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SUPREME GENERAL FILMS EXCHANGE LTD.

v.

ms HIGHNESS MAHARAJA SIR BRIJNATH SINGHJI DEO OF

MAIHAR & ORS..

August 4, 1975

. [M. H. BEG ,AND A. C. GUPTA, JJ.]

Specific Rt'lief Act, 1877-S. 42---Scopc of Transfer of Properly Act

s. 52 scope of.

The plaintiff-respondents was a mortgagee in respect of a cinema theatre of

which the appellant claimed to be a lessee in occupation. A comprom:se decree

was passed on 7th May, 1960 in the suit filed by the plaintiff-respondent against

the n1ortg~gor by which it was agreed that the amounts due would be realised by

the sale of the theatre. The Central Bank of India, another creditor of the mort­

gagor,

assigned its rights under the decree to the

pla'..ntiff-respondent. The

tBeatre was attached in the course of the execution of the decree. The original

lease of 1940 \Vhich the appellant cOmpany had entered into, expired in 1946

but the company continued as a tenant holding over until the impugned lease

dectl of -1956 was executed. The appellant company filed a suit in 1954 for the

spec:.fic performance of the agreement to lease. The lease deed of 1956 pur­

ported to carry out the terms of that compromise decree.

In this suit the plain­

tiff-respondent

was not impleaded as a party.

J1ie plaintiff-respondent claimed

that the lease of

1956 was void as it was struck by ss. 52 and 65A of the Trans­

fer of

Property Act and s. 64 of the Code of Civil Procedure. The appellant

company on the other hand, claimed that a suit of the nature filed by the pla'ntiff­

respondent di.d not lie as it fell outside the purview of s. 42 of the Specific Relief

:\ct, 1877. The trial court decreed the plaintiff-respondent's suit. The ~ppel­

lant'-s appeal \vas dismissed by the High Court.

Dismissing ihe appeal,

HELD: (1) The circumstances in \Vhich a declaratory decree under s. 42,

Specific Relief Act should be awarded is a matter of discretion depending upon

the facts of each case.

A complete stranger whose interest is not affected by an­

other's legal character or who has no interest in another's property could not

get a declaration under

s. 42, Specific Relief Act with reference to the legal

character or the property involved.

S.uch is not the present case. The plaintiff­

respondent had not only· the rights of a nlortgagee decree-holder with regilrd, to

tile property involved, but he was also the assignee of the rights of the Bank

\Vhich had got the property in question attached in execution of its de:ree. The

p!::tintiff-respondent possessed sufficient legal interest in the theatre as a mortgagee

as well as an assignee of a decree-holder, who had got the property attached be­

fore he

filed his

su~t, so as to enable him to sue for the declarations he sought.

}{e was not seeking a merely whimsical or eccentric or an unreasonable declara­

tion of a right in property with no enforceable legal claims over it which could

' remain unaffec'.ed by the appellant's claims as a lessee. [242G-243C]

Sfzeoparsan Singh & Ors. v. Ranu1anda11 Singh (since deceased) & Ors. 43

I A 91 held inapplicable.

Deokali Koer v. Keda.r Nath ILR 39 Cal. 704 @ 707; Bai Shti ·vaktuha \'.

Thakore Agarsinghji Raisinghji ILR 34 Bombay 676 @ 680; Kishori Lal v. Bet:

Raj & Ors. AIR 1952 Punjab 3_87 and Ran1araghava Reddy & Ors. v. Kondurll

Scslrn Reddy & 2 Ors. [1966] (Suppl.) SCR p. 270 @ 277 referred to.

(2) The plaintiff needed a declaration and

in the circumstances of the case

the declaration sought for could not be reasonably denied to him.

From the

plead'.ngs it is clear that the appe11ant had actually denied the plaintiff-respondent's­

rights

as a mortgagee and also the validity of the compromise decree. The res­

pondents had reasonable grounds

to apprehend that the appellant will rely upon

its

alleged lease to resist delivery of actual possession to_ an auction purchaser.

