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Revur Venkatasubba Rao And Others v. Gurijala Venkataramanayya And Others.

Madras High Court
Oct 21, 1947
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Structured Summary of the Opinion (Chief Justice; Govinda Menon, J. concurring)

Factual and Procedural Background

A sum of Rs. 2180-0-10 was deposited in Court to the credit of O.S. No. 64 of 1936 (District Court, Nellore). The funds originated from sale proceeds of crops raised in Fasli year 1338 on land that had been hypothecated in O.S. No. 28 of 1922 (a mortgage suit). The mortgagees have been paid their entitlements and the remaining balance (the Rs. 2180-0-10) is held for the cultivators of the hypothecated land.

The cultivators were grouped into three sets: respondents 1 to 3 (petitioners in the lower court) who cultivated 18 acres 12 cents of the 53 acres 62 cents cultivated portion; the appellants who cultivated 5/6ths of the remaining 35 acres 50 cents; and a group of other respondents who cultivated the remaining 1/6th of that 35 acres 50 cents. Several suits and proceedings over about 20 years related to these sums; the present application arises from E.A. No. 77 of 1943 in O.S. No. 64 of 1946.

Respondents 1 to 3 applied for payment out of the Rs. 2180-0-10 of Rs. 1600 to them and for the balance (Rs. 580-0-10) to be retained because of an attachment order in O.S. No. 176 of 1926 (against respondents 1 to 3) for Rs. 580-0-10. The District Judge ordered that respondents 1 to 3 could withdraw one half of the available sum without security (with a condition depending on whether the attachment had been raised) and that the other moiety could be withdrawn only on furnishing security and an undertaking to repay should the contesting parties prevail; the judge also referred appellants and the other respondents to appropriate proceedings to set aside the decree in O.S. No. 64 of 1936.

Legal Issues Presented

  1. Whether the compromise decree in O.S. No. 64 of 1936 (passed between mortgagee-decree-holders and respondents 1 to 3, with appellants and other respondents ex parte) is binding on the appellants and other respondents and can be challenged in execution proceedings.
  2. How the Rs. 2180-0-10 in Court should be apportioned among the cultivators (particularly whether respondents 1 to 3 were entitled to one-half of the whole sum or only to their proportionate share based on cultivated area).
  3. How the attachment in O.S. No. 176 of 1926 (a decree obtained against respondents 1 to 3 for Rs. 580-0-10) should affect any payment out from the deposited sum — i.e., whether the Rs. 580-0-10 should be treated as affecting only respondents 1 to 3's share or the whole sum in Court.
  4. Whether the District Judge's directions permitting partial withdrawals without security and requiring security for other withdrawals were correct in amount and in principle.

Arguments of the Parties

Appellants' Arguments

  • The decree in O.S. No. 64 of 1936 was not binding on them because it was passed pursuant to a compromise to which they were not parties; they contended it should be regarded as a nullity and ignored by the executing Court.
  • In O.S. No. 176 of 1926 respondents 1 to 3 were the judgment-debtors; the decree is not against the appellants or the other respondents, hence the Rs. 580-0-10 attachment should be deducted only from the sum to which respondents 1 to 3 are entitled, not from the total Rs. 2180-0-10.
  • Respondents 1 to 3 cultivated only 18 acres 12 cents of the 53 acres 62 cents, so they are not entitled to one half of the whole proceeds; they are entitled only to a proportionate share (the appellants estimated approximately Rs. 740) corresponding to their cultivation, from which the Rs. 580-0-10 attachment should be deducted if relevant.

Respondents 1 to 3's Arguments

  • They relied upon the terms of the decree in O.S. No. 64 of 1936 and treated the present application as in execution of that decree.
  • They argued that although the decree was passed pursuant to a compromise, it is a final decree binding on the parties to it and on all persons against whom it was made unless and until set aside by appropriate proceedings; it could not be challenged in execution proceedings where the executing Court may only construe and enforce, not examine the merits of, a decree.

Other Respondents' Position

  • The other respondents did not appeal from the District Judge's order, but through counsel they supported the appellants' appeal and relied upon Order 41, Rules 4 and 33 of the Code of Civil Procedure (as applicable to the proportions of shares among parties).

