Full Judgment Text
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PETITIONER:
SUPREME GENERAL FILMS EXCHANGE LTD.
Vs.
RESPONDENT:
HIS HIGHNESS MAHARAJA SIR BRIJNATH SINGHJI DEO OF MAIHAR &OR
DATE OF JUDGMENT04/08/1975
BENCH:
BEG, M. HAMEEDULLAH
BENCH:
BEG, M. HAMEEDULLAH
GUPTA, A.C.
CITATION:
1975 AIR 1810 1976 SCR (1) 237
1975 SCC (2) 530
CITATOR INFO :
D 1981 SC 981 (2,3,4,12)
ACT:
Specific Relief Act, 1877_S. 42-Scope of Transfer of
Property Act s. 52 scope of.
HEADNOTE:
The plaintiff-respondents was a mortgagee in respect of
a cinema theater of which the appellant claimed to be a
lessee in occupation. A compromise decree . was passed on
7th May, 1960 in the suit filed by the plaintiff-respondent
against the mortgagor be which it was agreed that the
amounts due would be released by the sale of the theater.
The Central Bank of India, another creditor of the
mortgagor, assigned its rights under the decree to the
plaintiff-respondent. The theater was attached in the course
of the execution of the decree. The original lease or 1940
which the appellant company had entered into, expired in
1946 but the company continued as a tenant holding over
until the impugned lease deed of 1956 was executed. The
appellant company filed a suit in 1954 for the specific
Performance of the agreement to lease. The lease deed of
1956 purported to carry out the terms of that compromise
decree. In this suit the plaintiff-respondent was not
imploded as a party. The plaintiff-respondent claimed that
the lease of 1956 was void as it was struck by ss. 52 and
65A of the Transfer of Property Act and s. 64 of the Code of
Civil Procedure. The appellant company on the other hand,
claimed that a suit of the nature filed by the plaintiff
respondent did not lie as it fell outside the purview of s.
42 of the Specific Relief Act, 1877. The trial court decreed
the plaintiff-respondents suit. The appellant’s appeal was
dismissed by the High Court.
Dismissing the appeal,
^
HELD: (1) The circumstances in which a declaratory
decree under s. 42, Specific Relief Act should be awarded
is a matter of discretion depending upon he facts of each
case. A complete stranger whose interest is not affected by
an other’s legal character or who has no interest in
another’s property could not get a declaration under s. 42,
Specific Relief Act with reference to the legal character or
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the property involved. Such is not the present case. The
plaintiff respondent had not only the rights of a mortgagee
decree-holder with regard to the property involved, but he
was also the assignee of the rights of the Bank; . which
had got the property in question attached in execution of
its be fore he filed his suit, The plaintiff-respondent
possessed sufficient legal interest in the theater as a
mortgagee are well as an assignee of a decree-holder, who
had got the property attached be fore he filed his suit, so
as to enable him to sue for- the declarations he sought. Me
was not seeking a merely whimsical or eccentric or an
unreasonable declaration of a right in property with no
enforceable legal claims over it which could remain
unafrected by the appellant’s claims as a lessee. [242G-
243C] .
Sheoparsan Singh & ors. v. Ramnandan Singh (since
deceased) & ors. 43 I.A. 91 held inapplicable.
Deokali Koer v. Kedar Nath ILR 39 Cal. 704 @ 707. Bai
Shri Vaktrba Thakore Agarsinghji Raisinghji ILR 34 Bombay
676 @ 680; Kisholi Lal v. Beg Raj & ors AIR 1952 Punjab 387
and Ramaraghava Reddy & ors. v. Konduru Seshu Reddy & 2 ors.
[1966] (Suppl.) SCR p. 270 @ 277 referred to.
