Holding

A decree, even if later found to be passed by a court lacking pecuniary jurisdiction, remains binding and operates as res judicata between the parties, and Section 21A covers objections to both territorial and pecuniary jurisdiction, leaving the assignee without any right and entitling the appellant to redeem the entire property.

Summary

The case involved three properties allotted to a Hindu joint‑family member (defendant No.2) who mortgaged them and later sold the equity of redemption to the appellant, Habib. The wife and minor sons of defendant No.2 challenged the sale, but the trial court upheld it and the decree became final. Subsequent suits questioned the validity of that decree on the ground that the court lacked pecuniary jurisdiction and that the sale was beyond the Karta's authority. The Supreme Court held that a decree, even if passed by a court later found to lack pecuniary jurisdiction, is not void but only voidable and, having become final, operates as res judicata between the co‑defendants. Section 21A of the CPC covers both territorial and pecuniary jurisdiction, so the objection could not be raised in appeal. Consequently, defendant No.6, the assignee of the wife and sons, had no interest in the properties, and the appellant was entitled to redeem the entire equity of redemption, not merely a one‑fourth share. The appeals were allowed and a composite final decree for redemption was granted.

Issues considered

The decree in O.S. No.61 of 1971 – whether it is res judicata and bars further claims.
Whether lack of pecuniary jurisdiction of the court that passed the decree renders it void.
The scope of Section 21A of the Code of Civil Procedure – does it cover both territorial and pecuniary jurisdiction.
The rights, if any, of defendant No.6 as assignee of the wife and sons.
The extent of the appellant's entitlement to redeem the equity of redemption – whole property or only a one‑fourth share.

Legislation cited

Code of Civil Procedure, 1908s. 11, s. 15, s. 20, s. 21, s. 21A, s. 97(1)(c), s. 97(3)
Suits Valuation Acts. 11

Subjects

res judicatapecuniary jurisdictionSection 21Aplace of suingredemptionjoint Hindu familyKartaassignmentmortgage

Judgment

A SUBHASH MAHADEVASA 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 B
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
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.
G
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.
H
'
-'(
152 SUPREME COURT REPORTS (2007] 4 S.C.R.

A 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
;
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
j 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
to Section 21 of the Code of Civil Procedure, as it existed prior to the
E 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 sub-
Section (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 } 55
A
.... 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,
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 a
former suit between the same parties in 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
of the Karta of the joint family. (Para 30) [175-C-DJ
G
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)
)
F
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 G
C.A. No. 1450of2007
)

S.N. Bhat, D.P. Chaturvedi and N.P.S. Panwar for the Appellant.

Amit Chadha, G.C. Hiremath, Kuna! Sinha and Shankar Divate for the H
4 \

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
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.
c
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.
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.] J59

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
160 SUPREME COURT REPORTS [2007] 4 S.C.R.

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
6J
SUBHASH MAHADEVASA HABIB 1•. NEMASA AMBASA DHARMADAS (D) BY LRS. [BALASUBRAMANYAN. J] 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,
by defendant No.2, the father. The suit was thus dismissed on 18.2.1974 .
B
...,,
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
that it was only intended to be a mortgage. The filing of O.S. No. 61 of 1971
c
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
162 SUPREME COURT REPORTS [2007) 4 S.C.R.
Y-
A jurisdiction to try O.S. No. 61 of I 97 I and whether the suit O.S. No. 4 of 1972
was 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
time been dismissed by the Munsiffs court, was filed in a court having no
B 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.
In the first suit filed by the wife and children, the sale in his favour was
D 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
held that the properties belonged to the joint family of defendant No.2. It has
F 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
4, his sons, purported to sell their rights to defendant No.6 in O.S. No. 67 of
G 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
164 SUPREME COURT REPORTS [2007] 4 S.C.R.
'f
A redeein the suit property only to the extent of I /4th share.
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.
No. 61 of 1971. The trial court accepted the argument that successive suits
E for redemption was maintainable so long as the right to redeem subsisted. It
held that the suit was not barred by res judicata. It may be noted that the
plea of res judicata was emphasised, based more on O.S. No. 67 of 1975
relating to item No. 1 and the refusal of the court therein to give relief in
respect of the other two items that were also the subject matter of the
F mortgage and were involved in O.S. No. 800 of 1992. Whatever it be, the
ultimate finding was that the suit was not barred by res judicata. Proceeding
from there, the trial court, on a consideration of the evidence, came to the
conclusion that the suit properties were the separate properties of defendant
No.2 and in the light of the repulsion of the challenge to the alienation made
by defendant No.2 both in O.S. No. 61 of 1971 and in O.S. No. 4 of 1972, the
G plaintiff was entitled to redeem the suit properties. A preliminary decree for
1
redemption was therefore passed. Defendants 1 and 11 went up in appeal by
way of R.A. No. 107 of 1998. The appellate court agreed with the findings of

