Himachal Pradesh High Court
Smt. Kamla Devi & Others vs Munshi Ram (Since Deceased) on 30 October, 2023
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
RSA No. No. 574 of 2006
Reserved on: 10.10.2023
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Date of Decision: 30th October, 2023
Smt. Kamla Devi & others
....Appellants
Versus
Munshi Ram (since deceased)
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through his LRs & others.
....Respondents
Coram rt
Hon'ble Mr Justice Rakesh Kainthla, Judge.
Whether approved for reporting? Yes
For the Appellants : Mr.Dushyant Dadwal, Advocate.
For the Respondent No. : Mr.Ajay Sharma, Sr. Advocate, with
1(a) and 1(b). Mr. Athrav Sharma.
None for respondents No. 2, 3, 5, 7 to
10 though represented.
Name of respondent No. 12 has
already been deleted
Remaining respondents already ex-
parte.
Rakesh Kainthla,Judge.
The present appeal is directed against the judgment
and decree dated 22.09.2006, passed by learned Additional
__________________
Whether reporters of the local papers may be allowed to see the judgment? Yes
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District Judge-II, Kangra at Dharamshala, District Kangra, H.P.,
vide which, the appeal filed by the present appellants (defendants
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before the learned Trial Court) was dismissed. (Parties shall
hereinafter be referred to in the same manner as they were
arrayed before the learned Trial Court for convenience).
2. Briefly stated the facts giving rise to the present appeal
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are that the plaintiff filed a Civil Suit for a declaration that he is
the owner in possession of 23/180 shares in the land comprised in
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Khata No. 21, Khatauni No. 32 to 37, Kita 18, measuring 1-49-07
hectares, situated in Mohal Thore, Upparli Mauza, Gangote,
Tehsil Dehra, District Kangra, H.P. (hereinafter referred to as the
'suit land'), by virtue of Sale Deed dated 21.06.1991, registered
before Sub Registrar Dehra and judgment and decree in Civil Suit
No. 225/91 titled Kamla Devi vs. Ichhye Devi etc. decided on
23.09.1991 passed by learned Sub Judge, Dehra is collusive, illegal,
null and void and not binding on the rights of the plaintiff. A
permanent prohibitory injunction restraining the defendants
from executing the decree or interfering with the ownership and
possession of the plaintiff was also sought.
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3. It was pleaded that the suit land is recorded to be
owned and possessed by defendants no. 1 to 10 and 13. In the
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Jamabandi, defendant No. 13 sold 23/180 shares in the suit land
through her General Power of Attorney Hari Krishan to the
plaintiff vide Sale Deed dated 21.06.1991, registered before the Sub
Registrar, Dehra, for a sum of ₹35,000/-. Mutation No. 121 was
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also sanctioned in favour of the plaintiff. Defendant no. 13 was
left with no share in the Khata after the sale. Defendants No.11, 12
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and 2 filed a Civil Suit No. 225 of 1991 against defendants No. 13,
10, 7, 8, 3 & 2 titled Kamla Devi etc. vs Ichhye Devi etc., seeking a
declaration that they were owners in possession of the entire
Khata. The suit was compromised on 23.09.1991. The compromise
was collusive and the decree was obtained by concealment of the
facts. This compromise was effected to frustrate the rights of the
plaintiffs. The judgment, decree and the mutation based on the
same are wrong, illegal, null and void and not binding on the
rights of the plaintiff. The defendants were requested to
acknowledge the title of the plaintiff but in vain. Hence, the suit
was filed for seeking the relief mentioned above.
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4. The suit was opposed by defendants No. 1 to 11, by
filing a written statement taking preliminary objections regarding
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lack of maintainability and cause of action, the plaintiff being
estopped by his acts and conduct from filing the suit, the
defendant being bona fide purchaser of the suit land, the suit
being collusive with defendant no.13 and the suit being bad for
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mis-joinder of the party. The contents of the plaint were denied
on merits. It was asserted that defendant no.13 had no right to sell
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the suit land as she had already received the sale price in the year
1964. She sold the suit land and other land for a consideration of
₹2000/-. The plaintiff did not pay any amount to defendant no.13.
Defendant No.13 obtained ₹ 2000/- for her share in the Khata
from defendants no. 2 to 4, 7 to 11 and their predecessors. The
defendants found during the consolidation proceedings that the
name of defendant no. 13 was continuing in the revenue record.
They wrote a letter to defendant no.13 and she agreed to transfer
her share. She also wrote a letter on 08.06.1991 to the defendants
to reach Dehra on 13.o6.1991 for the execution of the Sale Deed.
Defendant No. 13 did not reach Dehra on 13.06.1991; hence,
defendants no. 2 to 4 and 7 to 11 filed Civil Suit. Defendants 1 to 11
went to Hoshiarpur, where, defendant no. 13 executed an
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agreement of sale for the whole of the land in the village and
received ₹15,000/-. She agreed to execute the Sale Deed on
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01.08.1991. She did not appear on 01.08.1991, before the Sub
Registrar, for the execution of the Sale Deed. Defendant No.13
appeared in the Court of learned Sub-Judge, Dehra and
compromised the matter. She received ₹60,000/- more as
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consideration and relinquished her right in favour of defendants
no. 2 to 4 and 7 to 11. The learned Court passed a compromise
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decree on 23.09.1991. Defendants were not aware of the Sale Deed
executed by defendant no.13 in favour of the plaintiff. Hari
Krishan, son of the plaintiff, is a tenant of defendant no. 3, in a
shop situated in Khasra No. 851. A civil suit for eviction is pending
against him in the Court of learned Sub-Judge, Dehra. Defendants
No. 2 to 4 and 7 to 11, are in possession of the suit land. The
plaintiff has no locus standi to file the suit; therefore, it was
prayed that the suit be dismissed.
