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SMT. RAM KALI versus KULDEEP CHAN

High Court of Judicature at Allahabad

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Smt. Ram Kali v. Kuldeep Chan - SECOND APPEAL No. - 1758 of 1983 [2007] RD-AH 17979 (16 November 2007)

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HIGH COURT OF JUDICATURE AT ALLAHABAD

Reserved

Second Appeal No.1758 of 1983

Smt. Ramkali ..................................................................Defendant-Appellant

Versus.

Kuldeep Chand and others. .................................Plaintiff-Respondents

--------

Hon'ble Tarun Agarwala, J.

Before giving the facts arising out of the present Second Appeal, it is essential to give a brief background of the facts which led to the filing of the present suit and, consequently, the present appeal.

In 1932, Abdul Hai executed a mortgage in favour of Hazari Lal for a sum of Rs. 10,000/- repayable with interest in respect of certain properties which included a grove and a shop. Hajari Lal instituted a suit No.21 of 1946 for the recovery of Rs.14,987.50 due to him on the mortgage. In this suit, Hajari Lal prayed that 1/4 share of Abdul Hai be partitioned and a decree for the recovery of the amount be passed. The parties entered into a compromise which was recorded by the trial court on 23.3.1948 and, on 1.7.1948, the suit was decreed and the decree holder, namely, Hajari Lal became entitled to recover a sum of Rs.10,000/- alongwith interest @ 3% per annum. The court also appointed a Commissioner for the purposes of charging the property as specified in the plaint. Based on the aforesaid, a preliminary decree was drawn on 4.8.1948.

In the meanwhile, Abdul Hai died and the heirs of Abdul Hai sold a property, namely, a grove in favour of Jugal Kishore by means of a sale deed dated 21.3.1959. By another sale deed of the same date, i.e., 21.3.1959, the heirs of Abdul Hai also sold 1/4th portion of the shop to the sitting tenant, Mool Chand. In 1960, the tenant, Mool Chand died leaving behind Basant, Sukh Lal, Kamla Devi and Kaushalya, as his heirs and legal representatives.

On 3.3.1967, Hajari Lal entered into an agreement with Smt. Ram Kali, defendant No.1 to the effect that he, being the decree holder, would not proceed with the execution of the decree in suit No.21 of 1946 with respect to the property to be purchased by Smt. Ram Kali, defendant No.1 from the heirs of Abdul Hai, namely, the judgment debtor. Based on this agreement, the defendant No.1, Smt. Ram Kali purchased 3/4th share of the shop from the heirs of Abdul Hai, by means of a registered sale deed dated 3.3.1967.

On 20.7.1967, the decree holder Hajari Lal applied for the final decree under Order 34 Rule 5 of the C.P.C. which was drawn on 7.10.1967, and thereafter, the properties was put in auction in execution case No.4 of 1968.

On 11.4.1968, one of the property, namely, the grove was sold in auction to Fazal Ahmad. This was the property which was earlier purchased by Jugal Kishore by means of a sale deed dated 21.3.1959. Sri Jugal Kishore filed an objection on 13.4.1968 under Order 21 Rule 58 of the C.P.C. which was rejected and thereafter he filed a suit in 1970 for a declaration that he should be declared to be the owner on the basis of the sale deed dated 21.3.1959 and that the property could not be attached or auctioned. The said suit was dismissed in 1973 , against which, a First Appeal was filed which was also dismissed by the first appellate court by a judgment dated 1.7.1986. This judgment is reported in 1987 ALJ 27, Jugal Kishore and another vs. Smt. Aiysha Khatun and others. The first appellate court observed-

" the sale which the appellants obtained from the heirs of Abdul Hai on December 22, 1957 or subsequently on April 21,1959 ( Ex.15) is inescapably hit by lispendens. The effect of the rule is that this sale is rendered subservient to the rights of the parties to the action as determined by the judgment or decree. The sale cannot, in other words, serve to defeat the right which the decree-holder Hazari Lal acquired by virtue of the final decree in O.S.21 of 1946 to proceed in execution by auction sale of the property to recover his mortgage dues and the consequent title created in the auction purchaser- respondent as a result of the auction sale dated April 11, 1968."

Apart from the aforesaid property that was sold, the executing court also sold 1/4 share of the property in auction on 7.10.1968 to Kuldeep, the plaintiff in the present second appeal. This auction was confirmed by an order dated 16.11.1970.

