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PETITIONER: SUPREME GENERAL FILMS EXCHANGE LTD.

       Vs.

RESPONDENT: HIS HIGHNESS MAHARAJA SIR BRIJNATH SINGHJI DEO OF MAIHAR &OR

DATE OF JUDGMENT04/08/1975

BENCH: BEG, M. HAMEEDULLAH BENCH: BEG, M. HAMEEDULLAH GUPTA, A.C.

CITATION:  1975 AIR 1810            1976 SCR  (1) 237  1975 SCC  (2) 530  CITATOR INFO :  D          1981 SC 981  (2,3,4,12)

ACT:      Specific Relief  Act, 1877_S.  42-Scope of  Transfer of Property Act s. 52 scope of.

HEADNOTE:      The plaintiff-respondents was a mortgagee in respect of a cinema  theater of  which the  appellant claimed  to be  a lessee in  occupation. A  compromise decree  . was passed on 7th May,  1960 in the suit filed by the plaintiff-respondent against the  mortgagor be  which  it  was  agreed  that  the amounts due  would be  released by  the sale of the theater. The  Central   Bank  of   India,  another  creditor  of  the mortgagor, assigned  its rights  under  the  decree  to  the plaintiff-respondent. The theater was attached in the course of the  execution of  the decree. The original lease or 1940 which the  appellant company  had entered  into, expired  in 1946 but  the company  continued as  a tenant  holding  over until the  impugned lease  deed of  1956 was  executed.  The appellant company  filed a  suit in  1954 for  the  specific Performance of  the agreement  to lease.  The lease  deed of 1956 purported  to carry  out the  terms of  that compromise decree.  In  this  suit  the  plaintiff-respondent  was  not imploded as  a party.  The plaintiff-respondent claimed that the lease  of 1956  was void  as it was struck by ss. 52 and 65A of the Transfer of Property Act and s. 64 of the Code of Civil Procedure.  The appellant  company on  the other hand, claimed that  a suit  of the  nature filed  by the plaintiff respondent did  not lie as it fell outside the purview of s. 42 of the Specific Relief Act, 1877. The trial court decreed the plaintiff-respondents  suit. The  appellant’s appeal was dismissed by the High Court.      Dismissing the appeal, ^      HELD: (1)  The circumstances  in  which  a  declaratory decree under  s. 42,   Specific Relief Act should be awarded is a  matter of  discretion depending  upon he facts of each case. A  complete stranger whose interest is not affected by an other’s  legal  character  or  who  has  no  interest  in another’s property could not  get a declaration under s. 42, Specific Relief Act with reference to the legal character or

