Karnataka High Court
K. Raghava Reddy And Associates vs Smt. Kausalya Thirpuvanam on 4 April, 2025
Author: H.T. Narendra Prasad
Bench: H.T. Narendra Prasad
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 4th DAY OF APRIL 2025
BEFORE
THE HON'BLE MR. JUSTICE H. T. NARENDRA PRASAD
REVIEW PETITION NO.226 OF 2024
C/W
REVIEW PETITION NO.232 OF 2024
IN RP 226/2024
BETWEEN:
K. RAGHAVA REDDY & ASSOCIATES
HAVING ONE OF ITS OFFICES
AT ROYAL RESIDENCY G-1
BLOCK 1 NO 08. BRUNTON ROAD
BENGALURU - 560025
REPRESENTED BY ONE OF ITS
PARTNER, K R SRINIVAS REDDY
...PETITIONER
(BY SRI. S S NAGANAND, SENIOR COUNSEL FOR
SRI. DEVAIAH I.S. ADVOCATE)
AND
1. SMT. KAUSALYA THIRPUVANAM
D/O SRI V RAMALINGAM
AGED ABOUT 101 YEARS
R/AT NO.10/5-1 3RD CROSS
JAI BHARATH NAGAR
BENGALURU-560033.
2
2. MURUGA MANICKAM
S/O SRI SEEVAN MANICKAM
AGED ABOUT 60 YEARS
R/AT NO.10/5-1 3RD CROSS
JAI BHARATH NAGAR
BENGALURU-560033.
3. COMMANDY MANICKAM
S/O SRI SEEVAN MANICKAM
AGED ABOUT 57 YEARS
R/AT NO.10/5-1 3RD CROSS
JAI BHARATH NAGAR
BENGALURU-560033.
4. PEOPLE CHARITY FUND
ALSO CALLED THE PEOPLE CHARITY FUND
A TRUST HAVING ITS OFFICE AT NO 97
DR ALAGAPPA ROAD, CHENNAI
REPRESENTED BY TRUSTEE.
5. MRS NALINI SABARTANAM
W/O SRI SABARTANAM
AGED ABOUT 62 YEARS
RESIDING AT NO 6468
BAYVIEW DRIVE OAKLAND
CA 94605, USA.
...RESPONDENTS
(BY SRI.K G RAGHAVAN, SENIOR COUNSEL FOR SRI. S V BHAT, ADVOCATE FOR R1 TO R3:
SRI UDAY HOLLA, SENIOR COUNSEL FOR SRI. RAGHUNATH M D, ADVOCATE FOR R4:
SRI. V SRINIVASA RAGHAVAN, SENIOR COUNSEL FOR SRI. RAGHUNATH M.D., ADVOCATE FOR R5) 3 THIS REVIEW PETITION IS FILED UNDER SECTION 114 R/W UNDER ORDER XLVII RULE 1 OF THE CPC, 1908, PRAYING TO REVIEW THE ORDER DATED 07.02.2024 PASSED BY THIS HON'BLE COURT IN RP NO.235 OF 2023 (ANNEXURE-B) AND ETC.IN RP 232/2024
BETWEEN
1. PEOPLE CHARITY FUND ALSO CALLED THE PEOPLE CHARITY FUND A TRUST HAVING ITS OFFICE AT NO.97 ALAGAPPA ROAD CHENNAI-600084 REP BY TRUSTEES .
2. MRS NALINI SABARATNAM W/O SRI SABARATNAM AGED ABOUT 62 YEARS R/AT NO.6468 BAYVIEW DRIVE OAKLAND CA 94605, USA (MANAGING TRUSTEES OF 1ST PETITIONER) ...PETITIONERS (BY SRI. UDAY HOLLA, SENIOR COUNSEL FOR SRI. RAGHUNATH M. D., ADVOCATE FOR PETITIONER NO.1: SRI. V SRINIVAS RAGHAVAN, SENIOR COUNSEL FOR SRI. RAGHUNATH M D, ADVOCATE FOR PETITIONER NO.2) AND
1. SMT KAUSALAYA THIRUPUVANAM D/O SRI V RAMALINGAM AND W/O SRI THIRUPUVANAM 4 AGED ABOUT 101 YEARS R/AT NO.10/5-1 3RD CROSS JAIBHARATH NAGAR BENGALURU 560033.
2. MURUGA MANICKAM S/O SRI SEEVAN MANICKAM AGED ABOUT 60 YEARS R/AT NO.10/5-1 3RD CROSS JAIBHARATH NAGAR BENGALURU 560033.
3. COMMANDY MANICKAM S/O SRI SEEVAN MANICKAM AGED ABOUT 57 YEARS R/AT NO.10/5-1 3RD CROSS JAIBHARATH NAGAR BENGALURU 560033.
4. K RAGHAVA REDDY AND ASSOCIATES HAVING ONE OF ITS OFFICES AT ROYAL RESIDENCY G-1 BLOCK I NO.08 BRUNTON ROAD, BENGALURU 560025 REP BY ONE OF ITS PARTNER MR K RAGHAVA REDDY.
...RESPONDENTS (BY SRI. K G RAGHAVAN, SENIOR COUNSEL FOR SRI. S V BHAT, ADVOCATE FOR R1 TO R3:
SRI.S S NAGANAD, SENIOR COUNSEL FOR SRI. DEVAIAH I.S., ADVOCATE FOR R4) THIS REVIEW PETITION IS FILED UNDER SECTION 114 R/W UNDER ORDER XLVII RULE 1 OF THE CPC, 1908, PRAYING TO ALLOW THE PETITION AND REVIEW THE IMUGNED ORDER DATED: 07.02.2024 PASSED BY THE 5 HON'BLE HIGH COURT OF KARNATAKA AT BENGALURU IN REVIEW PETITION NO.235/2023 IN RFA 1294/2022 AND ETC.
THESE REVIEW PETITIONS, HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 27.02.2025, COMING ON FOR PRONOUNCEMENT, THIS DAY, THE COURT, MADE THE FOLLOWING:
CORAM: HON'BLE MR JUSTICE H.T. NARENDRA PRASAD CAV ORDER These two review petitions are filed under Section 114 r/w. Order XLVII Rule 1 of CPC, seeking for review of the order dated 07.02.2024 passed in R.P.No.235/2023, whereby, the order dated 15.02.2023 passed in RFA No.1294/2022 was recalled and RFA No.1294/2022 was restored to file.
2. For the sake of convenience, the parties are referred to as per their ranking in R.P.No.235/2023.
3. The brief facts of the case are that, the first petitioner is the daughter and the second and third petitioners are the great-grandsons of late 6 V.Ramalingam Mudaliyar. The second respondent is a Trust created as per the order under the Probate, Will and Testament of late V.Ramalingam Mudaliar dated 10.09.1942. In the said Will, late V.Ramalingam Mudaliar, settler of the second respondent had detailed the charitable activities that are to be undertaken by the Trust. Later, the Trust was registered under the Trust Deed dated 13.06.2012 and was renamed "People Charity Fund Trust" as "People Charity Fund". In addition to the original object, the power to sell or otherwise transfer the property of the Trust is included as an object of the Trust.