5. A separate written statement was filed by defendant
no. 13 taking preliminary objections regarding the lack of
maintainability and cause of action, and the plaintiff being
estopped by his acts, conduct and acquiescence from filing the
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suit. The contents of the plaint were denied on merits. It was
asserted that litigation was pending between defendants no. 13
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and defendants no. 2 to 4 and 7 to 11, regarding the suit land.
Defendant No. 13 executed a General Power of Attorney in favour
of Hari Krishan. The General Power of Attorney was prepared by
Hari Krishan and it was executed without the knowledge of
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defendant no. 13. The defendant no. 13 never agreed to sell the suit
land to the plaintiff. The Sale Deed executed by Hari Krishan is bad
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as no money was paid to defendant no.13. The plaintiff has no
concern with the suit land. Hence, it was prayed that the suit be
dismissed.
6. Separate replications denying the contents of the
written statements and affirming those of the plaint were filed.
7. Learned Trial Court framed the following issues on
10.09.1999:-
1. Whether the plaintiff is owner to the extent of
23/180 shares by way of the sale deed dated
21.6.1991? OPP
2. Whether Smt. Ichhya Devi had no right and
interest in the suit land and compromise and
decree dated 23.09.1991 is void qua plaintiff? OPP
3. Whether the plaintiff is entitled for relief of
injunction? OPP.
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4. Whether Smt. Ichhya Devi never authorized
General Power of Attorney to sell the land to the
plaintiff, if so its effect? OPD-13
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5. Whether plaintiff is estopped by his act and
conduct to file the suit? OPD.
6. Whether sale deed dated 21.06.91, is the result of
fraud between the plaintiff and Smt. Ichhya Devi?
OPD.
7. Relief.
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8. The parties were called upon to produce their evidence
and the plaintiff examined himself (PW-1), Hari Krishan (PW-2),
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Subhash Chand (PW-3), Sushil Kumar (PW-4), Ram Nath (PW-5),
Ram Prasad (PW-6), and Sansar Chand (PW-7). The defendants
examined Amrit Lal (DW-1), Ram Gopal (DW-2) and Bisheswar
Nath (DW-3). The plaintiff examined Madan Gopal (PW-8) in a
rebuttal.
9. The learned Trial Court held that defendant no.13 did
step into the witness box. The General Power of Attorney
specifically authorized the holder to execute the Sale/Mortgage
Deed etc. and he had the authority to sell the suit land. The plea of
the plaintiff regarding the payment of the amount of ₹ 2000/- in
the year 1964 was not proved. There was no mention in the
Agreement (Ext.DW-1/A), regarding the payment of ₹2000/- in
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the year 1964. The Compromise dated 23.09.1991; (Ext.DW-1/D)
does not mention the earlier agreement to sell. The letter dated
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08.06.1991, stated to have been written by defendant no.13 was
not placed on record. No notice was issued to the Sub-Registrar
not to register the Sale Deed. The compromise decree was
collusive and the principle of lis pendens will not apply to the Sale
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Deed executed in favour of the plaintiff. The compromise effected
after the alienation of the property will not make the alienation
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bad. Hence, the learned Trial Court answered issues no.1 in the
affirmative, issues no. 2 to 6 in the negative and decreed the suit
of the plaintiff.
10. Being aggrieved from the judgment and decree passed
by the learned Trial Court, defendants Kewal Krishan, Bal
Krishan, Vijay Kumar and Shakuntla Devi, filed an appeal which
was allowed by the learned Additional District Judge-II, on
23.10.2003, on the ground that Bhagwanti Devi had died during
the pendency of the suit and she was not brought on record.
Hence, the learned First Appellate Court remanded the case to the
learned Trial Court to decide the question of bringing on record
the legal representatives.
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11. FAO (0rd) No. 559 and 560 of 2003 were preferred
before this Court, which were decided on 16.05.2005. It was held
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that there was no dispute with Bhagwati Devi. She had also
transferred her share in favour of other defendants. There was no
justification for remanding the matter to the learned Trial Court.
Hence the matter was remanded to the learned First Appellate
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Court.
12. Learned First Appellate Court held that the
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compromise effected after the execution of the sale will not affect
the rights of the purchaser. Defendant No. 13 admitted the
execution of the General Power of Attorney and she did not step
into the witness box to prove her version that the General Power
of Attorney was executed fraudulently. The General Power of
Attorney had the authority to execute the Sale Deed. Therefore,
the appeals were dismissed.
13. Feeling aggrieved and dissatisfied with the judgments
and decrees passed by the learned Courts below, the present
appeal has been filed, asserting that the learned Courts below
erred in decreeing the suit. They ignored the fact that the Sale
Deed was hit by the principle of lis pendens. An injunction was
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issued by the Court for restraining Ichhiya Devi from alienating
the suit land and the Sale Deed executed during the subsistence of
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the injunction order was void. Ichhiya Devi had entered into a
compromise before the Court and its validity could not be
questioned. There was no evidence of any collusion and the
learned Courts below erred in holding that the suit was collusive.
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No adverse inference should be drawn against Ichhiya Devi;
therefore, it was prayed that the present appeal be allowed and the
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judgments and decrees passed by the learned Courts below be set
aside.
