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Nathu Dhoju Gholap Vs. Ramchand Balchand - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtMumbai
Decided On
Case Number Second Appeal No. 312 of 1943
Judge
Reported inAIR1946Bom462; (1946)48BOMLR301
AppellantNathu Dhoju Gholap
RespondentRamchand Balchand
Excerpt:
.....that her husband was divided from his brother, defendant no. 2, and that she was entitled to her husband's property. defendant no. 2 appealed. during the pendency of the appeal, defendant no. 1 sold the property, the subject-matter of the litigation, to the plaintiff. the appeal ended in a compromise that there was no partition of the family property and that defendant no. 1 was entitled only to maintenance which was declared a charge on the property. it was found that the compromise was fraudulent and collusive. the plaintiff having filed a suit to recover possession of the property under the deed of sale, it was objected that the suit was affected by lis pendens:;(1) that the compromise being fraudulent and collusive did not affect the plaintiff's rights under the sale-deed and..........it. it is, therefore, clear that the defendants acted collusively and fraudulently in getting the appeal compromised, with the evident object of defeating the plaintiff's rights under the sale deed which he had obtained from, defendant no. 1. i, therefore, accept the concurrent finding of both the courts below that the compromise decree in appeal no. 297 of 1937 was collusive and fraudulent and is not binding on the plaintiff. it is true that the rule of us pendens applies even though the pending suit ends in a consent decree or a compromise decree, but the consent or compromise must be honest and not fraudulent or collusive. a person, who takes transfer of property which is the subject-matter of a suit during its pendency, takes the risk of losing it if the result of the suit goes.....
Judgment:

Lokur, J.

1. The suit out of which this appeal arises was filed by the plaintiff to recover possession of certain property which he had purchased from one Sheubai, defendant No. 1, on December 1, 1937. Defendant No 1 is the widow of defendant No. 2's brother Dhondiba. After Dhondiba's death defendant No. 1 claimed that she succeeded to his property as his heir. But defendant No. 2 claimed that Dhondiba had died in union with him and that the property in his possession came to him by survivorship. Defendant No. 1, therefore, filed suit No. 130 of 1936 against defendant No. 2 to recover possession of the property which she claimed to have been allotted to her husband's share. She succeeded in proving that her husband and defendant No. 2 were separate and a decree for possession of the property in suit was passed in her favour on September 25, 1937. Defendant No, 2 filed an appeal (No. 297 of 1937) against that decree in the District Court on November 5, 1937. When that appeal was pending, defendant No. 1 sold the property in suit to the plaintiff on December 1, 1937. But the plaintiff did not get himself impleaded in the appeal. As defendant No. 1 had no longer any interest in the property she did not appear in the appeal although its notice was served on her. The plaintiff filed the present suit on July 18, 1938, against both the defendants to recover possession of the property purchased by him. Defendant (No. 1, though served with the summons in the. suit, did not first appear. Defendant No. 2 was served with the summons and he appeared on December 7, 1938. On that day both the defendants engaged a common pleader and asked for time to put in a written statement. They were given time till December 22, 1938, and during the interval, both the defendants appeared in appeal No. 297 of 1937 which was still pending and put in a compromise application wherein it was admitted that defendant No. 1's husband, Dhondiba, had died in union with defendant No. 2, that defendant No. 1 was entitled only to maintenance and that defendant No. 2 was the owner of the entire property subject to defendant No. 1's right of maintenance. Her maintenance was made a charge on the property and she was paid Rs. 75 in cash for arrears of maintenance. The decree of the trial Court which was wholly in favour of defendant No. 1 was set aside and a decree in terms of the compromise was passed in the appeal on December 16, 1938. Thereafter the defendants put in their written statement in the suit on March 8, 1939, contending, that defendant No. 1 had no title to the property in suit, that it had been decided in. the previous litigation that her husband had died in union with defendant No. 2 and that as the plaintiff's purchase was pendente lite, it was subject to the decision in the Lippeal which was then pending. The trial Court upheld these contentions and dismissed the suit. But in appeal the learned First Class Subordinate Judge with appellate powers found it necessary to decide whether the compromise decree in appeal No. 297 of 1987 was collusive and fraudulent. He, therefore, framed an issue as to whether it was obtained by collusion and fraud by defendants Nos. 1 and 2 with a view to defeat the plaintiff's rights under his sale deed, and remanded the suit for a finding on it. The trial Court then recorded a finding on that issue in the affirmative and found that the compromise decree was not binding on the plaintiff. That finding, was accepted by the lower appellate Court and as the plaintiff's suit was not affected by the previous litigation, which ended in a compromise decree, the decree of the trial Court was reversed and the plaintiff was given a decree for possession, mesne profits and costs. Defendant No. 2 has now appealed against that decree and it is contended that the Courts below were wrong in holding that the compromise decree was collusive and fraudulent. That is a finding of fact and it is sufficiently justified by the circumstances disclosed in the case. Defendant No. 1 had succeeded in her suit against defendant No. 2 and obtained a decree for possession. Relying on that decree the plaintiff purchased the property from her but unfortunately the decree has been appealed against and at the date of the sale deed the appeal was pending so that the decree of the trial Court was not final and the appeal was only a continuation of the suit. Hence there was a lis pendens at the time of the plaintiff's purchase and under Section 52 of the Transfer of Property Act, 1882, he purchased the property subject to the final decision in that suit. He should have applied to the appellate Court to be joined as a respondent since he had by his purchase stepped into the shoes of defendant No. 1. But he did not do so, and as defendant No. 1 had no longer any interest in the property, she did not think it worth while opposing the appeal. She did not execute the decree of .the trial Court to recover possession of the property and the plaintiff had to file a fresh suit against both the defendants to enforce the sale deed. It is significant that although defendant No. 1 did not appear in the suit, she joined defendant No. 2 in engaging a common pleader after the summons in the suit was served on defendant No. 2 and both of them took time to put in a written statement. The appeal was still pending then and defendant No. 2 wanted to get it disposed of, before putting in a written statement in the plaintiff's suit. Both the defendants then put in a compromise application in the appeal, although defendant No. 1 had not appeared in the appeal till then, That application was put in just nine days after they took time in the suit for putting in their defence. It is, therefore, obvious that defendant No. 2 succeeded in persuading defendant No. 1 to admit that her husband had died in union with him, to give up all the contentions in the suit and be satisfied with the allowance of maintenance. She was not a loser by that compromise since she had already parted with her husband's property in favour of the plaintiff and had no longer any interest left in it. It is, therefore, clear that the defendants acted collusively and fraudulently in getting the appeal compromised, with the evident object of defeating the plaintiff's rights under the sale deed which he had obtained from, defendant No. 1. I, therefore, accept the concurrent finding of both the Courts below that the compromise decree in appeal No. 297 of 1937 was collusive and fraudulent and is not binding on the plaintiff. It is true that the rule of Us pendens applies even though the pending suit ends in a consent decree or a compromise decree, but the consent or compromise must be honest and not fraudulent or collusive. A person, who takes transfer of property which is the subject-matter of a suit during its pendency, takes the risk of losing it if the result of the suit goes against the party from whom he has taken the transfer. But he takes such a risk of an adverse decision obtained in a fair and legal manner. If the final decision in the pending litigation is brought about by fraud or collusion, it cannot be said that the Us pendens was fairly decided and that decision cannot affect the rights of the transferee pendente lite. Hence the plaintiff is not bound by the compromise decree in appeal No. 297 of 1937 although that appeal was pending when he purchased the property from defendant No. 1.

