GANGA BAI v.

VIJAY KUMAR & ORS . . April 9, 1974.

[M. H. BEG AND Y. V. CliANDRACHUD, JJ.]

C.P.C.-Anrendnrent of the fe1110 of Appeal after 7} years lvitho1.et any application of condonatio11 of delay or good cause sho1vn-Whether proper- Appeal againrt a 111ere /illding of fact-iV/iether niaintainable. - .

In 1953~ defendant 1 executed on behalf of himSelf and his minor son, defendant 2, a deed of mortgage in favour of the plaintiff. Deft. 3 ls also a son of deft; 1 who was born after the mortgage deed. In 1956, a regd. deed of partition \\'as executed amongst the defendants under which the mortgaged property ..._ \Va'> allotted to the share of <lefts 2 & 3.

Thereafter, the mortgagee filed a civil suit to enforce the niortgage and the trial court passed a preliminary decree for sale of deft. l's interest in the mortgaged property. It held that part of the consideration for the mortgage was not su.pported by legaL necessity and the balance of the debt incurred was tainted '\\-ith immorality. Therefore; the debt was. held not binding on the one half share of deft. 2 in the mortgaged property .. As regards the partition, the trial court held that it was a colourable transaction effected to delay or defeit the creditors. · D

Being aggrieved, pltf. filed an appeal (40/59) in the I-Ugh Court. Deft. 1 & 2 against '\Vhom the suit was dismissed, also filed an-appeal (72/59) apinst the tir:zdi'ng of the trial court that the partition \•las a colourable transaction.

During the pendency of these 2 appeals, the preliminary decree was made final by the trial court and in 1960, the plaintiff purchased with the permission of the court. a joint half share of the mortga£; ed property in full satisfaction of his decree. Thereafter, the auction sale \Vas confirmed and the laintiff '\Vas put in E joint possession of the property. - ·

Thereafter, the appeals filed by theplaintiff and defendants 2 and 3 came up for hearing and while the appeals were part-hard, defts 2 & 3 applied on August 2, 1966 (nearly 71; years after filing the appeals). applied for amendment of their

femorandum of appeal in first appeal No. 72/59 and sought permission of the I1igh Court to challenge the preliminary decree passed by the trial COurt. The plaintiff opposed that amendment and applied that she did not desire to prose cute first appeal No. 40/59 filed by her.

The High Court did not pass any orders either on the application for amend n1cnt or the plaintiff's appeal, but adjourned the hearing of the appeals for 3 mouths to enable defendants to pay the am_ount due under the preliminary decree.

Accordingly the defendants deposited the money towards the satisfaction of the preliminary decree .

. 1\fter about 2 years, another dhision bench of the High Court, alJov.ed the amendments of the defendants' iremo of Appeal in .1\ppeal No. 72/59 ancl G

allowd time to the 'defendants to pay the deficit Court fee. which they paid. The High Court,"then took the 2 appeals for hearing and dismissed appeal No. 40/59 for non-prosecution and confirmed the findings of the trial court in favour of the defendants.

 As regards appeal. No. 72/59, the High C.ourt held that in vfew of Order 41, Rule 2 C.P.C., it '\Vas open to the de_fendants. '\Vith the leave of the court, to urge additional grounds without amending the Pwiemo of Appeal and therefore, the objection raised by the plaintiff that amendment should not be allowed, cannot

I ( l:io upheld'. 1.be High Court further held that the defendant-." appeal was com~ pctent :l.nd they had the righ, t to reeeem the mortgap:e.

On the merits. the Hib Cburt held that the partition '\\'as real and genuine. In the result. the High Court :set aside the preliminary decree as also the fmal demea11d with it the auction

GA.:<:GA BAI v. VJJAY KUMAR (Chmuf!'.aclzud, I.) 883

A sale in favour of 111~ plainliff. The High Court passed a fresh preliminary Jecree under order 34, Rule 4 C.P.C .• directing that that the plaintiff was entitled

to recover Rs. 34,~8~/- and odd .and directed the defendants to pay the entire decretal amount '''Ithrn 6 months of th~ date of decree. 1he plaintiff questions the correctness of the decree bfore this Court.

