Inordinate Delay Cannot Be Computed Mechanically Against Non-Party To Consent Decree; Interim Injunction Permissible At Leave-To-Appeal Stage To Prevent Irreversible Prejudice: Supreme Court

NEW DELHI: Supreme Court ruled on October 30, 2026, that an appellate court is fully justified in granting ex parte ad interim injunctive relief to preserve the suit property even before formally deciding applications for leave to appeal and condonation of delay. A bench comprising Justice J.B. Pardiwala and Justice K. Vinod Chandran also held that an inordinate delay of 11 years cannot be reckoned mechanically from the date of a consent decree against a stranger who asserts an independent right, as limitation begins only when the affected non-party acquires knowledge of the decree and the consequent prejudice.

The controversy arose out of a consent decree dated April 29, 2013, passed in a specific performance suit concerning certain lands, which was subsequently executed through a Court Commissioner via a registered sale deed dated June 18, 2022, in favour of the appellant. Respondents 1 to 9, asserting title over the land through a prior 1975 registered sale deed and subsequent mutation entries in favour of their HUF, approached the High Court of Gujarat in 2024 by filing a first appeal with applications for leave to appeal, condonation of an 11-year delay, and ad interim injunction. The High Court granted an ex parte ad interim restraint against the appellant on April 2, 2024, and subsequently, by an order dated August 14, 2024, condoned the delay, granted leave to appeal, and confirmed the injunction pending appeal.

The appellant approached the Supreme Court raising specific questions of law: whether the High Court committed an error in granting and continuing an ad interim injunction against a non-party prior to deciding leave and condonation; whether leave to appeal against a consent decree could be granted to strangers under Section 96 read with Order 23 Rule 3 and Rule 3A of the Code of Civil Procedure, 1908; and whether the condonation of an 11-year delay without rigid formal pleadings was legally sustainable.

Rejecting the appellant's primary jurisdictional objection against the grant of interim relief, the Supreme Court held that procedural prerequisites cannot be used as an engine to defeat substantial justice and render an appellate remedy infructuous. The bench observed that in peculiar circumstances where neither the appellant nor the aggrieved applicants were original parties to the suit, immediate interim preservation of the lis is imperative.

Appellate courts retain inherent jurisdiction to grant interim protection before deciding leave to appeal where third-party rights threaten the subject matter

The Court highlighted that if non-parties seeking leave were forced to wait until leave and impleadment applications were fully argued and formally decided, the suit property could be alienated and placed beyond retrieval in the interregnum.

The bench held that: "Had the Respondent nos. 1-9 been required to await the adjudication of the application for leave to appeal, followed by the application for impleadment, before seeking interim protection, the subject land might, in the meantime, have been alienated, encumbered, or otherwise dealt with in a manner prejudicial to their asserted rights and detrimental to the effective adjudication of the dispute. This apprehension was not merely speculative but warranted serious consideration in light of the prima facie circumstances surrounding the consent decree, the execution proceedings, the appellant’s role under the power of attorney, and his association with the original plaintiff."

The Court added that the initial ex parte order did not suffer from procedural infirmity because the appellant was subsequently issued notice, participated in extensive inter partes hearings spanning several dates, and suffered a reasoned confirmatory order on August 14, 2024.

Statutory bar under Section 96(3) and Order 23 Rule 3A CPC applies only to parties to compromise, not to prejudicially affected strangers

Addressing the maintainability of an appeal against a consent decree by a non-party, the Court clarified that Section 96(3) CPC read with Order 23 Rule 3 and Rule 3A CPC operates as an estoppel solely against the consenting parties to ensure finality. A stranger who asserts an independent, legally cognisable interest that is jeopardised by the decree is not precluded from invoking Section 96 CPC with the leave of the appellate court.

The Court held that: "A conjoint reading of Section 96(3) of the CPC, 1908 with Order 23 Rule 3 & Rule 3A thereof, makes it clear that the statutory bar on an appeal against a consent decree, and the estoppel arising therefrom, are founded upon the binding effect of the compromise between the parties thereto... 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."

Differentiating precedents such as Triloki Nath Singh and Pushpa Devi Bhagat, the bench noted that those cases applied to parties claiming through the original litigants during the pendency of litigation. In contrast, persons with independent antecedent rights cannot be barred from approaching the appellate court under Section 96 CPC to establish that the decree affects them adversely.

Computation of delay for strangers to a decree cannot run from the date of the decree but from actual or constructive knowledge

Dealing extensively with the condonation of the 11-year delay, the Supreme Court unequivocally rejected the arithmetic computation of limitation from the date of the decree. The bench held that when a non-party challenges a decree obtained behind their back, the relevant enquiry must focus on the acquisition of knowledge and subsequent diligence rather than the gross length of time elapsed.

The Court observed: "In our view, however, the mere computation of the period between the passing of the consent decree on 29.04.2013 and the institution of the appeal cannot, by itself, furnish a complete answer to the question of condonation. The Respondent Nos. 1-9 were neither parties to the original suit nor participants in the compromise on the basis of which the decree came to be passed. In such circumstances, it would be erroneous to proceed on the assumption that they had knowledge of the decree from the date of its passing, or that the entire intervening period must necessarily be reckoned against them without examining when and in what circumstances they acquired, or could reasonably have acquired, knowledge of the proceedings and the prejudice allegedly occasioned thereby."

The bench found that Respondents 1 to 9 discovered the alteration in revenue records and third-party claims only around August 2023, promptly pursued information through the Right to Information Act, and initiated appellate proceedings in early 2024. Such chronological diligence established sufficient cause, justifying the High Court's exercise of discretion to condone the 11-year delay.

Affirming the High Court's orders, the Supreme Court held that the grant of interim injunction, leave to appeal, and condonation of delay were fully justified to ensure appellate scrutiny of transactions carrying serious prima facie concerns of collusion. The Court dismissed both civil appeals, making it clear that its observations were confined strictly to the interlocutory and leave stage without expressing any final opinion on the substantive title dispute, and directed the High Court to dispose of the first appeal within three months.

Date of Decision: October 30, 2026

SUPREME COURT OF INDIA - REPORTABLE

Bench: Justice J.B. Pardiwala and Justice K. Vinod Chandran

Date of decision: 30/10/2026