Madhya Pradesh High Court
Subhash Chandra Agrawal vs Prem Chand Sachdeva on 6 January, 2025
Author: Gurpal Singh Ahluwalia
Bench: G. S. Ahluwalia
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1 Civil Revision No. 1154 of 2024
IN THE HIGH COURT OF MADHYA PRADESH
AT G WA L I O R
BEFORE
HON'BLE SHRI JUSTICE G. S. AHLUWALIA
ON THE 6th OF JANUARY, 2025
CIVIL REVISION No. 1154 of 2024
SUBHASH CHANDRA AGRAWAL
Versus
PREM CHAND SACHDEVA AND OTHERS
Appearance:
Shri Prakash Chandra Chandil, Shri Baldev Chhahira and Shri
Dharmendra Singh Rawat- Advocates for petitioner.
Shri Mohit Jain and Shri Mradul Gahoi- Advocates for respondent
No.1.
ORDER
This Civil Revision, under Section 115 of CPC, has been filed against
the order dated 21.10.2024 passed by X Civil Judge, Senior Division,
Gwalior (M.P.) in Civil Suit No.310A/2019 by which an application filed by
applicant under Section 11 of CPC has been rejected and it has also been held
that the suit is not barred by principle of res judicata while the application
filed under Order VII Rule 11 read with Section 151 of CPC has been
allowed to the extent of valuation and court fee.
2. It is the case of the petitioner that respondent No.1 filed a suit for
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specific performance of contract, declaration of title and permanent
injunction by pleading inter alia that on 18.10.2024, respondent No.1 entered
into an agreement to purchase an old House No.20/1502/1 situated in Ward
No.27 Kali Mai, Santar Morar, District Gwalior (M.P.) for consideration
amount of Rs.10,00,000/-. Rupees Three Lacs were paid by way of advance.
It was assured by respondent No.2/defendant No.1 that since the property in
dispute is under mortgage with Punjab National Bank, Morar Branch,
therefore, after getting the property released from mortgage, sale deed shall
be executed. Accordingly, on 05.02.2005, 17.03.2005 and 20.10.2005
additional amounts of Rs.2,50,000/-, Rs.2,50,000/- and 1,00,000/-
respectively were paid. Thus, it was prayed that out of total consideration
amount of Rs.10 lacs, Rs.9 lacs were paid up to 20.10.2005 and it was agreed
that the remaining amount of Rs.1,00,000/- shall be paid at the time of
execution of sale deed. The Punjab National Bank initiated proceedings for
recovery of mortgage-amount and the recovery proceedings No.1/2006-
2007/A-16 were initiated. When plaintiff came to know about pendency of
those proceedings then he appeared before the court of Tahsildar, Tahsil
Morar, District Gwalior and deposited the outstanding amount of
Rs.4,83,647/- and accordingly, the Bank also issued a sale certificate in
favour of plaintiff and possession was also given. It is the case of plaintiff
that in the year 2007 he was placed in possession of suit shop from the year
2007. Thereafter, one Subhash Chandra Agrawal (petitioner) filed W.P.
No.2520/2010 which was dismissed by order dated 11.01.2011 and the order
of Board of Revenue cancelling the sale certificate was upheld and the
Tahsildar was directed to proceed with the auction proceedings. Accordingly,
the auction proceedings under Section 147 of the M.P. Land Revenue Code
were restored and accordingly the Tahsildar, Tahsil Morar, District Gwalior
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issued show cause notice on 04.01.2019 for taking back the physical
possession of the shop. Accordingly, on 05.01.2019, possession of the shop
was taken back from the plaintiff. It was further alleged that Mukesh
(defendant No.1) who was the original owner of the land in dispute did not
appear in any of the proceedings. Thereafter, the suit shop was put to auction
and the auction was accepted in favour of Subhash Chandra Agrawal for
consideration of Rs.99,57,000/- and accordingly after depositing the aforesaid
amount the sale certificate was issued. It was alleged that defendant No.1
executed agreement to sell and did not give any information to the plaintiff
with regard to the mortgaged amount and therefore he executed the
agreement to sell by playing fraud on the plaintiff and thereafter defendant
No.1 also went ex parte. Accordingly, plaintiff issued notice to defendant
No.1 for recovery of Rs.99,57,000/- which was received back on the ground
that defendant No.1 has left his place of residence. Thus, it was pleaded that
defendant No.1 has played fraud by suppressing outstanding mortgage
amount and thereafter left the place of residence. It was alleged that plaintiff
has already paid Rs.9 lacs in compliance of agreement to sell and had also
paid Rs.4,83,647/- to repay the mortgage amount and accordingly it was
prayed that plaintiff is entitled for Rs.99,57,000/- from the defendants and it
was prayed that permanent injunction be also issued that the defendants
should not alienate the property in any manner and relief was also sought that
proceedings which were undertaken subsequent to the execution of agreement
to sell are null and void to the interest of plaintiff.
