Punjab-Haryana High Court
Yogeshwar Education Trust vs Gurmeet Kaur And Others on 28 August, 2008
IN THE HIGH COURT OF PUNJAB AND HARYANA AT
CHANDIGARH
E.S.A. No. 276 of 2004
Date of Decision: August 28, 2008
Yogeshwar Education Trust
...Appellant
Versus
Gurmeet Kaur and others
...Respondents
CORAM: HON'BLE MR. JUSTICE M.M. KUMAR
HON'BLE MR. JUSTICE T.P.S. MANN
Present: Mr. I.K. Mehta, Senior Advocate, with
Mr. M.S. Kohli, Advocate,
for the appellant.
Mr. Raj Kumar Gupta, Advocate,
for the respondents.
1. Whether Reporters of local papers may be Yes
allowed to see the judgment?
2. To be referred to the Reporters or not? Yes
3. Whether the judgment should be reported in Yes
the Digest?
M.M. KUMAR, J.
1. Owing to difference of opinion expressed by two Single Bench decisions of this Court in the cases of Mewa Singh v. Jagir Singh, AIR 1971 P&H 244 and Dalip Kaur v. Jeeva Ram, 1996 PLJ 72, this reference has been necessitated and has been placed before us to opine on the following questions of law:-
i) Whether the principles of lis pendens would apply in a case where sale has been effected after filing E.S.A. No. 276 of 2004 2 of SLP in the Supreme Court but before leave to appeal has been granted. In other words, whether the principles of lis pendens would apply in respect of sale deeds executed in favour of the appellant Trust on 4.7.1985, 24.10.1985 and 23.12.1985 after RSA 1020 of 1973 was dismissed by this Court on 8.3.1982 and SLP had been filed in the Supreme Court on 19.7.1982, however, leave to appeal was granted on 13.4.1987?
ii) Whether the effect of grant of leave to appeal is to be taken from the date of filing of the SLP i.e. on 19.7.1982 or from the date leave to appeal was granted on 13.4.1987? and
iii) Whether in any case, the plea of bona fide purchaser in terms of Section 41 of the Transfer of Property Act, 1882, is available to the appellant in case the land purchased by him is affected by the principles of lis pendens?
2. In order to put the issues in their proper perspective some skeleton facts as recorded in the reference order may first be noticed. The instant appeal is directed against order dated 11.12.2003, passed by the learned Additional District Judge, Kurukshetra, whereby order dated 15.5.1998, passed by the learned Civil Judge (Junior Division), Kurukshetra, has been upheld. As a consequence the appeal of the defendant-appellant has been dismissed. The respondent-decree holders had filed an application under Section 144 of the Code of Civil Procedure, 1908 (for brevity, 'the Code') seeking restitution of E.S.A. No. 276 of 2004 3 property measuring 131 Kanals 10 Marlas on the basis of a decree passed by Hon'ble the Supreme Court on 10.7.1995 in their favour in Civil Appeal No. 992 of 1987, which was directed against order dated 8.3.1982 passed by this Court in R.S.A. No. 1020 of 1973.
3. There was one Smt. Mando, who had sold land measuring 131 Kanals 10 Marlas on 19.6.1967 in favour of Sewa Singh, Dalbir Singh and Darbara Singh sons of Kapoor Singh (for brevity, 'the vendees'). Smt. Mando has two daughters, namely, Smt. Subbi and Smt. Giano, who filed two separate suits bearing Civil Suit Nos. 250 and 252 of 1968 respectively against the vendees (Sewa Singh, Dalbir Singh and Darbara Singh) for pre-emption of land and for setting aside sale deed dated 19.6.1967, executed by their mother Smt. Mando in their favour. Both the civil suits were consolidated and disposed of by a common judgment and decree dated 20.10.1972, passed by the learned Sub Judge Ist Class, Karnal. Accordingly, a decree for pre-emption was passed in respect of land measuring 131 Kanals 1 Marlas in favour of Smt. Subbi and Smt. Giano upholding their claim for pre-emption and the sale effected by Smt. Mando in favour of the vendees was set aside. Those vendees filed two separate appeals, which were dismissed by the learned District Judge, Karnal, on 10.5.1973. It further led to the filing of two regular second appeals, namely, R.S.A. No. 716 of 1993 (filed by Shri Tara Singh, lessee), and R.S.A. No. 1020 of 1973 (filed by Shri Sewa Singh and others, vendees of Smt. Mando). Both the aforementioned appeals were disposed of by this Court on 8.3.1982. R.S.A. No. 716 of 1993, filed by Shri Tara Singh, was allowed, whereas R.S.A. No. 1020 of 1973, filed by Shri Sewa Singh and others, vendees of Smt. E.S.A. No. 276 of 2004 4 Mando, was dismissed.
