HIGH COURT OF HIMACHAL PRADESH AT SHIMLA RFA No. 11 of 2009 & CWP No.763 of 2005. Reserved On: 24.5.2011 Decided on: 2.6.2011 RFA No.11 of 2009 Shanta Verma ………Appellant. Versus Vijay Kumar and others ………Respondents. CWP No.763 of 2005 Himachal Pradesh State Financial Corporation ………Petitioner. Versus Himachal Pradesh State Electricity Board and others ………Respondents. Coram: The Hon’ble Mr.Justice V.K. Ahuja, Judge. Whether approved for reporting? Yes. In RFA: For the appellant: Mr.N.K. Sood, Advocate. For the respondents: Mr.Chandranarayana Singh, Advocate, for respondent No.1. Mr.Ajay Kumar, Advocate, for respondents No.2 and 5. Mr.Tarlok Jamwal, Advocate, for respondents No.3 & 4. In CWP: For the petitioner: Mr.Ajay Kumar, Advocate. For the respondents: Mr.Tarlok Jamwal, Advocate, for respondents No.1 to 3. Mr.N.K. Sood, Advocate, for respondent No.5. Mr.C.N. Singh, Advocate, for respondents No.6 and 7. V.K. Ahuja, J.: This judgment shall dispose of the appeal filed by the appellant/defendant under Section 96 read with Order 41 CPC against the judgment and decree of the Court - 2 - of learned Additional District Judge, Una, dated 16.10.2008, vide which the suit for declaration filed by respondents No.1 and 2 (hereinafter also referred to as the plaintiffs) against the appellant (hereinafter also referred to as defendant No.1) and as against respondents No.3, 4 & 5 (hereinafter also referred to as the defendants No.2, 3 and 4, respectively), was decreed as against defendant No.1. This judgment shall also dispose of the writ petition filed by the HPFC/defendant No.4 challenging the sale proceedings qua the suit land. 2. Briefly stated, the facts of the case are that the plaintiffs filed a suit for declaration to the effect that the suit land alongwith the superstructure existing on the land measuring 0-1-47-42 hectares comprised in Khasra No.9, 10 etc. was owned and possessed by the plaintiffs having been purchased from defendant No.4 for Rs.8.5 lacs. The plaintiffs have further challenged the mutations of attachment No.475 and 510 procured by defendants No.2 and 3 and the subsequent auction sale, by having played fraud. It was alleged that the land in suit was owned and possessed by one Navjyoti Engineering Pvt. Ltd., not a party before this Court, and the said concern had secured a loan of Rs.19.50 lacs from defendant No.4. An equitable mortgage was also created by deposit of the deed of immoveable property in favour of defendant No.4 as is entered in the copy of jamabandi. The original owner Navjyoti Engineering Pvt. Ltd. failed to pay the loan and under the provision of Sections 29 and 30 of the State Financial Corporation Act, defendant No.4 took over the - 3 - possession of the mortgaged property on 5.7.1995. After taking over the possession, defendant No.4 advertised in the daily newspaper inviting bids for the sale of the taken over assets for 9.4.1999. Defendant No.4 thereafter called upon the bidder for negotiating the price. The plaintiffs also deposited a sum of Rs.17,000/- as earnest money alongwith the bid. The plaintiffs successfully negotiated with defendant No.4 and the price settled was Rs.8.5 lacs as on 30.8.1999. The plaintiff, as per this settlement with defendant No.4, also deposited the sale money. 3. It was further alleged that defendant No.4 delivered the possession of the sold assets on 23.7.2001 to the plaintiffs and since then the plaintiffs have been coming in possession of the suit land, building and machinery attached therein. It was also alleged that proforma defendant No.4 was in possession prior to handing over the possession to the plaintiffs for which defendant No.4 had employed a Chowkidar to look after the property. The plaintiffs after the purchase, posted their own person for looking after the property. It was further alleged that from examination of the record, it was revealed that Navjyoti Engineering Pvt. Ltd. had filed a suit for mandatory injunction against defendants No.2 and 3 and the suit was dismissed as withdrawn by way of compromise. No decree in favour of defendants No.2 and 3 was passed. However, it was revealed that defendants No.2 and 3 filed Execution Petition No.45 of 1995 on the basis of the dismissed suit and by misleading the court fraudulently got attached the suit land vide rapat No.475 and 510, dated - 4 - 29.7.1998 and 24.8.1998, though there was no executable decree and the land could not be attached. It was also alleged that defendant No.2 and 3 in conspiracy with defendant No.1, without adopting the procedure of Order 21 Rule 66, got the land auctioned in favour of defendant No.1 for a paltry sum of Rs.50,000/-. The proceedings of attachment and sale were kept secret. It was also alleged that the super structure existing over the suit land was of value of more than Rs.2.00 lacs. The plaintiffs were not made a party to the execution proceedings. Defendant No.4 continued in possession of the suit land and other assets and thereafter the plaintiffs came in possession of the suit land. The plaintiffs had challenged the warrant of attachment issued and the subsequent auction in favour of defendant No.1 and had also challenged mutation No.210 in favour of defendant No.1 being wrong, illegal and void. It was also alleged that