1981 (3) TMI 263 - SC - Indian Laws

Auction Purchaser's Rights Clarified: Symbolic vs. Physical Possession under Compromise Decree

Dev Raj Dogra and others Versus Gyan Chand Jain and others

The Supreme Court held that an auction purchaser, under a compromise decree, is entitled only to symbolic possession, not physical possession, of portions ... - Issues Involved:1. Entitlement of the auction purchaser to recover actual physical possession.2. Applicability of Section 52 of the Transfer of Property Act.3. Effect of Section 65A of the Transfer of Property Act.4. Rights under Order XXI, Rules 95 and 96 of the CPC.Issue-wise Analysis:1. Entitlement of the Auction Purchaser to Recover Actual Physical Possession:The principal question in this appeal was whether the auction purchaser, who bought a property at an auction sale held pursuant to a compromise decree between the mortgagor and the mortgagee, is entitled to recover actual physical possession of portions occupied by lessees. The lessees were inducted after the decree in the mortgage suit. The auction purchaser applied for physical possession under Order XXI, Rules 95 and 96 of the CPC. The Delhi High Court initially granted physical possession, but the Supreme Court later held that the auction purchaser is entitled only to symbolic possession, not physical possession, of the portions occupied by the tenants.2. Applicability of Section 52 of the Transfer of Property Act:Section 52 of the Transfer of Property Act, which deals with the doctrine of lis pendens, was a key point of contention. The appellants argued that Section 52 did not apply as the conditions laid down were not satisfied. They contended that the right to put the property to sale could not be considered a right to immovable property directly and specifically in question in the suit. The auction purchaser, however, argued that Section 52 applied because the tenancies were created after the institution of the suit and the passing of the compromise decree, making them illegal and void. The Supreme Court noted that Section 52 imposes a prohibition on transferring or dealing with property during the pendency of a suit if it affects the rights of any party under any decree or order.3. Effect of Section 65A of the Transfer of Property Act:The appellants contended that Section 65A, which empowers the mortgagor to grant leases while in lawful possession, should be read along with Section 52. They argued that a lease granted in terms of Section 65A does not affect the mortgagee's rights. The auction purchaser countered that Section 65A does not control Section 52, and the tenancies created after the decree were illegal. The Supreme Court observed that Section 65A deals with the mortgagor's powers to grant leases, while Section 52 deals with transfers during the pendency of a suit. The Court did not decide whether a lease granted under Section 65A during the pendency of a suit would attract Section 52, leaving this question open.4. Rights under Order XXI, Rules 95 and 96 of the CPC:The auction purchaser sought possession under Order XXI, Rules 95 and 96 of the CPC. Rule 95 provides for actual physical possession if the property is in the occupancy of the judgment-debtor or someone claiming under a title created by the judgment-debtor after attachment. Rule 96 provides for symbolic possession if the property is in the occupancy of a tenant or other person entitled to occupy it. The Supreme Court held that the auction purchaser was not entitled to physical possession under Rule 95 because the appellants were tenants, not judgment-debtors, nor were they occupying the property on behalf of the judgment-debtor. The Court directed that symbolic possession be given under Rule 96.Conclusion:The Supreme Court allowed the appeal, setting aside the High Court's order for physical possession and directing that symbolic possession be given to the auction purchaser. The Court made no order as to costs.