4. The controversy starts on 19.7.1982 with the filing of SLP No. 9541 of 1982 by the vendees of Smt. Mando against order dated 8.3.1982, passed by this Court in R.S.A. No. 1020 of 1973. The SLP was filed within the prescribed period of limitation. After more than five years the leave to appeal was granted by Hon'ble the Supreme Court on 13.4.1987 with specific order that there would be no stay. Thereafter, the SLP was renumbered as Civil Appeal 992 of 1987. During the pendency of the SLP, the Supreme Court by judgment dated 27.2.1986, passed in the case of Atam Prakash v. State of Haryana, (1986) 2 SCC 249, declared the Punjab Pre- emption Act (1 of 1913) (as amended in 1960) (as applicable in Haryana) as ultra vires of Article 14 of the Constitution, insofar as the right of pre-emption based on consanguinity was concerned. On the basis of the judgment rendered in Atam Prakash case (supra), civil appeal filed by the vendees of Smt. Mando was allowed by Hon'ble the Supreme Court on 10.7.1995 and the decrees for pre-emption passed in favour of Smt. Subbi and Smt. Giano, daughters of Smt. Mando, were set aside. It is significant to notice that in the intervening period when the SLP was pending, both Smt. Subbi and Smt. Giano had executed sale deeds in favour of Yogeshwar Education Trust (defendant-appellant) on 24.10.1985 and 23.12.1985. Besides, sale deeds were also executed in favour of Shri Shashi Kumar son of Shri Dhan Singh and Shri Prithi son of Shri Surta son of Shri Dhan Singh. Even the vendees of Smt. Subbi and Smt. Giano i.e. Shri Shashi Kumar and Shri Prithi further executed sale deeds in favour of Yogeshwar Education Trust (defendant-appellant) on E.S.A. No. 276 of 2004 5 4.7.1985 and 24.10.1985. It is, however, pertinent to mention that both Smt. Subbi and Smt. Giano had earlier taken possession of the land measuring 131 Kanals 10 Marlas on 12.6.1982 in pursuance of warrants of possession dated 22.5.1982, issued in execution of the pre-emption decree as a consequence of dismissal of R.S.A. No. 1020 of 1973 by this Court on 8.3.1982, which was filed by Shri Sewa Singh and other vendees of Smt. Mando. Shri Tara Singh, who was a lessee of the suit land died in the meantime and his legal heirs gave up their tenancy rights in favour of Smt. Subbi and Smt. Giano. In this manner, both Smt. Subbi and Smt. Giano had taken possession of the land measuring 131 Kanals 10 Marlas and also executed sale deeds in favour of the defendant-appellant trust and others. As noticed above, the vendees of Smt. Subbi and Smt. Giano (Shri Shashi Kumar and Shri Prithi) also executed sale deeds in favour of the defendant-appellant trust.
5. As a consequence of the order passed in their Civil Appeal by Hon'ble the Supreme Court the vendees of Smt. Mando, had then filed application seeking restitution of the property in terms of Section 144 of the Code, which had resulted into setting aside of decree for pre-emption passed in favour of Smt. Subbi and Smt. Giano. The application for restitution was filed on 15.5.1998, which was allowed by the learned Civil Judge (Junior Division), Kurukshetra, vide his order dated 28.3.2003. He ordered restitution of the property in favour of the respondents, who are vendees of Smt. Mando. The order of learned Civil Judge has been upheld by the learned District Judge, vide order dated 11.12.2003, dismissing the appeal filed by the appellant trust. That order has now been E.S.A. No. 276 of 2004 6 challenged in this appeal. It is in these circumstances that the aforementioned three questions have been referred to us in view of divergence of opinion expressed in two Single Bench decisions of this Court in the cases of Mewa Singh (supra) and Dalip Kaur (supra).
6. Mr. I.K. Mehta, learned senior counsel for the Appellant- trust has submitted that principles of lis pendens as envisaged by Section 52 of the Transfer of Property Act, 1882 (for brevity, 'the 1882 Act') would not be attracted to the facts of the present case because a final decree was passed in favour of Smt. Subbi and Smt. Giano. According to learned counsel, there was no appeal pending and it was on account of final decree that possession of the property was delivered to the appellant trust on 12.6.1982 by the lessee Tara Singh, who had earlier filed R.S.A. No. 716 of 1973. He has maintained that filing of SLP on 19.7.1982 is of no consequence because it could not be regarded as pendency of any appeal. In support of his submission, learned counsel has placed reliance on paras 4 and 44 of the judgment of Hon'ble the Supreme Court in the case of Kunhayammed v State of Kerala, (2000) 6 SCC 359. He has also referred to para 7 of the Division Bench judgment of Calcutta High Court in the case of Puranmall Goenka v. Savitri Devi Daga, 2006 (4) Indian Civil Cases 475, which has followed the judgment of Hon'ble the Supreme Court rendered in the case of Kunhayammed (supra). He has drawn our attention to various propositions laid down in the concluding para 44 and argued that the jurisdiction conferred by Article 136 of the Constitution is divisible into two stages. The first is up to the disposal of prayer for special leave to file an appeal. The second stage commences as and when the leave to appeal is E.S.A. No. 276 of 2004 7 granted and the special leave petition is converted into an appeal. He has also emphasised that jurisdiction under Article 136 of the Constitution are discretionary jurisdiction for disposing of petition for special leave to appeal and the doctrine of merger is not applicable to the special leave petition, irrespective of the fact whether the order is a speaking order or a non-speaking order, although it may be declaration of law by the Supreme Court within the meaning of Article 141 of the Constitution. Therefore, the argument raised is that on the date when sale deeds for valuable consideration, was executed on 4.7.1985, 24.10.1985 and 23.12.1985, merely SLP was pending, which was granted on 13.4.1987. Learned counsel has also placed reliance on paras 9 and 10 of the judgment of Hon'ble the Supreme Court in the case of Gyan Chand v. Kunjbeharilal, AIR 1977 SC 858, to argue that an application for special appeal under Article 136 of the Constitution cannot be equated with the ordinary remedy of appeal as of right under any provision of law. He has also cited paras 11 and 12 of the judgment of Hon'ble the Supreme Court to support the same view in the case of Laxman Marotrao Navakhare v. Keshavrao Eknathsa Tapar, AIR 1993 SC 2596.
