Telangana High Court

M/S. Kapil Consultancy Services ... vs K. Sudhakar Naidu on 10 August, 2022

Bench: P Naveen Rao, G.Radha Rani

            HONOURABLE SRI JUSTICE P.NAVEEN RAO
                            AND
            HONOURABLE DR. JUSTICE G.RADHA RANI

            CITY CIVIL COURT APPEAL NO.61 of 2022

                          Date: 10.08.2022

Between:

M/s.Kapil Consultancy Services Pvt.Ltd.,
(formerly, M/s.Kapil Chit Funds Pvt.Ltd.,),
Rep.by its authorized signatory
Sri P.Ravi Kumar, s/o.Subramanyam,
Aged about 60 years, having its Office
at H.No.3-1-631, Capt.Vijaya Raghunandan
Nagar, Karimnagar, & Corporate Office at
Kapil Towers, 15th Floor, Nanakramguda,
Hyderabad.
                                                       ..... Appellant/
                                          Claim petitioner/third party
            And
K.Sudhakar Naidu, s/o. Chalamaiah,
Aged about 57 years, Occu:Business,
r/o.Kovvuru Nagar, Ananthapurm
State of Andhra Pradesh and another.
                                                   ..... Respondents/

Respondents/ DHR/JDR

This Court made the following:

PNR,J & Dr.GRR,J CCCA No.61 of 2022

HONOURABLE SRI JUSTICE P.NAVEEN RAO AND HONOURABLE DR. JUSTICE G.RADHA RANI

CITY CIVIL COURT APPEAL NO.61 OF 2022

JUDGMENT: (per Hon'ble Sri. Justice P.Naveen Rao)

Heard learned counsel Sri Unnam Muralidhar Rao for appellant

and learned senior counsel Sri S.Ravi for first respondent.

2. According to the appellant, it has purchased property bearing

H.No.9-1-169/A with appurtenant land to an extent of 1500 square

yards in Plot No.39, Sarojini Devi Road, Secunderabad from 2nd

respondent under an agreement of sale dated 27.11.1996. As vendor

was not honouring the agreement of sale, appellant filed O.S.No.121 of

2006 on the file of I Additional Chief Judge, City Civil Court,

Secunderabad, seeking specific performance of agreement of sale.

Second respondent filed written statement agreeing the factum of

executing agreement of sale. A Compromise Memo was filed under

Order XXIII Rule 1 of Code of Civil Procedure, 1908 (for short, CPC).

Based on the compromise memo, decree and judgment was rendered

on 25.11.2006 directing second respondent to execute the sale deed.

However, second respondent failed to execute sale deed compelling the

appellant to file E.P.No.53 of 2006. Through Court, sale deed was

executed on 24.02.2007 bearing document no.478 of 2007. On the

same day possession was handed over and it is in possession of the

said property.

PNR,J & Dr.GRR,J CCCA No.61 of 2022

3. Appellant alleges that respondents 1 and 2 colluded, created an

agreement of sale dated 04.01.1984 covering the very same property

purchased by the appellant. Seeking to issue decree of specific

performance, O.S.No.41 of 2005 was filed in the Court of Principal

District Judge, Krishna at Machilipatnam in State of Andhra Pradesh.

In the said suit, a joint compromise memo was filed on 15.12.2005.

On the said date, the suit was referred to Lok-Adalat at Machilipatnam.

The Lok-Adalath passed award. Seeking enforcement of the decree,

E.P.No.32 of 2008 was filed in the Court of Additional Chief Judge, City

Civil Court, Secunderabad, against second respondent to execute the

sale deed.

4. Appellant further avers that even before a decree was passed,

first and second respondents entered into agreement of sale with

M/s.K.Raja Mouli & Sons. It appears, sale deed was also executed in

favour of M/s.K.Raja Mouli & Sons on 24.03.2006. However, having

come to know two different transactions covering the same property,

M/s.K.Raja Mouli & Sons sought refund of sale consideration.

Accordingly, and at the behest of respondents 1 and 2, appellant paid

the sale consideration to M/s.K.Raja Mouli & Sons. The sale deed

document no.2451 of 2007 was cancelled on 29.05.2007. Thereby only

appellant's sale deed remained as valid transaction.

5. Having come to know that E.P.No.32 of 2008 is filed praying the

Court to execute registered sale deed as per the award of the PNR,J & Dr.GRR,J CCCA No.61 of 2022

Lok-Adalat, Machilipatnam, offending its right to property, the

appellant filed claim petition, E.A.No.19 of 2022 in E.P.No.32 of 2008

under Order XXI Rule 58 of CPC. By order dated 31.01.2022, the E.A.,

was dismissed. Hence, this Appeal.

