During the pendency of appeal, on 22.08.1983
Mansha Ram and others executed a sale deed
in favour of Kartar Chand, Sansar Chand and
Rajinder Kumar- three sons of Bakshi Ram for
consideration of Rs. 12,500/-. The first
Appellate Court, by order dated 20.08.1984,
allowed the appeal, setting aside the decree of
Trial Court in light of statements made by
plaintiffs before the court. It noted that ‘the
plaintiffs have compromised the case and stated
that they do not want to pursue with the suit
and it to be dismissed.’ {Para 5}
22. Additionally, we must also note the case of
Som Dev v. Rati Ram (2006) 10 SCC 788. as presented by the
appellants to clarify the rigors of Order XXIII
Rule 3 of CPC. In this case, it was clarified by
this Court that after the amendment of Code of
Civil Procedure in 1977, a compromise decree
can be passed only on compliance with the
requirements of Rule 3 of Order XXIII, otherwise
it may not be possible to recognize the same as
compromise decree. When a compromise is to
be recorded and a decree is to be passed, Rule
3 of Order XXIII of the Code requires that the
terms of compromise should be reduced to
writing and signed by the parties.
23. In the present case, neither the
compromise deed has been reduced to writing,
nor it is recorded by the court. Mere statements
of the parties before court about such said
compromise, cannot satisfy the requirements of
Order XXIII Rule 3 of the CPC. Therefore, the
compromise decree is not valid.
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. OF 2024
(Arising out of SLP (C) No.14690 of 2015)
AMRO DEVI & ORS. Vs JULFI RAM.
Author: VIKRAM NATH, J.
Citation: 2024 INSC 527.
1. Leave granted.
2. The present appeal is filed by defendants
against the order of Himachal Pradesh High
Court dated 15.12.2014. The Respondents are
original plaintiffs who had filed the suit for
declaration and specific performance. The Trial
Court dismissed the suit. However, the first
Appellate Court reversed the finding of Trial
Court and decreed the suit. The High Court, by
the impugned order, dismissed the second
appeal.
3. Following are the facts leading to the Civil Suit
in question:
On 27.12.1979, Mansha Ram, Dev Raj,
Khazana Ram, Ramji Das and Bihari Lal
(hereinafter referred as “Mansha Ram and
others”) filed a suit (Civil Suit No. 43 of 1983) for
declaration and permanent injunction against
Julfi Ram, Tihru Ram, Bakshi Ram- all three are
sons of Khajana, Prem Chand-son of Julfi Ram,
Kartar Chand-son of Bakshi Ram and Dharam
Singh son of Nighu. Plaintiffs were the
landowners and defendants were the co-tenants
of the land. The Plaintiffs sought a declaration
that they are owners in possession of suit land
measuring 7 kanals 9 marlas. They also sought
permanent injunction restraining defendants
from interfering in the land in suit. The
defendants contested the suit and stated that
they are in cultivatory possession as tenants on
payment. Thus, they claimed to be owners by
virtue of tenancy.
4. Trial Court by order dated 11.04.1983, decreed
the suit in favor of plaintiffs- Mansha Ram &
others granting them both the reliefs of
declaration and permanent injunction by
holding that they are owners in possession.
Aggrieved, all six defendants preferred an
appeal before the District Judge. As one of the
plaintiffs -Dev Raj had died during the
pendency, his widow Asha Devi and his son
Suresh Kumar were arrayed as Respondents in
the First Appeal.
5. During the pendency of appeal, on 22.08.1983
Mansha Ram and others executed a sale deed
in favour of Kartar Chand, Sansar Chand and
Rajinder Kumar- three sons of Bakshi Ram for
consideration of Rs. 12,500/-. The first
Appellate Court, by order dated 20.08.1984,
allowed the appeal, setting aside the decree of
Trial Court in light of statements made by
plaintiffs before the court. It noted that ‘the
plaintiffs have compromised the case and stated
that they do not want to pursue with the suit
and it to be dismissed.’ Before the first Appellate
Court, Julfi Ram, Tihru Ram, Bakshi Ram,
Prem Chand and Kartar Singh made a joint
statement on 20.06.1984 that they have
reached a settlement with Respondents. They
have also paid money to Mansha Ram and
others and they shall be the owners and hold
possession of the land in dispute. Thus, Suit
filed by Plaintiffs be dismissed. Dharam Singhson of Nighu recorded a separate statement to
the same effect. On the other hand, Bihari Lal,
Suresh Kumar (son of Devraj and holder of
General power of attorney of Asha Devi), Ramji
Das and Dhyan Chand made a statement that
they have reached a settlement and have
received money. Thus, possession and
ownership of the land shall be with
appellants/defendants. Mansha Ram and
Khazana Ram also recorded their statements on
20.06.1984, that they have reached a
settlement and the suit may be dismissed.
