Supreme Court of India
ARJAN SINGHversusPUNIT AHLUWALIA & ORS.
- Citation
- 2008 INSC 668
- Decided
- 14 May 2008
- Disposal
- Case Partly allowed
- Bench
- S B SINHA
Holding
A compromise that does not satisfy the legal requirements and does not bind a non‑party with a rival claim is unlawful; therefore, the first part of Order 23 Rule 3 applies and the compromise decree is void as to the appellant.
Summary
Arjan Singh filed a suit for specific performance of a contract concerning a Chandigarh property and obtained an interim injunction that was extended up to 16 October 1996. A second suit was filed by Sanjeev Sharma against the same owner, Dr. Bawa, and the parties entered into a compromise on 19 February 2003, resulting in a deed of sale executed on 25 March 2003 in favour of Puneet Ahluwalia, a nominee of Sharma. Arjan Singh applied under Order 23 Rule 3 of the CPC to set aside the compromise decree, arguing that he was a non‑party with a rival claim and that the decree was therefore unlawful. The trial court allowed the application, but the High Court reversed that order; the Supreme Court partially allowed the appeal, holding that the first part of Order 23 Rule 3 applies, the compromise is void as to a non‑party, and the deed of sale is not binding on the appellant, being subject to the doctrine of lis pendens. Consequently, the trial court’s decision was upheld and the High Court’s order was set aside.
Issues considered
- The applicability of the first part versus the second part of Order 23 Rule 3 of the CPC when a compromise is entered in a suit where another plaintiff has a rival claim.
- Whether a compromise decree is binding on a non‑party who was not a party to the settlement.
- The effect of the expiry of the interim injunction on the validity of the subsequent deed of sale and the operation of the doctrine of lis pendens under Section 52 of the Transfer of Property Act.
- The relevance of Sections 19 and 20 of the Specific Relief Act, 1963 to the enforceability of the deed of sale.
- Whether the court may invoke inherent jurisdiction under Section 151 CPC or Order 39 Rule 2A for breach of the injunction.
Legislation cited
- Code of Civil Procedure, 1908s. Order 23 Rule 3, s. Order 39 Rule 2A, s. Section 151
- Indian Contract Act, 1872
- Specific Relief Act, 1963s. Section 19, s. Section 20
- Transfer of Property Act, 1882s. Section 52
Subjects
Specific performanceCompromise decreeOrder 23 Rule 3Lis pendensTransfer of Property ActSpecific Relief ActInjunctionCivil ProcedureNon‑party claimDecree validity
Judgment
-- ---- -- 12ooarss-:-c.R:-6s4
A ARJAN SINGH
v.
PUNIT AHLUWALIA & ORS.
(Civil Appeal No. 3573 of 2008)
MAY 14, 2008
B
[S.B. SINHA AND LOKESHWAR SINGH PANTA,JJ]
Code of Civil Procedure, 1908 :
Or. 23, r.3 - Compromise of suit- Two suits for specific
C performance by different plaintiffs against common defen-
dant, the owner of suit property- Both the plaintiffs impleaded
as defendants in respective suits - Compromise entered into
is one of the suits and decree passed in terms thereof- HELD
: Both the suits were required to be considered together - The
D two plaintiffs had a rival claim - It was a case where first part of
Order 23, r. 3 would apply-As the other plaintiff was not a party
to the settlement, the same would not be binding on him -
Specific Relief Act, 1963 - ss. 19 and 20 - Transfer of Prop-
erty Act, 1882 - s. 52.
E Specific Relief Act, 1963: \
s. 20 -Discretion as to decreeing specific performance -
Two suits filed by two different plaintiffs against the common de-
fendants, owner of suit property - Plaintiffs of both the suits im-
F pleaded as defendants in respective suits - Compromise de-
cree passed in one suit - HELD : Would not be binding on
plaintiff of the other suit as by reason of the compromise his claim
would not be defeated - Further, both the suits were required to
be considered together - There being rival claims, Court having
G regard to s. 20 of the Act could exercise its discretionary jurisdic-
tion in one suit or the other- Code of Civil Procedure, 1908 - Or.
23, r. 3- Transfer of Property Act, 1882 - s. 52.
