MAHBOOBSAHAB

SYED ISMAIL AND ORS.

MARCH 23, 1995

(K. RAMASWAMY AND B.L. HANSARIA, JJ .)

Cqde of Civil Procedure, 1908-Section 11-:Res judicata-Conditions for applying the doctrine in the case of co-defendants-Fraud or collusion-Effect of.

Mahomedan Law-Gift-Essential conditions for validity of Mahomedan Law-Guardianship-Mother cannot act as guardian of a minor.

The respondents filed a suit for possession against their father M

and the appellant claiming that their father had illegally sold the suit land D in favour of the appellant in collusion with the Patwari, while they were minors. The respondents claimed that their father had gifted the suit land jointly in their favour and in the favour of their mother by executing a

registered gift deed and their mother in tum had orally gifted her share to one of the respondents and therefore their father had no authority to E alienate the suit land. The appellants resisted the suit pleading that the suit lands were sold to him for consideration and in discharge of debts.

In another suit filed by another person claiming to be possessory mortgagee of the suit land and impugning a decree in favour of another creditor of the father of the present respondents, it was held that the father F of the respondents had gifted the land jointly to the respondents and their mother. The respondent and their father, who were co-defendants in the said suit, had filed a joint written statement admitting the claim of the plaintiff in the said suit. The respondents urged that this would act as a res judicata against the appellant as he was claiming title to the suit G property through their father.

The trial court rejected the plea of res judicata but decreed the suit on merit.

The point of res judicata was not urged before the first appellate H 975

A court, It held that - (i) the name of the father of the respondents continued { to appear as owner in the revenue records. till it was mutated in favour of the appellant; (ii) the gift deed executed by the father was not proved (iii) the oral gift made by the mother was false as neither the acceptance of the gift nor delivery of possession was proved (iv) the mother cannot act as a .B guardian of the property when father was alive. The first appellate court allowed the appeal holding that the alleged gifts were only a device to defraud 'creditors. ( In second appeal, the High Court reversed the order of the first ,--- appellate court only on the ground of res judicata without disturbing the c finding of facts. Hence, the present appeal.

Allowing the appeal, this court

HELD : 1. The trial court negatived the plea of res judicata as a

D preliminary issue. Though it was open to sustain the trial court decree on the basis of docine of res judicata, it was not argued before the.appellate court on this basis. Thereby the findings of the trial court on res judicata became final. [981-GJ ---"-

2.1 The doctrine of res judicata must be applied to codefendants

' E with great care and caution. The reason is that fraud is an extrinsic

collateral act which vitiates most solemn proceedings of courts of justice.

If a party obtains a decree from the court by practicing fraud or collusion, he cannot be aliowed to say that the -.iatter is res judicata and cannot be re opened. There can also be no question of res judicata in a case where F signs of fraud or collusion are transparently pregnant or apparent from

~-,_ the facts on record. As found by the appellate court, M was playing fraud upoR his creditors by creating false oral gifts or spurious claim of _)__ mortgages with a view to defraud them. (982-G-H, 983-B]

G 2.2 For application of the doctrine of res judicata between co-defendants, four conditions must be satisfied, namely (i) there must be a conflict of interest between the defendants concerned: (2) it must be necessary to -~~ decide the conflict in order to give the reliefs which the plaintiff claims;

(3) the question between the defendants must have been finally decided, and (4) the co-defendants were necessary or proper parties in the former H suit. [982-A)

I -.

S.M. Sadat Ali Khan v. Mirza Wiquar Ali, AIR (1943) PC 115; A Shashibusha11 Prasad Mishra v. Babuji Rai & Ors., [1969] 2 SCR 971 and lftiklzar Ahmed & 01:1". v. Syed Mel1arba11 Ali, [1974] 2 SCC 151, relied on.