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the property  involved. Such  is not  the present  case. The plaintiff respondent  had not only the rights of a mortgagee decree-holder with  regard to  the property involved, but he was also  the assignee  of the  rights of the Bank; .  which had got  the property  in question  attached in execution of its be  fore he  filed his  suit,  The  plaintiff-respondent possessed sufficient  legal interest  in the  theater  as  a mortgagee are  well as  an assignee  of a decree-holder, who had got  the property attached be fore he filed his suit, so as to  enable him to sue for- the declarations he sought. Me was not  seeking a  merely  whimsical  or  eccentric  or  an unreasonable declaration  of a  right in  property  with  no enforceable  legal   claims  over   it  which  could  remain unafrected by  the appellant’s  claims as  a lessee.  [242G- 243C] .      Sheoparsan Singh  &  ors.  v.  Ramnandan  Singh  (since deceased) & ors. 43 I.A. 91 held inapplicable.      Deokali Koer  v. Kedar  Nath ILR 39 Cal. 704 @ 707. Bai Shri Vaktrba  Thakore Agarsinghji  Raisinghji ILR  34 Bombay 676 @  680; Kisholi Lal v. Beg Raj & ors AIR 1952 Punjab 387 and Ramaraghava Reddy & ors. v. Konduru Seshu Reddy & 2 ors. [1966] (Suppl.) SCR p. 270 @ 277 referred to.      (2) The  plaintiff needed  a  declaration  and  in  the circumstances of  the case  he declaration  sought for could not be  reasonably denied  to him.  From the pleadings it is clear that  the appellant had actually denied the plaintiff- respondent’s ..  rights as a mortgagee and also the validity of the  compromise decree.  The respondents  had  reasonable grounds to  apprehend that  the appellant  will rely  upon s alleged lease  to resist delivery of actual possession to an auction purchaser.  The  existence of  lessee rights would certainly affect the price which  an auction  purchaser would  be prepared to pay for the property. [243C-F] 2-L839Sup.CI/17 238      (3)  As   the  special   doctrine  of  lis  pendens  is applicable the  purported lease of 1956 was availed from the outset. The  lease of  1956 purported to create entirely new rights purported  lite.  It  was  therefore  struck  by  the doctrine of lis pendens embodied in s. 52 of the Transfer of Property Act.  The terms  of the  3 compromise decree in the appellant‘s Suit against the mortgagor and the lease deed of 1956 purported  to confer  upon the  appellant  new  rights. There are  good deed  for suspecting  that the compromise in the suit for specific performance was adopted as a device to get round  legal difficulties in the execution of the  lease of ]956 in favour of the appellant company. [243G-244A, C] , B      Bishan Singh  & ors. v. Khazan  singh & Anr. [1959] SCR 878 and  Jayaram -Mudaliar   &  ors.,... [1973] (1) SCR 139, referred to.      (4) The  lease of  1956 was struck by the provisions of s. 64 C.P.C. Section 64 constitutes a special application of the doctrine  of lis  pendens in  the circumstance specified there.  The   order  of  the  trial  court  shows  that  the compromise had been arrived at between the decree-holder and the judgment-debtor under which the decree-holder had agreed to lift  attachment of  property except  with regard  to the theater which  was to  continue. It is, therefore, difficult to holder  had   that the  concurrent findings  of the trial court and  the High  Court that  the theater was attached in execution of  a decree  and  that  this  attachment  was  in existence when  the impugned  lease was executed in 1956 are erroneous. [244G-245A]

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JUDGMENT:      CIVIL APPELLATE  Jurisdiction: Civil Appeal No. 1041 of 1968.      Appeal by  Special Leave  from the  Judgment and Decree dated the  30th day  of August,  1967 of  the Madhya Pradesh High Court in First Appeal No. 8 of 1966 and      Special Leave  Petitions (Civil)  Nos. 2494  & 2533  of 1974      From the  judgment and  order dated the 30th September, 1974 of  the Madhya  Pradesh High  Court in Civil Review No. 456 of 1974.      D. V.  Patel, P.  R. Naolokar,  H. K.  Puri and  K.  K. Mohan, for the appellant (In C.A. No. 1041/68).      A. K.  Sen . K. Gambhir and K. P. Gupta, for respondent no. (V) & 2.      T. V.  S. N.  Chari  and  Urmila  Sirur,  for  L.Rs  of respondent 3 (In C.A No. 1041/68).      D. V.  Patel, N.  M. Ghatate, 5. Balnkrishnan and P. R. Naolakar for petitioners (In S.L.Ps.).      A. K.  Sen, S.  K. Mukherjee,  K. P  Gupta  and  S.  K. Gambhir, for respondent No. 1 (In both the S.L.Ps.)      T.V. S. N. Chari and Urmila Sirur, for respondent no. 2 (In     both      the      S.I      .Ps).      The judgment of the Court was delivered by      BEG, J.  The plaintiff-respondent  had filed  a suit in the  District   Judge’s  Court   at  Jabalpur   claiming   a declaration  that   a  lease   executed  in  favour  of  the Defendant-Appellant, M/s.  Supreme  General  Films  Exchange Ltd., (hereinafter referred to as ’the Company’), in respect of Strider Vilas Theater (now known as Plaza Talkies) by its former owners.  Jiwan Das  Bhatia and  his sons (hereinafter referred to  as ’the  Bhatias’),  is  void  and  ineffective against the plaintiff’s rights under 239 decrees obtained  in Civil Suit No. 15A of 1954 dated 7-S-60 and in  Civil  Suit  No.  3B  of  1952  dated  20-4-1954  in execution of  which  the  Theater  had  been  attached.  The plaintiff wanted  the declaration also to make it clear that an auction purchaser, purchasing the theater in execution of either of  the  two  decrees,  gets  rights  free  from  any obligation towards  the Defendant-Appellant  under the  void lease      The former  owners of  the thwarter,  the Bhatias,  had borrowed Rs.  2,50,000/- from  the  Plaintiff-Respondent,  a Maharaja, against the security of bales of cotton. On 29-12- 1951, they executed a registered mortgage deed in respect of the Plaza Theater in favour of the plaintiff as the price of pledged goods  was insufficient  to satisfy  the  dues.  The plaintiff, unable  to recover  the amount  due, had  brought Civil Suit  No. 15A of 1954 in which a compromise decree was passed on  7-5-1960, in  terms of  an agreement  between the parties that  amounts clue  will be  realized by the sale of Plaza theater.      The Central Bank of India, another creditor of Bhatias, had brought  Civil Suit No. 3B of 1952 and obtained a decree for Rs.  1,24,000- on  29-4-]952. Rights  under this  decree were assigned  in favour  of the  plaintiff-respondent.  The Plaza theater,  together with  other properties  of Bhatias, was attached  on 4-5-1955 in the course of execution of that decree.      The  appellant  company  claimed  to  be  a  lessee  in occupation of  the theater  where  it  had  carried  on  the business of  running a  Cinema under  an unregistered  lease