The appeal filed by defendants 2 & 3 \Vas against the finding recorded by the trial court that the partition between deft. 1 and hi" sons was a colourable trru:Jii;-

nci'?n. Therefori;:, 1t V.'as clear that the appeal filed by defts. 2 & 3 \Vas directed

ortnafly not against any part of the preh, ninary decree but again'it a mere .fin.ding recorded by the trial court that the partition was not genuine_ Before this Court, the main question v:as whether that appeal was maintainable and secondly, whether it \\as prOper for the High Court to allO\V the amendment of the -!\Iei:no of appeal after 71 years \vithou: good cause shown and without any . application for condonatton of delay .. A1Iov11ng the appeal,

l!ELD: (i) There is a basic distinction between the right of suit and the right oi' appeal. There is an inherent right in every pers0n to bring a suit of . a civil nature, but the right of appeal inheres in no one and therefore an appeal for its maintainability must have the clear authority of law. . The various provisions in the C.P.C. show that under the CO('e, an.appeal lies only as against a decree or as against an orderpassed under rules from which -an appeal is expressly allowed by Order 43, Rule 1. No appeal can lie against a mere finding for the simple reason that the Codes does not provide for any such appeal. Therefore, the first appeal filed by defendants 2 and 3 in the High Court was not maintainable :as it was directed againt a mere finding record.:d by the trial court. [886 D-HJ

(ii) The Hi_gh Court should not have allowed the amendment of the ?vferno of Appeal particularly when de_fendants 2 & 3 had neither explained the long- Je1ay nor sought its condonation.

Defendants 2 & 3 \Vere not denied by - t.'le preliminary decree the right to pay the <lecretal amount and the t\vo defen<lan.ts could even have applied under order 21, Rule 89 for setting aside the sale in fa':our .of the appellant; but they failed to do so. The prelimil!ary tl:cree had remained unchallenged since September., 1958 and by lapse of time a valuabJe ri.!!ht had ;<1.ccn1ed in favour of the decree-holder. Therefore, to allow the amend-· ment after such a long time \\rithout a good cause was not a yropcr exercise of judicial discretion in the circumstances r.:f te cas_e. [888 D-E

f'JVIT. APPEi I.ATE. JURISDICTIO" : Civil Appeal No. 582 of 1969 .

. Apreal from the Judgment' anll Decree dated the 19th March, 19(>8 o( the Bombav Hi!!h Court at Na_gpur in Firot Appeal No. 72 of 1959. - M. N. Phadke, R. A. Gupta and K. B. Rohalgi for the Appellant.

B. i\". Lokur, Arwz Kumar Sanglzl and A. G. Rat;; aparklz(for the R<;!'pondents.

The Judgment of the Court was delivered by- CHANDRACHUD, J. This is a plaintiff's appeal on a certificate granted by the Hi_gh Court of Bombay, Nagpur Dor.ch, under Artick

133(i)(al of the Constitution_

On March 24,· 1953 defendant 1 executed on behalf of himself and his minor son defendant 2. a deed of mortgage in favour of the pfaintiff.

Defendant 3 is also a son of. defendant 1 but he was born.

aftr the mortgage deed. on September 30, 1955. On January 11, 1956 a t\~£:lstcrctl deed of partition was cxecured amongst the defendants un<ler which the mortgaged property was allotted to the share of defendants-~ and .3. ·

On September 1, 1956 the mortgagee filed Civil Suit No. 3A of 1956 to enforce the mortgage. On September 20, 1958 the trial court passed a preliminary decree fc~ sale of defendant l's interest in the mortgaged property. It held that part of the consideration for the mortgage was not supported by legal , necessity and the balance of the debt incurred on the mortgage was tainted with immorality. Though, therefore, defondant 1 had executed the mortgage as a manager of the jcpnt Hindu family consisting of himself and defendant 2, the debt was hel.d not binding on the one-half share of defendant 2 in the mortgaged property.

On the issue relating to the genuineness of the partition eiiected by defendant 1 between himself and his suns, the trial court r!X'<}rded a finding that it was a. sham and colourable transaction and

its obiect was to delay or Uefeat the creditors.,

Being aggrieved bv. the ..decree directing the sale cf half the mortgaged property only, the jllaintiff filed First Appeal No. 40 of 1959 in the High Court of Bombay. Though the suit was dismissed as against defendants 2 and 3, they also filed an appeal in the High Court to

chllilenge the finding of the trial court that the deed of partition was a sham and colourable transaction.