The existence of lessee rights would certainly affect the price \Vhich an auction

purcha5er would be prepared to pay for the property. [243C-F]

2-L839Sup.CI/75

238 SUPREME COURT REPORTS [1976] 1 s.c.R.

~3) A-s .the special doctrine of /is pendens is applicable the purported lease

of 1956 was invalid from the outset. The_ lease of 1956 purported to create en­

tirely new rights "[Jendente lite. It \Vas therefore struck by tlie doctrine of /is

pendens embodied in s. 52 of the Transfer of Property Act. The terms of the

ccn1promise decree in the appellant's suit against the mortgagor and the lease

deed

of 1956 purported to confer upon the appellant new rights. There are good

grounds for suspecting that the compromise in the suit

for specific performance

was adopted

as a device to get round legal difficulties in the execution of

the

1ea3c of 1956 in favour of the appellant company. [243G-244A, C]

Bisha11 Singh & 0.rs. v. K/1a:;,a11 Singh & Anr. ll959] SCR 878 and Jayardnz

Mudaliar v. Ayyaswan1i & Ors. [1973] ( 1) SCR 139, referred to.

(4) The lease of 1956 was struck by the provisions of s. 64 C.P.C. Section 64

constitutes a spec~al application of the doctrine of /is pendens in the circum­

-stances specified there. The order of the trial ·Court shows ~hat the compromise

had been arrived at between the decree-holder and the judgment-debtor under

which the decree-holder had agreed to lift attachment of property except with

regard to the theatre which

was to continue. It is, therefore, difficult to hold

that the

con.current findings of the trial court and the High Court that the theatre

was attached in execution of a decree and that th!s attachment was in existence

\Vhen the i1npugned lease was executed in 1956 are erroneous. [244G-245A]

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1041 of 1968.

Appeal by Special Leave from the Judgment and Decree dated the

30th day of August, 1967 of the Madhya Pradesh High Court in First

Appeal No. 8 of 1966 and

Special Leave Petitions (Civil) Nos. 2494 & 2533 of 1974.

From the judgment. and order dated the

30th September, 1974 of

the Madhya Pradesh High Court in Civil Review No. 456 of 1974.

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D. V. Patel, P. R. Naolokar, H. K. Puri and K. K. Mohan, for the E

appellant (In C.A. No. 1041/68).

-·A. K. Sen, S. K. Gambhir and K. P. Gupta, for respondent no. 1

(V) & 2.

T. V. S. N. Chari and Urmila Sirur, for L.Rs of respondent 3 (In

C.A. No. 1041/68). F

D. V. Patel, N. M. Ghatate, S. Ba/akrishnan and P. R. Nao/ak~r.

for petitioners (In S.L.Ps.).

A. K .. Sen, S. K. Mukherjee, K. P. Gupta and S. K. Gambhir, for

respondent No. 1

(In both the

S.L.Ps.)

T. V. S. N, Chari and Urmila Sirur, for respondent no. 2 (In both G

the S.L.Ps l.

The Judgment of the Court

was delivered by

BEG, J.

·The plaintiff-respondent had filed a smt m the District

Judge's Court

at Jabalpur claiming a declaration that a lease executed

in favour of the Defendant-Appellant,

M/s. Supreme General Films

Exchange Ltd., (hereinafter referred to as 'the Company'), in respect H

of Sunder Vilas Theatre (now known as Plaza Talkies) by its former

owners, Jiwan Das Bhatia and his sons (hereinafter referred to as 'the

Bhatias'),

is void and ineffective against the plaintiff's rights under

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SUPREME GENERAL FILMS v. BRIJNATH (Beg, J.) 239

decrees obtained in Civil Suit No. 15A of 1954 dated 7-5-60 and in

Civil Suit No: 3B of 1952 dated 20-4-1954 iu execution of which the

Theatre had been attached. The plaintiff wanted the declaration also

to make it clear that an auction purchaser, purchasing the theatre in

execution of either of the two decrees, gets rights free from any obli­

gation towards

the Defendant-Appellant

under the void lease.

The former owners

of the threatre, the Bhatias, had borrowed

Rs.

2,50,000/-from the Plaintiff-Respondent, a Maharaja, against the

security

of bales of cotton.

On 29-12-1951, they executed a registered

mortgage deed in respect

of the Plaza Theatre.in favour of the plaintiff

as the price of pledged goods was insufficient to satisfy the dues. The

plaintiff, unable to recover the amount due,

hdd brought Civil Suit No.

