SAHU SHYAM LAL Vs. MSHAYAMLAL

JUDGEMENT

(1.) This has been referred to a Full Bench because of certain important questions of law which arise in it. It appears that Sahu Shyam Lal instituted Suit No. 125 of 1923 in the Court of the Subordinate Judge of Moradabad for dissolution of his partnership with Kalyan Das and others. On December 25, 1923, the parties compromised their dispute and a written compromise was filed in court. Under this compromise, apart from the liability to pay Rs. 1,000, the defendant agreed that Rs. 1,500 were further due to the plaintiff from the defendant and he agreed to pay the amount in annual instalments of Rs. 150 each spread over a number of years. It was also provided that in a default of payment of any instalment, the whole of the amount would become due and would be payable with interest at 1 per cent, per mensem and it further provided that, the property specifically mentioned in the compromise would remain (makful and marhun) hypothecated and mortgaged for the amount due to the plaintiff and that the; defendant shall not transfer or encumber the same property and that in case of breach of any of the conditions the plaintiff would be entitled to realise the amount by sale of the aforesaid property by execution) of this decree without bringing a fresh suit.

(2.) The court passed a decree in terms of this compromise and incorporated the whole of the compromise into the decree. It may be noted that this compromise was neither: registered nor was it attested as a mortgage deed would be. Subsequently one Gopal Ram brought a money suit No. 429 of 1926, against Kalyan Das and others and obtained a decree. After attaching the property mentioned in the previous decree he proceeded to execute his decree by sale of the same. Sahu Shyam Lal applied that his charge over the property should be declared at the time of the auction. This request was granted. The auction sale in execution of Gopal Ram's decree took place with the announcement of the incumbrance and the property was purchased for Rs. 14 by Munshi Shyam Lal who is a different person from Sahu Shyam Lal. When Sahu Shyam Lal executed his decree in Suit No. 125 of 1923 by sale of this properly Munshi Shyam Lal, the auction-purchaser, objected, but his objection was disallowed and the property was again sold at auction in execution of Sahu Shyam Lal's decree and the property was purchased by Sahu Shyam Lal for Rs. 550.

(3.) The present suit was instituted by Munshi Shyam Lal principally against Sahu Shyam Lal for a declaration that the purchase made by him previously was good and that the property was vested in him and that the present purchase, by Sahu Shyam Lal was invalid and not binding upon him. Both the courts below have decided the suit in favour of the plaintiff, holding that the compromise in Suit No. 125 of 1923 was in the nature of creating a mortgage on immovable property and not being registered was inadmissible in evidence and the court acted without jurisdiction in so far as it created a mortgage on immovable property. It was held that all subsequent proceedings including the auction purchase by Sahu Shyam Lal were null and void. Sahu Shyam Lal has come up in appeal to this Court and challenges the finding of the courts below. It is quite obvious that if the court had no jurisdiction to incorporate any part of the compromise into the decree, the decree would Be ultra vires and therefore void and a nullity and the auction purchase would fall with it. On the other hand, if the court had jurisdiction to entertain the compromise, then even if it acted in an irregular manner or acted illegally or committed an error of law the decree when passed would be one passed with jurisdiction and binding on the parties unless set aside in appeal or by way of review of judgment.