Supreme Court Lets Outsiders Challenge Consent Decree After 11-Year Delay
NEW DELHI: The Supreme Court of India on 30 October 2026 held that a person who was neither a party to a suit nor to the compromise behind a consent decree is not barred by Section 96(3) read with Order XXIII Rules 3 and 3A of the Code of Civil Procedure, 1908 from seeking leave to appeal against that decree, and refused to interfere with the Gujarat High Court's decision to condone an eleven year delay and restrain a buyer who obtained the land through that very decree.
A Bench of Justice J.B. Pardiwala and Justice K. Vinod Chandran dismissed the appeals of Girishbhai Natwarlal Patel, who bought the disputed land through a Court Commissioner's sale deed in 2022. The Court found, at a prima facie stage, serious questions over how he acquired the land, noting that he allegedly acted under a power of attorney for the original defendants and was closely linked to the plaintiff society. It asked the High Court to decide the main appeal within three months.
Case at a Glance
Case Title: Girishbhai Natwarlal Patel v. Gautam Punjabhai Palkhiwala (Dead) by LRs and Others
Case No.: Civil Appeal Nos. 14017-14018 of 2026, arising out of Special Leave Petition (Civil) Nos. 29178-29179 of 2024
Citation: 2026 INSC 1177 (marked reportable)
Bench: Justice J.B. Pardiwala and Justice K. Vinod Chandran (judgment authored by Justice Pardiwala)
Date of Judgment: 30 October 2026
What Was Challenged: The Gujarat High Court's ex parte ad interim injunction of 2 April 2024 and its judgment of 14 August 2024 in First Appeal No. 7226 of 2024, which continued the injunction, condoned a delay of 11 years and granted leave to appeal against a consent decree dated 29 April 2013 in Original Civil Suit No. 322 of 2012
Appearing for the Appellant: Mr. Anshin H. Desai, Senior Advocate
Appearing for Respondent Nos. 1 to 9: Mr. Mihir J. Thakore and Ms. Megha Jani, Senior Advocates
The Question Behind the Headline
Can a stranger to a consent decree reopen it more than a decade later? The Supreme Court said yes, but only with leave of the appellate court, and only if the person shows a legally recognisable interest that the decree prejudicially affects. The bar on appeals against consent decrees is aimed at the parties who agreed to the compromise, not at outsiders whose independent rights are allegedly hit by it.
The suspense in this case lies in who the buyer was. The allegation is that the very person who ended up owning the land had earlier held a power of attorney from the defendants, had filed a vakalatnama on their behalf, and was once the chairman of the society that won the decree. The Court did not decide that fraud was proved. It held that these circumstances were enough to let the High Court examine the matter.
Background
The Land and the Competing Chains of Title
The dispute concerns agricultural land originally owned by Purshottambhai Punjabhai. According to the respondents, he sold it by a registered sale deed dated 29 August 1975 to Vikram Punjabhai Palkhiwala, whose family members are Respondent Nos. 1 to 9. Mutation Entry No. 3106 recorded that sale in the revenue records. Tenancy proceedings between 1987 and 1997 ended in an order of 14 February 1994 holding the 1975 transfer valid, and on 20 November 1997 Mutation Entry No. 7597 recorded the land in the name of the family HUF.
The appellant's version differs. He pointed to a mutation entry in the name of the HUF that was cancelled in August 1980, a Deputy Collector's order of 16 March 1993 that led to the original owner's name appearing in the village forms, and a registered agreement to sell dated 11 September 1996 executed by the original owner's heirs in favour of Geetagram Cooperative Housing Society. The Supreme Court noted that the parties were at considerable variance on the subsequent course of events and relied on different mutation entries.
