H. S. GOUTHAM versus RAMA MURTHY AND ANR. ETC.

Citation: [2021] 4 S.C.R. 996 · Decided: 12-02-2021 · Supreme Court of India · Bench: ASHOK BHUSHAN · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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SUPREME COURT REPORTS
[2021] 4 S.C.R.
H. S. GOUTHAM
v.
RAMA MURTHY AND ANR. ETC.
(Civil Appeal No. 1844 of 2010)
FEBRUARY 12, 2021
[ASHOK BHUSHAN, R. SUBHASH REDDY,
M. R. SHAH, JJ.]
Code of Civil Procedure, 1908 – Or.XXI, r.92 r/w r.94, Or.XLI,
rr.27-29 –Defendants (mortgagers) failed to repay the borrowed
amount, father of appellant-original plaintiff filed suit – Consent
decree passed – Plaintiff filed execution petition – Judgment debtors-
defendants filed objections therein that the decree was obtained by
fraud – Overruled by Executing Court vide order dtd.03.03.98 –
Mortgaged property sold in Court auction – High Court in appeals
and revision by judgment debtors called for a report from the
Principal City Civil Judge as to whether the decree was obtained
by fraud – Relying thereupon and holding that the decree was
obtained by fraud and thus setting it aside, the appeals and revision
were allowed by impugned common judgment – On appeal by
original plaintiff and auction purchaser, held: All through-out there
was delay and negligence on the part of the judgment debtors in
not initiating the appropriate proceedings at appropriate stage –
Order dtd. 03.03.98 was not challenged by the judgment debtors
till the year 2000 – By then the mortgaged property was already
sold in the execution proceedings and the sale was confirmed in
favour of the auction purchaser, even the sale certificate was issued
and thus the sale became final in terms of Or.XXI, r.92 r/w r.94 –
Further, except the averments that the decree was obtained by fraud,
misrepresentation, the judgment debtors did not lead any evidence
in support thereof – Mere allegation that there was a fraud, not
sufficient – Also, procedure u/Or.XLI, r.27-29 was not followed by
High Court while calling for the report from the Principal City Civil
Judge – High Court erred in relying upon the report and holding
that the decree was obtained by fraud – Impugned common judgment
set aside – Fraud.
[2021] 4 S.C.R. 996
996
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Code of Civil Procedure, 1908:
Or.XLI, rr.27-29 – Held: Unless and until the procedure u/Or.
XLI, rr.27-29 are followed, the parties to the appeal cannot be
permitted to lead additional evidence.
Or.XXI, rr.89-92, 94 – Application filed to set aside court
auction/sale w.r.t the subject mortgaged property – Held: It is not
the case of the judgment debtors that there was any material
irregularity or fraud in publishing or conducting the sale – Their
objection is that the decree was obtained by fraud – Application
u/Or.XXI, r.90 was rightly dismissed by the Executing Court.
Fraud – Pleadings – Held: When fraud is alleged, the same
is required to be pleaded and established by leading evidence –
Mere allegation that there was a fraud, not sufficient.
Code of Civil Procedure, 1908 – s.96, Or.XXIII, r.3, Or.XLIII,
r.1(m), r.1A(2) – Appeal against consent decree – Maintainability
of – Held: As per s.96(3), the appeal against the decree passed
with the consent of the parties shall be barred – However, as per
Or.XXIII, r.3A no suit shall lie to set aside a decree on the ground
that the compromise on which the decree is based was not lawful –
However, when Or.XLIII, r.1(m) came to be omitted by Act 104 of
1976, simultaneously, Or.XLIII, r.1A came to be inserted by the same
Act, which provides that in an appeal against the decree passed in
a suit for recording a compromise or refusing to record a compromise,
it shall be open to the appellant to contest the decree on the ground
that the compromise should or should not have been recorded.
Allowing the appeals, the Court
HELD: 1.1 The execution of the simple mortgage deed,
execution of the promissory note and taking the amounts of loan,
have not been disputed by the judgment debtors. All through-
out there was a delay and negligence on the part of the judgment
debtors in not initiating the appropriate proceedings at
appropriate stage. Order dated 03.03.1998 overruling the
objections submitted by the judgment debtors to the effect that
the judgment was obtained by fraud and mis-representation was
not challenged by the judgment debtors till the mortgaged
property was auctioned; sale of the mortgaged property was
confirmed in favour of the auction purchaser and even the sale
H. S. GOUTHAM v. RAMA MURTHY AND ANR. ETC.
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SUPREME COURT REPORTS
[2021] 4 S.C.R.
certificate was issued in favour of the auction purchaser and sale
was registered with the Sub-Registrar and even also

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