(2) The plaintiff needed a declaration and in the
circumstances of the case he declaration sought for could
not be reasonably denied to him. From the pleadings it is
clear that the appellant had actually denied the plaintiff-
respondent’s .. rights as a mortgagee and also the validity
of the compromise decree. The respondents had reasonable
grounds to apprehend that the appellant will rely upon s
alleged lease to resist delivery of actual possession to an
auction purchaser.
The existence of lessee rights would certainly affect the
price which an auction purchaser would be prepared to pay
for the property. [243C-F] 2-L839Sup.CI/17
238
(3) As the special doctrine of lis pendens is
applicable the purported lease of 1956 was availed from the
outset. The lease of 1956 purported to create entirely new
rights purported lite. It was therefore struck by the
doctrine of lis pendens embodied in s. 52 of the Transfer of
Property Act. The terms of the 3 compromise decree in the
appellant‘s Suit against the mortgagor and the lease deed of
1956 purported to confer upon the appellant new rights.
There are good deed for suspecting that the compromise in
the suit for specific performance was adopted as a device to
get round legal difficulties in the execution of the lease
of ]956 in favour of the appellant company. [243G-244A, C] ,
B
Bishan Singh & ors. v. Khazan singh & Anr. [1959] SCR
878 and Jayaram -Mudaliar & ors.,... [1973] (1) SCR 139,
referred to.
(4) The lease of 1956 was struck by the provisions of
s. 64 C.P.C. Section 64 constitutes a special application of
the doctrine of lis pendens in the circumstance specified
there. The order of the trial court shows that the
compromise had been arrived at between the decree-holder and
the judgment-debtor under which the decree-holder had agreed
to lift attachment of property except with regard to the
theater which was to continue. It is, therefore, difficult
to holder had that the concurrent findings of the trial
court and the High Court that the theater was attached in
execution of a decree and that this attachment was in
existence when the impugned lease was executed in 1956 are
erroneous. [244G-245A]
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JUDGMENT:
CIVIL APPELLATE Jurisdiction: Civil Appeal No. 1041 of
1968.
Appeal by Special Leave from the Judgment and Decree
dated the 30th day of August, 1967 of the Madhya Pradesh
High Court in First Appeal No. 8 of 1966 and
Special Leave Petitions (Civil) Nos. 2494 & 2533 of
1974
From the judgment and order dated the 30th September,
1974 of the Madhya Pradesh High Court in Civil Review No.
456 of 1974.
D. V. Patel, P. R. Naolokar, H. K. Puri and K. K.
Mohan, for the appellant (In C.A. No. 1041/68).
A. K. Sen . K. Gambhir and K. P. Gupta, for respondent
no. (V) & 2.
T. V. S. N. Chari and Urmila Sirur, for L.Rs of
respondent 3 (In C.A No. 1041/68).
D. V. Patel, N. M. Ghatate, 5. Balnkrishnan and P. R.
Naolakar for petitioners (In S.L.Ps.).
A. K. Sen, S. K. Mukherjee, K. P Gupta and S. K.
Gambhir, for respondent No. 1 (In both the S.L.Ps.)
T.V. S. N. Chari and Urmila Sirur, for respondent no. 2
(In both the S.I .Ps).
The judgment of the Court was delivered by
BEG, J. The plaintiff-respondent had filed a suit in
the District Judge’s Court at Jabalpur claiming a
declaration that a lease executed in favour of the
Defendant-Appellant, M/s. Supreme General Films Exchange
Ltd., (hereinafter referred to as ’the Company’), in respect
of Strider Vilas Theater (now known as Plaza Talkies) by its
former owners. Jiwan Das Bhatia and his sons (hereinafter
referred to as ’the Bhatias’), is void and ineffective
against the plaintiff’s rights under
239
decrees obtained in Civil Suit No. 15A of 1954 dated 7-S-60
and in Civil Suit No. 3B of 1952 dated 20-4-1954 in
execution of which the Theater had been attached. The
plaintiff wanted the declaration also to make it clear that
an auction purchaser, purchasing the theater in execution of
either of the two decrees, gets rights free from any
obligation towards the Defendant-Appellant under the void
lease
The former owners of the thwarter, the Bhatias, had
borrowed Rs. 2,50,000/- from the Plaintiff-Respondent, a
Maharaja, against the security of bales of cotton. On 29-12-
1951, they executed a registered mortgage deed in respect of
the Plaza Theater in favour of the plaintiff as the price of
pledged goods was insufficient to satisfy the dues. The
plaintiff, unable to recover the amount due, had brought
Civil Suit No. 15A of 1954 in which a compromise decree was
passed on 7-5-1960, in terms of an agreement between the
parties that amounts clue will be realized by the sale of
Plaza theater.