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Sankaravadivammal v. Kumaraswamiah Authority holding that a compromise behind the back of a non-party cannot affect that non-party and that a decree based solely on such a compromise is a nullity (as cited from Hutchins J.). The court explicitly disagreed with the observation in this case for present purposes, stating that it is at variance with other binding decisions; it rejected applying Sankaravadivammal to hold the compromise decree a nullity where the Court had jurisdiction to make the decree.
Abdul Karim v. Meherunnissa Authority where an order made pursuant to a compromise (affecting parties who were not parties to it) was held to be without jurisdiction and could not be enforced. The court declined to follow the decision for the present facts, finding it inconsistent with the principle that an executing Court normally cannot go behind a decree when the decree was made by a Court having jurisdiction.
Girish Chunder Lahiri v. Shoshi Shikhareswar Roy Principle that in execution proceedings the Court is only construing the decree and not considering its merits. The court relied on this principle to hold that the decree in O.S. No. 64 of 1936 could not be attacked on its merits in execution proceedings and is to be treated as binding unless and until set aside by appropriate proceedings.
Kalipada Sarkar v. Horimohan Dalal Review and discussion of numerous decisions establishing that an executing Court cannot inquire into the validity of a decree and that an erroneous order remains effective until discharged. The court cited this decision to reinforce the rule that the executing Court must treat the decree as binding (subject to the recognized exception where the court lacked jurisdiction to make the decree).
Chuck v. Cremer (Lord Cottenham) Statement quoted: "every order or judgment however erroneous, is ... good until discharged or declared inoperative." The court invoked this maxim to support the rule that a decree remains operative until set aside by proper proceedings and cannot be impeached in execution.
Jnanendramohan Bhaduri v. Rabindranath Chakrabarti Authority that a decree passed by a Court which had no jurisdiction to make it is a nullity and incapable of execution. The court accepted the exception that a decree made without jurisdiction is void and cannot be executed; it applied this principle to clarify that the executing-Court rule is subject to the jurisdictional exception (but found the District Court here did have jurisdiction).

Court's Reasoning and Analysis

The court proceeded in two analytical strands: (A) the question whether the compromise decree in O.S. No. 64 of 1936 could be treated as a nullity by the executing Court, and (B) the correct practical distribution of the money in Court and the validity of the District Judge's directions about withdrawal and security.

A. Jurisdiction and the binding effect of the compromise decree:

  • The court observed the governing rule that, in execution proceedings, a Court is limited to construing and enforcing the decree and cannot go behind its merits; it cited Girish Chunder Lahiri and Kalipada Sarkar for that proposition and endorsed Lord Cottenham's maxim that an order stands until set aside.
  • The court acknowledged an exception: if a decree is void because the Court that passed it had no jurisdiction to do so, it is a nullity and cannot be executed (citing Jnanendramohan Bhaduri).
  • Applying these principles, the court found that the District Court of Nellore did have jurisdiction to pass the compromise decree in O.S. No. 64 of 1936 and thus that decree is binding on the parties to it and on all persons against whom it was made unless and until set aside by appropriate proceedings.
  • Consequently, the court rejected the appellants' submission (based on Sankaravadivammal and Abdul Karim) that the compromise decree was a nullity that the executing Court could ignore; the Chief Justice held those authorities to be inconsistent with the binding authorities relied upon and thus not applicable in this instance.

B. Allocation of the deposit and the District Judge's directions:

  • The court found the District Judge was correct in holding that, until the compromise decree is set aside, the appellants and other respondents have no right to any portion of the money in Court by way of independent entitlement.
  • However, the court held the District Judge erred in the particulars of the monetary allocation and the mechanics of withdrawal/security. The District Judge's direction permitting respondents 1 to 3 to withdraw one half of the available sum was incorrect as a matter of arithmetic and entitlement because respondents 1 to 3 had cultivated only 18 acres 12 cents out of the total cultivated area of 53 acres 62 cents.
  • The correct share for respondents 1 to 3 was to be ascertained by calculating the proportion which their cultivated area bears to the whole cultivated area (expressed in the opinion as 18/53rds (approximately) of Rs. 2180). From that ascertained sum, if the attachment for Rs. 580-0-10 has not been raised, that attachment amount should be deducted; if the attachment has been raised, respondents 1 to 3 may withdraw the whole ascertained share.
  • Any withdrawal in excess of the amounts so determined should be secured: respondents 1 to 3 must furnish security for any excess withdrawn or repay into Court any excess already withdrawn without security; but that obligation to repay or furnish further security will not be enforced if proceedings by appellants and other respondents to set aside the decree are barred by limitation (the court expressly did not decide the limitation issue).
  • The court applied Order 41, Rules 4 and 33 of the Code to fix the proportions for the appellants and the other respondents as 5/6th and 1/6th respectively of the cultivated area of 35 acres 50 cents (that area being the remaining cultivated portion after respondents 1 to 3's cultivation) out of the whole cultivated area of 53 acres 62 cents.

