1 SA165-91 Bsb IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION SECOND APPEAL NO. 165 OF 1991 1. Bansilal Chainaukh Malu & ors. ... Appellants v/s Narayan Vireshwar Dixit & ors. ... Respondents Mr.K.Y.Mandlik for the appellants. Mr.S.L.Kapse for respondent Nos.2(A) to 2(I). CORAM: SMT.NISHITA MHATRE, J. DATED: 23RD DECEMBER, 2011 ORAL JUDGMENT: 1. By this appeal, the appellants who were the plaintiffs in Regular Civil Suit No.87 of 1979 have challenged the judgment and order of the Civil Judge, Jr. Divn., Khandala which has been confirmed in Regular Civil Appeal No.375 of 1986. By the impugned decision, the suit filed by the appellants has been dismissed on the ground that it is barred by limitation as also the principle of lis pendens, it has been concurrently held that the appellants are bound by the 2 SA165-91 compromise decree dated 9.12.1970 in R.C.S. No.69 of 1968. 2. The undisputed facts involved in the present case are as follows:- One Ramchandra Zumbarlal Rathi owned a house property bearing No.368 situated at Village Shirval, Taluka – Khandala, Dist. Satara (in short, the suit property). He entered into an agreement for sale of the suit property for `4000/- with one N.V.Dixit – defendant No.1. Defendant No.1 later filed Suit No.69 of 1968 on 1.4.1968 for specific performance of the contract. While this suit was pending on 5.3.1969, Rathi sold the suit property to one Vitthal Baburao Kadam who was the petitioner in the suit property by a registered sale deed. In his written statement filed in Suit No.69 of 1968, Rathi contended that prior to the receipt of the suit summons he had sold the suit property to Kadam and, therefore, he had no right, title or interest in the same. Therefore, Kadam was added as a party defendant to the suit. On 1.10.1969, Kadam in turn sold the suit property to the the original plaintiff no.1 (Malu) in the present case by a registered sale deed on 18.10.1969. This property was purchased according to Malu for his joint family and joint business of which Malu was one of the partners. Kadam filed 3 SA165-91 a written statement pointing out the sale of the suit property to Malu. The plaint was amended by defendant No.1 in Regular Civil Suit No.69 of 1968 relinquishing his claim for specific performance and confining the relief sought in the suit to the monetary claim. 3. Regular Civil Suit No.69 of 1968 was compromised between Rathi and defendant No.1 on 9.12.1970. It was agreed that an amount of Rs.4000/- with 6% interest would be paid to defendant No.1. At the same time, Kadam was deleted as a party defendant. Malu had not been added as a party defendant to the suit. Under the compromise a charge was created on the suit property. As the decretal amount was not paid to defendant No.1, he filed Darkhast No.13 of 1972 on 2.5.1975 to recover the amount of `5,467.69. Ramchandra Rathi, the original defendant in that suit had died in 1971 itself and, therefore, notices of Darkhast were issued to his legal heirs. The suit property was attached under an order dated 20.9.1972 in consonance with the provisions of Order XXI Rule 54 of the Code of Civil Procedure. The judgment debtors i.e. the heirs and legal representative of Rathi, were not represented in Court and because of their absence the warrant of sale and proclamation was issued on 24.8.1973. Consequently, the 4 SA165-91 suit property was sold for `8000/- in the auction to Genaba Parbatrao Vaidya on 31.10.1973 i.e. original defendant No.2 in the present case. The Rathis applied for setting aside the sale on 30.11.1973 however that application was dismissed. The sale was confirmed on 26.11.1974 and Darkhast No.13 of 1972 was disposed of, the decree being satisfied on 30.11.1974. Three years later, the Rathis filed Misc. Civil Appeal No.2 of 1975 which was again dismissed by the District Judge, Satara. The civil revision application filed by the Rathis against the aforesaid miscellaneous civil appeal was dismissed on 19.9.1978. One year later i.e. on 10.9.1979 Malu filed a suit before the Civil Judge, Jr. Divn., Khandala, for a declaration that the compromise decree in Suit No.69 of 1968 was a nullity and, therefore, not binding on him. This suit was dismissed on 31.1.1986 by the Trial Court as it was barred by limitation and because the plaintiff was unable to prove that the decree in Regular Civil Suit No.69 of 1968 was not binding on him. Aggrieved by that decision, Malu filed Regular Civil Appeal No.375 of 1986 which was dismissed by the Additional District Judge, Satara, on 3.12.1990. The learned District Judge, while