# SUBHASH MAHADEV ASA HABIB v. NEMASA AMBASA DHARMADAS (D) BY LRS. AND ORS

- **Citation:** [2007] 4 S.C.R. 150
- **Court:** Supreme Court of India
- **Decided:** 2007-03-19
- **Case number:** Civil Appeal No. 1449 of2007
- **Bench:** S.B.Sinha, P.K. Balasubramanyan
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/subhash-mahadev-asa-habib-v-nemasa-ambasa-dharmadas-d-by-lrs-and-ors-22722
- **Pages:** 29

## Headnote

Code of Civil Procedure, 1908: Sections JI, 15, 20, 21 and 21 A.
C
Res judicata-lnherent jurisdiction and territorial jurisdiction-Lack
of-Distinction between-Place of suing-Suit for redemption-Three items
of property were allotted to one 'CB' in partition-He along with his two
minor sons executed a mortgage in respect of all the three items in favour
of one 'D'-Subsequently 'CB' acting for himself and as the guardian of his
minor sons, executed a simple mortgage in respect of the properties to one
D 'H'-Thereafter, 'CB', on his own, sold the properties, rather, the equity of
redemption, to the appellant-The wife and sons of 'CB' filed a suit arraying
· the appellant and 'CB' as defendants Nos. 1 and 2 respectively for a
declaration that the sale deed executed by 'CB' in favour of the appellant
was bogus and not binding on them and, in the alternative, for a declaration
E that the sale deed did not affect their shares in the properties and was not
binding on them-The trial court found that the plaintiffs had not proved
that the sale deed executed by 'CB' was not binding on them and, therefore,
upheld the whole title conveyed to the appellant-'CB' also flied a suit
challenging the sale in favour of the appellant-During the pendency of the
appeal, 'CB', his wife and his sons then purported to sell their rights in the
F properties to defendant No. 6 and asked him to get himself impleaded in the
appeal or in the suit-The appeal was dismissed and, thus, the decree
became final as against the wife and sons of 'CB'-The trial court, while
dismissing the suit filed by 'CB', held that the trial court which disniissed the
earlier suit had no pecuniary jurisdiction to entertain that suit and, therefore,
G the decree in that earlier suit was one without jurisdiction-The first and
second appeals were also dismissed-Thereafter, the appellant flied two suits
for redemption of the mortgage in favour of 'D'-The trial court found that
the properties were the separate properties of 'CB' and, therefore, upheld the
sale to the appellant and held that the appellant was entitled to redeem the
mortgage-Defendant No. 1, the mortgagee, and defendant No. 6 flied appeals
H
150
SUBHASH MAHADEVASA HABIB v. NEMASA AMBASA DHARMADAS (D) BY LRS.
151
before the lower appellate court-The lower appellate court partly allowed A
the appeal and held that 'CB' had only I/4th share in the properties and his
assignment to the appellant was limited only to I/4th share and accordingly
modified the decree of the trialcourt-The High Court dismissed the second
appeals-Correctness of-Held: Finding in the second suit that the decree
in the first suit could be ignored or the effect of it swept under the carpet
because the court which passed that decree lacked pecuniary jurisdiction
was clearly unsustainable in law-Defendant No. 6, as assignee, had no
interest in the properties sought to be redeemed and could not put forward
B
any valid defence to the suit for redemption filed by the appellant-The
decree passed in the suit filed by the wife and sons of 'CB' would bar
defendant No. 6 from questioning the right of the appellant under the C
assignment in his favour-High Court judgment set aside.
Words and Phrases:
"Place of suing"-Meaning of-Jn the context of Section 21A of the
Code of Civil Procedure, 1908.
D
In a partition between three brothers, three items of property were
allotted to one 'CB', the original defendant No. 2. He along with his two minor
sons, who were defendant Nos. 3 and 4, executed a mortgage in respect ofaJI
the three items in favour of one 'D', defendant No. 1 iit the suit. Subsequently,
defendant No. 2, acting for himself and as the guardian of his minor sons, E
executed a simple mortgage in respect of the properties to one 'H'. Thereafter,
defendant No. 2, on his own, sold the properties, rather, the equity of
redemption, to the appellant.
The wife and sons of defendant No. 2 filed a suit arraying the appellant
and defendant No. 2 as defendants Nos. 1 and

## Text

_Characters 0–39,978 of 79,727. This is a partial read: ask again with offset=39978 for what follows._

A
SUBHASH MAHADEV ASA HABIB
v.
NEMASA AMBASA DHARMADAS (D) BY LRS. AND ORS.
MARCH 19, 2007
B
[S.B.SINHA AND P.K. BALASUBRAMANYAN, JJ.]
Code of Civil Procedure, 1908: Sections JI, 15, 20, 21 and 21 A.