4. The case of the first respondent is that, the original Board of Trustees entered into an agreement of sale dated 13.06.1984 agreeing to sell 16,000 sq.ft. immovable property bearing No.28, situated at Dickenson Road, Civil Station, Bangalore - 560004 to 7 the first respondent for a sale consideration of Rs.10,00,000/- (rupees ten lakhs only), out of which Rs.2,00,000/- (rupees two lakhs only) has been paid on the date of the agreement and the balance sale consideration has to be paid at the time of the registration of the sale deed. Since the representatives of the Trust have failed to perform their part of the contract, the first respondent herein filed a suit in O.S.No.2495/1987 seeking specific performance of the contract against the Trust and seeking a direction to the Trust to execute the sale deed. After the contest, the said suit was decreed by the trial court by judgment and decree dated 21.02.1997. The same has been challenged by the Trust by filing a regular first appeal before this Court in RFA No.306/1997. This Court, by judgment and decree dated 13.06.2008 allowed the appeal and dismissed the suit. Being aggrieved by the same, the 8 first respondent herein approached the Supreme Court in SLP No.250/2009. Subsequently, the Supreme Court granted leave, it was renumbered as Civil Appeal No.5122/2009. The Supreme Court, vide its order dated 25.10.2016 dismissed the first respondent's appeal.
5. After the firm had been registered, the first respondent filed a fresh suit before the City Civil Court, Bangalore in O.S.No.7566/2016. On appearance, the first defendant in O.S.No.7566/2016 filed a written statement and also filed IA for rejection of the plaint under Order VII Rule 11(a) of CPC. The trial court, by order dated 14.07.2022 rejected the plaint for want of cause of action and barred by law. Being aggrieved by the same, the first respondent herein filed a regular first appeal before this Court in RFA No.1294/2022. This Court, on 20.07.2022 admitted the appeal and counsel represented the 9 respondents. Thereafter, on 15.02.2023, the parties filed a compromise petition under Order XXIII Rule 3 r/w. Section 151 of CPC, before this Court. This Court, accepting the compromise petition, disposed of the appeal on 15.02.2023. Being aggrieved by the order dated 15.02.2023, passed in RFA No.1294/2022, R.P.No.235/2023 has been filed. This Court, by order dated, 07.02.2024 allowed the review petition, recalled the judgment dated 15.02.2023 passed in RFA No.1294/2022 and restored RFA No.1294/2022 to the file. Challenging the same, the petitioners in R.P.Nos.226/2024 and 232/2024 have filed Special Leave to Appeal (Civil) Nos.8889/2024 and 8994/2024 before the Apex Court. The Apex Court, by order dated 26.04.2024 dismissed the said appeals as withdrawn reserving liberty to the petitioners therein to approach the High Court by way of review petitions. Hence, the present review petitions are filed. 10
6. Sri Naganand, the learned Senior Counsel for the petitioner in R.P.No.226/2024 and respondent No.1 in R.P.No.235/2023 raised the following contentions:
(i) Firstly, the petitioners in R.P.No.235/2023 are not trustees, they have no interest in the trust as well as the property in dispute. Therefore, they are not aggrieved persons, R.P.No.235/2023 filed by the petitioners was not maintainable.
(ii) Secondly, the only ground raised in R.P.No. 235/2023 is that the parties have not disclosed the sale of the remaining extent of the land to the third parties and it is not for the interest of the trust. In fact, sale of the properties to third parties is approved by the trust by passing a resolution. All the materials have been placed before the court along with the compromise petition. Therefore, there was no 11 suppression of facts before the Court. Hence, R.P.No.235/2023 was not maintainable.
(iii) Thirdly, there was a litigation between these two parties for the last 40 years. To give quietus to the litigation and in the interest of both the parties, they have entered into a compromise. Therefore, no fraud was committed by the parties in filing a compromise petition.
(iv) Fourthly, respondent Nos.1 and 2 in R.P.No.226/2024 have filed a suit under Section 92 of CPC. The same is pending consideration, they can agitate all the grounds in the said suit.
(v) Fifthly, as per the Trust Deed, the trustees have every right to deal with the trust property, there is no requirement for obtaining any permission from the court. It is very clear that they have sold the Trust properties only in the best interest of the Trust. In support of his contentions, he relied on the judgment 12 of the Apex Court in the case of CHAIRMAN, MADAPPA vs. N.MAHANTADEVARU AND OTHERS reported in AIR 1966 SC 878 (Para 9).
(vi) Sixthly, the only grievance of respondent Nos.1 and 2 is that without disclosing the sale of the remaining part of the properties to the third party, the compromise petition has been filed. Since the petitioner in R.P.No.226/2024 is concerned only with respect to the compromise entered between the parties to the extent of 6,123 sq.ft., he is not concerned with the other extent of the property.
Therefore, the parties, to give quietus to the litigation, which was agitated for the last 40 years, they have settled the matter for the benefit of both parties. This aspect is not considered by this Court while passing the order under review. Hence, he sought to allow the review petitions.
13
7. Sri Srinivasa Raghavan, learned Senior Counsel for the petitioner No.2 in R.P.No.232/2024 and respondent No.3 in R.P.No.235/2023 has raised the following contentions:
(i) Firstly, admittedly, the suit schedule property is in the possession of K.Raghava Reddy and Associates.
Even, the suit filed by K.Raghava Reddy and Associates was dismissed. Under Section 53 of the Transfer of Property Act, the trustees have to file a separate suit for possession. Since there has been litigation between the parties for the last 40 years, this Court has suggested for settlement and referred the matter for mediation. After deliberations, the parties have settled the matter in the interest of the trust.
(ii) Secondly, respondent Nos. 1 to 3 in R.P.No.232/2024 are not aggrieved parties. The review petition filed by them was not maintainable. 14 There is no finding in the order under review in this case as to how respondent Nos. 1 to 3 herein are aggrieved parties in the review petition. If they have any grievance, they have to challenge the same only in the suit filed under Section 92 of CPC.
(iii) Thirdly, if the judgment and decree is passed without jurisdiction, the order passed therein is a nullity. If the decree is passed in the suit which is barred by limitation, it does not vitiate the legality and validity of the proceedings and the order passed therein, unless the same is set aside, in the manner known to law. In support of his contention, he relied on the judgments of the Apex Court in the case of BUDHIA SWAIN AND OTHERS vs. GOPINATH DEB AND OTHERS reported in AIR 1999 SC 2089 and in the case of BHARAT SANCHAR NIGAM LIMITED AND ANOTHER vs. NORTEL NETWORKS INDIA 15 PRIVATE LIMITED reported in (2021) 5 SCC 783 (para 38).
