Full Judgment Text
2024 INSC 315
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.6884 OF 2012
THE STATE OF MADHYA PRADESH …APPELLANT
VERSUS
SATISH JAIN (DEAD)
BY LRS & ORS. …RESPONDENTS
J U D G M E N T
VIKRAM NATH J.
1
1. The Appellant-State of Madhya Pradesh -Defendant
in the Original Suit filed by Satish Jain (Respondent
No.1), since deceased, represented by his legal heirs,
is in appeal assailing the correctness of the
judgment and order dated 14.11.2005 passed by the
Madhya Pradesh High Court allowing Civil Revision
Signature Not Verified
Digitally signed by
Neetu Khajuria
Date: 2024.04.18
18:57:53 IST
Reason:
1
Hereinafter referred to as the, “State-Appellant”
Civil Appeal No. 6884 of 2012 1
No. 201 of 2005, titled “Satish Jain versus Rama &
Ors.”, whereby the High Court set aside the order of
the Trial Court dated 22.12.2004, and further
directed the Trial Court to proceed in accordance
with law to implement the award of the Arbitrator. It
also rejected the objections of the appellant dated
09.11.2004, and further the order rejecting the
report of the Arbitrator was also set aside. The
operative part of the impugned order as contained in
the paragraph 27 thereof is reproduced hereunder:
“27. Therefore, the order under revision is
set aside. The objection dated
09.11.2004 filed by respondent no.2
stands dismissed. The order rejecting
the report of the arbitrator is also set
aside. The Trial Court shall proceed
further according to law for
implementing the award.”
2. The relevant facts giving rise to the filing of the
present appeal are briefly stated hereunder:
Civil Appeal No. 6884 of 2012 2
(i). Satish Jain s/o Dayanand Jain instituted a
civil suit impleading one Rama s/o
Parasram as defendant No.1 and State of
Madhya Pradesh through Collector, Bhopal
as defendant No.2 praying for a decree of
declaration, permanent injunction and
mandatory injunction. It was registered as
C.S. No. 65A of 1990. The basis of the claim
was that the property in dispute being
Khasra Nos. 48 & 49 area 3.53 acres
situated in Village Halalpur, Tehsil Huzur,
District Bhopal was owned by the State of
Madhya Pradesh. However, defendant No.1
was enjoying continuous and peaceful
adverse possession over the suit land for the
last 50-60 years and as such has perfected
his rights by adverse possession and had
become the owner of the land.
Civil Appeal No. 6884 of 2012 3
(ii). It was further alleged that defendant No.1
has transferred all his rights, title, and
interest over the suit land in favour of the
plaintiff and had also handed over
possession of the suit land on 05.09.1988.
(iii). Thereafter the plaintiff had erected wired
fencing on 06.09.1988, and had been
enjoying possession of the suit land.
(iv). It is further alleged in the plaint that
defendant No.1 was likely to transfer the
rd
said land again in favour of the 3 party and
he also came to know that some officers and
employees of the State (defendant No.2) had
visited the suit land and tried to remove the
fencing. In such circumstances, the plaintiff
was compelled to institute the suit for
declaration, permanent injunction and
mandatory injunction.
Civil Appeal No. 6884 of 2012 4
(v). According to the plaintiff, the cause of
action arose on 07.10.1988, and again on
11.10.1988 when the officers/employees of
the State tried to remove the fencing.
(vi). The Trial Court decreed the suit ex-parte
vide judgement and order dated
22.06.1990.
(vii). The State preferred an appeal under Section
2
96 of the Code of Civil Procedure, 1908
which was dismissed on the ground of delay
th
of 8 days only by the IV Additional District
Judge, Bhopal.
(viii). The State preferred a civil revision before
the High Court which was registered as Civil
Revision No. 300 of 2002. The said revision
was allowed by the High Court vide order
dated 13.08.2003. It set aside the order of
2
In short, “CPC”
Civil Appeal No. 6884 of 2012 5
the Appellate Court dated 11.05.1991,
rejecting the application under Section 5 of
the Limitation Act. It also condoned the
delay of 8 days after allowing the application
for condonation of delay, and further
directed the Appellate Court to hear the
parties on merits and decide the appeal in
accordance with law.
(ix). The said appeal was allowed vide order
dated 09.01.2004 and the case was
remanded to the Trial Court for deciding the
same on merits after providing reasonable
time to the State to file its written
statement. The said suit is still pending
before the Trial Court.
(x). It would be worthwhile to mention that the
State has filed its written statement after
remand by the Appellate Court.
Civil Appeal No. 6884 of 2012 6
(xi). In the meantime, it appears that the suit
land was allotted to the Bhopal Municipal
3
Corporation for constructing a bus stand.
There is an agreement dated 30.07.1991
entered between BMC and the plaintiff that
the plaintiff would vacate the suit land,
allowing the BMC to construct the bus
stand, and in lieu, separate plots would be
allotted to the plaintiff.
(xii). It is also alleged that some allotments were
made by BMC in favour of the plaintiff but
they were later on cancelled.
(xiii). After remand, written statement was filed
by the State. Further, BMC was impleaded
as defendant No.3 by order of Trial Court
dated 13.03.2004.
