Holding

A genuine and lawful compromise petition must be recorded and enforced, and any subsequent sale deeds executed pendente lite are invalid, giving no rights to the alienees.

Summary

The petition involved a dispute over the property of a deceased adoptive mother between the adoptive son K.V. Seshiah and his two sons, each claiming rights under different wills. The parties executed a compromise on 21 August 1987, whereby Seshiah agreed to pay each son Rs.1 lakh in exchange for relinquishing their interests. One son, Sudarshan Gupta, alleged non‑payment and had alienated about 81 acres of the disputed land to third parties. The Supreme Court examined whether a genuine and lawful compromise petition under Article 136 of the Constitution and Order 23, Rule 3 of the CPC must be recorded despite the objection, and whether the subsequent sale deeds were valid. The Court held that the compromise was genuine and enforceable, directed Seshiah to pay the outstanding amount, declared the sale deeds invalid, ordered the alienees to deliver vacant possession, and disposed of the petition.

Issues considered

Whether a genuine and lawful compromise petition filed under Article 136 of the Constitution and Order 23, Rule 3 of the CPC must be recorded and enforced despite a party's objection.
Whether sale deeds executed pendente lite after the compromise confer any legal right on the alienees.
Whether the court can refuse to record a compromise on the ground of alleged non‑payment by one party.
Effect of the recorded compromise on the pending title suit and injunction.

Legislation cited

Code of Civil Procedure, 1908s. Order 23 Rule 3
Constitution of Indias. Article 136
Transfer of Property Act, 1882s. Section 54

Subjects

compromisesettlementsale deedpendente liteadoptionproperty disputespecial leave petitionArticle 136CPC Order 23Transfer of Property Actalieneesvacant possession

Judgment

A K. VENKATA SESHIAH ~-
v.
~
KANDURU RAMASUBBAMMA (DEAD) BY LRS.

FEBRUARY 19, 1991
B [RANGANATH MISRA, en AND KULDIP SINGH, JJ.]

•
Constitution of India, 1950-Article 136 read with Order 23, Rule
3, Code of Civil Procedure, 1908-Compromise petition-Genuine and
lawful-To be acted upon. .....

c Transfer of Property Act, 1882-Section 54-Sale of certain suit
~
property pendente lite of one of the parties and prior to compromis.e--
Not valid.

Respondent No. 1 adopted petitioner-appellant, who married two y
wives and through the first wife he had a son, the respondent No. 2 and '
D through the second, another son, the respondent No. 3. During the
pendency of th~ special leave petition the adoptive mother of appellant
died. Respondent 2 and 3 laid claim to the entire property of respondent
No. 1 exclusively 'Under two different wills said to be by the respondent
No. 1 and each contended that the other will was a forged one. On the
death of the adoptive mother, the appellant laid claim to her entire
E property as heir. While each of the parties had taken such stand, in ~
litigations a compromise was brought about on 21.8.1987 between the
....
appellant and his two sons, the respondents 2 and 3 and the same was
filed in this Court and in terms of the compromise the appellant, to
make payment of Rs.1 lakh to each of his two sons in lieu of relinquish-
· ment of their interest.
F
When the matter was listed for recording the compromise, the
respondent No. 2 contended that as he had not been paid Rs.1 lakh as ~-
stipulated in the compromise, in the meanwhile he had alienated about
81 acres of the suit properties to the third parties. The alienees had been
also impleaded as parties under the orders of this Court.
G
Disposing of the petition, this Court,

HELD: J. Once the Court was satisfied that there was a com- '-(
promise it was for the Court to record the same and no option lay before
the Court to act otherwise. [542A-B]
H

538
K.V. SESHIAH v. K. RAMASUBBAMMA 539

~ 2. As the compromise petition in the instant case is genuine and
lawful the same has to be acted upon. [542B] A

3. It is directed that the compromise petition shall be accepted
and in terms thereof the suit shall be disposed of and the terms of the
compromise shall form part of the order to be drawn up in this Court
for disposing of the special leave petition. [542B-C] B