15A of 1954 in

which a compromise decree was passed on 7-5-1960,

in terms of an agreement between the parties that amounts due

will-be

realised

by the sale of Plaza theatre.

· ·

The Central Bank of India, another creditor of Bhatias, had

brought Civil Suit No. 3B of 1952 and obtained a decree for Rs.

1,24,000/-on 29-4-1952. Rights under this decree

were assigned in

favour of the plaintiff-respondent. The Plaza theatre, together with

other properties

of Bhatias, was attache_d on 4-5-1955 in the course of

execution of that decree.

The appellant company claimed

to be a lessee in occupation of the

theatre where it had carried on the business

of running a

Cinema under

an unregistered lease obtained on 27-2-1940. The lease of 1940 had

expired

on 10-4-1946. The

Company continued as a tenant holding

over until the impugned lease deed of 30-3-1956 was executed. lf this

was a valid lease, it would have conferred upon the company the right

to be a tenant of the property under the lease for eight years, from

10-2-1956 to 10-2-1964, with an option for a renewal until 10-2-1970.

Titis lease was executed after the company had iiled a suit (No. 16A

of 1954) on 20-11-1954 for the specific pcrformanc~ of an agreement

to lease contained in a letter dated 19-7-1948. A compromise decree .

was passed on 24-3-1956 in this suit also. T)1e lease deed of 30-3-

1956 purported to carry out the terms -of that compromise decree

passed in a suit in

which the plaintiff was not impleadcd at all.

The plaintiff's case

was that the lease of

30-3-1956 was void as it

was struck by three statutory provisions, namely, section 52 of the

Transfer of Pnperty Act, Section 65A of the Transfer of Property

Act, •and Section 64 of the Civil Procedure Code. The

d.efendant-appellant compai,1y, in addition to denying the alleged

nghts

of the plaintiff to the benefits of these provisions, pleaded

that. a

snit of the nature filed by the plaintiff did not lie at all as it fell outside

the purview

of

Section 42 of the Specific Relief Act, 1877, altogether.

The Trial Court and the High Court, after having over-ruled the

pleas of the defendant·appellant, had decreed the plaintiff's suit. The

defendant company obtained special leave to appeal to this Court under

Article 136 of the Constitution.

240 SUPREME COURT REPORTS [1976] 1 S.C.R.

Learned Counsel for the appellant company tried to persuade us to

hold that the plaintiff had neither a legal character nor any such pre­

sent right in any property for which a declaration could be granted

under Section 42 of the Specific Relief Act 1877 (re-enacted as Section

34 of the Specific Relief Act of 1963). Furthermore, he contended

that the defendant-company had never denied any of the rights of the

plaintiff. Finally, he submitted that, in any case, no declaration at all

was needed by the plaintiff

if the lease of 1956, executed by the former

owners of the theatre in favour of the defendant-appellant, was void.

These arguments rest on the assumption that no declaratory relief

ca:1

be granted outside the ambit of

Section 42 of the Specific Relief Act,

1877 which read

as follows :

"42. Discretion of Court as to declarations of status or

right.

... Any person entitled to any legal character, or to

any right

as to any property, may institute a suit against any

person denying,

or interested to deny, his title to such

character

or right, and the Court may in its discretion make

therein a declaration that he

is so entitled, and the plaintiff

need not in such suit ask for any further relief :

Bar to such declaration

.... Provided that no Court shall

make any such declaration where the plaintiff, being able

to seek further relief then a mere declaration of title, omits

to

do so.

Explanation

.... A trustee of property is a

"person in­

terested to deny" a title adverse to the title of some one who

is not in existence, and for whom, if in existence, he would

be a trustee".

Learned Counsel for the appellant sought to support his argumcn ts

by citing: Deokalikoer v. Kedar Nath(I); Sheoparsan Singh & Ors. v.

Ramnandan Singh (since deceased) & Ors.(2); Bai Shri Vaktuba v.

Thakore Agarsinghji Raisinghji(

3

); Kis/zori Lal v. Beg Raj & Ors.(

4

)

Deokali Koer's case (supra) arose out of a dispute on the amount

of court fee payable.

