j

MAHBOOBSAHAB

v.

SYED ISMAIL AND ORS.

MARCH 23, 1995

(K. RAMASWAMY AND B.L. HANSARIA, JJ .)

Cqde of Civil Procedure, 1908-Section 11-:Res judicata-Conditions

for applying the doctrine

in the case of

co-defendants-Fraud or collusion-Ef­

fect

of.

Mahomedan Law-Gift-Essential conditions for validity of

Mahomedan Law-Guardianship-Mother cannot act as guardian of a

minor.

The respondents filed a suit for possession against their father M

A

B

c

and the appellant claiming that their father had illegally sold the suit land D

in favour of the appellant in collusion

with the Patwari, while they were

minors. The respondents claimed that their father had gifted the suit land

jointly in their favour

and in the favour of their mother by executing a registered gift deed and their mother in tum had orally gifted her share

to one of the respondents

and therefore their father had no authority to E

alienate the suit land. The appellants resisted the suit pleading that the

suit

lands were sold to him for consideration and in discharge of debts.

In another suit filed

by another person claiming to be possessory

mortgagee of the

suit

land and impugning a decree in favour of another

creditor of the father of the present respondents,

it was held that the father F

of the respondents had gifted the land jointly to the respondents and their

mother. The respondent

and their father, who were co-defendants in the

said suit,

had filed a joint written statement admitting the claim of the

plaintiff in the said suit. The respondents urged

that this would act as a

res judicata against the appellant as he was claiming

title to the suit G

property through their father.

The trial court rejected the plea of res judicata but decreed the suit

on merit.

The point of res judicata was not urged before the first appellate H

975

/

97Ci SUPREME COURT REPORTS (1995] 2 S.C.R.

A court, It held that -(i) the name of the father of the respondents continued

{ to appear as owner in the revenue records. till it was mutated in favour of

the appellant; (ii) the gift deed executed

by the father was not proved (iii)

the oral gift made by the mother was false as neither the acceptance of the

gift nor delivery of possession

was proved (iv) the mother cannot act as a

.B

guardian of the property when father was alive. The first appellate court

allowed the appeal holding

that the alleged gifts were only a

·device to

defraud 'creditors.

(

In second appeal, the High Court reversed the order of the first ,---

appellate court only on the ground of res judicata without disturbing the

c

finding of facts. Hence, the present appeal.

Allowing the appeal, this court

HELD :

1. The trial court negatived the plea of res judicata as a

D

preliminary issue. Though it was open to sustain the trial court decree on

the basis of

doc~ine of res judicata, it was not argued before the.appellate

court on this basis. Thereby the findings of the trial court on

res judicata

became

final. [981-GJ

---"-

2.1 The doctrine of res judicata must be applied to co-defendants

' E with great care and caution. The reason is that fraud is an extrinsic

collateral act which vitiates most solemn proceedings of courts of justice.

If a party obtains a decree from the court by practicing fraud or collusion,

he cannot ·be aliowed to say that the -.iatter is res judicata and cannot be

re· opened. There can also be no question of res judicata in a case where

F

signs of fraud or collusion are transparently pregnant or apparent from

~-,_

the facts on record. As found by the appellate court, M was playing fraud

upoR his creditors by creating false oral gifts or spurious claim of

_)__

mortgages with a view to defraud them. (982-G-H, 983-B]

G

2.2 For application of the doctrine of res judicata between co-defen-

dants, four conditions must be satisfied, namely (i) there must be a conflict

of interest between the defendants concerned:

(2) it must be necessary to

-~~

decide the conflict in order to give the reliefs which the plaintiff claims;

(3) the question between the defendants must have been finally decided,

and (4) the co-defendants were necessary or proper parties in the former

H

suit. [982-A)

I

--.

M. SAHAB v. S. ISMAIL [K. RAMASWAMY, J.] 977

S.M. Sadat Ali Khan v. Mirza Wiquar Ali, AIR (1943) PC 115; A

Shashibusha11 Prasad Mishra v. Babuji Rai & Ors., [1969] 2 SCR 971 and

lftiklzar Ahmed & 01:1". v. Syed Mel1arba11 Ali, [1974] 2 SCC 151, relied on.