-
l.
the trial court both on the· plea of res judicata and on the nature of the
properties in the hands of defendant No.2 and decreed that in the place of
the preliminary decree passed by the trial court, a final decree itself be drawn
H
SUBHASH MAHADEVASA HABIB v. NEMASA AMBASA DHARMADAS (D) BY LRS. [BALASUBRAMANYAN, J.Jl 65

up in the light of the findings entered. This decree was challenged in R.S.A. A
No. 685 of 2000. A memorandum of cross-objections was also filed. The
second appellate court held that the decree in O.S. No. 61 of 1971 filed by
the wife and sons of defendant No.2 and which was dismissed, had no effect
in view of the decision in O.S. No. 4 of 1972 and proceeded to reverse the
decree of the first appellate court on the basis that the decision in O.S. No.
4 of 1972 that the properties belonged to the joint family and the wife and B
sons of defendant No.2 had shares therein was final. It hence modified the
._,. decree by holding that the plaintiff was entitled to redeem and recover only
I/4th share in the plaint scheduled properties. This decree is challenged by
the plaintiff in the Civil Appeal arising from S.L.P. (C) No. 4352 of2003.

16. Thus, the finding of the High Court in both the suits for redemption
c
ultimately is that the plaintiff, the assignee from defendant No.2 of the equity
of redemption is entitled to redeem and recover only a 1/4th share in the three
items of properties that were subjected to mortgage based on its understanding
of the effect of the decrees in O.S. No. 61 of 1971 and O.S. No. 4of1972 and
proceeding on the basis that only the share of defendant No.2 had been D
conveyed to the plaintiff. The common plaintiff in the two suits challenges
these decrees of the High Court in these appeals.

17. It is argued on behalf of Habib, the plaintiff appellant, that the
decree in O.S. No. 61 of 1971 repulsing the challenge by the wife and sons
of defendant No.2 to the sale effected by defendant No.2 and upholding it, E
had become final and would operate as res judicata as against defendants 2,
2(a), 3 and 4 and that neither they nor defendant No. 6 as their assignee, could
be heard to contend that the sale of the equity of redemption in his favour
is invalid or that it does not convey to him the entire rights in the property.
Any challenge to the safo in his favour was barred by res judicata. Defendant F
No. 6 had derived no rights by the sale in his favour, On the other hand, it
)
is contended on behalf of defendants I and 6 that in the latter suit O.S. No.
4 of 1972 to which both Habib and defendant No.2 were parties, it was clearly
held that the earlier decree in O.S. No. 61 of 1971 in which both of them were
co-defendants, was a decree passed by a court having no pecuniary jurisdiction
to entertain the suit and that the decree therein would not operate as res G
..- judicata or preclude them from setting up the title of the wife and sons of
' defendant No.2 in the property. Thus, whereas Habib claimed that the entire
J equity of redemption had come to him, defendants 1 and 6 pleaded that what
Habib had was only a 1/4th share in the equity of redemption as having been
conveyed to him by defendant No.2 and he could not therefore lay claim to H
~~

166 SUPREME COURT REPORTS [2007] 4 S.C.R.

A the shares of the wife and sons of defendant No.2 and the finding in O.S. No. 'f

4 of 1972 that the properties were joint family properties would operate as res
judicata. The share of the wife and sons of defendant No.2 had come to
defendant No.6. The alternate contention on behalf of Habib is that even as
the owner of a fraction of equity of redemption, he could redeem the whole
of the mortgage and the mortgagee could not resist such a redemption. The
B answer to this is that even though that might be correct as far as the mortgage
is concerned, in view of the fact that defendant No. 6 had acquired shares
in the equity of redemption and he had also been impleaded in the suit and
.,,.
the mortgage was being redeemed, it was only possible to grant the plaintiff
~,
Habib a decree for redemption and recovery of possession of I/4th share in
c the properties, the other 3/4th share going to defendant No.6. The questions
for our decision arise out of what is thus posed by learned counsel.

