The High Court dismissed an appeal against an order dismissing an application for recording a compromise decree. The court held that the compromise was invalid and not binding on purchasers who had acquired rights in the mortgaged property from the mortgagor, as it prejudiced their vested rights.
None; Appeal dismissed.
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O.S.A.No.84 of 2024
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 01.10.2024
CORAM
THE HON'BLE Mr. JUSTICE S.S.SUNDAR AND THE HON'BLE Dr. JUSTICE A.D.MARIA CLETE
O.S.A.No.84 of 2024
N.Thanabal
.. Appellant
Vs.
1.M/s.Devie & Co. Rep. by its Proprietor Kumar 180, Dr.Nanjappa Road Coimbatore 641 018
2.S.Kumar
3.M/s.Rajeswari Credits Rep. by its Partner S.Thiagarajan Old No.155-A, New No.259 Jawahar Bazaar, Karur
4.Ms/.Sree Lakshmi Devi Investment Rep. by its Partner S.Thiagarajan Old No.155-A, New No.259 Jawahar Bazaar, Karur
5.M/s.Swarnalakshmi Credits Rep. by Kandasamy Old No.155-A, New No.259 Jawahar Bazaar, Karur (Defendants 3 to 5 were impleaded vide order dt.28.8.2007 in A.No.669/2005)
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6.K.Anandhi
(6th defendant impleaded vide order dt.17.7.2018 in OSA.No.71/2017 and time extended as per order dated 14.02.2020 in C.S.No.158 of 2004)
7.V.Ravikumar
(7th defendant impleaded vide order dt.11.4.2019 in OSA.No.413/2018 and time extended as per order dated 14.02.2020 in C.S.No.158 of 2004)
8.KR.Alagappan
9.KR.Sivaraman
10.S.Meenal
11.AL.Neela
(Defendants 8 to 11 impleaded vide order dt.24.9.2019 in A.No.4819/2019 and time extended as per order dated 25.11.2019 in A.No.8987 of 2019 and further extended as per order dated 14.02.2020 in C.S.No.158 of 2004)
.. Respondents
Original Side Appeal filed under Order XXXVI Rule 1 of O.S. Rules read with Clause 15 of Letters Patent, against the order dated 05.03.2024 passed in A.No.450 of 2024 in C.S.No.158 of 2024.
For Appellant : Mr.M.Velmurugan For RR1 and 2 : No appearance For RR3 and 4 : No such person For R5 : No such address For R6 : Mr.S.Rajasekar For R7 : Mr.S.Gopinathan For RR8 to 11 : Mr.P.K.Rajagopal
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O.S.A.No.84 of 2024
J U D G M E N T
(Delivered by S.S.SUNDAR, J.)
This appeal is directed against the order dated 05.03.2024 passed by the
learned Single Judge in A.No.450 of 2024 in C.S.No.158 of 2004.
2.1. The appellant is the plaintiff in C.S.No.158 of 2004 which was filed
for recovery of money, based on a simple mortgage deed admittedly executed by the 2nd defendant/2nd respondent herein, in favour of the plaintiff on 13.12.2002. The 1st defendant is the proprietary concern in which the
2nd defendant is the proprietor.
2.2. After the mortgage in 2002, the 2nd defendant/2nd respondent, the original owner/mortgagor sold the property in favour of the defendants 6 and 8 to 11 by virtue of subsequent sale deeds executed in the year 2004 and 2006. Therefore, the mortgagors viz ., the 2nd defendant/2nd respondent has no subsisting right as on date in respect of the mortgaged property. The defendants 6 and 8 to 11 were impleaded as parties to the suit.
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2.3. However, the plaintiff, based on the compromise entered into
between the defendants 1 and 2, filed A.No.450 of 2024 to accept the memorandum of compromise dated 22.01.2024 entered into between the plaintiff and the defendants 1 and 2 and to pass an order in terms of the compromise. The said application was resisted by the other defendants, on the ground that the compromise memo is not binding and that they have subsisting interest, based on the sale deeds executed by the 2nd defendant/2nd respondent. As per the compromise, defendants 1 and 2 had agreed to sell the suit property by executing a deed of conveyance for a consideration mutually settled and prayed for a judgment and decree in C.S.No.158 of 2004 in accordance with the terms of the compromise.
2.4. The learned Single Judge, by order dated 05.03.2024, dismissed the
said application holding that it cannot be entertained as it would prejudice the rights of the other parties who have vested rights. Challenging the same, this appeal has been preferred.
O.S.A.No.84 of 2024
1 and 2. Therefore, the compromise memo entered into between the plaintiff and the defendants 1 and 2, is invalid and to defeat the right of purchasers.
that an application was filed under Order VII Rule 11 CPC in the other suit and the matter is now before Hon'ble Supreme Court. Assuming for a moment that the defendants 1 and 2 have independent right, this Court cannot permit the parties to foreclose the suit, by entering into a compromise and to get a decree in terms of compromise to the prejudice of other parties to the suit who are not parties to the compromise.
O.S.A.No.84 of 2024
Defendants 6 and 8 to 11 have purchased the equity of redemption from 2nd defendant/mortgagor. After selling the property (i.e., the right of redemption), the 2nd defendant has no subsisting right in the suit property. However, by compromise, the plaintiff and the 2nd defendant had agreed to execute a sale deed in favour of the plaintiff and to get a decree in terms of compromise. This is with an intention to foreclose the rights of other defendants, who have purchased, whatever right the 2nd defendant has in the property. As against the defendants 6 and 8 to 11, the compromise is void and hence, the compromise is hit by explanation to Order XXIII Rule 3 CPC. Therefore, this Court is unable to entertain this appeal and it is dismissed as being devoid of merits. No costs.
[S.S.S.R.,J.] [A.D.M.C.,J.] 01.10.2024
Internet : Yes Neutral Citation : Yes/No gya
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S.S.SUNDAR, J. AND A.D.MARIA CLETE, J.
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2 issues framed by the court
Whether a compromise memorandum between only some parties to a suit is binding on other parties with subsisting rights in the subject matter?
Whether the learned Single Judge was justified in dismissing the application for recording compromise?
1 provisions across 1 enactments
N.Thanabal
M/s.Devie & Co.
S.Kumar
M/s.Rajeswari Credits
Ms/.Sree Lakshmi Devi Investment
M/s.Swarnalakshmi Credits
S.S.SUNDAR
A.D.MARIA CLETE
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
