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Saturday, October 10, 2015

a third party auction-purchaser’s interest in the auctioned property continues to be protected notwithstanding that the underlying decree is subsequently set aside or otherwise.==Applying the principles given in the aforementioned decisions to the facts of the present case, we find that in the order dated 10.02.2009, the learned single Judge while allowing the Notice of Motion No. 21 of 2006 had held that the highest offer made by the respondent therein (appellant before us) stood accepted by all the parties to the suit and thereafter passed certain directions to deposit the bid amount, execution of the conveyance deed etc. Thus a vested right has been created in favour of the respondent therein, that is, the present appellant and that cannot be set at naught simply by permitting the Defendant Nos. 4A, 4B and 5 to withdraw the Notice of Motion filed by them. It was for the Division Bench to decide the appeal on merits instead of permitting the withdrawal of the Notice of Motion and observing that the order of the learned single Judge passed on that Motion dated 10.02.2009 does not survive for consideration. 18) In view of the foregoing discussion, the order dated 01.03.2012 passed by the High Court of Bombay under appeal cannot be sustained and is hereby set aside. The High Court is directed to decide the appeal afresh on merits in accordance with law. The appeal is hereby allowed.


                                                                  REPORTABLE


                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION
                        CIVIL APPEAL NO. 8397 OF 2015
        (Arising out of Special Leave Petition (C) NO. 10721 OF 2012)



Avenue Supermarts Pvt. Ltd.                                 ....
Appellant(s)

            Versus

Mrs. Nischint Bhalla & Ors.                             .... Respondent(s)


                                      1

                               J U D G M E N T

R.K. Agrawal, J.

1)    Leave granted.
2)    The present appeal has been  filed  against  the  judgment  and  order
dated 01.03.2012 passed by the Division Bench of the High  Court  of  Bombay
in Appeal No. 271 of 2009 in Notice of Motion No. 21 of  2006  in  Suit  No.
3706 of 1995.   Before the High Court,  an  appeal  was  filed  against  the
order dated 10.02.2009 passed by the learned single Judge of the High  Court
on a Notice of Motion taken by Defendant Nos. 4A, 4B and 5  respectively  in
the aforementioned  suit  for  enforcement  and  implementation  of  certain
orders passed by the Court on consent of the parties to the suit.

