If Party Seeking Possession Of Immovable Property Is Aware About Sale In Favour Of A Third Party, It Must Implead The Latter As An Objector: Delhi HC

With respect to a decree for the possession of immovable property, the Delhi High Court has held that if the Decree Holders are aware of the sale in favour of the Objectors, they must implead the Objectors in the suit filed by them.

A single judge bench of Justice Amit Bansal observed,

"The manner in which the Decree Holders took possession of the properties from the Objectors was ex facie unlawful. The Decree Holders were aware of the sale in favour of the Objectors and also the possession of the Objectors in the aforesaid portions of the suit property. Despite this knowledge, the Decree Holders did not implead the Objectors in the suit filed by them. Even after the decree was passed, no legal notice was served on the Objectors to vacate the property, nor were they made parties in the execution proceedings and straightaway they were dispossessed from the portions of the suit property, of which they had been in a settled occupation for a long period of time."

Briefly, the facts of the case are that the Objector herein had purchased two floors of the suit property from the Decree Holder's mother. Thereafter, the Judgment Debtor got the letters of administration in his favour in respect of the will of the mother of the Decree Holders and later a Sale Deed was executed by the Judgment Debtor in favour of the Objector, in respect of the terrace of the suit property. It is averred that the Objector took reasonable care to ascertain that the Judgement Debtor had power to make the transfer.

However, in 2016, a suit for possession of the suit property was decreed in favour of the Decree Holder.

The grievance of the Objector is that despite being aware of the sale in favour of the Objectors and their possession, the Decree Holder failed to disclose to the Court that three portions of the property had already been sold by the Judgment Debtor. "Despite knowledge of the possession of the Objector, the Decree Holders neither impleaded the Objector."

As a consequence, the Objector along with his parents was dispossessed.

Following this, four Execution Applications were filed by the Objector:

First one was under Order XXI Rules 99, 101 and 106 of the CPC, seeking relief of status quo ante; Second one was under Section 144 of CPC seeking payment of mesne profits and damages for wrongful dispossession; Third one was for restraining the Decree Holders from creating third party rights in the suit property; Finally, the fourth one sought restoration of possession of suit property.

The Objector submitted that he is the bona fide purchaser of the suit property under the Agreement to Sell and had built further on the second and third floor to the knowledge of the Decree Holders.

The Decree Holder argued that there is no privity of contract between the Decree Holders and the Objectors and if the Objectors have any grievance at all, the same has to be only against the Judgment Debtor.

In order to reach a conclusion, the Court first analysed the relevant provisions of the CPC, that is, Order XXI Rules 97, 98, 99, 100, 101, 102. The court held that the Decree Holders ought to have filed an application under Order XXI Rule 97 of the CPC, so as to be put back in possession of the portions of the suit property in occupation of the Objectors. The court opined that –

"It is a matter of record that the Objectors have been in a settled possession of the aforesaid properties on the basis of registered Sale Deeds executed as far back in 1999 and 2002. The Decree Holders could not have unilaterally dispossessed the aforesaid Objectors, while seeking to execute the decree dated 3rd May, 2016 passed by this Court in a suit, where the Objectors were deliberately not made parties despite the Decree Holders/plaintiffs being aware of their possession of the aforesaid portions of the suit property. Even after the decree was passed, no legal notice was served on the Objectors to vacate the property, nor were they made parties in the execution proceedings and straightaway they were dispossessed from the portions of the suit property, of which they had been in a settled occupation for a long period of time."

Additionally, after having a look at the affidavit, the court held that the decree in question did not even mention the third floor of the suit property and yet in execution proceedings, the Decree Holders proceeded to take possession of the third floor of the suit property in an unlawful and mala fide manner. The court held that the conduct of the Decree Holders in dispossessing the Objectors without following the due process of law was unlawful as well as mala fide.

The court also held that through the letters of administration granted in favour of the Judgment Debtor, the Objectors purchased the portions of the suit property, on the basis of registered Sale Deeds. It was only in the year 2005, much after the Sale Deeds were executed, that the Decree Holders took steps for revocation of the grant of letters of administration, in which they eventually succeeded. But, in light of the observations in Crystal Developers vs Smt. Asha Lata Ghosh, the court stated that the bona fide intermediate acts of the administrator for the purpose of administration of the estate have to be protected. It opined that–

"Merely because the letters of administration granted in favour of the administrator were set aside at a later point of time, would not undo or invalidate intermediate acts performed by the administrator, while the letters of administration granted in his favour duly existed, unless the same are shown to be fraudulent or collusive."

The court noted that the fact that the Decree Holders were well aware about the possession of the third parties in the suit property but they deliberately did not implead any of such Objectors in the said proceedings, nor did they challenge the Sale Deeds executed in favour of such Objectors was wrong.

Counsel for the Decree Holders placed reliance on Order XXI Rule 102 of the CPC to contend that nothing contained in Order XXI Rules 98 and 100 of the CPC would apply to an Objector to whom the Judgment Debtor has transferred the property after the institution of the suit in which the decree was passed.

The court stated that the aforesaid provision recognises the doctrine of lis pendens enshrined in Section 52 of the Transfer of Property Act. Therefore, if a person purchases the property, which is a subject matter of a suit after the institution of the suit, doctrine of lis pendens would apply and the said purchaser cannot approach the Court under Order XXI Rules 98 and Rules 100 of the CPC.

Here, the court held that of course, the Decree Holders succeeded in the appeal filed by them and ultimately the letters of administration granted in favour of the Judgement Debtor were revoked. However, there was no lis pending when the Sale Deeds were executed in favour of the Objectors. Therefore, the doctrine of lis pendens had no application in the facts and circumstances of the present case.

In light of the aforesaid discussion, the court held that  the manner in which the Decree Holders took possession of the properties from the Objectors was ex facie unlawful. Therefore, the court held that the Objectors had made out a case for grant of status quo ante and are entitled to the restoration of possession of the aforesaid portions of the suit.

Accordingly, it was directed that the possession of the aforesaid portions of the suit property, that was taken by the Decree Holders pursuant to warrants of possession issued by the Court be restored to the Objectors, within a period of four weeks from today.

CASE TITLE: SARVINDER SINGH & ANR v. VIPUL TANDON

Citation: 2022 LiveLaw (Del) 654

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