3. It appears that petitioner was not impleaded as defendant. Accordingly,
petitioner moved an application under Order I Rule 10 of the CPC which was
allowed and petitioner was impleaded as defendant No.4. Petitioner filed his
written statement and denied all the facts and prayed for dismissal of suit.
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Thereafter, applications under Section 11 and Order VII Rule 11 of the CPC
were filed for dismissal of suit as barred by principle of res judicata.
4. The Trial Court by the impugned order dated 21.10.2024 has dismissed
the application filed under Section 11 of the CPC but allowed the application
under Order VII Rule 11 of the CPC on the question of valuation with
direction to pay the court fee as relief for Rs.99,57,000/- has been sought. It
was further directed that plaintiff shall value the suit properly and pay the
court fee by the next date of hearing, otherwise the suit shall be dismissed.
5. Challenging the rejection of application filed under Section 11 of the
CPC it is submitted by counsel for petitioner that in the recovery proceedings
respondent No.1 and one Kamal Agrawal filed their objections. Another
advertisement was issued by Tahsildar on 06.02.2007 for sale of property and
auction date was fixed for 08.02.2007. Thereafter, respondent No.1 and
Kamal Agrawal filed two revisions before Additional Collector challenging
the auction proceedings. The Additional Collector by interim order dated
06.02.2007 directed the Tahsildar to accept cheque of Rs.3,42,895/- from
Kamal Agrawal. Thereafter, respondent No.1 deposited the cheque on his
own initiative. The Additional Collector decided the revisions vide order
dated 28.06.2007. The revision filed by Kamal Agrawal was dismissed,
however, the revision filed by respondent No.1 was allowed on the ground
that since there is an agreement to sell the property in favour of respondent
No.1, therefore, he has right to receive possession of the property after
depositing the outstanding amount with the Bank. Accordingly, respondent
No.1 deposited an amount of Rs.4,83,675/-. Thereafter, petitioner filed the
writ petition before this Court which was registered as W.P. No.3672/2007.
The said writ petition was dismissed with liberty to petitioner to file revision
before Commissioner. W.A. No.328 of 2008 was filed which too was
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dismissed by the Division Bench. Thereafter, petitioner filed revision before
the Commissioner which too was dismissed by order dated 20.07.2009.
6. Being aggrieved by the order passed by the Commissioner, petitioner
preferred revision before the Board of Revenue. The Board of Revenue by
order dated 23.04.2010 set aside the order of Additional Collector by
observing that the person would not get any right on the basis of agreement to
sell and also held that Tahsildar committed an error of law in issuing the sale
certificate in favour of respondent No.1. Thereafter, respondent No.1 filed
W.P. No.2520/2010 which too was dismissed by observing that the agreement
for sale under the Transfer of Property Act is not a transfer of right, title and
interest in the property until a sale deed is executed and registered. It was
further held that on the basis of agreement to sell, respondent No.1 cannot get
any right or title in the property which was already mortgaged by the original
owner in favour of the Bank, therefore, it was held by the Court that it was
obligatory on the part of Tahsildar to auction the property in pursuance of the
revenue recovery certificate.
