Friday, 19 May 2017

When partial partition of joint family property is permissible?

Even as a rule of Hindu Law, if the property is not joint family property and the parties are not coparceners but only co-owners or tenants-in-common the rule is not so rigid and partial partition may be allowed if there is not much inconvenience to the other sharers.
19. In addition to that, the partial partition is prohibited for a good reason as the partition has the effect of breaking up a joint Hindu family. If such a family is disrupted, it stands to reason that the family should break up completely and the whole family property should be divided.
20. However, even suits praying for partial partition have also been recognized under some of the following circumstances, namely:
(i) where different portions of family property are situated in different districts, separate suits for partition for lands of each district may be brought;
(ii) it may be allowed when portion of joint property at the time of the suit for partition is incapable of partition;
(iii) where the property left out from its very nature impartible;
(iv) where the property is held jointly with strangers who cannot be joined as parties to a general suit for partition the same may be left out; or
(v) where the co-owners by mutual agreement decide to make partition of the joint family property leaving some portion in common.(Refer: Harey Harey Singha Chowdhury vs. Hari Chaitanya Singha Chowdhury MANU/WB/0413/1936 : 40 CWN 1237; Mansharam vs. Ganesh MANU/WB/0404/1912 : 17 CWN 521; Panchanan Mallick vs. Shiv ChandraILR 14 Cal 805; Balaram vs. Ramchandra ILR 22 Bom 922; Abdul Karim vs. Badruddin ILR 28 Mad 216).
Therefore, it is not in all events that partial partition is impermissible.
IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA
R.S.A. No. 565 of 2012
Decided On: 01.04.2017
 Pradeep Chand Sharma Vs.  Budhi Devi and Ors.

Hon'ble Judges/Coram:
Tarlok Singh Chauhan, J.

Citation: AIR 2017 HP73

1. This regular second appeal is directed against the judgment and decree passed by learned District Judge, Kullu on 3.7.2012 whereby he reversed the judgment and decree passed by learned Civil Judge (Senior Division), Kullu dated 6.12.2011.
2. The parties are ad idem that the facts of the case have been correctly set out in the impugned judgment passed by learned lower Appellate Court and, therefore, the same are extracted from the said judgment.
3. Brief facts necessary for disposal of the present appeal are that the plaintiff filed suit pleading that following property (hereinafter to be called suit property) is jointly owned and possessed by the parties:
(A) A two storeyed CGI sheet roofed building with attic bearing municipal No. 371 situated at Nehru Chowk, Manali comprised in Khasra No. 711, 712 measuring 0-4-0 Bigha contained in Khatoni No. 773 of Khata No. 536 incorporated in jamabandi for the year 1992-93 of Phati Nasogi, Kothi Manali, Tehsil and District Kullu.
(B) A four storeyed CGI shet roofed building with attic situated at Nehru Chowk Manali, Tehsil and District Kullu, comprised in Khasra No. 713 measuring 0-5-0 bigha contained in Khatoni No. 972 of Khata No. 535 incorporated in jamabandi for the year 1992-93 of Phati Nasogi, Kothi Manali, Tehsil and District Kullu.
(C) A single storeyed CGI roofed building comprised in Khasra No. 702 measuring 2-11-0 bigha contained in Khatoni No. 974 of Khata No. 537 incorporated in jamabandi for the year 1992-93 of Phati Nasoi, Kothi Manali, Tehsil and District Kullu,
(D) A single storeyed CGI roofed building comprised in Khasra No. 702, situated at Nehru Chowk Manali measuring 2-11-0 bigha contained in Khatoni No. 537 of Khata No. 974 incorporated in jamabandi for the year 1992-93 of Phati Nasogi, Kothi Manali, Tehsil and District Kullu.
(E) A three storeyed RCC building situated at Dana Bazaar Manali comprised in Khasra No. 750 measuring 0-1-0 bigha contained in Khatoni No. 829 of Khata No. 427 incorporated in jamabandi for the year 1992-93 of Phati Nasogi, Kothi Manali, Tehsil and District Kullu.
4. It was pleaded that the suit property was previously owned and possessed jointly by Moti Lal, plaintiff No. 1, Shadi Lal, Maya Das, Shiv Singh, Totu Ram, Sher Singh (defendant No. 4), Sham Lal, Hira, Hari Khushal, Milap Satish, Dharmi and Surjan defendant No. 2 and all these persons are successors of interest of Budh Ram. It was pleaded that after death of Maya Das his estate was inherited by his daughter Hri and Lila, plaintiffs No. 3 and 4 and after death of Shiv Chand, his estate was inherited by plaintiffs No. 5 to 14, after death of Totu Ram, his estate was inherited by Kishan Chand, defendant No. 3 and after death of Surat Ram, his estate was inherited by Sher Singh, defendant No. 4. It was further pleaded that the suit property is joint and unpartitioned and is presently owned by large number of share holders. The suit property is situated at Manali and fetching handsome rental income but due to large number of share holders it is highly inconvenient to divide income amongst all the co-sharers and prayed that the suit property be partitioned as per shares of the parties.
