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Thakur Pandey v. Bundi Ojha And Others
Structured Summary of Judicial Opinion (Hari Lal Agrawal, J.; concurring Chaudhary Sia Saran Sinha, J.)
Factual and Procedural Background
The plaintiff purchased a half-share (3 bighas 6 kathas and 2.5 dhurs) of certain lands (including plot No. 2843) by sale deed dated 26-11-1930 from Loknath Tiwary and others, and took possession. The remaining half-share (the other 3 bighas and odd) was sold by Khublal Tiwary to Ganga Bishun Tiwary (defendant No. 2). Defendant No. 2 created a simple mortgage in favour of the plaintiff and later sold the land to Jumman Mian by a registered sale deed dated 4-6-1938, leaving in deposit the mortgage money.
Jumman Mian later died leaving defendants Nos. 4–7 (his three sons and widow). The plaintiff obtained a mortgage decree based on a simple mortgage bond; defendants Nos. 4–7 satisfied that decree. Thereafter the plaintiff obtained Money Suit No. 423 of 1952 against defendants 4–6 for handnote dues (Rs. 642/-), that suit was decreed, and in execution the plaintiff purchased the disputed land at court auction, receiving delivery of possession on 17-10-1957.
Separately, Ganga Bishun (defendant No. 2) had executed a simple mortgage in favour of defendant No. 1 (the appellant). Defendant No. 1 instituted Title Mortgage Suit No. 156 of 1951 against Ganga Bishun and defendants 4–7; a preliminary decree was passed on 26-3-1953. An application for final decree was filed on 3-12-1957 (beyond the three-year period), but a final decree was prepared and executed in Execution Case No. 1191 of 1958 and the property was purchased by defendant No. 1.
The plaintiff's claim under Order XXI Rule 58 before the executing court was dismissed by order dated 15-9-1970, after which the plaintiff filed the present suit under Order XXI Rule 63 seeking a declaration that the property he purchased in the money-execution sale was not liable to be sold in the mortgage decree obtained by defendant No. 1.
At trial the court dismissed the plaintiff's suit, holding the title mortgage final decree valid and that the plaintiff's purchase was hit by the doctrine of lis pendens. On appeal the lower appellate court reversed the trial court: it found that Ganga Bishun had concealed the mortgage (fraud on Jumman Mian) and that the application for final decree was time-barred and therefore without jurisdiction; accordingly it held the plaintiff's purchase was not hit by lis pendens and decreed the plaintiff's suit. Defendant No. 1 then filed the present second appeal to the High Court, which was heard by a Division Bench.
Legal Issues Presented
- Whether a final decree prepared and executed after the period of limitation (beyond three years from a preliminary decree) is a nullity or otherwise without jurisdiction.
- Whether the doctrine of lis pendens applies to the plaintiff's purchase in a court auction (an involuntary transfer), i.e., whether lis pendens covers involuntary alienations such as court sales.
- Whether a suit is to be regarded as pending until the date of the final decree for the purposes of lis pendens (i.e., whether transfers during that entire period are prohibited/effected by lis pendens).
- Whether a third-party purchaser who was not a party to the mortgage suit can be affected by lis pendens when the alienor (a defendant in both suits) conveys the property in execution of a prior decree.
Arguments of the Parties
Appellant (Defendant No. 1) — Main Contentions
- The final decree in the title mortgage suit, though prepared and executed after the three-year period, was not without jurisdiction and thus not a nullity; consequently the sale in execution of that final decree must prevail and extinguish the plaintiff's intervening purchase (i.e., the plaintiff's purchase was hit by lis pendens).
- Relied on precedents (notably Bhaiga Parida v. Gannath Khandai and Ittyavira Mathai v. Varkey Varkey) to support the proposition that decrees passed beyond the period of limitation are not necessarily nullities and that limitation is not a question of jurisdiction.
- Argued that the mortgage suit must be deemed pending until the date of the final decree, so transfers made during that period are subject to lis pendens.
Respondent (Plaintiff and supporting counsel) — Main Contentions
- Contended that the doctrine of lis pendens, if applicable at all, applies to voluntary sales and not to involuntary transfers; since the plaintiff purchased at a court auction (an involuntary transfer), lis pendens should not invalidate that sale.
