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  • Section 47 of the Code of Civil Procedure.7.
  • Section 47 of the Code of Civil Procedure
  • Section 47 of the C.P.C.
  • Rent Control Act
  • Order 23, Rule 3
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Cites
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Citation Codes
Equivalent Citations
citation codes
Case Number
Judges
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  • Section 47 of the Code of Civil Procedure.7.
  • Section 47 of the Code of Civil Procedure
  • Section 47 of the C.P.C.
  • Rent Control Act
  • Order 23, Rule 3
Smart Summary

Structured Summary of the Provided Opinion

Factual and Procedural Background

On August 22, 1972 a decree was passed in Suit No. 406 of 1971 in favour of the plaintiff for recovery of Rs. 4,12,561 as principal and Rs. 1,52,156 as interest at 10% per annum up to the date of the last instalment. The suit had been compromised by a compromise deed dated August 19, 1972 which was recorded by the Court; a final mortgage decree was passed under which the defendants were permitted to pay the decretal amount in instalments. One term of the decree provided that upon default the entire balance would become payable and the plaintiff could apply for sale of the mortgaged property. The judgment-debtors paid Rs. 31,000 and thereafter defaulted.

The decree-holder filed Execution Case No. 85 of 1973 seeking sale of the mortgaged property and, in case of shortfall, execution against the judgment-debtors personally, jointly and severally. The execution application was filed on September 11, 1975; notice had earlier been issued on November 28, 1973 calling the judgment-debtors to appear on January 31, 1974. Several hearings occurred (January 31, 1974; February 26, 1974; April 29, 1974; May 31, 1974) during which the parties reported negotiations for compromise. Objections were filed by judgment-debtors Nos. 1, 2 and 3 on August 16, 1974 and replies were filed. Issues were framed on February 27, 1975. Before evidence on the objections was recorded, the decree-holder filed the presently considered application seeking disposal of issues on the record without oral evidence.

Legal Issues Presented

  1. Whether the objections of the judgment-debtor under Section 47 of the C.P.C. are maintainable?
  2. Whether the interest allowed is liable to be reduced in view of the provisions of Punjab Relief of Indebtedness Act and Usurious Loans Act?
  3. Whether the objections forming subject-matter of issue No. 2 is open to the judgment-debtor?
  4. Whether the compromise on the basis of which the decree in suit was passed is not binding on the judgment-debtor?
  5. Relief.

The court's immediate, focused legal question for the present application was whether, in execution proceedings under Section 47 C.P.C., the judgment-debtors can challenge the validity of a decree founded on a compromise on the ground that the compromise was obtained by misrepresentation or fraud.

Arguments of the Parties

Decree-holder's Arguments (counsel: Mr. R.L. Aggarwal)

  • Objections under Section 47 C.P.C. relate only to execution, discharge or satisfaction of the decree and not to its correctness or validity.
  • The validity of a decree cannot be examined in execution proceedings except where the Court which passed the decree was lacking in inherent jurisdiction.
  • Consequently, allegations that the decree was obtained by misrepresentation or fraud go to the validity of the decree and must be raised in a separate suit; they cannot be agitated in execution proceedings.
  • The issues in question do not require oral evidence and can be disposed of on the basis of the record and arguments.

Judgment-debtors' Arguments (counsel: Mr. Vohra)

