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K. Venkata Seshiah v. Kanduru Ramasubbamma (Dead) By Lrs.
Factual and Procedural Background
The special leave petition was filed under Article 136 of the Constitution against a judgment of the Andhra Pradesh High Court in a suit for declaration of title and injunction over approximately 81 acres of property originally belonging to Subbamma.
Subbamma had adopted K. V. Seshaiah, who later married twice and had two sons—Sudarshan Guptha (through his first wife) and Anand Babu (through his second). After Subbamma’s death in February 1985, competing claims arose:
- Each son asserted exclusive title on the strength of separate, mutually conflicting wills allegedly executed by Subbamma.
- The adoptive father, Seshaiah, claimed the entire property as her heir.
During the pendency of the special leave petition, the father and both sons executed a compromise dated 21 August 1987 under which the father agreed to pay ₹1 lakh to each son in exchange for their relinquishing any interest in the property. When the matter came up for recording the compromise, Sudarshan Guptha denied receipt of the agreed sum and refused to abide by the settlement. In the interim, he had sold parts of the disputed property to third-party purchasers (“alienees”), who were subsequently impleaded.
Legal Issues Presented
- Whether the compromise dated 21 August 1987, admittedly signed by all original parties, should be recorded and made the basis for disposal of the suit despite the subsequent objection of one signatory.
- Whether the pendente lite sale deeds executed by Sudarshan Guptha in favour of the alienees confer any valid title or interest in the property.
Arguments of the Parties
Respondent 2 – Sudarshan Guptha
- Contended he had not received the ₹1 lakh stated in the compromise deed.
- Maintained that, absent payment, he was not bound by the compromise.
Alienees (Third-Party Purchasers)
- Asserted the validity of their sale deeds and claimed ownership and possession of the land.
- Alleged they had made improvements and paid consideration (₹1 lakh earlier plus ₹77,124 at registration).
- Relied on certain judicial decisions which the Court found inapplicable.
Petitioner – K. V. Seshaiah
- Urged the Court to record and enforce the compromise as a final settlement.
- Agreed to pay an additional ₹1 lakh to Sudarshan Guptha to resolve all equities.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Bhaja Govinda Maikap v. Janaki Dei, AIR 1980 Ori 108 | Power of the court under Order XXIII Rule 3 CPC to record a compromise once its genuineness is established, even if a party subsequently resiles. | The Supreme Court adopted the same principle, holding that once satisfied of the compromise’s authenticity and lawfulness, the Court is bound to record it and dispose of the matter accordingly. |
Court's Reasoning and Analysis
The Court found the compromise petition genuine, voluntarily executed, and lawful. Key steps in its analysis included:
- Authenticity of Compromise: All three original parties conceded their signatures and the document’s genuineness. The only dispute was payment of the ₹1 lakh to Sudarshan Guptha. The Court viewed this as an executory term within an otherwise binding compromise.
- Pendente Lite Transfers: The sale deeds by Sudarshan Guptha were executed after the compromise and therefore subject to the doctrine of lis pendens. Given that he had agreed to relinquish his interest, he had no transferable title; consequently, the alienees acquired none.
- Applicability of Precedent: Relying on Bhaja Govinda Maikap, the Court emphasized that once a valid compromise is established, the Court must record it; a party’s later objection is immaterial.
- Equities and Compensation: To balance equities—particularly the alienees’ claim of having paid money and made improvements—the Court ordered specific monetary deposits and set-offs instead of mesne profits.
Holding and Implications
ORDER: The compromise petition dated 21 August 1987 is accepted and shall govern disposal of the suit and the special leave petition.
Key Directions:
- Seshaiah must deposit an additional ₹1 lakh for Sudarshan Guptha within eight weeks; Sudarshan may withdraw it.
- An amount of ₹77,124, representing consideration noted in the sale deeds, must be deposited in the trial court for withdrawal by the alienees.
- The sale deeds executed in favour of the alienees are declared invalid; the alienees have no right, title, or interest in the property.
- Alienees must deliver vacant possession to Seshaiah by 30 April 1991, failing which the trial court shall enforce delivery with police assistance if necessary.
- No order as to costs.
Implications: The decision resolves the dispute purely on the basis of the recorded compromise and invalidates pendente lite alienations. It reinforces the principle that courts must record and act upon genuine compromises under Order XXIII Rule 3 CPC. The ruling is confined to the parties and does not create new substantive precedent beyond reaffirming established law.
Order
1. The special leave petition under Article 136 of the Constitution is directed against the affirming judgment of the Andhra Pradesh High Court in a suit for title and injunction.
2. In view of the fact that a petition of compromise in respect of the entire subject matter of litigation has been filed in this Court it is unnecessary to refer to the facts leading to the litigation. We shall, therefore, confine the discussion to matters pertinent to the compromise.