- Lower appellate court found (and relied upon) factual findings of fraud by Ganga Bishun in concealing the mortgage from Jumman Mian and concluded that the application for final decree was time-barred and thus without jurisdiction; on that basis the lower appellate court held the plaintiff's purchase was not caught by lis pendens.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Bhaiga Parida v. Gannath Khandai (AIR 1918 Pat 492) | Held that a final decree passed much beyond the period of three years is not necessarily ground for setting it aside; limitation is not a question of jurisdiction and the remedy lies in the appropriate procedural challenge. | The court relied on this authority to support the view that the late final decree in the mortgage suit was not a nullity merely because it was beyond the three-year period. |
| Ittyavira Mathai v. Varkey Varkey (AIR 1964 SC 907) | Where a court has jurisdiction over subject matter and parties, a decree cannot be treated as a nullity merely because the suit was barred by time; an error of law (including failure to give effect to limitation) does not render the decree void for want of jurisdiction and must be corrected by procedural remedies (appeal, review, etc.). | The court adopted this principle to conclude that the final decree in the mortgage suit could not be treated as void for want of jurisdiction simply because limitation had not been observed; remedies lie in challenging the decree by appropriate procedural means. |
| Kedarnath Lal v. Sheonarain (AIR 1970 SC 1717) | Affirms that the principle of lis pendens extends to involuntary alienations, including court sales (though Section 52’s text may be strictly framed around transfers "or otherwise dealing", the principle nonetheless applies). | The court relied on this decision to hold that lis pendens applies to involuntary transfers such as court sales, and thus the plaintiff's court-auction purchase could be struck by lis pendens. |
| Lakkala Lakshmamma v. Lakkala Muni Krishnama Naidu ((1969) 1 SC WR 74) | Supports the proposition that lis pendens applies to involuntary alienations as well. | Used, alongside Kedarnath Lal, to confirm that the principle of lis pendens encompasses court sales and similar involuntary alienations. |
Court's Reasoning and Analysis
The court proceeded in two main analytical steps: (1) the validity of the final decree notwithstanding delay beyond limitation; and (2) the applicability of lis pendens to the plaintiff's court-auction purchase.
1. Validity of the final decree despite delay: The court examined authorities (Bhaiga Parida and Ittyavira Mathai) and observed that where a court has jurisdiction over the subject matter and the parties, a decree pronounced by it is not a nullity merely because the suit or application was barred by limitation. Section 3 of the Limitation Act is peremptory and requires dismissal of time-barred proceedings, but the failure to apply limitation is an error of law and not a jurisdictional defect rendering the decree void. Such errors must be corrected by the procedural remedies provided by law. On this basis the court held that the final decree in the title mortgage suit could not be characterized as without jurisdiction or a nullity solely because it was prepared after the three-year period.
2. Applicability of lis pendens to the plaintiff's purchase: The court addressed the respondents' contention that lis pendens applies only to voluntary alienations and not to involuntary transfers (such as court sales). While Section 52 of the Transfer of Property Act uses language prohibiting transfers "or otherwise dealing" by parties to the suit, earlier High Court decisions had held the section strictly did not apply to court sales. However, the Supreme Court authorities (Kedarnath Lal and Lakkala Lakshmamma) established that the principle of lis pendens does indeed extend to involuntary alienations, including court sales. The court therefore concluded that lis pendens applies to the plaintiff's purchase at a court auction.
The court then considered whether the mortgage suit was to be regarded as "pending" until the date of the final decree. It relied on the 1929 explanation appended to the relevant provision, which treats pendency as commencing from presentation of the plaint and continuing until disposal by a final decree or order and until satisfaction or discharge of such decree or order. Applying that explanation, the court found the mortgage suit remained pending until the final decree and therefore any transfers during that period were covered by lis pendens.