  • Issue No. 4 (whether the compromise is not binding) is a matter of fact and the judgment-debtors must be permitted to lead evidence on that issue.
  • The objection to the validity of the decree is two-fold: (a) procedural matter that the defendants or their authorised counsel did not appear when the compromise was recorded and the Court did not record acceptance by the parties or counsel; and (b) substantive allegation that the plaintiff obtained the defendants' signatures on the compromise deed by misrepresentation and fraud.
  • For the first part (procedural/record-based), counsel indicated he did not wish to lead evidence; for the second (fraud/misrepresentation), evidence is necessary.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Hira Lal Patni v. Sri Kali Nath, AIR 1962 SC 199 Validity of a decree can be challenged in execution proceedings only on the ground that the Court which passed the decree was lacking in inherent jurisdiction (examples: subject-matter wholly foreign to jurisdiction, defendant dead when suit instituted or decree passed). The court relied on this decision to state the general rule and to hold that allegations of fraud/misrepresentation in obtaining a compromise do not, by themselves, show lack of inherent jurisdiction and therefore cannot be examined in execution proceedings under Section 47.
A. Venkateseshyya v. A. Virayya, AIR 1958 Andh Pra 1 (FB) Under Section 47, questions to be entertained by the executing Court must relate to execution, discharge or satisfaction of the decree; to invoke Section 47 the question must relate to execution. Used to reinforce that an attack on the decree itself (e.g., asserting the decree is void) does not fall within Section 47 and thus is not ordinarily cognizable in execution proceedings.
Mahabir Singh v. Dip Narain Tewari, ILR 54 All 25 (AIR 1931 All 490) (FB) Where a dispute seeks the utter destruction of a decree (e.g., decree passed against dead person), it does not relate to execution of the decree but aims at its destruction and so is not within the purview of Section 47. Quoted to support the proposition that an attack on the decree's validity (void or voidable) is not an execution objection under Section 47.
Vasudev Dhanjihhai Modi v. Rajabihai Abdul Rehman (V.D. Modi v. Abdul Rahman), AIR 1970 SC 1475 Illustrates instances where a decree may be a nullity (examples: decree passed without bringing legal representatives on record, decree beyond court's pecuniary jurisdiction, personal decree against legal representative of deceased, ejectment decrees passed without required statutory conditions); executing court may go behind a decree where there is lack of inherent jurisdiction apparent on the face or by patent reasons. The court invoked this precedent to explain the limited exception where an executing court may examine and refuse execution — namely where the decree is a nullity for want of inherent jurisdiction — and to distinguish such cases from allegations of fraud/misrepresentation, which do not necessarily show lack of inherent jurisdiction.

Court's Reasoning and Analysis

The court confined its inquiry to whether the judgment-debtors may, in execution proceedings under Section 47 C.P.C., challenge the validity of a decree founded on a compromise on the ground that the compromise was obtained by misrepresentation or fraud.

The court reiterated the general rule: the executing Court must take the decree as it stands and proceed to execute it; it cannot ordinarily go behind the decree to question its correctness in law or fact. A well-established exception exists where the Court which passed the decree was lacking in inherent jurisdiction, in which event the decree is a nullity and execution must be refused.

Applying the cited precedents, the court explained that examples of lack of inherent jurisdiction include situations where the subject-matter was wholly outside the court's jurisdiction, the defendant was dead when the suit was instituted or decree passed, legal representatives were not brought on record where required, or where exclusive jurisdiction for the relief vested in a specialized forum (e.g., Rent Controller) and the civil court had no jurisdiction.

The court analyzed the character of a compromise obtained by fraud or misrepresentation: such a compromise produces a contract that is voidable at the option of the defrauded party and remains effective until rescinded. There was no rescission of the compromise up to the date of the decree; hence the Court was entitled to act on the compromise and pass a decree under Order 23, Rule 3 C.P.C., which empowers the Court to pass a decree when it is satisfied that the suit has been adjusted by a lawful compromise.

Therefore, allegations that the compromise was obtained by misrepresentation or fraud do not, without more, demonstrate lack of inherent jurisdiction and do not fall within the scope of Section 47 objections in execution proceedings. Such allegations amount to impeaching the decree itself (i.e., asserting the decree is voidable or voidable at best) and must be pursued by a separate suit to set aside the decree. The executing Court is not competent to embark on an inquiry requiring the reception of evidence to determine such allegations unless the lack of jurisdiction is apparent on the face of the record or there are patent reasons to doubt jurisdiction.

On this basis the court concluded that questions of fraud/misrepresentation in obtaining the compromise are outside the scope of execution objections under Section 47 and, consequently, the decree-holder's application seeking disposal of issues without oral evidence was allowed to the limited extent described in the order.

Holding and Implications

Decision: The court allowed the decree-holder's application and directed that the objection petition be set down for hearing of final arguments. There was no order as to costs.

Implications and direct effects:

  • The executing Court reaffirmed that it cannot, in execution proceedings under Section 47 C.P.C., ordinarily investigate allegations that a compromise (on which a decree was founded) was obtained by misrepresentation or fraud; such allegations do not, by themselves, show lack of inherent jurisdiction.
  • Allegations of fraud or misrepresentation in obtaining a compromise, being matters that impeach the decree itself (i.e., render it voidable), must be raised in separate proceedings (a suit) for rescission or setting aside of the decree rather than in execution proceedings.
  • The immediate procedural consequence for the parties in these execution proceedings is that the objection petition will be set down for final arguments on those issues that can be determined on the record; factual allegations requiring evidence regarding fraud/misrepresentation were held to be outside the scope of the executing Court's inquiry under Section 47.
  • No order as to costs was made by the court.

