Vs. S. Thiru Venkita Reddiar & Ors  INSC 207 (7 February 1996)
K.Ramaswamy, K.Hansaria B.L. (J)
1996 AIR 1293 1996 SCC (3) 289 JT 1996 (2) 447 1996 SCALE (2)323
O R D
appeal by special leave arises from the order of the learned single Judge of
the Kerela High Court made on June 24, 1977
in CRP No.3375/76. The facts are fairly not in dispute. O.S. No.95/53 was filed
in the court of the Sub-ordinate Judge at Quilon by Patai Central Bank Ltd. to
recover the amounts due from D.J. Gonzago, the second respondent. Certain
properties appended to the Schedule to the plaint and also items 1 to 7 of the
petition were attached before judgment under Order 38 Rule 6, Civil Procedure
Code, 1908 [for short the 'Code' ]. On Apri1 3, 1954, a compromise decree was
made empowering the decree holder to have the scheduled properties including
item Nos. 1 to 7 of the additional properties mentioned above. In the
meanwhile, the bank went into liquidation. The liquidator brought those
properties to sale. With permission of the court those properties were
purchased by the decree-holder in execution on June 26, 1969 and the sale was confirmed. On April 25, 1974, these properties, the subject matter in this case, were sold
by the liquidator to the first respordent-Thiru Venkita Reddiar.
appellant S.Noordeen, plaintiff in O.S. No.3B/60 on the file of the court of
the Subordinate Judge, Quilon filed a suit against D.J. Gonzago for recovery of
the money claim. On March
28, 1961, the money
decree was passed. The properties covered under items 1 to 7 of the petitior,
were sold in execution of the decree in O.S. No.95/53 after due attachment on January 13, 1969. The sale was confirmed on September 13, 1974. The appellant, therefore, filed
E.A. No.57/75 to declare that the sale of properties of the in execution of the
decree in O.S.95/53 at items 1 to 7 of the compromise decree was not valid and
it does not bind him. That was upheld by the executing Court and the District
Court in CMA. Thus the respondent came to file CRP in the High Court. The High
Court has held that though items 1 to 7 were not part of the schedule mentioned
properties, they became subject matter of the proceedings in O.S.No.95/53 in
which compromise decree, ultimately passed on 3.4.1954, properties were under attachwent
from 1953. Therefore, they became part of the suit properties. Consequentially,
they are not required to be compulsorily registered. The decree thereby is not
liable to be annulled. The appellant does not get any valid right to the
properties since they have already been sold.
learned ccunsel for the appellant contended that in view of the fact that items
1 to 7 of the compromise decree dated 3.4.54 were not the subject matter of
O.S. No.95/53 for recovery of the debt due fron Gonzago, the decree was
required to be registered under Section 17(1) of the Registration Act, 1908 for
short, the 'Act'] which was not done. Therefore, the right, title and interest
of the judgment-debtor Gonzago was not divested. The appellant having purchased
the property and having got the properties registered in the Court sale, he got
better title. The view of the High Court, therefore, was wrong in law. We find
no force in the contention.
necessary to clear the factual position which is not faily in dispute. There
was attachment before judgment in O.S. No. 95/53 subsisting till June 26, 1969, the date on which the property
items were sold in execution and the liquidator had become the purchaser from
the Court sale. The sale thereof was confirmed. The entire sale consists of
items of the Schedule and items 1 to 7 mentioned in the petition in addition to
the Schedule. It is seen that there was a compromise between the Bank and the
thereto, the decree was passed on April 3, 1954 comprising of all the properties.
question, therefore, emerges : whether the decree passed under the compromise
would attract exception engrafted in clause (vi) of sub-section (2) of Section
17 of the Act? The attachment before the judgment is an encumbrance preventing
the owner of the property to create encumbrance, sale or create charge thereon.
Attachment before judgment does not create any right, title or interest, but it
disables the judgment- debtor to create any encumbrances on the property.
when decree is passed, the property forms part of the decree so as to enable
the decree-holder to proceed with against the property to realise the
decree-debt, The question is: whether the properties which are not part of the
schedule mentioned in the suit will nonetheless be the part of the decree? It
is not mandatory that the property should be specifically mentioned, it is so
only in a mortgage suit under relevant clauses of Order 34 of the Code. The
decree holder is entitled to proceed against those items mentioned in the
petition. The decree would be executed as provided in other mode of the decree.
In other words, attached properties are also liable to be sold as integral part
of the decree. The properties, though do not form part of the Schedule, would
also become part of the decree.
seen that in addition to the schedules, by way of separate application, items 1
to 7 had also been attached under Order 38 Rule 6 of the Code. In the compromise,
the judgment-debtor agreed that these properties would be proceeded with in
execution of the decree. Thus, the properties mentioned in the Schedule as well
as the properties mentioned separately as items 1 to 7 became integral, part of
question is: whether proceedings under Order 38 Rule 6 of the Code is part of
the civil proceedings? It is seen that when an application under Order 38 Rule
1 is made for attachment before judgment, as envisaged in clauses (i), (ii),
(iii) and (iv), if the defendant furnishes security, then the need to make an
attachment of the properties does not arise. On his failure to do so, Rule 6
gives power to the court to attach the properties before judgment where no
cause is shown or security is not furnished. Then mode of attachment has been
provided in Rule 7. It says that "(s)ave otherwise expressly provided, the
attachment shall be made in the manner provided for the attachment of property
in execution of a decree." Rule 8 provides adjudication of claim to
property attached before judgment. The procedure has been provided for
attachment under Order 21 Rule 38 and adjudication under Order 21 Rule 528.