14. The appeal was admitted on the following substantial
questions of law framed on 27.10. 2010:-
1. Whether the learned Courts below were correct in
decreeing the suit of the plaintiff which was hit by
the provisions of Section 52 of the Transfer of
Property Act, 1882?
2. Whether the learned Courts below were correct in
holding that the decree in Civil Suit No. 225/91
passed by the learned Sub Judge Ist Class, Dehra
H.P. was collusive between the appellants and Smt.
Ichhya Devi when the plaintiff failed to prove any
constituting misrepresentation, fraud or the other
ground?
3. Whether the learned Courts below were correct in
decreeing the suit of the plaintiff when no ground
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constituting misrepresentation/fraud was pleaded
or proved and the conduct of Smt. Ichhya Devi,
defendant No.13 clearly established a collusion with
the plaintiff in the present suit?
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15. I have heard Mr. Dushyant Dadwal, learned Counsel
for the appellants/defendants and Mr. Ajay Sharma, learned Sr.
Advocate assisted by Mr Athrav Sharma, learned counsel for
respondents No. 1(a) and 1(b) (legal heirs of the original plaintiff).
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16. Mr. Dushyant Dadwal, learned Counsel for the
appellants/defendants submitted that the learned Courts below
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erred in decreeing the suit. The Sale Deed executed in favour of the
plaintiff was hit by the doctrine of lis pendens. An injunction order
was issued by the Court and the Sale Deed in violation of the
injunction order is bad. There was no evidence of collusion and
the learned Courts below erred in holding otherwise; therefore, he
prayed that theappeal be allowed and judgments and decrees
passed by the learned Courts below be set aside.
17. Mr. Ajay Sharma, learned Senior Counsel for
respondents no.1 (a) and 1(b), (legal heirs of the original plaintiff)
submitted that the two appeals were preferred before the learned
First Appellate Court, which were disposed of by one common
judgment. Two appeals should have been filed and the present
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appeal is barred by the principle of res judicata. He supported the
judgments and decrees on merits and submitted that the suit filed
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by the plaintiff was collusive. No decree of declaration could have
been granted and if such decree was granted, the compromise was
required to be registered as per the law. An unregistered
compromise will not confer any right upon the defendants.
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Hence, he prayed that the appeal be dismissed.
18. I have given considerable thought to the rival
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submissions at the bar and have gone through the records
carefully.
Maintainability of appeal
19. Before proceeding to determine the substantial
questions of law, it is necessary to deal with the question of
maintainability of appeal raised by Sh. Ajay Sharma learned Senior
Counsel. It was submitted that since two appeals were preferred
before the learned First Appellate Court, therefore, two separate
appeals should have been filed before this Court. The present
appeal is barred by the principle of res judicata. This submission
cannot be accepted. It was laid down by a five-judge Bench in
Mussammat Lachhmi v. Mussammat Bhulli, AIR 1927 Lah 289, that
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the principle of resjudicata applies to the original proceedings and
not to the appellate proceedings. Speaking through Tek Chand J,
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it was observed as under:-
"It must, therefore, be settled at the very outset whether
section 11 applies to appeals or whether its operation is
limited only to suits meaning proceedings in an action in
Courts of the first instance as distinguished from
proceedings in appellate Courts. After a careful examination
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of the section, I have reached the conclusion that it applies
to suits only and not to appeals. It is no doubt true that in
the body of the Civil Procedure Code as well as in other
enactments the word 'suit' is often used as including
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proceedings before an appellate Court, and also other
proceedings of a civil nature. But having regard to the
phraseology used in section 11 and more particularly to
Explanation II, which, it might be noted, was for the first
time added in 1908, the word 'Court' as used in this section
can but mean the trial Court, and 'suit' signifies
proceedings beginning with the plaint and ending with the
decree in that Court. It seems to me that no other
interpretation is possible. If the word 'suit' is to be taken as
including 'appeal' the section becomes inconsistent with
Explanation II. This was specifically ruled by LeRossignol, J.
(Chevis, J. concurring), in Dalipav. Rani Suraj Kaur[48 P.P. 1916, p. 139.], where at page 139 it is stated. "The word 'Court' referred to in section 11 of the Code of 1908 is the original Court, subject to the proviso that Court's judgment cannot be held to be final until the time for appeal has lapsed or till the appeal has been finally decided. This view is confirmed by the language of Explanation II to the section". In MussammatFakhar-un-Nissa v. Malik Rahim Bakhsh[23 P.R. 1897.], and Malik Rahim Bakhsh v. MussammatFakhar-un-Nisa[31 P.R. 1898.] (which latter was a judgment delivered on review in the earlier case), ::: Downloaded on - 31/10/2023 20:34:03 :::CIS 14 Chatterji and Stogdon, JJ., were also inclined to take the same view and in Ram Lal v. ChhabNath [(1890) I.L.R. 12 All.
578.], Edge, C.J. and Brodhurst, J., definitely laid down that "section 13 of the Code of 1882 did not apply to appeals, but .
the principle of res judicata did, as section 13 is not exhaustive". I feel strengthened in this view by the fact that after these judgments had been delivered under the Code of 1882, the legislature deliberately enacted Explanation II for the first time in 1908, which read with the main clause of the section, leaves no doubt whatever that 'suit' does not include 'appeal'.
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20. Therefore, the submission that the present appeal will rt be barred by the principle of res judicata cannot be accepted.
