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The Court discussed Order 21 of C.P.C Rule Nos. 97, 98 and 102, wherein it is laid down that in case the decree holder’s possession is being restricted then an application can be filed in the Court upon which the Court shall adjudicate. Rule 102 specifically excludes transferee pendente lite from seeking any relief under Rule Nos. 97 and 98. The Court observed the language of Order 21 Rule 98 and 102 C.P.C., and said that any alienation recorded during the pendency of the suit would not in any way place any fetter upon the rights of a decree holder to seek possession of the suit property which has been alienated ostensibly to defeat the rights of the decree holder. As per the Court, the pendency of the suit is a Constructive Notice to the third party transferee. Rule 102 recognizes the doctrine of lis pendens as enshrined in S. 52 of Transfer of Property Act, 1882 to protect the decree holder. Thus the decree holder invoking Rule 102 has to show that that the person resisting the possession or offering obstruction is claiming his title to the property after the institution of the suit in which decree was passed and sought to be executed against the judgment debtor.
IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH.
C.R. No.4622 of 2013 (O&M)
DATE OF DECISION : 4.3.2014
Harjit Kaur and others
VERSUS
Vinod Kumar and others
CORAM : HON'BLE MR.JUSTICE MAHESH GROVER
The petitioners are decree-holders who seek to get it executed, but
their attempts have been frustrated on account of the fraudulent act of the
respondents who by initially usurping their land, have also alienated it further so as
to render the decree in favour of the petitioners virtually illusory.
The petitioners initiated a suit for possession on the basis of
ownership on 15.6.1988 in which the predecessors in interest of the present
respondents namely Krishan Lal and Sham Lal were impleaded as the defendants.
Krishan Lal had allegedly forged a power of attorney and sold the land in question
to Sham lal. The present respondents is the revision petition are the LRs of both
Krishan Lal and Sham Lal. The learned trial Court dismissed the suit on 26.9.1994
which resulted in filing of an appeal where the appellant i.e. the petitioners were
successful. In its order dated 21.2.2000, the Appellate Court remanded the matter
back to the trial Court for a decision afresh which resulted in the decree in question
being passed in favour of the petitioners on 7.2.2007. It was held by the learned
trial Court that the General Power of Attorney executed in favour of Krishan Lal
was forged and the logical corollary to this was that Krishan Lal had defrauded
Sham Lal as well, to whom the land had been sold. The decree of possession
having been passed, liberty was also granted to Sham Lal to proceed against the
perpetrator of the fraudulent transaction i.e. Krishan Lal. No further appeal was
preferred against this order of the learned trial Court dated 7.2.2007 rendering it
final for the purpose of execution.
The fact that needs to be noticed is that during the pendency of the
proceedings, this land was sold by Sham Lal in favour of one Golden Forest
Company on 13.6.1996.
In execution, warrants of possession were issued but the revenue
officers returned the warrants unexecuted with a report dated 3.3.2011 that the suit
property stood in the name of M/s Golden Forest (India) Ltd. on the strength of
sale deed dated 13.6.1996 rendering the warrants of possession incapable of being
executed. The learned Executing Court passed an order dated 24.8.2012 wherein it
observed that the Golden Forest Company is not a party to the proceedings and
relying upon its knowledge it said that the Hon'ble Supreme Court was seized of
the matter in a case titled Securities and Exchange Board of India
v. Golden
Forest (India) Limited, T.C. (C) No.68 of 2003 wherein appropriate directions
had been issued and a Committee constituted for satisfaction of the claims of
various creditors. The petitioners by virtue of the application filed today, have
placed on record the proceedings of the Committee answering their query to
observe that “the dispute of the present nature is not covered by any of the
orders/directions passed by the Hon'ble Supreme Court of India relating to
competence, authority or jurisdiction of this Committee – GFIL” and further
stated that since the matter is admittedly of civil nature, therefore, the applicants,
if so advised, may approach the Civil Court. It is in the backdrop of this that the
learned counsel for the petitioners has referred to the provisions of Order 21 Rules
97,98,102 C.P.C. and stated that they being the decree-holders, cannot be deprived
of the possession even if the property has been sold during the pendency of the
suit. For the purpose of reference, Order 21 Rule, 97, 98, 102 C.P.C. are extracted
here below :-
“97. Resistance or obstruction to possession of immovable
property.-
(1) Where the holder of a decree for the
possession of immovable property or the purchaser of any
such property sold in execution of a decree is resisted or
obstructed by any person in obtaining possession of the
property, he may make an application to the Court
complaining of such resistance or obstruction.
