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2015 DIGILAW 1611 (HP)

Lajja Ram (deceased) through LR’s v. Chandu Devi

2015-11-03

RAJIV SHARMA

body2015
JUDGMENT : Rajiv Sharma, Judge This Regular Second Appeal has been instituted against judgment and decree dated 30.3.2005 rendered by learned Additional District Judge, Sirmaur District at Nahan, HP in Civil Appeal No. 8-N/13 of 2002. 2. “Key facts" necessary for the adjudication of the present appeal are that the predecessor-in-interest of the appellants-plaintiffs namely Lajja Ram, (hereinafter referred to as 'plaintiff' for convenience sake) filed a suit against the respondents-defendants (hereinafter referred to as 'defendants' for convenience sake) to the effect that the compromise decree dated 28.5.1975 passed in Civil Suit No. 83/1 of 1972 is illegal and void ab initio and it does not create any right, title or interest in favour of defendant No. 1 namely Chandu Devi and as such mutation No. 294 dated 27.2.1987 and subsequent revenue entries on the basis of same were also illegal qua suit land comprised in Khasra No. 135/1/1 (old), Khasra No. 303 (new) measuring 20.42 square metres situate in Mohal Dhabon, Nahan. According to the plaintiff, he was owner of the land. Defendant No. 1 has obtained collusive decree dated 28.5.1975. Decree could not defeat the provisions of Section 17 (2) of the Registration Act. Same was required to be registered. Defendants No. 2 and 3 were not competent to transfer the suit property to defendant No. 1. Mutation so attested was illegal. 3. Suit was contested by defendant No.1 by filing written statement. Averments made in the plaint were denied by defendant No. 1. Decree was obtained by her after a prolonged trial which had become final. Revenue entries were not wrong. She was owner of the suit property. Plaintiff was bound by decree. 4. Replication was filed. Issues were framed by learned Senior Sub Judge, Sirmaur at Nahan on 17.4.2001. He decreed the suit on 16.1.2002. Defendant No.1 Chandu Devi filed an appeal against the judgment and decree dated 16.1.2002 before the Additional District Judge, Sirmaur at Nahan. He allowed the appeal on 30.3.2005. Hence, this appeal. 5. The Regular Second Appeal was admitted on 7.7.2010, on the following substantial question of law: ‘Whether the Courts below have misinterpreted the evidence on record as also the law?” 6. Mr. Dushyant Dadwal, Advocate has further argued that the compromise decree was required to be registered under the Registration Act and thus, mutation No. 294 dated 27.2.1987 was void. 7. Mr. Neeraj K. Sharma and Mr. Mr. Dushyant Dadwal, Advocate has further argued that the compromise decree was required to be registered under the Registration Act and thus, mutation No. 294 dated 27.2.1987 was void. 7. Mr. Neeraj K. Sharma and Mr. Shyam Singh Chauhan, Advocates, have supported the judgment and decree dated 30.3.2005. 8. I have heard the learned Advocates and gone through the judgment and record carefully. 9. PW-1 Lajja Ram deposed that the path to his house is through the disputed land. He has constructed his house 18- 20 years back. Defendants No.2 and 3 have no concern with the suit land. in his cross-examination, he specifically admitted that defendant No. 1 is owner of the suit land. He also admitted that he has instituted a civil suit against the defendants, which was dismissed on 5.6.1998 He never got access to the path but volunteered that path is in use. 10. DW-1 Chandu Devi deposed that she was owner-in possession of the suit property. Plaintiff was never in possession of the same. Disputed land was her path. Lajja Ram has no right over the path. She has instituted a suit against the plaintiff, which was decided in her favour vide Ext. P4. Lajja Ram filed an appeal. Same was decided in her favour. He filed Regular Second Appeal before this Court, which was decided in her favour. 11. Compromise decree dated 28.5.1975 Ext. P1 was passed in Civil Suit No. 83/1 of 1972. Plaintiff was not a party to the compromise decree dated 28.5.1975. Plaintiff was also not the owner of Khasra No. 303 corresponding to old Khasra No. 135/1/1 measuring 20.42 square meters. Plaintiff has admitted that defendant No. 1 Chandu Devi was owner of suit land. He also admitted in his cross-examination that he has filed another suit claiming passage over the suit property which was dismissed on 28.11.1994, vide Ext. P1. Plaintiff was permanently injuncted from causing any interference in the suit land in any manner and further not to prevent the plaintiff from putting gate at the entrance of path situate on Khasra No. 303. Judgment was challenged by plaintiff before learned Additional District Judge, Sirmaur at Nahan. He dismissed the same on 24.11.1997. Thereafter an RSA No. 328/1997 was filed in this Court. It was dismissed by this Court vide Judgment Ext. D3. 