Supreme Court Upholds Decree in Property Dispute: Rehan Ahmed vs. Akhtar Un Nisa (2024)

Date of the Judgment: 22 April 2024

Citation: 2024 INSC 329

Judges: Vikram Nath, J. and Satish Chandra Sharma, J.

Can a compromise decree be challenged years after it was passed, especially when the challenging party is a legal heir of a defendant who was removed from the suit? The Supreme Court of India recently addressed this question in a property dispute case, clarifying the validity of a decree passed based on a compromise between the plaintiff and one of the defendants. The Court examined whether the decree was executable despite the absence of one of the original defendants in the final compromise. This judgment by Justices Vikram Nath and Satish Chandra Sharma clarifies the legal position on compromise decrees and their execution.

Case Background

The case revolves around a property dispute concerning Municipal Nos. 52-57 in Jaipur. Ghulam Mohiuddin (Defendant No.1) originally owned the property. In 1967, his brother Saeeduddin (Defendant No.2), acting as his power of attorney, entered into an agreement to sell the property to Rehan Ahmed (the plaintiff). However, the sale deed was not executed.

Rehan Ahmed filed a suit for specific performance in 1972 against both Ghulam Mohiuddin and Saeeduddin. During the pendency of the suit, the parties entered into a compromise on 11 May 1978. The compromise stated that Ghulam Mohiuddin admitted to the agreement to sell and agreed to execute the sale deed by 1 July 1978. The compromise also stated that Saeeduddin would vacate the third floor of the property and the rent notes would be transferred to Rehan Ahmed.

The Trial Court initially dismissed the suit on 9 May 1979 due to the absence of the plaintiff. However, the case was reopened on the same day and the court recorded that Rehan Ahmed and Ghulam Mohiuddin had executed the compromise. The suit was dismissed against Saeeduddin and another proforma defendant, Ahsan Ahmed, and a decree was passed against Ghulam Mohiuddin as per the compromise.

Timeline

Course of Proceedings

After the decree was passed, Ghulam Mohiuddin raised objections to the execution, stating that Rehan Ahmed had not paid the balance sale consideration. The Executing Court dismissed these objections on 9 December 1998. Ghulam Mohiuddin’s legal heir, General Tariq, challenged this order, but his revision petition was dismissed by the High Court, and his Special Leave Petition was also dismissed by the Supreme Court.

Later, Akhtar Un Nisa, wife of Saeeduddin and mother of General Tariq, filed fresh objections under Section 47 of the Code of Civil Procedure, 1908 (CPC), claiming that the decree was a nullity. The Executing Court dismissed these objections on 3 May 2007. However, the Rajasthan High Court allowed Akhtar Un Nisa’s revision petition on 21 March 2014, setting aside the Executing Court’s order and declaring the decree void. This led to the present appeal before the Supreme Court.

Legal Framework

The judgment primarily deals with the interpretation and application of Order XXIII, Rule 3 of the Code of Civil Procedure, 1908 (CPC), which governs compromise decrees. According to Order XXIII, Rule 3, “Where it is proved to the satisfaction of the Court that a suit has been adjusted wholly or in part by any lawful agreement or compromise… the Court shall order such agreement, compromise or satisfaction to be recorded, and shall pass a decree in accordance therewith.”

The Supreme Court also considered Section 47 of the Code of Civil Procedure, 1908 (CPC), which pertains to questions to be determined by the court executing the decree. Section 47 states that “all questions arising between the parties to the suit in which the decree was passed, or their representatives, and relating to the execution, discharge or satisfaction of the decree, shall be determined by the Court executing the decree and not by a separate suit.”

Arguments

Arguments by the Appellant (Rehan Ahmed):

• The decree was valid as it was based on a compromise between the plaintiff and the sole owner of the property, Defendant No. 1, Ghulam Mohiuddin.
• Defendant No. 2, Saeeduddin, had admitted he had no ownership rights to the property and was thus not a necessary party to the compromise.
• The compromise was duly verified by the Trial Court as per Order XXIII, Rule 3 of the Code of Civil Procedure, 1908 (CPC).
• The objections raised by Akhtar Un Nisa were not maintainable as similar objections by her son, General Tariq, had already been dismissed by the High Court and the Supreme Court.
• The High Court erred in setting aside the Executing Court’s order and declaring the decree void.

Arguments by the Respondent (Akhtar Un Nisa):

• The decree was without jurisdiction and a nullity as the property was jointly owned by Ghulam Mohiuddin and Saeeduddin.
• The compromise could not have been arrived at between the plaintiff and Defendant No.1 alone, as the suit was against both brothers.
• The Trial Court could not have accepted the compromise regarding Defendant No.2 vacating the third story of the house and the rent notes being transferred to the plaintiff.
• Since there was no decree against Saeeduddin, the decree holder had no right to get possession of the portion of the property in his possession.
• The tenants in the disputed property were tenants of Akhtar Un Nisa, not Saeeduddin.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the core issues that the Court addressed were:

1. Whether the compromise decree dated 09.05.1979 was valid and executable, given that it was based on a compromise between the plaintiff and Defendant No.1 alone, and not Defendant No. 2.
2. Whether the High Court was correct in setting aside the Executing Court’s order and declaring the decree a nullity.
3. Whether the objections under Section 47 of the Code of Civil Procedure, 1908 (CPC) filed by Akhtar Un Nisa were maintainable.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Supreme Court did not explicitly cite any case laws or legal provisions in this judgment, other than the provisions of the Code of Civil Procedure, 1908 (CPC) discussed above. The court relied on the facts of the case and the previous orders passed by the High Court and the Supreme Court in the same matter.