2.3 Though the appellant claimed title to the property through the

parents of the respondents, there was neither conflict of interest nor was

it necessary to decide about the validity of the gift said

to have been

executed

by M. The dispute therein was whether the possessory mortgagee

was bound

by the decree and the creditor could proceed against the father

and the said property is liable to sale for realisation of his decree debt. In

that context the relevancy or validity of

the gift is immaterial. [983-G-H]

3. Though gift

by a Mohammaden is not required to be in writing

and consequently need not be registered under the Registration Act, for a

B

c

gift to be complete, there should be a declaration of the gift by the donor,

acceptance of the gift, express

or implied, by or on behalf of the donee and

delivery of possession of the property, the subject matter of the gift by the

donor to the donee. The donee should take delivery of the possession of D

the property eitheL" actually or constructively. On proof of these essential

conditions, the gift becomes complete and valid. In case of immovable

-\..__ property in the possession of the donor, he should completely divest

himself physically of the subject of the gift. (980-D-E]

Mahomedan law by Mui/a, 19th Ed., referred to ••

4. In Mahammaden Law mother cannot act nor be appointed as

guardian of the property of the minor. She equally cannot act as guardian

for the minor himself. (980-G] ·

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 513 of

1979.

From the Judgment and Order dated 2.1.79 of the Karnataka High

Court in R.S.A. No. 161 of 1975.

Devendra Singh for the Appellant.

S.S. Javali and P.R. Ramasesh for the Respondents.

The following Judgment

of the Court was delivered by

E

F

G

H

978 SUPREME COURT REPORTS (1995) 2 S.C.R.

A K. RAMASWAMY, J. Syed Ismail and Ibrahim, sons of Maqdoom,

Panchamale filed O.S. No. 28 of 1965, impleading their parents and appel­

lant/purchaser, for possession of the suit lands and for mesne profits from

the appellant. The averments made

in support thereof are that their father

had executed a gift deed bequeathing

15 acres 38 gunthas out of 31 acres

B

· 36 gunthas in Survey No. 781 of Aland village, jointly in their favour and

their mother Smt. Chandi, third defendant,

who in her turn, orally gifted

over her share to Syed Ismail in April,

1958 at the time of

'1.is marriage.

Being minors, their father-second defendant,

while cultivating the lands on

their behalf, had colluded with the

Patwari and executed sale deed Ex•D-1

in favour of the appellant. On their becoming aware of the same, they filed

C the suit since their father had no right, title and interest therein to alienate

the lands. The sales, therefore, in favour of the appellant were invalid,

inoperative and do not bind them. The appellant pleaded that Maqdoom

had entered into an agreement of sale under Ex.D-22 on April 12, 1961 to

sell

12 acres of land for valuable consideration and had executed the sale

D deed, Ex.D-1 dated May 12, 1961, to discharge antecedent debts. Similarly

an agreement of sale of 4 acres of land for

2,500 was executed and the

appellant had obtained permission from the Assistant Commissioner on

August

4, 1964 for sale thereof. When he and

Smt. Chandi refused to

execute the sale deed, he filed OS No. 4/1 of 1966 for specific performance

which was decreed on contest and the sale deed Ex.D-3 was executed and

E · registered by the court. Their parents had not given any gifts which were

set up only to defraud the appellant.

It was brought out at the trial that in OS No. 3/1/1951 filed by one Ismail on the foot of a possessory mortgage,

the executability of another decree obtained by another creditor,

was

impugned, wherein by judgment and decree dated September 24, 1951, the

F Court held that Maqdoom had jointly gifted the lands to the respondents

and their mother by a registered gift deed.

The aforesaid finding was pleaded to operate

as res judicata against

the appellant. As a preliminary issue, the trial court held that the decree

in

OS No. 3/1/1951 does not operate as res judicata but decree.d the suit

G on merit. In R.A. No. 211/1970, the Additional Civil Judge, Gulbarga

reversed the decree and dismissed the suit holding that Maqdoom as an

owner had alienated. the property. His name continued to be the owner in

revenue records till it was mutated in the name of the appellants after

his

purchase. Neither the original nor certified copy of the gift deed alleged

H to have been executed by Maqdoom was filed. A letter of the Sub-Registrar

{

)

M. SAHAB v. S. ISMAIL [K. RAMASWAMY, J.] 979

to show its loss filed in the appeal cannot be used as evidence of execution A

of the gift over. The mother cannot act as a property guardian when the

father

is alive. The oral gift by the mother to the respondents was false as

neither acceptance of the gift nor delivery of possession of the lands either

by the father or the mother was proved. It was not proved that the father

or

any one had acted as guardian when

Smt. Chandi gifted her undivided

share to the first respondent nor

is there any proof of taking possession

from the

wife under the oral gift deed. The alleged gifts, therefore, were

not proved, nor were they valid

in law. Maqdoom, was a chronic debtor

and to defraud the creditors, he set up false plea of gifts in favour of his

children and

wife or spurious mortgages in favour of third party. Before

B

the appellate court, the decree in

OS No. 3/1/1951 was not pressed into C

service as res judicata to sustain the decree of the trial court.