(2) Where any application is made under sub-rule (1), the
Court shall proceed to adjudicate upon the application in
accordance with the provisions herein contained.
98. Orders after adjudication.- (1) Upon the determination
of the questions referred to in rule 101, the Court shall, in
accordance with such determination and subject to the
provisions of sub-rule (2),-
(a)
make an order allowing the application and
directing that the applicant be put into the
possession of the property or dismissing the
application ; or
(b)
pass such order as, in the circumstances of the
case, it may deem fit.
(2)
Where upon such determination, the Court is satisfied
that the resistance or obstruction was occasioned without any
just cause by the judgment-debtor or by some other person at
his instigation or on his behalf, or by any transferee, where
such transfer was made during the pendency of the suit or
execution proceeding, it shall direct that the applicant be put
into possession of the property, and where the applicant is still
resisted or obstructed in obtaining possession, the Court may
also, at the instance of the applicant, order the judgment-
debtor, or any person acting at his instigation or on his behalf,
to be detained in the civil prison for a term which may extend
to thirty days.
...
102.
...
...
Rules not applicable to transferee pendente lite.-
Nothing in rules 98 and 100 shall apply to resistance or
obstruction in execution of a decree for the possession of
immovable property by a person to whom the judgment-debtor
has transferred the property after the institution of the suit in
which the decree was passed or to the dispossession of any
such person.”
Reliance has also been placed on a judgment of the Hon'ble Supreme
Court in Usha Sinha v. Dina Ram and others (2008(3) R.C.R. (Civil) 145),
wherein the Hon'ble Supreme Court regarding the doctrine of lis pendens has
stated that a third party purchasing property from a party to the suit which is the
subject matter of litigation, cannot resist or obstruct or object the rightful claim of
the decree holder. For the purpose of reference, paras 12,18, 21 to 24 of the
judgment are extracted here below :-
“12. Bare reading of the rule makes it clear that it is based on
justice, equity and good conscience.
A transferee from a
judgment debtor is presumed to be aware of the proceedings
before a Court of law. He should be careful before he
purchases the property which is the subject matter of
litigation. It recognizes the doctrine of lis pendens recognized
by Section 52 of the Transfer of Property Act, 1882. Rule 102
of Order 21 of the Code thus takes into account the ground
reality and refuses to extend helping hand to purchasers of
property in respect of which litigation is pending. If unfair,
inequitable or undeserved protection is afforded to a
transferee pendente lite, a decree holder will never be able to
realize the fruits of his decree. Every time the decree holder
seeks a direction from a Court to execute the decree, the
judgment debtor or his transferee will transfer the property
and the new transferee will offer resistance or cause
obstruction. To avoid such a situation, the rule has been
enacted.
18.
...
...
It is thus settled law that a purchaser of suit property
during the pendency of litigation has no right to resist or
obstruct execution of decree passed by a competent Court.
The doctrine of 'lis pendens' prohibits a party from dealing
with the property which is the subject matter of the suit. 'Lis
pendens' itself is treated as constructive notice to a purchaser
that he is bound by a decree to be entered in the pending suit.
Rule 102, therefore, clarifies that there should not be
resistance or obstruction by a transferee pendente lite.
It
declares that if the resistance is caused or obstruction is
offered by a transferee pendente lite of the judgment debtor,
he cannot seek benefit of Rule 98 or 100 of Order 21.
...
21.
...
...
We are in respectful agreement with the proposition of
law laid down by this Court in Silverline Forum. In our
opinion, the doctrine is based on the principle that the person
purchasing property from the judgment debtor during the
pendency of the suit has no independent right to property to
resist, obstruct or object execution of a decree. Resistance at
the instance of transferee of a judgment debtor during the
pendency of the proceedings cannot be said to be resistance or
obstruction by a person in his own right and therefore, is not
entitled to get his claim adjudicated.
22.
For invoking Rule 102, it is enough for the decree
holder to show that the person resisting the possession or
offering obstruction is claiming his title to the property after
the institution of the suit in which decree was passed and
sought to be executed against the judgment debtor. If the said
condition is fulfilled, the case falls within the mischief of Rule
102 and such applicant cannot place reliance either on Rule 98
or Rule 100 of Order 21.
23.
So far as the present case is concerned, the facts are no
more in dispute. As already noted earlier, Title Suit No.140 of
1999 was instituted by the respondent-plaintiff on April 10,
1999.
Thus, the litigation was pending in respect of the
property and the matter was sub-judice.