21. Further in the present case, the appellants Kamla Devi and Roshan Lal had filed one appeal i.e. Civil Appeal No. 90-D/2001, whereas Kewal Krishan, Bal Krishan, Vijay Kumar and Shakuntla Devi had filed another appeal i.e. Civil Appeal No. 86-G/2001. Appellant Kamla Devi was arrayed as respondent no. 9 and Roshan Lal was arrayed as respondent no.5 in this appeal. This appeal was dismissed. Therefore, the respondents could not have filed any appeal because the judgment was in their favour.
::: Downloaded on - 31/10/2023 20:34:03 :::CIS 1522. It was laid down by this Court in Sher Chand vs. Pritam Chand 1997 (1) Shim.L.C. 300 that an appeal does not lie against the .
findings when the suit is dismissed. It was observed:
"6. In Madras Corporation v P. R. Ramachandriah, AIR 1977 Mad 25, a Division Bench of the said court held that when a party is not aggrieved by a decree, it was not competent to appeal against the decree on the ground that an issue is found against him Similarly in K. L. Bapuji v. State, AIR of 1977 AP 427, a Division Bench of Andhra Pradesh High Court has also taken the similar view that if all the defendants have common interest in obtaining the dismissal of the suit filed by the plaintiff and if for rt dismissing the suit it is not necessary to decide the controversy between the defendants inter se, the findings recorded on the controversy between the defendants themselves would not be res-judicata No appeal in the aforesaid circumstances, when the entire decree is in favour of the defendants, would lie against the findings at the instance of the defendant aggrieved by it. To a similar effect is a Full Bench judgment of Patna High Court reported in Arjun Singh v. 71 D Ghosh, AIR 1974 Pat I, where amongst other things, it was observed that appeal would only be maintainable if the findings on the issues decided against the party appealing would operate as res-judicata Since the findings recorded against the appellants on issues in the suit out of which this appeal has arisen do operate as res judicata, therefore, this judgment squarely covers the case of the plaintiff regarding the maintainability of the appeal. No decision to the contrary has been brought to the notice of this Court by the learned Counsel for the appellants.
7. Now coming to the facts of the case, admittedly the suit of the plaintiff was dismissed and further there is no executable decree in his favour wherefrom the plaintiff can derive any benefit against the defendants. The appeal, if ::: Downloaded on - 31/10/2023 20:34:03 :::CIS 16 any, in the facts of the present case could be maintained by the plaintiff and not by the defendants as filed by them before the lower appellate Court.
From whatever angle the case may be viewed, the fact .
remains that the appeal by the appellants before the lower appellate Court was incompetent and consequently the present appeal is also not maintainable.
23. Similar is the judgement of the Hon'ble Supreme Court of in Banarsi v. Ram Phal, (2003) 9 SCC 606: 2003 SCC OnLine SC 229, wherein it was observed:
rt "8. Sections 96 and 100 CPC make provision for an appeal being preferred from every original decree or from every decree passed in appeal respectively; none of the provisions enumerates the person who can file an appeal. However, it is settled by a long catena of decisions that to be entitled to file an appeal the person must be one aggrieved by the decree. Unless a person is prejudicially or adversely affected by the decree he is not entitled to file an appeal.
(See Phoolchand v. Gopal Lal [AIR 1967 SC 1470 : (1967) 3 SCR 153], Jatan Kumar Golcha v. Golcha Properties (P) Ltd. [(1970) 3 SCC 573] and Ganga Bai v. Vijay Kumar [(1974) 2 SCC 393] .)No appeal lies against a mere finding. It is significant to note that both Sections 96 and 100 CPC provide for an appeal against decree and not against judgment.
24. Therefore, the respondents did not have a right to file an appeal when the appeal filed by the appellant was dismissed.
25. It was laid down by this Court in Charan Dass v. Thakur Dass Mast Ram, 1972 SCC OnLine HP 18: AIR 1973 HP 22 that the ::: Downloaded on - 31/10/2023 20:34:03 :::CIS 17 principle of res judicata cannot be applied to a successful party as it had no right to file the appeal. It was observed at page 24:
.
"8. The learned counsel referred to AIR 1922 PC 241 (Midnapur Zamindari Co. Ltd. v. Naresh Narayan Roy). It was a case wherein a tenant was sought to be ejected, and he had taken two pleas 11) that he had acquired occupancy right, and (2) that the suit was premature. The trial Court held that there was no occupancy right, but the suit was premature. The High Court affirmed the trial Court of judgment. Subsequently, the zamindar brought another suit for possession over the land. The tenant again claimed occupancy rights. It was held that the question regarding occupancy rights was not res judicata in the subsequent rt suit for the tenant, having succeeded on the other plea, had no occasion to go further as to the finding against him. A similar situation has arisen in the present case because the petitioner-tenant had no occasion to go further from the finding of the learned appellate authority and it was the landlords who preferred revision before the High Court.
9. In Debi Dayal v. Annu Singh. (AIR 1943 Oudh 231) a similar proposition was held to be correct. The principle of constructive res judicata applies only to a case in which the party against whom it is sought to apply was unsuccessful in the previous suit or proceeding. It cannot be applied against a person who in the previous suit or proceeding had been successful. In the instant case, the petitioner-tenant had been successful in the previous proceeding and the plea of constructive res judicata cannot be availed against him. Therefore, in my opinion, the plea of constructive res judicata was not at all open in favour of the landlords. The petitioner-tenant could not be debarred from raising the two specific pleas whereby he sought to defeat the claim of the landlords for ejectment."
