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2017 DIGILAW 776 (MP)

Shanti Devi v. Indore Cloth Market Grah Nirman Sahkari Sanstha Maryadit

2017-06-27

P.K.JAISWAL, VIRENDER SINGH

body2017
JUDGMENT Singh, J. -- 1. The challenge in this first appeal is to the award passed by Lok Adalat dated 31.8.2013. 2. There is no doubt that every award made by the Lok Adalat is final and binding on all the parties to the dispute and no appeal lies against such award. Section 21(2) of The Legal Services Authorities Act, 1987 reads thus:- “Section 21(2) : Every award made by Lok Adalat shall be final and binding on all the parties to the dispute, and no appeal shall lie to any Court against the award.” 3. Section 96(3) of Code of Civil Procedure, 1908 provides :- “Section 96 (3) : No appeal shall lie from a decree passed by the Court with the consent of the parties.” 4. In this regard we can also refer P.T. Thomas v. Thomas Job [ AIR 2005 SC 3575 ], State of Punjab and another v. Jalour Singh and others [ AIR 2008 SC 1209 ]. 5. It is well settled that award of Lok Adalat can only be challenged on the ground of fraud as fraud vitiates all proceedings and voids all judicial acts. Illegality or competency of the parties of the compromise may also be considered while examining the validity of such award. 6. In this regard we can refer Banwari Lal v. Smt. Chandro Devi [ AIR 1993 SC 1139 ], S.P. Chengalvaraya Naidu v. Jagannath [ AIR 1994 SC 853 ] and Bhanwari Bai v. Kashmir Singh [ 2009(3) JLJ 96 = AIR 2009 MP 232 ]. 7. In this back drop of well settled legal proposition, now we go through the facts. 8. The land bearing Survey Nos.13/1 area 1.437 hectare, 13/6 area 0.202 hectare, 12/2 area 1.254 and 13/5 area No.0324 hectare (Total area 3.338 hectare) are the subject matter of the present litigation. Undisputedly, respondent No.2 Harjinder Singh and respondent No.3 Jagdish Singh were the original owners of the above said land. 9. Peculiar facts of this case travel in two streams since start of the controversy. First stream is that respondent No.1 Cloth Market Housing Society, Indore (hereinafter referred to as “Cloth Market Society”) purchased the land from its owners Harjinder Singh (respondent No.2) and Jagdish Singh (respondent No.3) on 1.1.1996 for the housing needs of its members. 9. Peculiar facts of this case travel in two streams since start of the controversy. First stream is that respondent No.1 Cloth Market Housing Society, Indore (hereinafter referred to as “Cloth Market Society”) purchased the land from its owners Harjinder Singh (respondent No.2) and Jagdish Singh (respondent No.3) on 1.1.1996 for the housing needs of its members. On 11.9.1996, Omprakash and Satyanarayan Bajaj (respondents No.4 and 5) President and Secretary of the Society, sold the land to one Nakoda Grih Nirman Cooperative Society, Maryadit (in short “Nakoda Society”). 10. Second stream of the facts is that on 19.2.1997 original owners of the disputed land Harjinder Singh and Jagdish Singh (respondents No.2 and 3) executed a Power of Attorney in favour of one Madanlal s/o Chogalal Jain (respondent No.6), who on the strength of this power of attorney executed a sale deed of the said land in favour of Nav Bharat Grih Nirman Sanstha Maryadit (in short “Nav Bharat Society”). Subsequently, Nav Bharat Society alienated the property in favour of Taiyab Ali (or Taiyabi) Real Estate Pvt. Ltd. Vide sale deed dated 10.9.2009. 11. Later on, as the fact of these alienations/sale deeds came to the knowledge of the then president of the Cloth Market Society Sitaram Vyas, he filed a Civil Suit No.32-A/2010 in the Court of District Judge, Indore on 23.8.2010. 12. During pendency of the civil suit, succeeding President of the Cloth Market Society Ashwini Kumar with ex-president Shri Sitaram Vyas entered into the compromise with Taiyab Ali and agreed to renounce all the claims of the Cloth Market Society on the disputed land in favour of Tauyab Ali on payment of certain amount to be disbursed amongst the members of the society to refund their money collected from them to allot them plots in the disputed land. In pursuance of this agreement, a compromise was filed before the Lok Adalat, which was accepted and an award was passed. This award is under challenge in the present appeal. 13. Few more facts which are relevant and have significant impact on the present controversy have also emerged out from the application filed by the respondent and also from the award passed by the Lok Adalat. This award is under challenge in the present appeal. 