5. The defendants filed written statements. Defendants No. 1 to 3 i.e. Hira, Surjan and Kishan Chand resisted and contested the suit and took couple of preliminary objections. It was pleaded that the plaintiffs are estopped by their own act and conduct to file the present suit and suit is not properly valued for the purpose of court fee and jurisdiction and also challenged the locus standi of the plaintiffs. It was pleaded that the shares of the persons have not been properly defined. These defendants pleaded that after death of Surat Ram, his share has been inherited by Shiv Chand, Sher Singh and remaining ten real brothers of Surat Ram jointly. They also pleaded that the suit property mentioned in Part E was jointly owned and possessed by the co-sharers mentioned in para No. 7 of the plaint and share of Shiv Das was inherited by Jawahar Lal, plaintiff No. 15.
6. Defendant No. 4 Sher Singh in his written statement took couple of preliminary objections qua limitation, maintainability, estoppel by act and conduct, locus standi and suit not properly valued for the purpose of court fee and jurisdiction. It was pleaded that the value of the suit property is more than one crore rupees, hence the suit was beyond pecuniary jurisdiction of the trial Court. It was pleaded that the suit was bad for partial partition since other property situated in village Yang Kothi Ranika, District Lahaul Spiti, Akhara Bazar, Kullu, Phati Dhalpur, village 18 Miles Phati Bran, Kothi Baragarh of the parties have not been included in the suit. It was pleaded that the suit was bad for non-joinder of necessary parties since son of defendant No. 4 Anil Kumar registered owner of Hotel Woodline Annexe has not been impleaded as party. Defendant No. 4 also pleaded that since the plaintiffs are not in possession of the suit property, hence the suit was not maintainable. Moreover, defendant No. 4 claimed absolute ownership and possession over the suit land. It was denied that the suit land was jointly owned and possessed by the parties. It was pleaded that the parties are agriculturist and governed by custom of Kullu Sub Division Riwaj-e-Zamindara, according to which female heirs, in presence of male heirs are not entitled to inherit anything and in case of death of holder of the property without any male heir and the female heir will acquire limited rights and in case of a widow, will acquire right till remarriage or death and in case of daughters they will acquire right till majority or married. It was pleaded that plaintiff No. 3 has already married and after her marriage her rights have been automatically reverted to the reversioners male heirs. Defendant No. 4 further pleaded that he was younger son out of 15 sons of Budh Ram and after 1950 had settled at Manali. The suit land was purchased by him from various persons from his own funds. He had purchased the property in the joint name of his brothers and no consideration was paid by the rest of the brothers. He also developed the suit land at his own expenses. The building expenses of the hotel were approved in the name of defendant No. 4 and electricity and water etc. were also sanctioned in favour of defendant No. 4 which prove that the suit property was exclusively owned and possessed by him. Defendant No. 4 claimed that the property mentioned in Headnote B was not residential house and it was Hotel building which was registered in the name of defendant No. 4. The building plan was proved in the name of defendant No. 4 and his son and fee of Rs. 1,25,000/- was charged by Nagar Panchayat Manali for sanction of plan. The defendant also claimed ownership by way of adverse possession over the suit property and was pleaded that since his possession was open, continuous and hostile to the other persons, hence he has become owner of the suit property by way of adverse possession. He denied that other parties had any right over the suit property.
7. Defendants No. 5 to 7 pleaded that the plaintiffs were estopped from their act and conduct from filing the suit, the suit was not properly valued and the plaintiffs had no locus standi to file the suit. They admitted that the suit property was jointly owned and possessed by the parties and pleaded that share of Surat Ram after his death was inherited by his brother Shiv Chand, Sher Singh and remaining ten brothers of Surat Ram jointly.