The appellant
thereafter purchased the property from original defendant
Nos.4 and 5 by a registered sale deed on February 15, 2000
i.e. during the pendency of the suit. It is also not in dispute
that the ex parte decree came to be passed against the
defendants on May 24, 2001. In the situation, in our
considered opinion, the doctrine of lis pendens would apply to
the transaction in question, and the High Court was wholly
right in holding that the case was covered by Rule 102 of
Order 21 of the Code. The appellant could not seek protection
of pendency of suit instituted by her. The executing Court was
not justified in granting stay of execution proceedings. The
High Court was, hence, right in setting aside the order of the
Executing Court.
24.
Rule 29 of Order 21 of the Code deals with cases
wherein a suit has been instituted by the judgment-debtor
against the decree-holder and has no relevance to cases of lis
pendens wherein transfer of property has been effected by the
judgment debtor to a third party during the pendency of
proceedings. The High Court, in our opinion, rightly held that
the appellant could not be said to be a 'stranger' to the suit
inasmuch as she was claiming right, title and interest through
defendant Nos.4 and 5 against whom the suit was pending.
She must, therefore, be presumed to be aware of the litigation
which was before a competent Court in the form of Title Suit
No.140 of 1999 instituted by the present respondent against
the predecessor of the appellant. As held in Bellamy, the fact
that the purchaser of the property during the pendency of the
proceedings had no knowledge about the suit, appeal or other
proceeding is wholly immaterial and he/she cannot resist
execution of decree on that ground. As observed in Silverline
Forum, a limited inquiry in such cases is whether the
transferee is claiming his right through the judgment-debtor.
In our judgment, the High Court was also right in observing
that if the appellant succeeds in the suit and decree is passed
in her favour she can take appropriate proceedings in
accordance with law and apply for restitution. That, however,
does not preclude the decree holder from executing the decree
obtained by him. Since the appellant is a purchaser pendente
lite and as she has no right to offer resistance or cause
obstruction and as her rights have not been crystalized in a
decree, Rule 102 of Order 21 of the Code comes into
operation.
Hence, she cannot resist execution during the
pendency of the suit instituted by her. The order passed by the
High Court, therefore, cannot be said to be illegal, unlawful or
otherwise contrary to law.”
I am in complete agreement with the contention raised by the learned
counsel for the petitioners more particularly when the respondents have no
justification to offer in view of the finality lent to the decree. If one were to
faithfully observe the language of Order 21 Rules 98 and 102 C.P.C., then any
alienation recorded during the pendency of the suit would not in any way place any
fetter upon the rights of a decree holder to seek possession of the suit property
which has been alienated ostensibly to defeat the rights of the decree holder. In
this case, there are glaring facts which indicate a complete fraud having been
played by the predecessor in interest of respondents No.2 to 8 who initially forged
the power of attorney and sold it to the predecessor in interest of respondent No.1
herein. The fraud would nullify and vitiate everything. It is a settled proposition
of law that actions and consequences of a fraud are a nullity in the eyes of law.
Therefore, there would be no justification in keeping the petitioners away from the
execution of their successful claim over the property.
The petition is, therefore, accepted and the impugned order is set
aside with a categoric direction to the Executing Court to forthwith execute the
decree and retrieve the possession from M/s Golden Forest (India) Ltd. and
restore the same to the petitioners since any other course would only perpetuate an
act whose object is in fraud and the subsequent transfer i.e. M/s Golden Forest
cannot obstruct the execution of a decree. They would indeed be at liberty to have
recourse to remedies under the law.
Before parting with the order, I cannot but comment upon the fact
that the predecessor in interest of respondents No.2 to 8 (Krishan Lal) who clearly
committed a fraud which led the petitioners into a prolonged round of litigation
and agony which has still not ended atleast till the passing of the order by this
Court, he cannot be let off without any consequences. The Court would have
ordinarily ordered his prosecution, but for the fact that he is no longer in the world,
therefore, it deems it appropriate to inflict monetary consequences upon him which
are determined at Rs.5 lacs which would cover the unauthorized use of the
property from 1972 and expenses for litigation which the petitioners had to
undergo due to his fraudulent act. The costs would be recovered from the estate of
Krishan Lal and would be compensatory in nature to be given to the petitioners.
The Executing Court is directed to ensure that the execution is carried out within
two months from the receipt of a copy of the order and a report sent to this Court.
Any attempt made to obstruct the execution would be viewed by this Court as an
act of defiance and liable to be proceeded with under the Contempt of Courts Act.
The petitioners would be at liberty to apprise this Court appropriately in such an
eventuality.
March 4, 2014
(MAHESH GROVER)
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