Rakesh Katyal vs Uma Pati Sood & Ors.
2021 Latest Caselaw 969 Del

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*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                                 Date of Decision: 23.03.2021

+      CS (OS) 116/2020 & I.A. 7600/2020, 9374/2020 & 3508/2020

       RAKESH KATYAL                                ..... Plaintiff
                   Through               Mr.Pradeep Dewan, Sr.Adv. with
                                         Ms.Anupam Dhingra,         Mr.Rahul
                                         Chaudhary and Mr.Avesh Chaudhary,
                                         Advs.
                           Versus

       UMA PATI SOOD & ORS.                             ..... Defendants

                           Through       Mr.Manohar Lal, Adv. for D-1
                                         Mr.Ankit Jain, Adv. for D-2
                                         Mr.Akash Gupta, Adv. for D-3.
       CORAM:
       HON'BLE MR. JUSTICE JAYANT NATH

JAYANT NATH, J. (Oral)

1. This suit is filed by the plaintiff seeking a decree of partition of property No. D-2/7, Janak Puri, New Delhi measuring 351 sq. mtrs declaring the share of the plaintiff as one fourth share.

2. The case of the plaintiff is that late Shri Jagan Nath Sood became the owner of the freehold land measuring 351 sq mtrs bearing No. 7, Block - D2, Janak Puri, New Delhi vide the conveyance deed dated 28.06.2002. On 23.03.2007 Shri Jagan Nath Sood died intestate leaving behind four legal heirs including defendant No.1 his son/Uma Pati Sood and another son Shri Rama Pati Sood and two daughters. His wife expired in 2007. On

23.02.2013 the two daughters relinquished their right, title and interest in favour of their brothers, namely, defendant No.1 Shri Uma Pati Sood and Shri Rama Pati Sood vide registered relinquishment deed. Rama Pati Sood at the relevant time was residing in USA and executed his General Power of Attorney in favour of one Mrs.Kiran Aggarwal and empowered her to sell and transfer his half undivided share in the property/land. The said power of Attorney holder on behalf of Rama Pati Sood executed a sale deed on 24.11.2015 in favour of Defendant No.2, M/s Jolly Brothers Buildwell Pvt. Ltd. and defendant No.3. Hence, Defendant No.2 and Defendant No.3 became owners of 1/8th undivided share each in the said land. M/s Jolly Brothers Buildwell Pvt. Ltd executed a sale deed on 26.12.2018 and sold their undivided share in the land to Mr.Rakesh Katyal i.e. the plaintiff. Hence, Plaintiff claims one fourth undivided share in the land. The share of the parties is stated as follows:

Plaintiff                                1/4th undivided share in the land
Defendant No.1                           1/2nd undivided share in the land
Defendant No.2                           1/8th undivided share in the land
Defendant No.3                           1/8th undivided share in the land


3.     Hence, the present suit for partition.

4. The plaintiff and defendant Nos. 2 and 3 are agreeable to a preliminary decree of partition defining the share of the respective parties, as noted above. Defendant no.1, however, has strong objections to the partition. In the written statement defendant No.1 does not dispute that defendant No.1 and Shri Rama Pati Sood became absolute owner of the said property. It is

stated that Defendant No.1 had executed a Collaboration Agreement with defendant No.2 on 12.06.2015 for construction of the entire suit property. Under Clause 7 of the Agreement after completion of the construction work the ownership of the entire basement, second floor without roof rights, third floor with roof rights along with proportionate parking area etc. was to be owned by defendant No.2 and he was to pay a sum of Rs.2.25 crores to Shri Rama Pati Sood. Hence, it is claimed that defendant No.2 who had already executed the collaboration agreement with defendant No.1 could not have purchased any portion of the suit property. It is clear that all this happened behind the back of Shri Rama Pati Sood and against his interest.