The High Court without disturbing any of the findings of facts

recorded by the appellate court, reversed the judgment solely on the

finding that the decree in OS No. 3/1/1951 operates as res judicata, as the D

parents and the respondents are co-defendants in that suit. Having been

divested of his title, Maqdoom had no right to alienate the properties

of

the minors in favour of the appellant. Accordingly the High Court reversed

the decree

of the

appella!e court and confirmed that of the trial court in

Second Appeal No. 161of1973, dated January 2, 1979.

The question, therefore, is whether the High Court was right in its

conclusion that the decree in OS No. 3/1/1951 operates as res judicata and

whether reversal of appellate decree without disturbing the findings of fact

E

on merits is legal. Having given our anxious consideration to the respective F

contentions of both the counsel we think that the High Court was

·wholly

wrong in its approach. Neither the mother nor the father was examined as

a witness to prove the gifts said to

have been given in favour of their minor

sons Ismail and Ibrahim, respondents Nos. 1

& 2.

Syed Ismail too was not

examined as a witness. Ibrahim in his evidence had admitted the execution

of the sale deed

by his father and he acted as an attesting witness to the G

sale transaction

under Ex.D-1. He also admitted that his father mortgaged

the property under Ex.P-3. In the objection petition the gift was not set up.

The appellate court, as a final court of fact, found that alleged registered

gift deed said to have been jointly

given by Maqdoom and his wife jointly

to his minor sons

was not filed either in this suit or in

OS No. 3/1/1951. H

980 SUPREME COURT REPORTS [1995) 2 S.C.R.

A Under s.147 of the Principles of Mahomedan Law by Mulla, 19th

Ed., Edited

by Chief Justice M. Hidayatullah, envisages that writing is not

essential

. to the validity of a gift either of movable or of immovable

property. Section 148 requires that it is essential, to the validity of a gift,

that the donor should divest himself completely of

all

o-wnership and

B dominion over the subject of the gift. Under s.149, three essentials to the

validity of the gift should be, (i) a declaration of gift

by the donor, (ii)

acceptance of the gift,

e~'Press or implied, by or on behalf of the donee,

and

(iii) delivery of possession of the subject of the gift by the donor

to

the donee as mentioned in s.150. If these conditions are complied with,

the

gift is

complete. Seciion 150 specifically mentions that for a valid gift

C there should be delivery of possession of the subject of the gift and taking

of possession of the gift by the donee, actually or constructively. Then only

the

gift is

complete. Section L'i2 envisages that where donor is in posses­

sion, a

gift of immovable property of which the donor is in actual possession

is not complete unless the donor physically departs from the premises with

D all his· goods and chattels, and the donee formally enters into possession.

.

It would, thus, be clear that though gift by a Mohammaden is not required

to

be in writing and consequently need not be registered under the

Registration Act; for a

gift to be complete, there should be a declaration

of the gift by the donor; acceptance of the gift, expressed or implied, by or

on behalf of the donee, and delivery of possession of the property, the

E subject-matter of the gift by the donor to the donee. The donee should take

delivery

of the possession of that property either actually or constructively.

On proof of these essential conditions, the gift becomes complete and valid.

In case

of immovable property in the possession of the donor, he should

completely divest himself physically of the subject of the

gift. No evidence

F has been adduced to establish declaration of the gift,

acceptance of the gift

by or on behalf of the minor or delivery of possession or taking possession

""" or who had accepted the gift actually or constructively. Admittedly he was

' in possession and enjoyment of the property till it was sold to the appellant.

G

Equally, i~ Mohammad.an Law mother cannot act nor be appointed as

property guardian of

the. minor. She equally cannot act as legal guardian.

Section 348 defines "minor" to mean "a person who has not com­

pleted the age

of eighteen years".