not accepting the reasoning of the Trial Court, has confirmed its findings. Accordingly, the Appellate Court has held that the sale deed dated 1.10.1969 by which the suit property was sold by Kadam to Malu had no 5 SA165-91 bearing on the compromise decree passed in R.C.S. No.69 of 1968 on 9.12.1970. The Appellate Court held that the compromise decree in R.C.S. No.69 of 1968 was binding on Malu because his suit was barred by the principle of lis pendens under Section 52 of the Transfer of Property Act and that the auction sale held in Regular Darkhast No.13 of 1972 in which Vaidya purchased the property was also binding on Malu. Further more, although the Appellate Court had not framed any issue regarding limitation, it has held that the suit was barred by limitation. 4. The substantial questions of law, therefore, which arise in the present appeal are as follows:- (1) Whether the suit filed by the plaintiff was barred by limitation on account of the provisions of Article 99 of the Limitation Act ? (2) Whether the compromise decree passed in Regular Civil Suit No.69 of 1968 on 9.12.1970 and the auction sale held pursuant to the order passed in Darkhast No.13 of 1972 was binding on the plaintiff i.e. Malu on account of the doctrine of lis pendens ? 6 SA165-91 5. The first issue which I will deal with is the aspect of limitation. The present suit has been filed for a declaration that the auction of the suit property in Regular Darkhast No. 13 of 1972 and the decree in R.C.S.No.69 of 1968 are not binding on the plaintiffs (referred hereafter as “the Malus”). As mentioned earlier, both the Trial Court as well as the Appellate Court have found that the suit is barred by limitation. The auction for the suit property was conducted on 31.9.1973. However, the sale was confirmed in the year 1974. Misc. Civil Appeal No.2 of 1975 was preferred by the Malus against the confirmation of this sale before the District Court, Satara. That appeal was dismissed and, therefore, the Malus filed Revision Application No.71 of 1978 which again was dismissed by this Court. Under Article 99, the limitation of one year is available for setting aside a sale by a Civil Court and the time begins to run from the date the sale is confirmed. It is the case of the Malus that since the High Court had dismissed the civil revision application in 1978, their suit which they have filed in 1979 was within the prescribed period of limitation and, therefore, not barred. It is also contended that, in any event, since a declaration was sought to the effect that the earlier decree and the auction sale were not binding on the plaintiffs, the limitation available is of three years from the date the right to suit first 7 SA165-91 accrued. 6. The sale was confirmed on 26.11.1974. It is not possible to accept the contention that because the Malus chose to challenge the sale by preferring Misc. Civil Appeal No.2 of 1975 before the District Court, the sale had not been confirmed on that date. Therefore, the limitation would run from 26.11.1974 and not from the date when the High Court dismissed the civil revision application. The suit, having been filed after a delay of five years, is obviously barred by limitation. Even assuming Article 58 is applicable as contended by the Malus, the suit ought to have been filed within three years of the sale having been confirmed i.e. by 25.11.1977. In my opinion, the Appellate Court has rightly held that it is Article 99 which is applicable and not Article 58 of the Limitation Act. Article 99 specifically applies to a suit filed for setting aside a sale by a civil court as in the present case and, therefore, the suit filed by the Malus is barred by limitation. 7. The next issue which is required to be considered is whether the decree passed in R.C.S.No.69 of 1968 was binding on the appellants. The main contention raised on behalf of the appellants is that they had no notice of the 8 SA165-91 pending suit filed by Dixit i.e. the defendant No.1 in the present suit and had bona fide purchased the suit property from Kadam under the sale deed of 1.10.1969. This fact was brought to the notice of the Court on 23.12.1969 by Kadam in his written statement. The plaintiff in that suit i.e. Dixit chose not to amend his plaint to implead the appellants as defendants to the suit. According to Mr.Mandlik, the learned advocate appearing for the appellants, the Appellate Court has erred in concluding that the suit was barred by the doctrine of lis pendens encapsulated under Section 52 of the Transfer of Property Act. He submitted that