Transfer of Property Act, 1882 :
H 684
ARJAN SINGH v. PUNIT AHLUWALIA 685
& ORS.
s. 52 - Transfer of suit property by defendant pending suit A
- Held: If order of injunction was operative to a particular date,
technically the same would not remain operative thereafter
and owner of land could have entered into compromise, but
the sale deed pursuant thereto would be hit by doctrine of /is
pendens - Doctrine of /is pendens - Specific Relief Act, 1963 B
- ss. 19 and 20 Code of Civil Procedure, 1908- Or. 23, r.3.
Appellant filed a suit for specific performance of con-
tract against the owner of the suit property (the principal
defendant). An ex parte inerim injunction was passed
therein which was extended from time to time and last up C
to 16.10.1996. An application for further extension was
filed but no order was passed. Later, another suit for spe-
cific performance of contract in respect of the same prop-
erty was filed by one 'S' against the principal defendant.
The said 'S' was also impleaded as defendant no.2 in the D
suit filed by the appellant. Similarly, appellant's applica-
tion for impleadment in the later suit was also allowed. A
purported compromise was agreed into between the prin-
cipal defendant and defendant No.2 in the subsequent
suit and a consent decree was passed therein on E
19.02.2003 pursuant whereto a deed of sale was executed
on 25.03.2003 in favour of respondent no.1, a nominee of
'S'. The appellant filed an application under Order 23, r.3
.._ of the Code of Civil Procedure, 1908, seeking to recall the
order dated 19.02.03. The said application was allowed F
by the trial court. However, the High Court set aside the
order of the trial court.
In the instant appeal filed by the plaintiff of the first
suit, it was contended for the appellant that the High Court
failed to take into consideration that it was a case where G
the first part of Order 23, r.3 would apply; and that since
the court did not pass any order on the application for
extension of interim order, on the principle that no party
should suffer owing to fault on the part of the court, the
sale deed dated 25.03.2003 must be held to be bad in law. H
686 SUPREME COURT REPORTS [2008) 8 S.C.R.
I
A Partly allowing the appeal, the Court
HELD : 1.1 A compromise which does not satisfy the
requirements of law would be unlawful and, therefore,
decree in terms thereof cannot be passed. When a com-
promise is entered into, the Court has a duty to see as to
8 whether the same meets the requirements of law. It may
be true that parties to the suit signed the compromise
petition. But, in the instant case, indisputably, the appel-
lant has a rival claim. The suit filed by him, vis-a-vis, the
one filed by 'S' was required to be considered together.
C The court could exercise its discretionary jurisdiction in
one of the suits or the other, having regard to Section 20
of the Specific Relief Act, 1963. By reason of a compro-
mise or otherwise, the claim of the appellant could not
have been defeated. [para 8] [692-A-D]
D
1.2 It is only pursuant to or in furtherance of the said
purported terms of settlement, the deed of sale was ex-
ecuted on 25.3.2003. The settlement entered into by and
between the parties proceeded on the assumption that no
decree for specific performance would be passed in the
E case of the appellant. It wrongly recorded that the appel-
lant is only a proforma defendant in the suit. The said com-
promise, was unlawful. [para 9 and 12] [693-0-F, 695-G]
1.3 The trial court has rightly held that it was a case
F where the first part of Order 23 Rule 3 of the Code of Civil
Procedure, 1908 would apply. As thEi appellant was not a
party to the settlement, the same was not binding on him.
[para 11] [694-E,F]
Pushpa Devi Bhagat (Dead) through LR. Sadhna Rao
G (Smt.) vs. Rajinder Singh & Ors. (2006) 5 SCC 566 - relied
on
2. The High Court, was right in holding that no order
of injunction was operative after 16.10.1996. If the order
of injunction was operative upto a particuiar date, techni-
H
ARJAN SINGH v. PUNIT AHLUWALIA 687
& ORS.
cally the order of injunction shall not remain operative A
thereafter. The owner of the land and 'S' thus, could have
entered into the compromise. The effect thereof would
be that the said deed of sale was not binding on the ap-
pellant. It would be hit by the doctrine of lis pendens, as
adumbrated under Section 52 of the Transfer of Property B
Act, 1872. The said deed of sale would not come in Court's
way in passing a decree in favour of the appellant. Its
validity or otherwise would not be necessary to be con-
sidered as the appellant is not bound thereby. 'S' and his
nominee respondent no.1/defendant no.3 would be c
deemed to be aware of the pendency of the suit. Even
Section 19 of the Specific Relief Act will be attracted. How-
ever, the deed of sale, therefore, need not be set aside. It
will have its own effect having regard to Section 52 of the
Transfer of Property Act and Section 19 of the Specific
0
Relief Act. [para 16 and 20) [696-F-H, 697-A, 698-C)
Pranakrushna and others v. Umakanta Panda and oth-
ers AIR 1989 Orissa 148; Phani Bhushan Dey v. Sudhamoyee
Roy & Anr. 91 Calcutta Weekly Notes 1078, and Harba/as
and Others v. The State of Haryana and Others 1973 Punjab E
Law Journal; Gurunath Manohar Pavaskar and Ors. v.