7. Mr. I.K. Mehta, learned counsel has then submitted that in Mewa Singh's case (supra), this Court has taken a categoric view in sub-para (2) of para 2 that pendency of SLP could not be regarded as any proceedings on the date when the gift of land was made in favour of a transferee and the same was not to be hit by the principle of lis pendens. According to the learned counsel, the leave to appeal in Mewa Singh's case (supra) was granted on 9.8.1962. He has then referred to para 6 of the judgment in Dalip Kaur's case (supra). E.S.A. No. 276 of 2004 8 Learned counsel has maintained that Section 52 of the 1882 Act would not apply.
8. His next submission is that the appellant trust is a bonafide purchaser within the meaning of Sections 41 and 44 of the 1882 Act. In that regard, reliance has been placed on a judgment of Hon'ble the Supreme Court in the case of Dhanalakshmi v. P. Mohan, AIR 2007 SC 1062. Learned counsel has argued that Hon'ble the Supreme Court has been permitting the transferees to join proceedings by allowing application under Order I Rule 10 of the Code. On the question of bona fide purchaser, learned counsel has placed reliance on a Division Bench judgment of Delhi High Court in the case of Sham Lal Dhingra v. Smt. Jaswant Kaur, AIR 1980 Delhi 171 and Single Bench judgments of this Court in the cases of Jagan Nath v. Raj Kumar, 1986 (2) PLR 101 and Anup Singh v. Smt. Bachni, 1996 (3) PLR 184.
9. He has then referred to some of the judgments rendered in matrimonial cases where the parties after obtaining decree of divorce have married within a reasonable period. In that regard, reliance has been placed on para 7 of the judgment of Hon'ble the Supreme Court in the case of Smt. Chandra Mohini Srivastava v. Shri Avinash Prasad Srivastava, AIR 1967 SC 581. He has submitted that in those cases rule of decision lapse by reasonable time. He has also placed reliance on paras 7 and 9 of the judgment of Hon'ble the Supreme Court in the cases of Smt. Lata Kamat v. Vilas, AIR 1989 SC 1477 and Tejinder Kaur v. Gurmit Singh, AIR 1988 SC 839.
10. Mr. Mehta, learned counsel has also placed reliance on E.S.A. No. 276 of 2004 9 paras 13 and 14 of the Constitution Bench judgment of Hon'ble the Supreme Court in the case of Atam Parkash (supra) and argued that all decrees which have attained finality on or before 27.2.1986 were protected and the transaction affected during that period were not to be reopened. According to learned counsel, in the present case the SLP was granted on 13.4.1987 and that too with specific order of 'no stay'.
11. Mr. Raj Kumar Gupta, learned counsel for the respondents has vehemently argued that the principle of lis pendens would apply to the facts of the present case because a bare perusal of the provisions along with explanation appended to Section 52 of the 1882 Act, would show that all transactions concerning property in dispute would be covered by the principle of lis pendens from the date of presentation of plaint till the date of satisfaction of decree irrespective of any other development. In that regard, he has placed reliance on the judgments of Hon'ble the Supreme Court in the cases of Ghantesher Ghosh v. Madan Mohan Ghosh, (1996) 11 SCC 446 (para 9); Rajendar Singh v. Santa Singh, AIR 1973 SC 2537 (paras 14 & 15); and Sanjay Verma v. Manik Roy, (2006) 13 SCC
608. Learned counsel has then referred to the provisions of Article 136 of the Constitution and argued that this provision commences with non-obstante clause. He has then referred to paras 13 and 14 of the judgment of Hon'ble the Supreme Court in Kunhayammed (supra) and paras 33 and 34 of the judgment in Jamshed Hormusji Wadia v. Board of Trustees, Port of Mumbai, (2004) 3 SCC 214. According to learned counsel, once the leave to file appeal is granted then it would date back to the date of filing of SLP. He has drawn support E.S.A. No. 276 of 2004 10 for the aforementioned view from last 10 lines of para 28 of the judgment of Kunhayammed (supra). He has also placed reliance on Dalip Kaur's case (supra) and supported the view taken by the learned Single Judge by arguing that since the decree passed in Mewa Singh's case (supra) was based on compromise, it has been rightly distinguished by the learned Single Judge of this Court. In that regard he has referred to the facts of Mewa Singh's case (supra).
