Lekshmi Gnanapakiam v. Ponnian Nadar — 1953 DIGILAW 198 (KER)

Judgment :- 1. The defendant is the appellant. The suit is for declaration of title to, and possession of, property. The plaint property originally belonged to one Gurpadam. It was sold for arrears of tax and was purchased by one Mytheen Khan Karion Khan. He sold the property to one Mariakannoo Pakiam under Ext. A on 25.7.1086. Pakiam executed a Sthreedhana sale in favour her adopted daughter Gnanappu Gnanaselvam under Ext. B dated 28.9.1036. Gnanaselvam executed a settlement deed in respect of the property in favour of plaintiffs 1 to 3. Ext. C dated 4.7.1098 is the settlement deed. Plaintiffs 1 to 3 sold their rights to the 4th plaintiff on 12.3.1122, under Ext. H. The defendant took a sale deed for the property from the brother of Mariakannoo Pakiam who was her legal heir. Ext. II dated 20.6.1112 is the sale deed. On the basis of the sale deed the defendant managed to get patta in her name. The suit is to set aside the pokkuvaravu decision and for declaration of the 4th plaintiff's title to, and possession of, the property. 2. The defendant contended that the right of Mariakkannoo Pakiam did not devolve on Gnanaselvam, and that the settlement deed, Ext. C executed by Gnanaselvam in favour of plaintiffs 1 to 3 was not valid. Pakiam and Gnanaselvam were in joint possession of the property. Subsequently difference of opinion arose between them and from 1094 onwards Gnanaselvam was not allowed to be in undisturbed possession of the property. Gnanaselvam thereupon filed Ext. K suit (O.S. No. 655 of 1094 of the Padmanabhapuram Munsiff 's Court) for declaration of her title to, and possession of, the property. Pakiam contended that the sale deed, Ext. B execeted by her was not in favour of the plaintiff in Ext. K suit but was in favour of Pakiam's own daughter Gnanaselvam. This contention was repelled by the court and the suit was decreed on 23.3.1099. Ext. K is the copy of the judgment. Pakiam appealed from the decree as A.S. No. 344 of 1099 of the Nagercoil District Court. The settlement deed, Ext. C, was executed by Gnanaselvam in favour of plaintiffs 1 to 3 during the pendency of the suit, namely, on 4.7.1098. The appeal was compromised between Pakiam and Gnanaselvam and by the compromise Gnanaselvam's right in the property was negatived and the suit was allowed to be dismissed. Ext. The settlement deed, Ext. C, was executed by Gnanaselvam in favour of plaintiffs 1 to 3 during the pendency of the suit, namely, on 4.7.1098. The appeal was compromised between Pakiam and Gnanaselvam and by the compromise Gnanaselvam's right in the property was negatived and the suit was allowed to be dismissed. Ext. IV dated 1.8.1100 is the copy of the compromise decree. The defendant contended that Ext. C was vitiated by lis pendens and that, therefore, plaintiffs 1 to 3 did not acquire any right in the property under that document. 3. The court below held that Ext. C was not affected by lis pendens since Ext. IV was a compromise decree. According to the learned Munsiff the rule of lis pendens will not apply to compromise decrees. Reliance was placed on the decision of the Travancore High Court in Sankaran Padmanabhan v. Sakarar Eraviar (7 T.L.R. 42), Chellakannu v. Kochan (18 T.L.J. 478) and on 18 T.L.J. Short Notes page 147. 4. We find ourselves unable to agree with this view of the learned Munsiff. 7 T.L.R. 42 was based entirely on the decision of the Madras High Court in Vaidyanatha Iyen v. Subramanya (12 Madras 439). This decision was subsequently overruled by a Full Bench of the Madras High Court in Annamalai Chettiar v. Malayandi Appiah Naik (29 Madras 426). In that case Sir Arnold White, C.J. Subramonia Iyer and Benson, JJ. discussed the question elaborately with reference to Indian and English decisions and held that the doctrine of lis pendens would apply to a compromise decree also provided the compromise was not the result of fraud or collusion. Subramonia Iyer, J. observed thus: "The essence of the doctrine of lis pendens undoubtedly is that where a proceeding before a court exercising contentious jurisdiction is honestly brought to a termination in one of the modes which the law permits it to be terminated by, and a decision of the Court is obtained, such decision is binding upon all persons who claim title by virtue of a transfer pending the litigation. With reference to this underlying principle there is no conceivable reason for attaching greater efficacy to a decision arrived at after actual contest than to decisions arrived at otherwise." With regard to the decision in 12 Madras 439 Sir Arnold White, C.J., observed: "With all deference to the learned judges who decided Vaidyanatha Iyen v. Subramanya (12 Madras 439) I cannot agree with the view that a court giving a decree in pursuance of a compromise performs a