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2010 (3) Supreme 398
SUPREME COURT OF INDIA
Dr. Mukundakam Sharma and R.M. Lodha, JJ.
Shanti Budhiya Vesta Patel & Ors. — Appellants
versus
Nirmala Jayprakash Tiwari & Ors. — Respondents
Civil Appeal Nos. 3549-3551 of 2010
[Arising out of SLP(C) Nos. 21108-21110 of 2007]
Decided on : 21-04-2010
Consent Decree –Challenge thereagainst-Predecessor-in-interest of appellants had nothing remaining in the suit property after he had transferred the same under said development agreement to respondent no. 9 for a full and final consideration of Rs 2,00,000/-. Thus, the predecessor-in interest of the appellants had no right, title or interest subsisting in the suit property- The predecessor-in interest of the appellants had relinquished his title, right or interest over/in the suit property in favour of respondent no. 9- A general proposition of law is that no person can confer on another a better title than he himself has-The appellants being the legal heirs of original appellant and as such they could not have claimed a title better than that of original appellant. (Para 28)
Code of Civil Procedure, 1908- Order 23 Rule 3-Consent Decree-Challenge thereagainst - Case of the appellants that there was no due compliance with the provisions of Order 23 Rule 3- It is settled position of law that the burden to prove that a compromise arrived at under Order 23 Rule 3 of the Code of Civil Procedure was tainted by coercion or fraud lies upon party who alleges the same- However, in the facts and circumstances of the case, appellants, on whom burden lay, had failed to do so- Although, the application for recall did allege some coercion, it could not be said to be a case of established coercion- Three criminal complaints were filed, but appellants did not pursue the said criminal complaints to their logical end- Appellants failed to furnish the full and precise particulars with regard to the alleged fraud- Particulars in support of the allegation of fraud or coercion had not been properly pleaded as required by law - Rather the Affidavits-cum-Declarations executed by the appellants indicated that no coercion or fraud was exercised upon the appellants by respondent no. 8 or 9 at any point of time and thus the consent decree could not be said to be anything but valid-. It is crystal clear that appellants chose not to avail an opportunity which was available to them- In such circumstances, held not appropriate to say that deeds and documents as well as the Powers of Attorney executed in favour of respondent no. 9 stood revoked merely by filing complaints with the police-Hence held that entering into the compromise as also filing of the same in the High court of Bombay by respondent no. 9 on behalf of the appellants was without any fraud and well within scope of his authority-Appeals having no merit dismissed. (Paras 31 to 34, 39 to 42)
Facts of the Case :
Present Appeals have been filed against order passed by High Court whereby High Court dismissed Civil Applications preferred by appellants seeking recall of an earlier order passed by the High Court which was based on consent terms duly signed by all the parties.
Findings of the Court :
It was held incomprehensible as to how could appellants challenge the consent decree passed by High Court, particularly when each one of them had, upon the death of original owner executed an Affidavit-cum-Declaration as well as separate Powers of Attorney in favour of the respondent no. 9. All the said Powers of Attorney were irrevocable and duly registered for valuable consideration. A bare perusal of said Affidavits-cum-declarations revealed that appellants knew that respondent no. 9 was the constituted attorney of their predecessor-in-interest and that the suit property had been transferred to respondent no. 9 for a consideration of Rs 2,00,000/In the said Affidavits-cum-Declarations each of appellants had undertaken to be bound by all deeds and documents entered into between their predecessor-in-interest and respondent no. 9 and they had also confirmed and ratified said deeds and documents thereby conferring right on respondent no. 9 to enforce those at all times in the future. In fact, in said affidavits, appellants categorically admitted the right of ownership of respondent no. 9 over the suit property. By executing said Powers of Attorney in favour of respondent no. 9, appellants had consciously and willingly appointed, nominated, constituted and authorized respondent no. 9 as their lawful Power of Attorney to do certain deeds,things and matters. It was thus crystal clear that appellants had not only confirmed and ratified the deeds and documents entered into between their predecessor-in-interest and respondent no. 9 but also constituted respondent no. 9 as their lawful attorney authorizing him, inter alia, to sign petitions, appear before Courts and also to compromise or compound disputes. In fact, appellants were estopped from questioning the acts done by respondent no. 9. This was because party executing the Power of Attorney is bound by the acts of Power of Attorney holder and that the Court could accept a compromise terms entered into by the Power of Attorney holder on behalf of the parties and that such a compromise would be a valid compromise. Hence held that appellants could not be said to have any right to assail the consent decree passed by the High Court.
Based on the provided legal document, the key points are as follows:
The party executing a Power of Attorney is bound by the acts of the attorney holder, and courts are willing to accept compromises entered into by the attorney on behalf of the parties, provided the attorney had proper authority (!) (!) .
A person cannot confer a better title than he himself possesses; thus, the transferor's rights and interests at the time of transfer are crucial in determining the validity of subsequent claims (!) .
The burden of proving that a compromise was obtained through coercion or fraud lies with the party alleging such misconduct. In this case, the parties failed to substantiate their allegations of coercion or fraud, and the affidavits indicated no coercion or fraud was exercised [paras 31-34, 39-42].
