Case: M/S. Devidayal Rolling Mills Vs. Prakash Chimanlal Parikh

A plot of land measuring 2000 sq. yards situated at Syani Road, Bombay is the subject-matter of this litigation. One part of the case is that the above property belonged to Chimanlal D. Parikh. He executed a will on October 20, 1952 in favour of his minor sons Prakash Chimanlal Parikh and Pankaj Chimanlal Parikh (hereinafter referred to as respondents 1 and 2). Chimanlal D. Parikh died on December 5, 1952. Devidayal Rolling and Refineries Pvt. Ltd. (hereinafter referred to as respondent 3) was in occupation of the said property as a tenant. Smt. Mayadevi, widow of Chimanlal D. Parikh and executors named in the will dated October 20, 1952 acting on behalf of respondents 1 and 2 filed suit No. 344 of 1958 for eviction against respondent 3 in the Bombay High Court. On October 31, 1961 a consent decree for eviction was passed in the above suit with the condition that the decree shall not be executed for a period of 12 years i.e. up to October 31, 1973. Respondents 1 and 2 in order to execute the said decree submitted an application under Order 21 Rule 16 and Order 21 Rule 22 CPC in the Bombay High Court. The said applications were allowed and respondents 1 and 2 were substituted as decreeholders by an order of the High Court dated December 10, 1973. M/s. Devidayal Rolling Mills (hereinafter referred to as "the petitioners") appeared in the execution proceedings and contended that they had purchased the business along with interest in the disputed property from Devidayal Rolling and Refineries Private Limited, respondent 3. The petitioners also filed a declaratory suit in January 1974 in the Small Cause Court at Bombay for being declared as tenants in the above property. The petitioners also filed an interlocutory application for restraining respondents 1 and 2 from executing the decree for eviction. Respondents 1 and 2 denied any tenancy having been created in favour of the petitioners. The Small Cause Court rejected the grant of any injunction in favour of the petitioners and a revision filed against the said order was also dismissed by the High Court. The petitioners then filed Special Leave Petition No. 4925 of 1977 in this Court, after the disposal of which, the present interim Application No. 1 has been filed2. A Bench of three Judges of this Court on December 13, 1977 dismissed the special leave petition but respondents 1 and 2 agreed not to execute the decree before January 1, 1980 on a usual undertaking to be given by the petitioners as well as respondent 3. The order dated December 13, 1977 having an important bearing in the case is reproduced ashearing counsel, the Court passed the followingORDERSpecial leave petition is dismissed. However, respondents 1 and 2 agree not to execute the decree before January 1, 1980, on the undertaking given by Mr. Nariman on behalf of the petitioners and respondents 3 that the petitioners and respondent 3 shall hand over vacant and peaceful possession of the premises to respondents 1 and 2 on or before the said date. The petitioners and respondent 3 further undertake that they will not raise any contention hereafter that they were or are in possession of the premises either as licensee or tenants of respondents 1 and 2 under the unamended or the amended Rent Act. Arrears of compensation according to the consent decree shall be paid within four weeks from today and further compensation shall be paid before the 10th of every month at the rate of Rs. 4000 per month. All other terms of the consent decree will remain. The petitioner and respondent 3 shall file through their Managing Director an affidavit in terms of this order, within two weeks."In pursuance to the above order, undertakings were filed on December 15, 1977. Subsequently an application C.M.P. No.18403 of 1978 was submitted on August 8, 1978 to the effect that after the filing of the undertakings the petitioners and respondent 3 had handed over peaceful and vacant possession of the premises to respondents 1 and 2 on June 25, 1978. It was further submitted that on June 25, 1978 itself a fresh tenancy had been granted by respondents 1 and 2 in favour of the petitioners. A copy of the agreement granting fresh tenancy was also filed along with the application. The above application was filed in view of the fresh agreement of tenancy warranting the obtaining of discharge of the undertakings filed before this Court. The following prayer was made in the said application(a) That it may be declared and recorded that the petitioners and respondent 3 have duly complied with the order of this Honble Court dated December 13, 1977 Ext. `A hereto and the undertakings recorded in the said order as well as the undertakings given by Kewal Kishan Agarwal and Bankey Kishan Agarwal in their affidavits dated December 15, 1977;(b) That the petitioners, respondent 3, the said Kewal Kishan Agarwal and the said Bankey Kishan Agarwal be relieved on their respective undertaking given by them to this Honble Court and recorded in the said order dated December 13, 1977 Ext. `A hereto and the said affidavits of Kewal Kishan Agarwal and Bankey Kishan Agarwal dated December 15, 1977; and(c) for such further