1. In this second appeal, the two sisters who were fighting for the agricultural land situated at Survey No. 957, area 7 Bigha 1 Biswa, in village Jaura Khurd, District Morena, and a residential house situated at village Shikarpur, left by their father Sardar Singh, have filed an application (I.A. No. VI of 1980) on 17-10-1989 under Order 23, Rule 3, C.P.C., for disposing of the appeal in terms of the compromise.
2. Before recording compromise and passing a judgment and decree in terms of the compromise one Rajendra Kumar Goyal filed an application (I.A. No. V/1989) on 20-10-1980 under Order 1, Rule 10 and Order 22, Rule 10 road with Section 151, C.P.C., stating therein that during the pendency of this appeal Pragobai, the plaintiff, had entered into an agreement for sale of her one-half share in the agricultural land on 23-8-1988 for a consideration of Rs. 1,05,000/-, out of which a sum of Rs. 25,000/ - was paid to her as earnest money and the balance is to be paid at the time of execution of the sale deed. Rajendra Kumar Goyal alleged that the two sisters have colluded to enter into a compromise to jeopardise his rights and interest; therefore, leave be granted to continue the appeal and he be ordered to be joined as a party to the appeal. The purchasers Rameshchandra Goyal, Vijayapal Singh, Dinesh Baboo Agrawal, Vinod Kumar Goyal, Mahendra Kumar and Ramkumar Bansod filed an application (I.A. No.VII/1989) on 3-11-1989 under Order 22, Rule 10, C.P.C., with an affidavit of Rameshchandra Goyal, and photostat copies of two registered saledeeds dated 11th October 1989 (Annexures A and B) and a photostat copy of a general power of attorney executed by respondent Pragobai in favour of Jagdish Singh Jadoo, alleging that Pragobai through Jagdish Singh Jadoo, the holder of the general power of attorney, has sold the disputed land on 11-10-1989. The sale is with the consent of Rajendra Kumar Goyal; therefore, the rights and interest in the subject-matter of the suit stand transferred and assigned, leave be granted to them to continue the appeal and they be impleaded as parties to protect their interest and rights in the suit property.
3. The appellant Baijantl opposed those applications and filed reply with an affidavit stating that Pragobai is an illiterate lady, she never executed any general power of attorney in favour of Jagdish Singh Jadon, neither Pragobai entered into any agreement to sell the property, nor any sale deed was executed by her. No consideration was received by Pagobai. Jagdish Singh Jadon has no authority or power to sell or dispose of Pragobai's property. The documents are forged, false and personified. It was averred that the lis is already settled by way of compromise and stands terminated; hence, the dispute which involves complicated questions of fact and law, cannot be decided in this appeal, the purchasers who are strangers, are free to file a regular civil suit. Pragobai also filed the reply with affidavit on the same lines.
4. Shri N. K. jain, learned counsel for the appellant Baijanti; Shri K. Kothari, learned counsel for respondent Pragobai, contended that both sisiers have entered into a compromise, wherein Pragobai has admitt ed the claim of Baijanti and also the genuine ness of the will executed by their father.
In the circumstances no leave can be granted for allowing the strangers to continue the appeal, as after compromise the lis between the two sisters has come to an end. Besides, it was contended that the general power of attorney and the sale deeds are forged, false and personified documents; hence, if the strangers, on the basis of these documents, want to establish their rights, that can only be done by a regular civil suit, and not in this appeal. Reliance was placed on Rambharose v. Tulsiram, 1965 Jab LJ (SN) 132. To demonstrate that the sale deeds are forged, Shri Jain pointed out that the suit land is situated in Morena District, while the deeds were fraudulently executed and registered at Bhind, a place where Registrar had no jurisdiction to register. To get the jurisdiction of the Registrar at Bhind, some property situated at Bhind has been included, which is insignificant and completely inassessible; the inclusion is only for registration, and not the subject of enjoyment. The sale is a mere device to evade the provisions of the Registration Act, the transactions are ficitious and non-existing between the parties, it amounts to fraud on the law of registration and is not valid under Section 28 of the Registration Act. Reliance was placed on two Privy Council decisions in the case of Collector, Gorakhpur v. Ramsunder Mal, AIR 1934 PC 187 and (Sri Raja) Inuganti Venkatarama Rao v. (Sri Raja) Sobhanadri Appa Rao, AIR 1936 PC 91. A Single Bench decision of this Court in Mst. Nathibai Ramratan v. Urilaji Punjaji Fulmali, AIR 1937 Nag 330 was also pressed into service. Therefore, it was contended that the Court cannot postpone recording of compromise and enquire into the claim of the third party.
