2025 (1) TMI 927 - HC - Indian Laws

Permissibility of restitution u/s 144 of the Code of Civil Procedure (CPC) when a sale deed is executed pursuant to an ex parte decree that has been subsequently set aside - HELD THAT - Admittedly the sale deed has been executed pursuant to the exparte decree passed in the suit filed for specific performance of the contract said to have been executed in the year 2004. Now the said exparte decree has been set aside in I.A.No.102 of 2016 and delay has also been condoned. It is to be noted that the above Orders have not been challenged. Now it is stated by the learned Senior Counsel appearing for the petitioner that they have filed SLP. However no number has been assigned. Be that as it may. Further the contention of the learned Senior Counsel that the restitution cannot be applied cannot be countenanced. Even assuming that the provision under section 144 of Code of Civil Procedure is not strictly applicable to the facts of the present case that will not deter the trial Court to exercise its jurisdiction which is inherent in it and arrest the prejudice caused to the parties at the act of the Court. It is to be noted that only on the basis of the sale executed by the Court the revision petitioner claim title. If the said sale deed is allowed to be on record and used for any other purpose it would certainly cause prejudice to the respondents . Therefore trial Court by its inherent jurisdiction has set right the mistake and restored the status quo ante which will not cause prejudice to either party. Therefore the trial Court has rightly exercised its jurisdiction which is inherent in it to prevent prejudice. In such view of the matter there are no merits in the revision petition. Conclusion - The trial Court by its inherent jurisdiction has set right the mistake and restored the status quo ante which will not cause prejudice to either party. This Civil Revision Petition is dismissed.

1. ISSUES PRESENTED and CONSIDERED

The judgment primarily addresses the following legal issues:

Whether restitution is permissible under Section 144 of the Code of Civil Procedure (CPC) when a sale deed is executed pursuant to an ex parte decree that has been subsequently set aside.
The validity and effect of a sale deed executed under an ex parte decree that has been set aside.
The inherent powers of the court to set aside actions taken under an ex parte decree that has been nullified.
The rights of subsequent purchasers and their status as bona fide purchasers without notice.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Restitution under Section 144 of CPC

Relevant legal framework and precedents: Section 144 of the CPC deals with restitution, allowing the court to restore parties to their original position when a decree or order is reversed or varied. The provision is typically invoked when a decree is altered on appeal or review.
Court's interpretation and reasoning: The court noted that although Section 144 might not strictly apply to the facts of this case, the trial court could exercise its inherent powers to rectify any prejudice caused by its actions.
Key evidence and findings: The ex parte decree was set aside, and the sale deed executed under it was challenged for its validity.
Application of law to facts: The court emphasized that the inherent powers of the trial court allowed it to restore the status quo ante to prevent prejudice, even if Section 144 was not directly applicable.
Treatment of competing arguments: The petitioner's argument that restitution under Section 144 was not permissible was rejected, as the court found that inherent powers could be used to achieve justice.
Conclusions: The court concluded that the trial court rightly exercised its inherent jurisdiction to avoid prejudice and restore the parties to their original positions.

Issue 2: Validity of Sale Deed Executed Under an Ex Parte Decree

Relevant legal framework and precedents: A sale deed executed under a decree is contingent on the validity of the decree itself.
Court's interpretation and reasoning: The court noted that since the ex parte decree was set aside, the sale deed executed pursuant to it could not confer any valid title.
Key evidence and findings: The ex parte decree was set aside, and no stay was granted by higher courts, nullifying the basis for the sale deed.
Application of law to facts: The court applied the principle that actions taken under a void decree cannot have legal effect.
Treatment of competing arguments: The petitioner's claim to title based on the sale deed was dismissed as the decree underpinning it was void.
Conclusions: The court upheld the trial court's decision to set aside the sale deed, as it was based on a nullified decree.

Issue 3: Court's Inherent Powers

Relevant legal framework and precedents: Courts possess inherent powers to ensure justice and prevent abuse of process.
Court's interpretation and reasoning: The court emphasized that inherent powers could be invoked to correct errors and prevent prejudice resulting from judicial actions.
Key evidence and findings: The trial court's use of inherent powers was justified to rectify the consequences of the ex parte decree.
Application of law to facts: The court found that the trial court's actions were necessary to maintain fairness and justice.
Treatment of competing arguments: The petitioner's objections to the use of inherent powers were overruled in favor of equitable relief.
Conclusions: The court affirmed the trial court's inherent jurisdiction to set aside the sale deed and restore the status quo.

Issue 4: Rights of Subsequent Purchasers

Relevant legal framework and precedents: The rights of bona fide purchasers without notice are protected under property law.
Court's interpretation and reasoning: The court noted that the status of subsequent purchasers as bona fide or otherwise is a factual matter to be determined at trial.
Key evidence and findings: A subsequent purchase was made in 2011, and the rights of the purchaser were contested.
Application of law to facts: The court directed that the issue of bona fide purchase be resolved during the trial.
Treatment of competing arguments: The court acknowledged the complexity of competing claims and deferred resolution to the trial.
Conclusions: The court restrained parties from alienating the property and directed an expeditious trial to resolve the issue.

3. SIGNIFICANT HOLDINGS

Preserve verbatim quotes of crucial legal reasoning: "The trial Court by its inherent jurisdiction has set right the mistake and restored the status quo ante which will not cause prejudice to either party."
Core principles established: The inherent powers of a court can be invoked to rectify actions taken under a decree that has been set aside, ensuring no party is prejudiced by the court's actions.
Final determinations on each issue: The court dismissed the Civil Revision Petition, upheld the trial court's decision to set aside the sale deed, and restrained the parties from alienating the property until the main suit is resolved.

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