8. In replication, the plaintiffs reasserted their case and controverted the pleadings made by the defendants.
9. The learned trial Court framed the issues on 24.9.2010 and 26.6.2011:
1. Whether the suit property is joint, if so, its effect? OPP
2. If issue No. 1 is proved in affirmative, whether the plaintiffs re-entitled to decree of possession of their shares, in the suit property by getting their share partitioned by metes and bounds as prayed? OPP
3. Whether the suit is not properly valued for the purpose of court fee and jurisdiction? OPD-4.
4. Whether the suit is time barred? OPD-4.
5. Whether the plaintiffs are estopped by their acts and conduct from filing the present suit? OPD-4.
6. Whether the suit property stood partitioned in family partition on 18.6.1988 as claimed, if so, its effect? OPD-4.
7. Whether the site plan filed with the plaint is not correct and not according to factual position on the spot? OPD-4.
8. Whether the suit is collusive with defendants No. 1 to 3 and 5 to 7 as alleged? OPD-4.
8A. Whether the suit of the plaintiff is not maintainable? OPD
8B. Whether the parties are governed by the agricultural custom of Kullu Sub Division known as Rewas-Jamindara? OPD
8C. Whether the present suit has been filed for partial. If yes, its effect? OPD
9. Relief.
10. After recording the evidence and evaluating the same, the learned trial Court decreed the suit of the plaintiffs by passing a preliminary decree for partition of the suit property.
11. Aggrieved and dissatisfied with the judgment and decree passed by the learned trial Court, legal representatives of defendant No. 4, who died during the pendency of the case before the learned trial Court filed an appeal before the learned first Appellate Court, who allowed the same vide judgment and decree dated 3.7.2012.
12. Aggrieved by the judgment and decree dated 3.7.2012 passed by learned first Appellate Court, the plaintiffs/appellants have filed the instant appeal before this Court.
13. This Court vide its order dated 29.10.2012 admitted the appeal on the following substantial questions of law:
"1. When admittedly the proceedings for partition of agricultural land situated in District Lahaul and Spiti were pending before the competent revenue authorities, has not Lower Appellate Court taken erroneous view of facts and rendered erroneous and perverse finding that the suit is not maintainable being for partial partition, ignoring the fact that property in dispute was situated in District Kullu and mainly was hotel and constructed portions alongwith land appurtenant thereto.
2. Whether lower Appellate Court has recorded erroneous and perverse findings that the suit pertaining to Khasra No. 702, which is assessed to land revenue is not maintainable in the Civil Court and application for partition ought to have been made before the revenue courts, ignoring the fact that such land was appurtenant to the structures for which suit for partition was filed.
3. Whether the lower appellate Court has misunderstood the correct legal position regarding the applicability of custom to the parties to the suit and has recorded wrong findings that the suit was not competent as the shares of the parties have not been properly defined? Has not the lower Appellate Court acted in arbitrary, mechanical, erroneous and perverse manner in reversing the preliminary decree passed by trial Court by not defining thee shares of the parties and also failing to notice that Ms. Bimla and Ms. Ram Devi were alive and were parties before the trial Court as well as lower Appellate Court?
14. I have heard learned counsel for the parties and have gone through the records of the case carefully.
Substantial questions of law No. 1 and 2:
15. Since both these substantial questions of law are intrinsically inter-linked and inter-connected the same are being decided by a common reasoning.
16. It is more than settled that normally when a partition is sought through the intervention of the Court the general rule is that the entire joint property owned by the co-owners, whether as joint tenants or tenants-in-common, must be brought into hotchpot for division by the Court.
17. It is equally a well established rule of law that the plaint in a suit for partition must embrace only such property in which the plaintiff has community of interest and unity of possession. Where a purchaser acquires an interest in the coparcenary property, the transfer really effects a severance of joint status in respect of the property transferred and he becomes a tenant-in-common in respect of such property with his vendor, but he does not become a coparcener.
18. Even as a rule of Hindu Law, if the property is not joint family property and the parties are not coparceners but only co-owners or tenants-in-common the rule is not so rigid and partial partition may be allowed if there is not much inconvenience to the other sharers.
19. In addition to that, the partial partition is prohibited for a good reason as the partition has the effect of breaking up a joint Hindu family. If such a family is disrupted, it stands to reason that the family should break up completely and the whole family property should be divided.
20. However, even suits praying for partial partition have also been recognized under some of the following circumstances, namely:
(i) where different portions of family property are situated in different districts, separate suits for partition for lands of each district may be brought;
(ii) it may be allowed when portion of joint property at the time of the suit for partition is incapable of partition;
(iii) where the property left out from its very nature impartible;
(iv) where the property is held jointly with strangers who cannot be joined as parties to a general suit for partition the same may be left out; or
(v) where the co-owners by mutual agreement decide to make partition of the joint family property leaving some portion in common.(Refer: Harey Harey Singha Chowdhury vs. Hari Chaitanya Singha Chowdhury MANU/WB/0413/1936 : 40 CWN 1237; Mansharam vs. Ganesh MANU/WB/0404/1912 : 17 CWN 521; Panchanan Mallick vs. Shiv ChandraILR 14 Cal 805; Balaram vs. Ramchandra ILR 22 Bom 922; Abdul Karim vs. Badruddin ILR 28 Mad 216).