7. It is submitted by counsel for petitioner that respondent No.1 preferred
WA No.62/2011 which too was dismissed by the Division Bench by order
dated 12.12.2012. Respondent No.1 also preferred SLP (Civil) No.3934/2014
which too was dismissed by the Supreme Court by order dated 24.02.2014.
Thereafter, the property was put to auction. Respondent No.1 also
participated in the said auction proceedings. However, petitioner was
successful in the auction proceedings and his bid which was highest to the
tune of Rs.99,57,000/- was accepted. It is submitted that so far as the civil
suit filed by respondent No.1 with regard to recovery of damages from
defendant No.1 is concerned, petitioner has no grievance to that effect.
However, the suit is not maintainable in relation to the relief Clause Nos.2, 3
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and 4 in the light of Section 11 of the CPC. Once the High Court has already
held that merely by execution of agreement to sell, no right is created in
favour of intending purchaser and the said order was upheld by the Division
Bench and also by the Supreme Court in SLP (Civil) No.3934/2014 then now
the Trial Court cannot reopen the said finding. It is further submitted that if
the agreement to sell was executed by playing fraud on the plaintiff then
plaintiff can seek damages but he cannot seek specific performance of
contract as well as permanent injunction and also cannot seek that subsequent
auction proceedings which took place and were decided in favour of
petitioner be cancelled.
8. Per contra, the revision is vehemently opposed by counsel for
respondent No.1. It is submitted that once defendant No.1 has played fraud on
plaintiff/respondent No.1 then the suit is maintainable.
9. Heard learned counsel for the parties.
10. The facts which have been mentioned in paragraph no.5 are averments
pleaded by the plaintiff in his plaint. The relief clause of plaint reads as
under:
lgk;rk ,oa O;;
1- ;gfd] oknh dk okn izfroknhx.k ds fo:) Lohdkj fd;k tkosA
2- ;gfd] ;g ?kksf"kr fd;k tkos fd oknh foØ; vuqca/kkuqlkj fof/kor
dk;Zokgh dj oknxzLr laifRr dks vius fgr esa iathd`r o;ukek djkus
dk vf/kdkjh gSA
3- ;gfd] oknh ds fgr esa ,oa izfroknhx.k ds fo:) bl vk'k; dh
LFkkbZ fu"ks/kkKk ikfjr dh tkos fd izfroknhx.k of.kZr vuqca/k ds izpfyr
jgrs oknxzLr lEifRr dks fdlh Hkh izdkj ls vU; laØkfUrr u djs vkSj
u djkosA
4- ;gfd] ;g ?kksf"kr fd;k tkos fd oknxzLr lEifRr ds laca/k esa
oknh ds fgr esa laikfnr foØ; vuqca/k i=ksa ds le{k Ik'pkrorhZ leLr
NEUTRAL CITATION NO. 2025:MPHC-GWL:191
dk;Zokgh oknh ds fgr ,oa vf/kdkjksa ds foijhr gksus ls izkjaHk ls gh
'kwU; ,oa fu"izHkkoh gSA
5- ;gfd] ;g ?kksf"kr fd;k tkos fd izfroknh.k }kjk oknxzLr lEifRRk
dk fof/kor o;ukek oknh ds fgr esa u djus dh n'kk esa ?kks"kfoØ; esa
izkIr izfrQy jkf'k 99]57]000@&¼fuu;kUos Ykk[k lrkou gtkj :i;s½ dks
oknh ds lkFk fd;s x;s iwoZ vuqca/kkuqlkj foØ; iw.kZ gks tkus ds dkj.k
oknh dks LoRo] LokfeRo ,oa vkf/kiR; ds iw.kZ vf/kdkj izfroknh Øekad 01
¼,d½ ds LFkku ij izkIr gks tkus ls oknh dks fof/kor e; C;kt vnk djsaA
6- ;gfd] vU; dksbZ lgk;rk ,Oka O;; ftldk dh oknh izdj.k ds
rF;ksa ,oa ifjfLFkfr;ksa esa izfroknhx.k ds fo:) izkIRk djus dk vf/kdkjh
gks og oknh dks izfroknhx.k ds fo:) nh ykbZ tkosA
7- ;gfd] izdj.k dk O;; U;k;'kqYd ,oa vf/koDrk 'kqYd oknh dks
izfroknhx.k ls fnyk;k tkosA
vr% ekuuh; U;k;ky; ls izkFkZuk gS fd oknh dk okn izfroknhx.k
ds fo:) U;k;fgr esa Lohdkj fd;k tkdj pkgh xbZ lgk;rk ,oa O;;
lfgr vKkfIr iznku dh tkosA
11. It is well established principle of law that in order to decide an
application under Order VII Rule 11 of CPC plaint averments are to be seen.
