2017 (3) TMI 1924 - SC - Indian Laws

Final decree drawn up in a partition suit - Principles of res judicata in case of decision in original suit - sale deed hit by doctrine of lis pendens or not - transfer pendente lite void or not by Section 52 of T.P. Act - effect of preliminary decree for partition - necessary to file a suit for cancellation of sale deed - adverse possession - alienating the share of co-sharer in the property - right to claim equity for allotment in final decree proceedings in suit for partition - sale was for legal necessity or not - effect of proceedings under the Tenancy Act 1950 - effect of decision of this Court and High Court with respect to final decree proceedings in Item No. 2 of Schedule B property - waiver of right by Appellants - guilty of delay or laches - effect of the decision of the Court under the Urban Land Ceiling Act? Whether the decision in Original Suit No. 294 of 1993 operates as res judicata if yes to what extent? - HELD THAT - In view of the categorical findings recorded by the trial court and first appellate court it is apparent that the sale deed dated 23.11.1959 was hit by doctrine of lis pendens and secondly on the basis of the said sale deed L.Rs. of Bala Mallaiah could have claimed only to the extent of the share of his vendor and not the entire land i.e. only to the extent of 14/104th share of Defendant No. 1 - in the case on hand it was necessary for the Court in the earlier round of litigation to decide the nature and scope of gift deed Ext. A-1. Accordingly the courts decided that the gift made in favour of ancestors of Respondent 1 of the land was absolute and it was not an endowment for a public or charitable purpose. On the facts of the case it is clear that though an issue was not formally framed the issue was material and essential for the decision of the case in the earlier proceeding. Hence the bar of res judicata applies to the facts of the present case. The finding with respect to purchase being made during lis pendens had attained finality and was not open to question in the present proceedings. Besides the validity of the sale deed to the extent of the share of the vendor which was sought to be re-agitated in the final decree proceedings was also not open to be raised in view of clear findings recorded in the suit of 1993. Whether the sale deed dated 23.11.1959 executed by Defendant No. 1 in favour of Bala Mallaiah is hit by doctrine of lis pendens? - HELD THAT - In the instant case a suit for partition was filed in the year 1935. On abolition of Darul Qaza Court in 1951 the case was transferred to the High Court. On abolition of original jurisdiction of the High Court file was sent to the city civil court. It appears that when the file from Custodian did not reach the city civil court hence order dated 8.1.1955 was passed - It is apparent from the aforesaid order that it was clearly an order of keeping the case sine die to be taken up only on receipt of the file on being informed by filing an application by the Plaintiff. The file was not before the court. Thus there was no question of dismissal of the case in default nor was it so dismissed by the court. However the Plaintiff laboured under wrong impression as such filed application under Order 9 Rule 9 Code of Civil Procedure and prayed for restoration of the suit. There was no necessity for the Plaintiff to file an application under Order 9 Rule 9 Code of Civil Procedure. The High Court had set aside the order dated 8.1.1955 and also held that there was no jurisdiction with the city civil court to pass an order on 1.12.1955 to impose and pay costs of Rs. 50. No doubt about it that Section 2 of T.P. Act protects Rule of Mohammedan law by excluding the provisions of Chapter II containing Sections 5 to 53A thereof. In our opinion exclusion is conditional upon existence of Rule of Mohammedan law in that regard that is to say if principle/rule of Mohammedan law provides as to transfers lis pendens the same would prevail and nothing in Section 52 of T.P. Act shall be deemed to affect any such rule. However we have not been shown any such Rule of Mohammedan law containing provision as to lis pendens and thus in the absence whereof the provisions of Section 52 T.P. Act would be attracted. The submission as to non-applicability of Section 52 of T.P. Act to Mohammedan law is hereby rejected. No legal fiction can be created in favour of the Respondents that the suit itself had been dismissed on 15.12.1955 due to non-payment of costs for restoration; whereas it was not dismissed at all and the High Court has also held that the order dated 1.12.1955 was without jurisdiction. The said order has to be ignored and was in fact set aside by the High Court. Thus the suit was in fact pending and was wrongly treated as having been dismissed. The High Court has rightly held that it was never dismissed. Thus the sale deed in question dated 23.11.1959 was executed during lis pendens and the High Court has erred in law in holding otherwise in the judgment impugned herein. Whether Section 52 of T.P. Act renders a transfer pendente lite void? - HELD THAT - The sale deed is not void but only valid to the extent of the share of vendor of Bala Mallaiah i.e. it is valid to the extent of 14/104th share which has been found in the preliminary decree and affirmed in the final decree. The sale deed was subject to the outcome of the suit which was to the aforesaid effect. What is the effect of preliminary decree for partition and the extent to which it is binding? - HELD THAT - The determination of shares as per preliminary decree has attained finality shares of the parties had been crystallised in each and every