6. According to learned counsel for appellant a collusive and

fraudulent decree was obtained in O.S.No.41 of 2005 from the

Lok-Adalat. Though, the property is located in Secunderabad, to invoke

the jurisdiction of the Court in Machilipatnam, a sham transaction

showing purchase of 10 acres land in Sy.No.512 in Pedda Gudur

village was created. Later, the plaintiff gave up his claim to said

transaction and issue was confined to Secunderabad property on

which compromise decree was obtained.

6.1. He would submit that on enquiries from the Office of Tahsildar,

Gudur Mandal, it was found that there was no Sy.No.512 in Pedda

Gudur village. He would therefore submit that fraudulent transactions

were created to knock away the property vested in the appellant.

6.2. He would submit that the respondents were indulging in forum

shopping. Instead of availing legal remedy in the Courts in

Secunderabad, case was filed in Machilipatnam by creating another

sham transaction and got the issue compromised in no time. All this

was done behind the back of the appellant. As the decree was obtained

from Court in Machilipatnam by playing fraud, it is non-est in the eye PNR,J & Dr.GRR,J CCCA No.61 of 2022

of law and the respondent decree holder is not entitled to seek its

enforcement.

7. Learned senior counsel appearing for respondents contended

that all false allegations are made. The decree of decree holder was

much earlier to institution of suit by appellant. In fact, his suit was

not maintainable affecting the same property when a decree was

already passed in favour of the Decree Holder and against the vendor

of appellant.

7.1. He would submit that this claim petition is a collusive one. It is

intended to deny the fruits of success in the suit filed by Decree

Holder. Earlier Sri K. Rajamouli filed similar claim petition in E.A. No.

58 of 2009, which was dismissed on 6.2.2012 and immediately

thereafter this E.A. was filed. The evidence of P.W.1 shows that filing

of E A No. 58 of 2009 and its dismissal was within the knowledge of the

appellant.

7.2. He would submit that the appellant was aware of the decree

granted to Decree Holder as evident from deposition of P.W.1 but kept

quiet for reasons best known to him. The decree has become final and

Decree Holder is entitled to seek its enforcement.

7.3. He would submit that once a decree is passed and has become

final, the Executing Court has to ensure its compliance. He would

further submit that Executing Court can not go beyond the decree. It's

jurisdiction is confined to execute the decree.

PNR,J & Dr.GRR,J CCCA No.61 of 2022

7.4. He would submit that Execution Petition is continuation of

decree granted to the plaintiff. The doctrine of lis pendens applied to

instant case. Until the decree is enforced all transactions undertaken

in the interregnum concerning the suit schedule property are subject

to final decision by the Executing Court. Therefore, the sale executed

in favour of the appellant is subject to E.P.No. 38 of 2008.

7.5. In support of his contentions, learned senior counsel relied on

judgment of the Supreme Court in Rameshwar Dass Gupta Vs State

of U.P1., and Samarendra Nath Sinha and Ors Vs Krishna Kumar

Nag2; and judgment of Madras High Court in Venukuri Krishna Reddi

and another Vs Kota Ramireddi and others3; A.Kulandaivelu Pillai

Vs Sowbagyammal4; Aravamudhu Ayyangar Vs Zamindarini

Srimath Abiramavalli Ayah and others5 and Privy Council

in Karrab-Ul-Din and others Vs. Moti Lal6.

8. The main plank of opposing the Execution Petition is that the

decree was obtained by playing fraud from a Court outside the

jurisdiction and therefore can not be enforced. It is also pleaded that

as the appellant also obtained decree on the same property and the

property is already registered on its name, there can not be

registration of a second sale deed on the same property.

JT 1996(7) 657=Indiakanoon.org/doc/284829/ 2 AIR 1967 SC 1440 3 1953 SCC OnLine Mad 335 4 AIR 1945 Mad 350= MANU/TN/0066/1944 5 AIR 1934 Mad 353=MANU/TN/0178/1933 6 1897 SCC OnLine PC 16 : (1896-97) 1 CWN 639 : (1896-97) 24 IA 170 PNR,J & Dr.GRR,J CCCA No.61 of 2022

9. It is not in dispute that the decree in O S No. 41 of 2005 was

earlier to instituting O.S. No. 121 of 2006 filed by the appellant

covering the same property. It is also not in dispute that the decree in

O.S. No. 41 of 2005 has attained finality. Once a decree is passed and

Decree Holder seeks execution of the decree, the role of the Execution

Court is only to seek its execution and can not travel beyond the

decree in the suit.