Finally, the court rejected the contention that the plaintiff—being a third party and not a party to the mortgage suit—could not be affected by lis pendens. The court emphasized that what the doctrine prohibits is an act of a party to the suit that affects the rights of another party. In Money Suit No. 423 of 1952, the decree was against defendants 4–6, who were also defendants in the mortgage suit; those defendants were therefore not legally entitled to deal with the property so as to affect appellant's rights. Consequently, the act of sale in execution by those defendants, and the executing court's purported alienation, were rendered nugatory automatically by operation of law (the doctrine of lis pendens).
Holding and Implications
Holding: The Division Bench allowed the appeal. It set aside the judgment and decree of the lower appellate court and restored the judgment and decree of the trial court which had dismissed the plaintiff's suit. The court ordered that the parties bear their own costs. The opinion concludes with the short note: "Appeal allowed." (Concurring opinion: Chaudhary Sia Saran Sinha, J. agreed.)
Implications: As directly stated in the opinion:
- The final decree in the title mortgage suit was held not to be a nullity merely because it was prepared and executed after the statutory three-year period; such a delay, if resulting in error, is to be corrected by procedural remedies rather than by treating the decree as void for want of jurisdiction.
- The plaintiff's purchase in a court auction during the pendency of the mortgage suit was held to be hit by the doctrine of lis pendens because (a) the principle extends to involuntary alienations including court sales, and (b) the mortgage suit was pending until the date of the final decree under the statutory explanation. Consequently the court restored the trial court's dismissal of the plaintiff's suit.
- The decision applies established precedent cited in the opinion rather than purporting to lay down a new principle; the judgment implements prior Supreme Court authority on limitation/jurisdiction and on the reach of lis pendens to involuntary transfers.
Judges: Hari Lal Agrawal, J. (author of the opinion) and Chaudhary Sia Saran Sinha, J. (concurring). Final disposition: Appeal allowed; trial court judgment restored; parties to bear their own costs.
Hari Lal Agrawal, J.:— This appeal by defendant No. 1, arises out of a suit filed by the plaintiff-respondent under the provisions of Order XXI, Rule 63 of the Civil P.C, for a declaration that the property fully described at the foot of the plaint purchased by him in court sale, was not liable to be sold in the mortgage decree obtained by defendant No. 1. The relevant facts, briefly stated, are as follows:—
The plaintiff had purchased 3 bighas 6 kathas and 2-1/2 dhurs of land appertaining to plot No. 2843 and others under khata Nos. 452 and 395, being the other half of the disputed lands, from Loknath Tiwary by a sale deed dated 26-11-1930 disposing of his half share in the 6 bighas and odd land. The remaining half share was sold by Khublal Tiwary, his uncle, to Ganga Bishun Tiwary (defendant No. 2). Defendant No. 2 first created a mortgage over the property in favour of the plaintiff and subsequently sold the land to one Jumman Mian, however, leaving in deposit the mortgage money, by a registered deed of sale dated 4-6-1938.
2. These are the admitted facts of this case; Raghunandan Tiwary and Khublal Tiwary were brothers. They had equal interest in a piece of land measuring 6 bighas 12 kathas and 5 dhurs situated in village Belsa, half of which is the subject matter of the suit. Raghunandan had two sons, Loknath and Uma Dutt, Uma Dutt, however, died leaving his widow Rati Kuer, Loknath and Rati Kuer sold their half share to the plaintiff on 26-11-1930 and according to the plaintiff's case, he has been coming in possession over the land in question by virtue of his purchase.
3. Khublal, the other co-sharer of the half interest, also sold his share to defendant No. 2 as already said earlier Jumman Mian, the purchaser from defendant No. 2 died leaving behind three sons and a widow. The sons are defendant Nos. 4 to 6 and the widow is defendant No. 7 in the suit. The mortgage suit brought by the plaintiff on the basis of the simple mortgage bond was decreed and defendant Nos. 4 to 7 paid up the dues and thus satisfied the decree.
4. The plaintiff brought another suit, namely Money Suit No. 423 of 1952 against defendant Nos. 4 to 6 for realisation of some handnote dues amounting to Rs. 642/-. This suit was also decreed and the decree was put in execution against the disputed land, namely, half share of Raghunandan Tiwary. In execution of this decree the plaintiff purchased the disputed land in Court auction and delivery of possession was effected on 17-10-1957.