property. Purchaser pendente lite is bound by the preliminary decree with respect to the shares so determined and it cannot be re-opened and whatever equity could have been claimed in the final decree proceedings to the extent of vendor s share has already been extended to the purchasers - It is apparent from Section 97 of the Code of Civil Procedure that the matters which are concluded by preliminary decree cannot be re-agitated in an appeal against the final decree. No appeal was preferred by the purchasers or by Defendant No. 1 as against the preliminary decree. Whether it was necessary to file a suit for cancellation of sale deed dated 23.11.1959? - HELD THAT - When the sale deed had been executed during the pendency of suit the purchaser pendente lite is bound by the outcome of the suit. The provisions of Section 52 prevent multiplicity of the proceedings. It was not at all necessary to file a suit for cancellation of the sale deed as the vendor had no authority to sell land of other co-sharers. He had right to alienate his own share only which he had in the property to the extent of 14/104th. As such the right title and interest of Bala Mallaiah were subject to the pending suit for partition in which a preliminary decree was passed in the year 1970 which had attained finality in which vendor of Bala Mallaiah Defendant No. 1 was found to be having share only to the extent of 14/104th. The preliminary decree was not based upon fraud or collusion - The lis pendens operates during execution also. Bala Mallaiah his L.Rs. and purchasers from them are bound by the decision of the case. They cannot circumvent the jurisdiction of the court and wriggle out of the decree. The transfer remained valid subject to the result of the suit and pendente lite purchaser is subject to the legal rights and obligations of his vendor as decided by the court. Whether Bala Mallaiah his heirs and purchasers had perfected their right title and interest by virtue of adverse possession? - HELD THAT - The High Court has held that there was no lis pendens and as such it was necessary to question the sale deed and for want of questioning the sale deed the Plaintiffs had perfected their title by virtue of adverse possession. The same is clearly a perverse finding - Merely a bald statement that there was adverse possession is not enough to set up a plea of adverse possession. It has to be clearly set out from which date it commenced and became hostile when there was repudiation of the title. No such plea has been raised. The High Court has erred in law in holding that the Plaintiffs perfected their title by virtue of adverse possession. The finding is perverse and has no foundational basis. Whether under the Muslim Law Defendant No. 1 being a co-sharer could have alienated the share of other co-sharers in the disputed property? - HELD THAT - In the instant case the property was ancestral property of Late Nawab Jung. It is not in dispute that Nawab Jung died intestate. The legal heirs of Late Nawab Jung succeeded to the estate as tenants in common and not as joint-tenants. The heirs succeeded to the estate in specific shares - As per the Sunni law a testator can leave a legacy to an heir only to the extent of 1/3rd of estate and not exceeding that. After death of a person the first step is to make payment of funeral expenses debts and legacies. On consideration of the incidents of disposition of property under different laws it is required to consider the personal law and then to apply the general principles of tenancy law to the permissible non-conflict zone to personal law which holds the field for the parties to arrive at a decision. The Privy Council in the case of Imambandi and Ors. v. Mutsaddi and Ors. 1918 (2) TMI 2 - PRIVY COUNCIL considering the distinction between the law which is applicable to Mohammedans has held that there is a sharp distinction which has to be drawn with other laws with respect to its special nature. The Court cautioned to apply the foreign decisions which are on considerations and conditions totally differing from those applicable to or prevailing in India - thus courts have to be careful to apply the decision of Muslim law to a case relating to Hindu law and the foreign decisions and vice versa. There cannot be universal application of principles of law on a particular subject. Special laws by which parties are governed are also to be taken into consideration so as to arrive at a just conclusion. In Abdul Majeeth Khan Sahib v. C. Krishnamachariar 1916 (11) TMI 2 - MADRAS HIGH COURT a Full Bench of the Privy Council was faced with the issue that if one of the co-heirs of a deceased Muhammadan in possession of the whole estate of the deceased or of any part of it sells the property in his possession forming part of the estate for discharging the debts of the deceased is such sale binding on other co-heirs or creditors of the deceased and if so to what extent? It was held that property of a deceased Muhammadan vests in his heir upon his death in specified share. Heirs of the deceased take their shares in severalty as tenants-in-common and under Muhammadan Law one heir of the deceased cannot bind shares to his co-heirs. Thus sale beyond 14/104th share by Hamid Ali to Bala Malliah was void. The Mohammedan Law does not recognize the right of one of shareholders being tenants-in-common for acting on behalf of others. While discharging debt also they act as independent debtors. A co-sharer cannot create charge on property of co-heir. The right of Muslim heir is immediately defined in each fraction of estate. Notion of joint family property is unknown to Muslim law. Co-heir does not act as agent while discharging debt