C
Res judicata-lnherent jurisdiction and territorial jurisdiction-Lack
of-Distinction between-Place of suing-Suit for redemption-Three items
of property were allotted to one 'CB' in partition-He along with his two
minor sons executed a mortgage in respect of all the three items in favour
of one 'D'-Subsequently 'CB' acting for himself and as the guardian of his
minor sons, executed a simple mortgage in respect of the properties to one
D 'H'-Thereafter, 'CB', on his own, sold the properties, rather, the equity of
redemption, to the appellant-The wife and sons of 'CB' filed a suit arraying
· the appellant and 'CB' as defendants Nos. 1 and 2 respectively for a
declaration that the sale deed executed by 'CB' in favour of the appellant
was bogus and not binding on them and, in the alternative, for a declaration
E that the sale deed did not affect their shares in the properties and was not
binding on them-The trial court found that the plaintiffs had not proved
that the sale deed executed by 'CB' was not binding on them and, therefore,
upheld the whole title conveyed to the appellant-'CB' also flied a suit
challenging the sale in favour of the appellant-During the pendency of the
appeal, 'CB', his wife and his sons then purported to sell their rights in the
F properties to defendant No. 6 and asked him to get himself impleaded in the
appeal or in the suit-The appeal was dismissed and, thus, the decree
became final as against the wife and sons of 'CB'-The trial court, while
dismissing the suit filed by 'CB', held that the trial court which disniissed the
earlier suit had no pecuniary jurisdiction to entertain that suit and, therefore,
G the decree in that earlier suit was one without jurisdiction-The first and
second appeals were also dismissed-Thereafter, the appellant flied two suits
for redemption of the mortgage in favour of 'D'-The trial court found that
the properties were the separate properties of 'CB' and, therefore, upheld the
sale to the appellant and held that the appellant was entitled to redeem the
mortgage-Defendant No. 1, the mortgagee, and defendant No. 6 flied appeals
H
150
SUBHASH MAHADEVASA HABIB v. NEMASA AMBASA DHARMADAS (D) BY LRS.
151
before the lower appellate court-The lower appellate court partly allowed A
the appeal and held that 'CB' had only I/4th share in the properties and his
assignment to the appellant was limited only to I/4th share and accordingly
modified the decree of the trialcourt-The High Court dismissed the second
appeals-Correctness of-Held: Finding in the second suit that the decree
in the first suit could be ignored or the effect of it swept under the carpet
because the court which passed that decree lacked pecuniary jurisdiction
was clearly unsustainable in law-Defendant No. 6, as assignee, had no
interest in the properties sought to be redeemed and could not put forward
B
any valid defence to the suit for redemption filed by the appellant-The
decree passed in the suit filed by the wife and sons of 'CB' would bar
defendant No. 6 from questioning the right of the appellant under the C
assignment in his favour-High Court judgment set aside.
Words and Phrases:
"Place of suing"-Meaning of-Jn the context of Section 21A of the
Code of Civil Procedure, 1908.
D
In a partition between three brothers, three items of property were
allotted to one 'CB', the original defendant No. 2. He along with his two minor
sons, who were defendant Nos. 3 and 4, executed a mortgage in respect ofaJI
the three items in favour of one 'D', defendant No. 1 iit the suit. Subsequently,
defendant No. 2, acting for himself and as the guardian of his minor sons, E
executed a simple mortgage in respect of the properties to one 'H'. Thereafter,
defendant No. 2, on his own, sold the properties, rather, the equity of
redemption, to the appellant.
The wife and sons of defendant No. 2 filed a suit arraying the appellant
and defendant No. 2 as defendants Nos. 1 and 2 respectively for a declaration F
that the sale deed executed by defendant No. 2 in favour of the appellant was
bogus and not binding on them and, in the alternative, for a declaration that
· the sale deed did not affect their shares in the properties and was not binding
on them.
The appellant filed a written statement and raised several issues. The
trial court found that the plaintiffs had not proved that the sale deed executed
by defendant No. 2 was not binding on them and, therefore, upheld the whole
title conveyed to the appellant. Defendant No. 2 also filed a suit challenging
the sale in favour of the appellant.
G
H
A
152
SUPREME COURT REPORTS
(2007] 4 S.C.R.
During the pendency of the appeal, defendant No. 2, his wife and his
sons then purported to sell their rights in the properties to defendant No. 6
and asked him to get himself impleaded in the appeal or in the suit The appeal
was dismissed and, thus, the decree became final as against the wife and sons
of defendant No. 2. The trial court, while dismissing the suit filed by the
B defendant No. 2, held that the trial court which dismissed the earlier suit had
no pecuniary jurisdiction to entertain that suit and, therefore, the decree in
that earlier suit was one without jurisdiction. The first and second appeals
were also dismissed.
Thereafter, the appellant filed two suits for redemption of the mortgage
C in favour of 'D'. The trial court found that the properties were the separate
properties of defendant No. 2 and, therefore, upheld the sale to the appellant
and held that the appellant was entitled to redeem the mortgage.
Defendant No. 1, the mortgagee, and defendant No. 6 filed appeals before
the lower appellate court The lower appellate coort partly allowed the appeal
D and held that defendant No. 2 had only 1/4th share in the properties and his
assignment to the appellant was limited only to l/4th share and accordingly
modified the decree of the trial court. Chailenging this decree of the lower
appellate court, both sides filed second appeals inthe High Court, which were
dismissed. Hence the appeal.