(iv) Fourthly, in the review petition filed by respondent Nos. 1 to 3 in R.P.No.232/2024, there is no pleading in respect of fraud. Therefore, there was no opportunity for the petitioner herein to deny the same.
(v) Fifthly, in the review petition filed by respondent Nos. 1 to 3 in R.P.No.232/2024, there is no pleading regarding the sale of remaining land in favour of M/s.Building Blocks Inc. by breach of trust deed. Without pleading, the Court has set aside the compromise decree. Therefore, the impugned order under review is to be recalled. The issue of dispute pertains to affairs of the trust and trust property, it is between the trustees and the remedy available for the parties interested in the Trust is only in a civil court under Section 92 of CPC. In support of his 16 contentions, he relied on the judgment of the Apex Court in the case of VIMAL KISHOR SHAN AND OTHERS vs. JAYESH DINESH SHAH AND OTHERS reported in (2016) 8 SCC 788.
(vi) Sixthly, pursuant to the compromise decree, K.Raghava Reddy and Associates have demolished the building and they have started putting up the construction and for the remaining extent, the sale deed has been executed in favour of M/s.Building Blocks Inc.. Hence, once a consent decree is acted upon, it cannot be reopened. In support of his contention, he relied on the judgment of the Apex Court in the case of RANGANAYAKAMMA AND ANOTHER vs. K.S.PRAKASH (DEAD) BY LRs. AND OTHERS reported in (2008) 15 SCC 673.
(vii) Seventhly, the compromise entered into between the parties is for the interest of the trust. Under the trust deed, trustees have all the right to 17 alienate the trust property in the interest of the trust. There is no illegality in the compromise or execution of the sale deed by the trustees. Now, the compromise decree or sale deed cannot be set aside. The compromise decree or agreement can be set aside only if it is illegal or invalid. In support of his contention he relied on the judgment of the Apex Court in the case of PUSHPA DEVI BHAGAT (DEAD) THROUGH L.R.SADHNA RAI (SMT.) reported in (2006) 5 SCC 566 and in the case of K.SRINIVASAPPA AND OTHERS vs. M.MALLAMMA AND OTHERS reported in (2022) 4 SCR 190.
(viii) Lastly, the purchaser of the remaining extent of the land, i.e. M/s.Building Blocks Inc. is not a party to the proceedings. Without impleading them, the review petition has been allowed and the compromise decree has been set aside. Therefore, the order under review in this petition has to be 18 recalled. The respondent Nos. 1 to 3 herein are not aggrieved persons. This Court has not given any finding regarding the petitioner having any interest in the trust. In support of his contention, he relied on the judgment of the Apex Court in the case of ADI PHEROZSHAH GANDHI vs. H.M.SEERVAI- ADVOCATE GENERAL OF MAHARASHTRA, BOMBAY reported in (1970) 2 SCC 484(para 6).
8. Sri Udaya Holla, learned Senior Counsel appearing for the Trust, has raised the following contentions:
(i) Firstly, respondent Nos. 1 to 3 herein have no locus to file a review petition since they have no interest in the suit property. More than that, they are not the beneficiaries under the trust. Even the suit filed by K.Raghava Reddy and Associates was dismissed. In view of Section 53 of the Transfer of Property Act, they can continue in the possession.19
Petitioner has to recover the possession only after filing a separate suit.
(ii) Secondly, there is no error in the compromise decree passed by this Court in the regular first appeal. The power of review is limited. This Court committed an error in recalling the compromise decree. In support of his contention, he relied on the judgment of the Apex Court in the case of SATVIR SINGH vs. BALADEVA AND OTHERS reported in (1996) 8 SCC 93 and of this Court in the case of B.L.PALANETRA @ VIRAKTHARADHYA AND ANOTHER reported in ILR 2008 Kar.816.
(iii) Thirdly, the trustees have not suppressed any material from this Court. They have brought to the notice of this Court regarding the sale of the remaining extent of the land in favour of M/s.Building Blocks Inc. There is no pleading in the review petition filed by respondent Nos. 1 to 3 herein regarding the 20 fraud. Therefore, this Court would not have recalled the compromise decree. In support of his contention, he relied on the judgment of the Apex Court in the case of RASIKLAL MANIKCHAND DHARIWAL AND ANOTHER vs. M.S.S.FOOD PRODUCTS reported in (2012) 2 SCC 196 (Para 61) and in the case of SHIVAJI BALARAM HAIBATTI vs. AVINASH MARUTHI PAWAR reported in (2018) 11 SCC 652.
(iv) Lastly, the trustees have the right to alienate the trust property in the interest of the trust. Hence, he sought to allow the review petitions.
9. Sri K.G.Raghavan, learned Senior Counsel appearing for the petitioners in R.P.No.235/2023 raised the following contentions:
(i) Firstly, against the order passed by this Court in R.P.No.235/2023, the petitioners herein filed Special Leave Petitions. The Apex Court has not 21 granted any liberty to the petitioners to file review petitions.
(ii) Secondly, in the guise of review, the parties cannot be permitted to re-argue the matter on merits.
This Court, in R.P.No.235/2023 has considered all the aspects of the matter and allowed the review petition. To review the order passed under review, the petitioners herein have not made out any ground.
(iii) Thirdly, K.Raghava Reddy Associates passed the resolution stating that 10,318 sq.ft of the property will be handed over to the trust and the same will be retained by the Trust. Even in the compromise petition filed by the Trust, before this Court, it is very clearly mentioned that the balance of land will be retained by the Trust. The Compromise petition has been filed before this Court on 15.02.2023, on the very same day, the remaining extent of the land has been sold to a third party, i.e., M/s.Building Block 22 Inc., by a registered sale deed. Therefore, the compromise entered between the parties is not in the interest or benefit of the Trust.
(iv) Fourthly, the Court is the guardian of the public trust property. This Court, after noticing that the compromise petition is not filed for the interest of the trust, has rightly recalled the compromise petition. When the suit filed by K.Raghava Reddy Associates has been dismissed on the ground of limitation, in the appeal, without condoning the delay, the Court cannot accept the compromise petition. Relying on the judgment of the Apex Court in the case of S.MADHUSUDHANA REDDY vs. V.NARAYANA REDDY AND OTHERS reported in (2022) SCC Online 1034 (Para 7), he submitted that the order under review cannot be challenged by filing one more review petition. Hence, he sought for dismissal of the review petitions.
23
10. By way of rejoinder, Sri Naganand, learned Senior Counsel raised the following contentions:
(i) Firstly, before the Apex Court, in S.L.P., the petitioners herein have withdrawn the appeals with liberty to file review petitions before this Court, in case, if the review petitions are dismissed, liberty sought to challenge the same before the Apex Court.
The SLP has been dismissed reserving the liberty sought by the petitioners.