12. Defendant was the owner of the suit land. Judgment was challenged by plaintiff before learned Additional District Judge, Sirmaur at Nahan. He dismissed the same on 24.11.1997. Thereafter an RSA No. 328/1997 was filed in this Court. It was dismissed by this Court vide Judgment Ext. D3. 12. Defendant was the owner of the suit land. Now the Court will advert to whether compromise decree was required to be registered under the Registration Act. This question is no more res integra in view of the law laid down by the Hon'ble Supreme Court. 13. Their Lordships of the Hon’ble Supreme Court in Bachan Singh v. Kartar Singh reported in 2002 (2) CivCC 589 , have held that a consent decree passed by the court is not required to be registered under the provisions of the Indian Registration Act and, therefore, the view taken by the first appellate court was not legally correct and has been rightly set aside by the High Court. Their lordships have held as under: 2. Learned counsel appearing for the appellant urged that the decree passed in suit no. 1365/81 was void, having obtained by fraud and, therefore, it could be avoided under section 44 of the Evidence Act. We do not find any merit in the argument. It may be stated that the plaintiff was the defendant in the suit no. 1365/81 filed by the respondents. In the said suit, the claim of the respondents was admitted by the present plaintiff-appellant and on the basis of the said admission, the suit was decreed. In case the present appellant was not satisfied with the decree, either he could have filed an appeal or moved an application for setting aside the decree alleged to have been obtained by fraud. Before the first appellate court, the plaintiff-appellant stated that there was no fraud in passing the decree in suit no. 1365/81, but the appellate court set aside the decree of the trial court on the ground that the decree was a sale only to overcome the provisions of the Indian Registration Act. This view of the appellate court was not correct. A consent decree passed by the court is not required to be registered under the provisions of the Indian Registration Act and, therefore, the view taken by the first appellate court was not legally correct and has been rightly set aside by the High Court. This view of the appellate court was not correct. A consent decree passed by the court is not required to be registered under the provisions of the Indian Registration Act and, therefore, the view taken by the first appellate court was not legally correct and has been rightly set aside by the High Court. We are, therefore, in agreement with the view taken by the High Court. 14. A Division Bench of the High Court of Punjab and Haryana in Gurdev Kaur v. Mehar Singh reported in AIR 1989 Punjab & Haryana 324 have held that a compromise decree does not require registration, provided the immoveable property is subject matter of the suit. The Division Bench has further held that for the first time title can be created under a consent or compromise decree. It is further held that a compromise or consent decree can be got set aside on one of the grounds on which a contract can be set aside, namely, if obtained by fraud, misrepresentation or coercion with an additional ground in favour of the minors or persons of unsound mind if they are able to prove that the next friend or the guardian who acted on their behalf was negligent in conducting the proceedings. The Division Bench has held as follows: 16. Adverting to Ranbir Singh's ease (1984 Pun LJ 562) (supra), this judgment fully supports the stand of Shri K. C. Puri, Advocate, that a compromise decree requires registration, and in the absence of it no valid title passes in favour of the decree-holder. Shankar Sitaram Sontakke's case ( AIR 1954 SC 352 ) (supra) was cited before the learned Judge for the proposition that if a party is bound by the terms of compromise contained in a consent decree, that party is barred by the principles of res judicata from re-agitating the question. In spite of that it was held that such a decree does not operate by way of res judicata, although it may operate as estoppel. Since the matter of res judicata is not being agitated in this ease we refrain from deciding it. In spite of that it was held that such a decree does not operate by way of res judicata, although it may operate as estoppel. Since the matter of res judicata is not being agitated in this ease we refrain from deciding it. The learned Judge then proceeded to observe in para No. 4 of the judgment as follows : "It is well established that a decree passed on compromise remains essentially a contract between the parties with seal of the Court