E
Allowing the appeal, the Court
HELD: 1.1. Defendant No. 2 and the appellant were only co-defendants
in the suit filed by the wife and the sons of defendant No. 1. Even then, the
decree therein could operate as resjudicata as between them if the conditions
therefor are satisfied. The conditions as laid down by this Court are: (i) there
F
must be a conflict of interest between the defendants concerned; (ii) it must
be necessary to decide the conflict in order to give the plaintiff the relief he
claims; (iii) the co-defendants must be necessary or proper parties to the suit
and (iv) the question between the defendants must have been finally decided
inter se between them. [Para 22 J [168-E, FJ
G
Jftikhar Ahmed v. Syed Meharban Ali, ( 1974) 3 SCR 464 and Mahboob
Sahab v. Syed Ismail, (1995] 2 SCR 975, relied on.
l.2. There was conflict of interest between defendant No. 2, the father,
and the appellant since the father was supporting the plaintiff and was
H questioning the sale deed and appellant, the defendant No. 1 therein, was
' -'(
..,.
... ~--.
;
)
j
SUBHASH MAHADEVASA HABID ... NEMASA AMBASA DHARMADAS (D) BY LRS.
} 53
resisting the claim and supporting the sale transaction. It was necessary to A
decide the conflict ~n that suit since the claim of the plaintiff therein and the
defence put up by the appellant made it obligatory for the court to decide the
issue for the purpos~ of finding out whether the plaintiffs therein were entitled
to relief. Defendant No. 2 and the appellant were necessary parties to the suit,
since the suit challenged the alienation made by defendant No. 2 to the
appellant, defendant No. 1 therein. The question was clearly finally decided B
in that suit resulting in dismissal of the challenge to the validity of the sale
effected by defendant No. 2 to defendant No. I. Thus, when that decision attained
finality it also precluded defendant No. 2 from seeking to challenge his sale
to the appellant on the basis that the alienation was beyond his competence as
Karta of the joint family or on the basis that the sale was not binding on the C
joint family or on the basis that the rights of the family had not been validly
conveyed to the appellant [Para 22) (168-F, G, H; 169-A-B)
2.1. The Code of Civil Procedure, 1908 has made a distinction between
lack of inherent jurisdiction and objection to territorial jurisdiction and
pecuniary jurisdiction. Whereas, an inherent lack of jurisdiction may make D
a decree passed by that court one without jurisdiction or void in law, a decree
passed by a court lacking territorial jurisdiction or pecuniary jurisdiction
does not automatically become void. At best it is voidable in the sense that it
could be challenged in appeal therefrom provided the conditions of Section
21 of the Code of Civil Procedure are satisfied. It may be noted that Section E
21 provided that no objection as to place of suing can be allowed by even an
appellate or revisional court unless such objection was taken in the court of
first instance at the earliest possible opportunity and unless there has been
a consequent failure of justice. In 1976, the existing Section was numbered
as sub-Section (1) and sub-Section (2) was added relating to pecuniary
jurisdiction by providing that no objection .as to competence of a court with F
reference to the pecuniary limits of its jurisdiction shall be allowed by any
appellate or revisional court unless such objection had been taken in the first
instance at the earliest possible apportunity and unless there had been a
consequent failure of justice. Section 21A also was introduced in 1976 with
effect from 1.2.1977 creating a bar to the institution of any suit challenging G
the validity of a decre~ passed in a former suit between the same parties on
any ground based on an objection as to the place of suing. The amendment by
Act 104of1976 came into force only on 1.2.1977 when !he second suit was
pending. By virtue of Section 97(1 )( c) of the Amendment Act, 1976, the said
suit had to be tried ~nd disposed of as if Section 21 of the Code had not been
amended by adding sub-Section (2) thereof. Of course, by virtue of Section H
~··
154
SUPREME COURT REPORTS
[2007] 4 S.C.R.
A 97(3) if Section 21A had to be applied, if it has application. But then Section
21 A on its wording covers only what it calls a defect as to place of suing.
,...
(Para 24) (170-A-F)
Saunders v. Anglia Building Society, (1971) A.C. 1004, referred to.
B
2.2. Though Section 21A of the Code speaks of a suit not being
maintainable for challenging the validity of a prior decree between the same
parties on a ground based on an objection as to "the place of suing", there is
no reason to restrict its operation only to an objection based on territorial
jurisdiction and excluding from its purview a defect based on pecuniary
jurisdiction. In the sense in which the expression "place of suing" has been
c used in the Code it could be understood as taking within it both territorial
jurisdiction and pecuniary jurisdiction. Section 15 of the Code deals with
pecuniary jurisdiction and, Sections 15 to 20 of the Code deal with "place of
suing". The heading "place of suing" covers Section 15 also.
[Para 25) [170-F, G)
D
The Bahrein Petroleum Co. Ltd. v. P.J. Pappu, (1966) 1 SCR 46, relied
on.