That was First Appeal No. 72 of 1959 ..

During the pcndency of these two appeals, the preliminary decree was made final by the trial court on October 23, 1958. On March 2,

1960 the plaintiff purchased, with the permission of the court, a joint half share in the mortgaged property in full satisfaction of his decree.

On September 21. 1960 the auction sale was confirmed and on l\ovcm- . • ber 25. 1960 the plaintiff.w.as put in joint possession o( the property.

On March 15. 1966 th.e aPjlC.:.tls filed by lhe plaintiff and by defendants 2. a_nd 3 came up for hearing before a Division Bench consisting of Abhyinkar and Deshmukh JJ. The hearing of the appeals was adjourne!d from time to timi: and while the appeals were part-heard, . defendant• 2 and 3 applied m August 2, 1966 for amendment of their Mcmorondum of Appeal in~First Appe"al No. 72 of 1959. Bv the pr()l)osed amendment they sought leave of the High Court t'l challenge the preliminary decree passed by the trial court. The plaintiff opposed that amendment and applied that she did not desire to prosecute Erst Appeal No. 40 of 1959 filed by her.

The High Court did not pass any orders either on the application for amendment made by defendants 2 and 3 or on the application of the plaintiff asking that her appeal be dismissed for non-prosecuticn.

On August 24, 1966 the High Court adjourned the hearing of the appeals for three months to enable defendants to pay the amount due under the preliminary decree. On November 24, 1966 defendants 2 and 3 deposited Rs. 12,500 and applied for an extension of two mcilths for paying the balance. The extension was granted by the High Court

and on January 25, 1967 'defendants 2 and 3 deposited a further sum . of Rs. 25,000 towards the satisfaction of the preliminary decree.

On Februarv 1¢. 1968 another Division Bench of tite High Court (Tambe and Badkas, JJ.) allowed the application of defendants 2 and 3 for amendment of their Memorandum of Appeal in Frrst

•• c

GANGA llAI v .. VIJAY ll:UMAR (Chandrachud, /.) 885

A Appeal No. 72 of 1959. On an application made by their counsel, the High COurt granted !Cf those defendants time till February 2:i, 1968 io pay the deficit court fees, which they did. The High Court then took up the two F1tst Appeals for hearing in March, 1968.

As the plaintiff bad applied that she did not desire to proceed with First Aooeal No. 40 of 1959 filed by her, the Hii::t, Court dismissed

that appeal for non-prosecution. As a conseq'uence of this order the Hil!h Court observed that the findings recorlled by the trial court

in favour of the defeltiants and adverse to the plaintiff would stand confirmed. '

In First Appeal No. 72. of. 1959 filed by defendants 2 and 3 it was uraed bv the plaintiff that as the ai>Peal was originally filed to challenire the. findina of the trial co1'rt on the question of genuinene1& of the partition. defendants 2 and 3 were not .mlilled to include new

ounds in the Memonutlum of Appeal and that the Memorandum

should not have been pennitted to be amended. 'the High Court he'd that in view of the provisions of Order 41, Rule 2, Civil Procedure Code. it was OPCn to fendants 2 and 3, with leave of the court, to urge additional grounds in their appeal without amending the Memorandum of appeal and therefore the objection raised by the plaintift as

against the amendment was futile.

The Hiah Coutt further held that the appeal filed by defendants 2 and 3 was competent even thoURh the suit was wholly dismissed as against them.

Accordina to the High Court, defendants 2 and 3 were aeerieved by t'ie adverse lindilllt on the question of partition nnd further they were denied under the preliminary decree the right to pay the decretal anionnt and to redeem the mortage. It was therefore ooen to them. to file an appe3! a1ainst that decree.

On the merits of the ap; ieal •. the High Court set aside the findinf, of tbe tr•a! court and h!l1d that the partition was "real .and enuine'

nd that it was not effected in order to defe•t 'he creditors. Defendants 2 and. 3 had therefore be<xlme owners of th' equity of redemption and they could not be deprived of the right to re<leem the mortgage.

In the result, the High Court set aside ihe, preliminary decree as also the l\nal decree and with it the auction s3Ie .in favour of the plaintiff. The High Court passed a fresh preliminary decree under Order 34, Rule 4, Civil Procedure Code declaring that the plaintiff was entitled to recover Rs. 34, 386 and odd and directing the defendants to pay the entire decretal amount within six months of the date of decree.