The 2012 Suit, the 2013 Consent Decree and the 2022 Sale Deed
In May 2012, Geetagram Cooperative Housing Society sued the heirs of Purshottambhai Punjabhai for specific performance of the 1996 agreement to sell, in Original Civil Suit No. 322 of 2012. On 29 April 2013, a compromise pursis signed by the plaintiff society and the defendants was filed and a consent decree was passed on the same day, granting specific performance. The society filed an execution application only in November 2020. On 18 June 2022, a Court Commissioner executed a registered sale deed in favour of Girishbhai Natwarlal Patel, with the society joining as a confirming party, and Mutation Entry No. 5327 recorded his name.
How the Family Challenged It
Respondent Nos. 1 to 9 said that they discovered in 2023 that revenue documents showed the appellant as occupant of the land in place of their HUF. They filed a First Appeal on 28 February 2024 challenging the consent decree as fraudulent and collusive, along with applications for leave to appeal, condonation of delay, interim relief, impleadment of the appellant and additional evidence. Documents received under the Right to Information Act on 21 March 2024 allegedly showed that the appellant was chairman of the society during 2002-2003.
On 2 April 2024, relying on that additional affidavit, they moved a draft amendment seeking interim orders against the appellant. The High Court passed an ex parte ad interim injunction restraining him from entering, selling, transferring, mortgaging, leasing or creating third party rights over the land. After hearing all sides over several dates, the High Court on 14 August 2024 confirmed the injunction, condoned the delay and granted leave to appeal.
Arguments Before the Supreme Court
The Appellant: Girishbhai Natwarlal Patel
Senior Advocate Anshin H. Desai argued that no appeal lies against a consent decree under Section 96(3) of the CPC and that a non-party cannot create a cause of action to challenge a compromise decree, relying on Triloki Nath Singh v. Anirudh Singh, Pushpa Devi Bhagat v. Rajinder Singh and R. Janakiammal v. S.K. Kumarasamy. He contended that an ex parte injunction should not have been granted on the strength of a proposed draft amendment, without impleading the appellant, relying on Acqua Borewell Pvt. Ltd. v. Swayam Prabha and Kishorsinh Ratansinh Jadeja v. Maruti Corporation.
He added that the High Court condoned a delay of 11 years mechanically, without exchange of pleadings and without a satisfactory explanation, that Respondent Nos. 1 to 9 lacked locus because the HUF was a separate legal entity, and that they suppressed the facts of 1980 to 1997. He denied collusion, saying all defendants had signed the compromise, no law barred a sale deed through a Court Commissioner, and the respondents never challenged the execution proceedings or the 2022 sale deed.
The Respondents: Palkhiwala Family Members
Senior Advocates Mihir J. Thakore and Megha Jani argued that no error of law was committed by the High Court. They said the original seller had divested himself of all rights in 1975, so his heirs could not validly agree to sell in 1996, and that the 2012 suit and 2013 decree were collusive. They pointed to the power of attorney of 22 March 2012 in favour of the appellant, the vakalatnama filed by him for the defendants, the sixteen year gap before the suit, the swift consent disposal, seven years of inaction before execution, his alleged chairmanship of the society, and the non-appearance of the society and the heirs before the Supreme Court.
They stated that the impugned orders were interlocutory, that the title question is pending in the First Appeal, that they had a strong prima facie case and balance of convenience, and that they were aggrieved persons under H. Anjanappa v. A. Prabhakar. They also alleged that the appellant tried to raise construction after the High Court order, as stated in an additional affidavit of 23 September 2024.
What the Supreme Court Held
Issue One: Was the Interim Injunction Sustainable?
The Court held that the High Court committed no error, not to speak of any error of law, in granting the injunction. It clarified at the outset that it was not examining the merits of the appeal against the consent decree, and that its observations on fraud and collusion are not conclusive findings.
Why the Court Saw a Real Risk to the Land
Prima facie, the Court said, the circumstances raised serious questions about how the appellant claims to have acquired the land. Serious doubts arose over whether the heirs of the original owner had any subsisting title to convey, and it appeared that the appellant acted under a power of attorney from the original defendants while also having close links with the plaintiff society, having purportedly served as its chairman in 2002-2003. The Court said these circumstances may not conclusively establish fraud or collusion, but they furnish sufficient basis, at this interlocutory stage, for the apprehension that the transactions warrant judicial scrutiny.