but is an independent debtor not as co-debtor or joint debtor. Co-sharers are not defined as joint contractors partners executors or mortgagees. Whether the purchaser has a right to claim equity for allotment of Item No. 6 of Schedule B property in final decree proceedings in suit for partition? If yes to what extent? - HELD THAT - Though it is true that purchasers can work out the equity in the final decree proceedings but it is only to the legally permissible extent and not beyond that. The preliminary decree declared the shares in item No. 6 of Schedule B property in specified shares. The preliminary decree is binding and even otherwise the sale was valid only to the extent of the share of Defendant No. 1 i.e. 14/104th share in the specific property and not beyond it - In the instant case preliminary decree has declared the share only to the extent of 14/104th in the disputed property in item No. 6 Schedule B . Thus by no equitable principle the purchaser can claim the entire property to be allotted to him. In the instant case equitable right of allotment of some land other than which was purchased out of some other properties allotted to the share of vendor Hamid Ali Khan D-1 has not been claimed in the objections filed during the final decree proceedings filed by the purchasers. The property admittedly has exchanged hands a number of times during the pendency of suit from 1935 till date and how the equity is to be worked out is always a question of fact in every case how much share has been allotted to the share of one vendor and how much property he had already alienated till that time and what are the debts or charges on the property that are legally permissible would be some of the relevant considerations - In the absence of requisite data pleadings and evidence question of working out equity in aforesaid manner cannot be examined or gone into by this Court at this stage. The claim of equity is outcome of ingenuity of arguments made only in this Court like a drowning fish trying to catch last straw. Whether sale was for legal necessity and thus binding? - HELD THAT - There are no force in the submissions raised on behalf of the Respondents based upon pattedar rights as it was subject to Section 52 of T.P. Act and the same is hereby rejected. What is the effect of decision of this Court and High Court with respect to final decree proceedings in Item No. 2 of Schedule B property? - HELD THAT - At least on point of law the decision of this Court being a reasoned order has relevance. Whether there is waiver of right by Appellants? - HELD THAT - During the pendency of the partition suit with respect to ancestral property of Late Nawab Jang Hamid Ali Khan - Defendant No. 1 - had alienated the property treating it as his own whereas it was obviously subject to the right of other co-shares finally declared in the preliminary decree. Bala Mallaiah and his successors have filed several proceedings civil suit of 1993 in which they have failed. Boddam Narsimha nephew of Bala Mallaiah also filed proceedings under the Act of 1950 for issuance of ownership certificate by virtue of their being protected tenants which case was also dismissed. Thus the stand which was taken by Appellants under the protected Tenancy Act was not at all inconsistent and did not amount to approbation and reprobation on the part of the heirs of Late Nawab Jung. Land grabbing proceedings were also instituted by L.Rs. of Bala Mallaiah and his brothers - The Appellants or their predecessors had not taken inconsistent stands. They were clearly protected by doctrine of lis pendens. Whether Appellants are guilty of delay or laches? - HELD THAT - As a matter of fact L.Rs. of Bala Mallaiah and his brother etc. took steps in the year 1993 and onwards by filing successive cases as enumerated above. There was no delay on the part of the Appellants defeating their rights. It was the Respondents who having lost in the three proceedings one after the other raised objection in the year 2004 in the final decree proceedings. What prevented them from doing so in the year 1993 has not at all been explained. Thus it is they who are responsible to delay in the final decree proceedings in a partition case instituted in the year 1935 and the matter is still pending in the shape of instant appeals before this Court. The effect under the Urban Land Ceiling Act - HELD THAT - It was also submitted that under the Urban Land Ceiling Act proceedings the land was not shown to be belonging to the heirs of Late Nawab Jung. The orders passed in urban land ceiling case have not been placed on record. That apart it was stated that the proceedings lapsed due to repeal of Urban Land Ceiling Act. Be that as it may. The Respondents are purchasers from branch of Bala Mallaiah whose vendor was Defendant No. 1. The property has further exchanged hands. Since the orders have not been placed on record in the aforesaid factual scenario the aforesaid proposition is not examined further and it is not appraised how the purchasers could claim a better right than the one possessed by their vendor. A compromise petition has been filed with respect to area 18 acres 25 guntas. As per the compromise the division of the property has to take place between the Appellants and the newly added Respondent Nos. 87 to 127. Same was objected to by one of heirs. It will involve transfer of the property hence we leave the parties to have resort to an appropriate remedy in this regard. It is found not to be recordable in the form of transaction in which it has been filed. Impugned judgment and decree passed by the High Court is set aside. The final decree of the Trial Court is restored - Appeal allowed.

