Marappa Gounder and Others vs Chennimalai Gounder (Died) and Others

S. Nagamuthu, J.—The First Respondent (since died) and the Second Respondent are the Plaintiffs in O.S. No. 282 of 1975 on the file of the learned Subordinate Judge, Erode. The Appellants 1 to 3 (all the three since died) were the Defendants 1 to 3 in the Suit. The Respondents 3 & 4 herein are the Defendants 4 & 5 in the Suit. The said Suit was filed for partition and for separate possession of the 1/3 share of the Plaintiffs and also for grant of mesne profits. The Suit was decreed as prayed for by the learned Trial Judge. As against the same, the Defendants 1 to 3 (Appellants 1 to 3 herein) filed an Appeal in A.S. No. 16 of 1981 before the learned District Judge of Periyar District at Erode (erstwhile Periyar District and presently the Erode District). The Appeal was partly allowed thereby confirming the decree and judgment of the Trial Court in respect of partition, but modified the decree in respect of mesne profits by reducing the same from Rs. 7,500 to Rs. 5,250/-. As against the same, the Defendants 1 to 3 have come up with the present Second Appeal. During the pendency of this Second Appeal, Appellants 2 & 3 died and in whose place, the Appellants 4 to 7 were brought on record as their legal representatives. The First Appellant also died (a Memo was filed by the learned Counsel for the Appellants to that effect) and the Appellants 5 to 9 have been recorded as his L.Rs. The First Respondent also died during the pendency of this Appeal in whose place the Respondents 5 to 9 have been brought on record as his legal representatives. The Respondents 2 & 3 despite service of notice have not appeared before this Court. This Second Appeal was originally heard by a learned Single Judge of this Court and the Appeal was allowed on 29.11.1991, thereby setting aside the decrees and judgments of both the Courts below. As against the same, a Civil Appeal in C.A. No. 430 of 1997 was filed before the Hon''ble Supreme Court and by an order dated 24.7.2003, the Hon''ble Supreme Court set aside the judgment and decree passed by this Court in this Second Appeal and remanded the matter back to this Court for fresh disposal in accordance with law mainly by considering whether any substantial question or questions of law arise for consideration between the parties. That is how, on such remand, this Second Appeal is now before this Court for fresh disposal.

As directed by the Hon''ble Supreme Court to find out whether any substantial question of law has arisen between the parties for consideration, when the records were perused it revealed that this Court as early as on 16.2.1982 itself had framed the following substantial questions of law viz.,--

Whether the judgments and decrees of the Courts below are vitiated on account of the fact that the defence plea regarding the Suit being barred by res judicata has not been considered and adjudicated upon ?

Whether the Courts below have committed an error in holding that the Suit is not barred by limitation ?

However, the said substantial questions of law were not noticed by this Court while disposing of this Appeal during the previous occasion and so they were not discussed in the judgment. That is the reason why the Hon''ble Supreme Court was pleased to set aside the decree and judgment of this Court. Since this Court has already framed the substantial questions of law, I proceed to dispose of this Second Appeal on the above substantial questions of law.

The facts of the case of the Plaintiffs are as follows:

(i) There are two items of suit properties comprised in S. Nos. 312-A/1 & 312-A/3 situated at Vairamangalam Village in Erode district. They are agricultural lands and the total extent of the suit properties is 7.83 acres.

(ii) The suit properties were originally owned by three branches of the decedents of a common ancestor. The Defendants 4 & 5 belong to one branch, one Bomma Naicker and his two sons belong to the second branch and one Nagammal and her minor sons belong to the third branch.

(iii) The First Defendant claimed that he had entered into a Sale Agreement to purchase the entire extent of the suit properties under a common Sale Agreement executed by all the three branches. The said agreement was entered into between the parties on 29.8.1966 and it was duly registered.

(iv) Mrs. Nagammal and her branch duly executed a Sale Deed in favour of the First Defendant under Ex.A35 on 14.12.1966, in respect of their undivided 1/3 share.