ministerial and not a judicial function. A decree is none the less a decree as defined by the Code of Civil Procedure because it is based on compromise, and the legal effects of a decree contemplated by S. 375 do not differ from the legal effects of a decree where the suit has been brought out to the end. The fact that a decree is given in accordance with the terms which have been come to between the parties does not prevent the decree being the formal expression by the court of an adjudication of a right claimed or a defence set up with the meaning of the definition." Benson, J., the other learned judge, who took part in the decision said: "It is difficult to see how compromises of the suit between the parties subsequent to the transfer can be held to render the suit non-contentious at the time of the transfer or indeed, at any time. The very fact that the compromise was effected shows that the suit was contentious. Moreover, if the compromise of a suit were held to render it non-contentious it would never be safe for any party to enter into a compromise since by doing so he would jeopardise the fruits of his decree, which might be made of no effect by a transfer made behind his back by the other party." The same view was taken by the Calcutta High Court in Bharat Ramanuj Das Mohanta v. Srinath Chandra Sahoo (21 Calcutta Weekly Notes 806). In that case also the question was discussed exhaustively with reference to decided cases, both English and Indian, by Mukerjee and Buckland, JJ. In that case also the question was discussed exhaustively with reference to decided cases, both English and Indian, by Mukerjee and Buckland, JJ. The learned judges observed: 'Unless a compromise is collusive the very fact that there is a compromise shows that the suit was in its origin nature contentious; otherwise there would be nothing to compromise." In Ram Bharose v. Rampal Singh (42 Allahabad 319) the Allahabad High Court held that if a suit is neither fraudulent nor collusive it may be none the less a contentious suit within the meaning of S. 52 of the Transfer of Property Act, 1882, notwithstanding that it is decided exparte. 5. The other decision that is relied on by the learned Munsiff is 18 T.L.J. 478. In that case Venkitarama Iyer and Parameswaran Pillai, JJ. held: "The bar of lis pendens is not applicable to a compromise between the parties, for the same partakes of the nature of any other contract or agreement which would be enforceable only between the parties thereto or their privies. This view receives support from the decision of a Full Bench of the Madras High Court in Veeraraghava Reddy v. Subba Reddy (43 Madras 37)." A reading of the decision in 43 Madras 37, however, shows that such a view was not taken by the Madras High Court in that case. What was held in that case was that an alienee pendente lite who has been added as a party to the litigation is entitled to object to a decree being passed in terms of a compromise arrived at between his alienor and the opposite party. In fact, the decision in 29 Madras 426 was cited with approval in that case. Seshagiri Iyer, J. observed: "The meaning of the expression "contentious proceeding" has given rise to a conflict of views. It was ultimately held in Annamalai Chettiar v. Malayandi Appiah Naik (29 Madras 426) that if the suit was contentious in its inception this character of contentiousness was not taken away by the fact that the parties subsequently entered into a compromise. This must be treated as an exception to the general rule. The result of the legislation and of the authorities is that, if the purchaser is not a party to the suit, he will be bound by a litigation which was in its inception contentious. This must be treated as an exception to the general rule. The result of the legislation and of the authorities is that, if the purchaser is not a party to the suit, he will be bound by a litigation which was in its inception contentious. Whatever may be the process by which the ultimate conclusion is reached, whether by obtaining after active contest, a decision by the judge or by a compromise outside court and its recognition by the Judge. That is all that is implied in or expressed by S. 52 of the Transfer of Property Act and by Annamalai Chettiar v. Malayandi Appiah Naik (29 Madras 426)." After referring to the relevant provisions of the Code of Civil Procedure the learned judge further observed: "It follows from these provisions of the Code of Civil Procedure that although a purchaser pendente lite takes the transfer subject to the result of the litigation, and if he is not impleaded as a party he will be bound by any lawful compromise or adjustment which may be entered into between the plaintiff and his transferor, the moment that he becomes a defendant, the only detraction of right to which he subject himself is the result of the litigation which has been openly and in his presence tried and decided upon. Once he is in the array of parties what could have been done by way of compromise or adjustment if he is not before the court should not be allowed to interfere with his claim for a fair trial and decision on the merits." This is all that was held in 43 Madras 37. The learned judges who decided 18 T.L.J. 478 have clearly gone wrong, if we may say so with respect, in regarding this case as an authority for the position that the doctrine of lis pendens is not applicable to compromise decrees. The decision reported in 18 T.L.J. Short Notes page 147, is apparently based on 7 T.L.R. 42 and 18 T.L.J. 478. 