Fraud and vested proprietary interest can justify recall of a compromise order, but only to the challenger's inherited share.

Fraud allegations allowed third parties with an established proprietary interest to invoke the court's inherent power to recall a compromise and sale order even after the lis had ended. The challenge succeeded only to the extent of the petitioners' vested inherited share: the Pratapaditya Road property was not voided in entirety, and the settlement was modified to exclude their father's share. The same limitation applied to the Ultadanga Road property, the thika-tenanted structure, and movable assets, which could not be transferred without their consent. Want of Income-tax clearance did not invalidate the court-sanctioned sale, as the pre-clearance rule was treated as inapplicable to a bona fide court sale.

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Issues: (i) Whether the application to set aside the compromise and sale order was maintainable at the instance of third parties alleging fraud and asserting an interest in the estate; (ii) whether the petitioners had locus standi in relation to the Pratapaditya Road property, and whether the sale of that property could be set aside in entirety; (iii) whether the allotment of the Ultadanga Road property, the thika-tenanted structure at Raja Dinendra Street, and movable assets in favour of one party could stand to the extent of the petitioners' share; (iv) whether want of clearance under the Income-tax Act defeated the court-sanctioned sale.

Issue (i): Whether the application to set aside the compromise and sale order was maintainable at the instance of third parties alleging fraud and asserting an interest in the estate.

Analysis: Allegations of fraud were held to justify invocation of the Court's inherent power to correct an order even after the lis had ended, and such challenge was not confined to parties on the record. The Court treated the petitioners as persons whose rights could be affected by the compromise and therefore entitled to seek recall of the order, at least to the extent their proprietary interest was shown. The objection based on lack of pending lis and alleged want of authority failed.

Conclusion: The application was maintainable insofar as fraud was alleged and an affected proprietary interest was shown.

Issue (ii): Whether the petitioners had locus standi in relation to the Pratapaditya Road property, and whether the sale of that property could be set aside in entirety.

Analysis: The property was found to have belonged to Sarala Bala and to be governed by the rules of succession applicable to ayautaka stridhana. On that footing, Salil acquired a vested undivided interest on his mother's death, which later devolved upon his sons. Section 26 of the Hindu Succession Act, 1956 did not defeat that interest because the succession had already opened before the relevant conversion-related disqualification could operate. At the same time, the Court accepted that the consent order could not be avoided in respect of the shares of the signatories who had settled their rights.

Conclusion: The petitioners had locus standi to the extent of their inherited share, and the sale was not set aside in entirety; it was modified so that their father's share was excluded from the transfer.

Issue (iii): Whether the allotment of the Ultadanga Road property, the thika-tenanted structure at Raja Dinendra Street, and movable assets in favour of one party could stand to the extent of the petitioners' share.

Analysis: The material placed before the Court did not establish exclusive title in the estate of the beneficiary of the compromise for those properties. The assets had been shown in the probate materials as part of the larger family estate, and the Court held that the petitioners inherited their father's share in them. Accordingly, the compromise could not validly transfer the petitioners' share without their consent.

Conclusion: The allotment and transfer were invalid to the extent of the petitioners' shares, and the settlement was sustained only subject to that limitation.

Issue (iv): Whether want of clearance under the Income-tax Act defeated the court-sanctioned sale.

Analysis: The Court held that the statutory pre-clearance requirements relied upon were aimed at voluntary transfers and tax evasion, and did not invalidate a court sale where the price was treated as the real market price and the revenue had not intervened. The objection was therefore not accepted as a ground to set aside the sale.

Conclusion: The sale was not invalidated for want of income-tax clearance.

Final Conclusion: The compromise and sale order was interfered with only to protect the petitioners' inherited share in the properties where their interest was established, while the settlement was otherwise left undisturbed and ancillary rectification directions were issued accordingly.

Ratio Decidendi: A third party may invoke the Court's inherent power to challenge a consent order procured by fraud where the order affects an established proprietary interest, but the challenge can succeed only to the extent of the challenger's own vested share and not so as to unsettle the rights of consenting co-sharers or a court sale that is otherwise legally valid.

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