3)    However, before the Division Bench, the original  Defendant  Nos.  4A,
4B and 5 sought withdrawal of the Notice of Motion No. 21 of 2006  filed  by
them in the Suit No. 3706 of 1995.  The Division Bench  of  the  High  Court
opined that as the Notice of Motion taken out by Defendant Nos. 4A,  4B  and
5 seeking interim reliefs and now they seek withdrawal of that motion,  they
cannot be prevented from withdrawing the  same  with  the  liberty  to  seek
appropriate  relief  to  which  they  may  be  entitled   in   the   changed
circumstances.   It had further held that as a result of the  withdrawal  of
the motion, the order of the learned  single  Judge  passed  on  the  motion
dated 10.02.2009 does not survive for consideration  rendering  this  appeal
infructuous.
4) Brief facts:
(a)   One Smt Durga Devi Hitkari was owner of various properties at  Mumbai.
 She died in the year 1991.  It appears that there was some dispute  between
her heirs regarding the estate left by her.  The  plaintiffs  therein  filed
the present suit for administration of estate of the deceased.   The  Notice
of Motion being No. 3441 of 1995 in the suit was  taken  by  the  plaintiffs
therein praying for appointment of a receiver  on  the  properties  left  by
Late Smt Durga Devi and for temporary injunction restraining the  defendants
therein from disposing or selling or creating  any  third  party  rights  or
interest in the property.
(b)   A learned single Judge of the High Court, vide order dated  04.08.1998
disposed of the Notice  of  Motion  by  restraining  the  defendants,  their
agents  and  servants  from  creating  any  third  party  interest   in   or
encumbering  or  selling  or  transferring  or  alienating  in  any   manner
whatsoever the  immovable  properties  bearing  Survey  No.  97  of  Mandavi
Division, admeasuring 202 sq. yards, Plot  No.  66  at  Chembur,  Ghatkopar,
Mahul Road, admeasuring 502 sq. yards and ground Ist, 6th and 7th  floor  of
Sky  Lark  Building  known  as  Hitkari  House  along  with  certain   other
directions.
(c)   On 01.12.1999, the said Award was made rule of the court by  the  High
Court and a decree in terms of the said  Award  was  passed  in  Arbitration
Petition No. 148 of 1997.
(d)   Being  aggrieved,  defendants  therein  moved  this  Court  by  filing
special leave petition being No. 9168 of 2000. Before  this  Court,  learned
counsel for the parties filed consent terms of  compromise  duly  signed  by
the parties.  Vide order dated 11.12.2000, the special  leave  petition  got
disposed of in terms of the consent terms dated  11.12.2000.   However,  the
said order was passed without prejudice to the  parties  to  move  the  High
Court of Bombay for probate proceedings.  The High Court, vide  order  dated
15.04.2004, disposed of the Notice of Motion No. 2998 of 2001 filed in  Suit
No. 3706 of 1995 in terms of the minutes of the order.
(e)   In the minutes, the earlier order of the learned  single  Judge  dated
04.08.1998 restraining the defendants from transferring  immovable  property
situated at Chembur was  modified  and  Defendant  Nos.  1,  4  and  6  were
permitted to take all necessary steps to  sell  the  said  property  on  the
terms and conditions mentioned in the minutes.
(f)   Bids were invited for the sale of the  property  at  Chembur  and  the
appellant herein gave bid of  Rs.  20,15,00,000/-  which  was  found  to  be
highest and accepted by the parties also.  No  challenge  was  made  to  the
sale contemplated under the provisions of the Code of Civil Procedure,  1908
(in short ‘the Code’).  As there was delay in execution  of  the  agreement,
Defendant Nos. 4A, 4B and 5 made an application by way of Notice  of  Motion
being No. 21 of 2006 to the court for completion  and  confirmation  of  the
sale process.  The learned single Judge of the High Court, vide order  dated
10.02.2009  confirmed  the  sale  process  and  directed  execution  of  the
documents in favour of the appellant.
(g)   The original Defendant Nos. 2, 6 and  7  challenged  the  order  dated
10.02.2009 by way of Letters Patent Appeal being No. 271 of 2009 before  the
Division Bench of the High Court.  The original Defendant Nos. 4A, 4B and  5
did not challenge the order dated 10.02.2009.
(h)   At the appellate stage, original Defendant Nos. 4A, 4B and 5  made  an
oral application for withdrawal of the notice of motion filed by them.   The
Division Bench of the High Court, vide order dated 01.03.2012,  allowed  the