The plaintiff questi011s the correctness of that decree in this appeal.

H It is necessary first to understand the nature of the appeal filed by defendants 2 and 3 in the Hi$ Court and the relief they soUMt therein. That appeal WllS in terms filed only ainst the finding 'recorded by the trial court that the partition between. defendant 1 and his llOllS was a sham and colourable transaction intended to defeat or delav the

cre<litors. The Memorandum Of Apoeal as filed orinally contained

seven grounds, each of which was directed against the findin& , lliven by the trial court on the question of partition. The Memorandum contained a note that as the subject-matter in dispute was not capable of being estimated in tenns of a money value, a fixed court fee of Rs. 20 was paid thereon. Only one prayer was originally made in the Memorandum of Appeal that the partition deed be declared as genuine.

Counsel for defendants 2 and 3, furnished to the registry of the High Court a written explanation as required by Rule 171 of the High Omrt Rules that as defendants 2 and 3 were only challenging the finding recorded by the trial court on the question of partition and as they were merely seeking a declaration that the partition was genuine, the fixed court fee of Rs. 20 was properly paid.

It is thus clear that the appeal filed by defendants 2 and 3 in the High Court was directed originally not agaist any part of the preliminary decree but against mere finding recorded by the trial court that the partition was not genuine. The main controversy before us centres round the question whether that appeal was maintainable on this. question. the position seems to us well-established.

There is. a basic distinction between. the right of suit and the right of appeal. There is an inherent right in every person to bring suit of a civil nature and unless the suit is barred by statute one may, at ones peril, bring a suit of one's choice. It is no answer to a suit, howsoever frivolous the claim, that the Jaw confers no such right to sue. A suit for its maintainability requires no authority of law and it is enough that no statute bars the suit. But the position in regard to appeals is 4uite the opposite. The right of appeal inheres in no one and there fore an appeal for its maintainability must have the clear authority of Jaw. That explains why the right of appeal is described as a creature of statute.

Under section 96(1) of the Code of Civil Procedure, save where otherwise expressly provided by the Code or by any other law for the time being in force, an appeal lies from every decree passed by any court exercising original jurisdiction, to the court authorised to hear appeals from the decisions of such court. Section 100 provides for a second appeal to the High Court from an appellate decree passed by a court subordinate to the High Court. Section 104(1) provides for appeals against orders of the kind therein mentioned and ordains that save as otherwise expressly provided by the Code or by any law for the time being in foree an appeal shall lie "from no other orders'" Clause (i) of this section provides for an appeal against "any orders made under Rules from which an appeal is expressly allowed by rules". Order 43, Rule 1 of the Code; which by reason of clause (i) of section 104(1) forms a part of that section, provides for appeals against orders passed under various rules referred to in clauses (a) to

(w) thereof. Finally, section 105(1) of the Code Jays down that save as otherwise expressly provided, no appeal shall lie from any order made by a court in exercise of its original or appellate jurisdiction.

These provisions show that under the Code of Civil Procedure, an appeal lies only as against a decree or as against an order passed under rules from which an appeal is expressly allowed by Order 43, Rule I.

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OANGA BAI V. VJ.JAY KUMAR (C/randrachud, /.) 8~ j

No appeal can lie against a mere finding for .the silllple reas<?, n that lhe Code does not provide for any such appeal. It must follow that F1rst Appeal No.- 72 of 1959 filed by defendants 2 and 3 was not. maintainable as it was directed against a mere finding recorded by the trial court.

The High Court .mixed up two distinct issues.: one, whether it_ was competent to defendants 2 and 3, if they were agieved by the preHrninary decree of file an appeal against that decree; and two, whether the appeal such as was filed by them was maintainable. If it be correct that defendants 2 and 3 could be said to have been aggrieved by the preliminary decree, it was certainly competent for them to challenge that decree in appeal. But they did not file an appeal against the preliminary decree and therefore the questiol\ whether. they were aggrieved by that decree and could file an appeal therefrom was irrelevant. While deciding whether the -appeal filed by defendants 2 and 3 was maintain. able, . the High Court digressed into the question of the competence of defendants 2 and 3 to file an appeal against the preliminary decree and taking the view that it was open to them to challenge that decree even though the suit was wholly dismissed against them, the High Court hC!d that the apjleal, which in fact was directed against a finding given by th_e trial court, was maintainable. It the High Court had appreciated that the two questions were distinct and separate, it would not have fallen into the error of deciding the latter question by considering the former.