5. Thereafter, defendant No. 1 filed a suit being CS No. 1053/2018 titled as Uma Pati Sood vs. M/s. CRS Infrastructure and Anr. in the district court. The aforesaid suit was filed for declaring the joint sale deed and also the collaboration agreement dated 12.06.2015 as null and void. The said suit was disposed of by passing a consent order dated 07.03.2019 whereby it is stated that defendant No. 2 agreed to complete the construction as per collaboration agreement. Hence, it is stated that defendant No.2 cannot seek partition of the property.

6. I have heard learned counsel for the parties.

7. Learned counsel for defendant No.1 has stated that under the doctrine of lis pendens defendant No.2 has no right in the property in question as the suit that was filed in the District Court was pending and defendant No.2 remained bound by the outcome of the suit. Reliance is placed on the judgment of the Supreme Court in the case of Thomson Press (India) Limited Vs. Nanak Builders and Investors Private Limited & Ors. (2013) 5 SCC 397 to claim that right of the plaintiff was affected by the doctrine of

lis pendens.

8. I may only note that in the collaboration agreement between defendant No.1 and defendant No.2 dated 12.06.2015 defendant No.1 categorically holds out that the said property is constructed on a land of which defendant No.1 is the absolute owner and is fully entitled to deal with the same in any manner whatsoever. Based on such a representation the collaboration agreement has been entered into. The Collaboration Agreement also provides that defendant No.2 will pay a sum of Rs.2.25 crores to Shri Rama Pati Sood including 15 lacs at the time of signing of the Collaboration Agreement and Rs.2.10 crores at the time of sale deed of half undivided share of the entire freehold property in question. The Collaboration Agreement, thus, recognises the rights of half undivided share of Shri Rama Pati Sood in the said property. There is, however, nothing to show that Shri Rama Pati Sood at any stage accepted the said Collaboration Agreement or was in any manner party to the same.

9. A perusal of the sale deed dated 24.11.2015 shows that it is executed on behalf of Shri Rama Pati Sood in favour of defendant No.2, M/s Jolly Brothers Buildwell Pvt. Ltd. and defendant no.3 whereby Shri Rama Pati Sood has agreed to sell and convey his half undivided share in the suit property in favour of the stated vendees. This sale deed is duly witnessed by defendant No.1. Hence, defendant No.1 cannot claim ignorance of the said sale deed. Defendant No.1 having signed the sale deed dated 24.11.2015 executed by Shri Rama Pati Sood as a witness shows that he was aware that Shri Rama Pati Sood did not agree to the Collaboration Agreement dated 12.06.2015. Instead of selling his share of property to defendant No.2 as envisaged in the Collaboration Agreement, Shri Rama Pati Sood sold his

share of the property to defendant Nos. 2 and 3 and M/s Jolly Brothers Buildwell Pvt. Ltd.

10. Despite the above position defendant No.1 in April 2018 decided to file a suit against defendant No.2 herein seeking the following reliefs:

i. Declare the Collaboration Agreement dated 12.06.2015 as fraudulent and null and void;

ii. Declare the subsequent Sale Deed dated 26.11.2015 as null and void;

iii. Grant recovery of Rs.3,65,800/- with interest from the date of 25.08.2015 to the plaintiff and against the defendants;

iv. To restore the property to the plaintiff and grant compensation for demolishing the property in favour of the plaintiff and against the defendant;‖

It is important to note that though a declaration was sought to declare the sale deed dated 26.11.2015 as null and void but none of the other beneficiaries of the sale deed other than defendant No. 2 were impleaded as parties to the suit. The suit was compromised on 07.03.2019. Defendant No.2 agreed to complete the construction work on the plot within a period of two years and it was agreed that plaintiff therein was to be given his share in the said property in terms of the collaboration agreement dated 12.06.2015. It is important to note that the other prayer sought in the suit, namely, a declaration that the sale deed 24.11.2015 be declared null and void was dropped. Clearly, the consent decree passed in the suit filed by the defendant no.1 against defendant No.2 does not in any manner abridge, alter or modify or in any manner take away the rights that the plaintiff and defendant Nos.2 and 3 have to the suit property in terms of the sale deed dated 24.11.2015.