superimposed thereon and is open to challenge on all grounds on which a contract can he vitiated. Consequently, the consent decree can be challenged not only on the grounds available under the Contract Act such as fraud, mistake or misrepresentation but also on any of the grounds available under any other law which prohibits such a contract or declares it to be ineffective so far as the transfer of any rights in immoveable property are concerned." Part of the observations in the aforesaid quotation seems to have been obtained from para 9 of the reported judgment in Shankar Sitaram Sonetekke's case (supra). To that extent the observations are all right. The learned Judge then proceeded to observe in para 5 of the judgment that if a compromise decree operates as an instrument of gift of immoveable property, it would not be exempt from registration because the learned Judge was of the view that exemption contained in Section 17(2)(vi) of the Act was applicable to Clauses (b) and (c) of Subsection (1) thereof and not to Clause (a), in which instrument of gift of immoveable property fell. It is not disputed that for the first lime title can be created under a consent or compromise decree. For example, title is created in plaintiffs favour under a compromise decree which before the elate of compromise decree vested in defendant and no consideration is mentioned for passing the title in compromise. This would be nothing but creation of a title for the first time in the plaintiff but this would be wrong to say that consent decree is an instrument of gift. Such a decree would not be an instrument of gift of immoveable property within the meaning of Section 17(1)(a) of the Act. There is no dispute that the moment title is being conveyed under instrument of gift of immoveable property of the value of Rs. Such a decree would not be an instrument of gift of immoveable property within the meaning of Section 17(1)(a) of the Act. There is no dispute that the moment title is being conveyed under instrument of gift of immoveable property of the value of Rs. 100/-or more, such an instrument would require registration. The question is whether the consent decree can be called an instrument of gift. The title in the immoveable property can be created by a non-testamentary instrument also and that would be covered by Clause (b) of Section 17(1) of the Act and since the applicability of Clause (b) has been excluded in regard to certain documents enumerated in Clauses (i) to (xii) of Section 17(2) of the Act, by virtue of Clause (vi), a compromise decree comprising of immoveable property, which is subject matter of the suit stands exempted from registration, whereas a compromise decree relating to immoveable properly other than which is subject matter of the suit is not exempted from registration. The observations of S. P. Goyal, J. on the aforesaid basis that a compromise decree in such a situation would be treated as an instrument of gift and would require registration is contrary to law. 19. Now adverting to the decision of J. V. Gupta, J. in Nachhittar Singh's case (AIR 1986 Punj & Har 197) (supra), at the outset it may be observed that in Khushal Singh's case AIR 1983 Punj and Har 151) (supra) the same learned Judge decided that the consent decree does not require registration but while deciding Nachhittar Singh's case (supra), the learned Judge referred to Sections 54 and 2(d) of the Registration Act as also to Sections 40, 41, 42 and 44 of the Evidence Act, 1872. For the purposes of decision of the matter as to whether a consent or compromise decree requires registration or not, reference to the Sections of the Evidence Act is not relevant. Sometimes collusion is misunderstood in contra-distinction to consent or compromise. If the rights of a third person is not involved, the contract, compromise or compromise decree between the parties would be binding. If rights of third party are involved in such a matter then the third party can always come forward to show that his title or interest has been affected in collusion with other persons. For illustration, we may quote an example. If rights of third party are involved in such a matter then the third party can always come forward to show that his title or interest has been affected in collusion with other persons. For illustration, we may quote an example. If ABC have interest in a property or a matter, B. and A entered into contract about it or got involved in a consent decree between themselves to the exclusion of A. A can always come forward to say that the contract or the compromise decree was collusive so far as he is concerned and would not bind him qua his share and interest, but that would bind B and C, all right." The learned Judge while deciding the aforesaid