An appellate court cannot record a compromise prejudicing a non-consenting party without hearing them.

The petitioner, respondent No. 8 in Regular Civil Appeal No. 20 of 2019, challenged the appellate court’s order dated 20 November 2021.

During that appeal, some appellants and respondents entered into a compromise, which the appellate court recorded and used to pass a consent decree disposing of the appeal.

The petitioner was not a party to the compromise and contended that the decree prejudiced her rights.

The respondent’s counsel did not dispute that the decree could affect the petitioner’s interests, while submitting that she had failed to establish her case before the trial court.

Whether the appellate court could record a compromise and pass a consent decree without giving the petitioner, a party to the appeal whose rights could be affected, an opportunity to object.

Whether the impugned consent decree and order disposing of the appeal should be set aside and the appeal restored for decision on its merits.

The Court exercised its supervisory jurisdiction under Article 227 of the Constitution of India.

It held that where a compromise between some parties to an appeal may prejudice the rights of another party, the appellate court must examine that potential effect and provide the affected party an opportunity to state any objection before recording the compromise and passing an order.

The petitioner was a party to the appeal but had not joined the compromise.

The appellate court accepted the settlement and disposed of the appeal without first determining whether it affected her rights or hearing her position.

The parties’ submissions before the High Court left undisputed that her interests were prejudiced by the consent decree.

In those circumstances, the failure to give her an opportunity to be heard amounted to a gross irregularity and jurisdictional error warranting supervisory intervention.

It directed the appellate court to decide the appeal on its merits in accordance with law, while considering the compromise and allowing affected parties to state their position regarding it.

Rule was made absolute to that extent; no order as to costs.