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obtained on  27-2-1940. The lease of 1940 had expired on 10- 4-1946. The Company continued as a tenant holding over until the impugned  lease  deed of 30-3-1956 was executed. If this was a  valid lease, it would have conferred upon the company the right to be a tenant of the property under the lease for eight years, from 10-2-1956 to 10-2-1964, with an option for a renewal until 10-2-1970. This lease was executed after the company had  filed a suit No. 16A of 1954) on 20-11-1954 for the specific  performance of an agreement to lease contained in a  letter dated 19-7-1948. A compromise decree was passed on 24-3-1956  in this suit also. the lease deed of 30-3 1956 purported to  carry out  the terms of that compromise decree passed in a suit in which the plaintiff was not impleaded at all.      The plaintiff’s  case was  that the  lease of 30-3-1956 was void  as it  was struck  by three  statutory provisions, namely, section  52 of the Transfer of Property Act, Section 65A of the Transfer of Propertied Act, and Section 64 of the Civil Procedure  Code. The  defendant-appellant company,  in addition to  denying the  alleged rights of the plaintiff to the benefits of these provisions, pleaded that a Suit of the nature filed  by the plaintiff did not lie at all as it fell outside the  purview of  Section 42  of the  Specific Relief Act, 1877, altogether.      The Trial  Court and the High Court, after having over- ruled the  pleas of the defendant-appellant, had decreed the plaintiff’s suit.  The defendant  company  obtained  special leave  to   appeal  to  this  Court  under  Article  of  the Constitution 240      Learned Counsel  for the  appellant  company  tried  to persuade us to A hold that the plaintiff had neither a legal character nor  any such  present right  in any  property for which a declaration could be granted under Section 42 of the Specific Relief  Act 1877  (re-enacted as  Section 34 of the Specific Relief Act of 1963). Furthermore, he contended that the defendant-company  had never denied any of the rights of the plaintiff.  Finally, he submitted that, ill any case, no declaration at  all was needed by the plaintiff if the lease of 1956,  executed by  the former  owners of  the theater in favour  of   the  defendant-appellant,   was  void.   ’these arguments rest  on the assumption that no declaratory relief can be granted outside the ambit of Section  of the Specific Relief Act, 1877 which read as follows:           "42. Discretion  of Court  as to  declarations  of      status or  right.. Any  person entitled  to  any  legal      character, or  to any  right as  to any  property,  may      institute  a   suit  against  any  person  denying,  or      interested to  deny, his  title to  such  character  or      right, and the Court may in its discretion make therein      a declaration that he is so entitled, and the plaintiff      need not in such suit ask for any further relief:           Bar to  such declaration..  Provided that no Court      shall make  any such  declaration where  the plaintiff,      being  able   to  seek   further  relief  then  a  mere      declaration of title, omits to do so.           Explanation.... A trustee of property is a "person      interested to  deny" a  title adverse  to the  title of      some one  who is  not in existence, and for whom, if in      existence, he would be a trustee".      Learned Counsel for the appellant sought to support his arguments by citing: Deokalikoer v. Kedar Nath(i) Sheoparsan Singh &  ors. v. Ramnandan Singh (since deceased) & ors.(2); Bai  Shri  Vaktuba  v.  Thakore  Agarsinghji  Raisinghji(3); Kishori Lal v. Beg Raj & ors.(4)

