Party to suit must first move trial court to impeach consent decree; First Appeal lies only after trial court decision

A bench of Justices Vikram Nath and Prasanna B. Varale heard an appeal by Sakina Sultanali Sunesara challenging a Larger Bench judgment of the Gujarat High Court which held that a litigant who was already on the record of a suit but contested the existence or validity of a compromise must first approach the trial court under the proviso to Order XXIII Rule 3 CPC and could not directly prosecute a First Appeal under Section 96. The appeals arose from applications under Order XLIII Rule 1‑A and Order XLIII appeals filed against consent decrees recorded in favour of the respondent community organisation.

The Supreme Court affirmed the Gujarat High Court. It held that the 1976 amendments to the Code of Civil Procedure produced a coherent statutory scheme: a party who accepted a compromise was barred by Section 96(3) from appealing; a party who denied the compromise must first invoke the proviso to Order XXIII Rule 3 before the trial court; Order XXIII Rule 3‑A barred a separate suit; and only if the trial court decided adversely would a First Appeal under Section 96(1) lie, where Order XLIII Rule 1‑A(2) permitted challenge to the recording of the compromise. The Court, in its reasoning, observed: "A party that accepts the compromise is bound by it and cannot appeal (Section 96(3)). A party that denies the compromise must first raise that dispute before the Trial Court (proviso to Order XXIII Rule 3). A fresh suit is no longer possible (Order XXIII Rule 3-A). If, and only if, the Trial Court decides the objection and passes a decree adverse to the objector, a first appeal lies under Section 96(1); in that appeal the appellant may, by virtue of Order XLIII Rule 1-A(2), challenge the recording of the compromise." The Court further reiterated that "a consent decree operates as an estoppel and is valid and binding unless it is set aside by the court which recorded the compromise on an application under the proviso to Rule 3."

Background The dispute concerned three contiguous non‑agricultural parcels in Siddhpur, Gujarat, originally owned by members of a family. The appellant, who later became the sole recorded owner by mutation entries, sold portions of the land in August 2015. The respondent Shia Imami Ismaili Momin Jamat alleged an earlier agreement to sell and, after competing suits, two separate written compromises were recorded as consent decrees in 2016. The appellant alleged she had no notice of those compromises and alleged fraud; she filed Applications (AOs) under Order XLIII Rule 1‑A/Order XLIII appeals challenging the consent decrees and sought to set them aside under Order XLIII Rule 1‑A and Order XLIII Rule 1(m) (deleted provision). The High Court’s Larger Bench answered reference questions by holding that a party on record must first seek relief under the proviso to Order XXIII Rule 3 and that Rule 1‑A did not create an independent appellate right; consequentially a Single Judge dismissed pending AOs for want of maintainability. The appellant contended Section 96 permitted a direct First Appeal where the compromise itself was disputed and relied on earlier precedents; respondents relied on Pushpa Devi and related authorities supporting the trial‑court first route.

The Supreme Court analysed the statutory changes effected by Amendment Act No. 104 of 1976 and a line of precedents, concluded that the Gujarat Larger Bench was correct, and dismissed the civil appeals. The Court observed that allegations of fraud, lack of authority or other vitiating factors were matters the proviso to Order XXIII Rule 3 required the trial court to examine and that until that route was pursued Section 96(3)’s bar persisted. The Court affirmed the Larger Bench judgment dated 28.08.2019 and the Single Judge’s consequential order of 06.09.2019, dismissed the appeals and left open the appellant’s liberty to invoke the proviso to Order XXIII Rule 3 before the trial court; it expressed no opinion on the merits of any such application and made no order as to costs.

Case Details: Case No.: 2025 INSC 570 (Civil Appeal Nos. 6681‑6682 of 2023) Case Title: Sakina Sultanali Sunesara (Momin) v. Shia Imami Ismaili Momin Jamat & Ors. Appearances: For the Petitioner(s): Mr. Huzefa Ahmadi, Senior Counsel For the Respondent(s): Mr. Rakesh Uttamchandra Upadhyay, Advocate