi Agarwal vs. Amit Kumar Agarwal, reported as (2005) 3 SCC 299. Just like in that case, the bench noted that partial performance of a compromise followed by a refusal to drop criminal charges constitutes a blatant abuse of the judicial process.
Applying the Constitution Bench judgment in Shilpa Sailesh v. Varun Sreenivasan, reported as (2023)14 SCC 231, the Court recognized that the marriage was emotionally dead and wrecked beyond the scope of salvage.
In conclusion, the Court expressed serious concern over the wife’s candid admission of attempting to justify her substantial unwritten claims by alluding to tax evasion. It further observed that the domestic violence complaint appeared to be premeditated and was devoid of any specific allegations of actual abuse.
The Bench observed, having clearly discerned the extortionate nature of the tactics employed, “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.”
Accordingly, the Supreme Court dissolved the marriage under Article 142 of the Constitution, citing irretrievable breakdown.
The Court quashed the DV proceedings entirely, directed the husband to pay the remaining settlement balance of roughly Rs. 70 lakhs, also directed him to hand over the passbook of the PPF account in the bank account of the wife and ordered that all subsequent civil and criminal litigation between the parties be permanently closed.
Case: Dhananjay Rathi vs Ruchika Rathi
Case No: Criminal Appeal No (S). 1924 OF 2026
Date of Order: 13.04.2026
Status: Disposed of