2.3. Even otherwise, considering the interpretation placed by this Court
on Section 11 of the Suits Valuation Act and treating it as equivalent in effect
E
to Section 21 of the Code of Civil Procedure, as it existed prior to the
amendment in 1976, it is possible to say, especially in the context of the
amendment brought about in Section 21 of the Code by Amendment Act 104
of 1976; that Section 21A was intended to cover a challenge to a prior decree
as regards lack of jurisdiction, both territorial and pecuniary, with reference
to the place of suing, meaning thereby the court in which the suit was
F instituted. As can be seen, the Amendment Act 104of1976 introduced subSection (2) relating to pecuniary jurisdiction and put it on a par with the
objection to territorial jurisdiction and the competence to raise an object!on
in that regard even in an appeal from the very decree. [Para 25) (171-A-B-C)
Kiron Singh v. Chaman Paswan, (1955) 1 SCR 117, Seth Hiralal Patni
G v. Sri Kali Nath, [1962) 2 SCR 747 and The Bahrein Petroleum Co. Ltd v. P.J.
Pappu, [1966) 1 SCR 46, referred to.
,,
2.4. There is no justification in understanding the expression "objection
as to place of suing" occurring in Section 21A as being confined to an
'-
objection only in the territorial sense and not in the pecuniary sense. Both
H could be understood, especially in the context of the amendment to Section 21
SUBHASH MAHADEVASA HABIB "· NEMASA AMBASA DHARMADAS (D) B >' LRS
} 5 5
....
brought about by the Amendment Act, as objection to place of suing. It appears
that when the Law Commission recommended insertion of Section 21A into
the Code, the specific provision subsequently introduced in sub-Section (2) of
Section 21 relating to pecuniary jurisdiction was not there. Therefore, when
introducing sub-Section (2) of Section 21 by the Amendment Act 104of1976,
A
the wordings of Section 21A as proposed by the Law Commission was not B
suitably altered or made comprehensive. But an objection to territorial
jurisdiction and to pecuniary jurisdiction is treated on a par by Section 21.
The placing of Sections 15 to 20 under the heading 'place of suing' also
supports this position. Taking note of the object of the amendment in the light
of the law as expounded by this Court, it would be incongruous to hold that C
Section 21A takes in only an objection to territorial jurisdiction and not to
pecuniary jurisdiction. It is, therefore, to be held that in the second suit, the
validity of the decree in the first suit could not have been questioned based on
the alleged lack of pecuniary jurisdiction. Of course, the suit itself was not
for challenging the validity of the decree in the first suit and the question of
the effect of the decree in the first suit only incidentally arose. In a strict D
sense, therefore, Secti6n 21A of the Code may not ipso facto apply to the
situation. [Para 25) [171-D-H; 172-AI
3. But the fact that Section 21(2) or Section 21A of the Code may not
apply would not make any difference in view of the fact that the position was
covered by the relevant provision in the Suits Valuation Act Section 11 of the E
Suits Valuation Act provided that notwithstanding anything contained in
Section 578 (Section 99 of the present Code cove'ring errors or irregularity)
of the Code of Civil Procedure an objection that a court which had no
jurisdiction over a suit had exercised it by reason of under-valuation could
not be entertained by an appellate court unless the objection was taken in the p
court of first instance at or before the hearing at which the issues were first
framed or the appellate court is satisfied for reasons to be recorded in writing
that the over-valuing or under-valuing of the suit has prejudicially affected
the disposal of the suit. (Para 2611172-A-B-C)
Kiran Singh v. Chaman Paswan, [1955) l SCR 117, relied on.
G
4. In the light of the above, it is clear that no objection to the pecuniary
jurisdiction of the court which tried the first suit could be raised successfully
)
even in an appeal against that very decree unless it had been raised at the
earliest opportunity and a failure of justice or prejudice was shown. Obviously,
therefore, it could not be collaterally challenged. That too not by the plaintiffs H
156
SUPREME COURT REPORTS
[2007] 4 S.C.R.
A therein, but by a defendant whose alienation was unsuccessfully challenged
by the plaintiffs in that suit. In the first suit an issue on the valuation and
court fee paid was raised and the court directed the plaintiffs therein to pay
additional court fee on adjudicating on that issue and the plaintiffs complied
with that direction. In the second suit in which the plaintiffs in the first suit
or their assignee was not a party, the court had no occasion to go into the
B question of the decree in the first suit having been passed by a court which
lacked pecuniary jurisdiction. Even assuming that it has such a jurisdiction,
it could not have ignored the finality of that decree or the legal effect of it,
merely on a finding that the suit was under-valued in the light of the ratio
clearly laid down by this Court in the decision referred to above. Therefore,
C finding in the second suit that the decree in the first suit could be ignored or
the effect of it swept under the carpet because the court which passed that
decree lacked pecuniary jurisdiction was clearly unsustainable in law.