Summary

Issues Involved:
1. Res judicata effect of Original Suit No. 294 of 1993.
2. Applicability of doctrine of lis pendens to the sale deed dated 23.11.1959.
3. Effect of Section 52 of the Transfer of Property Act on transfers pendente lite.
4. Binding nature and effect of preliminary decree for partition.
5. Necessity of filing a suit for cancellation of the sale deed dated 23.11.1959.
6. Perfection of title by adverse possession by Bala Mallaiah, his heirs, and purchasers.
7. Authority of a Muslim co-sharer to alienate the share of other co-sharers.
8. Right of the purchaser to claim equity in final decree proceedings.
9. Validity of the sale for legal necessity.
10. Effect of proceedings under the Tenancy Act, 1950.
11. Effect of decisions of the Supreme Court and High Court regarding final decree proceedings in Item No. 2 of Schedule 'B' property.
12. Waiver of rights by the appellants.
13. Delay or laches by the appellants.
14. Effect of the Urban Land Ceiling Act.

Detailed Analysis:

1. Res Judicata Effect of Original Suit No. 294 of 1993:
The court found that the decision in Original Suit No. 294 of 1993 operates as res judicata. The suit for permanent injunction was based on the sale deed dated 23.11.1959, and the court held that the sale was hit by the doctrine of lis pendens. The plaintiffs could claim only the share of their vendor, not the entire property. The plea of adverse possession was also negatived, and the findings were affirmed in subsequent appeals.

2. Applicability of Doctrine of Lis Pendens:
The court held that the sale deed dated 23.11.1959 was executed during lis pendens. The suit filed in 1935 was never dismissed, and the order dated 1.12.1955 imposing costs was without jurisdiction. The sale was subject to the outcome of the pending partition suit, and the doctrine of lis pendens applied.

3. Effect of Section 52 of the Transfer of Property Act:
Section 52 does not render transfers pendente lite void but subservient to the rights of the parties to the litigation. The sale deed was valid only to the extent of the vendor's share (14/104th) and subject to the final decree.

4. Binding Nature and Effect of Preliminary Decree for Partition:
The preliminary decree passed in 1970, determining the shares of the parties, was final and binding. The shares were crystallized, and the purchasers were bound by the preliminary decree. The court emphasized that the preliminary decree had attained finality and could not be re-opened.

5. Necessity of Filing a Suit for Cancellation of the Sale Deed:
The court held that it was not necessary to file a suit for cancellation of the sale deed dated 23.11.1959. The sale was subject to the doctrine of lis pendens, and the vendor had no authority to sell beyond his share. The preliminary decree determined the vendor's share, and the sale was valid only to that extent.

6. Perfection of Title by Adverse Possession:
The court found that the plea of adverse possession was not available. The sale was during lis pendens, and possession never became adverse. The High Court's finding of adverse possession was perverse and without basis.

7. Authority of a Muslim Co-sharer to Alienate the Share of Other Co-sharers:
Under Muslim law, co-sharers inherit specific shares as tenants in common. A co-sharer cannot alienate the share of other co-sharers. The sale by Hamid Ali Khan of the entire property was void beyond his share (14/104th).

8. Right of the Purchaser to Claim Equity in Final Decree Proceedings:
The court held that purchasers could work out equity in final decree proceedings but only to the extent of the vendor's share. The sale was valid only to the extent of 14/104th share, and no further equity could be claimed.

9. Validity of the Sale for Legal Necessity:
The court rejected the contention that the sale was for legal necessity. The sale deed recited that it was for the vendor's personal necessity, not for payment of land revenue or for the benefit of the entire estate.

10. Effect of Proceedings under the Tenancy Act, 1950:
The court found that the proceedings under the Tenancy Act, 1950, did not confer any additional rights on the purchasers. The claim of protected tenancy was negatived, and the sale remained subject to the pending partition suit.

11. Effect of Decisions of the Supreme Court and High Court:
The court noted that previous decisions regarding Item No. 2 of Schedule 'B' property supported the view that a co-sharer could not alienate the entire property. The decisions affirmed that the sale was subject to the preliminary decree and the rights of other co-sharers.

12. Waiver of Rights by the Appellants:
The court rejected the contention of waiver of rights by the appellants. The appellants' actions were consistent with protecting their rights under the doctrine of lis pendens, and there was no approbation and reprobation.

13. Delay or Laches by the Appellants:
The court found no delay or laches on the part of the appellants. The preliminary decree was final, and the proceedings for the final decree were initiated within the period of limitation. The delay was attributed to the respondents' multiple proceedings.

14. Effect of the Urban Land Ceiling Act:
The court declined to examine the effect of the Urban Land Ceiling Act due to the lack of relevant orders on record. The issue was left open for the State Government to examine.

Conclusion:
The appeals were allowed, the High Court's judgment and decree were set aside, and the final decree of the Trial Court was restored. Costs of Rs. 1,00,000 were imposed, to be paid within two months.