withdrawal of the Motion while holding that the order of the learned  single
Judge dated 10.02.2009 does not  survive  for  consideration  rendering  the
appeal infructuous.  Against the said order,  the  appellant  has  preferred
this appeal by way of special leave.
5)    Heard learned senior counsel for the parties.
Rival submissions:
6)    Learned senior counsel for  the  appellant  submitted  that  when  the
rights of the parties had been crystallized and findings have been  rendered
in favour of the appellant herein and against the respondents and  the  same
have  been  confirmed,  the  Division  Bench  of  the  High  Court,  without
considering the  effect  thereon  on  the  rights  already  accrued  to  the
parties, could not have permitted withdrawal of the Notice of Motion at  the
instance of the original Defendant Nos. 4A, 4B and 5.  In  the  alternative,
it is  submitted  that  even  if  the  Division  Bench  could  have  allowed
withdrawal of the original application, it  had  no  occasion  or  cause  to
observe that on withdrawal of the original application,  the  order  of  the
learned single Judge dated 10.02.2009 could not  survive  for  consideration
which in effect amounts to allowing the appeal without making  any  comments
on the merits or otherwise on the order dated 10.02.2009.
7)    He further submitted that the Division  Bench  was  not  justified  in
granting liberty to the parties to the suit  to  apply  for  appointment  of
receiver in respect of subject property for sale  thereon  as  the  sale  in
favour of the appellant herein had been in execution of the  First  and  the
Second decree which can only be set  aside  on  an  appropriate  application
being made in accordance with the provisions of Order XXI of  the  Code  and
not otherwise.  Even if the suit was to be withdrawn that would not lead  to
setting aside of the sale in favour of the appellant herein unless  recourse
to appropriate proceedings in accordance with the provisions  of  Order  XXI
of the Code is made.
8)    Learned senior counsel for the appellant  relied  upon  the  following
decisions in support of his contention  viz.,  R.  Rathinavel  Chettiar  and
Another vs. V. Sivaraman and Others (1999) 4 SCC 89,  Sneh  Gupta  vs.  Devi
Sarup and Others (2009) 6 SCC 194 and Janatha Textiles and  Others  vs.  Tax
Recovery Officer and Another (2008) 12 SCC 582.
9)    Learned senior counsel for the respondents,  however,  submitted  that
as the order dated 10.02.2009 passed by the learned single Judge  was  on  a
Notice of Motion filed by Defendant Nos. 4A, 4B and 5, it  was  always  open
for the said defendants to withdraw the  Notice  of  Motion  in  the  appeal
itself and once the court has permitted the withdrawal of Notice of  Motion,
the order, if any, passed on the said Notice of Motion, does not survive.
Discussion:
10)   We have given our anxious consideration to the  various  pleas  raised
by learned senior counsel for the parties.  It is not in dispute  that  vide
order dated 04.08.1998 in Administration Suit No. 3706 of 1995, the  learned
single Judge had  restrained  the  defendants,  their  agents  and  servants
therein from creating any third party interest in or encumbering or  selling
or transferring  or  alienating  in  any  manner  whatsoever  amongst  other
properties the immovable property  situated  at  Chembur,  Ghatkoper,  Mahul
Road bearing Plot No. 66 admeasuring 502 sq. yards also.   When  the  matter
was taken up by way of special leave petition being No. 9168 of 2000  before
this Court, the parties had signed the consent terms and  vide  order  dated
11.12.2000, this Court had disposed of the special leave petition  in  terms
of the consent terms dated 11.12.2000.  However, the said order  was  passed
without prejudice to  the  parties  to  move  the  High  Court  for  probate
proceedings.
11)   The  learned  single  Judge  of  the  High  Court,  vide  order  dated
15.04.2004, had taken on record the minutes of the order and the  Notice  of
Motion was disposed of in terms  of  the  minutes  of  the  order.   In  the
minutes of the order, the  order  of  injunction  in  respect  of  immovable
property at Chembur was varied  to  the  limited  extent  so  as  to  enable
Defendant Nos. 1, 4 and 6 to take all  necessary  steps  to  sell  the  said
property on the terms and conditions mentioned in the minutes.   It  is  not
necessary to reproduce the minutes of the  order.   Suffice  it  to  mention
that in terms of the minutes, the appellant herein submitted its bid of  Rs.
