Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Guj) 1093

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
BHARGAV D. KARIA, L. S. PIRZADA, JJ.
Gujarat Credit Corporation Ltd – Petitioner
Versus
Union Of India And Ors. – Respondents
Civil Application (For Orders) No. 1 Of 2026 In R/First Appeal No. 3766 Of 2019, Civil Application (For Stay) No. 1 Of 2019, Civil Application (For Bringing Heirs) No. 1 Of 2023, Civil Application (For Condonation Of Delay) No. 2 Of 2023
Decided On : 10-04-2026

Advocates Appeared:
For The Petitioner:Mr Shalin Mehta, Senior Advocate With Mr Dhaval M Barot
For The Respondent: Mr Cg Sharma, Mrs Kalpana K Raval, Ms Maithili D Mehta, Mr Sankul Kabra, Mr Hardik Brahmbhatt

An appellate court is empowered to dispose of an appeal by substituting the trial court's decree with a consent decree based on a post-litigation settlement reached between the parties, effectively resolving all disputes regarding property, title, and ownership.

Headnote:(A) Income Tax Act, 1961 - Section 269UD - Property auction - Sale deed - Settlement between parties - Appellate Court power to substitute decree - When a suit for declaration of title and ownership regarding a property sold through a public auction conducted by an authority is challenged, the appellate court has the jurisdiction to accept a settlement arrived at between the parties - Such settlement, when presented with supporting documentation, allows the appellate court to substitute the trial court's order with a decree based on the consent of the parties - The court is not required to adhere to technicalities when parties have reached an amicable resolution to the dispute. (Paras 2, 4)

Facts of the case:
The appellant acquired property through a public auction conducted by a statutory tax authority. The original owners of the property filed a civil suit challenging the legality of the auction, the transfer of title, and the sale deed, resulting in a partially decreed suit in favor of the original owners. The appellant challenged this decree in the high court. During the pendency of the appeal, the parties engaged in a settlement, with the claimants executing various deeds of confirmation and indemnity bonds acknowledging the appellant's ownership.

Issues: Whether the appellate court could allow an appeal based on a settlement arrived at between the parties, and whether the trial court's decree could be substituted by a consent decree based on the terms of such settlement.

Findings of Court:
The court observed that the parties had mutually agreed to resolve the dispute, substantiated by registered deeds of confirmation and indemnity bonds. The court found that in light of the settlement, it was unnecessary to pursue the litigation on merits or maintain the preliminary decree of the lower court, as the settlement fully addressed the ownership and title issues in favor of the appellant.

Ratio Decidendi: Where the parties enter into a bona fide settlement during an appeal, the court is empowered to grant a final decree in terms of those settled conditions, thereby superseding the previous judgment and decree to reflect the parties' agreement rather than a contested finding.

Result: Appeal and related applications disposed of in terms of the settlement.

ORDER :

BHARGAV D. KARIA, J.

Civil Application No. 1 of 2026, Civil Application No. 1 of 2019, Civil Application No. 1 Of 2023 and Civil Application No. 2 Of 2023 in First Appeal No. 3766 of 2019

1. Heard learned Senior Advocate Mr.Shalin Mehta with learned advocate Mr.Dhaval M. Barot for the Petitioner No. 1, learned advocate Mr.C.G. Sharma for the respondent Nos. 4 and 6, learned advocate Ms.Maithili D. Mehta for the respondent No. 1, learned advocate Mr.Sankul Kabra for heirs of respondent No.7 and learned advocate Mr.Hardik Brahmbhatt for heirs of Respondent No.5.

2. Civil Application No.2 of 2023 is filed to condone the delay in bringing the legal heirs of the original plaintiffs, respondent No.5 – Rameshchandra Ganpatram Patel and respondent No.6 – Kailashben Ganpatram Patel on record. Civil Application No.1 of 2023 is filed to bring on record legal heirs of respondent No.5 and respondent No.6, who passed away on 28.06.2001 and 15.08.2019 respectively. Considering that the parties have entered into a settlement, without entering into technicalities, the delay caused in filing the applications for setting aside the abatement as well as for bringing the legal heirs on record is allowed, and the delay of 7234 days is ordered to be condoned. Accordingly, Civil Application No.1 of 2023 is allowed by bringing the legal heirs of respondent No.5 as Nos.5/1 to 5/4 and respondent No.7 as respondent Nos.7/1 to 7/4, as stated in para No.3 of the application.

3. Respondent No.4 – Rohitkumar Ganpatram Patel is reported to have expired on 29.04.2021, and his only legal heir, his wife Vinodaben Rohitkumar Patel, had already expired on 02.03.2021. They were not having any legal heirs, and therefore respondent No.4 is ordered to be deleted.

4. Cause title be amended accordingly.

First Appeal No. 3766 Of 2019

1. Heard Senior Advocate Mr Shalin Mehta appearing with learned advocate Mr.Dhaval M. Barot for the Petitioner No. 1, learned advocate Mr.C.G. Sharma for the respondent Nos. 4 and 6, learned advocate Ms.Maithili D. Mehta for the respondent No. 1, learned advocate Mr.Sankul Kabra for heirs of respondent No.7 and learned advocate Mr.Hardik Brahmbhatt for heirs of Respondent No.5.

2. The appellant - Gujarat Credit Corporation Limited, had filed First Appeal No.3766 of 2019, being aggrieved by the Judgment and Decree passed by the learned Judge, Court No.26, City Civil and Sessions Court, Ahmedabad, in Civil Suit (CCC) No.478 of 1997, dated 21.06.2019.

3. Brief facts of the case are:

3.1 The appellant became the owner of the suit land by a registered Sale Deed No.13815 dated 20.10.2010, executed by respondent No.3 – original defendant No.3, being the Appropriate Authority of the Income Tax Department, as the appellant was a bidder in the auction held to recover the tax dues. As the appellant was found to be the highest bidder in the auction, the registered sale deed was executed in favour of the appellant.

3.2 Being aggrieved, the original owners, namely respondent No.4 – Rohitkumar Ganpatram Patel, respondent No.5 – Rameshchandra Ganpatram Patel, and respondent No.7 – Kailashben Ganpatram Patel, being original plaintiff Nos.1 to 3 preferred Civil Suit No.478 of 1997.

3.3 Respondent No.6 – Manish Rameshchandra Patel was impleaded as plaintiff No.2A by the Order passed below Exh.126.

3.4 By the impugned Judgment and Order dated 21.06.2019, the suit was partly decreed in favour of the plaintiffs, and the following Order was passed:

“ ORDER

1. The suit is partly allowed

2. It is hereby declared that the order dated 29/03/1990 passed by defendant No.3 in respect of the suit property bearing Survey No.214/1 to 214/5 situated in Mouje Memnagar, Taluka City, District Ahmedabad admeasuring 12584 Sq.Yds. is illegal, null and void ab-initio and vitiated by fraud, collusion and conspiracy and the same is hereby set aside.

3. It is further declared that the aforesaid order dated 29/03/1990 passed by defendant No.3 in respect of the suit property is not binding upon th

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