(v) Thereafter, the First Defendant herein filed a Suit in O.S. No. 250 of 1966 on 15.12.1966, for Specific Performance. During the pendency of the Suit, Bomma Naicker and his branch executed a Sale Deed in favour of the First Defendant herein thereby alienating their 1/3 share under Ex.A34 dated 16.12.1966. Thus, by virtue of these two Sale Deeds, the First Defendant had acquired title for 2/3 undivided share in the suit properties.

(vi) In the said Suit in O.S. No. 250 of 1966, the 5th Defendant herein was the 2nd Defendant and he was a minor then. He is the son of the 4th Defendant herein. The 4th Defendant herein was the First Defendant in the said Suit. The 4th Defendant resisted the Suit stating that the Sale Agreement was a fraudulent document and he never executed the said agreement along with others on 29.8.1966 as it was alleged in the said Suit. Thus the Suit was hotly contested.

(vii) While so, during the pendency of O.S. No. 250 of 1966, the 4th Defendant herein for himself and for the 5th Defendant herein as his natural guardian executed a sale deed under Ex.A4 dated 26.12.1966, thereby alienating their 1/3 undivided share in favour of the Plaintiffs herein. Thus, according to the Plaintiffs, they have got undivided 1/3 share in the suit properties. On account of the above Sale Deed (Ex.A4), the Plaintiffs herein were also added as parties to the said Suit.

(viii) The said Suit in O.S. No. 250 of 1966 was ultimately dismissed by the Trial Court. As against the same, an Appeal was preferred in A.S. No. 706 of 1970 before this Court. The Plaintiffs in the present Suit were also added as Respondents in the said Appeal (arrayed as Respondents 9 & 10).

(ix) The First Defendant in the present Suit Mr. Marappa Gounder was the sole Appellant in the said Appeal in A.S. No. 706 of 1970. When the said Appeal was pending before this Court, the 5th Defendant herein attained majority and he was so declared. Thereafter, under Ex.A2 dated 24.1.1975, the Defendants 4 & 5 again sold away their 1/3 undivided share in favour of the Defendants 2 & 3 herein. Even after the execution of Ex.A2, the Appeal was proceeded with by the parties.

(x) Finally on 12.2.1975, a Petition under Order 23, Rule 3, was filed by the Appellant-Mr. Marappa Gounder in A.S. No. 706 of 1970 and the Respondents 1 & 2 therein along with a Compromise Memo thereby requesting this Court to record the compromise and to decree the Suit in terms of the Compromise Memo.

(xi) But it should be taken note of that the Plaintiffs in the present Suit viz., Chennimalai Goundar and Guruswami who figured as Respondents 9 & 10 in A.S. No. 706 of 1970 were not parties to the compromise. As a matter of fact, from the records it can be seen that the Petition to record compromise was stoutly opposed by the Plaintiffs herein viz., the Respondents 9 & 10 in A.S. No. 706 of 1970.

(xii) Having considered the said Petition filed under Order 23, Rule 3, and the rival contentions, this Court passed a decree as against the Respondents 1 & 2 therein alone. The Appeal was dismissed as not-pressed as against the other Respondents in the Appeal including the Plaintiffs herein who were the Respondents 9 & 10 in the said Appeal.

(xiii) Thereafter, the Plaintiff filed the present Suit for partition based on Ex.A4-Sale Deed dated 26.12.1966, under which the undivided 1/3 share of the Defendants 4 & 5 was alienated to the Plaintiffs during the pendency of O.S. No. 250 of 1966.