Adverting to the question which the High Court did consider, namely, whether defendants 2 and 3 could be said to be aggrieved by the preliminary decree, there is nothing in the terms of that decree which. precluded those defendants from depositing the decretal amount to be able to redeem the mortgage. The trial court had passed the usual preliminary decree for sale in Form No. 5A, under Order 34., Rule 4 .

Civil Procedure Code. If the amount found due to the appellant under the decree was paid into the court within the stipulated or extended yeriod, the appellant would have been obliged to deliver to the mortgagors all the documents in her possession or power relating to tho mortgaged property and to deliver up to the defendants quiet and peaceable possession of the property free from the mortgage.

The amount declared to be due to the appellant by the preliminary decree was _not paid by the defendants, from which it .wottld appear that they were not interested in paying the amount. It is significant that defendants 2 and 3 were served th the notice of final decree proceedings and they appeared th_erein. The Code is merciful to morgors and perhaps rightly, because the mortgagee ought to have no grievance if the loan advanced by him is repaid with permissible interest,· costs and expens\'8. Under Order 21; Rule 89, it was open to defendants 2 arid 3 as late as after the appellant purchased the property in the auction sale, to pay the amount due to her. These defendants had interest in the mortgaged property by virtue of a title acquired before the sale. that is, under the tegistered partition dated January 11, 1956. Under Order 21, Rule 89, where illlmovable property is sold in execution of a deeree, any person owing the property or holding an interest there-

888 SUPJ.l!Mll COUllT J.l!PORTS [1974) 3 s.c.11.

in by virtue of a title acqu\red before the sale, can apply to have the A • sale set aside qn his depositing in Court, for payment to the purchaeer a sum equal to five per cent of the purchase-money and for payment to the decree-bolder, tho amount specified in the proclamation of sale ll!I that for the recovery of which the sale was ordered. Nothing of the kind was done and even the last significant opportunity was not availed of by the defendants. Counsel for the appellant seems right that the defendants were content that only half the mortgaged property was B directed to be sold and that it was only because of the. later appreciation in prices of real property that defendants 2 and 3 awoke to the exigency of challenging the preliminary decree. That was much too late.

So late indeed, that not having any plausible reason to assi111 for the inordinate delay caused in applying for an amendment of the appeal, they preferred not to file an application for condoW1tion of delay at all. The appeal was filed on January 4, 1959 while the appli

cation for amendment was made. on August 2, 1966. Event though no explanation was offered for the long delay of over 7t years, the High Court allowed the amendment with a laconic orcjer "Application for amendment allowed".

Thus, the appeal filed by defendants 2 and 3 being directed against D a mere finding given by the trial court was not maintainable; defendants 2 and 3 were not denied by the preliminary decree the right to pay the decretal amount; and the two defendants could even have applied under Order 21, Rule 89, for setting aside the sale in favour of the appellant but they failed to do so as, presumably, they were not interested in paying the amount. The High Court was therefore wholll in error in allowing the amendment of the Memorandum of Appea , E particularly when defendants 2 and 3 had neither explained the long delay nor sought its condonation. ·

The preliminary decree had remained unchallenged since September -1958 and by lapse of time a valuable right had accrued in favour of the decree-holder. The power to allow an amendment is un doubtedly wide and may at any stage be appropriately exercised in F the interest of justice, the law of limitation notwithstanding. But the exercise of such far-reaching discretionary powers is governed by judicial considerations and wider the discretion, greater ought to be the care and circumspection on the part of the .court. The apJl:al in terms was originally directed against the finding given by the tnal court that the partition was sham and colourable. "Being aggrieved by the finding given in the Judgment and the Decree .......... it is humbly prayed G that findings given by the learned Judge in Para 34 of his Judgment may kindly be set aside, and instead the partition deed dated 11-1-56 may kindly be declared as genuine"--so ran the Memorandum of Appeal. Defendants 2 and 3 reiterated through their counsel by filing a note to explain the payment of fixed court fees of Rs. 20 that they were "seeking the relief of declara'ion only" and therefore the court fee paid was proper and sufficient. Long years thereafter, the High H Court allowed the Memorandum to be amended not a reason was cited

to explain the delay and not a reason was given to condone it. And it was not appreciated that in granting time to defendants 2 and 3 to