Therefore, it is not in all events that partial partition is impermissible.
21. The purpose and object for insisting in a suit for partition that the entire joint property owned by the co-owners whether as joint tenants or tenants-in-common, must be brought into hotchpot in division is to ensure that much inconvenience is not caused to the opposite parties who are also co-heirs, because such suits lead to multiplicity of litigation and consequent harassment, inconvenience and endless litigation.
22. The rule against partial partition is only one of equity and convenience. Therefore, it is better to limit the rule in its application to properties over which the parties have community of interest and unity of possession. If partial partition can be had without inconvenience to the other sharers and if it will not stand in the way of equities being adjusted, it is not necessary to insist that all properties will have to be scheduled.
23. Thus, what can be taken to be settled is that there is no legal inhibition if there are justifying features in allowing a suit for partial partition. However, normally a distinction has to be made between partition of joint family property (joint tenants) and partition among tenants-in-common. The reason for the distinction is that in the former case, unlike in the latter case, there is unity of title, interest and possession over each and every item of property and hence the normal rule is that partition should be of entire properties of the joint family. In the case of partition between co-parceners (in respect of joint family properties) the entire property must be thrown into hotchpot except for certain well recognized exceptions.
24. On the other hand in the matter of partition of property held by tenants-in-common principle regarding partial partition may apply depending on the facts and circumstances of the case. Therefore, the rule regarding partial partition as it applies to the case of joint family properties cannot as such be applied in the case of partition of co-ownership properties in the possession of tenants-in-common.
25. Adverting to the facts, it would be noticed that the learned first Appellate Court by general and sweeping observations held that the suit was for partial partition as would be evident from para 29 of the judgment, which reads thus:
"29. The first and foremost question before this Court is "whether the partial partition is permissible in law and plaintiff had not included all the property jointly owned and possessed by the parties in the present suit?". The defendants had specifically pleaded that the plaintiffs have not included all the joint properties in the present suit, hence, the suit for partial partition was not maintainable. Issue No. 8C was framed qua this plea. The plaintiff when appeared as P.W. 1 admitted that the parties were having joint and un-partitioned properties at Lahaul Spiti, Akhara Bazaar Kullu and Village Ruaru. Admittedly, these properties have not been included in the present suit. Hence, the suit for partial partition was not maintainable."
26. I really fail to understand as to how the learned first Appellate Court arrived at such a conclusion as it was incumbent upon it to have first clearly spelt out in detail the properties which according to it had been left out, so as to not only enable the parties but also this Court to arrive at a conclusion as to which of the properties had been left out and the same obviously could not have been left to guess work.
Property at Lahaul and Spiti:
27. It has already come on record and even otherwise not disputed by the respondents that the proceedings for partition of agricultural land situated at Lahaul and Spiti was already pending before the competent revenue authorities at the time of filing of the suit and this otherwise is the conclusion that has rightly been drawn by the learned trial Court while deciding issue No. 8C.
Property at Kullu:
28. As regards the property at Kullu, Mr. G.R. Palsra, learned counsel for the respondents had invited my attention to the copy of jamabandi Ext. DW-1/B pertaining to Phati Dhalpur for the year 2001-02 to vehemently canvass that the property reflected in this document has not been included in the suit.
29. I have gone through the aforesaid document and find that in columns No. 4 and 5, which pertain to the ownership and possession, it has specifically been recorded 'Avadi Pati Raghunathpur'. Once that be so, then it cannot be inferred that the properties mentioned in this jamabandi belongs to the parties.
30. However, learned counsel for the respondents would still insist that the property is shown as Abadi and, therefore, should be presumed that there are buildings standing over this land, which in turn belongs to the parties. I am afraid that this argument is totally fallacious and without merit. The respondents in order to establish that there was building(s) standing upon the aforesaid land was required to establish this fact by leading clear, cogent and convincing evidence and thereafter was further required to prove that the same were joint family property and thus was required to be put in the hotchpot.
Property at Ruaru:
31. Learned counsel for the respondents has vehemently argued that the properties in village Ruaru in Mauza Kot Kandi as reflected in jamabandi Exts. D.W. 1/C, D.W. 1/D, D.W. 1/E, D.W. 1/F, D.W. 1/G, D.W. 1/H and Ext. D.W. 1/J are joint family properties, but have not been included in the suit and, therefore, the suit being one for partial partition ought to be dismissed.