It was observed there that the history of

"decrees

merely declaratory" indicated that these were innovations given autho­

ritative sanction in England by Section 50 of the Chancery Procedu:re

Act, 1852.

It was pointed out that

Section 15 of the Civil Procedu:re

Code of

1859 extended

tl1is recognition to decrees in suits in .tbis

country by enacting that "no suit sball be open to objection on the

ground that a merely declaratory decree or order is sought thereby and

it shall be lawful for the Civil Courts to make binding declarations of

right without granting consequential relief". This provision was re­

pealed by Act 10 of 1877 as this form of relief was recognised by

Section 42 of Specific Relief Act I of 1877 subject to the limitation

indicated there. Jenkins C.J., explained the new provision

as follows

(at p.

709) :

(I) I. L. R. Cal. 704 @ 707. (2) 43 I. A. 91.

(3) I. L. R. 34 Bombay 676 @ 680. (4) A.T.R. 1952 Punjab 387

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SUPREME GENERAL FILMS V. BRIJNATH (Beg, J.) 241

"The terms of the section are not a precise reproduction

of the provision contained in

the Act of 1859 and the English

Law :

in one direction they are more comprehensive, in

an­

other more limited. It is common tradition that the section

was designed to be a substantial reproduction of the scotch

action

of declarator, but whether this be so or not is of no

great moment.

We have to be guided by its provisions as

they are expressed. The section does not sanction every

form

of declaration, but only a declaration that the plaintiff

is entitled to any legal character or to any right as to any

property; it

is the disregard

"of this that accounts for the multi­

form and, at times, eccentric declarations which find a place

in Indian plaints".

In Deokali's case (supra), the learned Chief Justice pointed out

that one declaration sought _by the plaintiff there seemed designed to

get round the need to set aside a decree on grounds of fraud and col­

lusion. He held

two other declarations sought to be vague. He, how­

ever, explained (at p.

710) :

"I would only add this that the limit imposed by Section

42

is on decrees which are merely declaratory, and does not

expressly extend to decrees

in which relief is administered.

and declarations are embodied as introductory to that relief.

For such declarations legislative sanction

is not required :

they rest

on long established practice. But for all that the

Court should be circumspect

and even chary as to the

decla­

rations it makes : it is ordinarily enough that relief should

be granted without the declaration".

In Deokali's case (supra), the plaintiff's suit was not thrown out

on a preliminary ground, hut the plaintiff

was given an opportunity to

amend the plaint by asking for a consequential relief for setting aside

the impugned decree and paying an additional court

fee. The case

F could have only an indirect hearing on the case now before us where

no question of a payment of any additional court-fee after adding a

consequential relief involved

arises. The observations made in

Deokali's case must be read in the context of what arose for decision

there.

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In Sheoparsan Singh & Ors. case (supra), what was really held by

the Privy Council was that a grant of probate under the Probate and

Administration Act

(V of 1881), which operated as a judgn1ent

in

rem, could not be collaterally assailed by a suit for a declaration

brought by reversioners seeking

to question the will.

Sir Lawrence

Jenkins

who had, incidentally, decided Deokali Koer's case (supra)

too said (at

p. 97) : "It is not suggested that in this litigation the testamentary

jurisdiction

is, or can be, invoked, and yet there can be no

doubt that

this suit is an attempt to evade or annul the adjudi­

cation

in the testamentary suit, and nothing

more."

242

SUPREME COURT REPORTS (1976] 1 S.C.R.

We think that the decision in this case also does not assist the

appellant mnch.

In Bai Shri Vaktuba's case (supra), the Bombay High Court held

that a Talukdar plaintiff could bring a suit for a declaration and an

injunction to restrain the defendant from claiming that he was the

plaintiff's son. Learned Counsel for the appellant, however, relied upon

the following passage from it (at p. 680) :

"It has long been established that the general powet

vested

in the

Courts in India under the Civil Procedure Code

to entertain all suits of a civil nature excepting suits of which

cognizance

is barred by any enactment for the time being in

force, does not carry with it the general power of making

declarations except in

so far as such power is expressly con­

ferred by

statute."