11. Even otherwise, the consent decree dated 07.03.2019 passed in the

suit filed by defendant No.1 against defendant No.2 can obviously not bind the plaintiff or defendant No.3 who were not parties to the said suit. At best in case defendant No.1 has any right against defendant No.2 in terms of the consent decree dated 07.03.2019 he is free to take steps, as per law, but the same cannot be an impediment or in any manner deter the rights of the parties to the present suit. In this context, reference may be had to the judgment of a Co-ordinate Bench of this court in the case of Sukruti Dugal vs. Jahnavi Dugal and Ors. 2019 SCC OnLine Del 10226 where the co- ordinate Bench held as follows:

12. The aforesaid provision bars a challenge to the consent decree passed under Order 23 Rule 3 CPC. Admittedly, in the present case, the Plaintiff was neither party to the suit bearing CS (OS) 1175/2010, nor a party to the compromise/settlement that has been arrived at between Defendant No. 1 and Defendant No. 3. The proposed amendments seek a declaration that the compromise between Defendant No. 1 and Defendant No. 3 does not affect the rights of the Plaintiff. To my mind, the reliefs sought to that extent, are superfluous. A compromise between parties cannot affect the rights of a third party, who is not a party to the compromise. Such an aggrieved party can file a suit for appropriate relief disregarding the compromise decree and the same would not be barred by principles of res judicata or estoppel. The Allahabad High Court in the case of Smt. Suraj Kumari v. District Judge Mirzapur, 1990 SCC OnLine All 459 held as under:--

"22. The petitioner's second submission regarding the applicability of O.23, R. 3-A of the Code of Civil Procedure is misconceived the provision is confined only to the parties to the suit. The said provision is not applicable to a stranger to the said compromise decree. A suit by stranger to set aside the compromise decree, which affects his rights is not barred by the said provision. Order 23, Rule 3-A of the Code of Civil Procedure cannot be read dehors its earlier provision of the same chapter. The said provision is only a part of the entire Chapter of Order 23 of the Code of Civil Procedure

which prescribes provisions for withdrawl and adjustment of the suit. Order 23, Rule 3 of the Code of Civil Procedure provides for a situation where the parties have arrived at a compromise. Order 23, Rule 3 and Rule 3-A of the Code of Civil Procedure as added by Amending Act No. 104 of 1976 read together, makes it clear that a party to the suit is debarred from filing suit for setting aside compromise decree on the ground of being unlawful. Such a party has remedy by moving appropriate application before the Court concerned which has passed the compromise decree.

23. The said provision does not bar the present petitioner who was not a party to the said compromise decree to file a suit. As such there is no force in the petitioner's contention that a suit for setting aside the compromise decree entered into between Sri Nagarmal and Smt. Paradevi was barred by O.23, R. 3-A of the Code of Civil Procedure. The suit at the instance of present petitioner for setting aside compromise decree entered into between Smt. Paradevi and Sri Nagarmal is maintainable in law. In support of this contention the petitioner has placed reliance on AIR 1985 Karnataka 270, Smt. Tarabai v. Krishnaswamy Rao. Since the said provision does not bar the petitioner from filing the suit the decision is of no help to the petitioner."

(Emphasis supplied)

12. Clearly, a compromise between the parties cannot affect the rights of a third party who is not party to the compromise. Such an aggrieved party can file a suit for appropriate relief disregarding the compromise decree and the same would not be barred on principles of res judicata or estoppel. The above law clearly applies to the facts of the present case. Neither the predecessor of the plaintiff or the plaintiff or defendant No.3 were parties to suit or the compromise arrived at in the district court which resulted in a consent decree dated 07.03.2019. They are not bound by the said decree. No

doubt, defendant Nos. 1 and 2 were parties to the said compromise decree, however, the compromise decree does not alter or in any manner abridge or destroy their rights in the suit property which flows from the sale deed dated 24.11.2015.