Nagesh Siddappa Navalgund and Ors. 2007 (14) SCALE 283;
Pravin C. Shah v. K.A. Mohd. Ali and Another (2001) 8 SCC
.; 650; Bar Council of India v. High Court of Kera/a (2004) 6
sec 311 - referred to. F
Hadkinson v. Hadkinson (1952) 2 All ER 567- referred to.
3. The Trial Court, however, was right in holding that
the purported compromise was bad in law. It was unlaw-
ful being without any written consent of all the parties. G
>- Indisputably, not only the same was not binding on the
parties, the court in a case of this nature while consider-
ing the appellant's case shall not take note of the fact that
any deed of sale has been executed pursuant thereto.
Respondent No.3, as a logical corollary of these findings, H
688 SUPREME COURT REPORTS [2008] 8 S.C.R.
A would not be entitled to set up the plea of being bona fide
purchaser for value without notice. The court may also
"'
pass such other order or orders, as it may deem fit and
proper keeping in view its discretionary jurisdiction un-
der Section 20 of the Specific Relief Act, 1963. To that
B extent the judgment of the trial court is upheld and that of
the High Court set aside. [para 20] [698-D,E,F]
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 3573
of 2008
c From the JudgmenUfinal Order dated 10/10/2006 of the
High Court of Punjab & Haryana at Chandigurh in C.R. No. 94 7
of 2006
J.L. Gupta, Ashok K. Mahajan for the Appellant.
Dhruv Mehta, D.S. Walia, Dhiraj, Reeta Dewan Puri and )l
D
P.N. Puri for the Respondents.
The Judgment of the Court was delivered by
S.B. SINHA, J. 1. Leave granted.
E 2. Dr. S.R. Bawa was the owner of a property bearing
House No.169, Section 11-A, in the town of Chandigarh. Two
suits for specific performance of contract in respect of the said '
t
property were filed in the Court of Civil Judge, Chandigarh; one
of them filed by the appellant on the basis of a purported oral
F agreement for sale entered into on or about 20.6.1995 for a
•
consideration of Rs.32,00,000/- in terms whereof allegedly a
sum of Rs.3,20,000/- was deposited in his account through
Banker's Cheque on 22.6.1995. The said agreement of the
appellant was repudiated by Dr. S.R. Bawa in or about October
1995. A suit for specific performance was filed on 20.11.1995.
G
An ex parte order of injunction was issued passed therein for a ...
limited period but was admittedly extended from time to time,
the last one having been extended upto 16.10.1996. An appli-
cation for extension was filed but no order was passed.
H Relying on or on the basis of a purported agreement dated
ARJAN SINGH v. PUNIT AHLUWALIA 689
& ORS. [S.B. SINHA, J.]
20.6.1995, Sanjeev Sharma also filed a suit on 1.2.1996 for A
specific performance of contract in respect of the suit property
which also stood repudiated by Dr. Bawa. Even in that suit, the
Trial Court granted an injunction. Sanjeev Sharma applied for
and was impleaded as a defendant in the suit filed by the ap-
pellant by an order dated 14.10.1997. Similarly, the appellant's B
application for being impleaded as a defendant was allowed
by an order dated 18.12.1997.
The issues in both the suits being identical, parties led
similar evidence in both the suits. The principal defendant, Dr.
Bawa, however, did not lead evidence. C
3. The suit filed by Mr. Sanjeev Sharma was referred to
the Lok Ad al at. However, no settlement was arrived at.