13. Few more facts which are relevant and have significant impact on the present controversy have also emerged out from the application filed by the respondent and also from the award passed by the Lok Adalat. According to these facts; the disputed land was declared as surplus land under the provisions of sections 5(3), 10(4) and 27 of the Urban Land (Ceiling and Regulation) Act, 1976 (for short the Act, 1976) prior to the execution of the sale deed by Harjinder and Jagdish in favour of the respondent No.1 Cloth Market Society. Later, the original land owners Harjinder and Jagdish entered into an agreement with Madanlal Chogalal Jain, who further entered into an agreement with Nav Bharat Society to sell them the said land. They applied to the State Government for grant of exemption under section 20 of the Act, 1976 and the same was granted vide oder dated 1.8.1997. After obtaining the exemption, Madanlan executed a sale deed in favour of Nav Bharat Society and subsequently Nav Bharat Society executed a sale deed in favour of Taiyab Ali. 14. A resolution was passed in the meeting of Board of Directors of respondent No.1 Cloth Market Society on 12.5.2013 to resolve the dispute with Taiyab Ali, respondent No.9. A Special General Meeting of the Society was called on 21.7.2013 for this purpose and it was decided unanimously that to set at rest the controversy and to save interests of the members of the Society, dispute be compromised with Taiyab Ali. Thereafter, requisite permission was obtained from the Deputy Registrar, Co-operative Societies, Indore and after following the due procedure; respondent No.1 (Cloth Market Society) and respondent No.9 (Taiyab Ali) entered into compromise. 15. Apposite to mention here the observation made in para 3 of the award passed by the Lok Adalat. The Lok Adalat observed that respondent No.4 and 5, Ex-President (and Secretory) of the Cloth Market Society, respondent No.6 Madanlan Chogalal Jain, power of attorney holder of respondent No.1 and 2 (Original owner) and respondent No.7 Nakoda Society entered into tri-party agreement. Similarly, respondent No.7, Nakoda Society, respondent No.8 Nav Bharat Society and respondent No.9 Taiyab Ali have entered into a tri-party agreement. Similarly, respondent No.7, Nakoda Society, respondent No.8 Nav Bharat Society and respondent No.9 Taiyab Ali have entered into a tri-party agreement. Thus, interests of the respondents are not contrary or against interest of each other rather they are harmonious to each other and coalescent into the interest of respondents No.1 and 9 who ultimately entered into the compromise. 16. The facts and observations stated in last three preceding paras have not been challenged by the appellants. 17. Respondent No.9 Taiyab Ali has raised following objections regarding maintainability of the present appeal :- a. The appellants being third party have no locus standi to prefer the present appeal. b. The appeal against the decree passed with consent of the parties is barred under section 96(2) of CPC. c. The appellant against the award passed by the Lok Adalat is barred under section 21(2) of the Legal Services Authorities Act, 1987. d. The appellant is presented only on the court-fee of Rs.100/-, therefore, the same is liable to the dismissed for non-payment of requisite court fees by the appellant. e. The appeal is time barred. f. The defects as pointed out by the office of this Court were not cured by the appellants. 18. Following grounds have been raised by the appellants in the memo of appeal :- I. The disputed land was sold without intimation and without seeking consent of the members of the society and also without obtaining permission of the Registrar, Co- operative Societies. II. No refund was made to the appellants who were founder members of the society and the award is passed by the Lok Adalat by ignoring their interests. III. Incorporating the conditions to be complied with in future was illegal, even then the compromise was allowed. IV. After selling the land to the Cloth Market Society Harjinder Singh and Jagdish Singh (respondents No.2 and 3) were not having any authority to execute power of attorney in favour of Madanlal, and therefore, Madanlal was not having authority to further alienate the property in favour of Nav Bharat Society and similarly Nav Bharat Society was not having any authority to alienate the property in favour of Taiyab Ali. 19. 