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    Deokali Koer’s  case (supra)  arose out of a dispute on the amount  of court fee payable. It was observed there that the history  of "decrees  merely declaratory" indicated that these  were  innovations  given  authoritative  sanction  in England by  Section 50  of the Chancery Procedure Act, 1852. It was  pointed out  that Section 15  of the Civil Procedure Code of  1852 extended  this recognition to decrees in suits in this  country by  enacting that "no suit shall be open to objection on  the ground that a merely declaratory decree or order is sought thereby and it shall be lawful for the Civil Courts  to   make  binding  declarations  of  right  without granting consequential  relief". This provision was repealed by Act  10 of  1877 as this form of relief was recognized by Section 42  of Specific Relief Act I of 1877 subject to the- limitation indicated  there. Jenkins C.J., explained the new provision as follows (at p. 709): 241           "The terms  of  the  section  are  not  a  precise      reproduction of  the provision  contained in the Act of      1859 and  the English  Law: in  one direction  they are      more comprehensive,  in an  other more  limited. It  is      common tradition  that the section was designed to be a      substantial  reproduction   of  the  scotch  action  of      declaration, but  whether this  be so  or not  is of no      great moment. We have to be guided by its provisions as      they are expressed. the section does not sanction every      form of  declaration, but  only a  declaration that the      plaintiff is  entitled to any legal character or to any      right as  to any  property; it is the disregard of this      that  accounts  for  the  multi  form  and,  at  times,      eccentric declarations  which find  a place  in  Indian      plaints"      In Deokali’s  case (supra),  the learned  Chief Justice pointed out  that one  declaration sought  by the  plaintiff there seemed  designed to  get round the need to set aside a decree on  grounds of fraud and collusion. He held two other declarations sought to be vague. He, how ever, explained (at p. 710):           "I would  only add  this that the limit imposed by      Section 42  is on decrees which are merely declaratory,      and does  not expressly  extend  to  decrees  in  which      relief is  administered. and  declarations are embodied      as introductory  to that  relief. For such declarations      legislative sanction is not required: they rest on long      established practice. But for all that the Court should      be circumspect and even chary as to the declarations it      makes: it  is ordinarily  enough that  relief should be      granted without the declaration".      In Deokali’s case (supra), the plaintiff’s suit was not thrown out  on a  preliminary ground,  but the plaintiff was given an  opportunity. to  amend the  plaint by asking for a consequential relief  for setting  aside the impugned decree and paying an additional court fee. The case could have only an indirect  bearing on  the case  now before  us  where  no question of  a payment  of any  additional  court-fee  after adding  a   consequential  relief   involved   arises.   The observations made  ill Deokali’s  case must  be read  in the context of what arose for decision there.      In Sheoparsan  Singh &  Ors.  case  (supra),  what  was really held by the Privy Council was that a grant of probate under the  Probate and Administration Act (V of 1881), which operated as  a judgment  in rem,  could not  be collaterally assailed by a suit for a declaration brought by reversioners seeking to  question the will. Sir Lawrence Jenkins who had, incidentally, decided  Deokali Koer’s  case (supra) too said