Kishori Lal's case (supra) was cited to show that declaratory dec·

rees falling outside Section 42 of the Specific Relief Act are not permis­

sible because Section 42 Specific Relief Act is exhaustive on this sub­

ject. This view must be held to have been rejected by this Court when

it declared in

Veruareddi Ramaraghava Reddy &

Ors. v. Konduru Ses/m

Reddy & 2 Ors.(1) (at p. 277) ;

"In our opinion, S. 42 of the Specific Relief Act is not

exhaustive of the cases in which a declaratory decree may

be

made and the courts have power to

grant such a decree inde­

pendently of the requirements of the section. It follows,

therefore, in the present case that the suit of the plaintiff

for a declaration ihat the compromise decree

is not binding

on the deity

is maintainable as falling outside the purview of

s._ 42 of the Specific Relief Act".

The result is that Section 42 merely gives statutory recognition to

a well-recognised type of declaratory relief <and subjects it to a limita­

tion, but it cannot be deemed to exhaust every kind of declaratory

relief or to circumscribe the jurisdiction of Courts to give declarations

of right

in appropriate cases falling outside Section 42.

We think that the circumstances in

which a declaratory decree

under Section 42 should be awarded

is a matter of discretion depending

upon the facts of each case. No doubt a complete stranger whose

interest

is not affected by another's legal character or who has no

in­

terest in another's property could not get a declaration under Section

42 Specific Relief Act with reference to the legal character or the pro­

perty involved. Such, however, is not the case before us. The plain­

tiff-respondent, in the case before us, had not only the rigths of a mor­

tgagee decree-holder with regard to the property involved, but he was

-also the assignee of the rights of the Bank which had got the propertv

in question attached in execution of its decree. We

find, from connected

(!) [1966] Suppl S.C.R.

270 @ 277.

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SUPREME GENERAL FILMS V. BRIJNATH (Beg, J,) 24 3-

special leave petitions against orders under 0. 21, Ruic 95, Civil

Procedure Code that the plaintiff's wife became the auction purchaser

of,,this property during the pendency of the litigation now before us.

At the time when he filed the suit the plaintiff may have been looking

forward to purchasing the property. Although, the mere possibility of

future rights of

an intending purchaser could not, by itself, be enough

to entitle him to get a declaration relating to a purported lease affecting

the right to possess and enjoy the property, yet,

we think that the

plaintiff possessed sufficient legal interest

in the theatre, as a mortgagee

as well as an assignee of a decree holder

who had got the property

attached before he filed his suit, so

as to enable him to sue for the

declarations

he sought. He was not seeking a merely whimsical or

eccentric or an unreasonable declaration of a right in property with

no enforceable legal claims over it

which could remain unaffected by the

defendant-appellant's claims

as a lessee.

Surjya Kumar Dhar v. Girish Chandra Ghose & Anr.(1), was cited

to contend that the declaration sought by the plaintiff

was unnecessary

if the lease of the defendant-appellant was void.

We find, from the

pleadings in the case before us, that the defendant-appellant had actu­

ally denied the plaintiff's rights

as a mortgagee and also the validity

of the compromise decree in suit

No. 15A of 1954. No doubt the

plaintiff had not sought a decree for possession

as that could not be

granted at the time when the suit

was filed. Nevertheless, he had

reasonable grounds to apprehend that the defendant-appellant com­

pa11y will rely upon its alleged lease, as it did, in the course of execu­

tion proceedings, to resist delivery of actual possession to an auction

purchaser. The existence of lessee rights would certainly affect the

price an auction purchaser would be prepared to pay for the property,

or,

in other words, what a mortgagee or one who had got the property

attached could realize for the property to satisfy his dues. Thus, the

plaintiff needed the declaration; and,

in the circumstances of the case,

the declarations sought for could not be reasonably denied to him.

The contention that

the· case fell outside the purview of Section 52

of the Transfer of Property Act

as the lease was executed in purported

satisfaction of an antecedent claim rests upon the terms of an

agree­

ment of 1948, embodied in a Jetter, on the strength of. which the

defendant-appellant had

filed his suit for specific performance. We

find that the terms of the compromise decree in that suit and

]ease-deed

of 1956 purported to confer upon the defendant-appellant new rights.