26. Similar is the judgment in Deva Ram v. Ishwar Chand, (1995) 6 SCC 733, wherein it was held at page 740:
::: Downloaded on - 31/10/2023 20:34:03 :::CIS 1825. Let us now consider the plea regarding the effect of an adverse finding recorded by the court against a party in whose favour the suit or the appeal is ultimately decided.
26. It is provided in Section 96 of the CPC that an appeal .
shall lie from every decree passed by any court exercising original jurisdiction to the court authorised to hear an appeal from the decision of such court. So also, Section 100 provides that an appeal shall lie to the High Court from every decree passed in appeal. Thus sine qua non in both the provisions is the 'decree' and unless the decree is passed, an appeal would not lie under Section 96 nor would of it lie under Section 100 of the Civil Procedure Code. Similarly, an appeal lies against an 'order' under Section 104 read with Order 43 Rule 1 of the Civil Procedure Code where the 'orders' against which the appeal would lie have rt been enumerated. Unless there is an 'order' as defined in Section 2(14) and unless that 'order' falls within the list of 'orders' indicated in Order 43, an appeal would not lie.
27. Thus, an appeal does not lie against mere 'findings' recorded by a court unless the findings amount to a 'decree' or 'order'. Where a suit is dismissed, the defendant against whom an adverse finding might have come to be recorded on some issue has no right of appeal and he cannot question those findings before the appellate court.
(See Ganga Baiv. Vijay Kumar [(1974) 2 SCC 393 : (1974) 3 SCR 882] .)
28. In Midnapur Zamindari Co. Ltd. v. Naresh Narayan Roy[AIR 1922 PC 241: 48 IA 49, 55], it was observed as under:
"Their Lordships do not consider that this will be found an actual plea of res judicata, for the defendants, having succeeded on the other plea, had no occasion to go further as to the finding against them: but it is the finding of a court which was dealing with facts nearer to their ken than the facts are to the Board now, and it certainly creates a paramount duty on the appellants to displace the finding, a duty which they have now been able to perform."::: Downloaded on - 31/10/2023 20:34:03 :::CIS 19
29. A similar view was also expressed in an earlier decision in Run Bahadur Singh v. Lucho Koer[ILR (1885) 11 Cal 301: 12 IA 23 (PC)].
30. The Oudh Chief Court in Pateshwari Din v. Mahant Sarju .
Dass[AIR 1938 Oudh 18: 1937 OWN 1127] held that where a decree in the previous suit is wholly in favour of a person and gives him all the reliefs sought by him, he has no right of appeal against the decree so as to enable him to contest any adverse finding against him in such suit. Hence, such an adverse finding cannot operate as res judicata as against him in a subsequent suit.
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31. The High Court of Andhra Pradesh in Bansi Lal Ratwav.Laxminarayan[(1969) 2 An WR 246] and the Full Bench of the High Court of Patna in Arjun Singh v. Tara Das Ghosh[AIR 1974 Pat 1: 1974 BLJR 101] have taken the view rt that an appeal would not lie against mere adverse finding unless such finding would constitute res judicata in subsequent proceedings. We are, however, not concerned with this aspect of the matter in the present case nor are we concerned with the earlier aspect as the plea of res judicata having not been raised in the written statement, the appellant cannot be permitted to raise the plea here.
32. In view of what we have held above, the points canvassed before us are decided against the appellants.
27. It was noticed by Hon'ble Supreme Court in State of A.P. v. B. Ranga Reddy, (2020) 15 SCC 681, that one of the tests to determine whether the finding will constitute resjudicata or not is whether an aggrieved party could challenge it by way of appeal or not. When there is no right of appeal, the finding does not constitute resjudicata. It was observed:
::: Downloaded on - 31/10/2023 20:34:03 :::CIS 2030. In Ramesh Chandra[Ramesh Chandra v. Shiv Charan Dass, 1990 Supp SCC 633: AIR 1991 SC 264], the Court held that one of the tests to ascertain if a finding operates as res judicata is that the party aggrieved could challenge it by way of an .
appeal. The Court held as under: (SCC p. 635, para 4) "4. One of the tests to ascertain if a finding operates as res judicata is if the party aggrieved could challenge it. Since the dismissal of appeal or the appellate decree was not against Defendants 2 and 3 they could not challenge it by way of appeal. Even assuming that Defendant 1 could challenge the finding that the liability of of rent was of Defendants 2 and 3 as they were in possession, he did not file any written statement in the trial court raising any dispute between himself and Defendants 2 and 3. There was thus no occasion for the rt appellate court to make the observation when there was neither pleading nor evidence."
28. Therefore, the findings recorded in Civil Appeal No. 86/G/2001, will not constitute res judicata in the present proceedings and the appeal is maintainable.