These four statements are on record of the High
Court and of this Court.
6. Appellants submit that Bakshi Ram’s three son
got exclusive possession and mutation in
revenue records by virtue of the sale deed dated
22.08.1983. However, the Respondents submit
that by virtue of dismissal of suit by first
Appellate Court, all four brothers- Julfi, Tihru,
Bakshi and Nighu became owners and the sale
deed executed in favour of the three sons of
Bakshi Ram shall be subject to compromise
decree passed by first Appellate Court.
7. On 23.02.1988, the present suit (Civil Suit No.
41 of 1988) was instituted by
Respondents/Plaintiffs- Julfi Ram, Prem
Chand, Dharam Singh, Premi Devi, Atmi Devi,
Asha Devi, Subhash Chand and Gian Chandtwo sons of Nighu represented by their mother
Premi Devi (hereinafter referred as “Julfi Ram
and others”) against appellants/DefendantsBakshi Ram(since deceased), Tihru Ram, Amro
Devi (wife of Bakshi Ram), Sansar Chand,
Kartar Chand, Rajinder Kumar (minor son of
Bakshi Ram), Mansha Ram, Khazana Ram,
Ramji Das, Bihari Lal and Asha Devi- widow of
Suresh Kumar (hereinafter referred as “Bakshi
Ram and others”). Thus, the erstwhile owners
Mansha Ram and others were also impleaded as
defendants. The suit was filed for declaration
and permanent prohibitory injunction claiming
that plaintiffs are owners in possession of half
share i.e. 3 kanals 15 marlas in the suit land as
per the compromise between parties in Civil
Appeal decided by District Court on 20.08.1984.
Plaintiffs also stated that they continued to be
in possession and they were cultivating the
land. However, in June 1987 the defendants
started interfering with the land in suit stating
that they have purchased the land and plaintiff
cannot continue to cultivate. Only at this stage
plaintiffs claim to have received knowledge
about mutation entries where only the names of
defendants have been recorded.
8. On the other hand, defendants (Bakshi Ram
and others) submitted a written statement on
28.01.1992, contending that there was no
compromise in earlier proceedings since no
compromise deed was executed and placed on
record before the Court in appeal. They also
claimed that they have spent Rs. 9,000/- on
improvement of suit land after the purchase.
9. The Trial Court, by order dated 19.12.1992,
dismissed the suit. It held that for proceeding
under Order XXIII Rule 3 of Code of Civil
Procedure, 19081 the existence and production
of written compromise between the parties duly
signed by them is most important. It relied upon
the ruling of this Court in Gurpreet Singh vs
Chaturbhuj Gopal2
. Since the said compromise
was not presented in written form duly signed
by the parties, the mandate under Order XXIII
Rule 3 CPC is not fulfilled and thus it lacks legal
force. The Trial Court also held that statements
before the District Court cannot be treated as
agreement or compromise. On the fact of
possession, the Trial Court noted that plaintiffs
could not prove that they were in possession
and in cultivation of the land in suit as pleaded.
10. As the Trial Court dismissed the suit, Julfi
Ram and others preferred Civil Appeal
No.17/1993 before the District Judge,
Hamirpur. By order dated 21.12.2001, the
District Judge, allowed the appeal thereby
decreeing the suit. It held that the Trial Court
1 CPC
2 AIR 1988 SC 400.
had no occasion to comment upon the legality
of compromise because neither parties
challenged the compromise decree by filing an
appeal under Order 43 Rule 1-A of CPC. Thus,
it operated as res judicata and could not have
been re-opened in a subsequent suit. The said
compromise would be binding on parties. On
merits, it observed that the sale was
clandestinely executed by the vendors (Mansha
Ram and others) in favour of sons of Bakshi
Ram. It further stated that even if the sale deed
is considered to be valid, the same cannot be
allowed to be acted upon as it has been executed
during the pendency of Civil Appeal No. 64 of
1993 between the parties.