2.3 Though the appellant claimed title to the property through the parents of the respondents, there was neither conflict of interest nor was it necessary to decide about the validity of the gift said to have been executed by M. The dispute therein was whether the possessory mortgagee was bound by the decree and the creditor could proceed against the father and the said property is liable to sale for realisation of his decree debt. In that context the relevancy or validity of the gift is immaterial. [983-G-H]

3. Though gift by a Mohammaden is not required to be in writing and consequently need not be registered under the Registration Act, for a

gift to be complete, there should be a declaration of the gift by the donor, acceptance of the gift, express or implied, by or on behalf of the donee and delivery of possession of the property, the subject matter of the gift by the donor to the donee. The donee should take delivery of the possession of D the property eitheL" actually or constructively. On proof of these essential conditions, the gift becomes complete and valid. In case of immovable -\..__ property in the possession of the donor, he should completely divest himself physically of the subject of the gift. (980-D-E]

Mahomedan law by Mui/a, 19th Ed., referred to ••

4. In Mahammaden Law mother cannot act nor be appointed as guardian of the property of the minor. She equally cannot act as guardian for the minor himself. (980-G] ·

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 513 of 1979.

From the Judgment and Order dated 2.1.79 of the Karnataka High Court in R.S.A. No. 161 of 1975.

Devendra Singh for the Appellant.

S.S. Javali and P.R. Ramasesh for the Respondents.

The following Judgment of the Court was delivered by

A K. RAMASWAMY, J. Syed Ismail and Ibrahim, sons of Maqdoom, Panchamale filed O.S. No. 28 of 1965, impleading their parents and appellant/purchaser, for possession of the suit lands and for mesne profits from the appellant. The averments made in support thereof are that their father had executed a gift deed bequeathing 15 acres 38 gunthas out of 31 acres B 36 gunthas in Survey No. 781 of Aland village, jointly in their favour and their mother Smt. Chandi, third defendant, who in her turn, orally gifted over her share to Syed Ismail in April, 1958 at the time of '1.is marriage.

Being minors, their father-second defendant, while cultivating the lands on their behalf, had colluded with the Patwari and executed sale deed Ex•D-1 in favour of the appellant. On their becoming aware of the same, they filed C the suit since their father had no right, title and interest therein to alienate the lands. The sales, therefore, in favour of the appellant were invalid, inoperative and do not bind them. The appellant pleaded that Maqdoom had entered into an agreement of sale under Ex.D-22 on April 12, 1961 to sell 12 acres of land for valuable consideration and had executed the sale D deed, Ex.D-1 dated May 12, 1961, to discharge antecedent debts. Similarly an agreement of sale of 4 acres of land for 2,500 was executed and the appellant had obtained permission from the Assistant Commissioner on August 4, 1964 for sale thereof. When he and Smt. Chandi refused to execute the sale deed, he filed OS No. 4/1 of 1966 for specific performance which was decreed on contest and the sale deed Ex.D-3 was executed and E registered by the court. Their parents had not given any gifts which were set up only to defraud the appellant. It was brought out at the trial that in OS No. 3/1/1951 filed by one Ismail on the foot of a possessory mortgage, the executability of another decree obtained by another creditor, was impugned, wherein by judgment and decree dated September 24, 1951, the F Court held that Maqdoom had jointly gifted the lands to the respondents and their mother by a registered gift deed.

The aforesaid finding was pleaded to operate as res judicata against the appellant. As a preliminary issue, the trial court held that the decree in OS No. 3/1/1951 does not operate as res judicata but decree.d the suit G on merit. In R.A. No. 211/1970, the Additional Civil Judge, Gulbarga reversed the decree and dismissed the suit holding that Maqdoom as an owner had alienated. the property. His name continued to be the owner in revenue records till it was mutated in the name of the appellants after his purchase. Neither the original nor certified copy of the gift deed alleged H to have been executed by Maqdoom was filed. A letter of the Sub-Registrar

to show its loss filed in the appeal cannot be used as evidence of execution A of the gift over. The mother cannot act as a property guardian when the father is alive. The oral gift by the mother to the respondents was false as neither acceptance of the gift nor delivery of possession of the lands either by the father or the mother was proved. It was not proved that the father or any one had acted as guardian when Smt. Chandi gifted her undivided share to the first respondent nor is there any proof of taking possession from the wife under the oral gift deed. The alleged gifts, therefore, were not proved, nor were they valid in law. Maqdoom, was a chronic debtor and to defraud the creditors, he set up false plea of gifts in favour of his children and wife or spurious mortgages in favour of third party. Before

the appellate court, the decree in OS No. 3/1/1951 was not pressed into C service as res judicata to sustain the decree of the trial court.