Substantial question of law No.1
29. It was submitted that the learned Trial Court had issued a status quo order (Ext.P-7), dated 15.06.1991. The Sale Deed was executed on 21.06.1991 after the issuance of the injunction order and the same is void. This is not acceptable. It was laid down in Shankar Jha v. NandKishor Gupta AIR 2022 Raj ::: Downloaded on - 31/10/2023 20:34:03 :::CIS 21 169, that a Sale Deed executed in violation of breach of injunction order is not valid. It was observed:-
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"31. ....In the case of Thomson Press (India) Ltd., (supra), an issue as to the effect of sale in breach of injunction was considered. It was held that the breach of any injunction issued by any competent court would not automatically render the transfer whether by way of an absolute sale or otherwise ineffective. The party committing the breach may doubtless incur the liability to be punished for the of breach committed by it, but the sale by itself may remain valid as between the parties to the transaction subject only to any direction which the competent Court may issue in the case. The observations in this regard as contained in rt Para 52 of the said judgment are as below:
"52. There is, therefore, little room for any doubt that the transfer of the suit property pendetelite is not void ab initio and that the purchaser of any such property takes the bargain subject to the rights of the plaintiff in the pending suit. Although the above decisions do not deal with a fact situation where the sale deed is executed in breach of an injunction issued by a competent Court, we do not see any reason why the breach of any such injunction should render the transfer whether by way of an absolute sale or otherwise ineffective. The party committing the breach may doubtless incur the liability to be punished for the breach committed by it but the sale by itself may remain valid as between the parties to the transaction subject only to any directions which the competent Court may issue in the suit against the vendor."
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32. On the other hand, the judgment of the Hon'ble Supreme Court in the case of Thomson Press (India) Ltd., (supra) clearly holds that the transaction of sale, in breach ::: Downloaded on - 31/10/2023 20:34:03 :::CIS 22 of the injunction order, would not be automatically ineffective though the party committing the breach may incur liability to be punished for the breach committed by it.
.
Therefore, in the considered opinion of this Court, the finding of the learned Single Judge that the confirmation of sale and issuance of sale certificate would be void ab initio is against the principles laid down by the Hon'ble Supreme Court in the case of Thomson Press (India) Ltd., (supra). At the same time, the remedy would be available to the aggrieved party to seek adjudication on this aspect by of constituting separate proceedings before the appropriate forum as may be permissible under the law.
30. rt Therefore, the Sale Deed executed in spite of the injunction order is valid.
31. The learned Courts below had rightly held that the execution of General Power of Attorney by Ichhiya Devi was not disputed. Ichhiya Devi claimed in her written statement that this General Power of Attorney was executed fraudulently without explaining the contents of the same and she never consented to sell suit land through General Power of Attorney. However, she did not step into the witness box and the plea taken by her that her General Power of Attorney was executed fraudulently was never proved.
::: Downloaded on - 31/10/2023 20:34:03 :::CIS 2332. The previous suit was compromised after the execution of the General Power of Attorney and Sale Deed by the .
General Power of Attorney. It was laid down in Venkiteswara Pai Vamana Pai vs. Kunju Vava Mahomad Ali & others, AIR 1952 Travancore Cochin 309, that a compromise entered into by a party to the suit after transfer of his interest in favour of the stranger of will not affect the right of the transferee. It was observed:-
The law is clear on the point and it is to the effect that when a compromise is entered into by a party to the suit rt with the opposite party subsequent to the transfer of his interests in favour of a stranger with a view to defraud that stranger transferee that compromise will not affect the interest of the transferee & the decree passed on such a compromise will not affect that transferee, that is to say, the principle of 'lis pendens' will not apply to such a case.
Reference may be made to pages 239 and 240 of Mulla's Transfer of Property Act (3rd ed.). It may here be mentioned that Mr Vasu learned court for the respondent did not very seriously canvass the correctness of this position of law because he himself cited before us Veera Raghava Reddi V. Subba Reddi. 43 Mad 37 (S.B.), which is another authority for the above-said position.
33. In the present case Ichhiya Devi executed a General Power of Attorney authorizing the sale and after the execution of the General Power of Attorney, she entered into the compromise to defeat the right of transferee. Hence, in such a situation, the compromise will not affect the rights of the transferee.
::: Downloaded on - 31/10/2023 20:34:03 :::CIS 2434. The appellants/defendants filed the previous suit seeking a declaration that they were owners in possession of the .
suit land and other land because Ichhiya Devi had sold her share to them for a consideration of ₹2000/- in the year 1964. She had delivered the possession to the present appellants. The entries in the revenue record were wrong. The suit was compromised and of the Compromise Deed dated 23.09.1991, (Ext.P-3) reads that an amount of ₹62,000/- was settled as Sale Consideration out of rt which₹2000/- was received earlier and ₹ 60,000/- was received by way of instalment i.e. ₹25,000/- by cash and ₹35,000/- by cheque, therefore, the suit should be decreed in favour of the plaintiffs.
35. It is apparent from the compromise that Ichhiya Devi had received a sale consideration of ₹ 62,000/-. Even as per the plaint she had received a sale consideration of ₹ 2000 in the year 1964. The appellants did not have any Sale Deed in their favour.
The sale of the property worth more than ₹1000/- could not have been effected without a registered document. Thus, as per the plaint in the previous suit, the appellants were not the owners of the suit land but only the person in whose favour an agreement to ::: Downloaded on - 31/10/2023 20:34:03 :::CIS 25 sell existed. They could have obtained a decree for specific performance at the best and not a decree of declaration regarding .
their title. It was laid down by the Hon'ble Supreme Court in a similar situation in Ruby Sales and Services (P) Ltd. v. State of Maharashtra, (1994) 1 SCC 531, that a suit for specific performance will result in a decree after which the Sale Deed is to be executed.
of This process cannot be circumvented by straightaway declaring the rights of the plaintiff and if such rights are created for the first rt time, the decree is required to be compulsorily registered. It was observed at page 535:-
13. Normally either the vendor or the vendee files a suit for specific performance of the agreement to sell. But the suit is really directing the opposite party to comply with the terms of the agreement. If the plaintiff succeeds in establishing the agreement and that he was already ready and willing to perform his part of the agreement the court will normally decree the suit for specific performance of the agreement. The decree itself will provide time for performance by way of execution of the sale deed and if the defendant fails to execute the sale deed then the court gets it executed through its officer on behalf of the judgment-debtor in favour of the decree-holder. In the present case, all that had happened is that instead of the first decree for the specific performance of an agreement to sell being passed and later on by execution the conveyance deed being executed in pursuance thereof, by the compromise decree both the stages have been gone through at the initial stage of the suit itself whereby ::: Downloaded on - 31/10/2023 20:34:03 :::CIS 26 conveyance itself had been executed and the property was transferred after the filing of the suit for specific performance of the agreement to sell.