Holding and Implications

Core Holding: The appeal is partly allowed and partly dismissed. The court upheld that the compromise decree in O.S. No. 64 of 1936, having been made by a Court which had jurisdiction, is binding and cannot be attacked in execution proceedings; but the District Judge's directions about the quantum of money withdrawable without security and the mode of security were varied to reflect proportional entitlement based on cultivated area.

Direct consequences for the parties:

  • Respondents 1 to 3 are entitled to withdraw only the sum equal to the proportion their cultivated area (18 acres 12 cents) bears to the total cultivated area (53 acres 62 cents) of the Rs. 2180-0-10; if the Rs. 580-0-10 attachment remains, that amount must be deducted from their ascertained share; if the attachment has been raised, they may withdraw their full ascertained share.
  • Any withdrawal by respondents 1 to 3 in excess of that ascertained sum must be secured or repaid into Court; the lower Court is to order repayment or security for any such excess, unless proceedings to set aside the decree are barred by limitation (in which case no order for repayment or additional security will be made).
  • The appellants' and the other respondents' shares are fixed by applying O. 41, Rrs. 4 and 33: the appellants receive 5/6th and the other respondents 1/6th of the cultivated area of 35 acres 50 cents, measured as proportions of the whole cultivated area of 53 acres 62 cents.
  • The appeal succeeded in varying the District Judge's order on the question of the amounts and security but failed insofar as the appellants sought to treat the compromise decree as a nullity in execution proceedings; the decree stands unless and until set aside by appropriate proceedings.

Costs: The court ordered that the parties respectively bear their own costs.

Broader implications: The opinion applies established principles about the limited role of an executing Court and the narrow exception where a decree is void for want of jurisdiction; the court rejected particular authorities relied on by the appellants as inapposite to the present facts. The judgment does not purport to set out any new rule beyond its application of those principles to the facts of this case.

Show all summary ...

The Chief Justice:—The appeal relates to a sum of Rs. 2180-0-10 deposited in Court to the credit of O.S No. 64 of 1936 on the file of the District Court of Nellore; originally it was credited to O.S No. 28 of 1922 on the file of the Subordinate Judge's Court; by virtue of various proceedings it was transferred to the credit of other suits and is now credited as previously stated; throughout its various transfers its nature and the parties entitled to it have not altered.

O.S No. 28 of 1922 was a mortgage suit, the hypotheca being 67 acres 53 cents of land of which 53 acres 62 cents were cultivated. In respect of Fasli year 1338 the total proceeds from the crops raised on the cultivated portion of the hypotheca were paid into Court; this was some time after the year 1928; out of those proceeds the mortgagee-decree-holders have been paid all the sums to which they were entitled and, it is beyond doubt, the cultivators of the 53 acres 62 cents are entitled to the balance, namely, the above sum of Rs. 2180-0-10, to which the mortgagees assert no claim. The cultivators form three groups of persons: respondents 1 to 3, the petitioners in the Court below, they cultivated 18 acres 12 cents of the total cultivation of 53 acres 62 cents; the appellants, respondents 12, 14 to 16, 18 to 20 and 22 to 25 in the Court below, they cultivated 5/6ths of the remaining 35 acres 50 cents of the total cultivation; and respondents Nos. 4, 6, 8, 9, 11 and 12, respondents 17, 26, 28, 29, 31 and 32 in the lower Court, (hereinafter called “the other respondents”), they cultivated the remaining 1/6th of the 35 acres 50 cents. All other parties in the Court below and in this appeal can be ignored.