Section 349 provides that "all application

for the appointment of a guardian of the person or property or both

of a

minor are to be made under the.Guardians and Wards Act,

1890". Section

H 359 enumerates the persons entitled, in the order mentioned therein, to be

)

)

r

M. SAHAB v. S. ISMAIL [K RAMASWAMY, J.) 981

guardian of the property of a minor, namely, (1) the father; (2) the executor A

appointed by the father's will; (3) the paternal grand father; and ( 4) the

executor appointed

by the will of the paternal grand father.

Section 362

limits the power of the legal guardian to alienate immovable property

except

in the circumstances en.umerated therein. Similarly, the court guar­

dian has

no power to mortgage or charge or transfer by sale, gift, exchange

B

or otherwise and part with possession of immovable property of the ward

or to lease that property except with the previous permission of the court

and subject to the conditions mentioned in

s.363. Admittedly, no property

guardian

was appointed to act on behalf of the minors. No evidence that

the father acted

as legal guardian.

So also there is no proof of acceptance

of the oral gifts said to have been made

by the mother to Ismail, the eldest C

son, of her undivided share. There is no proof as well that possession was

·delivered under the oral gift and accepted on behalf of the minor and taken

possession.

Her 1/3rd undivided share

was not subject matter of

OS No. 3/1/1951. D

The Additional Civil Judge, therefore, was right in his findings that the gifts

have not been proved. They were not complete. Admittedly, the father

continued to be in possession and enjoyment of the lands as owner as

evidenced by the revenue records until it was mutated in the name

of the

appellants to the extent of

16 acres purchased by him as per the aforesaid

sale deeds Ex.D-1 and Ex.D-3. Ibrahim has attested Ex.D-1 when his father

E

conveyed the lands as an owner. Though the sale was against his interest,

he had not objected to the sale. He, thereby, is estopped by conduct and

record to assail Ex.D-1 sale or to claim any interest in the lands.

Under these circumstances the question emerges whether the High F

Court was right in reversing the appellate decree on the doctrine of res

judicata. At this juncture it may be relevant to mention that the trial court

negatived the plea of

res judicata as a preliminary issue. Though it was open

to sustain the trial court decree on the basis of the doctrine of

res judicata,

it was not argued before the appellate court on its basis. Thereby the G

findings of the trial court that the decree in

OS No. 3/1/1951 does not

operate

as a res judicata became final. The question then is whether the

doctrine

of res judicata stands attracted to the facts in this case. It is true

that under

s.11

C.P .C. when the matter has been directly or substantially

in issue in a former suit between the same parties or between parties under

whom they or any . of them claimed litigating under the same title, the H

982 SUPREME COURT REPORTS [1995] 2 S.C.R.

A decree in the former suit would be res judicata between the plaintiff and

the defendant or

as between the co-plaintiff or co-defendants four condi­

tions must be satisfied, namely, that (1) there must be a conflict of interest

between the defendants concerned; (2)

it must be necessary to decide the

conflict

in order to give the reliefs which the plaintiff claims; (3) the

B question between the defendants must have been finally decided; and ( 4)

the co-defendants were necessary or proper parties in the former suit. This

is the settled law as held in

S.M. Sadat Ali Khan v. Mirza Wiquar Ali, AIR

(1943) PC 115, Shashibushan Prasad Mishra v. Babuji Rai & Ors., [1969) 2

SCR 971; and Iftikhar Ahmed & Ors. v. Syed Meharban Ali, [1974) 2 SCC

151. Take for instance 'that if in a suit by 'A' against 'B & C', the matter is

C directly and substantially in issue between B & C, and an adjudication upon

that matter

was necessary to determine the suit to grant relief to 'A'; the

adjudication would operate

as res judicata in a subsequent suit between B

& C in which either of them is plaintiff and the other defendant. In other

words, if a plaintiff cannot get at his right without trying and deciding a

D case between co-defendants, the court will try and decide the case, and the

co-defendants

will be bound by the decree. But if the relief given to the

plaintiff does not require or involve a decision

of any case between

co­

defendants, the co-defendants will not be bound as between each other.

