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)