2. This, however, cannot dispose of this suit finally. Had. the compromise decree been fairly obtained or had it been held in the appeal that defendant No. 1's husband Dhondiba had, died in union with defendant No. 2 and that defendant No. 1 was not the owner of the property at the date of its sale to the plaintiff, then the plaintiff would have been bound by that decree and under the doctrine of Us pendens it would not have been open to him to plead that Dhondiba had died separated from defendant No. 2, But as the compromise decree in the appeal was the result of collusion and fraud,, it does not affect the plaintiff's rights under the sale deed and Section 52 of the Transfer of Property Act does not prevent him from ignoring the compromise decree and seeking to prove in spite of that decree that defendant No. 2 was separate from Dhondiba and that Dhondiba was the owner of the property in suit. By reason of the fraud and collusion the plaintiff is at liberty to lead evidence in spite of the compromise decree to prove that his vendor had a title to the property and that the sale deed passed by her conferred that title upon him. But this aspect of the case does not appear to have been considered by the Courts below and it was assumed that if the compromise decree of the appellate Court is not binding on the plaintiff, the plaintiff would be at once entitled to a decree in his favour on the strength of the decree of the trial Court. But that decree is no longer in existence and when the plaintiff purchased the property that decree was under appeal and in the appeal that decree was set aside. Although the reversal of the decree by the appellate Court be not binding on the plaintiff, yet the plaintiff cannot take advantage of the decree of the trial Court which no longer subsists. He must, therefore, prove independently of that litigation that defendant No. 1 had title to the property in suit. In his written statement defendant No. 2 did contend, that she had no title to the property and had no right to sell it and a specific issue was raised in the trial Court regarding the plaintiff's right and title to the property. But as both the Courts below did not think it necessary for the plaintiff to prove in this suit that Dhondiba and defendant No. 2 were separate by reason of the trial Court's decree in the previous litigation, no evidence was led by either party on that issue. I think that in the interest of justice 'both the parties should be allowed to adduce evidence to prove that defendant No. 1 was the owner of the property in suit when she sold it to the plaintiff. This issue will necessarily involve the question whether her husband Dhondiba had separated from defendant No. 2 and whether the property in suit had fallen to his share or was his self-acquisition.

3. I, therefore, remand the suit to the trial Court for findings on these issues. Both the parties are at liberty to adduce further evidence. The findings should be certified to this Court through the District Court within three months after the record is received by the trial Court.


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