32. I have gone through the aforesaid documents, a perusal whereof reveals that the properties as mentioned therein again do not exclusively belong to either of the parties, but are even owned and possessed by the persons who have no relationship with the parties to the suit.
33. Once that be so, then obviously, the land of Village Ruaru could not have been included in the suit. Further the suit cannot be held to be one for partial partition because even as a Rule of Hindu law, if the property is not joint family property and the parties are not coparceners but are only co-owners or tenants-in-common, the rule of partition is not so rigid and even partial partition can be allowed. It is for the party contesting such partition to prove that much inconvenience shall be caused to them, otherwise in such given cases, it is then only a rule of processual law.
Substantial questions of law No. 1 and 2 are accordingly answered.
Substantial question of law No. 3:
34. This question is no longer res integra in view of the judgment rendered by a co-ordinate Bench (Justice Rajiv Sharma, J.) in Bahadur vs. Bratiya and others, MANU/HP/0530/2015 : 2016 AIR (HP) 58 wherein it was categorically held that custom providing that the daughters will not inherit the property will be in derogation of the provision of Hindu Succession Act and cannot be recognized. It was further held that such custom would be in violation of Article 15 of the Constitution of India.
35. In view of the authoritative pronouncement on the point in issue, this question is virtually rendered academic and is answered accordingly.
36. Mr. G.R. Palsra, learned counsel for the respondents as last ditch effort would argue that the suit itself was not maintainable before the learned trial Court as the value of the property was worth several of crores, whereas the jurisdiction conferred upon the trial Court at the time of institution of the suit was hardly ` 5,00,000/- and thereafter subsequently enhanced to ` 10,00,000/-. I am afraid that even this submission of the learned counsel for the respondents cannot be countenanced firstly for the simple reason that the argument if accepted, would itself render the judgment in favour of the respondents by the first Appellate Court a nullity and that apart, even if it is assumed that the property is beyond the pecuniary jurisdiction of the trial Court, the same will have no bearing on the validity of the judgment and decree passed by it, more particularly when the respondents have failed to question the judgment and decree so passed on the ground that there has been prejudice on the merits (Refer: Kiran Singh versus Chaman Paswan MANU/SC/0116/1954 : AIR 1954 SC 340).
37. This issue has already been considered by this Court in RSA No. 115 of 2014, titled Surinder Singh Sautha versus Raja Yogindra Chandra, decided on 29.05.2014, wherein it was held as under:-
"18. The next point raised by learned counsel for the appellant is that the order passed by a Court lacking pecuniary jurisdiction is void, ab initio and, therefore, the judgment passed by the learned trial Court as affirmed by the learned lower Appellate Court is without jurisdiction and deserves to be set-aside. He referred to number of decisions of the various High Courts on the question viz. Mamraj Agarwala and others vs. Ahamad Ali Mahamad MANU/WB/0383/1918 : AIR 1919, Calcutta 984, Mool Chand Moti Lal vs. Ram Kishan and others MANU/UP/0214/1933 : AIR 1933 Allahabad 249, Shyam Nandan Sahay and others vs. Dhanpati Kuer and others MANU/BH/0084/1960 : AIR 1960 Patna 244 and Controller of Stores and another vs. M/s. Kapoor Textile Agencies, MANU/PH/0063/1975 : AIR 1975 Punjab 321.
19. The judgments relied upon by learned counsel for the appellant would not be of much significance and have lost efficacy in view of the judgment of the Hon'ble Supreme Court in Kiran Singh and others vs. Chaman Paswan and others MANU/SC/0116/1954 : AIR 1954 S.C. 340 wherein the Hon'ble Supreme Court held that when a case had been tried by a court on 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 of jurisdiction both territorial and pecuniary as technical and not open to consideration by an appellate Court, unless there has been a prejudice on the merits. Further it may be observed that there have been a number of subsequent pronouncements of the Hon'ble Apex Court and also by this Court on this issue which otherwise are binding on this Court. The same are referred to and discussed in detail in the later part of the judgment.
20. The entire law with regard to the decree passed by a Court lacking pecuniary jurisdiction has been discussed in detail by the Hon'ble Supreme Court in Subhash Mahadevasa Habib vs. Nemasa Ambasa Dharmadas (dead) by LRs. And others MANU/SC/7247/2007 : (2007) 13 SCC 650 and the position has been summed up as follows:
"33. What is relevant in this context is the legal effect of the so-called finding in OS No. 4 of 1972 that the decree in OS No. 61 of 1971 was passed 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 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.
