Section 131(9) in The Gujarat Panchayats Act, 1993
(9)(a)A taluka panchayat may compromise in respect of any suit instituted by or against it or in respect of any claim or demand arising out of any contract entered into by it under this Act, for such sum of money or other compensation as it shall deem sufficient:Provided that, if any sanction in the making of any contract is required by this Act, the like previous sanction shall be obtained for compromising any claim or demand arising out of such contract.(b)The panchayat may make compensation out of its funds to any person sustaining damage by reason of the exercise of any of the power vested in it and its officers and servants under this Act.