Indeed, there are good grounds for suspecting that the compromise in

the suit for specific performance

was adopted

as a device to get ronnd

legal difficulties in the execution of the lease of 1956 in favour of the

defendant-company.

We are unable to accept the argument,

soughtto

be supported by the citation of Bishan Singh & Ors .. v. Khazan· Singh

& Anr.(

2

), that the lease was merely an enforcement of an antecedent

or pre-existing right. We think that it purported to create entirely new

rights pemfr:nte lite. It was, therefore, struck by the doctrine o( lis-

(I) A. I. R. 1951 A55am 101. (2) [19591 S. C.R. 878 ..

244 SUPREME COURT REPORTS [1976] 1 S.C.R.

pendens, as explained by this Court in Jayaram Mudaliar v. Ayyaswami

& Ors. (1), embodied in Section 52 of the Transfer of Property Act,

An alternative argument of the appellant was that a case falling

within Section

65A(2)(e) of the Transfer of

Property Act, confining

the duration of a lease by a mortgagor to three years, being a special

provision, displaces the provisions of Section 52 of the Transfer of

Property Act. This argument overlooks the special objects of the

doctrine of

lis pendens which applies to a case in which litigation,

re­

lating to propert,y in which rights are sought to be created pendente

/i:e by acts of parties, is pending. Moreover, for the purposes of this

argument, the defendant-appellant assumes that the provisions of Sec-

tion 65A(2) (c) Transfer of Property Act are applicable. If that was

so, it would make no substantial difference to the rights of the defen­

dant-appellant, which would vanish before !he suit was filed if Section

.65A applies. We, however, think that, as the special doctrine of /is

pendens is applicable here, the purported lease of 1956 was invalid

from the outset.

In this view of the matrter, it is not necessary to

con­

sider the applicability of Section 65A(2) (e), which the defendant­

appellant denies, to the facts of this case.

3

As regards the applicability of Section 64, Civil Procedure Code, )

we find that parties disagree on· the question whether the attachment

made

by the Central Bank on 20-4-1955, in execution of the decree of

which the plaintiff-respondent

was the assignee, existed on the date of

the impugned lease of 30-3-1956. Learned Counsel for the appellant

relied upon the terms

of an order recorded on the order sheet, in the

Court of Additional District Judge, Jabalpur, in Civil

Suit No. 3B of

1952, on 25-1-1956, showing that, in

view of the stay order received

.;

from the High Court, execution could not proceed. The order sheet,

however, also contains the enigmatic statement that execution

was

dis­

missed as infructuous buf the attachment was to continue for six

months. The High Court had treated the last part of the statement in

the order sheet_ as void and ineffective presumably on the ground that

the Additional District Judge had

no jurisdiotion either to lift the

attachment or to dismiss the execution proceedings after the High .

J'

Court had

given its order staying all further action in execution. pro­

ceedings. The terms of the High Court's order are not evident from

anything placed before

us.

On the other hand, learned Counsel for

the plaintiff-respondent relies upon a subsequent order of the same

Court, passed on 30-4-1960, in the same suit. This order shows that

a compromise had been arrived at between the decree holder and the

judgment-debtor under which lhe decree holder had agreed to lift C

attachment of property except with regard to Plaza Talkies which was

to continue. We are, therefore, unable to hold that the concurrent

findings

of the Trial Court and the High Court. that the

Plaza Talkies

was attached in execution of decree in suit No. 3B of 1952 on 4-5-1955

and that this attachment

was in existence when the impugned lease was

executed on 30-3-1956, are erroneous.

On these findings, the lease of

1956

was certainly struck by the provisions of Section

64 Civil proce-H

<lure Code also. Section 64, Civil Procedure Code, in fact, constitutes

·----------· -·-·-· ----

(1) [;973] S.C.R. 139

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SUPREME GENERAL FILMS V. BRIJNATH (Beg, J.) :\l45

an application of the doctrine of lis pendens in the circumstances

specified there. \.

For the reasons given above, we dismiss this appeal with costs.

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ORDER

In view of our judgment in Civil Appeal No. 1041 of 1968, deli­

vered today,

we think that these Special Leave

Petitions (Civil) must

be and are hereby dismissed .

P.B.R.