34. It may be noted that Section 21 provided that no objection as to place of 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 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 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 only on 1.2.1977 when OS No. 4 of 1972 was pending. By virtue of Section 97(2)(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) thereto. Of course, by virtue of Section 97 (3) Section 21-A 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.
35. 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 jurisdiction and excluding from its purview a defect based on pecuniary jurisdiction. In 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.
36. Section 15 of the Code deals with pecuniary jurisdiction and, Sections 15 to 20 of the Code deal with "place of This Court in Bahrein Petroleum Co. Ltd. v. P.J. Pappu MANU/SC/0012/1965 : AIR 1966 SC 634 made 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, 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.
37. As can be seen, Amendment Act 104 of 1976 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 objection in that regard even in an appeal from the very decree. This was obviously done in the light of the interpretation placed on Section 21 of the Code as it existed and Section 11 of the Suits Valuation Act by this Court in Kiran Singh v. Chaman Paswan MANU/SC/0116/1954 : AIR 1954 SC 340 followed by Hiralal Patni v. Kali Nath MANU/SC/0041/1961 : AIR 1962 SC 199 and Bahrein Petroleum Co. Ltd. v. P.J. Pappu MANU/SC/0012/1965 : AIR 1966 SC 634. 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 by the Amendment Act, as objection to place of suing.
38. It appears that when the Law Commission recommended insertion of Section 21-A 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 Amendment Act 104 of 1976, the wordings of Section 21-A as proposed by the Law Commission were not suitably altered 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. MANU/SC/0012/1965 : AIR 1966 SC 634. 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 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 Section 21-A takes in only an objection to territorial jurisdiction and not to pecuniary jurisdiction. We are therefore inclined to hold that in the suit OS No. 4 of 1972, the validity of the decree in OS No. 61 of 1971 could not have been questioned based on alleged lack of pecuniary jurisdiction. Of course, the suit itself was not for challenging the validity of the decree in OS No. 61 of 1971 an the question of the effect of the decree in OS 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.
39. But the fact that Section 21 (2) or Section 21-A 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, 1887. Section 11 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 jurisdiction over a suit had exercised it by reason of undervaluation 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 reasons to be recorded in writing that the overvaluing or undervaluing of the suit has prejudicially affected the disposal of the suit. There was some confusion about the content of the section.
40. The entire question was considered by this Court in Kiran Singh v. Chaman Paswan, MANU/SC/0116/1954 : AIR 1954 SC 340. 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 Valuation Act. Their Lordships held: (AIR p. 342, para 7)
"7. ....It provides that objections to the jurisdiction of a court based on overvaluation or undervaluation 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 overvaluation or undervaluation 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 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 jurisdiction both territorial and pecuniary as technical and not open to consideration by an appellate court, unless there has been a prejudice on the merits."
In Hiralal Patni v. Kali Nath, MANU/SC/0041/1961 : AIR 1962 SC 199, it was held that: (AIR p. 201, para 4)
"4..... It is well settled that the objection as to local jurisdiction of a court 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 been given a statutory recognition by enactments like Section 21 of the Code of Civil Procedure."
In Bahrein Petroleum Co. Ltd. v. P.J. Pappu MANU/SC/0012/1965 : AIR 1966 SC 634, 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 even independently of Section 21, a defendant may waive the objection and may be subsequently precluded from taking it."
21. In fact, a similar proposition came up before this Court (Coram : Deepak Gupta, J, as his Lordship then was) in Tikam Ram and others vs. Purshotam Ram and others MANU/HP/3238/2011 : 2011 (3) Shim. L.C. 251 wherein again after noticing all the relevant provisions along with law, it was held as under:
"19. To appreciate the rival contentions of the parties, it would be appropriate to refer to Section 21 of the CPC and Section 11 of the Suits Valuation Act which read as follows:
Civil Procedure Code:
"21. Objections to jurisdiction. - [(1) No. objection as to the place of suing shall be allowed by any Appellate or Revisional Court unless such objection was taken in the Court of first instance at the earliest possible opportunity and in all cases where issues are settled, at or before such settlement, and unless there has been a consequent failure of justice.
(2) No objection as to the 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 was taken in the Court of first instance at the earliest possible opportunity, and, in all cases where issues are settled, at or before such settlement, and unless there has been a consequent failure of justice.
(3) No objection as to the competence of the executing Court with reference to the local limits of its jurisdiction shall be allowed by any Appellate or Revisional Court unless such objection was taken in the executing Court at the earliest possible opportunity, and unless there has been a consequent failure of justice."
