2009 Supreme(Kar) 221

High Court of Karnataka
THE HONOURABLE JUSTICE MR. S. ABDULNAZEER
Smt. Nancy Pais
Versus
S. Surendra & Another
R.F.A.No.74 of 2007
Decided on : 30-03-2009

Headnote:CODE OF CIVIL PROCEDURE, 1908 - Order 21, Rules 97 to 102: [S.Abdul Nazeer,J] Resistance to execution - Right to resistance execution - Held, Order 21 Rule 102 of the CPC states that nothing in Rules 98 and 100 shall apply to resistance or obstruction in execution of a decree for possession of immovable property by a person to whom the judgment debtor has transferred the property after the institution of the suit in which the decree was passed or to the dispossession of any such person. This Rule recognises the rule of lis pendens. Rules 97 to Rule 101 of Order 21 contains the provision enabling the Executing Court to deal with the situation when a decree holder entitled to possession of the property encounters obstruction from any person. If the resistance was made by a transferee pendente lite of the judgment debtor, the scope of adjudication would be whether he is such a transferee. If the finding is in the affirmative, the Execution Court has to hold that he has no right to resist the execution having regard to the language employed in Rule 102. On facts held, The appellant purchased the property from the second respondent during the pendency of the Suit. If that is so, holding a detailed enquiry or collection of evidence for adjudication of her right under Rules 98 to 100 of Order 21 of the CPC does not arise. The appellant has no right to resist or obstruct the execution of the decree in view of the clear language contained in Rule 102 Order 21 of the CPC.

       INDIAN CONTRACT ACT, 1872 - Section 2(i): [S.Abdul Nazeer,J] Void Contract - Enforceability - An agreement or compromise which is void or voidable - The validity of a consent Decree - Held, The Court can compromise a suit when it is proved to its satisfaction that a suit has been adjusted wholly or in part by any lawful agreement or a compromise, under Order 23 Rule-3 of the CPC. The explanation to the said provision states that an agreement or compromise, which is void or voidable under the Indian Contract Act shall not be deemed to be lawful within the meaning of the said Rule. Further, A consent decree is nothing but a contract between the parties superimposed with the seal of approval of the Court. The validity of a consent decree depends wholly on the validity of the agreement or compromise on which it is made. On facts held, After the amendment of Rule-3 of Order 23 of CPC, there is no bar for the Civil Court to record a compromise not only in respect of the subject matter of the suit but also extending beyond the subject matter of the suit. Since the compromise entered into between the parties is nothing but a fresh contract, Article-54 of the Limitation Act has no application. Thus, the compromise decree passed by the Court below is valid and is enforceable in law.

       TRANSFER OF PROPERTY ACT, 1882 - Section 52 :[S.Abdul Nazeer,J] Doctrine of Lis Pendens - Object of Section 52 - Principle of Equity and good conscience - Relevancy of - Held, The doctrine upon which the Section 52 of the Transfer of Property Act is based is that it would plainly be impossible that any action or suit could be brought to a successful termination if alienation pendent elite were permitted to prevail. The principle underlying the object of Section 52 is to maintain the status quo unaffected by the act of any party to the litigation pending its determination. It is in accordance with the principle of equity and good conscience or justice. The transferee pendente lite is bound by the decree just as much as he was a party to the suit. The principle of lis pendens being a principle of public policy, no question of good faith or bona fide arises. The effect of Section 52 is not to wipe out a sale pendent elite altogether but to subordinate it to the rights based on the decree in the suit. Further, The second respondent has sold the property in question in favour of the appellant when the Court below was holding an enquiry on the application filed by the respondents under Order 23 Rule 3 of the CPC. The Court below has decreed the suit. It is not the case of the second respondent that he has taken permission of the Court for alienation of the property. Though the appellant has asserted that the decree in question is a collusive decree, the same has not been established by her. Therefore, the sale deed executed by the second respondent in favour of the appellant dated 16.2.2006 is clearly hit by the doctrine of lis pendens and not binding n the first respondent - On facts held, A transferee pendent elite need not be made a party to the suit. She is bound by the decree in as much as she was a party to the suit. Section 52 of the Transfer of Property Act has an overriding effect and is not subject to Section 19(b) of the Specific Relief Act. Though Section 19(b) of the Specific Relief Act protects a transferee for value without notice, a transferee pendente lite is not entitled for such a protection. Section 19 of the Specific Relief Act can be enforced for good and sufficient reason. Appellant is not entitled to plead that she is a bona fide purchaser for value without notice of the litigation.

       LIMITATION ACT, 1963 - Article 54: [S. Abdul Nazeer, J] Period of Limitation for filing a Suit for Specific Performance of a contract - Applicability of Article 54 - Held, Article 54 of the Schedule to the Limitation Act provides the period of limitation for filing a suit for specific performance of a contract. The period of limitation is three years from the date fixed for performance or if no such time is fixed, when the plaintiff has notice that performance is refused. But, in the present case, the question is whether Article 54 has application at all? If the first respondent had lost the statutory remedy to enforce the agreement dated 27.11.1996 because of the limitation prescribed in Article 54, the Court could not have recorded the compromise on the basis of the said agreement. Such a compromise cannot be a lawful agreement between the parties. On facts held, The application for compromise was filed by the respondents in the suit on 1.9.2005. A compromise decree was passed on the basis of the said application on 18.7.2006. A compromise decree is a creature of an agreement on which it is based and is subject to all incidents of such agreement. It is a contract with the command of the Judge super-added to it. In other words, it is a fresh contract entered into between the parties super imposed with the seal of approval of the Court. Since, the compromise entered into between the parties is nothing but a fresh contract, Article 54 of the Limitation Act has no application.

       SPECIFIC RELIEF ACT, 1963 - Section 19 : [S. Abdul Nazeer, J] Enforcement of Subsequent Sale - Transfer of Property Act, 1882 -Section 52 - Doctrine of Lis-Pendens - Object of Section 52 - Principle of Equity and good conscience - Relevancy of - Held, The doctrine upon which the Section 52 of the Transfer of Property Act is based is that it would plainly be impossible that any action or suit could be brought to a successful termination if alienation pendent elite were permitted to prevail. The principle underlying the object of Section 52 is to maintain the status quo unaffected by the act of any party to the litigation pending its determination. It is in accordance with the principle of equity and good conscience or justice. The transferee pendente lite is bound by the decree just as much as he was a party to the suit. The principle of lis pendens being a principle of public policy, no question of good faith or bona fide arises. The effect of Section 52 is not to wipe out a sale pendent elite altogether but to subordinate it to the rights based on the decree in the suit. Further, The second respondent has sold the property in question in favour of the appellant when the Court below was holding an enquiry on the application filed by the respondents under Order 23 Rule 3 of the CPC. The Court below has decreed the suit. It is not the case of the second respondent that he has taken permission of the Court for alienation of the property. Though the appellant has asserted that the decree in question is a co9llusive decree, the same has not been established by her. Therefore, the sale deed executed by the second respondent in favour of the appellant dated 16.2.2006 is clearly hit by the doctrine of lis-pendens and not binding n the first respondent - On facts held, A transferee pendent elite need not be made a party to the suit. She is bound by the decree in as much as she was a party to the suit. Section 52 of the Transfer of Property Act has an overriding effect and is not subject to Section 19(b) of the Specific Relief Act. Though Section 19(b) of the Specific Relief Act protects a transferee for value without notice, a transferee pendente lite is not entitled for such a protection. Section 19 of the Specific Relief Act can be enforced for good and sufficient reason. Appellant is not entitled to plead that she is a bona fide purchaser for value without notice of the litigation.