11. The Appellants/defendants preferred a
Regular Second Appeal No. 55 of 2002 before
the High Court. The High Court, by the
impugned order, dismissed the same and
confirmed the decree passed by the first
Appellate Court dated 21.12.2001. The High
Court held that execution of sale deed does not
either abrogate, detract or dilute the effect of a
previous conclusive determination comprised in
the decree of 1984. Thus, the rights of plaintiffs
remained intact to the extent of one-half share
in the suit land. The sale deed is thus hit by the
doctrine of lis pendens.
12. We have heard learned counsel for the
parties and perused the material on record. The
question to be determined in the present case is
as to what is the status of the so called
compromise order dated 20th August 1984 in
the first round of litigation. The plaintiffs in the
second round of litigation were the defendants
whereas the Mansha Ram and others were
plaintiffs in the first round of litigation. The first
suit was for declaration and for permanent
injunction on account of interference by the
defendants therein. The plaintiffs were already
recorded in the revenue records. Their suit was
decreed by the Trial Court on 11.04.1983. At the
time of execution of sale deed, on 22.08.1983,
in favour of present appellants (defendants in
second suit, Mansha Ram and others) were fully
competent to execute the sale deed. It is true
that when the said sale deed was executed, the
first appeal was pending before the first
Appellate Court.
13. Before the first Appellate Court, the
plaintiff-respondent therein Bihari Lal gave a
short statement to the effect that they had
reached a settlement, received money and that
possession and ownership of the land would be
with the appellants. Mansha Ram and Khazana
Ram stated that they had reached a settlement
with the appellants, they agreed to the
statement of the appellant that suit may be
dismissed. At the same time appellants Julfi
Ram and others stated that they have reached a
settlement with the respondents, they had paid
money to Mansha Ram and others, that they
shall be owners in possession of the land in
dispute and that the suit be dismissed.
14. Based on these statements, the District
Judge, Hamirpur by order dated 20.08.1984
accepted the appeal, set aside the judgement
and decree of Trial Court and dismissed the
suit. It further directed that decree sheet be
prepared and file be consigned to the record.
The effect of this decree would be that the suit
of the plaintiffs was dismissed. No declaration
was granted to the defendants in the said suit.
There was no written compromise deed between
the parties, there was no verification as such of
any written document.
15. At best, under the alleged compromise
order of dismissal of suit the defendants therein
could have claimed to be in possession of the
land in suit and no further. The ownership
could not have been transferred because of the
dismissal of the suit. Even assuming for the
sake of argument that ownership rights were
also transferred under the alleged compromise
deed, the sale deed executed prior to the said
compromise will not be affected in any manner
as the plaintiffs were not only recorded as land
owners but also had a decree of declaration and
permanent injunction in their favour at the time
when sale deed was executed.
16. The defendants, in the first round of
litigation, were admittedly tenants. They could
have become owners of the land in suit either by
way of a registered sale deed in their favour or
by way of a declaration by the Competent Civil
Court whether on merits or by way of a
compromise decree granting such declaration.
Neither of the two happened. Merely because
some statement of the parties is recorded by the
first Appellate Court that they have settled the
dispute and that the suit may be dismissed,
would not make the defendants therein from
tenants to owners. Dismissal of the suit would
only mean that their status as tenants would
continue.
17. The first Appellate Court and the High
Court failed to consider that there was no
challenge to the sale deed dated 22.08.1983.
The doctrine of lis pendens or the restriction
imposed under section 52 of the Transfer of
Property Act, 18823 may not be relevant or
applicable in present case considering the fact
that one of the parties- plaintiffs in the
proceedings and respondents in pending appeal
having executed the sale deed during the
pendency of appeal, by their subsequent
conduct of giving a statement that their suit be
3 The TP Act.
dismissed, acted in dishonest and unfair
manner. They were fully aware of having
executed the sale deed, their subsequent
statement would only be termed as collusive
and dishonest. The order in the appeal court
was not a decree on merits declaring any rights
of the defendants to the suit (appellants in the
appeal). In such circumstances, the sale deed
dated 22.08.1983 could not be said to be hit by
doctrine of lis pendens.