A purported compromise was, therefore, entered into by
and between Dr. Bawa and Sanjeev Sharma. On or about D
19.2.2003, a consent decree was passed, pursuant whereto or
in furtherance whereof, a deed of sale was executed by Dr. Bawa
in favour of one Puneet Ahluwalia, a nominee of Sanjeev
Sharma. Appellant filed an application under Order 23 Rule 3
for the recall of the order dated 19.2.2003. PunitAhluwalia was E
also impleaded in the said suit as Defendant No.3. By reason
of an order dated 21.1.2006, the said application for recall was
·allowed by the learned trial Judge opining:
(1) The consent decree purported to have been entered
into by and between Dr. Bawa and Sanjeev Sharma F
being in terms of the second part of Order 23 Rule
3 of the Code of Civil Procedure, the same was not
valid as deed of sale executed pursuant thereto; and
(2) Although the order of interim injunction passed in the G
case of the appellant was not extended beyond
16.10.1996, as an application had been filed therefor
and as the appellant could not suffer owing to an act
of the Court and the same being violative of the order
of injunction, the deed of sale was invalid in law.
H
690 SUPREME COURT REPORTS [2008] 8 S.C.R.
A 4. The High Court, however, while exercising its revisional
jurisdiction by reason of the impugned judgment, set aside the
said order of the learned Judge on the premise that it is the first
part of Order 23 Rule 3 which was applicable in the case. It
was opined that as the interim order was not extended, the ques-
B tion of execution of any deed of sale in violation of the said or-
der of injunction did not arise.
5. Mr. J.L. Gupta, learned senior counsel appearing on
behalf of the appellant, would contend :
c (1) The High Court committed a manifest error in passing
the impugned order insofar as it failed to take into·
consideration that it was a case where the first part
of Order 23 Rule 3 would apply; and
(2) In view of the well known legal principle that any party
D cannot suffer owing to the fault on the part of the
Court, the deed of sale dated 25.3.2003 must be
held to be bad in law.
6. Mr. Dhruv Mehta, learned counsel appearing on behalf
E of the respondent, on the other hand, would urge :
(1) From the order sheet dated 4.3.2003, it would appear
that the willingness of the parties to the suit to enter
into a compromise was expressed and, thus,
although the appellant was aware thereof, he did not
F raise any objection to the recording of the
compromise dated 19.2.2003
(2) The purported application for recall dated 31.7.2003
was not maintainable as an appeal against the order
dated 19.2.2003 lay before the higher court.
G
(3) An order of injunction having been made operative
upto 16.1.1996, it is wrong to contend that the order
of injunction by reason of a legal fiction or otherwise
could continue beyond and, in any event, the appellant
having not taken any step to obtain an order of
H
ARJAN SINGH v. PUNIT AHLUWALIA 691
& ORS. [S.B. SINHA, J.]
injunction thereafter, the impugned order cannot be A
found fault with.
(4) Assuming that there was any breach of the order of
injunction, the consequence thereof having been
provided in terms of Order 39 Rule 2A of the Code
of Civil Procedure, thus, the court could have taken 8
recourse only thereto, thus, its power under Section
151 of the Code of Civil Procedure could not be
taken recourse.
(5) The contention of the appellant that the sale deed c
became inoperative in law is fallacious.
7. Order 23 Rule 3 of the Code of Civil Procedure reads
thus:
"3. Compromise of suit-Where it is proved to the
" satisfaction of the Court that a suit has been adjusted
0
wholly or in part by any lawful agreement or compromise
in writing and signed by the parties, or where the defendant
satisfies the plaintiff in respect of the whole or any part of
the subject-matter of the suit, the Court shall order such E
agreement, compromise or satisfaction to be recorded,
and shall pass a decree in accordance therewith so far as
it relates to the parties to the suit, whether or not the subject-
matter of the agreement, compromise or satisfaction is
the same as the subject-matter of the suit:
F
Provided that where it is alleged by one party and denied
by the other that an adjustment or satisfaction has been
arrived at, the Court shall decide the question; but no
adjournment shall be granted for the purpose of deciding
the question, unless the Court, for reasons to be recorded, G
thinks fit to grant such adjournment.
Explanation.-An agreement or compromise which is void
or voidable under the Indian Contract Act, 1872 (9of1872),
shall not be deemed to be lawful within the meaning of this
ru~: H
692 SUPREME COURT REPORTS [2008] 8 S.C.R.
-\
A 8. The said provision indisputably is in two parts. The first
·. part applies where the parties to the suit enters into a compro-
mise in terms whereof a decree may become executable on
the basis of the compromise. The second part, however, shall
apply in a case where the claim of the plaintiff stands satisfied
B and no further action is required to be taken by the parties in
terms of the consent decree.