(ii) Secondly, R.P.No.235/2023 was allowed by this Court on the ground that the Trust has suppressed the material facts from this Court. This finding of the Court is an error apparent on the face of the records and contrary to the materials available on record. In fact, the Trust has produced the resolution passed by the Trust, wherein it is very clearly stated that the remaining portion of the property will be sold 24 for the interest of the Trust. All the documents have been placed along with the compromise petition.
(iii) Thirdly, if the action of the Trust is not in the interest of the Trust or contrary to the Trust deed, the person interested in the Trust property can file a petition under Section 92 of CPC. He can urge all the contentions. The review petition filed by the petitioners in R.P.No.235/2023 is not maintainable.
(iv) Lastly, the judgment relied upon by the petitioners in R.P.No.235/2023 in the case of S.MADHUSUDHANA REDDY (supra) is not applicable to the facts of the case.
11. By way of rejoinder, Sri Udaya Holla, learned Senior Counsel appearing for the Trust has raised the following contentions:
(i) Firstly, in R.P.No.235/2023, the petitioners have raised only four grounds. In that petition, there is no pleading to the effect that they are interested in 25 the property in dispute. Even though the Will relied upon by the petitioners in R.P.No.235/2023 is related to the other property, in the Will, there is no reference to the property in dispute.
(ii) Secondly, one of the grounds raised in R.P.No.235/2023 is that one of the trustees has not signed the compromise decree. This statement made by the respondent is not correct. In fact both the trustees have signed the resolution. He relied on the judgment of the Apex Court in the case of SHIVAJI BALARAM HAIBATTI vs. AVINASH MARUTHI PAWAR reported in (2018) 11 SCC 652, to contend that the court cannot grant any relief beyond the pleadings.
12. By way of rejoinder, Sri Srinivasa Raghavan, learned Senior Counsel raised the following contentions:
26
(i) Firstly, there is no pleading in R.P.No.235/2023 referring that the compromise agreement is unlawful. Unless the Court gave a finding that the compromise agreement is unlawful, the compromise agreement cannot be recalled. In R.P.No.235/2023 the Court has not given any finding that the compromise decree is unlawful. Therefore, the order dated 07.02.2024 requires to be recalled.
(ii) Secondly, the remaining portion of the property has been sold in favour of a third party, on the basis of the sale deed, has taken possession, but, he has not been made as a party in R.P.No.235/2023.
Since there is a lack of pleading in the review petition, therefore, the order passed in R.P.No.235/2023 has to be recalled. In support of his contention, he relied on the judgment of the Apex Court in the case of AKELLA LALITHA vs. KONDA HANUMANTHA RAO AND ANOTHER reported in 2022 SCC Online 928. 27
(iii) Thirdly, in the compromise petition, the property sold in favour of a third party was not an issue. Only for transparency, the trust has produced the resolution to show that the remaining extent of the land will be sold in favour of the third party for the interest of the Trust.
(iv) Lastly, the petitioners in R.P.No.235/2023 have no locus. By filing a petition under Section 92 of CPC, unless obtained the leave, they cannot claim that they are the persons interested in the Trust. This aspect of the matter has not been considered in R.P.No.235/2023. Hence, sought to allow the petitions.
13. Heard the learned counsel for the parties. Perused the review petition and the documents produced by the parties.
28
14. The petitioners in these review petitions have sought for recalling the order dated 07.02.2024 passed in R.P.No.235/2023, on three grounds.
15. The first ground urged by the petitioners herein is that R.P.No.235/2023 filed by the petitioners is not maintainable. They do not fall within the definition of 'aggrieved person/party', they are not the beneficiaries under the Trust and they have no interest in the trust property. This Court has entertained the review petition without giving any finding regarding these aspects.
15.1. The compromise decree passed by the Court can be challenged even by a person who is not a party to the compromise decree, either by filing a review petition or an application under Order XXIII Rule 3 of CPC. The Apex Court in the case of TRILOKI NATH SINGH vs. ANIRUDH SINGH (DEAD) THROUGH LEGAL REPRESENTATIVES 29 AND OTHERS reported in (2020) 6 SCC 629 held that, even a third party can challenge the compromise decree on the ground of lawfulness of the compromise by filing an application under Order XXIII Rule 3 before the same Court, which recorded the compromise, a separate suit is not maintainable. The relevant paragraphs are extracted below:
"13. The precise question that falls for our determination is as to whether the suit filed by the appellant-plaintiff in seeking a declaration against the decree of compromise dated 15.9.1994 passed by the High Court of Patna in second appeal was maintainable in view of the provisions of Order 23 Rule 3 and Rule 3-A CPC.
14. Order 23 Rule 3 and Rule 3-A CPC may at this stage be extracted for ready reference:
"3. Compromise of suit.- Where it is proved to the satisfaction of the Court that a suit has been adjusted wholly or in part by any lawful agreement or compromise in writing and signed by the parties, or where the defendant satisfies the plaintiff in respect of the whole or any part of the 30 subject-matter of the suit, the Court shall order such agreement, compromise or satisfaction to be recorded, and shall pass a decree in accordance therewith so far as it relates to the parties to the suit, whether or not the subject-matter of the agreement, compromise or satisfaction is the same as the subject-matter of the suit:
Provided that where it is alleged by one party and denied by the other that an adjustment or satisfaction has been arrived at, the Court shall decide the question; but no adjournment shall be granted for the purpose of deciding the question, unless the Court, for reasons to be recorded, thinks fit to grant such adjournment.
Explanation. - An agreement or compromise which is void or voidable under the Indian Contract Act, 1872 (9 of 1872), shall not be deemed to be lawful within the meaning of this Rule.
3-A. Bar to suit.-No suit shall lie to set aside a decree on the ground that the compromise on which the decree is based was not lawful."
15. What has emerged as a legislative intent has been considered in extenso by this Court in Pushpa Devi Bhagat v. Rajinder Singh ((2006) 5 SCC 566, after taking note of the 31 scheme of Order 23 Rule 3 and Rule 3-A added with effect from 1-2-1977. The relevant paragraphs are as under: (SCC p. 576, para
17) "17. The position that emerges from the amended provisions of Order 23 can be summed up thus:
(i) No appeal is maintainable against a consent decree having regard to the specific bar contained in Section 96(3) CPC.
(ii) No appeal is maintainable against the order of the court recording the compromise (or refusing to record a compromise) in view of the deletion of clause (m) of Rule 1 Order 43.
(iii) No independent suit can be filed for setting aside a compromise decree on the ground that the compromise was not lawful in view of the bar contained in Rule 3-A.
(iv) A consent decree operates as an estoppel and is valid and binding unless it is set aside by the court which passed the consent decree, by an order on an application under the proviso to Rule 3 Order 23.