18. At this juncture, it would be appropriate to
note the judicial decision which has been relied
upon by the appellants to substantiate their
claim that the sale deed is not hit by Section 52
of the TP Act. In Thomson Press (India) Ltd. v.
Nanak Builders & Investors (P) Ltd. (2013) 5 SCC 397.
it was
held that transfer of suit property pendente lite
is not void ab initio, as it remains subservient to
the pending litigation. The purchaser of any
such property takes the bargain subject to the
rights of the plaintiff in pending suit. Therefore,
in the present case the sale deed dated
22.08.1983 is not hit by section 52 of the TP Act.
19. Referring to the second submission of the
respondents regarding the compromise decree
being valid in law, at the outset, Order XXIII
Rule 3 CPC is reproduced:
“3. Compromise of suit.—Where it is proved
to the satisfaction of the Court that a suit has
been adjusted wholly or in part by any lawful
agreement or compromise 1 [in writing and
signed by the parties] or where the defendant
satisfied the plaintiff in respect to the whole
or any part of the subject-matter of the suit,
the Court shall order such agreement,
compromise or satisfaction to be recorded,
and shall pass a decree in accordance
therewith 2 [so far as it relates to the parties
to the suit, whether or not the subject matter
of the agreement, compromise or satisfaction
is the same as the subject-matter of the suit:]
[Provided that where it is alleged by one
party and denied by the other that an
adjustment or satisfaction has been arrived
at, the Court shall decide the question; but
not adjournment shall be granted for the
purpose of deciding the question, unless the
Court, for reasons to be recorded, thinks fit
to grant such adjournment.]
[Explanation.— An agreement or
compromise which is void or voidable under
the Indian Contract Act, 1872 (9 of 1872),
shall not he deemed to be lawful within the
meaning of this rule.]”
20. A plain reading of the above provision
clearly provides that for a valid compromise in a
suit there has to be a lawful agreement or
compromise in writing and signed by the parties
which would then require it to be proved to the
satisfaction of the Court. In the present case
there is no document in writing containing the
terms of the agreement or compromise. In the
absence of any document in writing, the
question of the parties signing it does not arise.
Even the question of proving such document to
the satisfaction of the Court to be lawful, also
did not arise. Thus, it cannot be said that the
order dated 20.08.1984 was an order under
Order XXIII Rule 3 CPC.
21. Once it is held that the order dated
20.08.1984 was not an order of compromise of
suit under Order XXIII Rule 3 CPC the argument
relating to applicability and bar under Order
XXIII Rule 3A CPC would have no relevance at
all.
22. Additionally, we must also note the case of
Som Dev v. Rati Ram (2006) 10 SCC 788. as presented by the
appellants to clarify the rigors of Order XXIII
Rule 3 of CPC. In this case, it was clarified by
this Court that after the amendment of Code of
Civil Procedure in 1977, a compromise decree
can be passed only on compliance with the
requirements of Rule 3 of Order XXIII, otherwise
it may not be possible to recognize the same as
compromise decree. When a compromise is to
be recorded and a decree is to be passed, Rule
3 of Order XXIII of the Code requires that the
terms of compromise should be reduced to
writing and signed by the parties.
23. In the present case, neither the
compromise deed has been reduced to writing,
nor it is recorded by the court. Mere statements
of the parties before court about such said
compromise, cannot satisfy the requirements of
Order XXIII Rule 3 of the CPC. Therefore, the
compromise decree is not valid.
24. In view of the above analysis, the present
Civil Appeal is allowed, the orders passed by the
High Court and first Appellate Court are set
aside. The judgment and decree of Trial Court
dated 19.12.1992 dismissing the suit is
confirmed.
25. Pending application(s), if any, is/are
disposed of.
……………………………………J.
(VIKRAM NATH)
……………………………………J.
(PRASHANT KUMAR MISHRA)
NEW DELHI
JULY 15, 2024
Print Page
No comments:
Post a Comment