The consent decree based on a settlement entered into by an attorney within the scope of their authority is binding and cannot be challenged unless there is clear proof of fraud or coercion, which was not established here [paras 31-34].
The appellants had previously executed affidavits and Powers of Attorney acknowledging the transfer and ownership rights of the respondent, and these documents were registered and valid. These acts demonstrate their knowledge and ratification of the transactions, making their later challenge to the decree unjustified [paras 23-26, 1000484400022].
The appellants' allegations of revoking the Powers of Attorney through police complaints or executing new Powers of Attorney were not substantiated by the record, and such actions did not legally revoke the earlier Powers of Attorney or the authority granted therein [paras 1000484400035-0039].
The appellants had ample opportunity to raise their grievances and allegations of fraud before the court but chose not to pursue them diligently, which contributed to the court's conclusion that the consent decree was valid and within the scope of authority [paras 1000484400036-0038].
Overall, the court held that the consent terms and decree were valid, entered into within the scope of authority, and not obtained through fraud or coercion. Consequently, the appeals against the consent decree were dismissed [paras 1000484400041].
These points collectively emphasize the importance of proper authority, the binding nature of consent decrees, the burden of proof regarding allegations of misconduct, and the significance of timely and substantiated pleadings in challenging such decrees.
JUDGMENT
Dr. Mukundakam Sharma, J. —
1.Leave granted.
2.In the present appeals, the appellants have challenged the legality and validity of the order dated 12.10.2007 passed by the High Court of Judicature at Bombay whereby the High Court dismissed all the three Civil Applications preferred by the appellants herein seeking recall of an earlier order dated 13.06.2006 passed by the High Court which was based on the consent terms duly signed by all the parties.
3.In order to properly appreciate the precise nature and scope of the controversy arising in the present appeals, it would be appropriate as well as expedient to set out a brief statement of pertinent facts. The original appellant, Budhiya Vesta Patel, was the predecessor-in-interest of the present appellants. Budhiya Vesta Patel was appointed as a watchman by one R.K. Tiwari, who was cultivating grass on the suit property since 1954-55, to take care of the suit property and for this a Kachcha shed on the suit property was provided to him. In due course of time, Budhiya Vesta Patel extended the shed to construct a chawl known as Budhiya Patel Chawl consisting of 38 rooms, which were let-out by him.
4.After the death of the real owner of the suit property, Mr. Anant Mahadeo Tambe, husband of Leela Anant Tambe, respondent no. 7 herein, the suit property stood recorded in the name of respondent no. 7. By means of a consent decree passed in Suit No. 1230 of 1992 between respondent no. 7 and M/s. Hitesh Enterprises, respondent no. 8 herein, the latter became the owner of the suit property.
5.In the year 1999, Budhiya Vesta Patel filed a suit against respondent no. 7 and said R.K. Tiwari, the predecessor-in-title of Respondent nos. 1 to 6 herein, before the Bombay City Civil Court, Bombay being Suit No. 5163 of 1999 seeking a declaration that he is the owner of the suit property by adverse possession. Since said R.K. Tiwari also claimed title to the suit property, he also filed a suit.
6.Against this, a counter-claim being Counter Claim No. 11 of 2002 seeking eviction of Budhiya Vesta Patel and his tenants from the suit property was filed by respondent no. 7 and respondent no. 8. The aforesaid suits were contested and on the basis of the pleadings of the parties, issues were framed and evidence was led.
7.The trial Court by its judgment and order dated 10.02.2003 and 11.02.2003 dismissed the suit filed by Budhiya Vesta Patel and allowed the counter claim filed by respondent Nos. 7 and 8. The trial Court negatived Budhiya Vesta Patel’s claim of ownership of the suit property by adverse possession since his initial possession of the suit property was a permissive possession.
8.Aggrieved by the said judgment and order, several appeals came to be filed before the High Court of Bombay. Budhiya Vesta Patel had filed two appeals, being F.A. No. 1388 of 2003 and F.A. No. 1389 of 2003; the former against the dismissal of the suit filed by him and the latter against the decree passed against him in the counter claim. The third appeal being, F.A. No. 1390 of 2003, was preferred by one Yusuf Vali Mohd. Bilikhiya (respondent no. 9 herein), who was the Power of Attorney holder of Budhiya Vesta Patel. Respondent Nos. 1 to 6 also filed an appeal against the judgment and order of the trial Court which was registered as F.A. No. 1523 of 2003. However, subsequently, the same was withdrawn.
9.During the pendency of the aforesaid appeals, Budhiya Vesta Patel died on 05.12.2004. On 07.01.2005, each of the present appellants executed an irrevocable Power of Attorney in favour of respondent no. 9. On the basis of the said Powers of Attorney, respondent no. 9 filed three separate applications being Civil Application Nos. 3180 of 2005, 3181 of 2005 and 992 of 2005 in the aforesaid three appeals wherein he prayed that the legal representatives of Budhiya Vesta Patel, i.e., the appellants be brought on record in all the three appeals in place of Budhiya Vesta Patel.
10.On 26.04.2006, the appellants executed a Powe
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