12. We have bestowed our thoughtful consideration on the whole issue and have pondered over the rival submissions made by learned counsel for the parties. It would first be necessary to read and analyse Section 52 of the 1882 Act and the same reads as under:-
"52. Transfer of property pending suit relating thereto.- During the pendency in any court having authority within the limits of India excluding the State of J&K or established beyond such limited by the Central Government of any suit or proceedings which is not collusive and in which any right to immovable property is directly and specifically in question, the property cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the rights of any other party thereto under any decree or order which may be made therein, except under the authority of the court and on such terms as it may impose.
Explanation: For the purposes of this section, the pendency of a suit or proceeding shall be deemed to commence from the date of the presentation of the plaint or the institution of the proceeding in a court of E.S.A. No. 276 of 2004 11 competent jurisdiction, and to continue until the suit or proceeding has been disposed of by a final decree or order and complete satisfaction or discharge of such decree or order has been obtained, or has become unobtainable by reason of the expiration of any period of limitation prescribed for the execution thereof by any law for the time being in force."
13. It is trite to observe that principles of lis pendens have been codified and embodied in Section 52 of the 1882 Act, which are based on sound public policy. The principles of lis pendens restrain a party to the litigation from transferring or alienating or dealing with it in any manner or part of the same, which is subject matter of dispute, during the pendency of a suit so as to adversely affect the rights of the opposite party. It is equally well known that anybody dealing with with such property in a pending suit is deemed to have noticed and the pendency of a suit is considered to be noticed to all whether party to the suit or not. If any transaction have taken place during pendency of the suit then it would abide the final result of the judgment and decree, which may be passed by the Court. The basic principle incorporated by Section 52 of the 1882 Act is to give protection to the authority of the Court. The history of these principles has been traced by Hon'ble the Supreme Court in the case of Jaya Ram Mudaliar v. Ayyaswami, (1972) 2 SCC 200, which is echoed in para 47 of the judgment. Their Lordships' after citing commentary of celebrated authority Bennet "On Lis Pendens" have observed as under:
"47. It is evident that the doctrine, as stated in Section E.S.A. No. 276 of 2004 12 52, applies not merely to actual transfers of right which are subject-matter of litigation but to other dealings with it "by any party to the suit or proceeding, so as to affect the right of any other party thereto". Hence, it could be urged that where it is not a party to the litigation but an outside agency, such as the tax collecting authorities of the Government, which proceeds against the subject matter of litigation, without anything done by a litigating party, the resulting transaction will not be hit by Section
52. Again, where all the parties which could be affected by a pending litigation are themselves parties to a transfer or dealings with property in such a way that they cannot resile from or disown the transaction impugned before the Court dealing with the litigation, the Court may bind them to their own acts. All these are matters which the Court could have properly considered. The purpose of Section 52 of the Transfer of Property Act is not to defeat any just and equitable claim but only to subject them to the authority of the Court which is dealing with the property to which claims are put forward."
14. The aforesaid principles are the manifestation of equity, good conscience and justice. In the absence of principle of lis pendens, transfer and alienation during the pendency of a suit would become permissible, which would result into defeating rights of a claimant/plaintiff. Such a defeat of the rights of a claimant/plaintiff would cause failure of justice and principles of equity, good E.S.A. No. 276 of 2004 13 conscience or justice would be totally shelved. In support of the aforementioned view we draw support from the judgment of Hon'ble the Supreme Court in the case of Rajendar Singh (supra). Placing reliance on the earlier judgment rendered in the case of Jaya Ram Mudaliar (supra), in para 15 it was observed as under:-
"15. The doctrine of lis pendens was intended to strike at attempts by parties to a litigation to circumvent the jurisdiction of a court, in which a dispute on rights or interests in immovable property is pending, by private dealings which may remove the subject matter of litigation from the ambit of the court's power to decide a pending dispute or frustrate its decree. Alienees acquiring any immovable property during a litigation over it are held to be bound, by an application of the doctrine, by the decree passed in the suit even though they may not have been impleaded in it. The whole object of the doctrine of lis pendens is to subject parties to the litigation as well as others, who seek to acquire rights in immovable property, which are the subject matter of a litigation, to the power and jurisdiction of the Court so as to prevent the object of a pending action from being defeated."