Therefore, the only remedy available to a party to a consent decree to avoid such consent decree, is to approach the court which recorded the compromise and made a decree in terms of it, and 32 establish that there was no compromise. In that event, the court which recorded the compromise will itself consider and decide the question as to whether there was a valid compromise or not. This is so because a consent decree is nothing but contract between parties superimposed with the seal of approval of the court. The validity of a consent decree depends wholly on the validity of the agreement or compromise on which it is made. The second defendant, who challenged the consent compromise decree was fully aware of this position as she filed an application for setting aside the consent decree on 21-8-2001 by alleging that there was no valid compromise in accordance with law. Significantly, none of the other defendants challenged the consent decree. For reasons best known to herself, the second defendant within a few days thereafter (that is on 27.8.2001) filed an appeal and chose not to pursue the application filed before the court which passed the consent decree. Such an appeal by the second defendant was not maintainable, having regard to the express bar contained in Section 96(3) of the Code." (emphasis supplied)
16. The scope of intent of Order 23 Rule 3 and Rule 3-A was further considered by this Court in R. Rajanna v. S.R. Venkataswamy 33 ((2014) 15 SCC 471) wherein this Court held as under: (SCC p. 474, para 11) "11. It is manifest from a plain reading of the above that in terms of the proviso to Order 23 Rule 3 where one party alleges and the other denies adjustment or satisfaction of any suit by a lawful agreement or compromise in writing and signed by the parties, the court before whom such question is raised, shall decide the same. What is important is that in terms of Explanation to Order 23 Rule 3, the agreement or compromise shall not be deemed to be lawful within the meaning of the said Rule if the same is void or voidable under the Contract Act, 1872. It follows that in every case where the question arises whether or not there has been a lawful agreement or compromise in writing and signed by the parties, the question whether the agreement or compromise is lawful has to be determined by the court concerned. What is lawful will in turn depend upon whether the allegations suggest any infirmity in the compromise and the decree that would make the same void or voidable under the Contract Act. More importantly, Order 23 Rule 3-A clearly bars a suit to set aside a decree on the ground that the compromise on which the decree is based was not lawful. This implies that no sooner a question relating to lawfulness of the agreement or 34 compromise is raised before the court that passed the decree on the basis of any such agreement or compromise, it is that court and that court alone who can examine and determine that question. The court cannot direct the parties to file a separate suit on the subject for no such suit will lie in view of the provisions of Order 23 Rule 3-A CPC. That is precisely what has happened in the case at hand. When the appellant filed OS No. 5326 of 2005 to challenge the validity of the compromise decree, the court before whom the suit came up rejected the plaint under Order 7 Rule 11 CPC on the application made by the respondents holding that such a suit was barred by the provisions of Order 23 Rule 3-A CPC. Having thus got the plaint rejected, the defendants (respondents herein) could hardly be heard to argue that the plaintiff (appellant herein) ought to pursue his remedy against the compromise decree in pursuance of OS No. 5326 of 2005 and if the plaint in the suit has been rejected to pursue his remedy against such rejection before a higher court." (emphasis supplied)
17. By introducing the amendment to the Civil Procedure Code (Amendment) 1976 w.e.f. 1-2-1977, the legislature has brought into force Order 23 Rule 3-A, which creates bar to institute the suit to set aside a decree on the ground that the compromise on which decree 35 is based was not lawful. The purpose of effecting a compromise between the parties is to put an end to the various disputes pending before the court of competent jurisdiction once and for all.
18. Finality of decisions is an underlying principle of all adjudicating forums. Thus, creation of further litigation should never be the basis of a compromise between the parties. Rule 3-A of Order 23 CPC put a specific bar that no suit shall lie to set aside a decree on the ground that the compromise on which the decree is based was not lawful. The scheme of Order 23 Rule 3 CPC is to avoid multiplicity of litigation and permit parties to amicably come to a settlement which is lawful, is in writing and a voluntary act on the part of the parties. The court can be instrumental in having an agreed compromise effected and finality attached to the same. The court should never be party to imposition of a compromise upon an unwilling party, still open to be questioned on an application under the proviso to Order 23 Rule 3 CPC before the court.
36
19. It can be further noticed that earlier under Order 43 Rule 1(m), an appeal which recorded the compromise and decided as to whether there was a valid compromise or not, was maintainable against an order under Order 23 Rule 3 recording or refusing to record an agreement, compromise or satisfaction. But by the amending Act, aforesaid clause has been deleted, the result whereof is that now no appeal is maintainable against an order recording or refusing to record an agreement or compromise under Order 23 Rule 3. Being conscious of this fact that the right of appeal against the order recording a compromise or refusing to record a compromise was being taken away, a new Rule 1-A was added to Order 43 which is as follows:
"1-A. Right to challenge non-
appealable orders in appeal against decree.-(1) Where any order is made under this Code against a party and thereupon any judgment is pronounced against such party and a decree is drawn up, such party may, in an appeal against the decree, contend that such order should not have been made and the judgment should not have been pronounced.37
(2) In an appeal against a decree passed in a suit after recording a compromise or refusing to record a compromise, it shall be open to the appellant to contest the decree on the ground that the compromise should, or should not, have been recorded."
20. Thus, after the amendment which has been introduced, neither any appeal against the order recording the compromise nor remedy by way of filing a suit is available in cases covered by Rule 3-A of Order 23 CPC. As such, a right has been given under Rule 1-A(2) of Order 43 to a party, who denies the compromise and invites order of the court in that regard in terms of the proviso to Order 23 Rule 3 CPC while preferring an appeal against the decree. Section 96(3) CPC shall not be a bar to such an appeal, because it is applicable where the factum of compromise or agreement is not in dispute."
15.2. In view of the above, the petition filed before this Court for recalling the compromise decree dated 15.02.2023 passed in RFA No.1294/2022 is maintainable.
38
15.3. In respect of the contention of the petitioner herein that this Court has not given any finding that the petitioners in R.P.No.235/2023 are aggrieved persons or not, in fact, this Court, in the order dated 07.02.2024, has given a clear finding. The relevant paragraphs are extracted below:
"8. It is not in dispute that late V.Ramalingam Mudaliyar created a Trust under the Will dated 10.09.1942. In the said Will, late V.Ramalingam Mudaliar, settler of the second respondent had detailed the charitable activities that are to be undertaken by the Trust. Later, the Trust was registered under the Trust Deed dated 13.06.2012 and got renamed the "People Charity Fund Trust" as "People Charity Fund". In addition to the original object, the power to sell or otherwise transfer the property of the Trust is included as an object of the Trust. The first petitioner is the daughter and the second and third petitioners are the great-grandsons of late V.Ramalingam Mudaliar. They are persons interested in the Trust and they are the 39 beneficiaries of the aforesaid first respondent Public Charitable Trust.
