Date of judgement:
5 August 2021
Bench:
Justice Dhananjaya Y Chandrachud
Justice M R Shah
Parties:
Appellant – Saurav Jain & Anr.
Respondent – ABP Design & Anr.
Subject
The following case is a property dispute in which the jurisdiction of the Trial Court was called into question. It also answered various questions as to the requirement of making a cross objection, while challenging the adverse findings of the Trial Court.
Overview
- Zahid Hussain was the owner of a land in Moradabad, measuring 6960.84 sq.mts. It comprised of a piece of land named Gata No. 200, which was declared ‘surplus’ by the competent authority under the Urban Land (Ceiling and Regulation) Act 1976 (ULCRA), and the land was handed over to Moradabad Development Authority (MDA) by the provisions of the Land Acquisition Act, 1894.
- Gata no.200 was divided into two plots i.e. Gata no.200/1 which shall be owned by Zahid Hussain and Gata no.200/2 which shall be owned by the MDA. Hereafter, Zahid Hussain after getting permission from the authority, sold his portion of land to ABP Design (respondent no.1) by a registered sale deed. During the pendency of the case, ULCRA was repealed and the case was thus dismissed.
- In the year 2008, MDA issued a notice for auction of the entire land Gata no.200. In 2009, the auction was completed and the land was sold to Saurav Jain (appellant) for 65,75,000/- Rs. The respondent (ABP Design) file a suit, challenging the auction proceedings on the ground that MDA had ownership only over Gata no.200/2 and not over Gata no.200/1 which was owned by him.
- The suit was dismissed by the Trial Court and held that the auction was valid and MDA is the lawful owner of the land. The Court reasoned that ABP design (respondent) could not produce the original sale deed.
- When an appeal was made to the High Court it allowed the appeal and reversed this decision of the Trial Court.
- It also said that in the absence of physical taking over of possession and of the handing over of possession to MDA on the enforcement of the Repeal Act, the land comprised in Gata No. 200 measuring 1295.04 sq. mt. remained the property of Zahid Hussain. Hence, an appeal was made by Saurav Jain to the Supreme Court.
Issues
- Under what circumstances appellant has to make a cross objection under Order 41 Rule 22 of CPC?
- Whether the Trial Court had the power to entertain the suit initially filed by the respondent?
Legal Provisions
- Order 41 Rule 22 of the Code of Civil Procedure – Respondent may, after the hearing, object to decree as if he had preferred a separate appeal. He may also be permitted to make a cross objection.
- Section 5(3) of the Urban Land (Ceiling and Regulation) Act 1976 – A person holding vacant land in excess of the ceiling limit shall not transfer any such land unless he has furnished a statement under Section 6.
- Section 27(1) of the Urban Land (Ceiling and Regulation) Act 1976 – Prohibits the transfer of urban property.
- Article 136 of the Constitution of India – Special Leave to Appeal
Judgement
- The learned counsel for the appellant contended that there was an error in the judgement of the High Court because the jurisdiction of civil courts to entertain such suits was barred under the UCLA.
- He also said that the purchase of land by the respondent from Zahid Hussain was invalid, as the sale deed itself was void because provisions under ULCRA were not followed.
- A reference was also made to Order 41 Rule 22 of the CPC, it was contended that a party in whose favour the civil court has decreed a suit, can raise arguments against findings without having to file a cross- objection, in the appeal.
- The Supreme Court held that the competent authority had categorically denied permission for the transfer of land Gata no.200/1. Hence, the transaction between Zahid Hussain and the respondent was invalid under Section 5(3) and Section 27(1) of the ULCRA.
- The Court pointed out that the question of jurisdiction was raised by the appellant only before the Trial Court and not before the High Court. However, the law dictates that the question of jurisdiction can be raised at any stage of the proceedings. So it allowed the appellant to raise the question of jurisdiction without additional evidence since it involves a pure question of law and strikes at the heart of the matter.
- The Court reiterated its judgement of Banarsi & Ors. v. Ramphal wherein, it was held that after the 1976 amendment in Order 41 Rule 22 of CPC, the respondent can file cross-objections against the ‘findings’ of the lower court, while previously it could only be filed when the decree of the lower court was partly against the respondent. Its clause (2) says that it should be filed in the form of a memorandum
- After perusal of the case of Jamshed Hormusji Wadia v. Port of Mumbai, the Apex Court held that the principle stipulated in Order 41 Rule 22 of CPC can be applied to petitions under Article 136 of the Constitution to meet the ends of justice. It also held that ‘it is not essential that a challenge to the adverse findings of the lower court needs to be made in the form of a memorandum of cross-objection.’
- The Supreme Court also observed that both the Trial Court and High Court have failed to address the issue of jurisdiction. Also, the Court criticized the manner in which the plaint was drafted by the respondent in the Trial Court, which deviated from the real cause of action and made it an issue of only auction notice.
- Finally, the Court held that the Trials Court's decision to dismiss the suit was correct because the transfer of property from Zahid Hussain to the respondent was before the Repeal Act was enacted and the dual conditions given under Section 5(3) of ULCRA were not fulfilled before the transfer. Hence, the order of the High Court was set aside and the respondent was directed to pay 50,000/- Rs as costs to the appellant.
Conclusion
The Court relied heavily on judgements like Rama Chandra Murthy V. Syed Jala, Canara Bank V. P. Selathal & Ors, and Sopan Sukhdeo Sable V. Assistant Charity Commissioner and concluded that the jurisdiction of the civil court to entertain the suit instituted by the first respondent was barred. Justice V Ramkumar had also, in one of his judgements, interpreted the true meaning in Order 41 Rule 22. He believed that a respondent may assail any adverse finding against him without filing a cross objection even when the decree passed is wholly in his favour.
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