15. In the case of Sanjay Verma (supra) the question raised was whether transferee pendente lite was entitled to be joined as a party to the proceedings by accepting his application under Order I Rule 10. The High Court had allowed the application and the order was reversed by Hon'ble the Supreme Court reiterating the principles E.S.A. No. 276 of 2004 14 of lis pendens by observing as under:-
"12. The principles specified in Section 52 of the TP Act are in accordance with equity, good conscience or justice because they rest upon an equitable and just foundation that it will be impossible to bring an action or suit to a successful termination if alienations are permitted to prevail. A transferee pendent elite is bound by the decree just as much as he was a party to the suit. The principle of lis pendens embodied in Section 52 of the TP Act being a principle of public policy, no question of good faith or bona fide arises. The principle underlying Section 52 is that a litigating party is exempted from taking notice of a title acquired during the pendency of the litigation. The mere pendency of a suit does not prevent one of the parties from dealing with the property constituting the subject-matter of the suit. The section only postulates a condition that the alienation will in no manner affect the rights of the other party under any decree which may be passed in the suit unless the property was alienated with the permission of the court."
16. For application of Section 52 of the 1882 Act or for the application of principle of lis pendens, various requirements have to be fulfilled, which are discernible from Section 52 of the 1882 Act and the same are as follows:-
(a) A suit or a proceeding in which any right to immovable property is directly and specifically in E.S.A. No. 276 of 2004 15 question must be pending;
(b) The suit or proceeding shall not be a collusive one;
and
(c) The property which is subject matter of dispute during the pendency of such a suit or proceeding cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the right of any other party thereto under any decree or order, which may be passed except under the authority of the Court?
17. The question whether first appeal and final appeal to the Supreme Court would be deemed to be pendency of a suit, can be answered on the plain language of the explanation, which was added in the year 1929, to clarify certain doubts raised in various judgments rendered by the different Courts. The explanation makes it abundantly clear that pendency of a suit or proceeding must be deemed to have commenced from the date of presentation of the plaint or the institution of the proceeding in a Court of competent jurisdiction. Thus, if a suit is dismissed for non-prosecution or in default but thereafter it has been restored then for the purpose of lis pendens, the restoration is to relate back to the date of presentation of the plaint (See Ashutosh v. Ananta Ram, AIR 1919 Cal. 40). Accordingly, the principles of lis pendens would apply to any transfer or alienation or dealing with property in any other manner. Likewise, in the case where a plaint, which is insufficiently stamped, has been received by the Court and then time for making good deficiency of court fee is granted then the plaint is deemed to be presented when it E.S.A. No. 276 of 2004 16 was first received by the Court (See Shivashankarappa v. Shivappa, AIR 1943 Bom. 27).
18. It is significant to notice that the explanation also puts to rest any doubt whether an appeal or revision would be considered continuation of suit. The explanation postulates that a suit or proceeding would continue until such time such a suit or proceeding has been disposed by a final decree or order. The matter does not conclude on the passing of final decree, which might be delivered by the trial Court where the suit has been filed or by the last Court of appeal but such a decree or order must culminate in complete satisfaction or discharge of such decree or order. The explanation deliberately employs the expression 'and' between the two events, namely, one dealing with the disposal of a suit or proceeding by a final decree or order. Thereafter the word 'and' has been used to be followed by the second event, namely, that such decree or order must be satisfied or discharged. It also provides that if such a decree or order could not be satisfied for reasons of expiration of period of limitation etc. then it is a different matter. It is, thus, evident from the explanation that it is not only the initial judgment and decree, a suit envelop even final decree or order and, thereafter, the principles of lis pendens would continue to apply even to execution proceedings. In other words, prohibition of alienation and transfer or dealing with property constituting subject matter of suit by a party to the litigation would continue to apply till such time the decree or order are satisfied or discharged or otherwise become un-executable. The aforesaid interpretation is echoed in para 9 of the judgment of Hon'ble the Supreme Court in the case of Ghantesher Ghosh (supra), which E.S.A. No. 276 of 2004 17 reads thus:-
"9. Section 52 of the Transfer of Property Act is another illustration on the point dealing with the principle of lis pendens. The explanation to the said section indicates that the pendency of a suit would encompass the stage after the final decree till complete satisfaction and discharge of such decree or order. It is, therefore, obvious that legislature for different contingencies has though it fit to extend the scope and ambit of the terminology "suit" even for covering the execution proceedings in connection with decrees passed in suit such. ......"
19. The net result is that mere pendency of a suit may not prevent one of the parties from dealing with the property constituting the subject matter of the suit but it only postulates a condition that alienation would in no manner affects the rights of other party under the decree which may be finally passed in the suit unless the property was alienated with permission of the Court. A similar view has been expressed by the Full Bench of Kerala High Court in the case of Lakshmanan v. Kamal, AIR 1959 Kerala 67.
20. In this backdrop the questions of law raised in this reference needs to be considered. The answer to first two questions are implicit in the judgment of Hon'ble the Supreme Court in the case of Kunhayammed (supra). The first question whether the principles of lis pendens would continue to apply to the Special Leave Petition or would apply only when the leave is granted, are required to be answered. In Kunhayammed (supra) the question raised was E.S.A. No. 276 of 2004 18 whether the dismissal of Special Leave Petition would bar the remedy of review before the High Court in respect of a judgment/order passed by the High Court.