By application E.A No. 77 of 1943 in O.S No. 64 of 1946, out of which this appeal arises, respondents 1 to 3 sought for an order of Court that, out of the sum of Rs. 2180-0-10, the amount of Rs. 1600 be paid to them and that the balance of Rs. 580-0-10 be retained to meet any liability in O.S No. 176 of 1926 on the file of the District Munsif's Court, Nellore, in which suit the decree-holder had obtained an order for attachment of the money in Court to the extent of Rs. 580-0-10.

The learned District Judge, against whose decision this appeal is preferred, by his order directed that: the respondents 1 to 3 be permitted to withdraw one half of the available sum without security, namely, if the attachment had been raised, one half of Rs. 2180-0-10; if it had not been raised, then, one half of Rs. 1600; in regard to the other moiety, respondents 1 to 3 could withdraw it upon furnishing security and undertaking to make good the amount in the event of the contesting respondents (the appellants and the other respondents in this appeal) being entitled to claim that moiety; as regards the appellants and the other respondents, they were referred to appropriate proceedings to set aside the decree in O.S No. 64 of 1936 (to which reference hereafter will be made). It was in respect of such potential proceedings that the order for security was made regarding one moiety of the available money in Court, if withdrawn by respondents 1 to 3.

The appellants challenge the correctness of the learned District Judge's order in the following ways:

1. The decree in O.S No. 64 of 1936 is not binding upon them, they are entitled to treat it as a nullity and it should have been ignored by the learned Judge.

2. In O.S No. 176 of 1926 respondents 1 to 3 are the judgment debtors, the decree is not against the appellants or the other respondents, and the amount of the attachment of Rs. 580-0-10, should have been deducted from the sum to which respondents 1 to 3 are entitled out of the money in Court and should not be deducted from the total sum of Rs. 2180-0-10.

3. In any event respondents 1 to 3 having cultivated only 18 acres 12 cents of the 53 acres 62 cents, they are not entitled to one half of the whole cultivation proceeds but only to the proportion represented by their cultivation, namely, Rs. 740 (approximately) from which sum the amount of the attchment of Rs. 580-0-10 should be deducted, if occasion arises.

The other respondents have not preferred an appeal against the order of the learned District Judge but, through learned Counsel, they support the appellants' appeal and rely upon O. 41, Rr. 4 and 33 of the Code.

During the period of about 20 years in which the proceeds from the crops, harvested in fasli year 1338, have been in Court, of which the sum of Rs. 2180-0-10 now remains, there have been several suits and proceedings relating to that sum. It is unnecessary to set out all those pieces of litigation but to refer only to O.S No. 64 of 1936, abovementioned. But before doing this, it is convenient to record that there is no dispute as to the respective areas which the three groups of parties cultivated, that the decree for Rs. 580-0-10 in O.S No. 176 of 1926 was obtained against respondents 1 to 3, the appellants and the other respondents are in no way concerned with that decree and that the attachment against the money in Court solely affects the amount to which respondents 1 to 3 are entitled.

O.S No. 64 of 1936 was a suit in which the mortgagee-decree-holders in O.S No. 28 of 1922 were the plaintiffs; the present appellants, respondents 1 to 3, the other respondents or the predecessors-in-interest of some or all of them, inter alia, were the defendants; other defendants to the suit can be ignored. The claims made were for a declaration that the plaintiffs were entitled to the sum of Rs. 2180-0-10 the subject-matter of the present appeal, (then deposited to the credit of O.S No. 40 of 1929 on the file of the Subordinate Judge's Court, Nellore) and for a permanent injunction restraining the defendants from withdrawing the same. The plaintiffs and respondents 1 to 3 (who were defendants 1 to 4 in the suit there being one other person then associated with them, who can now be ignored) appeared in the suit; the present appellants and the other respondents were ex parte; as also were the remaining defendants, some of whom died pendente lite. On the suit coming on for disposal on 3rd November 1937, the plaintiffs and respondents 1 to 3 (therein described as defendants 1 to 4) filed a deed of compromise and presented an application praying that a decree be passed in accordance with its terms as between the plaintiffs, respondents 1 to 3 and against all the ex parte defendants. In pursuance thereof, the Court ordered and decreed, inter alia, that the amount of Rs. 2180-0-10 to the credit of O.S No. 40 of 1929, which represented the balance of the sale proceeds of the crops of the hypotheca raised in the fasli 1338, be sent for as the property of respondents 1 to 3 and be kept in deposit to the credit of that suit (O.S No. 64 of 1936); the question whether the deposit amount could be drawn by respondents 1 to 3 should be determined in execution proceedings (therein specified); and until that question were finally determined the amount thereof should not be drawn by respondents 1 to 3.