3
In short, “BMC”
Civil Appeal No. 6884 of 2012 7
(xiv). The appellant filed an application under
Order VII Rule 11 CPC and also under Order
VI Rule 17 CPC on 17.08.2004.
(xv). Further BMC filed an application under
Section 89 of the CPC stating that under the
agreement of 30.07.1991 plaintiff be
directed to pay Rs. 30,00,000/- (Rupees
Thirty lacs only) against the value of the
allotted land. It was further stated that in
case the full amount is deposited, BMC is
ready to fulfil its obligations. It therefore
prayed that the parties may be relegated to
a Mediator/Arbitrator for settlement of the
dispute under Section 89 CPC. This
application is dated 27.08.2004.
(xvi). The Trial Court, by order dated 17.09.2004,
referred the matter to Shri Hemant Kumar.
The said Arbitrator/Mediator in less than a
Civil Appeal No. 6884 of 2012 8
month gave an award/report dated
14.10.2004. In brief, the said award was to
the effect that the plaintiff would pay Rs.
30,00,000/- to BMC and such lease rent as
maybe determined, and in turn the BMC
would fulfil its obligation of allotment of
land, as per the agreement dated
30.07.1991.
(xvii). The Appellant-State of Madhya Pradesh
filed objections dated 09.11.2004 to the
award of the Arbitrator dated 14.10.2004
praying for setting aside the same on
various grounds. It was specifically stated
in the objections that the ownership of the
land still remains with the State of Madhya
Pradesh and that BMC had no business or
right to deal with such land without the
written consent or approval of the State.
Civil Appeal No. 6884 of 2012 9
(xviii). The Trial Court, after inviting objections
to the application of the State dated
09.11.2004, allowed the same by order
dated 22.12.2004. Aggrieved by the same,
the plaintiff preferred a civil revision, which
has since been allowed by the impugned
order, giving rise to the present appeal.
3. We have heard learned counsels for the parties and
perused the material on record.
4. It is an admitted position that the suit is still
pending before the Trial Court. The plaintiff has not
been granted any declaration as such till date. The
ex-parte decree having been set aside, there was no
occasion for the plaintiff to further act upon the
agreement dated 30.07.1991 since no rights had
crystallized to the parties. The basis of that
agreement was the ex-parte decree of declaration
and injunction in favour of the plaintiff. Once the ex-
Civil Appeal No. 6884 of 2012 10
parte decree has itself been set aside and the suit
was to proceed further from the stage of filing of
written statement by the Appellant- State, the
agreement dated 30.07.1991 would lose all its
credibility assuming there was any semblance of any
right to enter into the agreement. The application
filed by BMC under Section 89 CPC was also not
maintainable based on the agreement of
30.07.1991. There appears to be some kind of
collusion between BMC and the plaintiff. Whether or
not there was any condition in the agreement dated
30.07.1991 for appointment of Arbitrator, the very
basis of entering into the agreement having been set
aside, the agreement itself could not have been
relied upon by any of the parties.
5. The suit land admittedly was owned by the
Appellant-State. Even if the State had allotted it to
BMC for constructing a bus stand, BMC could not
Civil Appeal No. 6884 of 2012 11
have dealt with it and treated it to be in the
ownership or possession of the plaintiff by entering
into the agreement dated 30.07.1991. BMC would
be bound as an allottee of the State to utilise the
said land for the purpose for which it was given. It
ought to have taken appropriate steps for removal of
possession of the plaintiff which under law was
totally unauthorised and illegal.
6. A perusal of the agreement dated 30.07.1991 clearly
mentions that the plaintiff was claiming right under
the ex-parte decree dated 22.06.1990 and the
dismissal of the First Appeal on 11.05.1991. Later
on when both the orders had been set aside and the
suit itself was to proceed from the stage of the
Appellant-State filing its written statement, the
agreement itself would not have any sanctity in the
eye of law even inter se parties . The right created in
the plaintiff under the ex-parte decree stood
Civil Appeal No. 6884 of 2012 12
extinguished and, therefore, BMC ought to have
been careful enough of not placing any reliance any
further on the said agreement. The Trial Court was
justified in allowing the application by setting aside
the award. The High Court committed a grave error
in not considering the relevant aspects and in
placing reliance on the statement made by the
Appellant- State before the Trial Court that the State
had no interest inasmuch as it had allotted the land
to BMC to set up a bus stand and therefore, it
should be deleted from the array of parties as
defendant no.2. In any case, all the applications are
still pending before the Trial Court if not already
disposed off or withdrawn by the State.
7. In view of the above, the appeal deserves to be
allowed and is accordingly allowed. The impugned
order passed by the High Court is set aside.
Civil Appeal No. 6884 of 2012 13
8. The Trial Court will proceed with the suit and decide
the same on merits on the basis of evidence which
may be led before it.
9. There shall be no order as to costs.
10. Pending applications, if any, also stand disposed of.
…………………………………J
(VIKRAM NATH)
…………………………………J
(K.V. VISWANATHAN)
NEW DELHI
APRIL 18, 2024
Civil Appeal No. 6884 of 2012 14