21. However, during the decision of the afore-mentioned question their Lordships have spelled out various principles which may help us to fathom the answer to the question posed in the present petition. The Court speaking through Hon'ble Mr. Justice R.C. Lahoti (as His Lordship then was) has summed up their conclusion in para 44 of the judgement in the case of Kunhayammed (supra), which reads thus:
"To sum up our conclusions are :-
(i) Where an appeal or revision is provided against an order passed by a Court, tribunal or any other authority before superior forum and such superior forum modifies, reverses or affirms the decision put in issue before it, the decision by the sub-ordinate forum merges in the decision by the superior forum and it is the latter which subsists, remains operative and is capable of enforcement in the eye of law.
(ii) The jurisdiction conferred by Article 136 of the Constitution is divisible into two stages. First stage is up to the disposal of prayer for special leave to file an appeal. The second stage commences if and when the leave to appeal is granted and special leave petition is converted into an appeal.
(iii) Doctrine of merger is not a doctrine of universal or unlimited application. It will depend on the nature of E.S.A. No. 276 of 2004 19 jurisdiction exercised by the superior forum and the content or subject-matter of challenge laid or capable of being laid shall be determinative of the applicability or merger. The superior jurisdiction should be capable of reversing, modifying or affirming the order put in issue before it. Under Article 136 of the Constitution the SC may reverse, modify or affirm the judgment-decree or order appealed against while exercising its appellate jurisdiction and not while exercising the discretionary jurisdiction disposing of petition for special leave to appeal. The doctrine of merger can therefore be applied to the former and not to the latter.
(iv) An order refusing special leave to appeal may be a non-speaking order or a speaking one. In either case it does not attract the doctrine of merger. An order refusing special leave to appeal does not stand substituted in place of the order under challenge. All that it means is that the Court was not inclined to exercise its discretion so as to allow the appeal being filed.
(v) If the order refusing leave to appeal is a speaking order, i.e. gives reasons for refusing the grant of leave, then the order has two implications. Firstly, the statement of law contained in the order is a declaration of law by the SC within the meaning of Article 141 of the Constitution. Secondly, other than the declaration of law, whatever is stated in the order are the findings recorded by the SC which would bind the parties thereto and also E.S.A. No. 276 of 2004 20 the Court, tribunal or authority in any proceedings subsequent thereto by way of judicial discipline, the SC being the Apex Court of the country. But, this does not amount to saying that the order of the Court, tribunal or authority below has stood merged in the order of the SC rejecting special leave petition or that the order of the SC is the only order binding as res judicata in subsequent proceedings between the parties.
(vi) Once leave to appeal has been granted and appellate jurisdiction of SC has been invoked the order passed in appeal would attract the doctrine of merger; the order may be of reversal, modification or merely affirmation.
(vii) On an appeal having been preferred or a petition seeking leave to appeal having been converted into an appeal before SC the jurisdiction of High Court to entertain a review petition is lost thereafter as provided by sub-rule (1) of Rule (1) of Order 47 of the C.P.C."
22. It is, thus, evident that under Article 136 of the Constitution the first stage comes to an end and dove-tail with the second stage if and when the leave to appeal is granted. It is at this stage that Special Leave Petition is converted into an appeal. Conclusion No. (iii) noticed in the preceding para reached by Hon'ble the Supreme Court further shows that the doctrine of merger would apply to the judgment and decree or order passed in the civil appeal and it would not apply when Hon'ble the Supreme Court exercises discretionary jurisdiction disposing of petition for Special Leave to E.S.A. No. 276 of 2004 21 Appeal. If an order granting leave to appeal is to have any meaning then appeal has to be considered as continuation of suit covering the period spent on obtaining the leave of the Court because it is necessarily the only route to challenge the judgment of the High Court. Such an order would be deemed to have the effect of institution of appeal on the date when the Special Leave Petition was presented. The doctrine of merger would also come in operation and the orders of the inferior Court including that of the High Court would merge in the final order, which may be passed by the Supreme Court in the appeal. Therefore, it follows that judgment and order passed by the Supreme Court on the appeal have to be regarded as declaration of law within the meaning of Article 141 of the Constitution and binding on all the Courts within the territory of India. Once such is the legal position, the only irresistible conclusion is that the principles of lis pendens would not be excluded merely because a Special Leave Petition has remained pending, which not only is eventually granted and converted into appeal but the same has been allowed and accepted reversing the judgment and decree passed by the inferior Courts. Any contrary view would result into violation of Article 141 of the Constitution and also the doctrine of merger as laid down by their Lordships' in the case of Kunhayammed (supra). Moreover, in the present case, the Regular Second Appeal was dismissed by this Court on 8.3.1982 and the Special Leave Petition was filed on 19.7.1982, which was granted on 13.4.1987. Hon'ble the Supreme Court has already opined in the case of Atam Prakash (supra) that the right of pre-emption based on consanguinity is unconstitutional being violative of Article 14, 15 and 39(c) of the E.S.A. No. 276 of 2004 22 Constitution, holding that it is a relic of feudal past and inconsistent with the constitutional scheme. The appeal in the present case was eventually allowed on 10.3.1995 and the right of pre-emption was not found available. The declaration of law and the order passed by Hon'ble the Supreme Court cannot be violated by any Court or parties to the litigation by arguing that the principles of lis pendens would not apply. The suits filed by the pre-emptor, which had succeeded in favour of the pre-emptor up to this Court, were dismissed and the judgment and decrees consequently were set aside. Those judgment and decrees cannot be rehabilitated by stating that for the period of pendency of Special Leave Petition, the principles of lis pendens did not apply and, therefore, alienation or transfer made during that time without anything more would not be hit by principles of lis pendens.
