1967 (9) TMI 150 - HC - Indian Laws

Summary

Issues Involved:
1. Declaration of title to suit properties.
2. Injunction against execution of decree.
3. Setting aside the judgment and decree in O.S. 3 of 1958.
4. Allegation of fraud and collusion.
5. Res judicata.

Detailed Analysis:

Declaration of Title to Suit Properties:
The appellant company claimed ownership of the suit properties, asserting that they were purchased by its promoters as representatives of the company before its incorporation. The court below found that the suit properties belonged to the plaintiff company. However, the High Court noted that the properties were purchased by the promoters in 1945, and the company was incorporated in 1948. The High Court concluded that the company could not claim title to the properties without a registered conveyance from the promoters to the company after its incorporation.

Injunction Against Execution of Decree:
The appellant sought an injunction to restrain the first defendant from executing the decree obtained in O.S. 16 of 1949. The High Court observed that the first defendant had obtained a decree against the second and third defendants for a sum of Rs. 10,000 due under a promissory note. The High Court concluded that the decree in O.S. 16 of 1949 was valid and enforceable, and the first defendant was entitled to execute it.

Setting Aside the Judgment and Decree in O.S. 3 of 1958:
The appellant company sought to set aside the judgment and decree in O.S. 3 of 1958, claiming that it was obtained by fraud and collusion. The High Court found that the decree in O.S. 3 of 1958 was a clear decision on the question of title as between the parties and would operate as res judicata. The High Court held that the judgment and decree in O.S. 3 of 1958 were binding and could not be set aside on the grounds of fraud and collusion.

Allegation of Fraud and Collusion:
The appellant alleged that the second and third defendants colluded with the first defendant to allow the properties to be attached and sold to discharge their personal debts. The High Court found no evidence to support the finding of collusion or fraud. The High Court held that the second defendant had been contesting the execution of the decree in O.S. 16 of 1949 and had all along been asserting the company's title to the properties. The High Court concluded that there was no extrinsic fraud or collusion to vitiate the judgment and decree in O.S. 3 of 1958.

Res Judicata:
The High Court held that the judgment and decree in O.S. 3 of 1958 operated as res judicata and barred the present suit. The High Court noted that the issue of title to the suit properties had been directly decided in O.S. 3 of 1958, and the present suit could not re-agitate the same issue. The High Court concluded that the judgment and decree in O.S. 3 of 1958 were binding and conclusive as between the parties.

Conclusion:
The High Court allowed the appeal of the first defendant (A.S. 178 of 1962) and dismissed the suit, holding that the judgment and decree in O.S. 3 of 1958 were binding and operated as res judicata. The High Court dismissed the appeal of the company (A.S. 28 of 1962) and held that the company was not entitled to the suit properties without a registered conveyance from the promoters. The High Court found no evidence of fraud or collusion and concluded that the decree in O.S. 16 of 1949 was valid and enforceable.