The State Of Madhya Pradesh vs Satish Jain (Dead) By Lrs.

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.6884 OF 2012

THE STATE OF MADHYA PRADESH …APPELLANT VERSUS SATISH JAIN (DEAD) BY LRS & ORS. …RESPONDENTS

JUDGMENT

VIKRAM NATH J.

1. The Appellant-State of Madhya Pradesh1-Defendant

in the Original Suit filed by Satish Jain (Respondent

No.1), since deceased, represented by his legal heirs,

is in appeal assailing the correctness of the

judgment and order dated 14.11.2005 passed by the

Madhya Pradesh High Court allowing Civil Revision

Signature Not Verified Digitally signed by Neetu Khajuria Date: 2024.04.18 18:57:53 IST 1 Reason: Hereinafter referred to as the, “State-Appellant”

Civil Appeal No. 6884 of 2012 1 No. 201 of 2005, titled “Satish Jain versus Rama &

Ors.”, whereby the High Court set aside the order of

the Trial Court dated 22.12.2004, and further

directed the Trial Court to proceed in accordance

with law to implement the award of the Arbitrator. It

also rejected the objections of the appellant dated

09.11.2004, and further the order rejecting the

report of the Arbitrator was also set aside. The

operative part of the impugned order as contained in

the paragraph 27 thereof is reproduced hereunder:

“27. Therefore, the order under revision is set aside. The objection dated 09.11.2004 filed by respondent no.2 stands dismissed. The order rejecting the report of the arbitrator is also set aside. The Trial Court shall proceed further according to law for implementing the award.”

2. The relevant facts giving rise to the filing of the

present appeal are briefly stated hereunder:

Civil Appeal No. 6884 of 2012 2 (i). Satish Jain s/o Dayanand Jain instituted a

civil suit impleading one Rama s/o

Parasram as defendant No.1 and State of

Madhya Pradesh through Collector, Bhopal

as defendant No.2 praying for a decree of

declaration, permanent injunction and

mandatory injunction. It was registered as

C.S. No. 65A of 1990. The basis of the claim

was that the property in dispute being

Khasra Nos. 48 & 49 area 3.53 acres

situated in Village Halalpur, Tehsil Huzur,

District Bhopal was owned by the State of

Madhya Pradesh. However, defendant No.1

was enjoying continuous and peaceful

adverse possession over the suit land for the

last 50-60 years and as such has perfected

his rights by adverse possession and had

become the owner of the land.

Civil Appeal No. 6884 of 2012 3

(ii). It was further alleged that defendant No.1

has transferred all his rights, title, and

interest over the suit land in favour of the

plaintiff and had also handed over

possession of the suit land on 05.09.1988.

(iii). Thereafter the plaintiff had erected wired

fencing on 06.09.1988, and had been

enjoying possession of the suit land.

(iv). It is further alleged in the plaint that

defendant No.1 was likely to transfer the

said land again in favour of the 3rd party and

he also came to know that some officers and

employees of the State (defendant No.2) had

visited the suit land and tried to remove the

fencing. In such circumstances, the plaintiff

was compelled to institute the suit for

declaration, permanent injunction and

mandatory injunction.

Civil Appeal No. 6884 of 2012 4

(v). According to the plaintiff, the cause of

action arose on 07.10.1988, and again on

11.10.1988 when the officers/employees of

the State tried to remove the fencing.

(vi). The Trial Court decreed the suit ex-parte

vide judgement and order dated

22.06.1990.

(vii). The State preferred an appeal under Section

96 of the Code of Civil Procedure, 19082

which was dismissed on the ground of delay

of 8 days only by the IVth Additional District

Judge, Bhopal.

(viii). The State preferred a civil revision before

the High Court which was registered as Civil

Revision No. 300 of 2002. The said revision

was allowed by the High Court vide order

dated 13.08.2003. It set aside the order of

2 In short, “CPC”

Civil Appeal No. 6884 of 2012 5 the Appellate Court dated 11.05.1991,

rejecting the application under Section 5 of

the Limitation Act. It also condoned the

delay of 8 days after allowing the application

for condonation of delay, and further

directed the Appellate Court to hear the

parties on merits and decide the appeal in

accordance with law.

(ix). The said appeal was allowed vide order

dated 09.01.2004 and the case was

remanded to the Trial Court for deciding the

same on merits after providing reasonable

time to the State to file its written

statement. The said suit is still pending

before the Trial Court.

(x). It would be worthwhile to mention that the

State has filed its written statement after

remand by the Appellate Court.

Civil Appeal No. 6884 of 2012 6

(xi). In the meantime, it appears that the suit

land was allotted to the Bhopal Municipal

Corporation3 for constructing a bus stand.

There is an agreement dated 30.07.1991

entered between BMC and the plaintiff that

the plaintiff would vacate the suit land,

allowing the BMC to construct the bus

stand, and in lieu, separate plots would be

allotted to the plaintiff.

(xii). It is also alleged that some allotments were

made by BMC in favour of the plaintiff but

they were later on cancelled.

(xiii). After remand, written statement was filed

by the State. Further, BMC was impleaded

as defendant No.3 by order of Trial Court

dated 13.03.2004.

