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SUPREME COURT OF INDIA
S.B. SINHA & P.K. BALASUBRAMANYAN
SUBHASH MAHADEVASA HABIBPETITIONER
versus
NEMASA AMBASA DHARMADAS (D)BY LRS. & ORSRESPONDENT
Appeal (civil) 1449 of 2007
Decided on 19/03/2007
CIVIL APPEAL - SUIT FOR REDEMPTION - DECREE IN O.S. NO. 61 OF 1971 - DECREE IN O.S. NO. 4 OF 1972 - EFFECT OF - WHETHER THE DECREE IN O.S. NO. 61 OF 1971 WOULD OPERATE AS RES JUDICATA AS AGAINST DEFENDANTS 2, 2(A), 3 AND 4 AND THAT NEITHER THEY NOR DEFENDANT NO. 6 AS THEIR ASSIGNEE, COULD BE HEARD TO CONTEND THAT THE SALE OF THE EQUITY OF REDEMPTION IN HIS FAVOUR IS INVALID OR THAT IT DOES NOT CONVEY TO HIM THE ENTIRE RIGHTS IN THE PROPERTY - WHETHER THE DECREE IN O.S. NO. 4 OF 1972 THAT THE PROPERTIES BELONGED TO THE JOINT FAMILY AND THE WIFE AND SONS OF DEFENDANT NO. 2 HAD SHARES THEREIN WAS FINAL - WHETHER THE SUBSEQUENT ASSIGNEE, DEFENDANT NO. 6 COULD CLAIM ANY RIGHT AGAINST HABIB, THE PRIOR ASSIGNEE IN THE LIGHT OF THE DISMISSAL OF BOTH O.S. NO. 61 OF 1971 AND O.S. NO. 4 OF 1972.
Fact of the Case:
The first of the Civil Appeals challenges the decree of the High Court of Karnakata in R.S.A. Nos. 472 and 435 of 1998, both arising out of O.S. No. 67 of 1975. The second challenges the decree in R.S.A. No. 865 of 2000, arising out of O.S. No. 800 of 1992. Both the suits were for redemption and the decrees passed therein are questioned in these appeals by the common plaintiff in them.
Finding of the Court:
The High Court has asked itself the wrong question. It has not considered whether defendant No.6 could claim to have derived any right over the properties or in the equity of redemption on the basis of the assignment in his favour. Therefore, the decrees of the High Court call for interference.
Issues: 1. Whether the decree in O.S. No. 61 of 1971 would operate as res judicata as against defendants 2, 2(a), 3 and 4 and that neither they nor defendant No. 6 as their assignee, could be heard to contend that the sale of the equity of redemption in his favour is invalid or that it does not convey to him the entire rights in the property? 2. Whether the decree in O.S. No. 4 of 1972 that the properties belonged to the joint family and the wife and sons of defendant No. 2 had shares therein was final? 3. Whether the subsequent assignee, defendant No. 6 could claim any right against Habib, the prior assignee in the light of the dismissal of both O.S. No. 61 of 1971 and O.S. No. 4 of 1972?
Ratio Decidendi: 1. The decree in O.S. No. 61 of 1971 would operate as res judicata as against defendants 2, 2(a), 3 and 4 and that neither they nor defendant No. 6 as their assignee, could be heard to contend that the sale of the equity of redemption in his favour is invalid or that it does not convey to him the entire rights in the property. 2. The decree in O.S. No. 4 of 1972 that the properties belonged to the joint family and the wife and sons of defendant No. 2 had shares therein was not final. 3. The subsequent assignee, defendant No. 6 could not claim any right against Habib, the prior assignee in the light of the dismissal of both O.S. No. 61 of 1971 and O.S. No. 4 of 1972.
Final Decision: The appeals are allowed. The parties would suffer their respective costs in the circumstances of the case.