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(at p. 97):           "It is  not suggested  that in this litigation the      testamentary jurisdiction  is, or  can be, invoked, and      yet there  can be no doubt that this suit is an attempt      to evade  or annul the adjudication in the testamentary      suit, and nothing more." 242 We think that the decision in this case also does not assist the appellant much.      In Bai  Shri Vaktuba’s  case (supra),  the Bombay  High Court held  that a Talukdar plaintiff could bring a suit for a declaration  and an  injunction to  restrain the defendant from claiming  that he  was  the  plaintiff’s  son.  Learned Counsel  for   the  appellant,   however,  relied  upon  the following passage from it (at p. 650):           "It has  long been  established that  the  general      power vested  in the  Courts in  India under  the Civil      Procedure Code to entertain all suits of a civil nature      excepting suits  of which  cognizance is  barred by any      enactment for  the time  being in force, does not carry      with it the general power of making declarations except      in so  far as  such power  is  expressly  conferred  by      statute."      Kishori Lal’s  case (supra)  was  cited  to  show  that declaratory  decrees  falling  outside  Section  42  of  the Specific Relief  Act are  not permissible because Section 42 Specific Relief Act is exhaustive on this subject. This view must be  held to  have been  rejected by  this Court when it declared in  Veruareddi Rmaranghava  Reddy & Ors. v. Konduru Seshu Reddy & 2 ors (1) (at p. 277)           "In our  opinion, S. 42 of the Specific Relief Act      is not  exhaustive of  the cases in which a declaratory      decree may  be made  and the courts have power to grant      such a  decree independently of the requirements of the      section It follows, therefore, in the present case that      the suit  of the  plaintiff for  a declaration that the      compromise decree  is  not  binding  on  the  deity  is      maintainable as  falling outside  the purview of S.. 42      of the Specific Relief Act".      The result  is that  Section 42  merely gives statutory recognition to  a well-recognised type of declaratory relief and subjects  it to a limitation, but it cannot be deemed to exhaust every  kind of declaratory relief or to circumscribe the jurisdiction  of Courts to give declarations of right in appropriate cases falling outside Section 42.      We, think that the circumstances in which a declaratory decree under  Section 42  should be  awarded is  a matter of discretion depending upon the facts of each case. No doubt a complete  stranger   whose  interest   is  not  affected  by another’s  legal   character  or  who  has  no  interest  in another’s property could not get a declaration under Section 42 Specific Relief Act with reference to the legal character or the  property involved.  Such, however,  is not  the case before us.  The plaintiff-respondent, in the case before us, had not  only the  rights of  a mortgagee decree-holder with regard to  the  property  involved,  but  he  was  also  the assignee of  the rights  of  the  Bank  which  had  got  the property in question attached in execution of its decree. We find, from connected 243 special leave petitions against orders under o. 21, Rule 95, Civil Procedure  Code that  the plaintiff’s  wife became the auction purchaser  of this  property during  the pendency of the litigation  now before us. At the time when he filed the suit  the   plaintiff  may  have  been  looking  forward  to

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purchasing the  property. Although,  the mere possibility of future rights  of  an  intending  purchaser  could  not,  by itself, be  enough to  entitle  him  to  get  a  declaration relating to a purported lease affecting the right to possess and enjoy  the property,  yet, we  think that  the plaintiff possessed sufficient  legal interest  in the  theater, as  a mortgagee as  well as an assignee of a decree holder who had got the property attached before he filed his suit, so as to enable him to sue for the declarations he sought. He was not seeking a  merely whimsical or eccentric or all unreasonable declaration of a right in property with no enforceable legal claims  over   it  which  could  remain  unaffected  by  the defendant-appellant’s claims as a lessee.      Suriya Kumar  Dhar v.  Girish Chandra  Ghose & Anr.(1), was cited  to contend  that the  declaration sought  by  the plaintiff was  unnecessary if  the lease  or the  defendant- appellant was  void. We find, from the pleadings in the case before us,  that the defendant-appellant had actually denied the plaintiff’s  rights as a mortgagee and also the validity of the  compromise decree  in suit No. 15A of 1954. No doubt the plaintiff had not sought a decree for possession as that could not  be granted  at the  time when the suit was filed. Nevertheless, he  had reasonable  grounds to  apprehend that the defendant-appellant  company will  rely upon its alleged lease, as it did, in the course of execution proceedings, to resist  delivery   of  actual   possession  to   an  auction purchaser. The  existence of  lessee rights  would certainly affect the  price an  auction purchaser would be prepared to pay for  the property,  or, in other words, what a mortgagee or one  who had  got the property attached could realize for the property to satisfy his dues. Thus, the plaintiff needed the declaration;  and, in the circumstances of the case, the declarations sought  for could  not be  reasonably denied to him.      The contention  that the  case fell outside the purview of Section  52 of  the Transfer of Property Act as the lease was executed  in purported  satisfaction  of  an  antecedent claim rests upon the terms of an agreement of 1948, embodied in a  letter,  on  the  strength  of  which  the  defendant- appellant had  filed his  suit for  specific performance. We find that  the terms  of the  compromise decree in that suit and  lease-deed   of  1956  purported  to  confer  upon  the defendant-appellant  new  rights.  Indeed,  there  are  good grounds for  suspecting that  the compromise in the suit for specific performance  was adopted  as a  device to get round legal difficulties  in the execution of the lease of 1956 in favour of the defendant-company. We are unable to accept the argument, sought  to be  supported by the citation of Bishan Singh &  Ors. v.  Khazan Singh & Anr.(2), that the lease was merely an  enforcement  of  an  antecedent  or  pre-existing right. We  think that  it purported  to create  entirely new rights pendente  lite. It  was,  therefore,  struck  by  the doctrine of lis- 244 pendens, as  explained by  this Court in Jayaram Mudaliar v. Ayyaswami &  Ors.(1), embodied in Section 52 of the Transfer of Property Act.      An alternative  argument of  the appellant  was that  a case falling  within Section  65A(2)(e) of  the Transfer  of Property Act,  confining  the  duration  of  a  lease  by  a mortgagor  to   three  years,  being  a  special  provision, displaces the  provisions of  Section 52  of the Transfer of Property Act. This argument overlooks the special objects of the doctrine of lis pendens which applies to a case in which litigation, relating  to property in which rights are sought