18. Now that we have set out the facts and the history of the litigations
in some detail, it is not necessary to reiterate the facts all over again. Essentially,
the questions are, what is the effect of the decree in O.S. No. 61 of 1971 and
D whether it would bar defendant No.6 from questioning the right of the plaintiff
under the assignment, in his favour, what is the effP,ct, if any,. of the decree
in 0.S. No. 4 of 1972 and if it is open to defendant No.6 to raise a claim based
on the assignment in his favour, and on the materials, whether the properties
mortgaged are the separate properties of defendant No.2 or that of his joint
family in which at least his sons are entitled to shares capable of being
E conveyed to defendant No.6. How the wife was entitled to a share therein has
not been explained or clearly indicated in the judgments even if the properties
are held to be the joint family properties of defendant No.2. Even if the
properties are held to be joint family properties, whether the subsequent
assignee, defendant No.6 could claim any right against Habib, the prior
F assignee in the light of the dismissal of both O.S. No . 61 of 1971 and O.S.
No. 4 of 1972.

19. O.S. No. 61 of 1971 was filed by the wife and sons of defendant No.2
challenging the alienation of the equity of redemption made by defendant
No.2 in favour of the present plaintiff. Though the father had sold the
G properties on his own, the wife and sons of defendant No.2 challenged the
sale as conveying the entire rights of the joint family, obviously because ,..
defendant No.2 was the Karta of the joint family and he had purported to sell
it for family necessity. In that suit, which was filed in the Munsifrs court, the '-

basis of the claim to relief was that the properties obtained by defendant No.2
H in the partition with his brothers was coparcenary properties in his hands in
SUBHASH MAHADEVASA HABIB'" NEMASA AMBASA DHARMADAS (D) BY LRS. [BALASUBRAMANYAN. JJ} 67

~
which his sons would have a share. The whole challenge to the alienation by A
the father was based on such a claim. It was therefore essential for the court
trying that suit to decide the nature of the property in the hands of defendant
No.2. The court, on a consideration of the materials produced therein, came
to the conclusion that the properties were not shown to be coparcenary
properties in the hands of defendant No.2. The Court also considered the
alternate case based on the premise that the properties belonged to the joint
B
family and the question whether the sale by the Karta was binding on the
joint family. On the basis of the facts established and the findings, the court
found the alienation valid and binding on the wife and sons as it was
supported by necessity and was within the power of defendant No.2 as the
Karta of the joint family. The suit was thus dismissed upholding the alienation c
to Habib. In the normal course, such an adjudication would be final and
binding on the wife and sons of defendant No.2 and their assignee. In
; addition, the assignee had also notice of the sale to Habib and of the suit
and the appeal therefrom. It would also be binding on defendant No.2 to the
extent he supported the case of the plaintiffs in that suit. The appeal filed
against the decree not having been pursued, that decree became final. D

20. Then came O.S. No. 4 of 1972. We must emphasize that this suit was
filed by defendant No.2 himself challenging the alienation effected by him. His
wife and sons were not parties to that suit. The assignee did not get himself
impleaded and left it to defendant No.2 to protect his rights also. The plaintiff·
E
in the present suit was arrayed as the defendant in that suit. It may be noted
that the plaintiff and the defendant herein were co-defendants in O.S. No. 61
of 1971. In the second suit, which was in the subordinate Judge's court, the
court proceeded t0 enter a finding that O.S. No. 61 of 1971 was tried and
decided by a court which lacked pecuniary jurisdiction. It therefore proceeded
to hold that the decree in O.S. No. 61 of 1971 did not preclude it from deciding F
,)
the question whether the properties were the separate properties of defendant
No.2 (the plaintiff in that suit) or were the properties of the joint family in his
hands. The court proceeded to enter a finding that the properties were joint
family properties. But even then, the suit was dismissed in its entirety finding
that the plaintiff therein, the father, had not established any ground for setting
aside the alienation effected by him. Though an Appeal and a Second Appeal
G
_Jr
.,,,. were filed, no relief could be obtained by defendant No.2. Thus the alienation
became unassailable at the instance of defendant No.2 also, and consequently
_) of his assignee as well.