The plaintiff Kuldeep is the auction purchaser of 1/4th share in the property bearing shop Nos. 335, 356, and 356/1 and filed a suit in the year 1971 for the partition of his 1/4th share in the shop and for its possession. The plaintiff contended that he had purchased 1/4th share in the property in the auction for a sum of Rs.5,000/- in execution case arising out of suit No.21 of 1946. The defendant No.1, Smt. Ram Kali contended in her written statement that she was the owner of 3/4th share in the property in question by means of a sale deed dated 3.3.1967 executed by the heirs of Abdul Hai and that she had no objection to the partition of 1/4th share of the plaintiff. The defendant No.1 further alleged that the predecessor of defendant Nos. 2 to 6, namely, Mool Chand was not a bonafide purchaser. The defendant Nos. 2 to 6 also filed their written statement and contested the claim of the plaintiff alleging that their predecessor, Mool Chand was a bonafide purchaser for value, and that, in their sale deed 21.3.1959, there was no mention about any charge on the property whereas, the sale deed executed in favour of the defendant No.1, indicates that the property was mortgaged in favour of the decree holder.

On the basis of the pleadings, various issues were framed. The trial court, after considering the evidence that was brought on the record, held that the predecessor of defendant Nos. 2 to 6 was not a bonafide purchaser and decreed the suit against the share of defendant Nos. 2 to 6. The trial court held that Hajari Lal had entered into an agreement not to execute the decree from the share of defendant No.1 and that only 1/4th share of the property, which did not include the share of defendant No.1, was put in execution.

The defendant Nos. 2 to 6, being aggrieved by the decree of the suit, filed an appeal which was allowed in part. The lower appellate court held that the agreement dated 3.3.1967 executed by Hajari Lal with defendant no.1, being paper No.67A, was not admissible in evidence as it was not registered under Section 17 of the Registration Act. The appellate court, however, decreed the suit on rateable distribution as per the provision of Section 82 of the Transfer of Property Act. As a result of this decree, a portion of the share of the defendant no.1 become liable to be included in the partition decree in favour of the plaintiff.

The defendant no.1, being aggrieved by the order of the appellate court, has filed the present second appeal which was admitted on the following substantial questions of law, namely;

"A. Whether the lower appellate court has misconstrued the provisions of Section 82 of Transfer Property Act in granting the rateable distribution?

B. Whether the agreement dated 3.3.67 paper No.67A was admissible in evidence in the absence of its registration.

C. Whether the Mool Chand, not being bonafide purchaser had any right objecting the sale by auction in favour of the plaintiff ?

D. Whether the auction sale being made in accordance with the final decree passed by the court making charge only on the 1/4th share of Mool Chand, heirs of Mool Chand had right to object the sale by auction?

Heard Sri Arvind Srivastava, the learned counsel for the defendant No.1/appellant, Shri Sharad Malviya, the learned counsel for defendant Nos. 2 to 6 and Shri K.K.Dubey, the learned counsel for the plaintiff/ opposite party.

After hearing the counsels at some length and upon considering the material brought on the record, this court is of the opinion that the second appeal is liable to be allowed and the order of the lower appellate court is liable to be set aside.

A perusal of the execution application indicates that 1/4th share of the property was put to auction. The application under Order 34 Rule 5 of the C.P.C. clearly indicated that 3/4th of the property in the share of defendant No.1 was to be excluded while executing the decree. Therefore, a specified portion of the property of the shop was put in execution which was purchased by the auction purchaser, namely, the plaintiff. The auction was made in accordance with the final decree which excluded the share of defendant No.1, namely, 3/4th share of the shop. The defendant Nos. 2 to 6, having stepped into the shoes of the mortgagor, cannot have a better title than that of original mortgagor. Consequently, they cannot allege that the property which their predecessor had purchased was not under a mortgage. In fact, the heirs of Mool Chand, namely, defendant Nos. 2 to 6 had no right to object on the execution of the decree since they had stepped into the shoes of the mortgagor.

With regard to another property that was put in execution, namely, the grove which was purchased by Jugal Kishore from the heirs of Abdul Hai, the High Court, held that the sale deed in favour of Jugal Kishore would not defeat the right of the decree holder Hajari Lal, who had put the property in execution for the recovery of his mortgage dues and, consequently, the title created on the auction purchaser could not be defeated on account of the sale deed in favour of the Jugal Kishore. In the present case, the appellant's case is similar. The heirs of defendant Nos. 2 to 6, namely, Mool Chand, purchased the property from the heirs of the mortgagor. Consequently, defendant Nos. 2 to 6, having stepped into the shoes of the mortgagor, cannot have a better title than that of the mortgagor, and the title created in favour of the plaintiff, being the auction purchaser cannot be defeated on account of the sale deed in favour of Mool Chand. The findings given in the case of Jugal Kishore by the High Court is squarely applicable to the defendant Nos. 2 to 6.