~
It may be true that parties to the suit signed the compro-
mise petition. But, indisputably, the appellant herein has a rival
claim. The suit filed by him, vis-a-vis, the one of Sanjeev Sharma
c was required to be considered together. The court could exer-
cise its discretionary jurisdiction in one of the suits or the other,
having regard to Section 20 of the Specific Relief Act, 1963.
By reasoh of a compromise or otherwise, the claim. of the ap-
pellant could not have been defeated. When a compromise is
D entered into, the Court has a duty to see as to whether the same )f
meets the requirements of law. A compromise decree which
does not satisfy the requirements of law is not legal. It would be
unlawfuj. It, therefore, cannot be recorded.
·The terms of the compromise may, briefly be noticed:
E
"(d) That the defendant No.1 admits the claim of the plaintiff
and ttie said defendant No.1 has no objectiorf if the suit of
the plaintiff for specific performance is decreed in favour
of the plaintiff and against the defendant No.1 and the
F defendant No.1 shall get the Sale Deed executed in favour "'
of the plaintiff or in the name of the nominee(s) on or
, before 31.3.2003 subject to the balance payment of
consideration price amounting to Rs.24. 75 lacs by way of
Banker's cheque/draft in the name of the defendant No.1
and the defendant No.1 shall hand over the physical vacant
G
possession of first floor and the symbolic possession of ·~
the tenanted portion of the house in question.
(e) That the defendant No.1 is to go back to States and
the execution of decree is mandatory to be performed
H within the above-mentioned time and in the case of plaintiff
ARJAN SINGH v. PUNIT AHLUWALIA 693
& ORS. [S.S. SINHA, J.]
fails to pay the balance amount of Rs.24.75 lacs with the A
said stipulated period the defendant No.1 shall not be
entitled to sale deed by way of its execution and it will be
presumed that the plaintiff had no funds to purchase the
property.
xxx xxx xxx 8
(i) That the defendant No.2 Arjan Singh has also filed a
suit against the defendant No.1 in respect of the same
property i.e. House No.169, Sector 11-A, Chandigarh
alleging the contract having taken place on 21.6.1995 after c
· the contract of the plaintiff with defendant No.1. The said
suit is also pending in the Court. The plaintiff is a pro
forma defendant in the said suit and no relief has been
claimed against the plaintiff in the said suit. The outcome
of the said suit shall be the sole responsibility of the
0
defendant No.1 and the liability in the said suit qua the
earnest money, damages, interest shall be the
responsibility of defendant No.1 alone."
9. It is only pursuant to or in furtherance of the said pur-
ported terms of settlement, the deed of sale was executed on E
25.3.2003.
The settlement entered into by and between the parties pro-
ceeded on the assumption that no decree for specific performance
would be passed in the case of the appellant. It wrongly recorded
that the appellant is only a proforma defendant in the suit. F
10. The learned Trial Judge, while recording the compro-
mise, categorically held :
"Ld. Counsel for the plaintiff has stated that the
compromise has been effected between the parties and G
compromise Ex.C-1 has been placed on the file. Both the
parties i.e. the plaintiff and the defendant No.1 had got
their statements recorded separately that they have agreed
that the suit of the plaintiff is decreed as per the
compromise. In view of the compromise Ex.C-1 no claim H
694 SUPREME COURT REPORTS (2008] 8 S.C.R.
A has been made against the defendant No.2.
Heard.
The suit of the plaintiff is decreed as the defendant No.1
has admitted the claim of the plaintiff for specific
B performance and he had agreed that he shall get the sale
deed executed in favour of the plaintiff or in the name of
the nominee(s) on or before 31.3.2003 subject to the
balance payment of consideration price amounting to
Rs.24. 75 lacs and the defendant No.1 shall handover the
c physical vacant possession of the first floor and the
symbolic possession of the tenanted portion of the house
in question.
The plaintiff shall complete formalities and inform defendant
No.1 or his counsel 3 days before the e~xecution and
D registration of the sale deed.
There is no order as to costs. Suit of the plaintiff is decreed
in view of the compromise Ex.C-1 which is to be read as
part of the decree. Decree sheet be prepared accordingly
and file be consigned to the record room after due
E compliance."
11. One of the questions, therefore, which .arose for con-
sideration, is as to whether the first part or second part of Order
23 Rule 3 of the Code of Civil Procedure would apply. The Trial
F Judge, in our opinion, has rightly held that it was a case where
the first part of Order 23 Rule 3 would apply. As the appellant
was not a party to the settlement, the same was not binding on
him. The issue is directly covered by a judgment-of this Court in
Pushpa Devi Bhagat (Dead) through LR. Sadhna Rao (Smt.)