[Para 27) 1173-D-H; 174-A)
5.1. Section 11, when it is applied to two suits, has to be literally
D complied with and one of the requirements of Section 11 of the Code is that
the court which passed the decree in the first suit should have jurisdiction to
entertain the second suit in which the earlier decree is put forward as res
,..
judicata. For, Section 11 provides that no court shall try any suit between the
,,.._
same parties on an issue which was directly and substantially in issue in a
E former suit between the same parties in a court competent to try such
subsequent suit and the issue had been heard and finally decided. Therefore,
in that se~se, in the 'second suit, the decree in the first suit could not have
operated as resjudicata. [Para 29) [174-F-H; 175-AJ
5.2. Therefore, even if the finding in the second suit that the properties
F belonged to the joint family is taken as having attained finality that would not
carry either the mortgagee or the subsequent assignee, defendant No. 6, far
1
in this case, for the reason that the alienation by defendant No. 2 as Karta of
the joint family had also been upheld in the first suit, it beirig clearly held
that the sale was supported by neceS5ity and as being one within the competence
G
of the Karta of the joint family. (Para 30) [175-C-DJ
6. There is also another aspect. The second suit was filed by defendant.
No. 2 challenging the alienation made by him. Though a finding was entered
that the properties belonged to the joint family, the suit was dismissed wholly
in favour of the appellant, the defendant therein. The finding was that the
H alienation effected by defendant No. 2 was perfectly valid. That meant that the
-~.
)
)
SUBHASH MAHADEVASA HABIB '" NEMASA AMBASA DHARMADAS (0) BY LRS.
15 7
challenge of defendant No. 2 to the alienation had failed in its entirety. In A
such circumstances, it is highly doubtful whether a finding rendered against
the appellant, the defendant, in a suit that was wholly dismissed in his favour
would operate as resjudicata. IPara 31) (175-E, F)
7. When this is the position, there was no necessity for the first
appellate court or the High Court to go into the question whether the property B
in the hands of defendant No. 2 held by him for and on behalf of the family
consisting of himself and his sons or it was held by him as his own. There is
considerable doubt about the antecedents of the property and the partition
among defendant No. 2 and his brothers alone could not prove the character
of the properties in the hands of defendant No. 2. It depended on whether C
defendant No. 2 and his brothers inherited the properties through a female
ancestor or a male ancestor. The suit for redemption was filed by the plaintiff
as against the mortgagee, defendant No. 1. There is no valid defence put
forward by the mortgagee against the redemption of the mortgage. Defendant
No. 6 (defendant No. 11 in the other suit) had not derived any right in the
properties either from defendant No. 2 or from his wife and sons in view of D
the prior assignment by defendant No. 2 in favour of the plaintiff and by virtue
of the adjudication in the first suit, it has to be held that defendant No. 6, as
assignee, had no interest in the properties sought to be redeemed and could
not put forward any valid defence to the suit for redemption filed by the
plaintiff. If so, the decrees now passed by the High Court have to be found to E
be unsustainable. The High Court has asked itself the wrong question. It has
not considered whether defendant No. 6 could claim to have derived any right
over the properties or in the equity of redemption on the basis of the
assignment in his favour. Therefore, the decrees of the High Court call for
interference. (Para 34) (177-A-E)
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1449 of2007.
From the Final Judgment and Order dated 07.03.2002 of the High Court
ofKarnataka at Bangalore in R.S.A. No. 472 & 435of1998.
WITH
C.A. No. 1450of2007
S.N. Bhat, D.P. Chaturvedi and N.P.S. Panwar for the Appellant.
F
G
Amit Chadha, G.C. Hiremath, Kuna! Sinha and Shankar Divate for the H
158
SUPREME COURT REPORTS
(2007] 4 S.C.R.
A Respondents.
The Judgment of the Court was delivered by
P.K. BALASUBRAMANY AN, J. Leave granted.
B
1. The first of the Civil Appeals challenges the decree of the High Court
c
ofKamakata in R.S.A. Nos. 472 and 435of1998, both arising out ofO.S. No.
67 of 1975. The second challenges the decree in R.S.A. No. 865 of 2000,
arising out of O.S. No. 800 of 1992. Both the suits were for redemption and
the decrees passed therein are questioned in these appeals by the common
plaintiff in them.
2. Three items of properties situated in Hubli City in the State of
Kamataka are the subject matters of these two suits. Whereas in the first suit
O.S. No. 67of1975, we are concerned with C.T.S. No. 1015/A/20 having an
extent of 29.38 square yards, in O.S. No. 800 of 1992 we are concerned with
D C.T.S. No. 1015/A/19 having an extent of 14.7 square yards and 1028/2A
having an extent of 75 square yards. As seen recited in a deed of partition
dated 14.2.1961 entered into by three brothers belonging to a Hindu Mitakshara
Family, the said items along with other items belonged to their joint family.
But there is considerable dispute about the antecedents of the .Properties or
the title to the properties. In that partition, the above items were allotted to
E Chandappa Balappa Sangam, original defendant No. 2, in these suits. He
along with his two minor sons who. are defendant Nos. 3 and 4 executed a
mortgage in respect of all the three items on 12.8.1963 in favour ofDharmadas,
defendant No. I in the suit. This was followed by a deed of further charge
dated 28.8.1963. Subsequently, on I 0.6.1964, defendant No. 2 acting for himself
and as the guardian of his minor sons, defendant Nos. 3 and ~, executed .a
F simple mortgage in respect of the properties to one Hemadi, a moneylender.
