Ramchandra Gururao J... v. Kamalabai Alias Tani..., Bombay High Court, Judgment, Law, casemine.com

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Case Number

Second Appeal No. 370 of 1941

Attorney(S)

A.G Desai, with V.H Gumaste, for the appellant.
P.B Gajendragadkar, for respondent No. 1.

Judges

Mr. Divatia
Mr. Sen, JJ.

Acts

provisions of s. 52 of the Transfer of Property Act
s. 52 and s. 41 of the Transfer of Property Act.
SECTION 100 TRANSFER OF PROPERTY ACT
s. 52 of the Transfer of Property Act

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Smart Summary

Factual and Procedural Background

This opinion arises from execution proceedings on a compromise decree awarding past and future maintenance to Ambabai, a widow. The compromise decree charged certain properties that devolved to different defendants for the payment of the widow's maintenance. The litigation in this appeal concerns one specific parcel: Survey No. 3 at Shinganapur, which fell to the share of defendant No. 1 in a family partition and was alleged by the plaintiff to be charged under the decree.

During the pendency of the suit (the suit was filed on June 30, 1921), the property (Survey No. 3) was purchased from defendant No. 1 by the present appellant on September 8, 1921. The appellant was not a party to the original suit but was made a party during the execution proceedings as opponent No. 4. A compromise between the parties occurred on September 13, 1922, and a decree was drawn up on September 20, 1922, stating in material part that "out of the amount of maintenance, defendant No. 1 is liable to pay Rs. 57 which shall be the amount of his share, and to the extent of this sum the property of his share is subject to the charge."

The appellant opposed execution against the property. The lower courts rejected the appellant's contentions and ordered execution to proceed against the property. The present appeal repeats the grounds argued below. The appellate court dismissed the appeal with costs.

Legal Issues Presented

Whether a charge was created on Survey No. 3 when (a) the compromise described that properties "in possession" of defendants should be charged, but at execution the particular land was in the appellant's possession as purchaser.
Whether the decree was too indefinite to create a charge on the particular property because it referred only generally to "the property of defendant No. 1's share" without naming the specific survey number.
Whether a bona fide purchaser for value without notice (the appellant) who purchased the property during the pendency of the suit is protected by s. 100 of the Transfer of Property Act such that the decree-created charge would not bind the purchaser.
Whether the appellant, having purchased to pay off defendant No. 1's prior mortgage (and claiming subrogation to the mortgagee's position), could defeat the widow's charge because the mortgage debt is paramount.

Arguments of the Parties

Appellant's Arguments

There was no charge created on Survey No. 3 because the compromise stated the properties "in possession" of the defendants should be charged, and at execution the property was not in defendant No. 1's possession but in the appellant's possession as a purchaser.
The decree was indefinite as to this particular property because it merely stated that the "property of defendant No. 1's share" was subject to the charge and did not specify Survey No. 3.
Section 100 of the Transfer of Property Act protects a transferee for consideration without notice from enforcement of a charge; accordingly, the decree-holder (charge-holder) cannot proceed against property purchased pending the suit by someone unaware of the eventual charge created by the decree.
The appellant purchased the property to pay off a prior mortgage and is entitled to be subrogated to the mortgagee's position; that mortgage debt, being prior, should take precedence over the widow's charge and prevent sale in execution of the decree.

The opinion does not contain a detailed account of the respondent's (plaintiff's) separate or specific arguments beyond the fact that the plaintiff asserted the property was charged under the decree and proceeded in execution; the lower courts rejected the appellant's contentions and directed execution.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Shafiq-Ullah Khan v. Sami-Ullah Khan (Allahabad High Court)	Illustration of relationship between s. 52 and s. 41 of the Transfer of Property Act: s. 41 is a general estoppel provision; s. 52 is a special provision applying to transfers during pendency of a suit.	The court invoked this decision by analogy to support the proposition that a general provision (here s. 100) does not displace a special provision (s. 52) that governs transfers during litigation; therefore s. 100 does not defeat s. 52 in transfers effected during pendency.
Gangabai v. Pagabai (recent decision of this Court)	Held that a charge created over specific property in a decree for maintenance takes precedence over the rights of a private or auction purchaser of the same property during the pendency of the suit.	The court relied on this decision to conclude that even if the appellant had paid off a prior mortgage (and thereby claimed subrogation), he would still be bound by the decree-created charge and could not defeat the widow's charge by virtue of subrogation or priority.