Order accordingly.

    Addisons Paints And Chemicals v. Sant Ram Parma Nand

    On August 22, 1972, a decree was passed in Suit No. 406 of 1971 favour of the plaintiff and against the defendants for the recovery of Rs. 4,12,561 as a principal and another sum of 1,52,156/- as interest thereon at 10% per annum upto the date of the last instalment under the decree. The suit was compromised by the parties in terms of compromise deed dated August 19, 1972 which was recorded by this Court and a final mortgage decree against the judgment-debtors was passed, in terms of the compromise under which the defendants were allowed to pay the decretal amount in instalments. One of the terms he decree was that in case the defendants committed default in payment of any of the instalments, the entire balance decretal amount due on the date of default under the decree shall become payable forthwith and the plaintiff will be at liberty to apply to this Court for the sale of the mortgaged property. The judgment-debtors paid a total amount of Rs. 31,000/- and thereafter committed default in the payment of the instalments due under the decree.

    2. The decree-holder then filed Execution Case No. 85 of 1973 and prayed for the sale of the mortgaged property to apply the sale proceeds towards satisfaction of the decretal amount outstanding. Prayer was also made, that in case of shortfall, the decree may be executed against all the judgment debtors personally, jointly and severally. The Execution Application was filed on 11th of September, 1975 and has been pending in this Court. Notice of the application was issued on November 28, 1973 to the judgment-debtors for appearance before the Court on January 31, 1974. Thereafter, there were hearings on January 31, 1974, February 26, 1974, April 29, 1974 and May 31, 1974 but nothing substantial was done as the parties reported that they were negotiating for a compromise. Ultimately, the objections were filed by judgment debtors Nos. 1, 2 and 3 on August 16, 1974. Reply to the objections has also been filed. The following issues were framed on February 27, 1975:

    “1. Whether the objections of the judgment-debtor under Section 47 of the C.P.C. are maintainable? O.P.J. D.

    2. Whether the interest allowed is liable to be reduced in view of the provisions of Punjab Relief of Indebtedness Act and Usurious Loans Act ?

    3. Whether the objections forming subject-matter of issue No. 2 is open to the judgment-debtor ? O.P.D. H.

    4. Whether the compromise on the basis of which the decree in suit was passed is not binding on the judgment-debtor ?

    5. Relief.”

    The case was being made ready for trial, but before the objections could be set down for the recording of the evidence, the present application has been filed by the decree-holder. It is contended, that issues framed by the Court do not call for any oral evidence and can be disposed of on hearing arguments on the basis of the record-of the Court. It is further urged that the conduct of the judgment-debtors is mala fide and they have been adopting dilatory tactics with a view to delay/defeat the execution of the decree. Reply to this application has been filed. It is urged that issue No. 4 is an issue of fact and it is essential for the judgment-debtors to lead evidence on this issue.

    3. Issue No. 4 has been framed on the pleadings of the parties contained in paras. 2 and 3 of the objection petition and its reply. In para. 2 of the objection petition it is stated that defendant No. 1 had appointed Shri Swatantar Kumar, Advocate as his counsel; that he did not appear when the compromise was put up for consideration; that none of the defendants appeared in Court when the compromise was put up before the Court nor were they represented by a duly authorised advocate; that they had not authorised any counsel to appear and/or accept the terms of the compromise and that the Court did not record anybody's statement or even this much, that the compromise was acceptable to the parties or their counsel. In para. 3 of the objection petition, it is stated that the plaintiff got the defendants to sign the compromise deed, dated August, 19, 1972 by making mis-representations and playing fraud upon them. Mr. R.L Aggarwal, learned counsel for the decree-holder had stated at the Bar that he has not to lead any evidence in support of the issues. Mr. Vohra, the learned counsel for the judgment-debtors contended that the objection to the validity of the decree is thus two-fold, based on the pleas contained in paras. 2 and 3 of the objection petition. So far as first part is concerned, it is purely a matter of record of the suit and Mr. Vohra not want to lead any evidence. The second aspect of issue No. 4 is based on objection that the plaintiff got the defendants to sign the compromise dated 19-8-1972 by making misrepresentations by playing fraud upon them.