G v. Rajinder Singh & Ors. [(2006) 5 SCC 566] wherein two ques-
tions which had been framed were :
"(i) Whether the appeal filed by Pushpa Devi under
Section 96 of the Code of Civil Procedure against
tile consent decree was maintainable.
H
ARJAN SINGH v. PUNIT AHLUWALIA 695
& ORS. [S.B. SINHA, J.]
(ii) Whether the compromise on 23.5.2001 resulting in A
a consent decree dated 18.7.2001 was not a valid
compromise under Order 23 Rule 3 CPC."
The said questions were answered in the following terms,
opining:
B
"19. What is the difference between the first part and the
second part of Rule 3? The first part refers to situations
where an agreement or compromise is entered into in
writing and signed by the parties. The said agreement or
compromise is placed before the court. When the court is c
satisfied that the suit has been adjusted either wholly or in
part by such agreement or compromise in writing and
signed by the parties and that it is lawful, a decree follows
in terms of what is agreed between the parties. The
agreement/compromise spells out the agreed terms by
0
which the claim is admitted or adjusted by mutual
concessions or promises, so that the parties thereto can
be held to their promise(s) in future and performance can
be enforced by the execution of the decree to be passed
in terms of it. On the other hand, the second part refers to
cases where the defendant has satisfied the plaintiff about E
the claim. This may be by satisfying the plaintiff that his
claim cannot be or need not be met or performed. It can
also be by discharging or performing the required
obligation. Where the defendant so "satisfies" the plaintiff
in respect of the subject-matter of the suit, nothing further F
remains to be done or enforced and there is no question
of any "enforcement" or "execution" of the decree to be
passed in terms of it."
12. The compromise, in our opinion, was unlawful. What G
would be its effect is the question. But before we advert thereto,
another finding of the learned Trial Judge may also be noticed.
13. The learned Trial Judge passed an interim order on
2.2.1996, which was periodically extended. Indisputably, by
reason thereof, Dr. Bawa was restrained from transferring the H
696 SUPREME COURT REPORTS [2008) 8 S.C.R.
A property. A similar order of injunction was passed in Sanjeev
Sharma's case which was made absolute on 28.5.1997.
14. It is, however, again beyond any dispute that the said
order of injunction continued from time to time. It was operative
till 16.10.1996. It has been noticed by the learned Trial Judge
8 that an application for extension was filed. However, because
the Presiding Officer was on leave on 16.10.1 ~196 and later the
matter was transferred to another court, the interim order was
neither extended nor vacated.
c 15. Was the order of injunction operative' so as to attract
the provisions of Rule 2A of Order 39 of the Code of Civil Pro-
cedure or invoking the inherent jurisdiction of the court under
Section 151 thereof?
The learned Trial Judge opined that it was so because it
D was for the court fo pass an appropriate order thereunder. The
High Court, however, differed with the aforemi::mtioned finding
of the learned Trial Judge to hold that no order of injunction was
operative. It, furthermore, held that any transaction carried out
in violation of the order of the court is void; it would be a nullity.
E The decision of the High Court is based on the decisions of
different High Courts including Pranakrushna and others v.
Umakanta Panda and Others [AIR 1989 Orissa 148], Phani
Bhushan Dey v: Sudhamoyee Roy & Anr. [91 Calcutta Weekly
Notes 1078] and Harbalas and others v. The State of Haryana
F and Others 1973 Punjab Law Journal, 84].
16. We agree with the High Court on this issue. If the or-
der of injunction was operative upto a particular date, techni-
cally the order of injunction shall not remain operative thereaf-
ter. The owner of the land Dr. Bawa and the defendant No. 2
G Sanjeev Sharma, thus, could have entered into the compromise.