23. Accordingly, question Nos. (i) is answered by holding that the principles of lis pendens would apply in respect of transfers/alienation which have been effected after filing of the Special Leave Petition before the Supreme Court and before leave to appeal has been granted. The answer to question No. (ii), which is ancillary has to be that the order granting leave to appeal has to take effect from the date of filing the Special Leave Petition and not from the date the leave to appeal was granted. Therefore, the view expressed in Mewa Singh's case (supra) by the learned Single Judge of this Court, with utmost respect, is not correct and is hereby overruled, inasmuch as, this Court has observed that the remedy under Article 136 of the Constitution is an extra ordinary remedy and is not in the ordinary line of appeal and that the proceedings became pending only when leave to appeal was granted. The aforesaid E.S.A. No. 276 of 2004 23 reasoning does not commend itself to us. Therefore, with utmost respect we overrule the aforesaid view, especially when it comes into conflict with the observation made by Hon'ble the Supreme Court in Kunhayammed's case (supra).
24. The argument of Mr. I.K. Mehta, learned senior counsel, placing reliance on paras 4 and 44 of the judgment of Hon'ble the Supreme Court in Kunhayammed's case (supra) as applied by the Division Bench of Calcutta High Court in the case of Puranmall Goenka (supra) has not impressed us. According to Mr. Mehta, the first stage carved out by the Supreme Court under Article 136 of the Constitution deals with discretion of the court and the leave to appeal cannot be claimed as a matter of right. Therefore, he had urged that two stages should be segregated from each other and the period spent in obtaining the leave to appeal has to be saved from the application of principles of lis pendens. We are afraid that the argument is fallacious and deserves to be rejected. The Division Bench of Calcutta High Court has categorically held that they were not dealing with the maintainability of the review application but were called upon only to consider the issue of condonation of delay in filing the application. Therefore, the judgment of the Division Bench of Calcutta High Court does not have any bearing on the question raised in the present reference. The reliance of Mr. Mehta on the judgment of Hon'ble the Supreme Court in Kunhayammed's case (supra) does not require any further discussion because we have already discussed that once leave to appeal is granted then doctrine of merger would apply and the judgment of the inferior court would not survive. Moreover, in such a situation the order granting leave would take E.S.A. No. 276 of 2004 24 effect from the date of presentation of the Special Leave Petition and the order passed on appeal has to be regarded as declaration of law under Article 141 of the Constitution, which is binding on all the Courts and parties. The same reasoning would apply to the other two judgments of Hon'ble the Supreme Court in the cases of Gyan Chand (supra) and Laxman Marotrao (supra). The other argument that under Order I rule 10 of the C.P.C. the transferees were permitted to join as party in the pending suits, would not affect the basic principle of lis pendens that the transferee is bound by the judgment and decree and would be hit by the same. His argument based on matrimonial cases would also not be of any consequence and we do not feel any hesitation to reject the same.
25. The last question posed in the present reference whether the plea of bona fide purchaser in terms of Section 41 of the 1882 Act would be available to the transferee even if the sale deeds are hit by the doctrine of lis pendens. Section 41 of the 1882 Act carves out an exception to the general rule that a person cannot transfer a better title than he himself possess and that the benefit of plea of bona fide purchaser is not available to the transferee covered by the principles of lis pendens. It is in the nature of estoppel (illustration to Section 115 of Evidence Act, 1872). The question concerning bona fide purchaser in terms of Section 41 of the 1882 Act came up for consideration before a Division Bench of Allahabad High Court in the case of Md. Shafiqullah Khan v. Md. Samiullah Khan, AIR 1929 Allahabad 943. In that case subsequent to the institution of suit against the mortgagers, the property which was subject matter of the suit was mortgaged. The mortgagee was not granted a decree for sale E.S.A. No. 276 of 2004 25 and his plea of estoppel based on Section 41 was rejected by the Division Bench. Speaking for the Court, Hon'ble Mr. Justice Sulaiman rejected the plea of bona fide and proceeded to observe as under:-
"......it is perfectly clear that when the Court is to record a finding whether a transfer takes place with the express or implied consent of the true owner it must take into account the fact that before the transfer the suit which is to establish the title of the principal owner against an ostensible owner was actually pending and the consent if it had existed before, had been definitely revoked. The institution of the suit is in itself a very strong and unmistakable proof of the fact that the consent did not subsist. I would not go so far as to say that a consent express or implied, once existing, can be revoked secretly without intimation to the parties who are acting upon that consent, but I have no doubt in my mind that the estoppel arising under S. 41 cannot be such as to override the imperative provisions of S. 52. Cases of an express consent given while a suit is pending or is intended to be filed may amount to an existing fraud which would alter the position of the parties completely. But in the absence of such fraud I do not see how S. 41 can over-ride S. 52. S. 41 is a general section dealing with estoppel in the circumstances mentioned therein. S. 52 is a special section which applies to transfers during the pendency of a suit. In the presence of a special E.S.A. No. 276 of 2004 26 provision of law applicable to pending suits, the general provisions of estoppel contained in S. 41 would not apply. ......"