    4. Mr. R.L Aggarwal, had contended that the objections under Section 47 of the Code of Civil Procedure can only relate to the execution, discharge or satisfaction of the decree; in other words the question as to the correctness or validity of the decree cannot be gone into in execution proceedings. According to him, the question as to the validity of the decree is not one in execution, or about the discharge or satisfaction of the decree and can be gone into only by way of a separate suit and not in execution proceedings. However, an exception has been made, urged the counsel that the validity of a decree can be challenged in execution proceedings when the ground is that the Court which impeach the decree was lacking in inherent jurisdiction. The objections which impeach the decree itself, are not one relating to the inherent lack of jurisdiction the Court. In support of his contents, the learned counsel relied on Hira Lal Patni v. Sri Kali Nath , AIR 1962 SC 199 wherein it was held :—

    “....... The validity of a decree can be challenged in execution proceedings only on the ground that the Court which passed the decree was lacking in inherent jurisdiction in the sense that it could not have seizin of the case because the subject-matter was wholly foreign to its jurisdiction or that the defendant was dead at the time the suit had been instituted or decree passed, or some such other ground which could have the effect of rendering the Court entirely lacking in jurisdiction in respect of the subject-matter of the suit or over the parties to it.”

    Reliance is also placed on A. Venkateseshyya v. A. Virayya, AIR 1958 Andh Pra 1 (FB) wherein it was observed:

    “Under Section 47 all questions arising between the parties to the suit in which the decree was passed or their representatives and relating to the execution, discharge or satisfaction of the decree, shall be determined-by the Court executing the decree and not by a separate suit. To invoke this section, the question raised shall relate to the execution, discharge or satisfaction of the decree.

    The question raised by the plaintiffs in the present case does not relate to the execution of the decree for they attacked the decree itself on the ground that it was void. Me correct principle in my view has been stated by Sulaiman, C.J in Mahabir Singh v. Dip Narain Tewari, ILR 54 All 25 : (AIR 1931 All 490) (FB) where the learned Judge observed:

    “I am therefore clearly of opinion that where the question is either that a decree was passed against a dead person or was not passed against him at all and therefore it is a nullity, pure and simple, the dispute does not relate to the execution of the decree but aims at its utter destruction.

    The dispute as to the execution of a decree contemplates the existence of a valid decree. Where a decree is without jurisdiction or is otherwise utterly null and void, and can, therefore, be ignored by a person, his protest is not merely as to its execution but he impeaches the decree itself. Such a dispute, in my opinion is not within the purview of Section 47 at all.”

    The counsel contended that the objectors are not questioning the inherent jurisdiction of the Court in passing the decree in the suit; the challenge of the objectors is that the decree was obtained on the basis of the compromise dated August 19, 1972, which compromise was obtained by misrepresentation or fraud. Those questions do not, according to counsel, relate to the execution of the decree but relate to impeaching the decree itself.

    5. My enquiry in the present application is only limited to the question whether the judgment-debtors can challenge in the execution proceedings, the validity of the decree passed on the basis of the compromise dated August 19, 1972, on the ground that the compromise was obtained by making misrepresentation and by playing fraud upon them. The general rule is that an Executing Court cannot go behind the decree, it must take the decree as it is and must proceed to execute it. It must take the decree according to its tenor and cannot entertain any objection that the decree is incorrect in law or in facts. The function of the ex ecuting Court is to enforce and execute the decree and not to question its correctness. There is, however, a well established exception that if there was lack of inherent jurisdiction in the Court which had passed the decree, then the decree is a nullity and the executing Court has to refuse its execution. The Supreme Court in Hira Lal v. Sri Kali Nath's (AIR 1962 SC 199) (supra) case had clearly laid down that the validity of a decree can be challenged in execution proceedings only on the ground that the Court which passed the decree was lacking in inherent jurisdiction. The sense of lacking inherent jurisdiction was illustrated as when the Court could not have seizin of the case because the subject-matter was wholly foreign to its jurisdiction or that the defendant was dead at the time the suit had been instituted or decree passed. Again, in Vasudev Dhanjihhai Modi v. Rajabihai Abd ul Rehman, AIR 19 70 SC 1475 the Supreme Court pointed out that a decree may be a nullity, for instance, where it is passed without bringing the legal representatives on the record of the person who was at the date of the decree or against a ruling prince without a certificate. An executing Court may go behind a decree when a personal decree has been passed against the legal representative of a deceased debtor in respect of the debt due from the deceased. The Court in such a case would be lacking in inherent jurisdiction to pass a decree beyond the estate of the deceased debtor in the hands of the legal representative. The decree may be a nullity on the ground of lack of pecuniary jurisdiction of the Court over the subject-matter of the suit. The validity of the decree may be questioned on the ground that the decretal Court had o jurisdiction personal to it. An ejectment decree cannot be passed against a tenant unless the Court is satisfied that one or more of the grounds mentioned in the relevant Rent Control Act exists. Decree passed by a Court in ejectment suit in terms of the compromise, without satisfying itself if the grounds for eviction existed, would be a nullity and cannot be executed. An ejectment decree passed on the basis of an award which is made a rule of the Court, would again be a nullity and the executing Court would have been entitled to ignore the decree and refuse to execute it. In case, where exclusive jurisdiction is vested in the Court of Rent Controller to pass a decree or order for ejectment, the decree passed by a Civil Court would be a nullity and the executing Court would be entitled to go into its validity. But all these instances relate to the inherent jurisdiction of Court. There is a clear distinction between the existence of the jurisdiction and the manner of exercise of that jurisdiction. The ground of objection which has the effect of rendering the Court entirely lacking in jurisdiction in respect of the subject-matter of the suit or the parties to it, can only be considered in the execution proceedings.

