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2025 Supreme(Mad) 3740

2025 MHC 239
IN THE HIGH COURT OF JUDICATURE AT MADRAS
R.N. MANJULA, J.
Chinnaraj (died) & Ors. - Appellants
Versus
Vembu & Ors. - Respondents
S.A.No.253 of 2011
Decided On : 02-01-2025

Advocates Appeared:
For the Appellants : Mr. P. Mohanraj.
For the Respondents: Mr. K. Venkatasubban for M/s.Sarvabhauman Associates.

Settlement deeds must respect prior court orders and creditor rights, and possession claims must consider prior judicial outcomes to uphold judicial integrity.

Headnote:(A) Civil Procedure Code - Second Appeal - Reversal of First Appellate Court’s decision regarding possession of property - Settlement deed executed in 1981 is upheld - Prior court orders related to auction purchase were overlooked by the First Appellate Court - Validity of settlement deed as it pertains to creditors and its consequences - Continuous possession of plaintiffs acknowledged for over 12 years. (Paras 2, 9, 11, 15)

(B) Property Law - Rights of minors in property transactions - Court auction proceedings and their binding nature on legal heirs - Earlier orders of dismissal upheld to maintain legal integrity without adjudicating merits improperly. (Paras 10, 14)

Facts of the case:
The plaintiffs claimed the suit property based on an 1981 settlement deed executed by their father, which was allegedly disregarded by the defendants, who purchased it in a court auction due to unsettled loans. The trial court dismissed the suit, but the First Appellate Court allowed it, prompting a second appeal by the defendants. The plaintiffs asserted their continued possession and recorded a settlement in their favor. (Paras 2-4)

Findings of Court:
The Court concluded that earlier auction proceedings and court orders confirming the auction purchaser's title were not properly considered by the First Appellate Court. The validity and enforceability of the settlement deed were reaffirmed, particularly concerning the rights and interests of minors. (Paras 15)

Issues: The key issue was whether the First Appellate Court was correct in granting the plaintiffs relief under the settlement deed despite previous court decisions confirming the auction sale. (Para 9)

Ratio Decidendi: The court determined that the First Appellate Court erred in its evaluation, not giving effect to the finality of earlier proceedings and existing sales that effectively transferred title away from the plaintiffs. The court upheld that the settlement deed should not disrupt creditor rights. (Para 15)

Result: Second Appeal allowed, restoring the trial court's decision and setting aside the First Appellate Court's decree.

Table of Content
1. ownership and possession of suit property. (Para 1 , 2)
2. validity of the settlement deed and previous court orders. (Para 3 , 4)
3. trial court and appellate court decisions. (Para 5 , 6)
4. dispute over the execution of the judgment. (Para 7)
5. appellate court’s jurisdiction and consequences of prior rulings. (Para 9 , 15)
6. outcome of the second appeal. (Para 10 , 16)
7. execution proceedings and implications of ownership. (Para 11 , 12 , 13 , 14)

JUDGMENT :

The defendants 2 to 5 are the appellants. The plaintiff has filed the suit for declaration and recovery of possession. The suit was dismissed by the trial Court. The second plaintiff has filed the first appeal and the first appeal was allowed by reversing the judgment of the trial Court. Aggrieved over the same, the defendants 2 to 5 have preferred this second appeal.

2. The short facts pleaded in the plaint by the plaintiff are as follows:

The suit property originally belonged to the plaintiff's father Perumal Gounder. The plaintiff's father Perumal Gounder, along with the plaintiff's mother as guardian of the plaintiff have executed a settlement deed dated 13.02.1981, in favour of the plaintiffs. The plaintiff's mother in her capacity as guardian for the plaintiffs, have accepted the settlement and had taken possession of the suit property. One Chellammal had brought the suit property for sale in order to recover the decree she had obtained in O.S.No.551 of 1981 filed against the plaintiff's father on a suit promissory note. The defendants declared that they have taken the suit property in a Court auction purchase on 23.04.1997 and attempted to enter into the suit property on 10.01.1998. Subsequent to the settlement deed dated 13.02.1981 the plaintiff's father did not have any title over the suit property and hence the Court auction in favour of the defendant will not bind the interest of the plaintiffs. The plaintiffs continued to be in enjoyment of the suit property with the knowledge of the defendant for more than 12 years and by virtue of the continuous possession also they have prescribed title over the suit property. As the defendants set up the title over the suit property, the plaintiffs have filed the suit for declaration along with the relief of recovery of possession in the event the defendant dispossesses the plaintiff's possession over the suit property.

3. The averments made in the written statement filed by the first defendant are as follows:

The suit property was originally owned by Perumal Gounder. The settlement deed dated 13.02.1981 is not valid and enforcible and it was not acted acted upon. The plaintiff's father Perumal Gounder had obtained loan from one Chellammal and had executed a promissory note. As he had defaulted to repay the loan, Chellammal filed a suit before the Thirukoilur Munsif Court in O.S.No.551 of 1981 and got a decree on 16.10.1982. Subsequently she had brought the property for Court auction and the first defendant had taken the suit property in Court auction on 19.10.1992 and the same was confirmed on 29.11.1996. Subsequently the 1st defendant filed a delivery petition in E.A.No.149 of 1997 and he had also obtained delivery through Court on 23.04.1997. The suit property is in enjoyment of the first defendant and patta has also been transferred in his name. Subsequent to the confirmation of the Court auction purchase, Perurmal Gounder has filed a suit in O.S.No.551 of 1981 to cancel the auction and the same was dismissed and Perumal Gounder has not taken any further action after the said petition was dismissed. Hence, the suit filed by the plaintiff is not maintainable and Perumal Gounder had created the settlement deed in collusion with his family members just to defraud the loans he obtained from third parties.

4. The second and third defendants have also filed written statement in the same line in which the first defendant had filed the written statement. The first plaintiff has also filed a claim petition on the bas

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