}-'- 4. With a view to settling all equities between the parties, direc-
ted that the appellan~ to. pay a sum of Rs.1 lakh more to respon-
dent No. 2 within eight weeks. Rs.77,124 being the amount paid by the
... ~ alienees before the Sub-Registrar in respect of the sale-deeds shall be
- deposited. [542C-E]
c
5. The alienees have no right created under the alleged sale-deeds.
-y Their possession is without authority of law and clarified that none of
the sale-deeds is valid. [542F-H]

6. The alienees shall deliver vacant possession of the property by D
30th of April, 1991, and in the event of failure to do so the Trial Court
directed to deliver vacant possession. [543A-B]

Bhoja Govinda Maikap & Anr. v. Janaki Dei & Ors., AIR (1980)
A Orissa 108, approved.
E
CIVIL APPELLATE JURISDICTION: Civil Misc. Petition
No. 15001of1989.

AND

I.A. No. 1of1989 in S.L.P. No. 12288of1984. F

From the Judgment and Order dated 20.4.1984 of the Andhra
Pradesh High Court in Appeal No. 472 of 1976.

K. Mahadeva Reddy, Ms. Manjula Gupta, T.V. S.N. Chari and
A. Subba Rao for the Petitioner. O
Y K. Ram Kumar, S.A. Ahmed, Tanweer Abdul and Mohan
Pandey for the Respondents.

The following Order of the Court was delivered: ·
H
540 SUPREME COURT REPORTS [1991] 1 S.C.R.

The special leave petition under Article 136 of the Constitution is
A
directed against the affirming judgment of the Andhra Pradesh High
Court in a suit for title and injunction.

In view of the fact that a petition of compromise in respect of the
entire subject-matter of litigation has been filed in this Court it is
B unnecessary to refer to the facts leading to the litigation. We shall,
therefore, confine the discussion to matters pertinent to the
compromise.

Subbamma adopted one K.V. Seshiah. Seshiah married two
wives. Through the first wife he had a son born to him by name ~-
C Sudarshan Gupta and through the second another son by name Anand
Babu. In February, 1985, during the pendency of the special leave
petition the adoptive-mother died. Sudarshan and Anand Babu led
claim to the entire property of Subbamma exclusively to each of them Y
under two different wills said to be by Subbamma and each contended
that the other will was a forged one. With the death of the adoptive-
D mother, Seshiah led claim to the entire property as heir. While each
of the parties had taken such stand in the litigation a compromise was
brought about on 21.8.1987 between the father and his two sons and
the same was filed in this Court. The terms of the compromise stipu-
lated payment of Rs. l lakh by the father to each of his two sons in lieu _>\
E of relinquishment of their interest. When the matter was listed before
the Court for recording of the compromise, Sudarshan Gupta, second
respondent herein, maintained that he had not been paid Rs. l lakh as
stipulated and he had no intention to accept the compromise. The
question as to recording of the compromise was taken up by the Court
and parties have been heard.
F
One of the stipulations in the compromise deed which has admit- ~
tedly been signed by the father and his two sons stipulates:

"The petitioner has given to the second and third respon-
dents (the two sons) an amount of Rs. l lakh each and the
second and third respondents have received the same."

In the face of such a statement in the,compromise deed signed by the
parties the second respondent had disputed the fact of payment and
has, in the meantime, alienated about 81 acres of property which con-
H stitutes the subject-matter of dispute to third parties. The alienees
K.V. SESHIAH v. K. RAMASUBBAMMA 541

~ have now been brought on record under orders of this Court.
A
We have heard counsel for the original parties as also the
alienees. The alienations are for about a purported consideration of
Rs.4 lakhs. The sale-deeds indicate that a sum of Rs. l lakh had been
received earlier and a net amount of Rs. 77, 124 out of the considera- I
tion money under these documents has been paid before the register- B/
I ing authority. The alienees have admittedly been in possession of the I
_).._
'
property from the date of the sales which is more than three years' old
by now.