21. We find that what really emerges is the question based on the H
168 SUPREME COURT REPORTS [2007) 4 S.C.R.

A finality of the decree in O.S. No. 6 I of 1971 filed by the wife and sons of
defendant No.2. The consequence, according to us, of that decree having
become final, is that the wife and sons of defendant No.2 lost whatever rights
they had to question the alienation effected by defendant No.2 or to claim
that their rights in the properties remained unaffected by the alienation by the
B father. In other words, they had challenged the alienation effected by defendant
No.2, the Karta of the joint family on the basis that he had exceeded his
authority in effecting that sale and their suit has been dismissed upholding
the alienation both on the basis that it could be supported as an alienation
of his separate property by defendant No.2 and also on the basis that the
alienation can be supported as one by the Karta of a joint family and
C consequently binding on the joint family consisting of the plaintiffs in that
suit. This meant that the court found that the rights of the plaintiffs in that
suit had also been conveyed to Habib in terms of a valid assignment by the
Karta of the joint family. By the sale, the family including the plaintiffs had
lost their rights. The challenge to the decree was not pursued and the decree
attained finality. They cannot get over the effect of that decree by merely
D putting forward a claim in the present suits that t\ie property belonged to their
joint family and they have subsequently conveyed their rights to defendant
No.6. It is worth re-stating that neither they, nor their assignee were even
parties to OS No.4 of I 972.

E 22. Defendant No.2, the father and Habib, the plaintiff therein were only
co-defendants in O.S. No.61 of 1971. Even then, the decree therein could
operate as res-judicata as between them if the conditions therefor are satisfied.
The conditions as laid down by this Court are: (i) there must be a conflict of
interest between the defendants concerned; (ii) it must be necessary to d~cide
the conflict in order ,to· give the plaintiff the relief he claims; (iii) the co-
F defendants must be necessary or proper parties to the suit and; (iv) the
question between the defendants must have been finally decided inter se
l
between them .(see for instance lftikhar Ahmed and Ors. v. Syed Meharban
Ali and Ors., [1974] 3 SCR 464 and Mahboob Sahab v. Syed Js11iail and Ors.,
(1995] 2 SCR 975. There was a conflict of interest between Defendant No.2,
G the father and Habib since the father was supporting the plaintiff and was
questioning the sale deed and Habib, defendant No. I therein, was resisting
the claim and supporting the sale transaction. It was necessary to decide the
conflict in that suit since the claim of the plaintiff therein and the defence put
up by Habib made it obligatory for the court to decide the issue for the l

purpose of finding out whether the plaintiffs therein were entitled to relief.
H
SUBHASH MAHADEVASA HABIB v. NEMASA AMBASA DHARMADAS (D) BY LRS. [BALASUBRAMANYAN, J.JJ 69

Defendant No.2 and Habib were necessary parties to the suit, since the suit A
challenged the alienation made by defendant No.2 to Habib, defendant No.1
therein. The question was clearly finally decided in that suit resulting in
dismissal of the suit as a consequence of the decision on the question of
validity of the sale effected by defendant No.2 to defendant No.1. Thus, when
that decision attained finality it also precluded defendant No.2 from seeking B
to challenge his sale to Habib 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 joint family or on the basis that the rights of the family
had not been validly conveyed to Habib.

23. As we have seen, O.S. No. 4 of 1972 was filed by defendant No.2 C
himself questioning the alienation on the ground that it was vitiated by fraud,
coercion and undue inflqence. In a sense, it is seen that his plea was that he
was under the impression, when he executed the sale deed, that he was
executing a document to secure repayment of a loan of Rs.10,0001- which he
had taken from Habib. He had not intended to execute a sale deed. The
document writer had played a fraud on him. He was in a sense pleading a case D
of non-est factum [See Saunders v. Anglia Building Society, [1971] A.C. 1004
for instance]. The court negatived his claim and dismissed that suit. No
doubt, the court also rendered findings on other issues. But the result was
that the challenge of defendant No.2 to that alienation also failed. It is not
claimed before us that t~e right of defendant No.2 have come to defendant E
No.6 by virtue of defendant No.2 joining the sale by his wife and sons in
favour of defendant No.6. It is conceded that the rights of defendant No.2
have gone to Habib. The decree for redemption granted to Habib based on
the assignment to him of the share of defendant No.2 was not questioned by
defendant No.2 even before the High Court. Therefore, strictly nothing turns
upon the so-called findii;igs in O.S. No. 4 of 1972 because there is no case F
for defendant No.6 that he had acquired the rights of defendant No.2 by
)
virtue of the subsequent sale in his favour. Thus, we are reduced to a
situation where the rights, both of the wife and sons of defendant No.2 and
that of defendant No.2, to question the sale in favour of Habib, the plaintiff,
stood concluded against them by the respective decrees. Real!y, the question G
is not whether the issue regarding the nature of the property separate or joint
family should be taken to be concluded by the first decision or the second
decision. That is only a secondary aspect.

24. What is relevant in this context is the legal effect of the so-called
finding in O.S. No. 4of1972 that the decree in O.S. No. 61of1971 was passed H
170 SUPREME COURT REPORTS [2007] 4 S.C.R.