5. Before dealing with the two applications, it is necessary to mention, here, some essential facts. The owner of the disputed land, measuring 7 Bigha 1 Biswa, and the house was Sardar Singh, whose daughters are Baijanti and Pragobai. Sometime prior to the death of Sardar Singh, who died on 25-3-1979, Baijanti, the appellant with her husband was residing with Sardar Singh, after whose death, Baijanti claimed to be the sole owner of the suit property and other property left by Sardar Singh on the basis of a will executed and registered on 24-3-1979. Pragobai having come to know that her sister is claiming to be the sole owner of the property, instituted the suit for declaration and cancellation of the will being forged, and claimed that both sisters are legal heirs of the deceased and are entitled to the properties left by deceased Sardar Singh in equal shares. The suit was decreed by the trial Court. An appeal was taken to the first appellate Court, which allowed the appeal and remanded the case to trial Court, granting an opportunity to appellant Baijanti to examine the attesting witnesses of the will, Babulal and Vishal Singh. Against this order, a miscellaneous appeal, being M.A. No. 8/1985, was preferred by plaintiff in this Court, wherein the order of remand was set aside and the first appellate Court was directed to decide the appeal afresh in accordance with law. The first appellate Court vide impugned judgment under this appeal, on the basis of the material on record and after hearing parties, dismissed the appeal. Before the first appellate Court an application under O.41, R. 27, C.P.C., was also filed seeking an opportunity to examine the attesting witnesses of the will, but the same was also dismissed hence, the present appeal.
6. In the background of these facts, Shri R. D. Jain, learned counsel for the purchasers, and Shri A. K. Shrivastava, learned counsel for Rajendra Kumar Goyal, contended that as Pragobai has transferred her title, right and interest in her share by sale, the purchasers, being in bona fide belief that Pragobai being the natural heir having succeeded in the two Courts, wherein the will has been held to be a forged one, have purchased the property for a huge consideration, hence, the leave deserves to be granted to continue the appeal, as the purchasers will be bound by the decree, which may ultimately be passed. The compromise is collusive and fraudulent, as, after sale, Pragobai has made a secret arrangement in order to obtain a decision of this Court for a sinister purpose, i.e., to cause loss to the purchasers. Now, Pragobai has no right left in the property; in the circumstances, the admission of Pragobai has no value and the compromise cannot be recorded, the purchasers are not strangers and they be allowed to continue the appeal. Besides, a separate suit, if the compromise is recorded, cannot be filed because of the bar under Order 23, Rule 3A, C.P.C. Learned counsel placed reliance on Sm. Saila Bala Desai v. Sm. Nirmal Sundari Dassi, AIR 1958 SC 394; Nagubai v. Bahama Rao, AIR 1956 SC 593; Dharam-singh v. Jalima, 1980 Jab LJ 738; Irudayar Animal v. Salayath Mary, AIR 1973 Madras 421; Ramyad Mahton v. Ram Bhaju, AIR 1932 Patna 89; Faljari Lal v. Ram Sarup, AIR 1953 Madh Bha 177 and Apaya v. Govind, AIR 1956 Bom 625.
7. In the backdrop of this case, before dealing with the applications under Order 22, Rule 10 read with Order 1, Rule 10, C.P.C. it is necessary to deal with the contention of Shri N. K. Jain that as soon as the compromise is filed the lis between the parties comes to an end, even if the so-called purchasers have applied under Order 22, Rule 10, C.P.C, the recording of compromise cannot be postponed. It is true that various allegations of fraud impersonation in relation to the execution of the general power of attorney and the sale deeds have been made by both sisters. It cannot be disputed that if the sale deed executed by Pragobai in favour of purchasers are held to be real, the said sales will be hit by Section 52 of the Transfer of Property Act and, if a compromise decree is passed, such a decree would be binding on the transferees pendente lite. It is trite law that a transferee pendente lite is bound by the decree just as much as he was a party to the suit, such transferee puts himself in privity with the suit, and must be treated, not as a stranger to the suit, but as a party to it and is, consequently, bound by the terms of the decree in full. (See Nagubai v. Shama Rao (AIR 1956 SC 593) (supra)). Similarly, a decree based upon a compromise is just as much binding as a decree founded upon a decision on merits. [See Shyamlal v. Sohanlal, AIR 1928 All 3 and Amarnath v. Deputy Director of Consolidation, Kanpur, AIR 1985 All 163.]
8. In this case, on the application under Order 23, Rule 3, this Court has not passed any order or judgment after satisfying that the subject-matter of the suit has been adjusted wholly by a lawful agreement or compromise. Therefore, till passing of that order or judgment, the suit cannot be deemed to have been terminated even after the admission of whole of the claim by the plaintiff in favour of appellant/defendant and, therefore, the Court is bound to decide the objections made to such a compromise and the purchasers cannot be left to take recourse to law to challenge the compromise being collusive and fraudulent by filing a separate suit. It is true that this Court in Rambhorose v. Tulsiram (1965 Jab LJ (SN) 132) (supra) has taken the view that in asase when parties to the suit presented a competed compromise, it is not proper to postpone the consideration of that, because of the intervention of a third party, who claims rights and interest in the subject-matter, and enquire the claim of the third party. If the third party has get a right of his own in the subject-matter of the suit, he can be left to his own resourses in a regular civil suit. In my opinion, this case is not applicable, as it is based on the unamended provisions of the Civil Procedure Code. The C.P.C. was amended in the year 1976 by C.P.C. (Amendment) Act, 1976, which came into force from 1-2-1977. Rule 3A of O. 23 was inserted by the Amendment Act, which reads as under:-
"3A, Bar to suit.- No suit shall lie to set aside a decree on the ground that the compromise on which the decree is based was not lawful."