141 of the Code provides that "(t)he procedure provided therein in regard
to suits shal1 be followed, as far as it can be made applicable, in all
proceedings in any Court of civil jurisdiction". The Explanation amplifies
the doubt that the expression "proceedings" includes proceedings
under Order 9, but does not include any proceeding under Article 226 of the
Constitution". It would thus be clear that the proceedings envisaged for
adjudication under Order 38 Rule B read with Order 21 Rule 58, is a civil
proceeding. When attachment of the properties has been made before the
judgment, they become part of the civil proceedings in the suit. Thereby they
become part of the decree.
question is: whether such a decree is compulsorily registerable? This Court in Bhoop
Sinqh vs. Ram Singh Major [(1995) 5 SCC 709 = AIR 1996 SC 196] has considered
the question whether a compromise decree is compulsorily registerable. In that
case, there was no pre-existing right to the properties between the parties,
but a right was sought to be created for the first time under the compromise.
The High Court had taken the view that it was not compulsorily registerable
instrument under Section 17 of the Act. This Court considered elaborately the
circumstances in which clause (vi) of sub-section (2) of Section 17 would come
into play and stated in paragraph 18 thus :
legal position qua clause (vi), on the basis of the aofresaid discussion, be summarised
as below :
Compromise decree if bona fide, in the sense that the compromise is not a
device to obviate payment of stamp duty and frustrate the law relating to
registration, would not require registration. In a converse situation, it would
the compromise decree were to create for the first time right, title or
interest in immovable property of the value of Rs. 100 or upwards in favour of
any party to the suit the decree or order would require registration.
the decree were not to attract any of the clauses of sub- section  of
Section 17, a was the position in the aforsaid Privy Council and this Court's
cases, it is apparent that the decree would not require registration.
the decree were not to embody the terms of compromise, as was the position in
Lahore case, benefit from the terms of compromise cannot be derived, even if a
suit were to be disposed of because of the compromise in question.
the property dealt with by the decree be not the "subject- matter of the
suit or proceeding", clause [vi] of sub-section  would not operate,
because of the amendment of this clause by Act 21 of 1929, which has its origin
in the aforesaid decision of the Privy Council, according to which the original
clause would have been attracted, even if it were to encompass property not
litigated." It would be seen that if the decree were not to embody the
terms of the compromise, as was the position in other cases, the benefit in
terms of the compromise cannot be derived even if a suit were to be disposed of
because of the compromise in question. If the property dealt with by the decree
is not "subjectmatter of the suit or proceeding", then clause (vi) of
sub-section (2) would not operate because of the amendment of this clause by
Act 21 of 1929, which has its origin in the aforesaid decision of the Privy
Council, according to which the original clause would have been attracted even
if it were to encompass property not litigated.
17(1) of the Act provides that the document shall be registered if the property
in which they retate is an instrument or non-testamentary instruments which
purport or operate to create, declare, assign, limit or extinguish, whether in
present or in future, any right, title or interest, whether vested or
contingent, of the value of one hundred rupee and upwards, to or in immovable
(2) gives exception. It says that:
in clauses (b) and (c) of sub-section (1) applies to- x x x x x x x
immovable properties whose sale is impugned are not properties other than the
subject matter of the suit or proceedings. Therefore, the view of the High
Court is correct in law.
seen, as referred to by the learned single Judge, the Madras High Court and the
Patna High Court had taken the same view in Rambas vs. Jagarnath Prasad [AIR
1960 Patna 179], M.P. Reddiar vs. A. Ammal [AIR 1971 Madras 182], Govindaswami
vs. Rasu [AIR 1935 Madras 232] and C.M. Pillai vs. H.S.S.S.S. Kadhiri Thaikal
[AIR 1974 Madras 199]. Contra views were taken in Chhotibai Daulatram vs. Mansukhlal
Jasrai [AIR 1941 Bombay 1] and Ganeshlal vs. Ramgopal [AIR 1955 Raj.17].
case (Bombay High Court), it was a case of simple money decree and the
properties were not attached before judgment, but they were sold in execution
of the decree on compromise. The sale was sought to be impugned on the ground
that they were not registered. Therefore, they were held to be compulsorily registerable,
by operation of Section 17(1) of the Act. Section 17(2)(vi) was not attracted.
learned Judge had proceeded with on the premise that this exception would apply
to other proceedings under special laws but not to the civil proceedings.
view taken by the Bombay High Court is not correct in law. The Rajasthan High
Court had merely followed the view of the Bombay High Court without any further
reasons. Accordingly, we hold that the view of the Bombay High Court as well as
that of the Rajasthan High Court are not correct in law.
appeal is accordingly dismissed. No costs.