The High Court without disturbing any of the findings of facts recorded by the appellate court, reversed the judgment solely on the finding that the decree in OS No. 3/1/1951 operates as res judicata, as the D parents and the respondents are co-defendants in that suit. Having been divested of his title, Maqdoom had no right to alienate the properties of the minors in favour of the appellant. Accordingly the High Court reversed the decree of the appella!e court and confirmed that of the trial court in Second Appeal No. 161of1973, dated January 2, 1979.

The question, therefore, is whether the High Court was right in its conclusion that the decree in OS No. 3/1/1951 operates as res judicata and whether reversal of appellate decree without disturbing the findings of fact

on merits is legal. Having given our anxious consideration to the respective F contentions of both the counsel we think that the High Court was wholly wrong in its approach. Neither the mother nor the father was examined as a witness to prove the gifts said to have been given in favour of their minor sons Ismail and Ibrahim, respondents Nos. 1 & 2. Syed Ismail too was not examined as a witness. Ibrahim in his evidence had admitted the execution of the sale deed by his father and he acted as an attesting witness to the G sale transaction under Ex.D- 1. He also admitted that his father mortgaged the property under Ex.P-3. In the objection petition the gift was not set up.

The appellate court, as a final court of fact, found that alleged registered gift deed said to have been jointly given by Maqdoom and his wife jointly to his minor sons was not filed either in this suit or in OS No. 3/1/1951.

A Under s.147 of the Principles of Mahomedan Law by Mulla, 19th Ed., Edited by Chief Justice M. Hidayatullah, envisages that writing is not essential . to the validity of a gift either of movable or of immovable property. Section 148 requires that it is essential, to the validity of a gift, that the donor should divest himself completely of all o-wnership and B dominion over the subject of the gift. Under s.149, three essentials to the validity of the gift should be, (i) a declaration of gift by the donor, (ii) acceptance of the gift, e~'Press or implied, by or on behalf of the donee, and (iii) delivery of possession of the subject of the gift by the donor to the donee as mentioned in s.150. If these conditions are complied with, the gift is complete. Seciion 150 specifically mentions that for a valid gift C there should be delivery of possession of the subject of the gift and taking of possession of the gift by the donee, actually or constructively. Then only the gift is complete. Section L'i2 envisages that where donor is in possession, a gift of immovable property of which the donor is in actual possession is not complete unless the donor physically departs from the premises with D all his goods and chattels, and the donee formally enters into possession. .

It would, thus, be clear that though gift by a Mohammaden is not required to be in writing and consequently need not be registered under the Registration Act; for a gift to be complete, there should be a declaration of the gift by the donor; acceptance of the gift, expressed or implied, by or on behalf of the donee, and delivery of possession of the property, the E subject-matter of the gift by the donor to the donee. The donee should take delivery of the possession of that property either actually or constructively.

On proof of these essential conditions, the gift becomes complete and valid.

In case of immovable property in the possession of the donor, he should completely divest himself physically of the subject of the gift. No evidence F has been adduced to establish declaration of the gift, acceptance of the gift by or on behalf of the minor or delivery of possession or taking possession

""" or who had accepted the gift actually or constructively. Admittedly he was

' in possession and enjoyment of the property till it was sold to the appellant.

Equally, i~ Mohammad.an Law mother cannot act nor be appointed as property guardian of the. minor. She equally cannot act as legal guardian.