19. Following grounds have been taken by the appellants in their written arguments :- I. During pendency of the suit, the president of the Society Sitaram Vyas in collusion with other office bearers of the Society had formulated the site plan of the disputed land and sold several plots to various persons including the 16 appellants who deposited the sale consideration in the Society. An FIR was lodged against Sitaram Vyas and he is being prosecuted for the offence punishable under sections 406 and 420 of IPC. II. Sitaram Vyas and other office bearer illegally and fraudulently introduced 185 members of the Nav Bharat Society in the plaintiff society. Concealment of this fact is a fraud played upon the members of the Society and the Court as well. III. In spite of opposition by the appellants, fraudulently got passed a resolution on 21.7.2013 to sale the said land to Taiyab Ali. The Lok Adalat passed the award on the basis of this resolution but later on the said resolution was quashed by the Joint Registrar, Co-operative Societies, Indore Division, Indore vide order dated 27.11.2014 and thus the award becomes a nullity. IV. Civil Suit No.32-A/2010 was far beyond the limitation; therefore, no compromise could have been entered into by the parties in said suit. V. Compromise or the settlement was entertained by the Lok Adalat without presence of the concerned parties and was converted into an award within an hour of presentation before the Lok Adalat. VI. The Lok Adalat has passed the award beyond its pecuniary jurisdiction as such the award is totally without jurisdiction. 20. It is unambiguously clear from the facts mentioned in para 17 that before filing the compromise in the Lok Adalat a resolution was passed in the meeting of Board of Directors of respondent No.1 Cloth Market Society on 12.5.2013 to resolve the dispute with Taiyab Ali, respondent No.9. A Special General Meeting of the Society was called on 21.7.2013 for this purpose and it was decided unanimously that in the interests of the members of the Society, dispute be compromised with Taiyab Ali. Thereafter, requisite permission was obtained from the Deputy Registrar, Cooperative Societies, Indore and then only respondent No.1 (Cloth Market Society) and respondent No.9 (Taiyab Ali) filed compromise. Thereafter, requisite permission was obtained from the Deputy Registrar, Cooperative Societies, Indore and then only respondent No.1 (Cloth Market Society) and respondent No.9 (Taiyab Ali) filed compromise. True, that the permission granted by the Deputy Registrar was later quashed by the Joint Registrar, Co-operative Societies vide order dated 27.11.2014 but this happened after the award passed by the Lok Adalat on 31.8.2013. Thus, at the time of passing the award by the Lok Adalat, the permission granted by the Deputy Registrar was in force, therefore, no fraud can be said to be played on the Court by the parties to the compromise. This is settled law that subsequent development has no impact on the order passed earlier. 21. The Lok Adalat, in para 3 of the award, considered the issue of presence of the parties to the compromise as mentioned in para 18 above and found that the interests of the respondents are not contrary or against each other rather they are harmonious to each other and coalescent into the interest of respondents No.1 and 9 who ultimately entered into the compromise. Other respondents except respondent No. 9 were not the contesting parties to the suit, therefore, the plaintiff/respondent No.1 compromised the suit with it and there is no illegality in such compromise. The learned Court examined the compromise and found that it was not against any public policy or law. Nothing contrary is available on record to show that the compromise filed before the Lok Adalat was not according to law. Parties to the compromise were competent to compromise the case in all respects and with regard to all the parameters settled for compromising the case. Therefore, the compromise was valid and legal. 