SC Upholds HUF Members’ Leave to Appeal Consent Land Decree After Buyer Represented Seller Heirs and Acquired the Land

In 2013, a consent decree for specific performance was passed in favour of Geetagram Cooperative Housing Society, based on a 1996 agreement to sell.

In 2022, a sale deed for the subject land was executed in favour of the appellant, who had acted under a power of attorney for the original defendants and was alleged to have been associated with the Society.

Respondent Nos. 1–9, who were not parties to the suit or compromise, claimed an independent interest in the land and alleged fraud and collusion.

After discovering changes in the revenue records in or around 2023, they sought leave to appeal against the consent decree, condonation of an approximately 11-year delay, and interim protection.

The Gujarat High Court granted an ex parte injunction on 2 April 2024 and, on 14 August 2024, continued it, condoned the delay, and granted leave to appeal.

The appellant challenged those orders before the Supreme Court.

Section 96(3) CPC bars an appeal from a consent decree as between parties to the compromise; Order XXIII Rule 3 governs recording a compromise, while Rule 3A bars a suit to set aside a decree on the ground that the compromise was unlawful.

Those provisions do not, by themselves, bar a non-party asserting an independent legal interest prejudicially affected by the decree; the non-party must nevertheless obtain appellate leave and show that the decree adversely affects a legally cognisable right or interest.

The Court applied the principles in V.N. Krishna Murthy v. Ravikumar and H. Anjanappa v. A. Prabhakar: leave is not granted to a person who is only remotely or indirectly affected, but may be granted where the person is genuinely aggrieved or bound by, or prejudicially affected by, the decree.

The Court also considered the principles in Banwari Lal v. Chando Devi, Pushpa Devi Bhagat v. Rajinder Singh, R. Rajanna v. S.R. Venkataswamy and Triloki Nath Singh v. Anirudh Singh concerning challenges to compromise decrees and distinguished the position of parties to a compromise from that of independent non-parties.

The Court held that the injunction was justified as a measure to preserve the land pending appellate scrutiny.

The appellant’s role under a power of attorney for the original defendants, his alleged association with the plaintiff Society, and his eventual acquisition of the land raised prima facie concerns warranting protection; the injunction was also continued only after the appellant had an opportunity to be heard.

Respondent Nos. 1–9 were not parties to the compromise and did not claim through a party to it, so the consent-decree bar and compromise estoppel did not automatically preclude their appeal.

Their asserted interest and the circumstances surrounding the decree and subsequent conveyance were sufficient, at the leave stage, to show potential prejudice, without deciding the merits of their title or fraud allegations.

The delay was properly considered in light of their non-party status, their claimed discovery of the altered revenue records in 2023, and the steps they took thereafter; the date of the decree alone did not establish that they had knowledge of it.

It clarified that its conclusions did not determine the parties’ ultimate rights in the land or the truth of the fraud and collusion allegations.

The Gujarat High Court was requested to hear and dispose of the main appeal within three months.