The application, out of which this appeal arises, was made by respondents 1 to 3, relying upon the terms of the decree in O.S No. 64 of 1936 and it is an application in execution of that decree. The appellants, supported by the other respondents, contended that, since the decree was passed pursuant to a compromise between the plaintiffs and respondents 1 to 3 and since the appellants and the other respondents were not parties to the compromise decree, it is not binding upon them but only upon the parties thereto; the decree was passed without jurisdiction, it is a nullity and it can be ignored by the appellants and the other respondents; consequently, it does not entitle the respondents 1 to 3 to the whole sum of Rs. 2180-0-10 and it does not prevent an order being made for payment out to the appellants and to the other respondents of their respective shares of the money in Court, to which they are entitled. On behalf of the respondents 1 to 3 Mr. Subba Rao argued that, however wrong or incorrect it might have been for the decree to have been passed against the appellants and the other respondents upon the compromise effected between the plaintiffs and respondents 1 to 3, nevertheless it is a decree which prevents an order for payment out of Court being made in their favour; no appeal was preferred against this decree, it is final and conclusive, the Court which made the decree had jurisdiction in that behalf, it is not a nullity; and unless and until set aside by appropriate proceedings it is binding upon the appellants and the other respondents.

In support of his contention that the decree is a nullity, Mr. Krishnamurthi for the appellants, cited Sankaravadivammal v. Kumaraswamiah (1) and Abdul Karim v. Meherunnissa (2). In Sankaravadivammal's case a decree was passed upon a compromise in a partition suit to which the seventh defendant was not a party; in execution of the decree she was dispossessed of certain property; she presented a petition objecting that the decree could not bind her and praying that delivery of possession of the property by an amin might be cancelled; her petition was rejected by the Subordinate Judge, as also her appeal therefrom to the District Judge; in the High Court the actual decision was that she was entitled to appeal against the order rejecting her petition and it was remanded to the Subordinate Judge for disposal; at page 475 of his judgment Hutchins J. observed that,

“The compromise behind her back cannot possibly affect her position, nor can the decree which on its face has no basis beyond an agreement between ther parties. The decree is a nullity.”

In Abdul Karim's case a raiyati holding was sold to a stranger in execution of a decree for rent; out of the proceeds the decree was satisfied and the balance was paid to the judgment debtors; thereafter, the mortgagee of the holding, who had previously obtained a mortgage decree and had purchased the holding in execution of that decree, applied to have the sale in execution of the rent decree set aside; the mortgagee and the auction purchaser effected a compromise upon the terms of which an order was made, including a direction that the mortgagee was at liberty to recover the balance of the sale proceeds from the judgment debtors who were not parties to the compromise; an application in execution to enforce the order was allowed, on appeal, by the District Judge; on appeal to the High Court it was observed, at page 34 of the judgment, that there was no jurisdiction to make the order and no jurisdiction to enforce it and the order of the District Judge was set aside.

Each of the above decisions was given in proceedings in execution. It has been laid down by a long series of authorities that a Court executing a decree cannot go behind it. In Girish Chunder Lahiri v. Shoshi Shikhareswar Roy. , it was observed by the Judicial Committee at page 967 of the judgment, that “in execution proceedings we are only construing the decree and not considering its merits.” There are numerous decisions to the same effect, but reference to one of them alone is necessary, Kalipada Sarkar v. Horimohan Dalal , in which a large number of the decisions were reviewed and discussed. There, a decree was passed against a lunatic represented by a next friend who was a minor and, consequently, incompetent to act as next friend: the lunatic having died, execution of the decree was sought against the lunatic's assets in the hands of his son; at page 637 of the report it was pointed out that, whilst such a decree could be attacked by way of an application for review to the Court which made it, by way of an appeal or application for revision to a superior tribunal or by way of a regular suit, nevertheless, the Court which made the decree cannot, when called upon to execute it, be invited to hold that the decree was erroneously or improperly made; after referring to Girish Chunder's case, and to other decisions at page 632, it was observed, at page 638, “that every order or judgment however erroneous, is, in the words of Lord Cottenham in Chuck v. Cremer (3), good until discharged or declared inoperative and that the executing Court cannot enquire into the validity or propriety of the decree.”