4
\
The document recites that a sum of Rs. 25001- was taken as a loan for his
'-
trade. It may be noted that the deed of partition recites that the family was
conducting a joint trade in firewood. On 15.10.1970, defendant No. 2, on his
own, sold the properties, rather, the equity of redemption, to Habib, the
G plaintiff in these suits for redemption. The sale deed recites that the properties
were outstanding on three mortgages and the sale was being effected for
family necessity and to pay off debts and to create capital for business. The
best price had been offered by the purchaser. It purports to convey the entire
rights in the property. It also contains an assertion that the seller, defendant
No. 2, was the absolute owner of the properties, having a marketable title. The
H mortgage to defendant No. I and further charge are referred to as encumbrances
)
SUBHASH MAHADEVASA HABIB i: NEMASA AMBASA DHARMADAS (D) BY LRS. [BALASUBRAMANY AN. J.] J 59
on the properties.
A
3. It is seen that the wife and sons of defendant No.2 filed O.S. No. 61
of 1971 arraying Habib, the assignee from defendant No.2, and defendant
No.2 as defendants, for a declaration that the sale deed executed by defendant
No.2 in favour of Habib was bogus and not binding on the plaintiffs or in
the alternative, for a declaration that the sale did not affect their shares in the B
properties and was not binding on their shares and for a decree for permanent
injunction restraining Habib from taking possession of the suit properties.
4. It was pleaded in the plaint that:
"Defendant No. 2 was the manager of the joint Hindu family consisting C
of himself and the plaintiffs. The joint family owned and possessed
and enjoyed the suit properties. It has now transpired that without the
knowledge of the plaintiffs, the second defendant, on 15/1011970 sold
the suit properties with the interest of the plaintiffs therein to the first
defendant purporting to be for a sum of Rs. 10,000/-. The plaintiffs D
and defendant No.2 being coparceners each have I/4th share in the
suit properties, which have been alienated by the second defendant
without legal necessity and without considerations of family benefit.
Perusal of the recitals of the sale deed showed it to be one without
consideration, 'bogus' and having been brought about by fraud,
misrepresentation and undue influence. The sale consideration shown E
in the document is also too inadequate. The plaintiffs on becoming
aware of the impugned transaction, issued a legal notice to the first
defendant, and thereafter instituted this suit, the cause of action for
which arose on 15/10/1970."
5. In the written statement, Habib who was defendant No. l therein, F
spoke of the prior mortgages in favour of others and of the mortgage in
favour of Hemadi being executed by defendant No.2 on his own behalf as well
as on behalf of his minor sons and the mortgage transactions being entered
into by defendant No.2 for family necessity and family benefit. Defendant
No.2 found himself in a position where he had no alternative to selling the G
properties for clearing off his debts. Hence he offered to sell the suit properties
to Habib with the object of paying off the earlier mortgages. Habib agreed to
purchase. Subsequent to the purchase Habib had paid off the amounts due
to Hemadi and had obtained a release from his heirs. The transaction he had
entered into was a bona fide one. The suit had been under-valued. There was
no cause of action as against him. Defendant No. 2, who was defendant No.2 H
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A in that suit as well, contended that the properties were joint family properties.
He further pleaded that the earlier mortgages were binding on the plaintiffs
and there was pressure on the estate justifying a further borrowing and he
had borrowed a sum of Rs. I 0,000/-. The document writer had induced him
to execute the sale deed impugned therein making him believe that it was a
deed of mortgage to secure a borrowing and the repayment of Rs.10,000/-.
B Thus, ·a fraud had been played on him in getting a sale deed executed. He
alone was not competent to enter into a transaction in respect of the properties.
6. The trial court framed issues on whether the suit deed was got
executed by exercise of fraud, undue influence and misrepresentation, whether
C the plaintiffs proved that the sale deed was not binding on them, did defendant
No. I Habib prove that the sale was for payment of antecedents debts and
legal necessity and was effected after due enquiry and binding against the
plaintiffs, whether the suit was valued properly for the purpose of court fee
and whether Habib prov~d that the alleged sale transaction was for legal
necessity or for benefit of the estate and that it is binding on the plaintiffs.
D
7. The court heard the issue of valuation as a preliminary issue. It held
that the suit had been under-valued. The plaintiffs were directed to pay
additional court fee. The deficit court fees was made up by the plaintiffs.
Thereafter, after trial, it found that the plaintiffs had not pleaded properly a
case of fraud, misrepresentation and undue influence and even otherwise
E there was no adequate or acceptable evidence to find that the suit transaction
was vitiated by fraud, misrepresentation or undue influence. The evidence on
record was elaborately considered. The court then found that the plaintiffs
have not proved that the sale deed executed by defendant No.2 was not
binding on them. While arriving at that finding, the court held that it had to
F first decide the nature of the property notwithstanding the dearth of pleadings
on the side of the Habib on that aspect. The court held that the suit properties
were admittedly in the ownership of the mother of the second defendant and
the same having been inherited by defendant No.2 from a female ancestor, the
properties were his separate properties. The law on the subject was discussed
by the court while arriving at that finding. The court also held that there was
G no material on the basis of which it could hold that there was a blending of
the properties by defendant No.2 on the basis of which the joint family
·character of the properties could be found. The court then proceeded to
consider the question whether the alienation was binding on the plaintiffs on
the basis or on the assumption that the suit properties were the joint family
H properties of the plaintiffs and defendant No.2. The court held that even if
-
SUBHASH MAHADEVASA HABIB 1•. NEMASA AMBASA DHARMADAS (D) BY LRS. [BALASUBRAMANYAN. J] J 6 J
the properties were treated to be joint family properties, the alienation by A
defendant No.2 was within the limits of the powers vested in him as the Karta
of an Undivided Hindu Family and consequently, the sale deed executed by
him was sustainable both in law and on facts. It was binding on the joint
family. The plaintiffs could not successfully challenge the same. Thus, the
trial court upheld the whole title conveyed to Habib, defendant No. I therein, B
by defendant No.2, the father. The suit was thus dismissed on 18.2.1974 .