and other reliefs as the nature and circumstances of the case may require for which act of kindness as the petitioners have in duty bound shall ever prayThe above application came up for consideration on December 11, 1978 and was disposed of by the followinghearing counsel, the Court passed the following orderThe other side has no objection. Order made as prayedconcludes one part of the case4. Second part of the case is that after a lapse of nearly 12 years of disposal of the special leave petition the above I.A. No. 1 of 1990 has been filed on January 23, 1990 by one Jugal Kishore Gupta and for convenience we shall hereinafter mention this application as having been filed by the applicant-company. It has been submitted on behalf on the applicant-company that originally Chimanlal D. Parikh was the sole proprietor of a firm M/s Jayant Metal Manufacturing Company (in short JMMC). On November 21, 1952 the said Chimanlal D. Parikh converted it into a partnership firm of himself and his wife Mayadevi5. Chimanlal D. Parikh died on December 5, 1952. On October 22, 1963 a deed of partnership was made between Mayadevi and her sons, respondents 1 and 2. The business of JMMC was taken over and continued by this partnership firm. On December 7, 1966 Mayadevi retired from the above partnership firm and respondents 1 and 2 alone continued as partners. On December 13, 1971 a private limited company was incorporated of which respondent 1 and 2 alone were the directors. On September 1, 1973 this private limited company also became a partner in the partnership firm of JMMC of which respondents 1 and 2 were the only partners. By an agreement of sale dated July 31, 1979 the applicant-company purchased 100% shares of the private limited company of respondents 1 and 2. After the aforesaid agreement Jugal Kishore Gupta on behalf of the applicant-company also took over the entire assets of the company of respondents 1 and 2 on April 23, 1980. It has been further submitted on behalf of the applicant-company that the disputed had become the property of the private limited company floated by respondents 1 and 2 in 1971 and respondents 1 and 2 had no right to deal with the property in their individual capacity. They had no right and authority to create a fresh tenancy in favour of the petitioners on June 25, 1978 and they practiced a fraud before this Honble Court in obtaining the order dated December 11, 1978 making a deliberate and intentional false misrepresentation that they were owners of the property in dispute and had a right to create fresh tenancy in favour of the petitioners in their individual capacity. It has been further submitted that the applicant-company came to know of the above facts only after the advocate for the applicant made inspection of papers on January 20, 1990. In the above circumstances the applicant-company has filed I.A. No. 1 and has made the followingCourt may be pleased to -(a) direct that the applicant be impleaded as respondent 4 in the Special Leave Petition No. 4925 of 1977;(b) order an enquiry about the fraud practised by the petitioner and the respondents upon this Honble Court and about any other point or points on which this Honble Court deems fit to order an enquiry;(c) clarify that the undertakings given by the petitioner and respondent 3 was to hand over the possession to respondents 1 and 2 for and on behalf of the applicant as its Directors;(d) take action against the petitioner and respondents 1 and 3 for perjury;(e) vacate the order dated December 11, 1978 inasmuch as respondents 1 and 2 were not competent to enter into Tenancy Agreement dated June 25, 1978 creating tenancy in favour of the petitioner;(f) direct the petitioner and respondent 3 to forthwith hand over vacant and peaceful possession of the suit premises to the applicant; and(g) pass such other and further order or orders as this Honble Court may deem fit and proper in the circumstances of the case."In compliance with the aforesaid order of this Court the High Court framed the following twoWhether the property admeasuring approx. 2000 sq. yds. of plot No. 581 (part) and plot No. 582 (part) of TPS IV, Mahim Division, Bombay belongs to Prakash Chimanlal Parikh and Pankaj Chimanlal Parikh ?(2) Whether M/s Jayant Metal Manufacturing Co. Pvt. Ltd. are owners of the property mentioned in issue No. (1)The High Court after discussing the entire evidence, recorded the finding on issue No. (1) in the affirmative and that of issue No. (2) in the negative. As a result of the above findings, the High Court has held that the property admeasuring approximately 2000 sq. yds. belonged to Prakash Chimanlal Parikh and Pankaj Chimanlal Parikh (respondents 1 and 2) and that M/s JMMC Pvt. Ltd. (the applicant-company) were not the owners. The High Court has sent the report dated August 13-14-16-17, 1991. The applicant-company has filed objections on October 29, 1991 to the findings recorded by the High Court and the petitioners have filed a counter on November 23, 1991 to the objections filed by the applicant-company

Court's reasoning:
6. This application came up for consideration before this Court and the following order was passed on April 2,hearing learned counsel for the parties, we find that in the proceedings it is difficult to decide the question of title to the disputed property which includes an approximate area of 2000 sq. yds. of plot No. 581 (part) and 582 (part) in TPS Scheme IV, Mahim, Bombay, at present in the possession M/s Devidayal Rolling Mills who are claiming to be protected tenants under the Rent Act. Title to this property is being claimed by M/s Jayant Metal Manufacturing Company Private Ltd., as well as by M/s Prakash Chimanlal Parikh and Pankaj Chimanlal Parikh from whom M/s Devidayal Rolling Mills are claiming to be tenants. Since this disputed question cannot be decided in the present proceedings we remit the issue relating to the title to the aforesaid property to the High Court, Bombay with a direction that the question of title will be decided after giving opportunity to the parties concerned to file affidavits, discovery and leading evidence, etc. After hearing the parties and examining the witness the High Court will record findings and forward the same to this Court for further orders. The findings may be remitted to this Court within six months. After the report is submitted to this Court the parties are free to file objections, if any, within three weeks thereof. Thereafter the matter will be listed for further orders."We have given our thoughtful consideration to the arguments advanced on behalf of the parties and have carefully gone through the record as well as the written arguments. As already mentioned above respondents 1 and 2 were substituted as decreeholder by an order of the High Court dated December 10, 1973. The petitioners having purchased the business from Devidayal Rolling Mills, (respondent 3) had filed a declaratory suit in January 1974 in the Small Causes Court at Bombay. In the said suit the interlocutory application restraining respondents 1 and 2 from executing the decree for eviction was dismissed. The revision filed by the petitioners was also dismissed by the High Court and against that order the petitioners had come before this Court by filing the above Special Leave Petition No. 4925 of 1977. The special leave petition was also dismissed on December 13, 1977 and time as granted to vacate the property in dispute before January 1, 1980. In pursuance to the order dated December 13, 1977 some undertakings were given by the petitioners and respondent 3 on December 15, 1977 and t hereafter the petitioners and respondent handed over the possession of the property in dispute to respondents 1 and 2 on June 25, 1978 and on the same day a fresh agreement of lease was granted by respondent 1 and 2 in favour of the petitioners. We are thus totally at a loss to understand as to how any question of its title as sought to be raised by the applicant-company against respondents 1 and 2 or any question of fraud, if any, in granting a fresh lease dated June 25, 1978 by respondents 1 and 2 could at all be brought up before this Court straight away. These questions now sought to be raised by the applicant-company in the present application have nothing to do with the controversy raised in the main special leave petition itself which also came to be dismissed long back on December 13, 1977. In our view such controversy regarding the alleged applicant-companys title to the property or the question of alleged fraud in respect of creating a fresh tenancy dated June 25, 1978 in respect of that property had no relevance even remotely with the question raised in the special leave petition. Such question of title or fraud could neither be gone into in a special leave petition in exercise of its jurisdiction under Article 136 or 142 of the Constitution nor could the same be raised under Section 47 of the Code of Civil Procedure in the disposed-of special leave petition non by way of any interlocutory application. The order dated April 2, 1990 appears to have been passed under a clear misconception that it will aid the final decision on the application. This Court while passing the order dated April 2, 1990 did not decide any controversy non did it grant the application for impleadment filed by the applicant-company. There was no proceeding pending at all before this Court in respect of the above special leave petition in which the present application could have been filed after a lapse of 12 years and it was an apparent and obvious mistake on the part of this Court in entertaining such application. We cannot accept the submission made on behalf of the applicant-company that the order dated April 2, 1990 is final and binding so as to compel us to decide the question of title19. The special leave petition itself was filed by the petitioners who were claiming as tenants in the property in dispute against the order of the High Court affirming the order of the Small Causes Court refusing to grant interim injunction against the execution of the decree for eviction. Thus the controversy, if any, raised in the main special leave petition itself had nothing to do with the question of any dispute of title between respondents 1 and 2, and the applicant-company20. It may be noted that according to the applicant-companys own case they had made an agreement of purchasing 100 % shares