In view of the aforesaid, this court is of the opinion that Mool Chand, having stepped into the shoes of the mortgagor was not a bonafide purchaser and their heirs had no right to object to the sale made in the auction in favour of the plaintiff. The auction, being made in accordance with the final decree on the 1/4th share of the property, the heirs of Mool Chand had no right to object to the sale made pursuant to the auction. The question of law as framed aforesaid, is decided accordingly.

In the opinion of the court, the document dated 6.7.1967 paper No.67A was admissible in evidence and the court below committed an error in holding that the said document was required to be registered under Section 17 of the Registration Act. The document, paper No. 67A only contemplates that the mortgagee would not proceed against the share purchased by the defendant No.1. No right flows from the deed. Consequently, the document dated 6.7.1967 was not covered under the provisions of Section 17A of the Registration Act and was not required to be compulsorily registered. The finding of lower appellate court is manifestly erroneous in law.

In Mithilesh Kumar vs. Manohar Lal, AIR 1997 ( 9) SCC 54, the Supreme Court found that there was a restrictive clog on the exercise of the right over the property in which the respondents had undertaken for constructing the house or wall over the property purchased. The undertaking given by the respondents was with regard to the exercise of their right over the property. Since this undertaking was incapable of valuation, the Supreme Court, consequently held, that its value cannot be construed to be hundred rupees or more, and therefore, the agreement entered into by the respondent with the appellant was not required to be compulsorily registered under Section 17 (1)(b) of the Registration Act. The aforesaid judgment is squarely applicable to the present case. Hazari Lal, the decree holder placed a restricted clog on the exercise of his right over the property by not putting the property in execution which was purchased by defendant No.1. Such exercise of power by the decree holder was incapable of valuation and, in any case, was not required to be registered under Section 17(1)(b) of the Registration Act.

In N. Khadervali Saheb ( D) through LRs and another vs. N. Gudu Sahib ( D) through LRs and others, 2003 ( 2) AWC 1018, the Supreme Court held that the document which recorded the settlement pursuant to the dissolution of the partnership firm, was an award which was not required to be registered under Section 17 of the Registration Act since the document did not transfer or assign interest in any asset.

In V.B. Dharmyat ( deceased) through Lrs vs. Shree Jagadguru Tontadrya and others, 1999 (6) SCC 15, the Supreme Court held:

"that an agreement to lease under Section 2(7) of the Registration Act, 1908 must be a document which effects an actual demise and operates as a lease. An agreement between two parties, it was held, which entitles one of them merely to claim the execution of a lease from the other without creating a present and immediate demise in his favour is not an agreement to lease within the meaning of Section 2(7) of the Act."

Section 17(1) of the Registration Act evisages that any document which come within any of the enumerated instruments, is compulsorily required to be registered. Clause (b) provides that other non- testamentary instruments which purport or operate to create, declare, assign, limit or extinguish, whether in present or in future, any right, title, or interest, whether vested or contingent, of the value of one hundred rupees and upwards, to or in immovable property is required to be compulsorily registered, failing which the document could not be read in evidence in view of the prohibition contained in Section 49 of the Registration Act.

In the present case, the document in question, is not in the nature of a registered document. The question is, whether the document creates, declares, assigns, etc., any present or future right, title or interest of the value of one hundred rupees and upwards. In my opinion, the said document only places a restrictive clog on the exercise of the right of the decree holder in putting the property into execution. In my view, the document does not create any right in 'praesenti' nor was there any immediate demise of the property. It was only an executory agreement which was not capable of any valuation. Therefore the said document was not required to be compulsorily registered under Section 17(1)(b) of the Registration Act. The question of law, as framed aforesaid, is decided accordingly.

In my opinion, the provision of Section 82 of the Transfer of Property Act has no application to the present facts and circumstances of the case. It is open to the auction purchaser either to proceed against the whole property or against a part of such property. In the present case, the mortgagee executed his decree in respect of the portion of the property which was purchased by Mool Chand. The question of rateable distribution from the property of defendant No.1 which was not part of the execution proceeding is totally misplaced and without jurisdiction. Such direction could not be issued by the lower appellate court. This court, therefore, holds that the lower appellate court was in error in directing rateable distribution as per the provisions of Section 82 of the Transfer of Property Act.

In view of the aforesaid, the judgment of the lower appellate court cannot be sustained and is quashed and the decree passed by the trial court is restored. The Second Appeal is allowed with costs on Defendant Nos. 2 to 6.

Dated: 16th November 2007

SFH


Copyright

Reproduced in accordance with s52(q) of the Copyright Act 1957 (India) from judis.nic.in, indiacode.nic.in and other Indian High Court Websites

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