One thing is clear that initially, the Additional Collector allowed the revision
filed by respondent No.1 and directed the Tahsildar to accept the outstanding
mortgage amount from plaintiff/respondent No.1 which was done and
accordingly, sale certificate was also issued in favour of respondent No.1.
However, the order of Additional Collector which was affirmed by the
Commissioner was set aside by the Board of Revenue and the sale certificate
issued in favour of respondent No.1 was quashed and Tahsildar was directed
to proceed further with the auction proceedings. The said order of Board of
Revenue was challenged by respondent No.1 by filing W.P. No.2520/2010
which was dismissed by co-ordinate Bench of this Court by order dated
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11.01.2011 with the following observations:-
9. Section 58 of the Transfer of Property Act, 1882 describes
the Mortgage, which is as under:
"58. "Mortgage", "mortgagor", "mortgagee", "mortgage- money"
and "mortgage-deed" defined- (a) A mortgage is the transfer of
an interest in specific immoveable property for the purpose of
securing the payment of money advanced or to be advanced by
way of loan, an existing or future debt or the performance of an
engagement which may give rise to a pecuniary liability.
The transferor is called a mortgagor, the transferee a
mortgagee: the principal money and interest of which payment is
secured for the time being are called the mortgage-money, and
the instrument (if any) by which the transfer is effected is called
a mortgage-deed."
From the aforesaid section, it is clear that the 'mortgage' is a
transfer of an interest in specific immoveable property for the
purpose of securing the payment of money advanced by way of
loan. Hence, the respondent Nos. 6 and 7 have transferred their
interest in the property in favour of Bank. Consequently, they had
no right and authority to execute agreement to sale of the same
property in favour of other persons until and unless the mortgage
was redeemed.
10. The Hon'ble Supreme Court in the case of Dharma Naika vs.
Ram Naika and Another, reported in AIR 2008 SC 1276 has held as
under in regard to agreement for sale:
"Next is the definition of "Transfer under Section 3(e) of the Act.
"Transfer" means a sale, gift, exchange, mortgage with or
without possession, lease or any other transaction not being a
partition among members of a family or a testamentary
disposition and includes the creation of a charge or an agreement
to sell exchange, mortgage or lease or enter into any other
transaction.
A bare reading of the definition of "Transfer" as defined in
Section 3(e) of the Act would show that an "agreement for sale"
of any "granted land" is included within the meaning of
"Transfer". That being the position, the word "Transfer as
defined under the Act is an inclusive definition. That is to say, it
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includes "sale" as well as "agreement for sale", although an
agreement for sale under the Transfer of Property Act is not a
transfer and the right title or interest in the land does not pass
until the sale deed is executed and registered, "Sale" has been
defined in Section 54 of the Transfer of Property Act which
means transfer of ownership in exchange for a price paid or
promised or part-paid and partpromised. As noted herein- earlier
an agreement to sell does not by itself create any interest of the
proposed vendee in the immovable property but only creates an
enforceable right in the parties (See: Rambhau Namdeo Gajre vs.