20,15,00,000/- which was found to be the highest and  was  accepted  by  the
parties.  In the Notice of Motion being No. 21 of 2006  filed  by  Defendant
Nos. 4A, 4B and 5, the learned single Judge, vide  order  dated  10.02.2009,
had held that the offer made by the respondent therein who is the  appellant
before us stood accepted by all the parties to  the  suit.   While  allowing
the Notice of Motion, the learned single Judge gave  certain  directions  in
the operative part of the order dated 10.02.2009.  For ready reference,  the
directions given in the order dated 10.02.2009 passed by the learned  single
Judge are reproduced below:-
                                    “Order
(1). The respondents shall deposit  a  sum  of  Rs.  2,28,15000/-  with  the
Prothonotary & Senior Master, High Court, Bombay within one  week  from  the
date of signature on the detail order, who should forthwith invest the  said
amount in any nationalized Bank as fixed deposit.
(2).  The Advocate for the defendant Nos. 4A, 4B and 5 shall return the  Pay
Order  dated  5-8-2005  for  the  amount  of  R.2,28,15,000/-  back  to  the
respondents against the aforesaid deposit to be made by the respondents  for
cancellation of the same.
(3).  Within one week therefrom, the defendant Nos.  2,  4A,  4B,  5  and  6
shall handover the original title deeds  of  the  Chembur  property  to  the
Prothonotary and Senior Master, who shall keep the  same  in  safe  custody.
Within one week therefrom, the Court Receiver shall take  formal  possession
of the Chembur property and get it  vacated  from  the  defendants  and  any
party claiming through  them.  The  Receiver  shall  then  intimate  to  the
respondents about the vacant possession being available and within one  week
therefrom the respondents shall deposit the remaining consideration  of  Rs.
17,86,85,000/- with the court receiver High  Court,  Bombay.   In  case  the
amount is not deposited within  one  week  as  directed,  then  the  deposit
amount of Rs. 2,28,15,000/- shall stand forfeited and shall be  handed  over
to the credit of the suit.
(4).  In case the amount is deposited as directed above, the defendant  Nos.
2, 4A, 4B, 5 and 6 and Shri Sanjay Sawhney (the heir of  the  defendant  No.
8) shall execute register and duly  admit  the  execution  before  the  Sub-
Registrar of an irrevocable Power of  Attorney  in  the  format  annexed  at
Exhibit-12 to the affidavit in reply of the  respondents  dated  18-10-2007,
at the cost and expenses of the respondents. The Court Receiver  shall  then
handover the possession of the  Chembur  property  to  the  respondents  and
shall  also  handover  the  original  title   deeds   and   thereafter   the
Prothonotary & Senior Master shall handover the original title deeds to  the
respondents.
(5). In case the defendants above-mentioned fail to  execute  the  Power  of
Attorney, as aforesaid, then the Court Receiver shall execute the  same  and
register it at the costs and expenses of the respondents and further if  the
respondents want, they shall also execute the  deed  of  conveyance  at  the
costs of the respondents.
(6).  The respondents to  indemnify  and  keep  indemnified  the  defendants
against all actions, demands, claims, costs, charges and expenses by  reason
of any claim on account of any act or omission of the  Attorneys  under  the
Power of Attorney to be executed in their favour.
(7)  After  the  completion  of  the  aforesaid  sale  in  favour   of   the
respondents, the parties shall be entitled to  distribution  of  the  amount
and any one of them may apply to the Court for distribution of the  same  in
terms of the order of the Supreme Court dated 11-12-2000 and  the  order  of
this Court         dated 15-4-2004.
(8). The respondents shall pay to the Court Receiver the costs, charges  and
expenses of the Receiver to be worked out on the basis of  actuals  incurred
and estimated by the Court Receiver and not on the basis of  commission  and
the Court Receiver shall stand discharged without any further order of  this
Court.
(9).  In case of any difficulty,  liberty  to  the  party  to  approach  the
Court.  At  this  stage,  the  learned  senior  counsel  appearing  for  the
defendant Nos. 6 and 7 makes oral request for  stay  of  operation  of  this
order for a period of six weeks. Request granted. The effect  and  operation
of this order is stayed  for  a  period  of  six  weeks  from  the  date  of
signature on the detail order”.

