1. Land ownership dispute — Suit dismissal based on oral statements — Subsequent sale deed executed pendente lite — Claim for declaration of ownership based on compromise. (Para 3 , 4 , 5 , 6 , 7 , 8 )
Back
Next 
2024 Supreme(SC) 595
SUPREME COURT OF INDIA
Vikram Nath, Prashant Kumar Mishra, JJ.
Amro Devi & Ors. – Appellants
Versus
Julfi Ram (Deceased) Through Lrs. & Ors. – Respondents
Civil Appeal No. 7791 of 2024 (Arising out of SLP (C) No. 14690 of 2015)
Decided on : 15-07-2024
Advocates appeared:
For the Appellant(s) : Mr. M. C. Dhingra, AOR Mr. Gaurav Dhingra, Adv. Mr. Vikrant Yadav, Adv. Mr. Kunal Verma, Adv. Mr. Niharika Dubey, Adv.
For the Respondent(s): Mr. Anil Nag, AOR
For the Appellant(s) : Mr. M. C. Dhingra, AOR Mr. Gaurav Dhingra, Adv. Mr. Vikrant Yadav, Adv. Mr. Kunal Verma, Adv. Mr. Niharika Dubey, Adv.
For the Respondent(s): Mr. Anil Nag, AOR
Important Points
IMPORTANT POINTS
(1) Compromise of suit – For a valid compromise in a suit there has to be a lawful agreement or compromise in writing and signed by parties which would then require it to be proved to satisfaction of Court.
(2) Doctrine of lis pendens or restriction imposed under Section 52 of Transfer of Property Act, 1882 may not be relevant or applicable in a case where one of plaintiffs in proceedings and respondents in pending appeal having executed sale deed during pendency of appeal.
(1) Compromise of suit – For a valid compromise in a suit there has to be a lawful agreement or compromise in writing and signed by parties which would then require it to be proved to satisfaction of Court.
(2) Doctrine of lis pendens or restriction imposed under Section 52 of Transfer of Property Act, 1882 may not be relevant or applicable in a case where one of plaintiffs in proceedings and respondents in pending appeal having executed sale deed during pendency of appeal.
Subject
Civil Law - Property Law
Act Referred
Headnote
Civil Procedure Code, 1908 – Order XXIII Rule 3 – Transfer of Property Act, 1882 – Section 52 – Compromise of suit – Suit for declaration and specific performance – For a valid compromise in a suit there has to be a lawful agreement or compromise in writing and signed by parties which would then require it to be proved to satisfaction of Court – In present case, there is no document in writing containing terms of agreement or compromise – Defendants, in first round of litigation, were tenants – They could have become owners of land in suit either by way of a registered sale deed in their favour or by way of a declaration by Competent Civil Court whether on merits or by way of a compromise decree granting such declaration – Neither of two happened – Merely because some statement of parties is recorded by first Appellate Court that they have settled dispute and that suit may be dismissed, would not make defendants therein from tenants to owners – Dismissal of suit would only mean that their status as tenants would continue – Doctrine of lis pendens or restriction imposed under Section 52 of Transfer of Property Act, 1882 may not be relevant or applicable in present case considering fact that one of plaintiffs in proceedings and respondents in pending appeal having executed sale deed during pendency of appeal – They were fully aware of having executed sale deed, their subsequent statement would only be termed as collusive and dishonest – Orders passed by High Court and first Appellate Court set aside and judgment and decree of Trial Court dismissing suit confirmed. (Paras 15, 16, 17, 20, 22, 23 and 24)
Facts of the case:
Present appeal is filed by defendants against order of Himachal Pradesh High Court dated 15.12.2014. Respondents are original plaintiffs who had filed the suit for declaration and specific performance. Trial Court dismissed the suit. However, first Appellate Court reversed finding of Trial Court and decreed suit. High Court, by impugned order, dismissed second appeal.
Findings of Court:
Neither compromise deed has been reduced to writing, nor it is recorded by the court. Mere statements of the parties before court about such said compromise, cannot satisfy requirements of Order XXIII Rule 3 of the CPC. Therefore, compromise decree is not valid.
Result : Civil Appeal allowed.
Legal Category Hierarchy
Table of Contents
2. Whether a suit dismissal based on oral statements constitutes a valid compromise decree transferring ownership and whether a sale deed executed pendente lite is hit by lis pendens. (Para 6 , 8 )
3. Dismissal of a suit based on oral statements does not transfer ownership from landowners to tenants; Order XXIII Rule 3 CPC requires a written, signed agreement. (Para 12 , 13 , 14 , 15 , 16 , 17 , 20 , 21 , 23 )
4. A valid compromise decree under Order XXIII Rule 3 CPC requires a lawful agreement in writing and signed by the parties; oral statements are insufficient. (Para 19 , 20 , 22 , 23 )
5. Appeal allowed — High Court and first Appellate Court orders set aside — Trial Court judgment dismissing the suit confirmed. (Para 24 )