proposition in Nachhittar Singh's (AIR 1986 Punj & Har 197) (supra), re opened the facts of the compromise decree on the basis of collusion and yet in the last paragraph came to the conclusion which is as follows (at p. 200 of AIR) : "...In the absence of any transfer as such, the plaintiff could not get the declaration of his being the owner of the suit land on the strength of the decree unless it was duly registered as provided Under Section 17 of the Registration Act. In that situation, the said decree violated the provisions of the T.P. Act and the defendant Nachhittar Singh could not claim himself to be the owner of the suit land on the basis of that decree alone or fraud as such alleged or proved by the plaintiff....." If transfer was to be made by a written instrument, then, of course, the same has to be stamped and got registered, but if transfer is made by a compromise decree, there is a specific exception contained in Section 17(2)(vi) which was not kept in view by the learned Judge while deciding the ease and that is how the error has crept in. It is beyond pale of controversy that under a consent or compromise decree title can be created for the first time and the decree would not require registration provided it is subject matter of the suit. Hence, we are constrained to overrule Nachhittar Singh's case (supra) as well. 20. It is beyond pale of controversy that under a consent or compromise decree title can be created for the first time and the decree would not require registration provided it is subject matter of the suit. Hence, we are constrained to overrule Nachhittar Singh's case (supra) as well. 20. For the reasons recorded above, by agreeing with the view taken in the judgments cited above that a compromise decree does not require registration, provided the immoveable property is subject matter of the suit, we hold that a compromise decree regarding immoveable property which is subject matter of the dispute in the suit, does not require registration, even if title is created in favour of the decreeholder for the first time under the decree, whether with consideration or without consideration. 22. In Bishundeo Narain v. Scogeni Rai, AIR 1951 SC 280 , the Supreme Court in para 20 has observed as follows : "It does not matter whether the decree was by consent or otherwise, for a decree, unless and until it is set aside or avoided in one or other of the ways in which alone a decree may be attacked, holds its force and binds all concerned." Again in Shankar Sitaram Sonlakke's case ( AIR 1954 SC 352 ) (supra)., the following observations were made in para 9. "It is well settled that a consent decree is as binding upon the parties thereto as a decree passed by invitum. The compromise having been found not to be vitiated by fraud, misrepresentation, misunderstanding or mistake, the decree passed thereon has the binding force of res judicata." The observations made in the aforesaid two decisions of the Supreme Court show that a compromise decree would bind the parties and their privies unless it can be avoided in one of the ways in which a contract can be avoided, that is, by showing that the decree was obtained by fraud, misrepresentation, misunderstanding or mistake and otherwise the decree would be binding on them, and would not be challengele in a subsequent suit except on the aforesaid grounds. 27. For the reasons recorded above, we hold : i) that a compromise or consent decree does not require registration, even if it creates title in respect of immoveable property of the value of Rs. 100/- or more, provided it is subject matter of suit. 27. For the reasons recorded above, we hold : i) that a compromise or consent decree does not require registration, even if it creates title in respect of immoveable property of the value of Rs. 100/- or more, provided it is subject matter of suit. ii) that a compromise or consent decree can be got set aside on one of the grounds on which a contract can be set aside, namely, if obtained by 'fraud; 'misrepresentation', or 'coercion', with an additional ground in favour of the minors or persons of unsound mind, if they are able to prove that the next friend or the guardian, who acted on their behalf, was negligent in concluding the proceedings. If none of these grounds is established, the Courts in a subsequent suit will have no jurisdiction to go behind the consent decree to find out whether the facts stated in the plaint, which culminated into compromise decree were right or wrong. 15. Learned Court below has correctly appreciated the evidence on record. The substantial question of law is answered accordingly. 16. Consequently, there is no merit in the appeal and the same is dismissed. Pending application(s), if any, also stand disposed of. No costs.