Maya Devi v. Lalta Prasad .

Per Radhakrishnan, J.

The executing court as well as the High Court have committed a grave error in not properly appreciating the objections filed by the appellant. The registered power of attorney was executed by none other than the wife N of P and the appellant herein on 12-5-2006 in respect of the property in question for a sale consideration of Rs 70,000, which was received by N in cash in advance and she acknowledged the same before the Sub-Registrar. On the same day, N, wife of P handed over physical vacant possession of the land and building situated thereon and from 12-5-2006 onwards, the appellant is in possession of the property. A decree has been obtained against P by the respondent without any proper contest and the court proceeded against P ex parte. Evidently, a collusive decree was obtained by the respondent to get over the registered power of attorney executed in favour of the appellant.

(Paras 6 to 8)

In para 27 of Suraj Lamp (2), (2012) 1 SCC 656 it has been clarified that the observations made by the Supreme Court in Suraj Lamp (1), (2009) 7 SCC 363 are not intended to in any way affect the validity of sale agreements and powers of attorney executed in genuine transactions. The power of attorney executed on 12-5-2006 in favour of the appellant by the wife of P is a genuine transaction executed years before the judgment of the Supreme Court. The facts clearly indicate that the agreement for sale dated 3-11-2003 was created by none other than P, the husband of N, who had executed the general power of attorney and possession was handed over to the appellant. That being the fact situation, the objection filed by the appellant under Order 21 Rule 58 CPC in execution has to be allowed. The executing court can execute the decree in the civil suit, but without proceeding against the property referred to in the registered power of attorney dated 12-5-2006.

(Para 10)

Suraj Lamp and Industries (P) Ltd. (2) v. State of Haryana, (2012) 1 SCC 656 : (2012) 1 SCC (Civ) 351, explained and applied

Suraj Lamp and Industries (P) Ltd. v. State of Haryana, (2009) 7 SCC 363 : (2009) 3 SCC (Civ) 126, explained

Maya Devi v. Lalta Prasad, Execution First Appeal No. 23 of 2010, order dated 24-1-2011 (Del), reversed

Per Vikramajit Sen, J. (concurring)

The execution proceedings were initiated by the respondent decree-holder on 27-10-2007 under Order 21 Rule 11 CPC. It transpired that attachment orders came to be passed. The application dated 3-7-2008, being objections under Order 21 Rule 58 read with Section 151 CPC was preferred by the appellant pleading, inter alia, that the decree-holder had wrongly scheduled her property in the execution application; that she was the absolute and real owner thereof having purchased it on 12-5-2006 from N, wife of P (judgment-debtor); that the appellant had no other connection or concern with the judgment-debtor or with his wife in any manner whatsoever. N had also participated in the execution proceedings and had filed her affidavit by way of evidence, asseverating therein that she had sold the property to the appellant by executing a registered general power of attorney agreement to sell, affidavit, receipt, possession letter, will deed, which were duly notarised on 12-5-2006. N further stated that she had purchased the property from one R by means of similar documentation all of which were handed over by her to the appellant at the time of selling of the said property. Thus, it needs to be kept in perspective that Order 21 Rule 97 to Rule 101 CPC envisage the determination of all questions in execution proceedings and not by way of an independent suit. The executing court, therefore, was duty-bound to consider and decide the objections filed by the appellant with complete care and circumspection. The executing court ignored and overlooked the important submission of the appellant stating that she was the absolute owner of the suit property and that she had no truck whatsoever either with the judgment-debtor P or his wife N beyond purchasing the subject property from the latter.

(Paras 32, 33, 36 and 37)

What has also escaped the attention of the executing court is that Suraj Lamp (1), (2009) 7 SCC 363 has prospective operation, thereby rendering it inapplicable to the subject 2006 transaction. Secondly, if the general power of attorney executed in favour of the appellant was bereft of legal efficacy, the ownership of N would also be invalid since she had purchased the property from R by means of similar documentation, and sequentially the property would have no connection whatsoever with the judgment-debtor. The High Court has also wrongly applied Suraj Lamp (1) case and has also neglected to reflect upon the appellant's plea that she (i) is the actual owner of the suit property having purchased it for valuable consideration, and (ii) being a third party not connected in any mala fide manner with the judgment-debtor, and (iii) not having received prior notice of any action of late P, was impervious to execution proceedings. A miscarriage of justice has taken place on an unsubstantiated presumption that one of the assets of the judgment-debtor had been illegally transferred to defeat the decree. The appellant had no other recourse than to file objections under Order 21 Rule 58 CPC.