Apart from the position existing when a Court passes a decree against a dead person, which does not arise in the present instance and needs no consideration, the principle of law, to which reference has just been made, is subject to an exception. It is that, when a decree is passed by a Court which has no jurisdiction to make it, the decree is a nullity and it is incapable of execution. That was so held by their Lordships of the Judicial Committee in Jnanendramohan Bhaduri v. Rabindranath Chakrabarti (4); there an award in arbitration was filed in Court; pursuant to S. 15 of the Indian Arbitration Act, 1899 the Court purported to pass a decree upon the award, which it had no jurisdiction to do, since that section provided only that on being filed, an award should be enforceable as if it were a decree (S. 17 of the Indian Arbitration Act, 1940) now enables such a decree to be passed.

Returning to the matters in the present appeal. The District Court of Nellore, unlike the Court in the last cited authority, undoubtedly had jurisdiction to pass a decree in O.S No. 64 of 1936, and, indeed, to pass a decree on the terms of a compromise between the parties. The decree which it did make, indubitably, is one which is binding upon the parties to the compromise.

Although the appellants and the other respondents were not parties to the compromise, nevertheless the Court had jurisdiction to make the decree and it is not invalid for want of jurisdiction; it is binding on all persons against whom it was made unless and until set aside by appropriate proceedings. Its validity cannot be challenged in execution proceedings, in which proceedings a Court can only construe and enforce a decree, it cannot consider its merits and validity. With respect I am unable to agree with the observations expressed in Sankaravadivammal's and Abdul Karim's cases; they are at variance with the decisions by which I am bound or, with which I agree. In my opinion the learned District Judge was correct in holding that, unless the order and decree in O.S No. 64 of 1936 be set aside, the appellants and the other respondents have no right to any portion of the money in Court.

In other respects I am unable to agree with the order of the learned District Judge. Since respondents 1 to 3 did not cultivate one half of the 53 acres 62 cents but only 18 acres 12 cents of that area and since those respondents were the sole judgment-debtors in the decree in O.S No. 176 of 1926, the order was wrong regarding the amounts allocated to respondents, 1 to 3, and the sums to be withdrawn with or without security, by them. The amount of that share is a sum ascertained by calculating the proportion which the area cultivated by them bears to the whole cultivation area, namely, 18/53rds (approximately) of Rs. 2180. From the sum so ascertained, the amount of the attachment, if not raised, should be deducted and respondents 1 to 3 should withdraw the resulting balance without security, or, if the attachment has been raised, the whole of the amount ascertained as above; security should be furnished for any withdrawal in excess of either of those two amounts, whichever it be.

The order appealed from will be varied in the above respects and the respondents 1 to 3 will repay into Court any sums overdrawn by them, ascertained as above, for which security has not been given or they will furnish security for such excess withdrawal forthwith upon order so to do given by the lower Court. That order is subject to this further direction; if proceedings, which the appellants and the other respondents can take, to have the decree in O.S No. 64 of 1936 set aside are now barred by limitation (upon which no opinion is expressed), in that circumstance, no order will be made upon respondents 1 to 3 regarding repayment of, or furnishing additional security for, money withdrawn by them from Court.

Whilst the other respondents have not preferred an appeal, the facts and circumstances in this appeal fall within O. 41, Rr. 4 and 33 of the Code and those provisions should apply. It follows that the proportions of the money in Court attributable to the appellants will be 5/6th and to the other respondents 1/6th of cultivated area of 35 acres 50 cents out of the whole cultivation of 53 acres 62 cents.

The appeal has failed in part but has succeeded in other respects. In my view the proper order for costs is that the parties respectively bear their own.

Govinda Menon, J.:—I agree.

N.R.R