6. The question was elaborately discussed by the Travancore High Court in Padmanabha Iyen v. Ananthapadmanabha Pillai (22 T.L.J. 1104). Chacko and Raman Thampi, JJ. who took part in that decision refused to follow 7 T.L.R. 42,18 T.L.J. 478 and 18 T.L.J. Short Notes 147 and followed 29 Madras 426, 25 Calcutta Weekly Notes 806 and 42 Allahabad 319 already referred to. Chacko and Raman Thampi, JJ. who took part in that decision refused to follow 7 T.L.R. 42,18 T.L.J. 478 and 18 T.L.J. Short Notes 147 and followed 29 Madras 426, 25 Calcutta Weekly Notes 806 and 42 Allahabad 319 already referred to. It is very strange that this decision was not brought to the notice of the learned Munsiff. We are in full agrement with the view taken by the Travancore High Court in 22 T.L.J. 1104. We may also refer in this connection to the following observation of Sankaran, J. in Ahamathu Mudaliar v. Chaithu (5 D.L.R. T-C 144) with regard to the effect of the amendment of S. 52 of the Transfer of Property Act in 1929. "The effect of the section as it stood prior to the amendment was to make the rule of lis pendens apply only to transfers of property involved in contentious suits and effected during the active prosecution of the suit. With the amendment of the section the expressions "active prosecution" and "a contentious suit or proceeding" have been substituted by the word 'pendency' and the expression "any suit or proceeding which is not collusive". As the section now stands the transfer of the property involved in a suit can escape the rule of lis pendens only if it is shown that the suit or proceeding was a collusive one. Unless such collusion is established the rule will prevail, no matter whether the suit was contentious or not." 7. The court below has clearly gone wrong in its view that the rule of lis pendens will not apply to compromise decrees. But, as stated already, the rule will apply only if the compromise was not the result of fraud or collusion. This is clear from the wording of S. 52 of the Transfer of Property Act. The words used are: "any suit or proceeding which is not collusive". If the compromise was entered into fraudulently or collusively it is clear that the rule of lis pendens will not apply to the case. (Vide Juthan Tewari v. Parasanath Sing 151 I.C. 70). A suit may be collusive in its very inception or a decree may be obtained by collusion in a suit which was honestly begun. If the compromise was entered into fraudulently or collusively it is clear that the rule of lis pendens will not apply to the case. (Vide Juthan Tewari v. Parasanath Sing 151 I.C. 70). A suit may be collusive in its very inception or a decree may be obtained by collusion in a suit which was honestly begun. When the parties to a suit enter into an agreement for the express purpose of defeating the rights of a transferee pendente lite and a decree is passed in terms of the agreement the doctrine of lis pendens will not apply to the case (vide Periamurugappa Assari v. Manicka Chetty: 49 M.L.J. 68). The plaintiffs have alleged in paragraph 9 of the replication that the compromise decree in A.S. No. 344 of 1099 of the Nagercoil District Court was the result of fraud and collusion and that it was intended to defeat plaintiffs 1 to 3 who had acquired the rights of Gnanaselvam. The Court below has not considered this question since it was of opinion that the rule of lis pendens would not apply to a compromise decree. For a proper disposal of the suit it is necessary that an issue is raised on this question and tried by the court below. We, therefore, set aside the judgment and decree of the Court below and send back the case to that court for fresh disposal according to law after raising an additional issue relating to the question whether the compromise in A.S. No. 344 of 1099 of the Nagercoil District Court was the result of fraud or collusion. The parties will be free to adduce evidence relating to this question. 8. The appeal is allowed in the manner stated above. The costs of the appeal will be costs in the cause except the court fee paid on the memorandum of appeal which will be refunded to the appellant. Allowed.