...,,
8. An appeal, R.A. 191 of 1991 was filed from the said judgment and
decree by the plaintiffs in that suit. Defendant No. 2, his wife and his sons
then purported to sell their rights in the property to defendant No.6 by deed
dated 9.1.1975. It recited the factum of the earlier sale to Habib and asserted c
that it was only intended to be a mortgage. The filing of O.S. No. 61 of 1971
and its dismissal was recited and the filing of an appeal against that decree
was also recited. The filing of O.S. No. 4 of 1972 was also recited. The
purchaser, defendant No.6 was asked to get himself impleaded in both and
to pursue the litigation and get cancelled that sale deed. Defendant No. 6 did
not choose to get himself impleaded in the appeal or in the suit O.S. No. 4 D
of 1972. The appeal R.A. I 9 I of I 99 I was dismissed as not pressed on
9.7.1976. Thus, the decree in O.S. No. 61of1971 became final as against the
wife and sons of defendant No.2 and their assignee to the extent of their
alleged rights or shares in the properties.
9. The consequence was that the challenge of the wife and sons of E
defendant No.2 on behalf of the family to the alienation effected in favour of
Habib by defendant No.2 failed. The title of the family was thus held to have
passed to Habib, treating the property conveyed to be joint family property.
This decision was rendered in favour of Habib, the assignee, in the presence
of the father, defendant No.2 therein, as well. On the day defendant No.2, his F
)
wife and sons sold their alleged rights to defendant No.6 herein, the joint
family or defendant No.2, his wife and sons had nothing to convey since the
decree in O.S. No. 61 of 1971 stood confirmed, the appeal against it having
been dismissed, subject of course to any relief being granted to defendant
No.2 in the suit OS 4 of 1972, he had himself filed, challenging the sale.
G
10. Even while O.S. No. 61 of 1971 was pending, defendant No.2 who
executed the sale deed, had himself filed O.S. No. 4 of 1972 challenging the
...)
sale in favour of Habib. Among other issues, two issues were raised therein
as to whether the court in which O.S. No. 61 of 1971 was filed by the wife
,.
and sons of defendant No.2 (the plaintiff in O.S. No. 4of1972) had pecuniary H
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[2007) 4 S.C.R.
A jurisdiction to try O.S. No. 61 of I 97 I and whether the suit O.S. No. 4 of 1972
Ywas not maintainable in view of the filing ofO.S. No. 61of1971 in the Munsif
court by the wife and sons of the plaintiff in O.S. No. 4 of I 972. Neither the
wife of defendant No.2 nor his sons were parties to the suit. The court even
though it dismissed the suit, held that O.S. No. 61 of 1971 which had by that
B
time been dismissed by the Munsiffs court, was filed in a court having no
pecuniary jurisdiction to entertain that suit and therefore the decree in O.S.
No. 61 of 1971 was one without jurisdiction. Hence the decision therein would
not operate as res judicata and estoppel by record in the suit filed by the
father (the present defendant No.2). On a finding that no vitiating circumstance
to invalidate the sale is established, the trial court dismissed the suit. An
c appeal R.A. No. 16 of 1981 filed by the plaintiff in that suit (the present
defendant No.2), challenging the dismissal of his suit, was dismissed and a
second appeal taken as R.S.A. No. 92 of 1985 was also dismissed. What
requires to be emphasised is that Habib was a party both to O.S. No. 61 of
1971 and to O.S. No. 4 of 1972. In fact, the suits were directed against him.
D
In the first suit filed by the wife and children, the sale in his favour was
upheld both on the basis of the sale being supported by necessity and
benefit to the joint family of defendant No.2 and his sons and as being one
within the competence of defendant N o.2 as the Karta of the joint family and
also on the basis that the property was the separate property of defendant
No.2 and the sale was not vitiated. In the latter suit, the sale was upheld on
E the finding that defendant No.2, the plaintiff therein, had failed to establish
any element to vitiate or invalidate the sale. While doing so and dismissing
the suit filed by defendant No.2, the court held that the decree in O.S. No.
61 of 1971 was passed by a court having no pecuniary jurisdiction and hence
the decree therein would not operate as res judicata. It was also cursorily
F
held that the properties belonged to the joint family of defendant No.2. It has
to be noted that both Habib, the present plaintiff and the present defendant
No.2 were co-defendants, being defendants 1 and 2 in O.S. No. 61 of 1971 and
they were respectively the plaintiff and the defendant in O.S. No. 4 of 1972.
