The Supreme Court has clarified the procedural route for challenging disputed compromises under the Code of Civil Procedure, 1908.
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NEW DELHI: In a significant ruling, the Supreme Court has clarified that
Order XLIII Rule 1-A of the Code of Civil Procedure, 1908 (CPC) does not create a new, independent right of appeal. Instead, it merely allows an appellant—already before the appellate court—to challenge a decree on the ground that the compromise, underlying that decree, ought not to have been recorded.
The appeals were filed against a decision by a Larger Bench of the Gujarat High Court, which had answered a reference arising out of an appeal. The High Court had concluded that a litigant who was already a party to the suit but disputed the validity or existence of a recorded compromise under Order XXIII Rule 3 CPC must first approach the Trial Court. According to the High Court, a first appeal under Section 96 CPC is only available to persons not on the record of the original suit.
Where the existence or validity of a compromise is disputed by a party to the original proceedings, the correct procedure is to first raise objections before the Trial Court, not directly file a first appeal.
The Supreme Court’s Observations
Referring to previous decisions in Pushpa Devi Bhagat v. Rajinder Singh (2006) and Banwari Lal v. Chando Devi (1993), the Division Bench comprising Justice Vikram Nath and Justice Prasanna B. Varale observed:
“The route is well established: the proviso to Order XXIII Rule 3 CPC is not optional—it is the exclusive remedy available to a party to the suit who denies the compromise. Order XLIII Rule 1-A does not confer an independent right of appeal. It only enables an existing appellant to argue that the compromise decree should not have been recorded.”
The Court emphasized that when the fact of compromise is not disputed, the bar under Section 96(3) CPC becomes absolute, barring an appeal against a consent decree.
Thus, Order XLIII Rule 1-A cannot be treated as a standalone basis for filing an appeal; it can only supplement arguments made in an already pending appeal.
The Supreme Court, finding no fault with the Gujarat High Court’s interpretation, declined to interfere with the High Court’s judgment.
Factual Background
The case concerned three contiguous parcels of non-agricultural land situated in Siddhpur, District Patan, originally owned by one Moosabhai Mooman. After his death, ownership passed to his widow, his sons Sultan and Shaukat Ali (Respondent No. 3), and his daughter Mumtaz (Respondent No. 7).
- Sultan passed away, leaving behind the appellant (his widow) and two children, Salma (Respondent No. 5) and Altaf (Respondent No. 6).
- In 2007, Shaukat Ali and Hassan Ali, claiming to act on behalf of the other co-owners, entered into an agreement to sell the land to ten individuals. However, the agreement was later terminated in 2011.
- Subsequently, a compromise was entered into between Respondents 1 and 2 (representatives of a Trust) and Shaukat Ali and Hassan Ali, leading to a first consent decree.
- Based on this decree, the plaintiff withdrew the original suit. However, another Special Civil Suit was filed, leading to a second compromise and second consent decree.
The appellant, claiming lack of knowledge and alleging fraud, challenged these consent decrees through Appeals from Orders (AOs) under Order XLIII Rule 1-A CPC. Other purchasers also filed parallel appeals.
Due to conflicting judicial opinions on the applicability of Rule 1-A, the matter was referred to a Larger Bench of the High Court, which ultimately dismissed the appeals.
Supreme Court’s Legal Reasoning
On examining the relevant provisions of CPC, the Supreme Court noted:
- A party accepting the compromise is bound by it and cannot appeal (Section 96(3) CPC).
- A party denying the compromise must raise objections before the Trial Court (proviso to Order XXIII Rule 3 CPC).
- Fresh suits challenging compromises are barred under Order XXIII Rule 3-A CPC.
Only if the Trial Court adjudicates the objection and rejects it, can the aggrieved party file a first appeal under Section 96(1) CPC. In that appeal, the appellant may then rely on Order XLIII Rule 1-A to argue that the compromise was wrongly recorded.
The Bench further clarified:
- Allegations of fraud or misrepresentation do not transform a consent decree into a regular decree.
- Such allegations must first be tested by the Trial Court under the proviso to Order XXIII Rule 3.
Since the appellant was already a party to the suit, she was not entitled to invoke remedies available only to third parties. The decrees in question were passed after settlement before a Lok Adalat, strengthening their character as consent decrees.
The Court noted that after the 1976 amendment to the CPC, the procedure is twofold:
- Party to the suit → Approach Trial Court first.
- Third party affected → Approach appellate court with leave.
Hence, the appeals filed under Order XLIII Rule 1-A were found incompetent.
Affirming the Gujarat High Court’s Larger Bench decision and the consequential orders, the Supreme Court held:
“The appellant may, if advised, invoke the proviso to Order XXIII Rule 3 of the CPC before the Trial Court.”
Case Details
- Case Title: Sakina Sultanali Sunesara (Momin) v. Shia Imami Ismaili Momin Jamat Samaj & Ors.
- Neutral Citation: 2025 INSC 570
- Appearances:
- For Appellant: Senior Advocate Huzefa Ahmadi
- For Respondents: Advocates-on-Record Anushree Prashit Kapadia and Rakesh Uttamchandra Upadhyay
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