9. The Section 539 of CPC of 1877 is substantially the same as sub-section (1) of Section 92 of CPC of 1908. The effect of the amendment of Section 539 of the Code of 1877 where the words "a direct interest" was substituted by the words "an interest" by Act No.7/1888 is to widen the class of persons who are entitled to institute a suit under the said Section. No "direct interest" is necessary as the word "direct" has been omitted. It is enough if a person has "an interest" in the trust. "Interest" denotes a present and substantial interest. In Section 92 of the Code of Civil Procedure, 1908, the legislature has used the words "person having an interest in the trust" in order to exclude frivolous and mischievous applications by busybodies, members of the public and persons who do not have a specific interest in the trust. The "present interest" means, an interest in the present or in future likely to be affected by the way in which property is being managed and mismanaged.40
10. The first petitioner is the daughter of late V.Ramalingam Mudaliar, who is the settler of the second respondent. Through a Will dated 10.09.1942, the first petitioner is also a beneficiary in the Will. Petitioner Nos. 2 and 3 are the great-grandsons of late V.Ramalingam Mudaliar. They have filed a suit before the Principal City Civil Judge, Bengaluru, seeking the following reliefs:
"(a) Removing the 2nd defendant as a trustee of the 1st defendant trust.
(b) Appoint new trustees to manage and administer the 1st defendant trust.
(c) Direct to hold an enquiry in respect of accounts and affairs of the 1st (it) defendant trust.
(d) Direct the 2nd defendant to handover all the trust properties belonging to the 1st defendant trust to the newly appointed trustees, and
(e) Settling a scheme for proper administration of the 1st defendant trust."
They have also filed Misc. Petition under Section 92 of the CPC before the Principal City Civil Judge, Bengaluru. The petitioners are the heirs of the original creator of the Trust and 41 also they are the beneficiaries of the second respondent Public Charitable Trust. They have an interest in the Trust."
15.4. Also it is very clear from the Will dated 10.09.1942 that the Trust is created by late V.Ramalingam Mudaliar for a public purpose. Clause (10) of the Trust Deed dated 13.06.2012 related to 'beneficiary'. It reads as under:
"10) Beneficiary.
The benefits of the Trust shall be open to all, irrespective of race, gender, sexuality, nationality, caste, community, disability, class, creed or religion."
15.5. In view of that, it is very clear that the petitioner Trust is a Public Charitable Trust. The petitioners in R.P.No.235/2023 are not only the beneficiaries, but they are also the family members of the late Ramalingam Mudaliar (first petitioner is the daughter and second and third petitioners are the great-grandsons). Therefore, they are interested in 42 the trust and they have also filed the suit under Section 92 of CPC on the ground that the trustees have incorporated a clause in the Trust Deed that the trustees can sell or otherwise transfer the trust properties, is contrary to the main object of the trust. The said suit is pending before the Court for consideration. During pendency of the suit, the trustees have sold the trust properties. Therefore, they have filed the petition for recalling the compromise decree. The contention of the petitioner herein that no finding has been given on these aspects, does not hold water.
16. The second ground urged is that, this Court has recalled the compromise decree on the ground that the petitioner - Trust has suppressed the material facts from this Court in respect of alienation of the remaining extent of the property in favour of M/s.Building Block Inc. is not correct, in fact, all the 43 records have been enclosed along with the compromise petition. Therefore, they contended that the finding of this Court is contrary to the materials available on record and also the finding of this Court that the alienation of the property to the third parties is not in the interest of the Trust, is not correct, the same is contrary to the materials available on record, hence, requires for recalling the order.
16.1. Late V.Ramalingam Mudaliar was the creator of the Trust - People Charity Fund, by a Will dated 10.09.1942. The main object of the People Charity Trust, as per the Will dated 10.09.1942, is extracted below:
" The rest of the properties not otherwise bequeathed under the Will or Codicil to any of the legatees aforementioned, after paying my just debts and my funeral expenses and expenses for probate and management of the estate shall be allocated for the charitable trusts noted hereunder and the same be 44 handed over by the Executors to the trustees appointed and constituted by me for the purpose of such properties earmarked or allocated for the charitable trust, the business concerns which are now being run by me as- proprietor thereof, are intended by me to be converted with private or public limited companies and if so converted during my life time, the dividends there from shall be utilised for the charitable trust, provided of course, that my trustees being at liberty, either to convert the said concerns or to continue them as proprietary concerns if by the time of my demise, the same have not been so converted subject of course to such rights of the trustees as are more fully detailed in the succeeding paragraphs.
For the purpose of managing the trust indicated hereunder I hereby appoint:--
1. Rajamantrapraveen Dewan Bahadur K.Matthan.
2. Rukn-ul-Mulk S. Abdul Wajid,
3. Mr. V.R.Rạnganatha Mudaliar, Deputy Director of Public Instructions in Madras.
4. Mr. L. S. Munnaji Rao Kodam, Yarn Moro hunt, Bangalore City.45
as trustees with powers each to animate to his Successor or add to their number as they choose and fill up vacancies if any of them have failed to nominate his Successor. I suggest to them that they might retain the service of my Accountant Mr. M.S. Ganapathy Shettiar as Accountant and my estate and of Rao Saheb S. V. Govindarajan as the manager of Daily Post or it may be leased to him if the Trustees deem fit.
1. To construct a gynecological ward in the Vani Villas Hospital, Bangalore, at a cost of 80,000/- or there abouts.
2. The balance, after providing for the above Will constitute a Fund the income from which shall be applied for encouragement and development of Industries, Education or Medical Aid, Medical Research, Diffusion of Medical knowledge including work in Nutrition and dietary, by the grant of scholarship or in any other manner as the circumstances of the case may require and my trustees deem fit. I grant my trustees the power of appointment to select and decide what specific purpose coming within the scope of all or any of the above should be encouraged or preferred. My 46 trustees will have power to continue any business of mine or convert the business or any of them or any shares or property into cash and invest them with charitable deposits with the Government of Mysore or in any other manner and utilise the income or dividends for the purposes of the trust. It is my wish that the fund of the trust should grow in dimension with the contributions from friends and the public and that it should be called, the "peoples Charity Fund" and that the scope of its beneficence should enlarge at the liberty of my trustees.
Should it not be possible for any valid reason to construct the Gynecological Ward, (item No. 1 of the Trust) the trustees are empowered to add on the sum allotted for it to the fund indicated in item.
This will is dictated by me of my aim from Will and I was fully conscious of what I was doing when I dictated the terms of that will.