.
xxx
15. As we have noticed earlier the definitions of "conveyance" and "instrument" start with the expression "includes" which shows that the definitions are very wide.
It appears to us that the amendment was made out of abundant caution and it does not mean that the consent decree was not otherwise covered by the definitions given of in Section 2(g) or 2(l) of the Act. As stated earlier it depends on the terms thereof. Merely because an agreement is put in the shape of a consent decree it does not change the contents of the document. It remains an rt agreement and it is subject to all rights and liabilities which any agreement may suffer. Having a stamp of court affixed will not change the nature of the document. A compromise decree does not stand on a higher footing than the agreement which preceded it. A consent decree is a mere creature of the agreement on which it is founded and is liable to be set aside on any of the grounds which will invalidate the agreement.
36. It was held that the consent decree creating rights is compulsorily required to be registered. It was observed:
10. From the above recital in the consent decree there can be no manner of doubt that the parties to the transaction and the suit agreed that the consent decree itself shall operate as conveyance from defendants in favour of the plaintiffs in respect of the suit property particularly described in Ex. 'A' to the plaint. Before the High Court, it was not contested that the consent decree does not operate as "conveyance".
11. There is no particular pleasure in merely going by the label but what is decisive is by the terms of the document.::: Downloaded on - 31/10/2023 20:34:03 :::CIS 27
It is clear from the terms of the consent decree that it is also an "instrument" under which title has been passed over to the appellants/plaintiffs. It is a live document transferring the property in dispute from the defendants .
to the plaintiffs.
12. Thus the position becomes clear that the consent decree falls under the definitions of "conveyance" as well as "instrument".
37. Similarly, it was held in Bhoop Singh v. Ram Singh of Major, (1995) 5 SCC 709, that if the rights are created for the first time by a compromise decree, the same is compulsorily required to be registered in the absence of which the same will be rt ineffective. It was observed:-
12. The aforesaid decisions do not cover the whole ground, according to us. They meet our approval as far as they go. But something more is required to be said to find out the real purport of clause (vi). It needs to be stated that sub-section (1) of Section 17 mandates that the instrument enumerated in clauses (a) to (e) shall be registered compulsorily if the property to which they relate is immovable property, the value of which is Rs 100 or upwards. When the document purports or operates to create, declare, assign, limit or extinguish, whether in present or in future, any right, title or interest therein, whether vested or contingent, it has to be registered compulsorily. The Act does not define 'instrument'.
Section 2(14) of the Indian Stamp Act, 1899, defines 'instrument' to include every document by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded. Sub-section (2) of Section 17 of the Act engrafts exceptions to the instruments covered only by clauses (b) ::: Downloaded on - 31/10/2023 20:34:03 :::CIS 28 and (c) of sub-section (1). We are concerned with clause
(vi) of sub-section (2). Clause (vi) relates to any decree or order of a court, except a decree or order expressed to be made on a compromise and comprising immovable .
property other than that which is the subjectmatter of the suit or proceeding. Clause (v) is relevant which in contrast reads thus:
"Any document not itself creating, declaring, assigning, limiting or extinguishing any right, title or interest of the value of one hundred rupees and of upwards to or in immovable property, but merely creating a right to obtain another instrument which will, when executed, create, declare, assign, limit or rtextinguish any such right, title or interest;".
The Explanation amplifies that a contract for the sale of immovable property containing a recital of payment of any earnest money or the whole or any part of the purchase price shall not be deemed to be required or ever to have required registration.
13. In other words, the court must enquire whether a document has recorded unqualified and unconditional words of present demise of right, title and interest in the property and included the essential terms of the same; if the document, including a compromise memo, extinguishes the rights of one and seeks to confer right, title or interest in praesenti in favour of the other, relating to immovable property of the value of Rs 100 and upwards, the document or record or compromise memo shall be compulsorily registered.
14. In Tek BahadurBhujil v. Debi Singh Bhujil [AIR 1966 SC 292] the Constitution Bench of this Court considered the validity of the family arrangement and the question was whether it required to be compulsorily registered under Section 17. This Court, while upholding oral family arrangement, held that registration would be necessary ::: Downloaded on - 31/10/2023 20:34:03 :::CIS 29 only if the terms of the family arrangements were reduced into writing. A distinction should be made between the document containing the terms and recital of the family arrangement made under the document and .
a mere memorandum prepared after the family arrangement had already been made either for the purpose of record or for information of the court for making necessary mutation. In such a case the memorandum itself does not create or extinguish any rights in immovable properties and therefore does not fall within the mischief of Section 17(2) of the of Registration Act. It was held that a memorandum of family arrangement made earlier which was filed in the court for its information was held not compulsorily registrable and therefore it can be used in evidence for rt collateral purposes, namely, for the proof of family arrangement which was final and binds the parties. The same view was reiterated in Maturi Pullaiah v. Maturi Narasimham [AIR 1966 SC 1836 : (1967) 2 MLJ 14 (SC)] wherein it was held that the family arrangement will need registration only if it creates any interest in immovable property in present time in favour of the parties mentioned therein. In the case where no such interest is created, the document will be valid, despite it being non-registered and will not be hit by Section 17 of the Act.