Why the Injunction Could Come Before the Leave Decision
The Court accepted that neither the respondents nor the appellant was a party to the original suit, and that the impleadment application could be heard only after the applicants made good their case for leave. Had they been made to wait, the land might have been alienated or encumbered in the meantime. The Court called this apprehension not merely speculative.
The Later Hearing Cured the Ex Parte Start
The Court noted that the matter did not rest with the ex parte order. The appellant was subsequently heard, and the continuation of the injunction on 14 August 2024 followed that hearing, so it was not an automatic perpetuation of the ex parte order. In these circumstances, the High Court could not be faulted for treating immediate interim protection as necessary to preserve the subject matter of the dispute.
Issue Two: Can a Stranger to a Consent Decree Seek Leave to Appeal?
The Court called the appellant's argument thoroughly misplaced. It explained that Section 96(3) and Order XXIII Rules 3 and 3A seek finality for lawful compromises and prevent parties who consented to a decree from resiling from it, but the bar cannot be mechanically invoked to defeat the right of a person who was not a party to the compromise and who asserts an independent legal interest prejudicially affected by the decree.
The Precedents Read in Context
The Court read Banwari Lal v. Chando Devi, Pushpa Devi Bhagat v. Rajinder Singh and R. Rajanna v. S.R. Venkataswamy as dealing with remedies available to parties to a compromise. It distinguished Triloki Nath Singh because the appellant there had acquired the property during the pendency of the title suit and derived his claim through a party to it, whereas Respondent Nos. 1 to 9 are complete strangers to the consent decree and do not trace their claim through any party to it.
The Limits on a Non-Party's Right
The Court stressed that non-party status does not confer an unrestricted right of appeal. Relying on V.N. Krishna Murthy v. Ravikumar and H. Anjanappa v. A. Prabhakar, it reiterated that leave cannot be granted to every person remotely affected, and that the applicant must show a legally cognisable interest that is prejudicially affected. It added that the fact that the decree is a consent decree neither dispenses with that requirement nor itself bars the grant of leave.
Why Leave Was Rightly Granted Here
The material relied on by the family could not, at this stage, be dismissed as showing a merely imaginary or remote interest, even though mutation entries do not by themselves confer title.
The suit was filed in 2012 on a 1996 agreement, the decree followed within a short time by consent, and it was executed only in 2020, with the sale deed to the appellant following in 2022.
The appellant allegedly held a power of attorney from the heirs and filed a vakalatnama for them in the suit before himself becoming the beneficiary of the conveyance.
The non-appearance of the society and the heirs before the High Court and the Supreme Court was an additional circumstance that could not be wholly disregarded.
Taken together, these circumstances do not establish fraud or collusion, but show that the grievance is not so tenuous as to shut the door to appellate scrutiny at the threshold.
Issue Three: Was Condoning an 11 Year Delay Valid?
The Court held that merely computing the period between the decree and the appeal cannot answer the question of condonation. Since Respondent Nos. 1 to 9 were neither parties to the suit nor participants in the compromise, it would be erroneous to assume that they knew of the decree from the date it was passed. The relevant question is when, and in what circumstances, they acquired knowledge of the proceedings and the prejudice allegedly caused.
The Court noted that they claimed to have learnt of the change in the revenue records in or around August 2023, took steps to find out how it happened, and relied on an RTI response of 21 March 2024. The significance of these events, it said, lies not in whether every allegation will be proved but in the fact that the record discloses an explanation for not challenging the decree earlier. The challenge to the condonation order was rejected, and the Court stated that condonation does not decide the merits.
Operative Directions
The ex parte ad interim injunction of 2 April 2024, as continued by the judgment of 14 August 2024, does not warrant interference.