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

✓ Order XXIII, Rule 3 of the Code of Civil Procedure, 1908 (CPC): The Court held that the Trial Court had correctly followed the procedure for verifying the compromise as per this provision.

✓ Section 47 of the Code of Civil Procedure, 1908 (CPC): The Court held that the objections raised by Akhtar Un Nisa were not maintainable under this provision as similar objections had already been dismissed.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the following factors:

• Sole Ownership of Defendant No. 1: The Court emphasized that Defendant No. 1, Ghulam Mohiuddin, was the sole owner of the property, and Defendant No. 2, Saeeduddin, had no ownership rights. This was crucial in upholding the validity of the compromise decree, as it was an agreement between the plaintiff and the sole owner.
• Verification of Compromise: The Court found that the Trial Court had correctly verified the compromise as per Order XXIII, Rule 3 of the Code of Civil Procedure, 1908 (CPC). The Court noted that the delay in verification was due to procedural reasons and did not invalidate the compromise.
• Previous Dismissal of Similar Objections: The Court took into account that similar objections raised by General Tariq, a legal heir of Defendant No. 1, had already been dismissed by the High Court and the Supreme Court. This led the Court to conclude that the objections by Akhtar Un Nisa were an abuse of process.
• Admissions of Defendant No. 2: The Court highlighted that Defendant No. 2, Saeeduddin, had consistently admitted that he had no ownership rights to the property. This acknowledgment further supported the validity of the compromise between the plaintiff and Defendant No. 1.

Fact:Law Ratio

The Court’s reasoning was a blend of factual analysis and legal interpretation. The court gave more weightage to the factual aspects of the case, including the ownership of the property, the admissions of the parties, and the previous proceedings. The legal aspects were considered to ensure that the correct procedure was followed.

Logical Reasoning:

The Supreme Court considered the High Court’s reasoning that the property was jointly owned by Defendants No. 1 and No. 2, and that the absence of Defendant No. 2’s signature on the compromise invalidated the decree. However, the Supreme Court rejected this interpretation because Defendant No. 2 had consistently acknowledged that he had no ownership rights over the property. The Supreme Court also rejected the High Court’s finding that the Trial Court failed to properly verify the compromise, noting that the verification was delayed due to procedural reasons but was ultimately completed correctly. The Court also noted that the High Court overlooked the fact that similar objections had already been dismissed in earlier proceedings.

The Supreme Court’s decision was that the compromise decree was valid and executable. The Court set aside the High Court’s order and restored the Executing Court’s order, rejecting the objections of Akhtar Un Nisa.

The Court quoted from the compromise deed in its judgment: “That, Def. No.1 also admits that a sum of Rs. 10,000/ – out of entire agreed sale consideration was received in respect to the disputed property on 4.10.1967 and a sum of Rs.1,000/ – was received on 1.1.69 and Rs.500/ – on 22.1.69 i.e. a total of Rs.11,500/ – was received by def. No . 2 on behalf of Def No . 1 which is liable to be adjusted from the total consideration of the property…”. The Court also noted that “the Def. No.1 shall get executed and registered sale-deed of the above described houses and shops in favor of plaintiff Rehan Ahmad till 1.7.1978 and shall receive remaining sale consideration amount of Rs.25,000/-.” The Court further quoted from the compromise deed that “if the Def. No. 1 fails to execute sale deed in this period then the plaintiff Rehan Ahmad shall be entitled to get the sale -deed executed and registered in his favor through the Court.”

There was no majority or minority opinion in this case. The judgment was delivered by a bench of two judges, both of whom agreed on the decision.

Key Takeaways

• A compromise decree is valid if it is based on an agreement between the plaintiff and the sole owner of the property, even if other defendants are later removed from the suit.
• The verification of a compromise decree, as per Order XXIII, Rule 3 of the Code of Civil Procedure, 1908 (CPC), is a procedural requirement, and delays in verification due to procedural reasons do not invalidate the decree.
• Objections to a decree are not maintainable if similar objections have already been dismissed in previous proceedings.
• Admissions of a party regarding their lack of ownership rights can be crucial in determining the validity of a compromise decree.

Directions

The Supreme Court directed that the Executing Court’s order dated 03.05.2007 be restored, and the objections of Respondent No. 1 under Section 47 of the Code of Civil Procedure, 1908 (CPC) be rejected.

Development of Law

The ratio decidendi of the case is that a compromise decree is valid and executable if it is based on an agreement between the plaintiff and the sole owner of the property, even if other defendants are later removed from the suit, and that objections to the decree are not maintainable if similar objections have already been dismissed in previous proceedings. There was no change in the previous position of law, but the judgment clarifies the application of Order XXIII, Rule 3 of the Code of Civil Procedure, 1908 (CPC) and Section 47 of the Code of Civil Procedure, 1908 (CPC) in such cases.

Conclusion

The Supreme Court’s judgment in Rehan Ahmed vs. Akhtar Un Nisa clarifies the validity of a compromise decree in a property dispute. The Court upheld the decree, emphasizing that it was based on a valid agreement between the plaintiff and the sole owner of the property. The Court also clarified the procedural aspects of verifying a compromise decree and the maintainability of objections. This judgment reinforces the importance of finality in legal proceedings and the need to avoid abuse of process.