The view taken by the Division Bench of Allahabad High Court was followed and applied by the Division Bench of Nagpur High Court in the case of Gendmal Amolakchand Marwari v. Laxman Tanba Krushnapakshi, AIR (32) 1945 Nagpur 86.
26. The aforesaid question also fell for consideration before a Single Bench of this Court in the case of Kanshi Ram v. Kesho Ram Bahna, AIR 1961 Punjab 299. The learned Singh Judge while placing reliance on the judgments of Allahabad High Court and Nagpur High Court has held in para 8 as under:-
" (8) The principle embodied in S. 41 is an exception to the general rule that a person cannot pass a better title in the property than he himself has. It has been found by the competent Courts that Sunder has no title to the suit property and Karti and Muni have been declared owners of it. Sunder, therefore, could not validly transfer his rights in the property to the appellants. This result could be avoided only under the equitable principle of estoppel in S. 41 of the Transfer of Property Act.
There is, however, authority for the proposition that the principle of estoppel must yield to the doctrine of lis pendens under which no title in property could be validly transferred during the pendency of litigation in respect of it. In Shafiq-Ullah Khan v. Sami-ullah Khan, E.S.A. No. 276 of 2004 27 ILR 52 All 139: (AIR 1929 All 943) it was ruled by Sir Shah Muhamad Sulaiman and Pullan JJ., that "the estoppel arising under S. 41 cannot be such as to override the imperative provisions of S. 52". In the words of Pullan J., "section 41 and 52 are mutually exclusive. In the case of a transfer in the circumstances mentioned above, S. 41 does not arise". It was held that where the transfer was made during pendency of litigation, no question of estoppel under section 41 could arise. A similar view was enunciated in Gendmal v. Laxman, ILR 1944 Nag 852: (AIR 1945 Nag 86) by a Division Bench of the Nagpur High Court (Niyogi and Digby JJ.) It was ruled that an estoppel under S. 41 cannot override the imperative provisions of S. 52 of the Act."
27. The aforesaid view has also been followed and applied by this Court in the case of Balwinderjit Kaur v. Financial Commissioner, 1987 Pb & Hry 189. It was held that a transferee of disputed property during pendency of a civil suit against the transferor for specific performance of agreement to sell, would be bound by the decree against the transferor. The plea that they were bona fide purchaser without notice would be of no consequence. It appears to us to be well settled that the principle of estoppel would not govern the doctrine of lis pendens. In other words the principle of estoppel must yield to the doctrine of lis pendens under which no title in property could be validly transferred during the pendency of the litigation. The aforesaid view has the support of Division Bench judgment of Allahabad High Court rendered in the case of Md. E.S.A. No. 276 of 2004 28 Shafiqullah Khan (supra) and another Division Bench judgment of Nagpur High Court in the case of Gendmal Amolakchand Marwari (supra). Moreover, the Division Bench of Allahabad has opined, with which we are in respectful agreement, that Section 41 of the 1882 Act is a general section dealing with estoppel in the circumstances mentioned therein whereas Section 52 is a special section, which governs transfers during the pendency of a suit. Accordingly, the general provision must give way to special provision of law applicable to pending suits and, thus, the general provision of estoppel embodied in Section 41 of the 1882 Act would not apply. On principle as well as precedent, the last question has to be answered against the appellants who are transferee pendente lite.
28. The reliance of Mr. I.K. Mehta on the judgment of Delhi High Court in the case of Sham Lal Dhingra (supra) does not come to his rescue because a bona fide purchaser or transferee stand entirely on a different footing than the right of a subsequent tenant who had opposed the original tenant in the proceedings under the Delhi Rent Control Act, 1958, especially when special statutory protection has been given to subsequent tenant under Section 14 of the Delhi Rent Act, 1958. The consequence would be entirely different and that proposition proceeds on many other factors. Therefore, we have no hesitation to reject the argument raised by the learned counsel.
29. The questions of law having been answered in the afore- mentioned terms, we direct the office to place the appeal for decision on merit before an appropriate Bench as per roster.
E.S.A. No. 276 of 2004 29
(M.M. KUMAR)
JUDGE
(T.P.S. MANN)
August 28, 2008 JUDGE
Pkapoor