A by a court which had no pecuniary jurisdiction to pass that decree. The Code
of Civil Procedure 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 a decree passed by that court one
without jurisdiction or void in law, a decree passed by a court lacking territorial
B jurisdiction or pecuniary jurisdiction does not automatically become void. At
best it is voidable in the sense that it could be challenged in appeal t4erefrom
provided the conditions of Section 21 of the Code of Civil Procedure are
satisfied. It may be noted that Section 21 provided that no objection as to
place the 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
C 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 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
D opportunity and unless there had been a consequent failure of justice. Section
21 A also was introduced in 1976 with effect from 1.2.1977 creating a bar to
the institution of any suit challenging the validity of a decree 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 104 of 1976 came into force
E only on 1.2.1977 when O.S. No. 4 of 1972 was pending. By virtue of Section
97(1 )( c) of the Amendment Act, 1976, the said suit had to be tried and
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 97(3) if Section 21A
had to be applied, if it has application. But then, Section 21A on its wording
covers only what it calls a defect as to place of suing.
F
25. Though Section 21 A 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
G jurisdiction and excluding from its purview a defect based on pecuniary
jurisdiction. Jn the sense in which the expression "place of suing" has been
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 2o·of the Code deal with 'place of ....
suing'. The heading 'place of suing' covers Section 15 also. This Court in The
H
+
SUBHASH MAHADEVASA HABIB 1·. NEMASA AMBASA DHARMADAS (0) BY LRS. [BALASUBRA~.ANYAN, J] } 7J

Bahrein Petroleum Co. Ltd. v. P.J. Pappu & Anr., (1966] I S.C.R. 461 made A
no distinction between Section 15 on the one hand and Sections 16 to 20 on
the other, in the context of Section 21 of the Code. Even otherwise, considering
the interpretation placed by this Court on Section 11 of the Suits Valuation
Act and treating it as .equivalent in effect to Section 21 of the Code of Civil
Procedure, as it existed prior to the amendment in 1976, it is possible to say, B
especially in the context of the amendment brought about in Section 21 of the
Code by Amendment Act 104 of 1976, that Section 21 A 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 instituted. As can be seen, the Amendment Act l 04 of
1976 introduced sub-Section (2) relating to pecuniary jurisdiction and put it C
on a par with ·the objection ·to territorial jurisdiction and the competence to
raise an objection iffthat regard even in an appeal from the very decree. This
was obviously done inrthe ·light of the interpretation plac~d on Section 21 of
the Code as it existed and Section 11 of the Suits Valuation Act by this Court
in KiranSingh & Ors.·v. Chaman Paswan & Ors.,[1955] .I S.C.R. 117 followed
by Seth Hiralal Patni v. Sri Kali Nath, (1962] 2 S.C.R. 747, and The Bahrein D
Petroleum Co. ltd. v. P.J. Pappu & Anr. (supra). Therefore, 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 could be understood,
especially in the context of the amendment to Section 21 brought about the E
Amendment Act, as objection to place of suing. It appears that when the Law
Commission recommended insertion of Section 2 lA 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 104 of 1976, the wordings
of Section 21 A as proposed by the Law Commission was not suitably altered F
or made comprehensive. Perhaps, it was not necessary in view of the placing
of Sections 15 to 20 in the Code and the approach of this Court in Bahrein
Petroleum Co. ltd. (supra). But we see that 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 G
position. Taking note of the objec of the amendment in the light of the law
as expounded by this Court, it would be in congruous to hold that Section
21 A takes in only an objection to territorial jurisdiction and not to pecuniary
J jurisdiction. We are therefore inclined tohold that in the suit O.S. No. 4 of
1972; the validity of the decree in O.S. No. 61of1971 could not bave been
questioned based on alleged lack of pecuniary jurisdiction. Of course, the suit H
+
] 72 SUPREME COURT REPORTS [2007) 4 S.C.R.

A itself was not for challenging the validity of the decree in O.S. No. 61 of 1971
and the question of the effect of the decree in O.S. No. 61 of 1971 only-
incidentally arose. In a strict sense, therefore, Section 21 A of the Code may
not ipso facto apply to the situation.