the transaction was illegal in view of the charge and lien of defendant No.4 and no auction or sale could take place unless no objection certification was taken form defendant No.4 since they were having the first charge over the said property. Defendant No.1 has also procured entry of delivery of possession but this rapat is merely a paper entry since the possession was never delivered to defendant No.1. Thus, the plaintiffs had prayed for declaration that the sale in favour of defendant No.1 and the mutation of attachment procured by defendants No.2 and 3 and subsequent sale be declared null and void since they are the result of fraud and in the alternative relief of possession was also claimed. - 5 - 4. Defendant No.1 took up preliminary objection in regard to maintainability, locus standi etc. On merits, defendant No.1 admitted the ownership of Navjyoti Engineering Pvt. Ltd. but pleaded that she had purchased the property in execution proceedings for consideration and she is a bonafide purchaser in good faith, for value and without notice. She denied her knowledge in regard to title of defendant No.4, if any, and pleaded that the plaintiffs could have filed an objection petition in the execution proceedings but these cannot be challenged by a separate suit. Defendants No.2 and 3 had pleaded that the sale of the property was effected prior to 21.2.1999 in an execution petition filed by defendants No.2 and 3 against Navjyoti Engineering Pvt. Ltd. In regard to the previous suit, it was pleaded that a compromise was effected in between the parties and the plaintiff in that suit i.e. Navjyoti Engineering Pvt. Ltd. undertook to pay the due amount of Rs.2,13,411/- to defendants No.2 and 3 as per the compromise. Since the said firm failed to make the payment, defendants No.2 and 3 filed the execution petition and the land was accordingly sold in favour of defendant No.1. It was also pleaded that a compromise decree was passed which was legally executable and as such no cause of action has arisen to the plaintiffs. 5. On the pleadings of the parties, the following issues were settled by the learned trial Court: 1. Whether the mutation of attachment no.475 and 510 procured by defendants NO.2&3 and subsequent auction/sale by defendants No.2 & 3 behind the back of defendant No.4 as well as plaintiff is wrong, illegal, - 6 - void and not binding upon the rights of the plaintiffs as alleged? OPP 2. Whether the plaintiffs are entitled for permanent injunction as alleged? OPP 3. Whether the plaintiffs have purchased the suit land from defendant No.4 for Rs.8,50,000/- as alleged? OPP 4. Whether the suit is not maintainable? OPD 5. Whether the suit is bad for non-joinder and mis- joinder of parties? OPD 6. Whether the plaintiffs have no locus standi to file the suit? OPD 7. Whether the suit is not properly instituted and constituted as alleged? OPD 8. Whether the suit is collusive between the plaintiffs and defendant No.4? OPD 9. Whether the plaintiffs are estopped by their act and conduct? OPD 2&3 10. Whether the plaintiffs have no cause of action? OPD 11. Whether the defendant No.1 is bonafide purchaser for value without notice? OPD-1 12. Relief. 6. In support of these issues, the parties led evidence and the learned trial Court, vide its impugned judgment decided all the issues in favour of the plaintiffs and against defendant No.1 and consequently decreed the suit of the plaintiffs in full. 7. I have heard the learned counsel for the parties and have gone through the record of the case. 8. The submissions made by the learned counsel for the appellant were that the learned trial Court had come to a wrong conclusion that the previous decision vide Ext.PW-3/A was neither a decree nor was an executable order. It was submitted that it was an executable order and - 7 - the parties had agreed to abide by the terms of the compromise and execution proceedings were filed by defendants No.2 and 3 and the land was sold in favour of defendant No.1 in accordance with law as per the procedure. It was also submitted that no objections were raised by the plaintiffs or defendant No.4 in the execution proceedings and they did not file any appeal or revision against the said proceedings. Thus, it was submitted that the findings of the learned trial Court under Issues No.2 and 3 and other issues are bad in the eyes of law. Defendant No.1 was a bonafide purchaser for consideration having no knowledge of the claim of defendant No.4 or that the plaintiffs over the suit property. Thus, the findings to the contrary are liable to be reversed. 9. On the other hand, the learned counsel for the respondents had supported the impugned judgment and decree passed by the learned trial Court supplementing it by some other submissions which shall be referred below. 