The Suit was resisted by the Third Defendant by filing a Written Statement and the same was adopted by the Defendants 1 & 2. The Defendants 4 & 5 viz., the vendors of the Plaintiffs remained ex parte. According to the Written Statement of the Third Defendant, the sale made under Ex.A4 in favour of the Plaintiffs during the pendency of O.S. No. 250 of 1966 suffers from the Doctrine of lis pendens as provided u/s 52 of the Transfer of Property Act and therefore the Plaintiffs cannot claim partition based on Ex.A4. It was also contended that the compromise decree passed as against the Respondents 1 & 2 in A.S. No. 706 of 1970 viz., the Defendants 4 & 5 herein binds the alienees viz., the Plaintiffs herein also. Therefore, the Plaintiffs are barred by the Doctrine of res judicata to claim any right or title over the suit properties. It was also further contended that the suit is barred by limitation.

Based on the above pleadings, the Trial Court framed appropriate issues. On the side of the Plaintiffs, the First Plaintiff examined himself as P.W.1 and two other witnesses besides marking 35 documents as Exs.A1 to A35. On the side of the Defendants, the First Defendant examined himself as D.W.1 and marked one document as Ex.B1.

Having considered all the above materials, the Trial Court decreed the Suit as prayed for. As against the same an Appeal in A.S. No. 16 of 1981 came to be filed. The Lower Appellate Court, confirmed the decree in respect of partition however, modified the decree in respect of mesne profits thereby reducing it from Rs. 7,500/- to Rs. 5,250/-. As against the same, the present Second Appeal has been filed.

When this Second Appeal was admitted on 16.2.1982, by this Court, as I have referred to above, substantial questions of law were in fact framed as extracted in para 3 of this judgment.

I have heard the learned Counsel on either side and perused the records carefully.

Admittedly, the 4th and 5th Defendants together had 1/3 undivided share in the suit property. There is no controversy that another 1/3 undivided share was sold in favour of the First Defendant and yet another 1/3 share was sold in favour of the Defendants 2 & 3. Thus, the Defendants 1 to 3 have got title for 2/3 share about which there is no controversy. The only issue is as to whether the sale made by the Fourth Defendant (D4) on his behalf and on behalf of the Fifth Defendant (D5) who was then a minor, under Ex.A4 dated 26.12.1966 during the pendency of the Suit in O.S. No. 250 of 1966 is affected by the Doctrine of lis pendens and whether the Plaintiffs are, therefore, Entitled for any share in the suit properties or not.

The learned Senior Counsel appearing for the Appellants would submit that since the Plaintiffs purchased 1/3 undivided share in the suit property from D4 under Ex.A4 during the pendency of the Suit in O.S. No. 250 of 1966, the said purchase is governed by Section 52 of the Transfer of Property Act. He would further submit that since the said Suit in O.S. No. 250 of 1966 ultimately came to be compromised before this Court in A.S. No. 706 of 1970 in which there was a decree passed based on the compromise as against D4 & D5 herein and since the Plaintiffs claim title through D4 & D5 herein, they are bound by the compromise decree made in A.S. No. 706 of 1970. Since the said decree is for Specific Performance as against D4 & D5 herein, the same is binding on the Plaintiffs also and therefore the Suit claim is not sustainable. Thus, according to the learned Senior Counsel both the Courts below had fallen in error by not considering the Doctrines of lis pendens and res judicata.

But the learned Senior Counsel appearing for the Respondents would submit that, of course, it is true that the purchase made by the Plaintiffs under Ex.A4 was during the pendency of O.S. No. 250 of 1966. He would further submit that since the Suit in O.S. No. 250 of 1966 culminated in dismissal of the Appeal in A.S. No. 706 of 1970 as against the Plaintiffs herein who were Respondents 9 & 10 in the said Appeal, the sale made under Ex.A4 is valid and the same has not in any manner been affected by Section 52 of the Transfer of Property Act.

I have considered the above submissions and I have carefully gone through the records and the decisions relied on by the learned Senior Counsel on either side.