5. Ganga Bishun, defendant No. 2, had also executed a simple mortgage in favour of defendant No. 1 the appellant before us, who happened to be his maternal cousin, in respect of the disputed land. This mortgage was concealed from Jumman Mian. Title mortgage suit Number 156 of 1951 was accordingly instituted by defendant No. 1 against defendant No. 2 and defendants Nos. 4 to 7, the purchasers of his interest. In this suit a preliminary decree was passed on 26-3-1953 and an application for final decree was made on 3-12-1957 i.e beyond the prescribed period of 3 years from the date of the preliminary decree but nonetheless the final decree was prepared and put in execution in Execution Case No. 1191 of 1958 and the property in suit was purchased by defendant No. 1. The plaintiff preferred a claim under O. XXI R. 58 of the Civil P.C, but the executing Court by its Order dated 15-9-1970 dismissed the same and accordingly the plaintiff filed the present suit. The plaintiff based his claim by virtue of his purchase of the suit land in Execution Case No. 306 of 1956 on 13-3-57 where the decree was passed in Money Suit No. 423 of 1952 on the basis of the handnote as already stated earlier, and in this way his case was that the right, title and interest in the suit property were already acquired by him which could not be resold in execution of the final decree in mortgage suit.
The suit was contested by defendant No. 1 and one of the grounds urged on his behalf was that the sale in the money execution case was void as it was hit by the doctrine of lis pendens having been held, during the pendency of the title mortgage suit, which must be deemed to be pending till the date of the final decree which was prepared on 9-5-1958.
6. The trial court dismissed the suit holding that the final decree in the title mortgage suit was valid and the purchase by the plaintiff in the money execution case was hit by the doctrine of lis pendens. The plaintiff accordingly filed an appeal. The lower appellate Court recorded the following findings, (1) Ganga Bishun (defendant No. 2) played a fraud on Jumman Mian by concealing the existence of the encumbrance (the simple mortgage), and (2) the application for final decree was barred by limitation and, therefore the final decree was without jurisdiction and void and as such, the plaintiff's purchase in execution of the money decree was not hit by lis pendens. It accordingly decreed the plaintiff's suit.
The defendant No. 1 has accordingly filed this second appeal which has been referred to Division Bench for hearing.
7. Mr. Kailash Roy, appearing for the appellant, contended that the final decree, although passed beyond the period of limitation, was not without jurisdiction and, therefore, the purchase by the plaintiff was hit by the doctrine of lis pendens, which must yield to the sale in favour of defendant No. 1 in execution of the final decree. In support of his contention he placed reliance firstly upon the decision in Bhaiga Parida v. Gannath Khandai (AIR 1918 Pat 492). In that case also the final decree was passed much beyond the period of 3 years and in execution of the decree the property was sold. A suit was instituted by the judgment debtor to challenge the same on the ground that the decree was obtained by fraud. It was held that merely because the decree was passed beyond the period of limitation, could be no ground for setting it aside and, in any event, the suit for the said purpose was not maintainable. The remedy of the judgment debtor was to make an application within a period of 30 days from the date of his knowledge of the sale. It was further held that question of limitation was not a question of jurisdiction.
The Supreme Court also in the case of Ittyavira Mathai v. Varkey Varkey (AIR 1964 SC 907) observed that where a Court having jurisdiction over the subject matter and the parties, passes a decree, even if the suit was barred by time, such decree cannot be treated as a nullity and be ignored, as although the Court is bound to decide right, may decide wrong and even though it decides wrong, it would not be doing something which it had no jurisdiction to do. The remedy of the aggrieved party was to get the decree set aside by preferring an appeal against it. It is no doubt true that Section 3 of the Limitation Act is peremptory in nature and enjoins a duty upon the Court to dismiss an application or suit filed after the period of limitation, it does not say that the Court shall not entertain them and where the Court does not give effect to the rule of limitation and thus fails to perform its duty, it cannot be said that the Court acted without jurisdiction. In that event, it commits an error of law and it is well settled that an error of law can be corrected only in accordance with the remedies provided under the procedural law. A Judgment or order may be bad in law but until and unless it is set aside it will hold good and would be operative and binding on the parties. No decision taking a contrary view was cited by the learned counsel for the respondents.