Section 348 defines "minor" to mean "a person who has not completed the age of eighteen years". Section 349 provides that "all application for the appointment of a guardian of the person or property or both of a minor are to be made under the.Guardians and Wards Act, 1890". Section H 359 enumerates the persons entitled, in the order mentioned therein, to be

guardian of the property of a minor, namely, (1) the father; (2) the executor A appointed by the father's will; (3) the paternal grand father; and ( 4) the executor appointed by the will of the paternal grand father. Section 362 limits the power of the legal guardian to alienate immovable property except in the circumstances en.umerated therein. Similarly, the court guardian has no power to mortgage or charge or transfer by sale, gift, exchange B or otherwise and part with possession of immovable property of the ward or to lease that property except with the previous permission of the court and subject to the conditions mentioned in s.363. Admittedly, no property guardian was appointed to act on behalf of the minors. No evidence that the father acted as legal guardian. So also there is no proof of acceptance of the oral gifts said to have been made by the mother to Ismail, the eldest C son, of her undivided share. There is no proof as well that possession was delivered under the oral gift and accepted on behalf of the minor and taken possession.

Her 1/3rd undivided share was not subject matter of OS No. 3/1/1951. D The Additional Civil Judge, therefore, was right in his findings that the gifts have not been proved. They were not complete. Admittedly, the father continued to be in possession and enjoyment of the lands as owner as evidenced by the revenue records until it was mutated in the name of the appellants to the extent of 16 acres purchased by him as per the aforesaid sale deeds Ex.D-1 and Ex.D-3. Ibrahim has attested Ex.D-1 when his father E conveyed the lands as an owner. Though the sale was against his interest, he had not objected to the sale. He, thereby, is estopped by conduct and record to assail Ex.D-1 sale or to claim any interest in the lands.

Under these circumstances the question emerges whether the High F Court was right in reversing the appellate decree on the doctrine of res judicata. At this juncture it may be relevant to mention that the trial court negatived the plea of res judicata as a preliminary issue. Though it was open to sustain the trial court decree on the basis of the doctrine of res judicata, it was not argued before the appellate court on its basis. Thereby the G findings of the trial court that the decree in OS No. 3/1/1951 does not operate as a res judicata became final. The question then is whether the doctrine of res judicata stands attracted to the facts in this case. It is true that under s.11 C.P .C. when the matter has been directly or substantially in issue in a former suit between the same parties or between parties under whom they or any . of them claimed litigating under the same title, the H

A decree in the former suit would be res judicata between the plaintiff and the defendant or as between the co-plaintiff or co-defendants four conditions must be satisfied, namely, that (1) there must be a conflict of interest between the defendants concerned; (2) it must be necessary to decide the conflict in order to give the reliefs which the plaintiff claims; (3) the B question between the defendants must have been finally decided; and ( 4) the co-defendants were necessary or proper parties in the former suit. This is the settled law as held in S.M. Sadat Ali Khan v. Mirza Wiquar Ali, AIR

(1943) PC 115, Shashibushan Prasad Mishra v. Babuji Rai & Ors., [1969) 2 SCR 971; and Iftikhar Ahmed & Ors. v. Syed Meharban Ali, [1974) 2 SCC

151. Take for instance 'that if in a suit by 'A' against 'B & C', the matter is C directly and substantially in issue between B & C, and an adjudication upon that matter was necessary to determine the suit to grant relief to 'A'; the adjudication would operate as res judicata in a subsequent suit between B & C in which either of them is plaintiff and the other defendant. In other words, if a plaintiff cannot get at his right without trying and deciding a D case between co-defendants, the court will try and decide the case, and the co-defendants will be bound by the decree. But if the relief given to the plaintiff does not require or involve a decision of any case between codefendants, the co-defendants will not be bound as between each other.