26. But the fact that Section 21 (2) or Section 21 A of the Code may not
B 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 I I of
the Suits Valuation Act provided that notwithstanding anything contained in
Section 578 (Section 99 of the present Code covering errors or irregularity)
of the Code of Civil Procedure, an objection that a court which had no
C 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 court of first instance at or before the hearing at which the issues were
first framed or the appellate court is satisfied for reas~ns to be recorded in
writing that the over-valuing or under-valuing of the suit has prejudicially
affected the disposal of the suit. There was some confusion about the content
D of the Section. The entire question was considered by this Court in Kiran
Singh (supra). Since in the present case, the objection is based on the
valuation of the suit or the pecuniary jurisdiction, we think it proper to refer
to that part of the judgment dealing with Section 11 of the Suits Valuatio.n Act.
Their Lordships held:

E "It provides that objections to the jurisdiction of a Court based on
over-valuation or under-valuation shall not be entertained by an
appellate Court except in the manner and to the extent mentioned in
the section. It is a self-contained provision complete in itself, and no
objection to jurisdiction based on over-valuation or under-valuation
F can be raised otherwise than in accordance with it. With reference to
objections relating to territorial jurisdiction, section 21 of the Civil
Procedure Code enacts that no objection to the place of suing should
be allowed by an appellate or revisional Court, unless there was a
consequent failure of justice. It is the same principle that has been
adopted in section 11 of the Suits Valuation Act with reference to
G pecuniary jurisdiction. The policy underlying sections 21 and 99 of
the Civil Procedure Code and section 11 of the Suits Valuation Act is
the same, namely, that when a case had been tried by a Court on the
merits and judgment rendered, it should not be liable to be reversed
purely on technical grounds, unless it had resulted in failure of justice,
and the policy of the Legislature has been to treat objections to
H
SUBHASH MAHADEVASA HABIB 1·. NEMASA AMBASA DHARMADAS (D) BY LRS. (BALASUBRAMANYAN, l.J} 73

jurisdiction both territorial and pecuniary as technical and not open A
to consideration by an appellate Court, unless there has been a
prejudice on the merits."

In Seth Hirata/ Patni v. Sri Kali Nath (supra), it was held that:

"It is well settled that the objection as to local jurisdiction of a court B
does not stand on the same footing as an objection to the competence
of a court to try a case. Competence of a court to try a case goes to
the very root of the jurisdiction, and where it is lacking, it is a case
of inherent lack of jurisdiction. On the other hand, an objection as to
the local jurisdiction of a court can be waived and this principle has C
been given a statutory recognition by enactments like S. 21 of the
Code of Civil Procedure."

... In Bahrein Petroleum Co. Ltd v. P.J. Pappu & Anr. (supra), it was held
Section 21 is a statutory recognition of the principle that the defect as to the
place of suing under Sections 15 to 20 of the Code may be waived and that D
even independently of Section 21, a defendant may waive the objection and
may be subsequently precluded from taking it.

27. In the light of the above, it is clear that no objection to the pecuniary
jurisdiction of the court which tried O.S. No. 61 of 1971 could be raised
successfully even in an appeal against that very decree unless it had been E
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 therein, but by a defendant whose alienation was
unsuccessfully challenged by the plaintiffs in that suit. We may also notice
that in O.S. No. 61of1971, an issue on the valuation and court fee paid was F
_) 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 O.S. No. 4 of 1972, in a suit to which the plaintiffs in O.S. No. 61 of 1971
or their assignee was not a party, the court had no occasion to go into the
question of the decree in 0. S. No. 61 of 1971 having been passed by a court
which lacked pecuniary jurisdiction. Even assuming that it had such a G
jurisdiction, it could not have ignored the finality of that decree or the legal
effect cf 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, finding in O.S. No. 4of1972 that the decree in O.S. No. 61 of \97\
could be ignored or the effect of it swept under the carpet because the court H
which passed that decree lacked pecuniary jurisdiction was clearly
174 SUPREME COURT REPORTS [2007] 4 S.C.R.

A unsustainable in law.

28. The question that really arose in O.S. No .. 4of1972'was.wliether ttie
sale deed executed by the plaintiff therein (defendant No.2) to' Habib was
liable to be set aside as one vitiated by fraud,.coercion,.misrepresentation.or
undue influence. On that question, the nature of the property whether separate
B or joint family had not that much relevance. The:validity of:the decree. in O.S.
No. 61 of 1971 was also not involved directly and substantially. So, a finding
that the decree in O.S. No. 61 of 1971 was passed by a court: not having
pecuniary jurisdiction, could not be held to be lieard. and finally, decided.
Moreover, since O.S. No. 4of1972 was dismissed in its;entirety in·favour of
C Habib, the present plaintiff, the finding on the question. of-the. alleged lack
of pecuniary jurisdiction of the. Court which passedthe:decree'in:O.S, No: 61
of 1971 cannot be said to operate as res judicata:imany subsequent suit
where the legal effect of the decree in O.S. No: 61 of 1971: is·in·question. In
O.S. No. 4 of 1972, what was required to be decided was-the question:whether
defendant No.2 herein was entitled to get the-sale deed.executed~by him in
D favour of Habib declared invalid or inoperative as a sale.

