Supreme Court: Parties Cannot Trade Based on a Mere Declaration of Rights Under the Preliminary Decree in a Suit for Partition

Supreme Court: Parties Cannot Trade Based on a Mere Declaration of Rights Under the Preliminary Decree in a Suit for Partition

The Supreme Court in a landmark case dismissed a series of appeals and declared that the preliminary decree in a partition suit was not vitiated by fraud. The bench comprising of Justices V. Ramasubramanian and Pankaj Mithal observed that, based on a mere declaration of the rights that take place under the preliminary decree, the parties cannot trade in, on specific items of properties or specific portions of suit schedule properties.

The appeals arose from various Special Leave Petitions (SLPs) filed by different parties, including Trinity Infraventures Ltd., Sameena Kausar and others, and Fareeduddin Khan and others. The Court dismissed these appeals, upholding the validity of the preliminary decree.

In this case, the Supreme Court was hearing a land dispute case, which went back over 50 years, and involved several parties.

In 2019, the Division Bench of the Telangana High Court had ruled that the appellants had failed to establish that the land in Hydernagar village is the Mathruka property of Khurshid Jah Paigah, from whom they were claiming title under a preliminary decree passed by the High Court of Hyderabad in 1963.

The said preliminary decree was passed by the Single Judge of the High Court while sitting as a Trial Judge, in a suit for partition between the family members of Kurshid Jah, based on a compromise entered between some of the parties to the suit.

It was the case of the appellants that the Court in its preliminary decree for partition had ruled that the lands in Hydernagar are Mathruka property.

However, the Telangana High Court held, that the land in Hydernagar village was Jagir land, but prior to 1948 pattas were granted to cultivating Ryots. Therefore, the Court held that title to the land had passed on to the cultivating Ryots before 1948 itself, who had validly conveyed title to their successors, i.e., the claim petitioners/ respondents.

The High Court had found that the said land did not vest in the State Government after the Hyderabad Jagir Abolition Regulation, 1358 Fasli came into operation. Thus, the claim petitioners had perfected title over the lands by adverse possession.

The issues before the Court were:

(i) Whether the Division Bench of the High Court was right in declaring that the preliminary decree dated 28 June, 1963 was vitiated by fraud and consequently null and void, especially when there was no pleading and no evidence let in?

(ii) Whether the concurrent findings of the Single Judge and the Division Bench of the High Court that Khurshid Jah did not leave behind any Mathruka property, goes contrary to the finding recorded in the Judgment and preliminary decree that has attained finality?

(iii) Whether the finding recorded in the judgment and preliminary decree that the lands in Hydernagar are Mathruka property is binding upon third parties?

(iv) What is the scope of the enquiry under Order XXI Rules 97- 101, Code of Civil Procedure, 1908 (CPC)?

(v) Whether the claims of the claim petitioners stood established? and;

(vi) Whether the State of Telangana has any legitimate claim and whether any such claim would still survive after a series of setbacks to the State Government in the Court room?

On undertaking a detailed analysis of Issue (i) and Issue (iv), the Apex Court held that the judgment and preliminary decree dated 28 June, 1963, though may not be vitiated by fraud, were certainly not binding upon third parties like the claim petitioners as well as the Government who had set up independent claims and that whatever was done in pursuance of the preliminary decree was an abuse of the process of law.

While noticing that there were no pleadings made to the effect that the preliminary decree was vitiated by fraud, the Court remarked that allegations of fraud require special pleadings in terms of Order VI, Rule 4 of the CPC.

The Court added that in a simple suit for partition, the parties cannot assert title against strangers, even by impleading them as proforma respondent.

The bench observed, “The strangers who are impleaded in a partition suit, may have nothing to say about the claim to partition. But they may have a claim to title to the property and such a claim cannot be decided in a partition suit.”

On Issue No. (iv) the Court held that in an enquiry under Order XXI, Rules 97 to 101, CPC, the Executing Court cannot decide questions of title set up by third parties (not claiming through or under the parties to the suit or their family members), who assert independent title in themselves.

The bench clarified that, “All that can be done in such cases at the stage of execution, is to find out prima facie whether the obstructionists/claim petitioners have a bona fide claim to title, independent of the rights of the parties to the partition suit. If they are found to have an independent claim to title, then the holder of the decree for partition cannot be allowed to defeat the rights of third parties in these proceedings.”

Apropos to the Issue No. (ii) and Issue No. (iii) the Court held that the Single Judge as well as the Division Bench (in the impugned judgment) were right in holding that the properties were not established to be Mathruka properties. The effect of the order of the Nazim Atiyat was not examined by the Trial Judge. In any case, such an examination had to be done independently and not in a partition suit, keeping in view, the Hyderabad Abolition of Inams Act, 1955 (in short Act 1955) and various subsequent enactments relating to agricultural land reforms and urban land ceiling.

While analyzing the issue (v), the Court observed that, the report of the Receiver-cum-Commissioner in this regard and the order passed thereon by the Court dated 20 January, 1984 for handing over possession, was shocking, in the light of the fact that the Receiver himself recorded in his letter dated 9 April, 1980 that faisal patti stood in the name of the claim petitioners.

Therefore, it was too late in the day for the appellants to question as to how the claim of the claim petitioners stood established. Thus, the Court accordingly answered this issue No. (v) in favor of the claim petitioners/respondents.

Lastly, with respect to issue no. (vi), the Court avowed if in a suit for partition, the title to a property cannot be decided in favor of the parties claiming partition qua strangers, the same logic would apply even to the claim petitioners qua the State Government. The judges remarked, “But we must remember that what is sauce for the goose must be a sauce for the gander.”

The Court concurred with the senior counsel for the State that lot of issues remain unresolved in this regard. There was no occasion for the Court so far, to consider the effect of the 1955 Act.

The Court stated that the question as to who holds title to the remaining part of the land will still remain at large, if the assignees of the decree go out. If the appellants have no title to the rest of the lands on account of the Jagir Abolition Regulations and if the claim petitioners have title only to one portion of the land on account of the pattas granted prior to 1948, there must be somebody who owns the remaining extent of land. Assuming that somebody else owns the land, the effect of agricultural land reforms and urban land ceiling enactments were still there to be considered.

However, the Court clarified that it was not deciding the title to land in these proceedings. Therefore, with respect to the Issue No. (vi) answered that the finding recorded and the conclusion reached in the impugned judgment, was not binding on the State Government.

The Court thus held that the claim of the claim petitioners/respondents over the lands stood established. The bench thus dismissed the appeals.