Where the above four conditions did not exist the decree does not

E .operate as res judicata. It must, therefore, be that all the persons who have

right, title and interest are made parties to the suit and that

they· should

have knowledge that the right, title and interest would

be in adjudication

and the finding or the decree therein would operate

as a res judicata to

their right, title and interest in the subject-matter of the former suit. Even

F in their absence a decree could be passed and it may be used as an

evidence of the plaintiff's title either accepted or negatived therein. The

doctrine of

res judicata would apply even though the party against whom

it

is sought to be enforced, was not co-nominee made a party nor entered

appearance nor did he contest the question. The doctrine of

res judicata

·

must, however, be applied to co-defendants with great care and caution.

G The reason is that fraud is an extrinsic collateral act, which vitiates the most

solemn proceedings of courts of justice.

If a party obtains a decree from

the court by practicing fraud or collusion, he cannot

be allowed to say that

the matter is

res judicata and cannot be re-opened. There can also be no

questi6n of res judicata in a case where signs of fraud or collusion are

H transparently pregnant or apparent from the facts on record:

\_

{

(

)

)

M. SAHAB v. S. ISMAIL [K. RAMASWAMY, J.] 983

Therefore, in applying the doctrine of res judicata between co-defen- A

dant or co-plaintiff, care must, of necessity, be taken by the courts to see

that there must in fact 'be a conflict of interest between the co-defendants

or co-plaintiffs concerned and it

is necessary to decide the conflict in order

to

give relief which the plaintiff in the suit claimed and the question must

have been directly and substantially in issue and

was finally decided there-

B

in. As found by the appellate court, Maqdoom was playing fraud upon his

creditoi:s by creating false oral gifts or spurious claims of mortgagees with

a

view to defraud them. Section 44 of the Evidence Act envisages that any

party to a suit or proceeding may show that any judgment, order or decree,

-

which is relevant under

s.40, 41 or 42 has been obtained by fraud or ,.-

.... collusion. Under s.40, the existence of the judgment, order or decree which c

by law prevents any Court from taking cognizance of a suit or holding a

trial,

is a relevant fact when the question is whether such court ought to

take cognizance of such suit or to hold such trial.

When the evidence on record establishes that the suit in

OS No.

D

3/1/1951 was collusive or fraudulent to defraud the creditors, it is a relevant

fact and the court would take cognizance thereof to find whether the trial

court

is precluded to try the issue. The High Court had not adverted to

>--

nor bestowed its attention this aspect of the matter except mechanical

application of the principles laid by this Court in

lftikhar Ahmed's case

E

(supra). The pleadings in

OS No. 3/1/1951 were not produced in the courts

below. The judgment, Annexure II, indicates that the respondents and their

another brother and the parents were impleaded

as defendants 1to5. Sixth

defendant

was the decree holder in another suit. It was claimed therein

that the defendants 1 to 4 were said to have executed possessory mortgage

in favour of one Ismail, the plaintiff therein. A joint written statement

was

F

r.r-::

filed by them admitting the claim of the plaintiff who had pleaded the gift

said to have been given

by Maqdoom in favour of the three sons and his

I

wife. They have admitted the same. Thus it would be clear that there was

._.C no conflict of interest between the defendants in that suit. On the other

hand they had confessed to the claim . set up

by the alleged possessory

G

mortgagee therein. Though the appellant claimed title to the property

through the parents of the respondents, there

was

neither conflict of

y-

interest nor was it necessary to decide about the validity of the gift said to

have been executed

by Maqdoom. The dispute therein was whether the

possessory mortgagee

was bound by the decree and the creditor could

proceed against the Maqdoom and the said property

is liable to sale for H

984 SUPREME COURT REPORTS (1995] 2 S.C.R.

A realisation of his decree debt? In that context the relevancy or validity of

the

gift is immaterial. It was admitted therein that they had executed

possessory mortgage in favour of Ibrahim, plaintiff therein.

On· that basis, ·1i

the only question would have been whether he would be entitled to resist

the execution of the decree obtained against Maqdoom by the 6th defen-

dant therein? The oral

gift or sale of 4 acres under Ex.D-3 was not the

B subject-matter of

OS No. 3/1/1951. The High Court, therefore, committed

. gross palpable error of law in applying the doctrine of res judicata between

co-defendants relying upon the decree in OS No. 3/1/1951 dated September

24, 1951, even if it could be pressed into service in the second appeal.

C The appeal is accordingly allowed. The judgment and decree of the

High Court are set aside and that of the appellate court stands restored,

in consequence the suit of the respondents 1

& 2 stands dismissed with

costs throughout.

B.K.M. Appeal allowed.