The Central Bank of India, another creditor of Bhatias,
had brought Civil Suit No. 3B of 1952 and obtained a decree
for Rs. 1,24,000- on 29-4-]952. Rights under this decree
were assigned in favour of the plaintiff-respondent. The
Plaza theater, together with other properties of Bhatias,
was attached on 4-5-1955 in the course of execution of that
decree.
The appellant company claimed to be a lessee in
occupation of the theater where it had carried on the
business of running a Cinema under an unregistered lease
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obtained on 27-2-1940. The lease of 1940 had expired on 10-
4-1946. The Company continued as a tenant holding over until
the impugned lease deed of 30-3-1956 was executed. If this
was a valid lease, it would have conferred upon the company
the right to be a tenant of the property under the lease for
eight years, from 10-2-1956 to 10-2-1964, with an option for
a renewal until 10-2-1970. This lease was executed after the
company had filed a suit No. 16A of 1954) on 20-11-1954 for
the specific performance of an agreement to lease contained
in a letter dated 19-7-1948. A compromise decree was passed
on 24-3-1956 in this suit also. the lease deed of 30-3 1956
purported to carry out the terms of that compromise decree
passed in a suit in which the plaintiff was not impleaded at
all.
The plaintiff’s case was that the lease of 30-3-1956
was void as it was struck by three statutory provisions,
namely, section 52 of the Transfer of Property Act, Section
65A of the Transfer of Propertied Act, and Section 64 of the
Civil Procedure Code. The defendant-appellant company, in
addition to denying the alleged rights of the plaintiff to
the benefits of these provisions, pleaded that a Suit of the
nature filed by the plaintiff did not lie at all as it fell
outside the purview of Section 42 of the Specific Relief
Act, 1877, altogether.
The Trial Court and the High Court, after having over-
ruled the pleas of the defendant-appellant, had decreed the
plaintiff’s suit. The defendant company obtained special
leave to appeal to this Court under Article of the
Constitution
240
Learned Counsel for the appellant company tried to
persuade us to A hold that the plaintiff had neither a legal
character nor any such present right in any property for
which a declaration could be granted under Section 42 of the
Specific Relief Act 1877 (re-enacted as Section 34 of the
Specific Relief Act of 1963). Furthermore, he contended that
the defendant-company had never denied any of the rights of
the plaintiff. Finally, he submitted that, ill any case, no
declaration at all was needed by the plaintiff if the lease
of 1956, executed by the former owners of the theater in
favour of the defendant-appellant, was void. ’these
arguments rest on the assumption that no declaratory relief
can be granted outside the ambit of Section of the Specific
Relief Act, 1877 which read as follows:
"42. Discretion of Court as to declarations of
status or right.. Any person entitled to any legal
character, or to any right as to any property, may
institute a suit against any person denying, or
interested to deny, his title to such character or
right, and the Court may in its discretion make therein
a declaration that he is so entitled, and the plaintiff
need not in such suit ask for any further relief:
Bar to such declaration.. Provided that no Court
shall make any such declaration where the plaintiff,
being able to seek further relief then a mere
declaration of title, omits to do so.
Explanation.... A trustee of property is a "person
interested to deny" a title adverse to the title of
some one who is not in existence, and for whom, if in
existence, he would be a trustee".