3. Subbamma adopted one K.V Seshaiah. Seshaiah married two wives. Through the first wife he had a son born to him by name Sudarshan Guptha and through the second another son by name Anand Babu. In February 1985, during the pendency of the special leave petition the adoptive mother died. Sudarshan and Anand Babu laid claim to the entire property of Subbamma exclusively to each of them under two different wills said to be by Subbamma and each contended that the other will was a forged one. With the death of the adoptive mother, Seshaiah laid claim to the entire property as heir. While each of the parties had taken such stand in the litigations a compromise was brought about on August 21, 1987 between the father and his two sons and the same was filed in this Court. The terms of the compromise stipulated payment of Rs 1 lakh by the father to each of his two sons in lieu of relinquishment of their interest. When the matter was listed before the court for recording of the compromise, Sudarshan Guptha, respondent 2 herein, maintained that he had not been paid Rs 1 lakh as stipulated and he had no intention to accept the compromise. The question as to recording of the compromise was taken up by the court and parties have been heard.
4. One of the stipulations in the compromise deed which has admittedly been signed by the father and his two sons stipulates:
“The petitioner has given to the second and third respondents (the two sons) an amount of Rs 1 lakh each and the second and third respondents have received the same.”
In the face of such a statement in the compromise deed signed by the parties respondent 2 has disputed the fact of payment and has, in the meantime, alienated about 81 acres of property which constitutes the subject matter of dispute to third parties. The alienees have now been brought on record under orders of this Court.
5. We have heard counsel for the original parties as also the alienees. The alienations are for about a purported consideration of Rs 4 lakhs. The sale deeds indicate that a sum of Rs 1 lakh had been received earlier and a net amount of Rs 77,124 out of the consideration money under these documents has been paid before the registering authority. The alienees have admittedly been in possession of the property from the date of the sales which is more than three years' old by now.
6. Admittedly, the transfers are pendente lite. In fact, if the compromise is valid and binding the alienor-respondent 2 had no interest in the property to part with in view of the stipulation in the compromise that on receipt of Rs 1 lakh he relinquished his entire interest in the property. The alienees have made an attempt to hold out that there were agreements for sale prior to the compromise for which there is no acceptable evidence. We think we have to find that the alienees had no interest in the property prior to the compromise and we must hold that the sale deeds are subsequent to August 21, 1987.
7. Mr Ram Kumar who appeared for respondent 2, apart from maintaining that his client has not received the sum of Rs 1 lakh has not been able to point out any justification as to why the compromise should not be acted upon and on the basis of it the litigation may not be disposed of. The factum of compromise is not in dispute. Respondent 2 and his counsel Mr Ram Kumar have accepted the fact that the parties have signed the compromise petition which contain terms which they had accepted and all parties have accepted the document of compromise to be genuine.
8. Counsel for the alienees has taken the stand that the said alienations are valid and the transferees have become owners of the property and has even maintained that there have been improvements of the property by the alienees. He sought to rely on certain decisions which on being referred to were found to be totally inapplicable to the facts of the case. On the other hand, we find that a similar question arose before the Orissa High Court in the case of Bhaja Govinda Maikap v. Janaki Dei AIR 1980 Ori 108 where the power of the court under Order XXIII, Rule 3 of the Code of Civil Procedure in the face of an objection of one of the parties to the compromise was considered. Relying upon several authorities of different High Courts and one of the Privy Council referred to in the decision, the High Court held that once the court was satisfied that there was a compromise it was for the court to record the same and no option lay before the court to act otherwise.
9. We are in accord with the principle indicated in the said decision and are of the view that as the compromise petition is genuine and lawful the same has to be acted upon. We direct that the compromise petition shall be accepted and in terms thereof the suit shall be disposed of and the terms of the compromise shall form part of the order to be drawn up in this Court for disposing of the special leave petition.
10. With a view to settling all equities between the parties and with the consent of Seshaiah who is present in court, and counsel for the sons and after hearing the advocate for the alienees, we make the following directions:
1. Seshaiah shall pay a sum of Rs 1 lakh more to Sudarshan Guptha within eight weeks from today. This amount shall be deposited in the Registry of this Court within the time indicated and Sudarshan Guptha shall be free to withdraw the amount.
2. Rs 77,124 being the amount paid by the alienees before the Sub-Registrar in respect of the sale deeds shall be deposited within the same period in the trial court and the alienees of the different sale deeds would be entitled to withdraw the amounts on the basis of the record made by the Sub-Registrar on each of the sale deeds.
3. The alienees have no right created under the alleged sale deeds. Their possession is without authority of law. Ordinarily, they would have been liable to account for mesne profits. In view of the fact that there was the allegation of payment of Rs 1 lakh to Sudarshan Guptha which we have not investigated and to meet the further allegation that some improvements have been made to the property which too we have not gone into, we direct that the mesne profits shall be set off against the same. Under orders of this Court security has been furnished for mesne profits. In view of the aforesaid direction, the security furnished in the trial court shall stand discharged and the alienees will have no liability to account for mesne profits. We declare and clarify that none of the sale deeds is valid and none of the alienees has any interest in the aforesaid property.
4. The alienees shall deliver vacant possession of the property by April 30, 1991, to Seshaiah and in the event of failure to do so the trial court is directed by our present order to deliver vacant possession of the entire property in suit including those which are covered by the sale deeds in favour of the alienees to Seshaiah within one month therefrom. If necessary, the trial court may appoint a Commissioner and take police help for executing this order and such cost shall ultimately be borne by the defaulting alienees but may initially be met by Seshaiah.
There would be no order for costs.
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