of the private limited company of respondents 1 and 2 on July 31, 1979 and thereafter Jugal Kishore Gupta on behalf of the applicant-company took over the entire assets on April 23, 1980. Thus the applicant-company cannot be said to have anything to do with the two orders passed by this Court on December 13, 1977 and on December 11, 1978 nor could the applicant-company be regarded as one in any way adversely affected by the agreement dated June 25, 1978 of new tenancy as till then it had not taken any steps of purchasing the said shares. There was no scope or even any semblance of any controversy now sought to be raised by the applicant-company which could have been raised or decided in the main special leave petition itself. That apart a Bench of three Judges of this Court on February 13, 1977 has dismissed the special leave petition and so far as the order dated December 11, 1978 is concerned it neither decided any controversy nor changed its earlier order of dismissal of the special leave petition. We are clearly of the view that this interlocutory application filed by the applicant-company on January 23, 1990 in the dismissed special leave petition as back as on December 13, 1977 was totally misconceived and there was no provision under which the same could have been entertained by this Court21. It is no doubt true that on account of the order dated April 2, 1990 both the parties have been put to an enormous cost but this cannot be a justification for entertaining a controversy which did not arise even remotely in the main special leave petition and which could only be decided by way of regular substantive proceedings in the lowest court of competent jurisdiction. This Court cannot entertain and decide the question of title in respect of an immovable property raised for the first time before this Court by any of an interim application in a dismissed special leave petition. There is no question of any acquiescence, waiver or estoppel against a party where the error is committed by the Court itself. This Court is under a bounden duty to correct its own mistake. So far as the case of Union Carbide Corporation v. Union of India is concerned the same has no relevance and can be of no assistance at all to the applicant-company in the facts and circumstances of the present case22. The principle laid down in Satyadhyan case and Y. B. Patil is to the effect that the principle of res judicata can be invoked not only in separate subsequent proceedings but they can also get attracted in subsequent stage of the same proceedings. There cannot be any difference of opinion in the said view. However, this question would depend on the facts and circumstances of each case and the nature of the order passed at an earlier stage of the proceedings. In Arjun Singh v. Mohindra Kumar it was observed asthe principle of res judicata is invoked in the case of the different stages of proceedings in the same suit, the nature of the proceedings, the scope of the enquiry which the adjectival law provides for the decision being reached, as well as the specific provisions made on matters touching such decision are some of the material and relevant factors to be considered before the principle is held applicable."So far as the question of rendering justice in a civil litigation is concerned, it can only be know after the final culmination of such litigation and the party succeeding can be adequately compensated by way of costs. It has been rightly said that "cost is a panacea in law which heals every sore in litigation". In the present system of adversarial civil litigation between the parties it may turn out to be costly as well as time consuming, if either of the parties decide to bring all or any controversy for decision up to the apex Court. In our considered view the question of title to an immovable property or fraud in any transaction relating to it cannot be entertained by this Court in an interlocutory application filed by a third party in a special leave petition dismissed as long ago a 12 years discarding all procedural requirements. We are thus clearly of the view that the order dated April 2, 1990 did not decide any issue finally nor can it be considered as binding or operative as a res judicata or otherwise24. It is true that the High Court has recorded a finding in favour of the petitioners and against the applicant-company and as such the applicant-company is prejudiced if the said finding remains in tact. However, in view of the fact that we are upholding the preliminary objection, it is necessary in the interest of justice to declare the entire proceedings in the High Court including the findings recorded on the question of title as non est and not binding on any of the parties concerned. We order accordingly. Although we have refrained from making any observations on the merits of the issues raised in the I.A. regarding the questions of alleged title and alleged fraud we make it clear that this judgment or any observations made therein will not in any manner prejudice the rights of any of the parties with regard to the title of the property in dispute or any question of fraud sought to be raised by the applicant-company in an appropriate forum