Though the narration of facts is very long, the substantial questions of law involved in this Second Appeal fall within a very narrow compass. There can be no doubt that any sale made during the pendency of a Suit by one of the parties to the lis to a third party will be affected by the Doctrine of lis pendens as provided u/s 52 of the Transfer of Property Act. It is too well settled that such a sale made during the pendency of the Suit, has not been declared as void by Section 52 of the Transfer of Property Act. It only contemplates that the said sale shall be subject to the final outcome of the Suit. In this regard, we may refer to the judgment of the Hon''ble Supreme Court in Nagubai Ammal and Others Vs. B. Shama Rao and Others, wherein the Hon''ble Supreme Court has held as follows:

It was finally contended that the purchase by Devamma in execution of the decree in O.S. No. 100 of 1919-20 was void and conferred no title on her, because the Official Receiver in whom the estate of Keshavananda, the mortgagor, had vested on his adjudication as insolvent on 19.2.1926 had not been made a party to those proceedings and that, in consequence, the title of Dr. Nanjunda Rao and his successors under the Sale Deed dated 30.1.1920 continued to subsist, notwithstanding the Court auction sale on 2.8.1928.

The obvious answer to this contention is that the properties which were sold on 2.8.1928 did not vest in the Official Receiver on the making of the order of adjudication on 19.2.1926, as they had been transferred by the mortgagor, long prior to the presentation of Insolvency Case No. 4 of 1925-26 under the very sale deed dated 30.1.1920, which forms the root of the Appellants'' title. That sale was no doubt pendente lite, but the effect of Section 52 is not to wipe it out altogether but to subordinate it on the rights based on the decree in the Suit.

As between the parties to the transaction, however, it was perfectly valid, and operated to vest the title of the transferor in the transferee....

(Emphasis supplied)

Again the Hon''ble Supreme Court in paragraph 25 has held as follows:

But it is argued for the Appellants that having regard to the words of Section 52 that pendente lite "the property cannot be transferred", such a transfer must, when it falls within the mischief of that section, be deemed to be non est, that in consequence Keshavananda must, for purpose of lis pendens, be regarded as the owner of the properties, notwithstanding that he had transferred them, and that the Official Receiver who succeeded to his rights had a right to be impleaded in the action.

This contention gives no effect to the words "so as to affect the rights of any other party thereto under any decree or order which may be made therein", which makes it clear that the transfer is good except to the extent that it might conflict with rights decreed under the decree or order. It is in this view that transfers pendente lite have been held to be valid and operative as between the parties thereto.

(Emphasis supplied)

Thus as per the said settled law, in the instant case, as between the Plaintiffs and their alienors, viz., Defendants 4 & 5, the sale made in favour of the Plaintiffs under Ex.A4 is valid, however, subject to the outcome of the Suit in O.S. No. 250 of 1966.

The final outcome of the Suit in O.S. No. 250 of 1966 came by way of a compromise decree passed in A.S. No. 706 of 1970 on 12.2.1975. As I have already narrated, the said Appeal in A.S. No. 706 of 1970 was filed by Mr. Marappa Gounder who is the First Defendant in the present Suit. There were as many as 10 Respondents and the Respondents 9 & 10 therein are the present Plaintiffs. The Respondents 1 & 2 in A.S. No. 708 of 1970 are the Defendants 4 & 5 in the present Suit. A perusal of the judgment of this Court in A.S. No. 706 of 1970 would make it clear that the Appeal was not pressed in respect of the Respondents 3 to 10 therein, including the Plaintiffs in the present Suit also who figured as Respondents 9 & 10 in the said Appeal. Thus, the Appeal was dismissed as not pressed in respect of the Respondents 3 to 10 therein.

The compromise referred to above was reached between the Appellants therein viz., Mr. Marappa Gounder (First Defendant herein) and the Respondent 1 & 2 therein (Defendants 4 & 5 herein) alone. In the compromise reached between them the, following are the terms of compromise:

(1) That the 1st & 2nd Defendants do execute the Sale Deed in regard to their interest in the suit properties as provided for in Ex.A5-Agreement in favour of the Plaintiff on this nominees.

(2) That the Plaintiff do have leave to withdraw the Appeal take such further steps as he may be advised.