10. Before I refer to the pleas raised by the learned counsel for the appellant, some facts of the case and the impugned order in question are necessary to be referred to. The facts of the case are that Navjyoti Engineering Pvt. Ltd. filed a suit as against defendants No.2 and 3 for issuance of mandatory injunction directing the defendants to restore the electricity energy in the premises of the Industrial Unit located at Village Jhalera and also prayed for the grant of permanent injunction. In that suit, a compromise was effected in between the parties - 8 - and the following order was passed by the court of the learned Sub Judge Ist Class, Una: “File taken up today on the request of the parties. It has been stated by the parties that they have entered into a compromise which is Ext.C-1 filed on the record. Statements of both the parties have been recorded to this effect. In view of the statement of the plaintiff, the suit is dismissed as withdrawn. However, both the parties shall remain bound by the terms of compromise Ex.C-1. File after completion be consigned to records.” 11. The terms of the compromise Ext.C-1 have not been reproduced in the order but a reference to the compromise has been made by the court in its order. The facts of the case, as can be gathered from para 10 of the impugned judgment, are that the defendants had released electricity connection to the said firm, who had not paid energy charges to the defendants and a sum of Rs.2,13,411/- had become due against the firm. The defendants disconnected the electricity and the firm filed the suit for mandatory and permanent injunction as referred to above. During the proceedings, compromise Ext.C-1 was effected in between the parties. According to the compromise Ext.C-1, the plaintiff had agreed to pay the amount in installments and in view of the statement made by the parties, the suit was dismissed as withdrawn. Thereafter, the plaintiff failed to pay the amount and the execution proceedings were initiated by defendants No.1 and 2 as against the said plaintiff and in those execution - 9 - proceedings, the suit property was purchased by defendant No.1 for a sum of Rs.50,000/-. 12. The question which arises for consideration is as to whether the order dated 9.4.1992 can be termed as an executable order or a decree in which execution proceedings could be filed by defendants No.1 and 2 in that case. The learned counsel for the appellant had drawn my attention to the provisions of Section 2(2) CPC in regard to the decree, which read as under: “(2) “decree” means the formal expression of an adjudication which, so far as regards the Court expressing it, conclusively determines the rights of the parties with regard to all or any of the matters in controversy in the suit and may be either preliminary or final. It shall be deemed to include the rejection of a plaint and the determination of any question within section 144, but shall not include- (a) any adjudication from which an appeal lies as an appeal from an order, or (b) any order of dismissal for default.” 13. The reading of the above definition clearly envisages that there has to be some formal expression of adjudication and the order should conclusively determine the rights of the contesting parties to bring the order into the domain of a decree. 14. Order 21 Rule 11 relates to execution. It is clear that before Order 21 Rule 11 is invoked by a decree holder, the decree holder must be armed with a money decree. The provisions of Order 21 Rule 11 may be reproduced as under: - 10 - “(1) Where a decree is for the payment of money the Court may, on the oral application of the decree- holder at the time of the passing of the decree, order immediate execution thereof by the arrest of the judgment-debtor, prior to the preparation of a warrant if he is within the precincts of the Court.” 15. Thus, it is clear that there should be a pre existing decree or an order capable of execution. Section 2(14) CPC reads as under: “(14) “order” means the formal expression of any decision of a Civil Court which is not a decree;” 16. Thus, it is clear that in case the parties had prayed that a compromise decree be passed and accordingly the orders had been passed by the learned trial Court, it could be termed as an executable decree or an executable order, which is not so in the present case. The parties who had filed the execution proceedings were defendants before the learned trial Court, who had not filed any counter claim for recovery of the amount in question and prayed for the decree of the counter claim set up by them for the recovery of the amount in question. The suit simpliciter was for permanent injunction and mandatory injunction, which had been got dismissed by the plaintiffs in view of the compromise effected in between the parties. Neither the suit was for the recovery of the amount nor any counter claim was put up by the defendants which was decreed in favour of the defendants and, therefore, the defendants had no right to file the execution petition for the recovery of the amount in question. In case, the decree - 11 - had been passed based upon the compromise, it could have been inferred that the decree in question was executable. It was for them to seek appropriate remedy before the civil court for implementation of the compromise in view of the undertaking given by the plaintiff, but they could not file the execution petitioner for recovery of the amount as against the plaintiff in case he failed to pay the amount as agreed. In case the parties had prayed that a decree be passed, things would have been. 18. From the above discussion, it follows that the learned trial Court had come to a right conclusion that the order in question Ext.PW-3/A was