Therefore, as the purchasers pendente lite would be bound by the decree, justice requires that they should be given an opportunity to protect their rights and interest, and should not be left to take recourse to law, as it would be inequitable to allow a party to snatch the property from the hands of purchasers pendente lite on the basis of the admission or compromise made by the plaintiff/transferor subsequent to the State of transfer by sale, stating that she has no right, title or interest and the defendant is the only owner; hence, the purchasers are entitled to oppose the compromise before a final order or judgment, decreeing the suit, is passed in terms of the compromise; that lis remains alive which is also the view of this Court. (See Dharam Singh v. Jalima (1980 Jab LJ 738) (supra)).
9. Ordinarily, a purchaser pendente lite who is bound by the proceedings taken by the party to the suit, is granted leave to protect his rights, if he chooses to apply under Order 22, Rule 10, C.P.C., a judicial discretion has to be exercised on such applications. But the contention of Shri N. K. Jain that the sale-deeds are fraudulent and forged and are not valid under Section 28 of the Registration Act, therefore, the so-called purchasers have no right to be impleaded as a party under Order 22, Rule 10, deserves consideration. Indisputably, there is a serious challenge to the sale-deeds and to the general power of attorney, being forged and fraudulent. The sale deeds have been registered at District Bhind in relation to property situated in District Morena, by inclusion of some property situated at Bhind, presumably, with a view to effect registration at Bhind and to repeal the challenge that the provisions of the law of registration were evaded and fraud was practised on the Registrar.
10. A question certainly arises on such facts and circumstances whether the discretion of granting leave should be exercised under Order 22, Rule 10, C.P.C., without any enquiry. The applications have been filed in second appeal. An appeal is a continuation of suit and the provisions of Order 22, Rule 10 apply to appeals. It is settled that in a suit or an appeal, an applicant who invokes the aid of Order 22, Rule 10, is not, as a matter of right, entitled to an order in his favour, regardless of the delay or laches; there can be no doubt that the Court has discretion in the matter, but the discretion has to be exercised judicially, and the application should be allowed rather than dismissed to avoid multiplicity of proceedings and to prevent injustice. It is also not the law that merely because an assignment is challenged, that can be a ground for refusing leave. But, in the circumstances, like the present, the Court before exercising discretion can hold an enquiry into the factum of validity of the assignment, as the Court is clothed with the jurisdiction to grant or refuse leave, that gives the jurisdiction to Court to hold an enquiry, if the assignment is challenged, as held by this Court and by Calcutta and Madras High Courts in Neville v. Freser, AIR 1944 Nag 137; Surendra Narain v. Nityendra Narain, AIR 1926 Cal 173; Enday Ali v. Benodini Dutt, AIR 1919 Cal 323; Nanjamal v. Bwaramurthi, AIR 1964 Mad 592 and Seethi Achi v. Mayappa, AIR 1934 Mad 337.
11. The facts and circumstances of this case warrant that before allowing or refusing leave under Order 22, Rule 10, to the purchasers, an enquiry should be ordered to be held in the matter of assignment by way of transfer, as the applications cannot be disposed of only on the basis of the affidavits filed by the parties. The parties should be afforded an opportunity to lead evidence in respect of genuineness or validity of the transfer, and a finding from the first appellate Court deserves to be called for, on the following questions:
1. Whether Pragobai executed the general power of attorney in favour of Jagdish Singh Jadon?
2. Whether Pragobai transferred the suit land and other property in favour of the purchasers after receipt of consideration from them?
3. Whether the sale-deeds were got executed after playing fraud on the law of registration are, therefore, invalid?
After the receipt of the findings, the application under Order 22, Rule 10, C.P.C., shall be considered; till then, the decision on application under Order 23, Rule 3 is postponed.
12. Parties are directed through their counsel to appear before the first appellate Court on 22-4-1990. On that date the first appellate Court shall fix a date for recording of evidence of both parties. The first appellate Court shall afford an opportunity to parties to lead evidence on the questions so framed by this Court; parties shall keep their evidence present. After recording of evidence, the first appellant Court shall hear the parties and submit its report. The enquiry shall be completed within four months from today, and the report should reach this Court by 31 st July 1990. If the parties want to summon witnesses, they may do so at their own risk. No fresh notice of appearance need be issued by the first appellate Court.
13. Let the record of the case be sent to the first appellate Court with a copy of this order so as to reach the same on or before 12-4-1990.