8. In view of the above discussion, I would hold that the final decree passed in the title mortgage suit in favour of defendant No. 1 cannot be said to be nullity or without jurisdiction.
9. The next contention of Mr. Kailash Roy was that the purchase by the plaintiff of the property in question in execution of his money decree was hit by the doctrine of lis pendens inasmuch as the suit of defendant No. 1 must be deemed to be pending until the date of the passing of the final decree. Learned counsel appearing for the respondents, however, tried to meet this contention by raising an argument that the doctrine of lis pendens, if at all, would apply to voluntary sales and not to involuntary transfers, and inasmuch as the plaintiff had purchased the lands in suit in a Court auction, the same was not hit by the doctrine of lis pendens. It is, no doubt, true that Section 52 of the Transfer of Property Act, which enshrines this doctrine of lis pendens prohibits transfer “or otherwise dealing” of any immoveable property by any party to the suit or proceeding so as to affect the rights of any other party thereto under any decree or order, except under the authority of the Court and on such terms as it may impose and, therefore strictly speak-it does not apply to Court sales as was also held by some of the High Courts earlier, but now the settled law is that though the section itself may not apply to involuntary alienations, the principle of lis pendens applies to them as well and suffice it may be to cite the decision of the Supreme Court in Kedarnath Lal v. Sheonarain (AIR 1970 SC 1717) where on a consideration of an authority of the Privy Council and some other High Court it was clearly laid down that the principle of lis pendens applies to involuntary alienations such as Court sale also. To the same effect is another decision of the Supreme Court in the case of Lakkala Lakshmamma v. Lakkala Muni Krishnama Naidu ((1969) 1 SC WR 74).
10. Now remains for consideration a subsidiary question as to whether a suit will be deemed to be pending until the date of the final decree as the section now applies to transfers during the entire “pendency” of the suit. There has been a cleavage of authority on this question in various High Courts but by the addition of the explanation in the year 1929, the question is answered by itself to a great extent. The explanation very clearly provides that the pendency of a suit or proceeding shall be deemed to commence from the date of the presentation of the plaint or the institution of the proceeding and to continue until the suit or proceeding has been disposed of by a final decree or order and complete till the satisfaction or the discharge of such decree or order has been obtained. It is, therefore, obvious that the pendency of the mortgage suit was very much there until the passing of the final decree and inasmuch as the plaintiff had purchased the property under mortgage suit, during the pendency of the said suit, his purchase must be held to be hit by the doctrine of lis pendens.
Counsel for the plaintiff respondent has also submitted that inasmuch as the plaintiff was not a party to the mortgage suit of the appellant, he should not be deemed to be hit by the doctrine of lis pendens. The contention is also devoid of any merit inasmuch as what is prohibited by the doctrine of lis pendens is the act of a party of the suit or proceeding so as to affect the right of the other party thereto. In Money Suit No. 423 of 1952 the decree was passed against defendant Nos. 4 to 6. These defendants were also defendants in the subsequent mortgage suit in question. Therefore, those defendants were not entitled in law to deal with the property so as to affect the right of the other party to the suit, namely, the appellant who was the plaintiff of the mortgage suit. The presence of the alienee, namely, the plaintiff, was therefore not at all necessary in the suit according to the scheme of Section 52 of the T.P Act. The action of the party and, on the facts of the present case, that of the executing Court in the money execution case which purported to alienate the interest of the party concerned, is rendered nugatory by the operation of law, namely, the doctrine of lis pendens automatically. The inevitable result is followed by fiction of law, and, therefore, the presence of the third party is not at all required.
11. The learned Additional subordinate Judge, therefore, completely misdirected himself in decreeing the plaintiff's suit. The trial court has taken a very correct view in the matter. I would accordingly allow the appeal, set aside the judgment and decree of the Court of appeal below and restore those of the trial Court. In the circumstances, however, I shall leave the parties to bear their own costs.
Chaudhary Sia Saran Sinha, J.:— I agree.
Appeal allowed.
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