29. Actually, it was not relevant for that·court·to·go into·tliat:question
in the sense that the plaintiffand the defendant before it;. were co-defondimts
in the earlier suit. As co-defendants, no doubt;. eitlier·of"them· would: have
been barred by res judicata because ofthe fiitding:on:tlie issue·wlietlier·the
E alienation effect by defendant No.2' in favour orHabib; was-.Jiable·to·be:set
aside or ignored at the instance of the members•ofthejoint family, since·tliat
was an issue tliat it was essential to decide, for adjudicatihg:on·tlie~riglits;put
forward by the plaintiffs in 0.S. No. 6 I of I 971°. As a consequence;.the finding
would have been res judicata even between the co•defondants: Moreover;
p defendant No.2 therein, the father was obviously supporting the·pfaintiffS in
O.S. No. 61 of 1971 in their challenge to the alienation: But the question-tlien
would arise whether the court which passed' the decree·in·O:S: No: 61' of 1971
was having jurisdiction to hear and decide finally the·second suit·O:S~ No;
4 of I 972 for lack of pecuniary jurisdiction: This is also an essential element
in terms of Section I I of the Code of Civil Procedure; Section· I I~ when it is
G applied to two suits, has to be literally complied' with· and" one· of'the
requirements of Section I I 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
H which was directly and substantially in issue in a former suit between the
SUBHASH MAHADEVASA HABIB"· NEMASA AMBASA DHARMADAS (D) BY LRS. [BALASUBRAMANYAN. l.] 17S
)
same parties in a court competent to try such subsequent suit and the issue A
had been heard and finally decided. Therefore, in that sense, in O.S. No. 4
of 1972, the decree in O.S. No. 61 of 1971 could not have operated as res
judicata.

30. But the question then is what is the effect of a finding in O.S. No.
4 of 1972 that the properties belonged to the joint family of defendant No.2. B
Firstly, in spite of such a finding that suit was wholly dismissed in favour of
..,.
Habib. Secondly, in view of the dismissal of in O.S. No. 61of1971, and the
rejecting of the challenge to the alienation by the members of the joint family,
such a finding made no difference to the parties to the present litigation. This
is because the court which decided O.S. No. 61 of 1971 had also held in one C
of the issues that was framed that the sale of the properties by defendant
No.2 to Habib was binding on the joint family consisting of the plaintiffs in
O.S. No. 61of1971 and defendant No.2 therein and the sale could not be set
aside or declared invalid even to the extent of the shares of the plaintiffs in
that suit on the materials available. Therefore, even ifthe finding in O.S. No.
4 of 1972 that the properties belonged to the joint family is taken as having D
attained finality that would not carry either the mortgagee or the subsequent
assignee, defendant No.6, far in this case, for the reason that the alienation
by defendant Ho.2 as Karta of the joint family had also been upheld in O.S.
No. 61of1971, it being clearly held that the sale was supported by necessity
and as being one within the competence of the Karta of the joint family.
E
31. There is also another aspect. O.S. No. 4 of 1972 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 Habib, the defendant therein. The finding was that the
alienation effected by defendant No.2 was perfectly valid. That meant that the p
challenge of defendant No.2 to the alienation had failed in its entirety. In such
circumstances, it is highly doubtful whether a finding rendered against Habib,
the defendant, in a suit that was wholly dismissed in his favour would operate
as res judicata.

32. We think that on the facts of this case it is not necessary to decide G
finally either whether the decree in O.S. No. 4 of 1972 would operate as res
judicata or about the nature of the properties in the hands of defendant No.2.
Defendant No. 6 claims to be the assignee from defendant No.2, his wife and
his sons. The assignment in his favour was on 9.I.1975. As far as the
defendant No.2 was concerned, he had sold whatever rights he had in the H
176 SUPREME COURT REPORTS [2007] 4 S.C.R.