Narayan Bapuji Dhotra (Dead) through LRs. ((2004) 8 SCC
614). Therefore, it is clear that under the general law, that is,
under the Transfer of Property Act, an 'agreement for sale' is not
the same as 'sale' and in the case of an agreement for sale, the
title of the property agreed to be sold still remains with the
vendor but in the case of 'sale' title of the property is vested with
the vendee. Therefore, an agreement for sale is an executory
contract whereas sale is an executed contract."
From the aforesaid judgment, it is clear that the agreement
for sale under the Transfer of Property Act is not a transfer of right,
title and interest in the property until a sale-deed is executed and
registered. In the present case. on the basis of agreement to sale,
the petitioner could not get any right or title in the property, which
was already mortgaged by the Respondent Nos. 6 and 7 in favour
of the Bank. Hence, it was obligatory on the part of the Tahsildar to
auction the property in pursuance to the Revenue Recovery
Certificate.
11. Consequently, the petition of the petitioner is hereby
dismissed. It is held that the Board of Revenue has rightly
cancelled the sale certificate issued by the Tahsildar in favour of
the petitioner in pursuance to the order passed by the Additional
Collector. It is ordered that the Tahsildar shall complete the auction
proceedings of the property and the interested parties are at liberty
to submit their bids for auction and after accepting the auction bids,
the Tahsildar shall repay the loan amount of the Bank and the
amount which was deposited by the petitioner with the Tahsildar in
pursuance to the order passed by the Additional Collector shall also
be refunded to the petitioner.
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No order as to costs.
(Underline supplied)
12. The aforesaid findings were affirmed by Division Bench of this Court
by order dated 12.12.2012 in WA No.62/2011 and by Supreme Court of India
by order dated 24.02.2014 passed in SLP (Civil) No.3934/2014. Thus, the
quashment of order of Additional Collector and Commissioner, sale
certificate which was issued in favour of respondent No.1 has been affirmed
up to the stage of Supreme Court. It is not the case of plaintiff that the
aforesaid orders were obtained by playing fraud. In order to attract the
principle of res judicata, it is to be seen that the matter was finally decided on
merits by the court of competent jurisdiction which was pending between the
same parties and the question raised was directly and substantially involved
in the issue. If the aforesaid ingredients are considered, then it is clear that
petitioner, respondent No.1 as well as respondent No.2 were party before the
Commissioner, Board of Revenue, WP. No.2520/2010, W.A.No.62/2011 and
SLP (Civil) No.3934/2014. It is not the case of respondent No.1 that the court
had no jurisdiction to decide the lis involved in the said case. Once the
question as to whether respondent No.1 had acquired any right or title by
virtue of agreement to sell has already been answered against respondent
No.1 and the Tahsildar was directed to proceed further with auction
proceedings and respondent No.1 after having participated in the auction
proceedings has failed in that, this Court is of the considered opinion that the
Trial Court cannot grant relief No.2, 3 and 4 because the question which was
substantially and directed involved in the previous litigation which went up to
the Supreme Court has already been decided on merits and it cannot be
reopened by the Trial Court in absence of any plea of fraud. Furthermore, this
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Court cannot dismiss the suit partially under Order VII Rule 11 of the CPC.
Therefore, it is held that reliefs No.2, 3 and 4 are barred by the principle of
res judicata and the Trial Court has committed a material illegality by holding
that the principle of res judicata does not apply. Thus, it is held that the suit is
barred by the principle of res judicata and therefore the plaint is liable to be
rejected under Order VII Rule 11 of the CPC. However, so far as relief No.5
is concerned, liberty is granted to respondent No.1 that he may file a suit
against respondent No.2 for recovery of damages without seeking any relief
in respect of property in dispute either by way of specific performance of
contract or in any other manner.
13. With aforesaid observations, the order dated 21.10.2024 passed by X
Civil Judge, Senior Division Gwalior in Civil Suit No.310-A/2019 so far as it
relates to rejection of application under Section 11 of CPC is hereby set aside.
The plaint is rejected as barred by the principle of res judicata, with liberty as
mentioned in paragraph No.12.
14. Revision succeeds and is hereby allowed.
(G.S. Ahluwalia)
Judge
(and)