3 In short, “BMC”

Civil Appeal No. 6884 of 2012 7

(xiv). The appellant filed an application under

Order VII Rule 11 CPC and also under Order

VI Rule 17 CPC on 17.08.2004.

(xv). Further BMC filed an application under

Section 89 of the CPC stating that under the

agreement of 30.07.1991 plaintiff be

directed to pay Rs. 30,00,000/- (Rupees

Thirty lacs only) against the value of the

allotted land. It was further stated that in

case the full amount is deposited, BMC is

ready to fulfil its obligations. It therefore

prayed that the parties may be relegated to

a Mediator/Arbitrator for settlement of the

dispute under Section 89 CPC. This

application is dated 27.08.2004.

(xvi). The Trial Court, by order dated 17.09.2004,

referred the matter to Shri Hemant Kumar.

The said Arbitrator/Mediator in less than a

Civil Appeal No. 6884 of 2012 8 month gave an award/report dated

14.10.2004. In brief, the said award was to

the effect that the plaintiff would pay Rs.

30,00,000/- to BMC and such lease rent as

maybe determined, and in turn the BMC

would fulfil its obligation of allotment of

land, as per the agreement dated

30.07.1991.

(xvii). The Appellant-State of Madhya Pradesh

filed objections dated 09.11.2004 to the

award of the Arbitrator dated 14.10.2004

praying for setting aside the same on

various grounds. It was specifically stated

in the objections that the ownership of the

land still remains with the State of Madhya

Pradesh and that BMC had no business or

right to deal with such land without the

written consent or approval of the State.

Civil Appeal No. 6884 of 2012 9 (xviii). The Trial Court, after inviting objections

to the application of the State dated

09.11.2004, allowed the same by order

dated 22.12.2004. Aggrieved by the same,

the plaintiff preferred a civil revision, which

has since been allowed by the impugned

order, giving rise to the present appeal.

3. We have heard learned counsels for the parties and

perused the material on record.

4. It is an admitted position that the suit is still

pending before the Trial Court. The plaintiff has not

been granted any declaration as such till date. The

ex-parte decree having been set aside, there was no

occasion for the plaintiff to further act upon the

agreement dated 30.07.1991 since no rights had

crystallized to the parties. The basis of that

agreement was the ex-parte decree of declaration

and injunction in favour of the plaintiff. Once the ex-

Civil Appeal No. 6884 of 2012 10 parte decree has itself been set aside and the suit

was to proceed further from the stage of filing of

written statement by the Appellant- State, the

agreement dated 30.07.1991 would lose all its

credibility assuming there was any semblance of any

right to enter into the agreement. The application

filed by BMC under Section 89 CPC was also not

maintainable based on the agreement of

30.07.1991. There appears to be some kind of

collusion between BMC and the plaintiff. Whether or

not there was any condition in the agreement dated

30.07.1991 for appointment of Arbitrator, the very

basis of entering into the agreement having been set

aside, the agreement itself could not have been

relied upon by any of the parties.

5. The suit land admittedly was owned by the

Appellant-State. Even if the State had allotted it to

BMC for constructing a bus stand, BMC could not

Civil Appeal No. 6884 of 2012 11 have dealt with it and treated it to be in the

ownership or possession of the plaintiff by entering

into the agreement dated 30.07.1991. BMC would

be bound as an allottee of the State to utilise the

said land for the purpose for which it was given. It

ought to have taken appropriate steps for removal of

possession of the plaintiff which under law was

totally unauthorised and illegal.

6. A perusal of the agreement dated 30.07.1991 clearly

mentions that the plaintiff was claiming right under

the ex-parte decree dated 22.06.1990 and the

dismissal of the First Appeal on 11.05.1991. Later

on when both the orders had been set aside and the

suit itself was to proceed from the stage of the

Appellant-State filing its written statement, the

agreement itself would not have any sanctity in the

eye of law even inter se parties. The right created in

the plaintiff under the ex-parte decree stood

Civil Appeal No. 6884 of 2012 12 extinguished and, therefore, BMC ought to have

been careful enough of not placing any reliance any

further on the said agreement. The Trial Court was

justified in allowing the application by setting aside

the award. The High Court committed a grave error

in not considering the relevant aspects and in

placing reliance on the statement made by the

Appellant- State before the Trial Court that the State

had no interest inasmuch as it had allotted the land

to BMC to set up a bus stand and therefore, it

should be deleted from the array of parties as

defendant no.2. In any case, all the applications are

still pending before the Trial Court if not already

disposed off or withdrawn by the State.

7. In view of the above, the appeal deserves to be

allowed and is accordingly allowed. The impugned

order passed by the High Court is set aside.

Civil Appeal No. 6884 of 2012 13

8. The Trial Court will proceed with the suit and decide

the same on merits on the basis of evidence which

may be led before it.

9. There shall be no order as to costs.

10. Pending applications, if any, also stand disposed of.

…………………………………J (VIKRAM NATH)

…………………………………J (K.V. VISWANATHAN)

NEW DELHI APRIL 18, 2024

Civil Appeal No. 6884 of 2012 14