A properties to the plaintiff on 15.10.1970. His challenge to the sale by him in
favour of the plaintiff had also been repelled. Therefore, on 9. I .1975 when he
is said to have conveyed the suit properties in junction with his wife and sons
to defendant No.6 (defendant No. I I in O.S. No. 800 of I 992), he had nothing
to convey to the assignee. In other words, when he joined the sale deed
B 'executed by his wife and sons in favour of defendant No.6, defendant No.2
had no title to convey to defendant No.6, he having already conveyed
whatever rights he had to the plaintiff. The courts below in the present suits ~
have also upheld the sale by finding that the rights of defendant No.2 had
gone to the plaintiff. Defendant No. 6 has also acquiesced in that decree.

C 33. When defendant No.2 conveyed the properties to the plaintiff, his
wife and sons had filed O.S. No. 61 of 1971 challenging the alienation by
defendant No.2. They proceeded on the basis that it was the sale of the
properties of the joint family. Their challenge had been repelled by the decree
in O.S. No. 61·of1971 passed on 18.2.1974. They allowed that decree to
become final by not pursuing their appeal against that decree. They had
D asserted their title to' the properties, but relief was denied to them finding that
they had no subsisting right in the properties, their rights also having been
conveyed to Habib, the present plaintiff. They had sued the present plaintiff
and defendant No.2, the executant of the deed. So, when on 9.1.1975 the wife
and sons purported to execute a sale deed in favour of defendant No. 6, on
E the basis of the same, defendant No.6 could put forward no claim to the
properties at least as against Habib, the present plaintiff, against whom O.S.
No. 61of1971 had been filed by his assignors. The decree in O.S. No. 61 of
1971 would not only bar the wife and sons of defendant No.2 from putting -
forward any claim to the properties as against the present plaintiff, but the
said decree would also bar the subsequent assignee from them from putting
F forward any claim over the properties. In other words, defendant No.6 cannot
claim to have derived any right over the properties by way of assignment
either from d~fendant No.2 or from the wife and sons of defendant No.2. The
decree in O.S. No. 4 of 1972 to which the wife and sons of defendant No.2
were not parties could not alter this position. The cause of action put in suit
G by the plaintiff in that suit (defendant No.2 herein) was independent of any
right of his wife and sons. A finding therein that the court while passing the
decree in O.S. No. 6 I of 197 I had no pecuniary jurisdiction to entertain that
suit, cannot survive the dismissal of 0.S. No. 4 of 1972 itself. On our part, . L

we find no merit in the plea that decree in O.S. No. 61 of 1971 is liable to be
ignored in the circumstances of the case.
H
SUBHASH MAHADEVASA HABIB v. NEMASA AMBASA DHARMADAS (D) BY LRS. [BALASUBRAMANYAN, J.Jl 77
)

34. When this is the position, there was no necessity for the first A
appellate court or the High Court to go into the question whether the property
in the hands of defendant No.2 was 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
B
whether 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. I. There is no valid defence
put forward by the mortgagee against the redemption of the mortgage. In our
view that defendant No. 6 (defendant No. I I in the other suit) had not derived c
any right in the properties either from defendant No.2 or from his wife and
sons in view of the prior assignment by defendant No.2 in favour of the
plaintiff and by virtue of the adjudication in O.S. No. 61 of 1971, 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 D
Court have to be found to be unsustainable. According to us, 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. E
35. It is dear in the circumstances that the plaintiff is entitled to a decree
for redemption of the entire properties. Defendant No. 6 (Defendant No. I I
in O.S. 800 of I992) has no right in the properties. We see no reason to
prolong this proceeding by passing a preliminary decree to be followed by
_,) a final decree. The mortgage money in both the suits as payable has been F
quantified. Apparently, the amounts have been deposited also. We therefore
grant the plaintiff decrees for redemption in both the suits. We pass a
composite final decree for redemption. Defendant No. I, the mortgagee and

. .,.}
now his legal representatives shall execute a deed of redemption or
reconveyance as required under law in favour of the plaintiff after receipt of
the amounts due under the two decrees as fixed by the trial court. If the
plaintiff has not deposited the amounts, he will deposit the same within three
months from this date with notice to the mortgagee. All defendants in both
G

the suits would jointly and severally vacate the suit properties and shall hand
over vacant possession of the suit properties to the plaintiff within four
months from the date of this judgment. If the defendants fail to do so, the H
178 SUPREME COURT REPORTS [2007) 4 S.C.R.
{
A plaintiff would be entitled to recover the properties in execution of this decree
without any objection or obstruction from them. For the purposes of execution,
the decree would be treated as a composite decree. We thus allow the
appeals. The parties would suffer their respective costs in the circumstances
of the case.

B V.S$: Appeals allowed.