(Paras 38 and 39)

Suraj Lamp and Industries (P) Ltd. v. State of Haryana, (2009) 7 SCC 363 : (2009) 3 SCC (Civ) 126, distinguished

Maya Devi v. Lalta Prasad, Execution First Appeal No. 23 of 2010, order dated 24-1-2011 (Del), reversed

The plaint contains an averment that the suit property had already been sold. The defendant P (his wife N was not impleaded), had appeared in the trial court and filed his written statement. After filing his written statement he stopped appearing, and the suit proceeded ex parte. However, the absence of the defendant does not absolve the trial court from fully satisfying itself of the factual and legal veracity of the plaintiff's claim. In fact, this feature of the litigation casts a greater responsibility and onerous obligation on the trial court as well as the executing court to be fully satisfied that the claim has been proved and substantiated to the hilt by the plaintiff. The failure to file a written statement, thereby bringing Order 8 Rule 10 CPC into operation, or the factum of the defendant having been set ex parte, does not invite a punishment in the form of an automatic decree. Both under Order 8 Rule 10 CPC and on the invocation of Order 9 CPC, the Court is nevertheless duty-bound to diligently ensure that the plaint stands proved and the prayers therein are worthy of being granted.

(Paras 40 and 41)

Shantilal Gulabchand Mutha v. Telco Ltd., (2013) 4 SCC 396 : (2013) 2 SCC (Civ) 632, relied on

The appellant has not taken any steps for setting aside the ex parte decree against late P since the appellant objector has no reason to evince or harbour any interest in the inter se dispute between the respondent decree-holder and the judgment-debtor, P. On a conjoint reading of Order 21 Rule 58 CPC and the fasciculus of Order 21 comprising Rules 97 to 104, it becomes clear that all questions raised by the objector have to be comprehensively considered on their merits. In the case in hand, the decree from which the execution proceedings emanate is not one for delivery of possession, but is a simple money decree. Order 21 proscribes the filing of a separate suit and prescribes that all relevant questions shall be determined by the court. Objections under Order 21 should be meaningfully heard so as to avoid the possibility of any miscarriage of justice. It is significant in this regard that Rule 103 ordains that where any application has been adjudicated upon under Rule 98 or Rule 100, the order made thereon shall have the same force and be subject to the same conditions as to an appeal or otherwise, as if it were a decree. The appellant is a third party and has been brought into the lis by a side wind in that her property is sought to be attached with the intention of satisfying a decree in which she was not directly or intrinsically concerned. The appellant objector who has approached the Court under Order 21 Rule 58 CPC is more advantageously or favourably placed inasmuch as she is a third party so far as the decree is concerned, and her property is not the subject-matter of the decree. It is thus clear that the courts below have rejected the objections merely because of some sympathy towards the decree-holder. The objections deserved to be allowed without disturbing the decree, leaving all other remedies open to the respondent decree-holder, including proceedings against the estate of the judgment-debtor.

(Paras 42 to 44)

Brahmdeo Chaudhary v. Rishikesh Prasad Jaiswal, (1997) 3 SCC 694; Shreenath v. Rajesh, (1998) 4 SCC 543; Tanzeem-e-Sufia v. Bibi Haliman, (2002) 7 SCC 50, relied on

D. Registration Act, 1908 — Ss. 50, 48, 17 and 18 — Probative/Evidentiary value of documents — Preference to registered document over unregistered document — Held, registered documents (though not mandatorily registrable) would score over others — Documents purportedly executed in favour of respondent decree-holder are unregistered and payment made by him to vendor is not substantiated, while sale/conveyance of property to appellant was made by way of registered power of attorney [saved by exception carved out in Suraj Lamp (2), (2012) 1 SCC 656] — Hence, held, alleged transaction between vendor and respondent decree-holder was not genuinely prior in time to execution of registered power of attorney — Evidence Act, 1872 — Ss. 60 to 64 — Transfer of Property Act, 1882, Ss. 54, 59, 107, 118 & 123 and 9

(Paras 15 and 16)

E. Contract Act, 1872 — Ss. 73 and 74 — Remedies/Relief for breach of contract — Penalty for breach of contract — Legality — Law summarised — Recovery of double the amount of sale consideration as penalty for breach of contract — Impermissibility of — Held, imposition and recovery of penalty for breach of contract is legally impermissible under Contract Act

(Paras 19 to 31)

Chunilal V. Mehta & Sons Ltd. v. Century Spg. and Mfg. Co. Ltd., AIR 1962 SC 1314; Fateh Chand v. Balkishan Dass, AIR 1963 SC 1405; Phulchand Exports Ltd. v. O.O.O Patriot, (2011) 10 SCC 300 : (2012) 1 SCC (Civ) 131; ONGC Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705; Maula Bux v. Union of India, (1969) 2 SCC 554; Union of India v. Raman Iron Foundry, (1974) 2 SCC 231; BSNL v. Reliance Communication Ltd., (2011) 1 SCC 394 : (2011) 1 SCC (Civ) 192; ONGC Ltd. v. Saw Pipes Ltd., (2003) 5 SCC 705, followed

Halsbury's Laws of England (4th Edn. 1998) Vol. 12(1), Para 1065; Corpus Juris Secundum, Vol. 25-A (2012); American Restatement (Second) of Contracts, 1981, referred to

F. Specific Relief Act, 1963 — Ss. 10 and 19(b) — Specific performance of contract for sale of property, held, cannot be decreed against defendant devoid of title — Transfer of Property Act, 1882 — Ss. 7 and 8 — Nemo dat quod non habet

(Para 27)

Appeal allowed N-D/52976.CV