(3) That the Plaintiff do pay the amount deposited by him in the Trial Court and withdraw by him as per order of this Court before the Sub-Registrar at the time of registration of the Sale Deed to be executed by the 1st & 2nd Defendants.

(4) That the sum of Rs. 4,000/- (Rupees four thousand only) lying to the credit of O.S. No. 250 of 1966 on the file of the Court of the Subordinate Judge, Erode shall be refunded to the Appellant/Plaintiff; and

(5) That the Appeal be and is hereby dismissed as against Respondents 3 to 10.

(6) That each party do bear their own costs in this Appeal.

This Court accepted the said compromise and passed decree in terms of the said compromise only against Respondents 1 & 2 therein who are Defendants 4 & 5 in the present Suit. As I have already stated as against the other Respondents in the Appeal including Respondents 9 & 10 therein who are the Plaintiffs in the present Suit the Appeal was dismissed as not pressed.

In normal course if the transferee pendente lite is not a party to the suit, there can be no doubt that such alienation will be subject to the outcome of the Suit and the decree binds him as well. Even if any compromise is reached between the parties to the Suit, the decree passed on the said compromise shall be binding on the alienee, though he is not a party to the Suit, in view of the Doctrine of lis pendens. But in a case where the transferee pendente lite is subsequently added as a party to the Suit and if any compromise is reached between the parties including the alienor pendente lite, but without the consent of the alienee pendente lite, then, such a compromise decree shall not be binding on the alienee pendente lite.

For this proposition, I may refer to the Full Bench judgment of this Court in Veeraraghava Reddi v. Subba Reddi, 1915 ILR 43 Mad., 37. In the said judgment, it has been held as follows:

It follows from these provisions of the CPC that although a purchaser pendente lite takes the transfer subject to the result of the litigation, and if he is not impleaded as a party, he will be bound by any lawful compromise or adjustment which may be entered into between the Plaintiff and his transferor, the moment that he becomes a Defendant, the only detraction of right to which he subjects himself is the result of the litigation which has been openly and in his presence tried and decided upon. Once he is in the array of parties what could have been done by way of compromise or adjustment if he is not before the Court should not be allowed to interfere with his claim for a fair trial and a decision on the merits.

The Full Bench also proceeded to state as follows:

If there was fraud or collusion even though the purchaser is not a party he can impeach the compromise in a fresh Suit, and how is his position bettered by intervening at an earlier stage to protect his rights.

The Full Bench further proceeded to say as follows:

I am therefore of opinion that the compromise, although it may be binding upon the First Defendant, cannot affect the rights of the Fourth Respondent to claim a judicial decision on the question.

Another Hon''ble Judge of the Full Bench (Hon''ble Mr. Justice Kumaraswami Sastri) while concurring with the above view has observed as follows:

When an alienee has been so added he gets all the rights of a party to a Suit. I can see nothing in the Code which reduces him to a mere figurehead bound by all the acts of the original parties because his alienation was pending the Suit. If for example his transferee remains ex parte can it be said that he cannot let in evidence or prosecute or defend the Suit because it has been held that an alienee pendente lite is bound by an ex parte decree passed in the Suit. Order 23, Rule 3, contemplates a compromise or adjustment between all the parties to the Suit and it is difficult to see how the Court can pass a decree on a compromise to which a party to the Suit was not a party without such person''s consent unless it can be held that a compromise as a compromise between the original parties is binding on an alienee pending Suit. To do so would be to extend the Doctrine of lis pendens to agreements between the original parties to a Suit which may at some future date enable them to get a decree in terms thereof. I can find no authority for doing so.

From the above authoritative pronouncement made by the Full Bench of this Court, the following propositions emerge:

(i) A transfer made by a party to the Suit during the pendency of the Suit is not void altogether, but the validity is subject to the outcome of the Suit.

(ii) If the alienee pendente lite is not a party to the Suit or Appeal, any decree passed in the Suit including a decree passed on a compromise between the parties to the Suit or Appeal shall be binding on the alienee pendente lite provided there was no fraud or collusion.