Court's Reasoning and Analysis

The court proceeded through a structured analysis addressing each of the appellant's contentions using statutory principles and the cited authorities:

On lis pendens (s. 52, Transfer of Property Act): The court observed that the principle of lis pendens applies to suits for maintenance where specific properties are sought to be charged. Section 52 precludes transfers during active litigation that would affect the rights of other parties under a subsequent decree. The court treated s. 52 as the governing principle for transfers during the pendency of a suit.
On the first two contentions (possession at time of execution; indefiniteness of decree): The court rejected these as unsubstantial. It emphasized that the operative document for rights is the decree itself (not the compromise application), and the decree expressly stated that the property of defendant No. 1's share was subject to the charge. It was common ground that Survey No. 3 fell to defendant No. 1's share and the plaintiff had provided survey numbers for the shares; therefore the decree was not indefinite and the specific property could be ascertained.
On the s. 100 contention (protection of bona fide transferees without notice): The court analyzed the relationship between s. 52 and s. 100. It observed that s. 100 generally provides that a charge shall not be enforced against property in the hands of a transferee who took for consideration and without notice of the charge. However, the court explained this provision operates where the charge pre-exists the transfer. In contrast, where a transfer takes place during the pendency of litigation and the charge is created later by decree, the transfer occurs before the creation of the charge. In such cases s. 52 governs and binds the transferee despite absence of notice. The court concluded s. 100 does not operate to defeat s. 52 in transfers made during litigation; notice is immaterial where the transfer is to the detriment of a party in whose favour the charge is later created.
By analogy to Shafiq-Ullah Khan v. Sami-Ullah Khan, the court treated s. 52 as a special provision applicable to transfers during litigation which is not displaced by general provisions such as s. 100.
On subrogation and priority of mortgage: The court noted the lower court proceeded on the assumption that the appellant had paid off the prior mortgage. Even accepting that, the court relied on Gangabai v. Pagabai to hold that a charge created by a decree for maintenance over specific property takes precedence over the rights of a private or auction purchaser who acquired the property during the pendency of the suit. Thus subrogation did not defeat the widow's charge.
Conclusion of analysis: All four contentions advanced by the appellant were rejected based on the foregoing statutory construction and precedents, and the lower courts' orders directing execution against the property were affirmed.

Holding and Implications

Holding: APPEAL DISMISSED — the appellate court dismissed the appeal and awarded costs against the appellant.

Implications and Consequences:

The decree-created charge over Survey No. 3 (a parcel that fell to defendant No. 1's share) is binding on the appellant, despite his purchase of the property during the pendency of the suit and despite any absence of notice of the future decree-created charge.
Section 52 of the Transfer of Property Act governs transfers during litigation, so a transferee who acquires property during the pendency of a suit is bound by a charge later created by decree in that suit; the protection in s. 100 (for transferees without notice) does not apply where the transfer precedes the charge's creation.
Payment off of a prior mortgage and claimed subrogation by a purchaser who acquired property during the suit does not defeat a decree-created maintenance charge: such charge takes precedence over the rights of a private or auction purchaser acquired during the pendency.
The direct practical effect is that execution may proceed against the property (Survey No. 3) to satisfy the widow's maintenance claim. The opinion does not articulate any broader doctrinal change beyond applying existing statutory rules and precedent to these facts.

Appeal dismissed.

Y.V.D

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Ramchandra Gururao Joshi (Original Opponent No. 4), v. Kamalabai Alias Tanibai Bhratar Sheshagirirao Sarathi, Heir Of The Deceased Ambabai Bhratar Venkaji Balaji Yardi; And Others (Heir Of Original Darkhastdar And Opponents Nos. 2 And 3)

Divatia, J.:—

This appeal arises in execution proceedings of a decree for past as well as future maintenance obtained by Ambabai, a widow, against the defendants. It is a compromise decree under which certain properties having fallen to the share of the different defendants were separately charged for the amount of the widow's maintenance. We are only concerned in this litigation with one property, Survey No. 3, at Shinganapur, which in the division of the defendants' family came to the share of the first defendant and which according to the plaintiff-widow has been charged for her maintenance. This property has been purchased during the pendency of the suit from the first defendant by the present appellant who was not a party to the suit but who was made a party in the execution proceedings as opponent No. 4. This purchase took place on of September 8, 1921, after the suit was filed on June 30 of the same year. On September 13, 1922, there was a compromise between the parties and on September 20, a decree was drawn up in terms of the compromise. The material portion of the decree is that “out of the amount of maintenance, defendant No. 1 is liable to pay Rs. 57 which shall be the amount of his share, and to the extent of this sum the property of his share is subject to the charge.” There is no doubt, and it is conceded, that Survey No. 3 fell to his share in the partition. There is, therefore, no question of the liability of defendant No. 1. But the appellant's case is that, although he purchased it during the pendency of the suit, the plaintiff has no right to proceed against it for several reasons.

It was firstly contended that there was no charge created upon that survey number because the compromise upon which the decree proceeded was to the effect that the property in possession of the defendants was to be charged and that at the time of execution this property was not in possession of the first defendant but had come to the appellant's possession as purchaser. Secondly, the decree was not definite in creating a charge on this particular property because it only stated that the property of defendant No. 1's share was subject to the charge without mentioning this particular property. Thirdly, it was contended that the charge was not binding on the appellant because he was a bona fide purchaser for value without notice of the charge; and lastly, it was urged that the appellant had purchased the property from defendant No. 1 to pay off the latter's mortgage debt and that therefore he was entitled to be subrogated to the position of the mortgagee, and that debt being paramount to the widow's charge for maintenance, the property in the appellant's hands was not liable to be sold in execution of the decree. All these contentions have been repelled ‘by both the lower Courts, and it is ordered that execution should proceed against the property.

