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Synopsis

The Supreme Court has on April 23, 2025 said if a person was already a party to the suit, and denies that any lawful compromise ever took place, the CPC requires that person to go back to the trial court under the proviso to Order XXIII Rule 3 and ask that court to decide whether the compromise is valid. 

On the other hand, someone who was not a party to the suit, but whose rights are hurt by a consent decree, may approach the appellate court in a first appeal under Section 96 of the CPC, but only after obtaining leave, a bench of Justices Vikram Nath and Prasanna B Varale said. 

The court pointed out Order XLIII Rule 1-A does not create an independent appeal at all; it merely says that, once an appeal is otherwise before the court, the appellant may argue that the compromise should, or should not, have been recorded. 

Dealing with an appeal filed by Sakina Sultanali Sunesara (Momin), the bench upheld the judgment of August 28, 2019 rendered by a larger bench of the High Court of Gujarat on a reference.

The court also rejected appellant’s submission that allegations of fraud transformed a consent decree into an ordinary decree, saying this cannot be accepted. 

"Fraud, want of authority or other vitiating elements are precisely the matters that the proviso directs the trial court to examine. Unless and until that route is pursued, the statutory bar in Section 96(3) of the CPC remains operative," the court observed.

In the present case, the court essentially examined whether a litigant who was already a party to the suit, yet contests the very fact or legality of a compromise embodied in a decree, is restricted to an application before the trial court under the proviso to Order XXIII Rule 3 or may, at her election, maintain a first appeal under Section 96 of the CPC notwithstanding Section 96(3).    

Brief Background

The appellant in the present case was a defendant-of-record in two special civil suits. 

Both decrees based on written compromise terms signed by counsel who held unquestioned vakalatnamas. The signature of duly authorised counsel was the signature of the party. The decrees were therefore consent decrees within the meaning of Section 96(3). The appellant never invoked the proviso to Order XXIII Rule 3; instead, she lodged appeals from orders on the footing of the deleted Order XLIII Rule 1(m). Thus, the larger bench of the High Court was correct in holding that such appeals are incompetent since 1976, the bench said.     

The court also noted the presence of subsequent purchasers does not assist the appellant. 

Those purchasers were never parties to the suits; they have, with leave, instituted first appeals in the High Court, a course that Section 96(1) of the CPC permits to non-parties. The appellant, by contrast, was a party to the suits and cannot appropriate the remedy reserved for third parties. Both suits were eventually compromised before a Lok Adalat. 

Case Title: Sakina Sultanali Sunesara v. Shia Imami Ismaili Momin Jamat Samaj & Ors.