Learned Counsel for the appellant sought to support his
arguments by citing: Deokalikoer v. Kedar Nath(i) Sheoparsan
Singh & ors. v. Ramnandan Singh (since deceased) & ors.(2);
Bai Shri Vaktuba v. Thakore Agarsinghji Raisinghji(3);
Kishori Lal v. Beg Raj & ors.(4)
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Deokali Koer’s case (supra) arose out of a dispute on
the amount of court fee payable. It was observed there that
the history of "decrees merely declaratory" indicated that
these were innovations given authoritative sanction in
England by Section 50 of the Chancery Procedure Act, 1852.
It was pointed out that Section 15 of the Civil Procedure
Code of 1852 extended this recognition to decrees in suits
in this country by enacting that "no suit shall be open to
objection on the ground that a merely declaratory decree or
order is sought thereby and it shall be lawful for the Civil
Courts to make binding declarations of right without
granting consequential relief". This provision was repealed
by Act 10 of 1877 as this form of relief was recognized by
Section 42 of Specific Relief Act I of 1877 subject to the-
limitation indicated there. Jenkins C.J., explained the new
provision as follows (at p. 709):
241
"The terms of the section are not a precise
reproduction of the provision contained in the Act of
1859 and the English Law: in one direction they are
more comprehensive, in an other more limited. It is
common tradition that the section was designed to be a
substantial reproduction of the scotch action of
declaration, but whether this be so or not is of no
great moment. We have to be guided by its provisions as
they are expressed. the section does not sanction every
form of declaration, but only a declaration that the
plaintiff is entitled to any legal character or to any
right as to any property; it is the disregard of this
that accounts for the multi form and, at times,
eccentric declarations which find a place in Indian
plaints"
In Deokali’s case (supra), the learned Chief Justice
pointed out that one declaration sought by the plaintiff
there seemed designed to get round the need to set aside a
decree on grounds of fraud and collusion. He held two other
declarations sought to be vague. He, how ever, explained (at
p. 710):
"I would only add this that the limit imposed by
Section 42 is on decrees which are merely declaratory,
and does not expressly extend to decrees in which
relief is administered. and declarations are embodied
as introductory to that relief. For such declarations
legislative sanction is not required: they rest on long
established practice. But for all that the Court should
be circumspect and even chary as to the declarations it
makes: it is ordinarily enough that relief should be
granted without the declaration".
In Deokali’s case (supra), the plaintiff’s suit was not
thrown out on a preliminary ground, but the plaintiff was
given an opportunity. to amend the plaint by asking for a
consequential relief for setting aside the impugned decree
and paying an additional court fee. The case could have only
an indirect bearing on the case now before us where no
question of a payment of any additional court-fee after
adding a consequential relief involved arises. The
observations made ill Deokali’s case must be read in the
context of what arose for decision there.
In Sheoparsan Singh & Ors. case (supra), what was
really held by the Privy Council was that a grant of probate
under the Probate and Administration Act (V of 1881), which
operated as a judgment in rem, could not be collaterally
assailed by a suit for a declaration brought by reversioners
seeking to question the will. Sir Lawrence Jenkins who had,
incidentally, decided Deokali Koer’s case (supra) too said
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(at p. 97):
"It is not suggested that in this litigation the
testamentary jurisdiction is, or can be, invoked, and
yet there can be no doubt that this suit is an attempt
to evade or annul the adjudication in the testamentary
suit, and nothing more."
242
We think that the decision in this case also does not assist
the appellant much.
In Bai Shri Vaktuba’s case (supra), the Bombay High
Court held that a Talukdar plaintiff could bring a suit for
a declaration and an injunction to restrain the defendant
from claiming that he was the plaintiff’s son. Learned
Counsel for the appellant, however, relied upon the
following passage from it (at p. 650):
"It has long been established that the general
power vested in the Courts in India under the Civil
Procedure Code to entertain all suits of a civil nature
excepting suits of which cognizance is barred by any
enactment for the time being in force, does not carry
with it the general power of making declarations except
in so far as such power is expressly conferred by
statute."