The High Court was justified in granting leave to appeal to Respondent Nos. 1 to 9.
The High Court committed no error in condoning the delay.
The appeals were dismissed and pending applications were disposed of.
Having regard to the nature of the litigation, the High Court was requested to take up the main appeal for final hearing and dispose of it within three months.
The Registry was directed to forward a copy of the judgment to the High Court of Gujarat.
Key Lines From the Judgment
The statutory bar, however, cannot be mechanically invoked to defeat the right of a person who was not a party to the compromise and who asserts an independent legal interest prejudicially affected by the decree.
A stranger to a compromise decree cannot be said to be barred under Section 96(3) read Order XXIII Rule 3 and Rule 3A of the CPC, 1908, since the scope and import of these provisions are limited to the parties to the compromise and act as an estoppel only with respect to them.
At the same time, non-party status does not confer an unrestricted right of appeal.
What This Means Going Forward
Consent decrees are not a shield against outsiders. Parties to a compromise remain bound, but a stranger with an independent interest can seek leave to appeal, subject to showing prejudice.
Leave is discretionary and needs a real interest. The Court repeated that remote or imaginary injury does not qualify, so applicants must plead and prove how the decree affects their own rights.
Delay depends on knowledge. For a non-party, the clock of delay is examined from when they knew or could reasonably have known of the decree, not mechanically from the decree date.
Buyers under compromise decrees face scrutiny. Where a purchaser has links with both sides of the decree, courts may protect the land through interim orders while the appeal is decided.
Nothing is decided on fraud yet. The Court was explicit that the merits of the title claim and the allegations of fraud and collusion remain open for the High Court.
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Frequently Asked Questions
Can a person who was not a party to a consent decree appeal against it?
Yes, with the leave of the appellate court. The Supreme Court held that Section 96(3) of the CPC and Order XXIII Rules 3 and 3A bar the parties to the compromise, not strangers to it, but the stranger must show a legally cognisable interest that is prejudicially affected by the decree.
Why did the Supreme Court allow an appeal after an 11 year delay?
The Court held that the delay cannot be computed mechanically from the decree date for a non-party. The respondents explained that they learnt of the revenue record changes around August 2023 and acted after that, so the High Court committed no error in condoning the delay. The order does not decide the merits.
Did the Supreme Court find fraud or collusion in the consent decree?
No. The Court said the circumstances do not by themselves establish fraud or collusion, but they justified scrutiny at the interlocutory stage. It clearly stated that the merits and the allegations of fraud and collusion remain open for decision by the High Court.
Can an ex parte injunction be granted against a person who is not yet a party?
On the peculiar facts of this case, the Court held the High Court was justified in granting interim protection to preserve the land, especially because the appellant was later heard and the injunction was continued only after that hearing.
What happens next in this dispute?
The First Appeal against the 2013 consent decree continues before the Gujarat High Court, which has been requested to hear and dispose of the main appeal within three months of 30 October 2026. The injunction against the appellant stays in place until then.
Keywords
Consent decree, Section 96(3) CPC, Order XXIII Rule 3, Order XXIII Rule 3A, stranger to consent decree, leave to appeal, non-party appeal, person aggrieved, condonation of delay, ex parte ad interim injunction, fraud and collusion, specific performance, Court Commissioner sale deed, mutation entry, Triloki Nath Singh, H. Anjanappa v. A. Prabhakar, V.N. Krishna Murthy, 2026 INSC 1177, Justice J.B. Pardiwala, Justice K. Vinod Chandran.
Case Title: Girishbhai Natwarlal Patel v. Gautam Punjabhai Palkhiwala (Dead) by LRs and Others
Case No.: Civil Appeal Nos. 14017-14018 of 2026, arising out of Special Leave Petition (Civil) Nos. 29178-29179 of 2024
Citation: 2026 INSC 1177
Bench: Justice J.B. Pardiwala and Justice K. Vinod Chandran
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