Suits Valuation Act
"11. Procedure where objection is taken on appeal on revision that a suit or appeal was not properly valued for jurisdictional purposes.- (1) Notwithstanding anything in [Section 578 of the Code of Civil Procedure (14 of 1882)] and objection that by reason of the over-valuation or under-valuation of suit or appeal a Court of first instance or lower Appellate Court which had no jurisdiction with respect to the suit or appeal exercise jurisdiction with respect thereto shall not be entertained by an Appellate Court unless.-
(a) the objection was taken in the Court of first instance at or before the hearing at which issues were first framed and recorded, or in the lower Appellate Court in memorandum of appeal to that Court, or
(b) the Appellate Court is satisfied, for reasons to be recorded by it in writing, that the suit or appeal was over-valued or under-valued, and that the overvaluation or undervaluation thereof has prejudicially affected the disposal of the suit or appeal on its merits.
(2) If the objection was taken in the manner mentioned in clause (a) of sub-section (1), but the Appellate Court is not satisfied as to both the matters mentioned in clause (b) of that sub-section and has before it the materials necessary for the determination of the other grounds of appeal to itself, it shall dispose of the appeals as if there had been no defect of jurisdiction in the Court of first instance or lower Appellate Court.
(3) If the objection was taken in that manner and the Appellate Court is satisfied as to both those matters and has not those materials before it, it shall proceed to deal with the appeal under the rules applicable to the Court with respect to the hearing of appeals; but if it remands the suits or appeal, or frames and refers issues for trial, or requires additional evidence to be taken, it shall direct its order to a Court competent to entertain the suit or appeal.
(4) The provisions of the Section with respect to an Appellate Court shall, so far as they can be made applicable, apply to a Court exercising revisional jurisdiction under [Section 622 of the Code of Civil Procedure (14 of 1882)] or other enactment for the time being in force.
(5) This Section shall come into force on the first day of July, 1887."
20. The Apex Court in Kiran Singh and others vs. Chaman Paswan and others, MANU/SC/0116/1954 : AIR 1954 (41), SC 340 was dealing with a case for recovery of possession of more than 12 acres of land. The suit was dismissed. The plaintiff thereafter filed an appeal in the court of District Judge who also dismissed the appeal. In the second appeal, the plaintiffs for the first time raised an objection that the suit itself had not been properly valued for the purpose of Court fee and jurisdiction and prayed that their appeal should be treated as a first appeal against the order of the learned trial Court. The High Court rejected the plea of the plaintiffs on the ground that the defendants could succeed only when they established prejudice on the merits of the case. An appeal was filed before the Apex Court and it was urged that the decree passed by the District Judge was a nullity because in an original suit having valuation of Rs. 9980/-, appeal would lie to the High Court alone and not to the District Judge. The Apex Court held as follows:-
"It is a fundamental principle well established that a decree passed by a Court without jurisdiction is a nullity and that its invalidity could be set up whenever and wherever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings. A defect of jurisdiction, whether it is pecuniary or territorial, or whether it is in respect of the subject matter of the action, strikes at the very authority of the Court to pass any decree, and such a defect cannot be cured even by consent of parties."
21. Relying upon these observations, Sh. Bhupender Gupta, learned senior counsel for the respondents submits that the decree and judgment of the learned trial Court is a nullity and the learned District Judge was justified in ordering the return of the plaint. This argument cannot be accepted to be correct because it was after making these observations that the Apex Court dealt with Section 11 of the Suits Valuation Act.
22. Dealing with the import of the word prejudice occurring in Section 11, the Apex Court held as follows:-
"The language of Section 11 of the Suits Valuation Act is plainly against such a view. It provides that over valuation or undervaluation must have prejudicially affected the disposal of the case on the merits. The prejudice on the merits must be directly attributable to over valuation or under valuation and an error in a finding of fact reached on a consideration of the evidence cannot possibly be said to have been caused by over valuation or undervaluation. Mere errors in the conclusions on the points for determination would therefore be clearly precluded by the language of the Section."
23. It is also important to note that the aforesaid decision of the Apex Court was rendered much before the amendment of Section 21 of the Code of Civil Procedure. Vide Code of Civil Procedure Amendment Act, 1976, sub-sections 2 and 3 were introduced in Section 21 and sub-section 2 clearly provides that no objection as to the competence of a Court with reference to the pecuniary limits of its jurisdiction shal be allowed by any Appellate Court unless such objection was taken in the court of the first instance at the earliest possible opportunity before settlement of issues and unless there has been a consequent failure of justice. Sub-section 2 clearly envisages that not only should the objections have been taken at the first instance but there should have been consequent failure of justice. If there is no failure of justice then the Court would not entertain the objection as to the competence of the Court with reference to its pecuniary limits. This aspect of the matter has not at all been considered by the lower appellate Court.