On behalf of the appellant the same grounds which were urged in the lower Courts have been repeated here. It was contended that the provisions of lis pendens which apply to this case were the provisions of s. 52 of the Transfer of Property Act as it stood before the date of the amendment. Even so, however, we do not think that it would make any difference so far as the application of the old section to the facts of the present case is concerned. That section says that during the active prosecution in any Court in British India of a contentious suit or proceeding in which the right to immoveable property was in question, the property cannot be transferred or dealt with so as to affect the rights of any other party thereto under the decree. There is no doubt that the principle of lis pendens applies to a suit for maintenance in which it is sought to have certain properties charged for the maintenance, and the lis would apply to those properties if they are charged under the decree.

With regard to the first two contentions of the appellant we do not think that there is any substance in them at all. It is no doubt true that in the compromise application it was stated that the properties in possession of the respective defendants should be charged under the decree. But when the decree was drawn up, and we have to look to the decree and not to the compromise application, it was clearly stated that the property of defendant No. 1's share was subject to the charge. The decree states that it was passed in terms of the compromise, but it was clearly contemplated that under the decree what was to be charged was the property which came to the share of the respective defendants. Secondly, there is no difficulty in ascertaining what the property is. It is common ground that this particular land fell to the share of defendant No. 1, and the plaintiff has also given the various survey numbers which fell to the respective defendants' shares. It cannot, therefore, be said that the decree is in any way indefinite.

It is the third contention urged by Mr. Desai on behalf of the appellant that has some importance. The contention is that all that the decree created was a charge on the property and that the decree-holder is, therefore, merely a charge-holder and nothing more. Section 100 of the Transfer of Property Act provides that save as otherwise expressly provided by any law for the time being in force, no charge shall be enforced against any property in the hands of a person to whom such property has been transferred for consideration and without notice of the charge. The argument is that s. 52 must be read along with s. 100 and as controlled by it with the result that even though a charge may be created in favour of the plaintiff the latter cannot proceed against the charged property purchased pending the suit by a person who was not aware of the creation of the charge. Indeed, in such a case the purchaser would never have notice of the charge at the time of his purchase during the pendency of the suit because ex hypothesi the charge would be created by the decree. The contention, therefore, amounts to this that whenever a property is sold pending the litigation and thereafter a charge is created in the decree, the charge is in all cases not binding on the transferee because at the date of his transfer he would have no notice of the charge which is going to be imposed in the decree. If this argument is correct, the plaintiff will have no remedy against the property in the hands of the appellant. But we do not think that is the correct legal position. The underlying principle of s. 52 of the Transfer of Property Act is that no immoveable property which is the subject-matter of the litigation can be transferred or dealt with by any party to the suit to the detriment of the other party. The decree may be for possession or sale of the property or it may only create a charge on the property. But whatever the nature of the decree, it is binding on the person to whom the property is transferred during the litigation. If the decree created a charge, that charge is in all cases binding on the transferee, and the question of notice is immaterial. Section 100 of the Transfer of Property Act saves any other express provision of law. Moreover, that section would apply only when the transferee takes the property without notice of the charge, in other words, the charge must have been created before and the transfer must have taken place after the creation of the charge. But in the case of a transfer during the pendency of the litigation, the position would be the reverse. The transfer would necessarily take place before the charge is created in the decree. It is difficult to see, therefore, how the provisions of s. 100 would apply to a case of transfer during the pendency of a litigation. That section is a general provision relating to a charge and it provides, among other things, that a transferee after the charge would be affected only if he has notice of the same. It does not provide as to what might happen if the transfer takes place before the charge is created. Such a case when it happens pending the suit is covered by s. 52, under which the transfer cannot take place to the detriment of the person in whose favour the charge is created.

By way of analogy, we might refer to a decision of the Allahabad High Court in Shafiq-Ullah Khan v. Sami-Ullah Khan. There the question was as to the relation between s. 52 and s. 41 of the Transfer of Property Act. The latter relates to a transfer by an ostensible owner of the property with the consent of the true owner. It was urged in that case that s. 52 would not apply to a case which falls under s. 41. But it was held that those two sections are mutually exclusive and that s. 41 is only a general section dealing with estoppel in the circumstances mentioned therein, while s. 52 was a special section which applies to a transfer during the pendency of a suit. On the same principle, it can be said here that s. 100 would not apply to the present case which fails clearly under the provisions of s. 52. We, therefore, think that the lower Court was right in holding that even though the appellant may be a transferee with consideration and even without notice of the pending litigation, he is bound by the charge created by the decree.

The last contention relates to subrogation. There is no definite folding of the lower Court that the appellant has paid off the previous mortgage. But the lower Court has proceeded on the basis that he has. Even so, the point is concluded by a recent decision of our Court in Gangabai v. Pagabai. It was held in that case that a charge created over specific property in a decree for maintenance takes precedence over the right of a private or auction purchaser of the same property during the pendency of the suit. There is no doubt, therefore, that even if the appellant has paid off the previous mortgagee, he is bound by the charge.

All the four contentions urged by the appellant, therefore, fail, and the appeal is dismissed with costs.