neither a decree nor an executable order and, therefore, no executable decree was there to be executed in terms of the provisions of Order 21 CPC. 19. The dates of these proceedings and other dates may be relevant which may be reproduced below. The order Ext.PW-3/A was passed on 9.4.1992 and the execution proceedings were initiated for attachment of immoveable property on 12.3.1997 as per Ext.D-6. The attachment was effected thereafter. Notice of sale was issued as per Ext.D-18 on 14.1.1999. A perusal of order Ext.D-22, dated 23.2.1999, of the Court of Senior Sub Judge, Una shows that the property was auctioned for Rs.50,000/- and a sum of Rs.12,500/- has been paid by the auction purchaser. Notice was issued to the auction purchaser for deposit of the remaining amount. Then a notice was issued to the purchaser vide Ext.D-23 and she deposited the amount and thereafter the sale was confirmed. Then the petition was filed by - 12 - defendant No.1 for delivery of possession, which is dated 1.4.2000 and possession was accordingly delivered as per rapat dated 24.11.2000 Ext.D-31 to the purchaser. In the meanwhile, the land had been sold in auction proceedings initiated by defendant No.4 in view of the provisions of Sections 29 and 30 of the H.P. Financial Corporation Act and the plaintiffs had purchased the land for a sum of Rs.8,50,000/- from defendant No.4 and the possession was also delivered to the plaintiffs on 23.7.2001. A perusal of Ext.PW-3/H, copy of the jamabandi for the year 1987-88, shows that the land in question owned by Navjyoti Engineering Pvt. Ltd. was mortgaged with defendant No.5 and there is a clear note in that regard. Once the land was under mortgage with defendant No.5, defendants No.2 and 3 could not have initiated any proceedings for the sale of the land in question over which the defendant No.4 had a prior charge since it was mortgaged with them. Therefore, once the learned trial Court had rightly come to a conclusion that the decree in question was not an executable decree or order, the proceedings filed for execution by defendants No.2 and 3 were nonest in the eye of law and the sale in question in favour of defendant No.1 ignoring the entry in the jamabandi Ext.PW-3/H that it could not be sold, the said transaction cannot be termed as bonafide and, therefore, defendant No.1 cannot be said to be a bonafide purchaser for consideration. 20. During the course of arguments, it was also pointed out by the learned counsel for the respondents that though the original loan in question was for a sum of - 13 - Rs.19.50 lacs and there is nothing on the record as to how the amount of Rs.2.13 lacs was worked out by defendants No.2 and 3 while filing the execution proceedings and even though this amount was due, the sale was effected for a sum of Rs.50,000/-, meaning thereby that defendants were not able to recover the whole amount due to them and the sale was confirmed and no objections appeared to have been raised by defendants No.2 and 3 which points to their collusion with defendant No.1. The learned counsel for the respondents had also submitted that the transaction in question was not bonafide since defendant No.1 is the wife of counsel for defendants No.2 and 3 i.e. the Electricity Board. The fact that the said counsel was representing defendants No.2 and 3 is clear from a perusal of the order sheet of the court of the year 1992. However, it has not been pointed out that defendant No.1 is the wife of the counsel for defendants No.2 and 3 though it appears from the particulars given that the land in question was purchased in the name of the wife of the counsel for defendants No.2 and 3, which fact also stood proved form the proceedings when the possession was delivered to her when his presence was also marked therein. 21. Going by the record, it is clear that neither any executable decree was passed nor there were any executable order and since the execution proceedings were not liable to be initiated against the plaintiffs in that case, therefore, those proceedings can be termed as void and in view of the entry in the revenue record that the land was mortgaged, the sale in question cannot be said to - 14 - be bonafide and defendant No.1 cannot be said to be a bonafide purchaser for value. 20. In view of the above discussion, it is clear that the learned trial Court had come to a right conclusion that the plaintiffs are the owners in possession of the suit land and they are entitled to possession on refund of the amount paid by defendant No.1 i.e. Rs.50,000/- at the time of the auction purchase. I accordingly hold that there is no merit in the appeal filed by the appellant, which is dismissed accordingly. 21. As far as the writ petition filed by the H.P. Financial Corporation is concerned, the relief claimed by the petitioner in the writ petition was also the same as has been claimed in the suit filed by the plaintiffs as against the defendants. In the writ petition also they have challenged the validity of the proceedings initiated before the learned trial Court with the prayer that they may be quashed. In view of my above findings in the regular second appeal, nothing survives in the writ petition, which also stands disposed of. June 2, 2011. (V.K. Ahuja), (tilak) Judge.