Key Points: - The decree in O.S. No. 61 of 1971 operated as res judicata against certain defendants regarding the sale of the equity of redemption in Habib’s favor (!) . - The decree in O.S. No. 4 of 1972 held the properties were joint family properties, but this finding was not final or conclusive for Habib’s rights; the court treated it as not binding to alter Habib’s prior rights established in O.S. No. 61 of 1971 (!) (!) (!) . - The Supreme Court ultimately held that Habib was entitled to redeem the entire properties, and that defendant No.6 had no valid rights to the properties due to prior assignments and final decrees; it issued composite final decrees for redemption in favor of Habib (!) .
JUDGMENT
(Arising out of SLP(C) No. 4274-4275 of 2003)
With C.A. No. 1450 /2007 [@ S.L.P. (C) No. 4352 of 2003]
P.K. BALASUBRAMANYAN, J.
Leave granted.
1. The first of the Civil Appeals challenges the decree of the High Court of Karnakata in R.S.A. Nos. 472 and 435 of 1998, both arising out of O.S. No. 67 of 1975. The second challenges the decree in R.S.A. No. 865 of 2000, arising out of O.S. No. 800 of 1992. Both the suits were for redemption and the decrees passed therein are questioned in these appeals by the common plaintiff in them.
2.Three items of properties situated in Hubli City in the State of Karnataka are the subject matters of these two suits. Whereas in the first suit O.S. No. 67 of 1975, we are concerned with C.T.S. No. 1015/A/20 having an extent of 29.38 square yards, in O.S. No. 800 of 1992 we are concerned with C.T.S. No. 1015/A/19 having an extent of 14.7 square yards and 1028/2A having an extent of 75 square yards. As seen recited in a deed of partition dated 14.2.1961 entered into by three brothers belonging to a Hindu Mitakshara Family, the said items along with other items belonged to their joint family. But there is considerable dispute about the antecedents of the properties or the title to the properties. In that partition, the above items were allotted to Chandappa Balappa Sangam, original defendant No. 2, in these suits. He along with his two minor sons who are defendant Nos. 3 and 4 executed a mortgage in respect of all the three items on 12.8.1963 in favour of Dharmadas, defendant No.1 in the suit. This was followed by a deed of further charge dated 28.8.1963. Subsequently, on 10.6.1964, defendant No. 2 acting for himself and as the guardian of his minor sons, defendant Nos. 3 and 4, executed a simple mortgage in respect of the properties to one Hemadi, a moneylender. The document recites that a sum of Rs. 2500/- was taken as a loan for his trade. It may be noted that the deed of partition recites that the family was conducting a joint trade in firewood. On 15.10.1970, defendant No. 2, on his own, sold the properties, rather, the equity of redemption, to Habib, the plaintiff in these suits for redemption. The sale deed recites that the properties were outstanding on three mortgages and the sale was being effected for family necessity and to pay off debts and to create capital for business. The best price had been offered by the purchaser. It purports to convey the entire rights in the
property. It also contains an assertion that the seller, defendant No. 2, was the absolute owner of the properties, having a marketable title. The mortgage to defendant No. 1 and further charge are referred to as encumbrances on the properties.
3. It is seen that the wife and sons of defendant No.2 filed O.S. No. 61 of 1971 arraying Habib, the assignee from defendant No.2, and defendant No.2 as defendants, for a declaration that the sale deed executed by defendant No.2 in favour of Habib was bogus and not binding on the plaintiffs or in the alternative, for a declaration that the sale did not affect their shares in the properties and was not binding on their shares and for a decree for permanent injunction restraining Habib from taking possession of the suit properties.
4. It was pleaded in the plaint that:
"Defendant No. 2 was the manager of the joint Hindu family consisting of himself and the plaintiffs. The joint family owned and possessed and enjoyed the suit properties. It
has now transpired that without the knowledge of the plaintiffs, the second defendant, on 15/10/1970 sold the suit properties with the interest of the plaintiffs therein to the first defendant purporting to be for a sum of Rs. 10,000/-. The plaintiffs and defendant No.2 being coparceners each have 1/4th share in the suit properties, which have been alienated by the second defendant without legal necessity and without considerations of family benefit. Perusal of the recitals of the sale deed showed it to be one without consider
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