10. It is settled principle of law that a decree cannot be frustrated by

any third party transactions before the decree is executed. Theory of

lis pendens embodied in Section 52 of Transfer of Property Act,1882

applies till the complete satisfaction or discharge of the decree and also

applies to even registration made through Court. It is apt to consider

the opinion expressed by Madras High Court, Hon'ble Supreme Court

and the Privy Council, in the following decisions.

11. In A.Kulandaivelu Pillai Madras High Court held :

"6. What is to happen in the case of a conflict between Ss. 52 and 100 is the only point that remains for answer. While S. 100 says that a charge will not prevail against a bona fide transferee for value without notice, S. 52 seems to deprive him of this privilege, is the argument of Mr. Ramabhadrachariar. One answer to the question is probably what was given by the Nagpur High Court in I.L.R. (1941) Nag. 513 [('40) 27 A.I.R. 1940 Nag. 163 : I.L.R. (1941) Nag. 513 : 194 I.C. 861, Ghasiram v. Mt. Kundanbai.] , namely, that a charge given by a decree of Court cannot be described as a charge created by the act of parties or by operation of law. The learned Judges who decided that case have given good reasons for holding that the omission to refer to charge decrees in this section was probably intentional and not accidental. But it is not necessary to pursue this line further as I think there is another answer. There is no real conflict at all between the two sections. Section 52 expressly provides for all cases of decrees in suits relating to immovable property whether they involve a mortgage or a charge or recovery of possession and states that no party to the suit can transfer or otherwise deal with the property "so as to affect the rights of any other party thereto under any decree or order which may be made therein, except under the authority of the Court." It makes no exception in favour of a bona fide transferee for value without notice." .........

PNR,J & Dr.GRR,J CCCA No.61 of 2022

11.1. In Samarendra Nath Sinha, Hon'ble Supreme Court held:

"20. ................It is true that Section 52 strictly speaking does not apply to involuntary alienations such as court sales but it is well-established that the principle of lis pendens applies to such alienations. (See Nilkant v. Suresh Chandra [12 IA 171] and Motilal v. Karrabuldin [24 IA 170] ). It follows that the respondent having purchased from the said Hazra while the appeal by the said Hazra against the said preliminary decree was pending in the High Court, the doctrine of lis pendens must apply to his purchase and as aforesaid he was bound by the result of that suit".................

11.2. In Karrab-Ul-Din and others Vs. Moti Lal, the Privy Council

held as under

"7. It may be as well her to dispose of a very extraordinary contention set up for the Defendant. He bought whatever interest belonged to the heirs of Agha who were mortgagees, and to Yusuf and Nasim who were mortgagors. But three months before he bought, Masih had instituted his suit against those very persons to establish his title against them, and it was established by the decree of November 1885. Is if possible for the Defendant to allege that, as against Masih or his heirs, the heirs of Agha or Yusuf or Nisim had any interest to convey to him? The District Judge holds that the Defendant is free from the decree because he was no party to the suit, and because the ttansfer to him was made prior to the decree. If that were law, it is difficult to see in what cases a pending suit would be any protection; and Mr. Branson very properly declined to argue in support of that view. But then he could not assign any reason for avoiding the force of the decree except that Agha's attachment was prior to Masih's suit. Attachment however only prevents alienation; it does not confer title; and even if it did, the interest so acquired would be that of Agha or his heirs, who were Defendants in Masih's suit. It is too clear for argument that the decree of November 1885 binds the interests of Agha, Yusuf and Nasim, and of all persons claiming under them by transfer subsequent to the 28th July 1884."

12. Having regard to the settled principle of law, we do not see any

error in the trial Court dismissing the EA filed by the appellant.

13. Heavy reliance was placed on endorsement stated to have been

issued by the Tahsildar on 12.2.2013 (Ex.P4) whereunder he has

stated that in Peda Guduru village, there is no survey No. 512 to

contend that agreement of sale dated 4.1.1984 is a sham document

invented to invoke the jurisdiction of civil Court in Machilipatnam. The

trial Court declined to rely on the document Ex.P4 as its authenticity

was not proved and the concerned Tahsildar was not examined. The PNR,J & Dr.GRR,J CCCA No.61 of 2022

trial Court also noticed that nothing was elicited by cross examining

RW1. On the assertion of appellant that fraud was committed by

Decree Holder, the trial Court was not persuaded to agree with the