22. All other grounds raised or allegations made by the appellants are interrelated to the right, title or authority and other acts of the parties. Some member of the Nav Bharat Society were taken on the member roll of Cloth Market Society fraudulently, proposal of compromise was not processed and got passed properly etc. are the internal transaction of business of the Cloth Market Society. Similar is the nature of objection that the civil suit, in which compromise was filed, was barred by limitation. All facts related to these objections do not show that any fraud, with which this Court has sole concern, played by the parties with the Court. are the internal transaction of business of the Cloth Market Society. Similar is the nature of objection that the civil suit, in which compromise was filed, was barred by limitation. All facts related to these objections do not show that any fraud, with which this Court has sole concern, played by the parties with the Court. This Court is not a proper forum to consider such issues and they may be raised in an appropriate proceeding. Objections regarding pecuniary jurisdiction of the permanent Lok Adalat is misconceived as for considering the cases already pending in the Court, no pecuniary jurisdiction has been set by the Act, 1987. Pecuniary jurisdiction up to Rs.10 lacs has been settled under section 22C of the Act, 1987 for permanent Lok Adalat constituted for pre-litigation conciliation and settlement under section 22B of the Act, 1987. Therefore, this objection is also not tenable. 23. The applicant/respondent has challenged locus of the appellants. Therefore it is necessary to examine as to who can file appeal ? Undisputedly, the appellants are members of the Cloth Market Society, who had purchased the disputed land initially and have deposited the money with the Society to get the plot in the disputed land. Section 96 CPC does not enumerate the persons who can file an appeal under this section. It is however fundamental that in order to be entitled to file an appeal the person must be aggrieved by and dissatisfied with the judgement. As a general principle, no one can appeal unless he was a party to the proceedings. However, any person who is not a party to a decree or order if he is either bound by the order or is aggrieved by it or is prejudicially affected by it or has a legal grievance which might have deprived him of the benefit or bound by the order passed is certainly entitled to file appeal. Even in case of doubt as to the existence of the right of appeal, the appellant should get the benefit of doubt. It is appropriate to refer the judgments of the Hon’ble Supreme Court, reported in Adi Pheroz Shah Gandhi v. H. M. Servai, Advocate General of Maharashtra [Bombay: AIR 1971 SC 385 ], State of Punjab v. Amar Singh [ AIR 1974 SC 994 at p.1016] and Banarsi v. Ramphal [ AIR 2003 SC 1989 ]. It is appropriate to refer the judgments of the Hon’ble Supreme Court, reported in Adi Pheroz Shah Gandhi v. H. M. Servai, Advocate General of Maharashtra [Bombay: AIR 1971 SC 385 ], State of Punjab v. Amar Singh [ AIR 1974 SC 994 at p.1016] and Banarsi v. Ramphal [ AIR 2003 SC 1989 ]. Hence, rejecting the objection taken by the respondent in its application under consideration, we hold that the appellants have Locus to file the appeal. 24. The appellants have not cured the defects pointed out by the office and even after objection of the office no proper court-fees has been paid. Once the appeal was dismissed for such defaults but even after restoration, the defects have not been cured. On these grounds also the appeal is not maintainable. 25. Thus, it is explicitly clear that resolution was passed in the meeting of Board of Directors of respondent No.1/Cloth Market Society on 12.5.2013 to resolve the dispute with respondent No.9 for welfare of the members of the society. Thereafter, a Special General Meeting was called on 21.7.2013 and a proposal was submitted before the General Body and after consideration it was decided that it would be in the interests of members of the Society to end the dispute with the respondent No.9 for welfare of the members of the Society. Thereafter, permission was obtained from the Deputy Registrar, Co-operative Societies, Indore and only after following such procedure respondent No.1 and 9 entered into compromise. All these facts have been considered by the learned presiding officer of Lok Adalat. It does not appear to us that at any stage on entering into compromise any fraud or misrepresentation as alleged by the appellants have been played by the respondent Cloth Market Society. The proposal of entering into compromise with respondent No.9 was unanimously passed in the Special General Meeting of the Society. There does not appear subsistence of any element of fraud. Neither concealment nor misrepresentation of facts could be established in any of the action of the parties to the compromise. Therefore, we are of the view that present appeal is not maintainable. 26. Consequently, the present appeal is dismissed as not maintainable. No order as to the cost.