11. As noticed earlier, defendant No.2, his wife and defendants 3 and
G 4, his sons, purported to sell their rights to defendant No.6 in O.S. No. 67 of
197 5 (He is defendant No. I I in O.S. No. 800 of I 992). Now Habib, on the basis
of the assignment from defendant No.2, filed the suit O.S. No. 67of1975 for
redemption of the mortgage in favour of defendant No. I Dharmadas. On the
(.
ground that the deed of mortgage was not produced, the suit was confined
to only one item, the extent in C.T.S. No. 1015/A/20, on the basis of an
H admission of a subsisting mortgage in the written statement. Habib therefore
SUBHASH MAHADEVASA HABIB v. NEMASA AMBASA DHARMADAS (0) BY LRS. [BALASUBRAMANYAN, I] J 63
filed a second suit O.S. No. 800 of I 992 for redemption of the other two items A
C.T.S.Nos. 1015/A/19 and 1028/2A-I. In both the suits, the assignee from
defendant No.2, his wife and sons was imp!eaded as a defendant; defendant
No. 6 in O.S. No. 67 of I 975 and defendant No. I I in O.S. No. 800 of 1992.
12. In O.S. No. 67 of 1975, the parties joined issue on whether the
properties belonged to defendant No.2 or they were the joint family properties B
of defendants 2, 3 and 4, defendant Nos. 3 and 4 being sons of defendant
No.2. Issues were also framed on the finality of the findings in O.S. No. 6 I
of 1971 and on the effect of the decision in O.S. No. 4 of 1972. The plea of
the res judicata loomed large. The trial court held that the finding on the
nature of the property in O.S. No. 61 of 197 I and the decree therein cannot C
be ignored as a nullity and that the finding in O.S. No. 4 of 1972 does not
bar the court from deciding the issue of the title to the properties. No
evidence was adduced by defendants 2 to 4 to establish that the properties
were their joint family properties. None of them even went to the box to speak
to such a case. Only defendant No.6 attempted to produce evidence in that
regard. After discussing the evidence, that court decreed 0.S. No. 67 of 1975 D
for redemption of the item involved therein, finding that the property was the
separate property of defendant No.2. It therefore fully upheld the sale to
plaintiff Habib, of the equity of redemption and held that Habib was entitled
to redeem the mortgage.
13. Defendant No. 1, the mortgagee, and defendant No. 6, the assignee E
from defendants 2, 3 and 4 of their purported rights, filed R.A. No. 104of1992
challenging the decree of the trial court. The lower appellate court held that
the judgment and decree in O.S. No. 61 of 1971 was passed by a competent
court having pecuniary jurisdiction. It also noticed that the findings in O.S.
No. 61 of 1971 were not set aside by any court. Proceeding to discuss the F
)
merits, the appellate court held that the finding in O.S. No. 4 of 1972 being
that the properties were the properties of the joint family of defendant No.2,
the said finding having become final, it had to be held that the properties were
properties of the joint family. On discussing the evidence, that court ended
up by holding that defendant No.2 had only a I/4th share in the properties
and hence his assignment to Habib, the plaintiff conferred on Habib only a G
I/4th interest in the equity of redemption. It did not specifically advert to or
deal with the consequence of the finality of the decree in OS No. 4 of 1972.
It rejected the case of defendants I and 6 that the mortgage already stood
redeemed. The appellate court modified the decree of the trial court and
passed a preliminary decree for redemption by permitting the plaintiff to H
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SUPREME COURT REPORTS
[2007] 4 S.C.R.
A redeein the suit property only to the extent of I /4th share.
'f
14. Challenging this decree of the lower appellate court, both sides filed
second appeals in the High Court. The plaintiff Habib, filed R.S.A. No. 472
of 1998 and defendants 1 and 6 filed R.S.A. No. 435 of 1998. Habib questioned
the finding that he was entitled to redeem only I/4th share. Defendants 1 and
B 6 questioned the rejection of their plea that the ~ortgage already stood
redeemed. The High Court agreed with the approach and conclusion of the
lower appellate court and confirming the decision of the lower appellate court,
....,.
dismissed both the second appeals. The decision in these second appeals is
'•
challenged in the Civil Appeal arising from the Special Leave Petition (Civil)
c Nos. 4274-4275 of 2003. Defendants 1 and 6 have not appealed against it.
15. O.S. No. 800 of 1992 was filed by Habib, also the plaintiff in the
earlier suit, for redemption of items 2 and 3 comprised in the mortgage and
the sale in his favour. Defendant No. 1 and defendant No. 11, the assignee
(defendants 1 and 6 in the earlier suit) were the main contesting defendants.
D In the said suit, issues were raised on whether the suit was barred by res
judicata and whether the suit properties were self-acquired properties of
defendant No.2, the assignor of the equity of redemption to the plaintiff. The
case of defendant No. 11 on res judicata was based on the decision in O.S.
No. 67 of 1975. The plaintiff Habib, obviously relied on the findings in O.S.
E
No. 61 of 1971. The trial court accepted the argument that successive suits
for redemption was maintainable so long as the right to redeem subsisted.