24. In Sat Paul and another v. Jai Bhan Ananta Saini, MANU/PH/0163/1973 : AIR 1973 Punjab and Haryana 58 decided prior to the amendment to Section 21 and only taking into consideration Section 11 of the Suits Valuation Act, a learned Single Judge of the Punjab and Haryana High Court held that without showing that any prejudice has been caused, the Appellate Court could not set aside the judgment only on the ground of the suit being improperly valued.
25. In Harshad Chiman Lal Modi v. DLF Universal Ltd. and another MANU/SC/0710/2005 : 2005 (7) SCC 791 the Apex Court held as follows:
"We are unable to uphold the contention. The jurisdiction of a Court may be classified into several categories. The important categories are (i) territorial or local jurisdiction; (ii) pecuniary jurisdiction; and (iii) jurisdiction over the subject matter. So far as territorial and pecuniary jurisdictions are concerned, objection to such jurisdiction has to be taken at the earliest possible opportunity and in any case at or before settlement of issues. The law is well settled on the point that if such objection is not taken at the earliest, it cannot be allowed to be taken at a subsequent stage. Jurisdiction as to subject-matter, however, is totally distinct and stands on a different footing. Where a Court has no jurisdiction over the subject matter of the suit by reason of any limitation imposed by statute, charter or commission, it cannot take up the cause or matter. An order passed by a Court having no jurisdiction is a nullity."
26. The Apex Court further went on to hold that the Courts at Delhi did not have jurisdiction under Section 16 to decide the issue and, therefore, lacked inherent jurisdiction to decide the matter.
27. The then Hon'ble Chief Justice of this Court in Ajay Singh v. Tikka Brijendra Singh and others, MANU/HP/0103/2006 : 2006 (2) SLC 394 considered this question in detail and after noting the provisions of Sections 21 and 99 of the Civil Procedure Code and Section 11 of the Suits Valuation Act held as follows:
"A combined reading of the aforesaid three provisions of law clearly suggests, first and foremost that no objection as to the competence of a Court with reference to its pecuniary limits of jurisdiction shall be allowed unless there has been a consequential failure of justice, and secondly, that no decree shall be reversed or substantially varied etc. on account of any error etc. including an error of jurisdiction which does not affect the merits of the case and thirdly, no objection about the jurisdiction of a Court for over valuation or under valuation of a suit etc. shall be entertained by an Appellate Court unless, apart from the objection having been taken in the Court of first instance etc., the Appeal Court is satisfied for reasons to be recorded in writing that such overvaluation or under valuation has prejudicially affected the disposal of the suit by the trial Court."
28. In Hasham Abbas Sayyad v. Usman Abbas Sayyad and others, MANU/SC/5541/2006 : 2007 (2) SCC 355, the Apex Court held as follows:-
"24. We may, however, hasten to add that a distinction must be made between a decree passed by a Court which has no territorial or pecuniary jurisdiction in the light of Section 21 of the Code of Civil Procedure, and a decree passed by a Court having no jurisdiction in regard to the subject matter of the suit. Whereas in the former case, the appellate Court may not interfere with the decree unless prejudice is shown, ordinarily the second category of the cases would be interfered with."
29. It would be pertinent to mention that the Apex Court and this Court clearly laid down that so far as objections to the territorial and pecuniary jurisdiction are concerned, the objections must be taken at the earliest possible opportunity and order of the Court not having pecuniary jurisdiction cannot be said to be an nullity. The Court does not lack jurisdiction to decide such a dispute. It only does not have the pecuniary jurisdiction to decide the dispute. Therefore, if it entertains and tries the matter and decides these disputes then the learned Appellate Court cannot set aside its findings unless it comes to the conclusion that prejudice has been caused in terms of Section 11 of the Suits Valuation Act and consequent failure of justice in terms of Section 21(2) of the Code of Civil Procedure."
38. In view of the aforesaid discussion, I find merit in this appeal and the same is accordingly allowed and the judgment and decree passed by learned first Appellate Court is set-aside and the judgment and decree of the learned trial Court is restored. However, before parting, it needs to be observed that as the suit was filed about two decades back on 19.5.1997, the same has to be taken to its logical end expeditiously. Accordingly, in the event of the appellants approaching the learned trial Court for passing a final decree, the Court shall make all endeavour to pass a final decree as expeditiously as possible and in no event later than three months of the filing thereof.
The appeal is disposed of in the aforesaid terms, so also the pending application(s) if any, leaving the parties to bear their own costs.
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