12)   From a reading of the directions given by the learned single Judge  in
the operative portion of the order dated  10.02.2009  reproduced  above,  we
find that the learned single Judge had directed  the  appellant  herein  who
was the respondent before learned single Judge  to  deposit  a  sum  of  Rs.
2,28,15,000/- with the Prothonotary & Senior Master, High  Court  of  Bombay
within one week and the advocate for the Defendant Nos. 4A,  4B  and  5  was
directed to return the pay order dated 05.08.2005  for  the  amount  of  Rs.
2,28,15,000/-  back  to  the  respondents  therein  against  the   aforesaid
deposit.  The Defendant Nos. 2, 4A, 4B, 5 and 6  were  further  directed  to
handover the original title deeds of Chembur property to the Prothonotary  &
Senior Master, High Court of Bombay to be  kept  in  safe  custody  and  the
court receiver to take formal possession of the Chembur property within  one
week and get it vacated from the defendants therein and any  party  claiming
through  them.   After  intimation  to  the  respondents  about  the  vacant
possession being available, the respondent (appellant herein), was  required
to deposit the remaining consideration of Rs. 17,86,85,000/- with the  court
receiver.  In case the amount is not deposited within one week as  directed,
the deposit of Rs. 2,28,15,000/- would stand forfeited and was to be  handed
over to the credit of the suit.  It was further directed that  in  case  the
amount is deposited as directed, the Defendant Nos. 2, 4A, 4B, 5 and  6  and
heir of Defendant No. 8 shall allow the execution of  an  irrevocable  Power
of Attorney in the prescribed format before the  sub-Registrar.   The  court
receiver was then directed to  hand  over  the  possession  of  the  Chembur
property to the respondent and was also directed to  handover  the  original
title deeds to the respondent.  The conveyance deed was also directed to  be
executed at the cost of the respondent.
13)    The  order  dated  10.02.2009,  in  fact,  gave  certain   directions
regarding the sale of the immovable property at Chembur  in  favour  of  the
respondent therein  who  is  the  appellant  before  us.   The  order  dated
10.02.2009 was brought up in  appeal  by  some  of  the  defendants.   Those
defendants, who were appellants in Appeal No. 271 of 2009,  had  not  sought
for any withdrawal of appeal.  The question is as to whether Defendant  Nos.
4A, 4B and 5, on whose Notice of Motion No. 21  of  2006,  the  order  dated
10.02.2009 has been passed giving directions for confirmation  of  the  sale
and execution of the conveyance deed etc.,  of  the  immovable  property  at
Chembur in favour of the present appellant, can  be  permitted  to  withdraw
and the order  dated  10.02.2009  can  be  said  to  be  not  surviving  for
consideration.
14)   In the case of R. Rathnivel (supra), this  Court  has  considered  the
question as to whether at a stage  where  the  rights  of  the  parties  are
crystallized can be divested of the rights under the decree  simply  because
of withdrawal of the suit at the appellate stage or  not.   This  Court  has
held as follows:-
“12. What is essential is that the matter must have been finally decided  so
that it becomes conclusive as between the parties to the suit in respect  of
the subject-matter of the suit with reference to which relief is sought.  It
is at this stage that the rights of the parties are crystallised and  unless
the decree is reversed, recalled, modified or set aside, the parties  cannot
be divested of their rights  under  the  decree.  Now,  the  decree  can  be
recalled, reversed or set aside either by the court which had passed  it  as
in review, or by the appellate or  revisional  court.  Since  withdrawal  of
suit  at  the  appellate  stage,  if  allowed,  would  have  the  effect  of
destroying or nullifying the decree affecting thereby rights of the  parties
which came to be vested under the decree, it cannot be allowed as  a  matter
of course but has to be allowed rarely only when a strong case is made  out.
It is for this reason that the proceedings either in appeal or  in  revision
have to be allowed to have a full trial on merits.”