GANGA BAI v. VIJAY KUMAR (Chandrachud, J.) 8~&

make up the deficit of the court fees 7 t years after the aal was li)ed, an amendment was being allowed which had its impact nCJ only on the preliminary decree but on the final decree which was passed in the meanwhile, the auction sale which was held in pursuance of the final decree and the sale certificate which was granted to .the appellant who, with the leave of the court and in full satisfaction of her decree, had purchased a joint 1/3 share in the mortgaged property. With the

striking down of the preliminary decree, these proceedings had to fall but the error really lay in allowing the amendment so as to permit, without good cause shown, a belated . challenge to the preliminary decree.

One other aspcct of the question relating to the mai!ltainability of the appeal yet remains to be examined. Counsel for the respondenL•· argues that the finding of the trial court on the issue of partition would have operated as res judicata against them and they were therefore entitled to appeal therefrom.

In Ha, rchandra Das v. Bholanath Das on which the learned counsel for the respondents relies in support of this submission, a suit for prmption was dismissed by the trial court on the ground of limitation. In an ap~ filed by the plaintiff, the District Court reversed that findin!!l but confirmed the decree dismissing the suit on the ground that the sale effected by defendants 4 and 5 in lavour of defendants I, 2 and 3 was not validly registered and there being no "sale", there can be no right of preempti.on. Deiendants I to 3 preferred an appeal to the High Court against the finding recorded by the District Court that the sale effected in their favour by defendants 4 and 5 was not valid as it was not lawfully registered. On a preliminary objection

raised by the plaintiffs to the maintainability of the appeal, the High Court of Calcutta held that though under the Code of Civil Procedure there can be no appeal as against a mere finding, "it may be taken to be the view of courts in India generally, that a party to the suit adversely affected by a finding contained in a judgment, on which a decree is based, may appeal; and the test applied in some of the cases for the purpose of determining whether a party has been aggrieved or not was whether the finding would be res judicata in other proceedings". The High Court, however, upheld the preliminary objection on the ground that the issue regarditig validity of the sale which was decided against defendants l to 3 would not operate as res judicara in any subseque0t proceeding and therefore the appeal which was solely directed against the finding on that issue was not maintainable.

The position here is similar to that in the Calcutta case. The trial court decreed the mortgagee's suit only as against defendant 1, the father, and directed the sale of his one half interest in the mortgaged property on the ground that part of the consideration for the mortgage was not supportO<j by legal necessity, the remaining part of the consideration was tainted with immorality and therefore the mortgage was not binding on the interest of the sons, defendants 2 and 3. Whether the partition between the father and sons was sham or real had no

(I) I.L.R. (19351 62 Cal. 701.

:impact on the judgment of the trial cc!W't and made no material diffe- .rence to the decree passed by it. The finding recorded by the trial court that the partition was a colourable transaction was unnecessary for the decision of the suit because even if the court were to find that the partition was genuine, the mortgage wollid only have bound the interest of the father as the debt was not of a character which, under the Hindu law, would bind the interest of the sons. There is no substance in the submission made on behalf of the sons that if the partition was held to be genuine, the property would have been wholly freed from the mortgage encumbrance. The validity or the binding nature of an alienation cannot depend on a partition effected after the alienation; or else, a sale or a mortgage effected by the Karla of a joint-Hindu family can easily be avoided by effecting a partition amongst the members of the joint family. As the mat_ter relating to the partition was not directly and substantially in issue in the suit, the finding that the partition was sham cannot operate as res judicata. Therefore, the appeal filed by defendants 2 and 3 against that finding was not maintainable, even on .the assumption that the High Court of Calcutta is right in its view

that though under the Code there could_ be no appeal against a finding, yet "On grounds of justice" an appeal may lie against a finding provided that it would operate as res judicata so as to preclude a party aggrieved by the finding from agitating the question covered by the findinll in any other proceeding. It is not necessary here to determine whether the view of the Calcutta High Court is correct.

For these reasons we allow the appeal with costs, set aside the judgment of the High Court and restore that of the trial court.

s. c.

Appeal allowed.