16.2. Subsequently, Trust has been registered by the registered Trust Deed on 13.06.2012. A clause 47 has been included to alienate the trust property for the benefit of the Trust. The object of the Trust is extracted below:
"3. Objects of the Trust:
i) To establish, to take over or acquire and maintain and manage schools, colleges and other educational institutions, hostels orphanages, charitable organizations.
ii) To award scholarships, stipends to students in India and enable their studies in India or in foreign countries and for purchasing books, to award prizes to students for proficiency in any subject or languages.
iii) To promote study and research in any subject and afford facilities to those who conduct each study and research on any subject.
iv) To give financial aid or any other help to deserving persons.
v) To establish, take over or acquire and maintain and manage crèches, homes for the old and disabled and orphanages and all such 48 lawful things incidental or conductive to the attainment of the above objects.
vi) To impart training for advancement of knowledge in any subject or language.
vii) To do such business or make such investments with a view to enhance the corpus of the Trust or to achieve the objects of the Trust.
viii) To establish, maintain and manage hospitals, clinics, laboratories and medical research centers and to provide the poor with medical aid.
ix) To give subscriptions or donations to any charitable institutions.
x) To accept, upon such terms as they shall think fit, any donations, grants, subscription, aid and contributions from any Government, local authority, corporation, firm company syndicate, association or other individual person or from any Charitable or other institution whether they be in cash or in other movable or immovable property for the purposes of the Trust and such donation, grants, aids, subscriptions and contributions 49 shall be applied for all or any of the objects of the trust.
xi) To acquire by purchase, lease or otherwise any property whether movable or Immovable or any rights for the purposes of the trust and to sell, give on lease, mortgage or otherwise transfer any such property or rights.
xii) To construct, maintain or alter any building or works necessary for the purpose of the trust.
xiii) To borrow money for the purpose of the trust upon, any terms and conditions either with or without interest.
xiv) To take up the socio-economic programme for the betterment of women and children.
xv) To take up any Rural Development Programme and to conduct the same.
xvi) To receive grants from any agencies including Central Board for the Education and to conduct programme for them.
xvii) To do such activity/activities for furtherance of Art, Literature, Music etc. 50 xviii) To spread knowledge and education by publication of books, periodicals, journals, Literature etc. xix) To establish or help in establishing Institutions for the treatment and shelter for animals.
xx) To give monetary aid or other help for relief from natural calamities like floods, cyclone, tempest or otherwise, to give monetary aid or other help for the disposal of dead persons or cremation or performance of obsequies.
xxi) To give aid for the promotion of agriculture, horticulture and the like and for research in the same subjects.
xxii) To do all such other lawful things as may be considered Incidental or conductive to the attainment of the objects mentioned above.
xxiii) To do all such other lawful things as may be considered incidental or conductive to the attainment of the objects mentioned above.51
xxiv) To do all such other lawful things or desired by the trustees conductive to changing environment, situations and time.
xxv) To undertake any other activities of a charitable nature.
xxvi) To do such other things, either alone or in conjunction with others as are incidental, ancillary, supplemental or conducive to the attainment of the above.
xxvii) To donate, assist and support in any manner, institutions having similar objectives of this Trust.
16.3. There is a clause in the said Trust Deed that the trustees can alienate the property for the benefit of the Trust. The relevant portion is extracted below:
"(e) To acquire, build upon, pull down, re-build and to alter, repair, improve, sell or dispose off or otherwise deal with any land, building or premises or property for the use of the Trust."52
Again, the said Trust Deed was amended under a Supplemental Trust Deed dated 14.01.2016. It is clearly stated that the Founder Trustee late V.Ramalingam created a Public Charitable Trust. In the Supplemental Trust Deed, one more clause was added, i.e., 6(a): Loan to Trustees. The Clause 6(a) is extracted below:
"6(a): Loan to Trustees: Further after much deliberation and in the interest of the Trust funds being augmented, the present Trustees have unanimously ratified the decision to enable the Managing Trustee and the Co- Trustees to avail of loans from the Trust, provided a simple interest is paid at the rate prescribed for fixed deposits by public sector banks. "
16.4. Being aggrieved by the insertion of alienation clause in the Trust Deed, the petitioners in R.P.No.235/2023 have filed Misc.No.936/2022 under Section 92(1) of CPC before the Principal City Civil Judge, Bengaluru seeking leave to file the suit, 53 praying for removal of the trustees, for appointment of the new trustees to manage and administer the Trust and direct to hold enquiry in respect of the accounts and affairs of the trust and other reliefs.
16.5. The main ground urged in Misc.No.936/2022 is that the settler of the trust has no intention to sell the properties of the Trust. Contrary to the original object of the Trust, the Trust Deed is registered on 13.06.2012 inserting the clause that the Trustees have the power to sell the Trust property. The relevant paragraphs in Misc.No.936 /2022 are extracted below:
"7. The plaintiff submits that to cover up the aforesaid mismanagement, the aforesaid Sri.A.Ramalingam conspired with other Trustees and a trust deed dated 13/6/2012 was got registered renaming the "People Charity Fund" as "People Charity Fund Trust", which is the 1st defendant herein. It is clear from the trust deed dated 13/6/2012 that power to sell or otherwise transfer property of 54 the Trust is included as an object of the Trust, which is clearly contrary to the original objects of the Trust and which is contrary to the very basic concept of charitable trust apart from being illegal. The said trust deed is sought to be further amended under a supplemental trust deed dated 14/10/2016, which not being narrowed down the charitable objects of the Trust but provided for extending loans to Trustees, which is again an illegal object of the trust. That apart, this supplemental trust deed provided for new Rules governing management of the trust purportedly conferring powers to invest/ own and development of real estate. Hence all the aforesaid powers are clearly illegal and opposed to public policy.
8. The plaintiff submits that several immovable properties were dedicated to the 1st defendant Trust under a registered deed of transfer dated 10/12/1956. Subsequently, the 1st defendant has also acquired few other properties. All the aforesaid properties are the trust properties, which can be used only for achieving the charitable objects provided for under the probated Will under which the 1st defendant came into existence. However, the 55 trustees of the 1st defendant trust have committed breach of trust and sold many of the said properties and all the sale proceeds were used for their personal use but they were never put to use for any charitable activities as required. Now the aforesaid Sri. A. Ramalingam is no more and the 2nd defendant herein is the sole Trustee of the 1st defendant Trust. The very fact that the 1st defendant Trust is sought to be managed by a single trustee makes it clear that the same is completely mismanaged and there is breach of trust. The 2nd defendant is a US Citizen and hence she is incapable and incompetent to act as a trustee of a public charitable trust in India including the 1st defendant trust.
9. The Plaintiffs have reliably learnt that instead of carrying out the charitable objects as directed by the settler, Late V. Ramalingam Mudaliar under the aforesaid probated will and as reiterated to some extent in the registered trust deed dated 13/6/2012, the 2nd defendant has been showing keen and only interest to sell of the Trust properties for her personal gain. The Plaintiffs having definite information that in this regard, the 2nd defendant has been 56 making constant efforts to sell the properties of the trust in violation of law. Upon making inquiries, the plaintiffs have learnt that loans are given to the Trustees, properties are used for personal use and gains, rental income is used for personal use and never accounted for, the funds of trust is utilised for lavish living of the Trustees, no charitable works undertaken, to name a few, are the mismanagements and misappropriations committed by the 2nd defendant.
10. Thus, it is crystal clear that there is complete breach of trust deed with respect to the management and administration of the 1st defendant public charitable trust and the same requires remedial measures including directions and settlement of scheme for its proper administration."