    6. The question whether the promise deed was obtained from the defendants/judgment-debtors by mis-representation or fraud is not one which relates to the inherent jurisdiction of the Court. The executing Court has no jurisdiction to go into the question whether the compromise agreement on which the decree was based was valid or binding on the judgment-debtors, for that would defeating the decree on the allegation that it was obtained by fraud. If the consent to the compromise deed was obtained by fraud or misrepresentation, the agreement is still a contract but voidable at the option of the parties whose consent was so obtained. The contract continues to be valid till the defrauded party elects to avoid it. There was no rescission the compromise till the date of passing of the decree and the Court could validly act on that compromise and pass a decree. Under Order 23, Rule 3 of the Cod of Civil Procedure, the Court had jurisdiction to pass a decree where it was proved to the satisfaction of the Court that the suit has been adjusted by an lawful s compromise. Compromise is a adjustment of the controversies in the suit by mutual concession. The Court could not be said to be lacking in inherent jurisdiction, if it acted upon a compromise which had not been rescinded, eves if it is assumed that it was obtained by misrepresentation or fraud. The decree is not a nullity but might at best be invalid. A valid decree cannot be challenged in the execution proceedings. The consent/compromise decree being only the contract between the parties with the seal of the Court super added to it, a suit may lie to set aside that decree on any of the grounds of which the contract is voidable such as fraud or misrepresentation, but such a question cannot be raised in the Executing Court. The questions relating to misrepresentation or fraud do not relate to the execution of a decree but relate to impeaching the decree itself; as being voidable or void having been obtained on a compromise which itself was obtained by fraud or misrepresentation. It amounted to a plea that the decree was voidable or even void or that it was wrongly passed by the Court. Again if the question of want or absence of jurisdiction cannot be determined without an amount of research, the executing Court is not competent to permit that enquiry to be made which would require the Court to take evidence. Section 47 of the Code of Civil Procedure is not intended to be used for the purpose of investigating matters relating to the validity of the decree itself when on the face of it there is nothing illegal about the decree. The Court executing the decree is not competent to embark on an enquiry into facts, which if established, will tend to show that the Court passing the decree had no jurisdiction to do so. The executing Court can only go into the question whether or not the decree is a nullity, where on the face of the decree it is apparent that the Court passing the decree had no jurisdiction or there are patent reasons for doubting the inherent jurisdiction of the Court. “When a decree is made by a Court which has no jurisdiction to make, objection as to its validity may be raised in an execution proceeding if the objection appears on the face of the record. Where the objection as to the jurisdiction of the Court to pass the decree does not appear on the face of the record and requires examination of the questions raised and decided at the trial or which would have been but have not been raised, the executing Court will have no jurisdiction to entertain an objection as to the validity of the decree even on the ground of absence of jurisdiction”. (See V.D Modi v. Abdul Rahman, (AIR 1970 SC 1475)) (supra). The questions relating to the obtaining of the compromise by fraud and mss-representation, therefore, do not relate to the execution of the decree and are thus outside he scope of the objections under Section 47 of the Code of Civil Procedure.

    7. In view of my finding, I allow this application and direct that the objection petition be set down for hearing of final arguments, as the other questions raised therein relate to legal issues based on the record of the suit. There is no order as to costs.

    Order accordingly.
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    Comments

    Addisons Paints And Chemicals v. Sant Ram Parma Nand
    (Sep 12, 1975)