Kishori Lal’s case (supra) was cited to show that
declaratory decrees falling outside Section 42 of the
Specific Relief Act are not permissible because Section 42
Specific Relief Act is exhaustive on this subject. This view
must be held to have been rejected by this Court when it
declared in Veruareddi Rmaranghava Reddy & Ors. v. Konduru
Seshu Reddy & 2 ors (1) (at p. 277)
"In our opinion, S. 42 of the Specific Relief Act
is not exhaustive of the cases in which a declaratory
decree may be made and the courts have power to grant
such a decree independently of the requirements of the
section It follows, therefore, in the present case that
the suit of the plaintiff for a declaration that the
compromise decree is not binding on the deity is
maintainable as falling outside the purview of S.. 42
of the Specific Relief Act".
The result is that Section 42 merely gives statutory
recognition to a well-recognised type of declaratory relief
and subjects it to a limitation, but it cannot be deemed to
exhaust every kind of declaratory relief or to circumscribe
the jurisdiction of Courts to give declarations of right in
appropriate cases falling outside Section 42.
We, think that the circumstances in which a declaratory
decree under Section 42 should be awarded is a matter of
discretion depending upon the facts of each case. No doubt a
complete stranger whose interest is not affected by
another’s legal character or who has no interest in
another’s property could not get a declaration under Section
42 Specific Relief Act with reference to the legal character
or the property involved. Such, however, is not the case
before us. The plaintiff-respondent, in the case before us,
had not only the rights of a mortgagee decree-holder with
regard to the property involved, but he was also the
assignee of the rights of the Bank which had got the
property in question attached in execution of its decree. We
find, from connected
243
special leave petitions against orders under o. 21, Rule 95,
Civil Procedure Code that the plaintiff’s wife became the
auction purchaser of this property during the pendency of
the litigation now before us. At the time when he filed the
suit the plaintiff may have been looking forward to
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purchasing the property. Although, the mere possibility of
future rights of an intending purchaser could not, by
itself, be enough to entitle him to get a declaration
relating to a purported lease affecting the right to possess
and enjoy the property, yet, we think that the plaintiff
possessed sufficient legal interest in the theater, as a
mortgagee as well as an assignee of a decree holder who had
got the property attached before he filed his suit, so as to
enable him to sue for the declarations he sought. He was not
seeking a merely whimsical or eccentric or all unreasonable
declaration of a right in property with no enforceable legal
claims over it which could remain unaffected by the
defendant-appellant’s claims as a lessee.
Suriya Kumar Dhar v. Girish Chandra Ghose & Anr.(1),
was cited to contend that the declaration sought by the
plaintiff was unnecessary if the lease or the defendant-
appellant was void. We find, from the pleadings in the case
before us, that the defendant-appellant had actually denied
the plaintiff’s rights as a mortgagee and also the validity
of the compromise decree in suit No. 15A of 1954. No doubt
the plaintiff had not sought a decree for possession as that
could not be granted at the time when the suit was filed.
Nevertheless, he had reasonable grounds to apprehend that
the defendant-appellant company will rely upon its alleged
lease, as it did, in the course of execution proceedings, to
resist delivery of actual possession to an auction
purchaser. The existence of lessee rights would certainly
affect the price an auction purchaser would be prepared to
pay for the property, or, in other words, what a mortgagee
or one who had got the property attached could realize for
the property to satisfy his dues. Thus, the plaintiff needed
the declaration; and, in the circumstances of the case, the
declarations sought for could not be reasonably denied to
him.