16.6. In Misc.No.936/2022, an emergent notice to respondents was issued on 28.07.2022. On 21.10.2022, counsel for the petitioner filed IA No.2 under Order 5 Rule 17 of CPC to issue notice of this petition, by way of affixture. IA No.2 was allowed and 57 permitted to take out notice by way of affixture. It was reported on 28.11.2022, that notice was served on respondent Nos.1 and 2 by affixture. Petitioners were permitted to take steps by way of paper publication by 03.01.2023. On 12.01.2023, the application filed by the petitioner under Order 5 Rule 20(a) of CPC for taking out a notice to respondents by way of paper publication was allowed and the hearing date was fixed on 16.02.2023. The paper publication was taken out on 20.01.2023. Immediately, thereafter, i.e., on 02.02.2023, K.Raghavareddy and Associates passed a resolution for execution of compromise. In that resolution, it is specifically mentioned that 10,318 sq.ft. area shall be retained by the Trust. Thereafter, the trust passed the resolution on 06.02.2023 and on 16.02.2023 the advocate for respondent in Misc.No.936/2022 appeared before the trial court and sought time to file objections. During 58 the pendency of Misc.No. 936/2022, on 14.02.2023, the petitioner herein moved a memo for posting RFA No.1294/2022. The matter was posted before the Court on 15.02.2023. On that day, the petitioner herein filed a compromise petition before this Court under Order XXIII Rule 3 r/w. Section 151 of CPC. In Clause (2) of the compromise petition, it is specifically stated that the balance area would be retained by the respondents. The relevant portion is extracted below:
"2. The Appellant and Respondents jointly agree and confirm that they shall divide the Schedule Property as under:
a) An area to the extent of 6,123 square feet ear-marked in the Sketch annexed hereto as ANNEXURE A and marked in Blue colour and which is morefully described in Schedule 'B' hereunder and hereinafter referred to as the "Schedule B Property", shall be allotted to the Appellant in lieu of the Appellant giving up its claim to the entire property, and the balance area shall be retained by the respondents.59
b) An area to the extent of 10,318 square feet ear-marked in the Sketch annexed hereto as ANNEXURE A and marked in green colour, and which is morefully described in Schedule 'C' and hereinafter referred to as the "Schedule C Property", is retained by the Respondents."
16.7. They have produced the resolution passed by the Trust - People Charity Fund dated 06.02.2023. In that, there is a reference that the remaining extent of 10,318 sq.ft. earmarked in the sketch annexed to the compromise petition would be sold by the Trust to raise the funds for setting off expenditures and for generating funds/finances to undertake further charitable activities in a larger scale with wider reach.
16.8. Even though in the compromise petition it is mentioned that the remaining extent of land shall be retained by the trust, but, on the same day, i.e., on 15.02.2023, they executed a sale deed in respect of the remaining portion of the land in favour of M/s. Builders Block Inc. Regarding pendency of 60 Misc.Petition and alienation of the remaining portion of the property in favour of M/s.Builders Block Inc., the same has not been disclosed in the compromise petition. The Misc.No.936/2022 is filed seeking leave of the Court to file a suit on the main ground that in the Trust Deed, power to sell clause was included against the main object of the Trust. Therefore, this Court is of the opinion that the compromise was not in the interest of the Trust. Hence, by order dated 07.02.2024 the compromise decree was recalled.
17. In respect of the third ground raised by the petitioner herein that the issue of limitation is a question of admissibility and not a jurisdiction, there is no dispute in respect of the above proposition of law is concerned, they have also relied on the judgment of the Apex Court in the case of NUSLI NEVILLI WADIA vs. IVORY PROPERTIES AND OTHERS reported in (2020) 6 SCC 557, in the case of 61 BUDHIA SWAIN AND OTHERS vs. GOPINATH DEB AND OTHERS reported in AIR 1999 SC 2089 paras 9 and 14 and also in the case of ITTYAVIRA MATHAI vs. VARKEY VARKEY AND ANOTHER reported in AIR 1964 SC 907. The relevant para is extracted below:
"8. The first point raised by Paikedy for the appellant is that the decree in OS No. 59 of 1093 obtained by Anantha Iyer and his brother in the suit on the hypothecation bond executed by Ittiyavira in favour of Ramalinga Iyer was a nullity because the suit was barred by time. In assuming that the suit was barred by time, it is difficult to appreciate the contention of learned counsel that the decree can be treated as a nullity and ignored in subsequent litigation. If the suit was barred by time and yet, the court decreed it, the court would be committing an illegality and therefore the aggrieved party would be entitled to have the decree set aside by preferring an appeal against it. But it is well settled that a court having jurisdiction over the subject-matter of the suit and over the parties 62 thereto, though bound to decide right may decide wrong; and that even though it decided wrong it would not be doing something which it had no jurisdiction to do. It had the jurisdiction over the subject-matter and it had the jurisdiction over the party and, therefore, merely because it made an error in deciding a vital issue in the suit, it cannot be said that it has acted beyond its jurisdiction. As has often been said, courts have jurisdiction to decide right or to decide wrong and even though they decide wrong, the decrees rendered by them cannot be treated as nullities. Learned counsel, however, referred us to the decision of the Privy Council in Maqbul Ahmad v. Onkar Pratap Narain Singh [AIR (1935) PC 85] and contended that since the court is bound under the provisions of Section 3 of the Limitation Act to ascertain for itself whether the suit before it was within time, it would act without jurisdiction if it fails to do so. All that the decision relied upon says is that Section 3 of the Limitation Act is peremptory and that it is the duty of the court to take notice of this provision and give effect to it even though the point of limitation is not referred to in the 63 pleadings. The Privy Council has not said that where the court fails to perform its duty, it acts without jurisdiction. If it fails to do its duty, it merely makes an error of law and an error of law can be corrected only in the manner laid down in the Civil Procedure Code. If the party aggrieved does not take appropriate steps to have that error corrected, the erroneous decree will hold good and will not be open to challenge on the basis of being a nullity."
It is very clear from the above ruling of the Apex Court that if the party aggrieved does not take appropriate steps to have the error corrected, the erroneous decree will hold good and will not be open to challenge on the basis of being a nullity.
17.1. In the case on hand, the suit filed by K.Raghava Reddy Associates was dismissed on the ground that it is barred by limitation. The same has been challenged before this Court by filing a regular first appeal. This Court has accepted the compromise decree in the regular first appeal. But in this case, the 64 said compromise decree has been challenged before this Court by filing a review petition. Therefore, the said judgments are not applicable to the facts of this case.
18. After considering all these aspects of the matter, this Court has rightly passed an order on 07.02.2024 in review petition by recalling the order dated 15.02.2023 passed in R.F.A.No.1294/2023. The order dated 07.02.2024 passed in R.P.No.235/2023 neither suffers from any legal infirmity nor an error apparent on the face of the record. Hence, review petitions are dismissed.
Sd/-
(H. T. NARENDRA PRASAD) JUDGE Cm/-