there was a serious ommission in the suit filed by Dixit as the appellants had not been joined as a party. He urged that this was a fatal flaw and, therefore, any decree in that suit could not be binding on the appellants. Being aware of the sale of the property by Kadam in favour of the appellants, had chosen not to join appellants as a party to the suit. 8. The compromise decree between Dixit and Rathi in R.C.S. No.69 of 1968 was passed on 9.12.1970. Under this compromise decree, Rathi agreed to pay Dixit a sum of `4000/- with 6% interest. Kadam was deleted as a party defendant and a charge was created on the suit property. Rathi had sold the suit property to Kadam on 5.3.1969. 9 SA165-91 9. Section 52 of the Transfer of Property Act reads as follows:- “Sec.52 Transfer of property pending suit relating thereto.- During the pendency in any Court having authority within the limits of India excluding the State of Jammu and Kashmir or established beyond such limits by the Central Government of any suit or proceedings which is not collusive and in which any right to immovable property is directly and specifically in question, the property cannot be transferred or otherwise dealt with by any party to the suit or proceeding 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 and on such terms as it may impose. Explanation.- For the purposes of this section, the pendency of a suit or proceeding shall be deemed to commence from the date of the presentation of the plaint or the institution of the proceeding in a Court of competent jurisdiction, and to continue until the suit or proceeding has been disposed of by a final decree or order and complete satisfaction or discharge of such decree or order has been obtained, or has become unobtainable by reason of the expiration of any period of limitation prescribed for the execution thereof by any law for the time being in force.” Thus, while any suit or proceedings with respect to any right in an immovable property is pending in any Court, the property cannot be transferred or otherwise dealt with by any party to the suit or proceedings so as to jeopardize the rights of any other party. Dixit had filed the suit on 1.1.1969 for specific performance against Rathi on 1.4.1968. Therefore, from that day onwards Rathi could not have sold 10 SA165-91 the property so as to jeopardize the rights of Dixit. All subsequent sales could not have been effected as Rathi himself had no right to sell the property. The question would be whether Section 52 of the Transfer of Property Act would apply without a notice for lis pendens being registered by the plaintiff in R.C.Suit No.69 of 1968. Under Section 18(ee) of the Registration Act, 1908 (as applicable in the State of Maharashtra) a notice for lis pendens is may be registered. The registration of such a notice is optional and not mandatory. 10. Assuming the notice of lis pendens has not been registered, it would not mean that the suit is not barred by the doctine of lis pendens as contained in Section 52 of the Transfer of Property Act, 1880. The registration of the notice being optional, the right which accrues to a party under Section 52 would still survive. The compromise decree was certainly binding on the appellants as they had purchased the suit property from a person who had no right, title or interest in the same. The principle of lis pendens was attracted when the first sale was sought to be made by Rathi in favour of Kadam. In my opinion, therefore, although the notice of lis pendens was not registered, it would not give any right to any subsequent purchaser to claim ownership of the suit 11 SA165-91 property. Moreover , it cannot be said that the decree and the auction sale were not binding on the appellants. The suit property was purchased in 1973 by the respondent No.2 herein in auction proceedings. The appellants had made all attempts to ensure that their rights were protected by filing Misc. Civil Application No.2 of 1973 against the order passed in Darkhast No.13 of 1972 in R.C. Suit No.69 of 1968 and were unsuccessful. In fact they had pursued those proceedings by raising the same contentions and had failed to get relief in the lower courts as well as this Court in the revision application. 11. Accordingly, it must be held that the second appeal fails as the appellants were not able to make out their case that the decree passed in R.C.Suit No.69 of 1968 and the sale of the suit property thereafter in Darkhast proceedings was not binding on them. 12. Appeal dismissed. (SMT. NISHITA MHATRE, J.) 12 SA165-91 13 SA165-91