The contention that the case fell outside the purview
of Section 52 of the Transfer of Property Act as the lease
was executed in purported satisfaction of an antecedent
claim rests upon the terms of an agreement of 1948, embodied
in a letter, on the strength of which the defendant-
appellant had filed his suit for specific performance. We
find that the terms of the compromise decree in that suit
and lease-deed of 1956 purported to confer upon the
defendant-appellant new rights. Indeed, there are good
grounds for suspecting that the compromise in the suit for
specific performance was adopted as a device to get round
legal difficulties in the execution of the lease of 1956 in
favour of the defendant-company. We are unable to accept the
argument, sought to be supported by the citation of Bishan
Singh & Ors. v. Khazan Singh & Anr.(2), that the lease was
merely an enforcement of an antecedent or pre-existing
right. We think that it purported to create entirely new
rights pendente lite. It was, therefore, struck by the
doctrine of lis-
244
pendens, as explained by this Court in Jayaram Mudaliar v.
Ayyaswami & Ors.(1), embodied in Section 52 of the Transfer
of Property Act.
An alternative argument of the appellant was that a
case falling within Section 65A(2)(e) of the Transfer of
Property Act, confining the duration of a lease by a
mortgagor to three years, being a special provision,
displaces the provisions of Section 52 of the Transfer of
Property Act. This argument overlooks the special objects of
the doctrine of lis pendens which applies to a case in which
litigation, relating to property in which rights are sought
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to be created pendente lite by acts of parties, is pending.
Moreover, for the purposes of this argument, the defendant-
appellant assumes that the provisions of Section 65A(2)(e)
Transfer of Property Act are applicable. If that was so, it
would make no substantial difference to the rights of the
defendant-appellant which would vanish before the suit was
filed if Section 65A applies We, however, think that, as the
special doctrine of lis pendens is applicable here, the
purported lease of 1956 was invalid from the outset. In this
view of the matter, it is not necessary to consider the
applicability of Section 65A(2) (e), which the defendant-
appellant denies, to the facts of this case.
As regards the applicability of Section 64, Civil
Procedure Code, we find that parties disagree on the
question whether the attachment made by the Central Bank on
20-4-1955, in execution of the decree of which the
plaintiff-respondent was the assignee, existed on the date
the impugned lease of 30-3-1956. Learned Counsel for the
appellate relied upon the terms of an order recorded on the
order sheet, in the Court of Additional District Judge,
Jabalpur, in Civil Suit No. 3B of 1952, on 25-1-1956,
showing that, in view of the stay order received from the
High Court, execution could not proceed. The order sheet,
however, also contains the enigmatic statement that
execution was dismissed as infructuous but the attachment
was to continue for six months. The High Court had treated
the last part of the statement in the order sheet as void
and ineffective presumably on the ground that the Additional
District Judge had no jurisdiction either to lift the
attachment or to dismiss the execution proceedings after the
High Court had given its order staying all further action in
execution proceedings. The terms of the High Court’s order
are not evident from anything placed before us. On the other
hand, learned Counsel for the plaintiff-respondent relies
upon a subsequent order of the same Court, passed on 30-4-
1960, in the same suit. This order shows that a compromise
had been arrived at between the decree holder and the
judgment debtor under which the decree holder had agreed to
lift attachment of property except with regard to Plaza
Talkies which was to continue. We are, therefore, unable to
hold that the concurrent findings of the Trial Court and the
High Court, that the Plaza Talkie was attached in execution
of decree in suit No. 3B of 1952 on 4-5-1955 and that this
attachment was in existence when the impugned lease was
executed on 30-3-1956, are erroneous. On these findings, the
lease of 1956 was certainly struck by the provisions of
Section 64 Civil procedure Code also. Section 64, Civil
Procedure Code, in fact, constitues
245
an application of the doctrine of lis pendence in the
circumstance specified there.
For the reasons given above, we dismiss this appeal
with costs.
ORDER
In view of our judgment in Civil Appeal No. 1041 of
1968, delivered today, we think that these Special Leave
Petitions (Civil) must be and are hereby dismissed
P.B.R.
246