The effect thereof would be that the said deed of sale was
not binding on the appellant. It would be hit by the doctrine of lis
pendens, as adumbrated under Section 52 of the Transfer of
Property Act. The said deed of sale would not come in the Court's
ARJAN SINGH v. PUNIT AHLUWALIA 697
& ORS. [S.B. SINHA, J.]
way in passing a decree in fvour of the appellant. Its validity or A
otherwise would not be necessary to be considered as the ap-
pellant is not bound thereby. Sanjeev Sharma and consequently
Puneet Ahluwalia would be deemed to be aware of the pen-
dency of the suit. Even Section 19 of the Specific Relief Act will
be attracted. B
17. Reliance has been placed by Mr. Gupta on Surjit Singh
v. Harbans Singh [AIR 1996 SC 135 : (1995) 6 SCC 50]
wherein this Court opined:
"4 ... In defiance of the restraint order, the alienation/ c
assignment was made. If we were to let it go as such, it
would defeat the ends of justice and the prevalent pulllic
policy. When the Court intends a particular state of affairs
to exist while it is in seisin of a lis, that state of affairs is
not only required to be maintained, but it is presumed to
0
exist till the Court orders otherwise. The Court, in these
circumstances has the duty, as also the right, to treat the
alienation/assignment as having not taken place at all for
its purposes ... "
18. There cannot be any dispute with regard to the afore- E
mentioned proposition of law. This decision answers the ques-
tions raised by Mr. Mehta that the consequences of violating
the order of injunction must be kept confined only to Rule 2A of
• Order 39 of the Code of Civil Procedure. We must also take
notice of the fact that even a court in exercise of its inherent F
jurisdiction under Section 151 of the Code of Civil Procedure,
in the event of coming to the conclusion. that a breach to an
order of restraint had taken place, may bring back the parties
to the same position as if the order of injunction has not been
violated. [Gurunath Manohar Pavaskar and Ors. v. Nagesh G
"' Siddappa Navalgund and Ors. [2007 (14) SCALE 283]
19. Furthermore, in a given case, the court may also in-
voke the rule as adumbrated in Hadkinson v. Hadkinson [(1952)
2 All ER 567]. The said i:irinciple, however, has been explained
by this Court in Pravin C. Shah v. K.A. Mohd. Ali and Another H
•
698 SUPREME COURT REPORTS [2008] 8 S.C.R.
A [(2001) 8 SCC 650] stating:
"21. The observations can apply to the courts in India
without any doubt and at the same time without impeding
the disciplinary powers vested in the Bar Councils under
the Advocates Act.
B
{See also Bar Council of India v. High Court of Kera/a •
[(2004) 6 sec 311n
20. However, as in this case, no ord1ar of injunction was
breached, the said principle has no application.
c
The deed of sale, therefore, need not be set aside. It will
have its own effect h&ving regard to Section 52 of the Transfer
of Property Act and Section 19 of the Specific Relief Act.
The learned Trial Judge, however, was right in holding that ~
D the purported compromise was bad in law. It was unlawful be-
ing without any written consent of all the pa1rties. We need not
go into the question as to whether the same was fraudulent or
not, but indisputably not only the same was not binding on the
parties, the court in a case of this nature while considering the
E appellant's case shall not take note of the fact that any deed of
sale has been executed pursuant thereto. Respondent No.3,
as a logical corollary of these findings, would not be entitled to
set up the plea of being bona fide purchaser for value without
notice. The court may also pass such other order or orders, as v
F it may deem fit and proper keeping in viEiw its discretionary
jurisdiction under Section 20 of the Specific Relief Act, 1963.
To that extent the judgment of the learned Trial Judge must be
upheld and that of the High Court must be set aside.
We, however, do not agree· that the appellant cannot be
G made to suffer for violation of the order of the court but as the
legal principle stated in the judgment of the learned Trial Judge
in that behalf is not correct, the same would not apply in this
case. As no order of injunction was operative, the court cannot
pass an order of injunction with retrospecltive effect so as to
H take away the right of the parties created for the said purpose.
ARJAN SINGH v. PUNIT AHLUWALIA 699
& ORS. [S.B. SINHA, J.]
To the said effect, the court must make a distinction between an A
incidental proceeding and a supplemental proceeding. An or-
der of injunction can be passed in terms of the provisions of the
supplemental proceedings contained in Section 94 of the Code
of Civil Procedure. An express order must be passed while
giving effect to the supplemental proceedings which is addi- B
tional to the incidental power of the court. The distinction is fine
but real.
21. For the reasons aforementioned, the impugned judg-
ment is set aside to the aforementioned extent. The appeal is
allowed in part. In the facts and circumstances of the case, C
Respondent No.2 and 3 must bear the costs of the appellant.
Counsel's fee assessed at Rs.50,000/- (Rupees fifty thousand
only).
R.P. Appeal partly allowed.
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