...
~-~--- Admittedly, the transfers are pendente lite. In fact, if the com-
promise is valid and binding the alienor-respondent no. 2 had no in-
terest in the property to part with in view of the stipulation in the C
compromise that on receipt of Rs. l'lakh he relinquished his entire
-v, interest in the property. The alienees have made an attempt to hold
out that there were agreements for sale prior to the compromise for
which there is no acceptable evidence. We think we have to find that
the alienees had no interest in the property prior to the compromise D
and we must hold that the sale-deeds are subsequent to 21.8.1987.

Mr. Ram Kumar who appeared for the second respondent, apart
from maintaining that his client has not received the sum of Rs. 1 lakh
has not been able to point out any justification as to why the com-
promise should not be acted upon and on the basis of it the litigation E
may not be disposed of. The factum of compromise is not in dispute.
Respondent no. 2 and his counsel Mr. Ram Kumar have accepted the
fact that the parties have signed the compromise petition which con:
tain terms which they had accepted and all parties have accepted the
document of compromise to be genuine.
F
Counsel for the alienees has taken the stand that the said aliena-
tions are valid and the transferees have become owners of the property
and has even maintained that there have been improvements of the
property by the alienees. He sought to rely on certain decisions which
on being referred to were found to be totally inapplicable to the facts
of the case. On the other hand, we find that a similar question arose G
before the Orissa High Court in the case of Bhoja Govinda Maikap &
Anr. v. Janaki Dei & Ors., AIR (1980) Ori. 108 where the power of
the Court under Order 23, rule 3 of the Code of Civil Procedure in the
face of an objection of one of the parties to the compromise was
considered. Relying upon several authorities of different High Courts
and one of the Privy Council referred to in the decision, the High H
542 SUPREME COURT REPORTS . [1991] 1 S.C.R.

A Court held that once the Court was satisfied that there was' a com-
promise it was for the Court to record the same and no option lay
before the Court to act otherwise.

We are in accord with the principle indicated in the said decision
B a:nd are of the view that as the compromise petition is genuine and
lawful the same has to be acted upon. We direct that the compromise
petition shall be accepted and in terms thereof the suit shall be dis- \

posed of and the terms of the compromise shall form part of the order /~
to be drawn up in this Court for disposing of the special· leave petition.

-
With a view to settling all equities between the parties and with
C the consent of Seshiah who is present in Court, and counsel for the
sons and after hearing the Advocate for the alienees, we make the
following directions:
yI
1. Seshaiah shall pay a sum of Rs. l lakh more to Sudarshan
Gupta within eight weeks from today. This amount shall "be
D
deposited in the Registry of this Court within the time indicated
and Sudarshan Gupta shall be free to withdraw the amount.

2. Rs. 77, 124 being the amount paid by the alienees before the
Sub-Registrar in respect of the sale-deeds shall be deposited
within the same period in the Trial Court and the alienees of the
E different sale-deeds would be entitled to withdraw the amounts
on the basis of the record made by the Sub-Registrar on each of
the sale-deeds.

3. The alienees have no right created under the alleged sale-
deeds. Their possession is without authority of law. Ordinarily,
F they would have been liable to account for mesne profits. In view
of the fact that there was the allegation of payment of Rs. l lakh
to Sudarshan Gupta which we ~.ave not investi.gated and to
meet the further allegation that some improvements have been
made to the property which too we have not gone into, we direct
that the mesne profits shall be set off against the same. Under
G orders of this Court security has been furnished for mesne pro-
fits. In view of the aforesaid direction, the security furnished in
the Trial Court shall stand discharged and the alienees will have
no liability to account for mesne profits. We declare and clarify
that none of the sale-deeds is valid and none of the alienees has
any interest in the aforesaid property.
H
K.V. SESHIAH v. K. RAMASUBBAMMA 543

4. The alienees shall deliver vacant possession of the property A
by 30th of April, 1991, to Seshiah and in the event of failure to
do so the Trial Court is directed by our present order to deliver
vacant possession of the entire property in suit including those
which are covered by the sale-deeds in favour of the alienees to
Seshiah within one month therefrom. If necessary, the Trial
B
Court may appoint a Commissioner and take police help for
executing this order and such cost shall ultimately be borne by
the defaulting alienees but may initially be met by Seshiah.

There would be no order for costs.

- V.P.R. Petition disposed of. C

-