(iii) If the alienee pendente lite is subsequently added as a party to the Suit, then he has got a right to contest the Suit just like that of any other party. Even if the alienors who are parties to the Suit remain ex parte, the alienee, as a party to the Suit, has got every right to let in evidence and to establish his title or any other right which he claims through the alienor.

(iv) In conclusion, despite the contest made by the alienee, irrespective of the fact whether the alienor contested the suit or not, if a decree is passed against the alienee pendente lite then undoubtedly in view of Section 52 of the Transfer of Property Act, the transferee pendente lite shall be bound by the said decree.

(v) In the event a decree is passed on a compromise reached between the alienor pendente lite and other contesting parties and if the alienee pendente lite is not a party to the said compromise, it shall be deemed that such compromise reached between alienor pendente lite and other parties is as a result of collusion between them.

(vi) As provided in Section 52 of the Transfer of Property Act, if there is any collusion between the alienor pendente lite and other parties barring the alienee, then, undoubtedly the Doctrine of lis pendens shall not operate against the Transferee pendente lite.

(vii) If the alienee pendente lite is also a party to the compromise upon which a decree is passed in terms of the compromise, the alienee pendente lite will also be bound by the decree.

With the above broad propositions set by the Hon''ble Full Bench of this Court in the above judgment in mind, if we analyse the facts of the present case, the Plaintiffs in the present Suit who were Respondents 9 & 10 in the above Appeal were not parties to the compromise and therefore the decree passed against the Defendants 4 & 5 herein (Respondents 1 & 2 in A.S. No. 706 of 1970) shall not bind the Plaintiffs herein, also because the Appeal was dismissed as against the present Plaintiffs as not pressed.

Yet another fact which requires mention is that even before the Petition for recording compromise was filed in A.S. No. 706 of 1970, the vendor of the Plaintiffs again sold away their 1/3 undivided share in the very same property to the Plaintiffs in O.S. No. 250 of 1966 under Ex.A2 on 24.1.1975. Only after execution of the Sale Deed a compromise was recorded on 20.3.1995. Since as on the date of execution of Ex.A2, the vendors of the Plaintiffs had no title to convey since they had already sold away the same to the Plaintiffs. The said document shall not convey any title to Mr. Ramasamy Gounder and another. The execution of the said Sale Deed only goes to further strengthen the case of the Plaintiffs that their vendors had colluded with the Appellants herein.

In view of the above discussions, in my considered opinion, applying the above principles, the Doctrine of lis pendens cannot be made applicable to the facts of the present case and thus the sale made under Ex.A4 to the Plaintiffs cannot be stated to be defective in any manner. To put it otherwise, the compromise decree passed in A.S. No. 706 of 1970 as against the Defendants 4 & 5 herein namely the alienors of the Plaintiffs herein is not binding on the Plaintiffs and so the Doctrine of lis pendens will not in any manner affect the present suit. The Plaintiffs are therefore entitled for partition. Apart from that, both the Courts below have, on appreciation of facts, held that there was collusion between alienors of the Plaintiffs and the Appellants in A.S. No. 706 of 1970 while recording compromise in the said Appeal. This is essentially a question of fact which cannot be reopened in this Second Appeal. I fully endorse the conclusion arrived at by the Courts below that the said decree obtained in A.S. No. 706 of 1970 as against the alienors of the Plaintiffs herein is a collusive decree and therefore Section 52 of the Transfer of Property Act will not in any manner affect the claim of the Plaintiffs in the suit properties.

The learned Senior Counsel for the Appellants has not advanced any argument in respect of the second substantial question of law to substantiate his contention that the Suit is barred by limitation as well as the plea of res judicata. So, I do not venture into the same. In the result, I do not find any merit in this Appeal, the Appeal fails and the same is accordingly dismissed. The decree and judgment passed by the lower Appellate Court is confirmed. Considering the facts and circumstances of the case, there shall be no order as to costs.