6. What are the mandatory requirements for a valid compromise decree under Order XXIII Rule 3 of the CPC?
A valid compromise requires a lawful agreement or compromise in writing and signed by the parties, which must be proved to the satisfaction of the Court. Mere oral statements made by parties before the court are insufficient to satisfy these statutory requirements. (Para 19 , 20 , 22 , 23 )
7. Does the dismissal of a suit based on a settlement statement transfer ownership of the property to the defendants?
No. The dismissal of a suit based on statements of settlement does not automatically transfer ownership. If the defendants were tenants, the dismissal of the suit merely means their status as tenants continues unless ownership is transferred via a registered sale deed or a formal court declaration. (Para 14 , 15 , 16 )
8. When is a transfer of property pendente lite not hit by the doctrine of lis pendens under Section 52 of the Transfer of Property Act?
A transfer is not hit by the doctrine of lis pendens if the subsequent court order is not a decree on merits declaring specific rights of the parties. A simple dismissal of a suit does not abrogate the validity of a prior sale deed executed by the owner. (Para 17 , 18 )
JUDGMENT :
Vikram Nath, J.
Leave granted.
2. The present appeal is filed by defendants against the order of Himachal Pradesh High Court dated 15.12.2014. The Respondents are original plaintiffs who had filed the suit for declaration and specific performance. The Trial Court dismissed the suit. However, the first Appellate Court reversed the finding of Trial Court and decreed the suit. The High Court, by the impugned order, dismissed the second appeal.
3. Following are the facts leading to the Civil Suit in question:
On 27.12.1979, Mansha Ram, Dev Raj, Khazana Ram, Ramji Das and Bihari Lal (hereinafter referred as "Mansha Ram and others") filed a suit (Civil Suit No. 43 of 1983) for declaration and permanent injunction against Julfi Ram, Tihru Ram, Bakshi Ram-all three are sons of Khajana, Prem Chand-son of Julfi Ram, Kartar Chand-son of Bakshi Ram and Dharam Singh son of Nighu. Plaintiffs were the landowners and defendants were the co-tenants of the land. The Plaintiffs sought a declaration that they are owners in possession of suit land measuring 7 kanals 9 marlas. They also sought permanent injunction restraining defendants from interfering in the land in suit. The defendants contested the suit and stated that they are in cultivatory possession as tenants on payment. Thus, they claimed to be owners by virtue of tenancy.
4. Trial Court by order dated 11.04.1983, decreed the suit in favor of plaintiffs- Mansha Ram & others granting them both the reliefs of declaration and permanent injunction by holding that they are owners in possession. Aggrieved, all six defendants preferred an appeal before the District Judge. As one of the plaintiffs -Dev Raj had died during the pendency, his widow Asha Devi and his son Suresh Kumar were arrayed as Respondents in the First Appeal.
5. During the pendency of appeal, on 22.08.1983 Mansha Ram and others executed a sale deed in favour of Kartar Chand, Sansar Chand and Rajinder Kumar- three sons of Bakshi Ram for consideration of Rs. 12,500/-. The first Appellate Court, by order dated 20.08.1984, allowed the appeal, setting aside the decree of Trial Court in light of statements made by plaintiffs before the court. It noted that 'the plaintiffs have compromised the case and stated that they do not want to pursue with the suit and it to be dismissed.' Before the first Appellate Court, Julfi Ram, Tihru Ram, Bakshi Ram, Prem Chand and Kartar Singh made a joint statement on 20.06.1984 that they have reached a settlement with Respondents. They have also paid money to Mansha Ram and others and they shall be the owners and hold possession of the land in dispute. Thus, Suit filed by Plaintiffs be dismissed. Dharam Singh-son of Nighu recorded a separate statement to the same effect. On the other hand, Bihari Lal, Suresh Kumar (son of Devraj and holder of General power of attorney of Asha Devi), Ramji Das and Dhyan Chand made a statement that they have reached a settlement and have received money. Thus, possession and ownership of the land shall be with appellants/defendants. Mansha Ram and Khazana Ram also recorded their statements on 20.06.1984, that they have reached a settlement and the suit may be dismissed. These four statements are on record of the High Court and of this Court.
6. Appellants submit that Bakshi Ram's three son got exclusive possession and mutation in revenue records by virtue of the sale deed dated 22.08.1983. However, the Respondents submit that by virtue of dismissal of suit by first Appellate Court, all four brothers- Julfi, Tihru, Bakshi and Nighu became owners and the sale deed executed in favour of the three sons of Bakshi Ram shall be subject to compromise decree passed by first Appellate Court.
7. On 23.02.1988, the present suit (Civil Suit No. 41 of 1988) was instituted by Respondents/Plaintiffs- Julfi Ram, Prem Chand, Dharam Singh, Premi Devi, Atmi Devi, Asha Devi, Subhash Chand and Gian Chand-two sons of Nighu represented by their mother Premi Devi (hereinafter referred as "Julfi