15. In Ratan Lal Sharma v. PurshottamHarit [(1974) 1 SCC 671 : (1974) 3 SCR 109] this Court held that the award had expressly made an exclusive allotment of partnership assets, including the factory and liabilities to the appellant, and made him entitled to the same, thereby purporting to create rights in immovable property worth above Rs 100 in favour of the appellant. It was, therefore, held that it required registration under Section 17 of the Act. It was also pointed out that it is equally settled law that the share of a partner in the assets of the ::: Downloaded on - 31/10/2023 20:34:03 :::CIS 30 partnership which has immovable property is a moveable property and that the assignment of the share does not require registration under Section 17. Take the familiar cases of a decree in a suit for specific performance of a .
contract. Though a contract of sale is not compulsorily registrable as it does not create title or right in immovable property; but on a decree for specific performance made by the court, the document executed in furtherance thereof requires registration though it has the imprint of the decree of the court.
of
16. We have to view the reach of clause (vi), which is an exception to sub-section (1), bearing all the aforesaid in mind. We would think that the exception engrafted is meant to cover that decree or order of a court, including a rt decree or order expressed to be made on a compromise, which declares the pre-existing right and does not by itself create a new right, title or interest in praesenti in immovable property of the value of Rs 100 or upwards. Any other view would find the mischief of avoidance of registration, which requires payment of stamp duty, embedded in the decree or order.
17. It would, therefore, be the duty of the court to examine in each case whether the parties have pre-
existing rights to the immovable property, or whether under the order or decree of the court, one party having right, title or interest therein agreed or suffered to extinguish the same and created right, title or interest in praesenti in immovable property of the value of Rs 100 or upwards in favour of other party for the first time, either by compromise or pretended consent. If the latter be the position, the document is compulsorily registrable.
18. The legal position qua clause (vi) can, on the basis of the aforesaid discussion, be summarised as below:
(1) Compromise decree if bona fide, in the sense that the compromise is not a device to obviate ::: Downloaded on - 31/10/2023 20:34:03 :::CIS 31 payment of stamp duty and frustrate the law relating to registration, would not require registration. In a converse situation, it would require registration.
.
(2) If the compromise decree were to create for the first time a right, title or interest in immovable property of the value of Rs 100 or upwards in favour of any party to the suit the decree or order would require registration.
(3) If the decree were not to attract any of the of clauses of sub-section (1) of Section 17, as was the position in the aforesaid Privy Council and this Court's cases, it is apparent that the decree rt would not require registration.
(4) If the decree were not to embody the terms of compromise, as was the position in the Lahore case, benefit from the terms of compromise cannot be derived, even if a suit were to be disposed of because of the compromise in question.
(5) If the property dealt with by the decree be not the "subjectmatter of the suit or proceeding", clause (vi) of sub-section (2) would not operate, because of the amendment of this clause by Act 21 of 1929, which has its origin in the aforesaid decision of the Privy Council, according to which the original clause would have been attracted, even if it were to encompass property not litigated.
38. In the previous suit, the present appellants had no right except to get the Sale Deed executed by filing a suit for Specific Performance. The transfer of ownership to them after the receipt of ₹62,000/- by compromise (Ext.P-3), created rights in ::: Downloaded on - 31/10/2023 20:34:03 :::CIS 32 their favour for the first time and such a compromise was required to be registered. In the absence of the registration, there will not .
be any valid conveyance of the title in favour of the appellants and the doctrine of lis pendens will not help them. Therefore, the learned Courts below had rightly held that the provisions of Section 52 of the Transfer of Property Act did not apply to the of present case. Hence, the substantial question of law no.1 is answered accordingly.
rt Substantial question of law No.2.
39. The learned Courts below held that the compromise was collusive. This is apparent from the fact that this compromise was executed after the execution of the General Power of Attorney by Ichhiya Devi to defeat the rights of the present plaintiff. The collusion was writ large. Therefore, the findings recorded by the learned Courts below cannot be faulted with and this substantial question of law is answered accordingly.
Substantial question of law No.3.
40. The learned Courts below had rightly held that there was no evidence of the receipt of ₹2000/- in the year 1964, and no letter dated 08.06.1991, was placed on record to show that any ::: Downloaded on - 31/10/2023 20:34:03 :::CIS 33 transaction had taken place with the appellants before execution of the Power of Attorney (Ext.PW2/B) dated 14.06.1991.
.
Compromise (Ext.P3) was executed on 23.09.1991, after the execution of the Sale Deed and the General Power of Attorney in favour of the present plaintiff. The plaintiff could not have anticipated that the suit would be compromised and he could not of have colluded to defeat the rights of the appellants. Hence, this substantial question of law is answered accordingly.
Final order:
rt
41. In view of the above, the present appeal fails and the same is dismissed. The record of the case be remitted back to the learned Courts below. Pending miscellaneous applications, if any, also stand disposed of.
(Rakesh Kainthla) Judge 30th October,2023 (Ravinder) ::: Downloaded on - 31/10/2023 20:34:03 :::CIS 34 .
of rt ::: Downloaded on - 31/10/2023 20:34:03 :::CIS