13. Defendant No.1 has placed reliance on the judgment of the Supreme Court in the case of Thomson Press (India) Limited Vs. Nanak Builders and Investors Private Limited & Ors. (2013) 5 SCC 397. A perusal of the said judgment shows that it spells out the doctrine of lis pendens as follows:

29. The aforesaid Section 52 of the Transfer of Property Act again came up for consideration before this Court in Rajender Singh v. Santa Singh [(1973) 2 SCC 705: AIR 1973 SC 2537] and Their Lordships with approval of the principles laid down in Jayaram Mudaliar v. Ayyaswami [(1972) 2 SCC 200: (1973) 1 SCR 139] reiterated: (Rajender Singh case [(1973) 2 SCC 705: AIR 1973 SC 2537], SCC p. 711, para 15) ―15. The doctrine of lis pendens was intended to strike at attempts by parties to a litigation to circumvent the jurisdiction of a court, in which a dispute on rights or interests in immovable property is pending, by private dealings which may remove the subject-matter of litigation from the ambit of the court's power to decide a pending dispute or frustrate its decree.

Alienees acquiring any immovable property during a litigation over it are held to be bound, by an application of the doctrine, by the decree passed in the suit even though they may not have been impleaded in it. The whole object of the doctrine of lis pendens is to subject parties to the litigation as well as others, who seek to acquire rights in immovable property, which are the subject-matter of a litigation, to the power and jurisdiction of the court so as to prevent the object of a pending action from being defeated.‖

Hence, the object of the doctrine is to strike at any attempt by parties to litigation to circumvent the jurisdiction of the court by acts which have

the effect of removing the immovable property which is the subject matter of the litigation from the ambit of court's power. The whole object is to subject the parties to the litigation as well as others who seeks to acquire right in the immovable property which are the subject matter of the litigation to the power and jurisdiction of the court to prevent the object of pending action from being frustrated. Admittedly, in this case, the sale deed in question in favour of defendant Nos. 2 and 3 was executed on 24.11.2015. The suit is filed in April 2018. The legality and validity of the sale deed dated 24.11.2015 though challenged in the suit without impleading the relevant parties was ultimately dropped. Clearly, the said doctrine of lis pendens does not in any manner affect the rights of the plaintiff and defendant Nos. 2 and 3 in the facts and circumstances of this case.

14. Accordingly, there is no reason or impediment in passing a preliminary decree. I, accordingly, pass a preliminary decree holding the share of the parties as follows:

Plaintiff                              1/4th undivided share in the land
Defendant No.1                         1/2th undivided share in the land
Defendant No.2                         1/8th undivided share in the land
Defendant No.3                         1/8th undivided share in the land

15. Mr.Hemant Gupta, Advocate (Mobile No: +91-9899009971) is appointed as a Local Commissioner to visit the suit premises and to see whether the property can be partitioned by metes and bounds. If the property can be so partitioned, let the ld. Local Commissioner suggest the mode of partition. The fees of the Local Commissioner is fixed at Rs.1,00,000/- (Rupees One Lakh) plus out of pocket expenses. The local Commissioner

can take assistance of the draughtsman. The fee shall be paid by the plaintiff and defendant No.2 and 3. The fees will be paid in advance.

16. The Local Commissioner will submit his report within six weeks from today.

17. List on 26.07.2021.

I.A. 7600/2020

1. This is an application under Order 39 Rule 4 CPC filed by defendant No.1.

2. This court on 16.03.2020 had passed an interim order directing that the suit property be preserved pending decision in the pending application and till the next date of hearing no third party interest shall be created in the suit property by any of the parties.

3. In view of the above order, there is no reason to vacate the said interim order. The order is confirmed.

4. Application is disposed of.

JAYANT NATH, J MARCH 23, 2021/st/n