Where the above four conditions did not exist the decree does not E .operate as res judicata. It must, therefore, be that all the persons who have right, title and interest are made parties to the suit and that they should have knowledge that the right, title and interest would be in adjudication and the finding or the decree therein would operate as a res judicata to their right, title and interest in the subject-matter of the former suit. Even F in their absence a decree could be passed and it may be used as an evidence of the plaintiff's title either accepted or negatived therein. The doctrine of res judicata would apply even though the party against whom it is sought to be enforced, was not co-nominee made a party nor entered appearance nor did he contest the question. The doctrine of res judicata must, however, be applied to co-defendants with great care and caution.

G The reason is that fraud is an extrinsic collateral act, which vitiates the most solemn proceedings of courts of justice. If a party obtains a decree from the court by practicing fraud or collusion, he cannot be allowed to say that the matter is res judicata and cannot be re-opened. There can also be no questi6n of res judicata in a case where signs of fraud or collusion are H transparently pregnant or apparent from the facts on record:

( )

Therefore, in applying the doctrine of res judicata between co-defen- A dant or co-plaintiff, care must, of necessity, be taken by the courts to see that there must in fact 'be a conflict of interest between the co-defendants or co-plaintiffs concerned and it is necessary to decide the conflict in order to give relief which the plaintiff in the suit claimed and the question must have been directly and substantially in issue and was finally decided there- B in. As found by the appellate court, Maqdoom was playing fraud upon his

creditoi:s by creating false oral gifts or spurious claims of mortgagees with a view to defraud them. Section 44 of the Evidence Act envisages that any party to a suit or proceeding may show that any judgment, order or decree, - which is relevant under s.40, 41 or 42 has been obtained by fraud or ,.- .... collusion. Under s.40, the existence of the judgment, order or decree which c by law prevents any Court from taking cognizance of a suit or holding a trial, is a relevant fact when the question is whether such court ought to take cognizance of such suit or to hold such trial.

When the evidence on record establishes that the suit in OS No. D 3/1/1951 was collusive or fraudulent to defraud the creditors, it is a relevant fact and the court would take cognizance thereof to find whether the trial court is precluded to try the issue. The High Court had not adverted to >-- nor bestowed its attention this aspect of the matter except mechanical application of the principles laid by this Court in lftikhar Ahmed's case E (supra). The pleadings in OS No. 3/1/1951 were not produced in the courts below. The judgment, Annexure II, indicates that the respondents and their another brother and the parents were impleaded as defendants 1to5. Sixth defendant was the decree holder in another suit. It was claimed therein that the defendants 1 to 4 were said to have executed possessory mortgage in favour of one Ismail, the plaintiff therein. A joint written statement was F r.r-::

filed by them admitting the claim of the plaintiff who had pleaded the gift said to have been given by Maqdoom in favour of the three sons and his

I wife. They have admitted the same. Thus it would be clear that there was

._.C no conflict of interest between the defendants in that suit. On the other hand they had confessed to the claim . set up by the alleged possessory G mortgagee therein. Though the appellant claimed title to the property through the parents of the respondents, there was neither conflict of yinterest nor was it necessary to decide about the validity of the gift said to have been executed by Maqdoom. The dispute therein was whether the possessory mortgagee was bound by the decree and the creditor could proceed against the Maqdoom and the said property is liable to sale for H

A realisation of his decree debt? In that context the relevancy or validity of the gift is immaterial. It was admitted therein that they had executed possessory mortgage in favour of Ibrahim, plaintiff therein. On that basis, 1i the only question would have been whether he would be entitled to resist the execution of the decree obtained against Maqdoom by the 6th defendant therein? The oral gift or sale of 4 acres under Ex.D-3 was not the B subject-matter of OS No. 3/1/1951. The High Court, therefore, committed

. gross palpable error of law in applying the doctrine of res judicata between co-defendants relying upon the decree in OS No. 3/1/1951 dated September 24, 1951, even if it could be pressed into service in the second appeal.

C The appeal is accordingly allowed. The judgment and decree of the High Court are set aside and that of the appellate court stands restored, in consequence the suit of the respondents 1 & 2 stands dismissed with costs throughout.

B.K.M.

Appeal allowed.