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to be  created pendente lite by acts of parties, is pending. Moreover, for  the purposes of this argument, the defendant- appellant assumes  that the  provisions of Section 65A(2)(e) Transfer of  Property Act are applicable. If that was so, it would make  no substantial  difference to  the rights of the defendant-appellant which  would vanish  before the suit was filed if Section 65A applies We, however, think that, as the special doctrine  of lis  pendens is  applicable  here,  the purported lease of 1956 was invalid from the outset. In this view of  the matter,  it is  not necessary  to consider  the applicability of  Section 65A(2)  (e), which  the defendant- appellant denies, to the facts of this case.      As regards  the  applicability  of  Section  64,  Civil Procedure  Code,  we  find  that  parties  disagree  on  the question whether  the attachment made by the Central Bank on 20-4-1955,  in   execution  of   the  decree  of  which  the plaintiff-respondent was  the assignee,  existed on the date the impugned  lease of  30-3-1956. Learned  Counsel for  the appellate relied  upon the terms of an order recorded on the order sheet,  in the  Court of  Additional  District  Judge, Jabalpur, in  Civil Suit  No.  3B  of  1952,  on  25-1-1956, showing that,  in view  of the  stay order received from the High Court,  execution could  not proceed.  The order sheet, however,  also   contains  the   enigmatic  statement   that execution was  dismissed as  infructuous but  the attachment was to  continue for  six months. The High Court had treated the last  part of  the statement  in the order sheet as void and ineffective presumably on the ground that the Additional District Judge  had  no  jurisdiction  either  to  lift  the attachment or to dismiss the execution proceedings after the High Court had given its order staying all further action in execution proceedings.  The terms  of the High Court’s order are not evident from anything placed before us. On the other hand, learned  Counsel for  the plaintiff-respondent  relies upon a  subsequent order  of the same Court, passed on 30-4- 1960, in  the same  suit. This order shows that a compromise had been  arrived at  between  the  decree  holder  and  the judgment debtor  under which the decree holder had agreed to lift attachment  of property  except with  regard  to  Plaza Talkies which  was to continue. We are, therefore, unable to hold that the concurrent findings of the Trial Court and the High Court,  that the Plaza Talkie was attached in execution of decree  in suit  No. 3B of 1952 on 4-5-1955 and that this attachment was  in existence  when the  impugned  lease  was executed on 30-3-1956, are erroneous. On these findings, the lease of  1956 was  certainly struck  by the  provisions  of Section 64  Civil procedure  Code also.  Section  64,  Civil Procedure Code, in fact, constitues 245 an application  of the  doctrine  of  lis  pendence  in  the circumstance specified there.      For the  reasons given  above, we  dismiss this  appeal with costs.                            ORDER      In view  of our  judgment in  Civil Appeal  No. 1041 of 1968, delivered  today, we  think that  these Special  Leave Petitions (Civil) must be and are hereby dismissed P.B.R. 246