This Court after referring to the various decisions of the High Courts  have
come to the conclusion that where a decree passed  by  the  trial  Court  is
challenged in appeal, it would not be open to the plaintiff, at that  stage,
to withdraw the suit so as to destroy that decree.  In para 22,  this  court
held as under:-

“22. In view of the above discussion, it  comes  out  that  where  a  decree
passed by the trial court is challenged in appeal, it would not be  open  to
the plaintiff, at that stage, to withdraw the suit so  as  to  destroy  that
decree. The rights which have come to be vested in the parties to  the  suit
under the decree cannot be taken away by withdrawal  of  the  suit  at  that
stage unless very strong reasons are shown that  the  withdrawal  would  not
affect or prejudice anybody’s vested rights. The impugned  judgment  of  the
High  Court  in  which  a  contrary  view  has  been  expressed  cannot   be
sustained.”

15)   In Janatha Textiles (supra),  this  Court  has  held  that  it  is  an
established principle of law  that  in  a  third  party  auction-purchaser’s
interest   in   the   auctioned   property   continues   to   be   protected
notwithstanding that the underlying decree  is  subsequently  set  aside  or
otherwise.
16)   In Sneh Gupta (supra), this Court has held that a right to withdraw  a
suit in the suitor would be unqualified, if no right has been vested in  any
other party.
Conclusion:
17)   Applying the principles given in the aforementioned decisions  to  the
facts of the present case, we find that in the order dated  10.02.2009,  the
learned single Judge while allowing the Notice of Motion No. 21 of 2006  had
held that the highest  offer  made  by  the  respondent  therein  (appellant
before us) stood accepted by all the parties  to  the  suit  and  thereafter
passed certain directions to  deposit  the  bid  amount,  execution  of  the
conveyance deed etc.  Thus a vested right has been created in favour of  the
respondent therein, that is, the present appellant and that  cannot  be  set
at naught simply by permitting the Defendant Nos. 4A, 4B and 5  to  withdraw
the Notice of Motion filed by them.   It  was  for  the  Division  Bench  to
decide the appeal on merits instead of  permitting  the  withdrawal  of  the
Notice of Motion and observing that the order of the  learned  single  Judge
passed on that Motion dated 10.02.2009 does not survive  for  consideration.


18)   In view of  the  foregoing  discussion,  the  order  dated  01.03.2012
passed by the High Court of Bombay under appeal cannot be sustained  and  is
hereby set aside.  The High Court is directed to decide  the  appeal  afresh
on merits in accordance with law.  The appeal is hereby allowed.

      ...…………….………………………J.
                (RANJAN GOGOI)



      .…....…………………………………J.
         (R.K. AGRAWAL)

NEW DELHI;
OCTOBER 8, 2015.
ITEM NO.1A               COURT NO.12               SECTION IX
(For judgment)
               S U P R E M E  C O U R T  O F  I N D I A
                       RECORD OF PROCEEDINGS

                        Civil Appeal No. 8397 of 2015
          (Arising from Special Leave Petition (C)  No. 10721/2012

AVENUE SUPERMARTS PVT. LTD.                        Petitioner(s)

                                VERSUS

NISCHINT BHALLA & ORS.                             Respondent(s)

Date : 08/10/2015      This appeal was called on for pronouncement of
            judgment today.

For Petitioner(s)      Mr. E. C. Agrawala, AOR

For Respondent(s)      Ms. Anushree Menon, Adv.
                       Mr. Vikas Mehta, AOR

                       Mr. Puneet Singh Bindra, Adv.
                       Mr. Aslam Ahmed, Adv.
                       Mr. Gagan Gupta, AOR

      Hon'ble Mr. Justice R.K. Agrawal pronounced  the  reportable  judgment
of the Bench comprising Hon'ble Mr. Justice Ranjan Gogoi and His Lordship.
      Leave granted.
      The appeal is allowed in terms of the signed  reportable  judgment  as
follows:
      “In view of the foregoing  discussion,  the  order  dated   01.03.2012
passed by the High Court of Bombay under     appeal cannot be sustained  and
is hereby set aside.  The   High Court is  directed  to  decide  the  appeal
afresh  on    merits  in  accordance  with  law.   The  appeal   is   hereby
allowed.”

      (R.NATARAJAN)                                 (SNEH LATA SHARMA)
       Court Master                                    Court Master
            (Signed reportable judgment is placed on the file)

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