M.R.SHAH,J. - (1.) Feeling aggrieved and dissatisfied with the impugned judgment and order dated 16.09.2006 passed by the High Court of Karnataka at Bangalore in RFA No. 274 of 2001, MFA No. 3934 of 2000 and CRP No. 3297 of 2000, the original plaintiff and the subsequent auction purchaser who purchased the property in question in the Court auction in execution proceedings, have preferred the present appeals.
(2.) The facts leading to the present appeals in nutshell are as under: 2.1 That, as per the case of the original plaintiff, the respondents herein - original defendants (hereinafter referred to as the 'original defendants') borrowed a sum of Rs. 1,00,000/- from the father of the appellant herein - original plaintiff (hereinafter referred to as the 'original plaintiff) in the year 1990 by way of a simple mortgage deed and then further Rs.50,000/- by way of a promissory note in the year 1992. The deed of simple mortgage was executed on 11.07.1990. The mortgage deed was executed between the original defendants as Mortgager and one partnership firm namely C.H. Shantilal and Co. as Mortgagee. The original plaintiff is the son of Shri C.H. Shantilal who was one of the partners of the firm which was dissolved on 17.12.1994. That, as per the case of the original plaintiff, the mortgager borrowed a loan of Rs. 1,00,000/- from mortgagee in order to clear their earlier debt in lieu of mortgage of property - suit property. That the mortgager was to repay Rs. 1,00,000/- to the mortgagee within a period of 5 years from the day the deed was entered into along with interest at the rate of 1.5% per mensem or 18% per annum. That the interest was required to be paid by the mortgagers to the mortgagee every month on or before the 10th of each month. According to the original plaintiff, in the event of failure to pay the principal or interest within the period, the mortgagee will be entitled to enforce the said mortgage and cause the property or any portion sold and appropriate the proceeds towards the satisfaction of the mortgage deed. A promissory note was also executed by the original defendants while taking a further sum of Rs.50,000/- on 13.12.1992 and created a further charge in the mortgaged property. That, as the defendants-mortgagers did not pay the aforesaid amount, the plaintiff filed a suit being O.S. No. 3376 of 1995 on 30.5.1995 before the Court of learned City Civil Judge at Bangalore for a sum of Rs. 2,50,000/- together with interest thereon. It was also further prayed that on failure of the defendants to pay the decretal amount, the plaintiff shall be at liberty to sell the mortgaged property and the sale considerations so realized to be adjusted over the decretal amount. According to the plaintiff, the defendants filed a written statement on 31.05.1995 and admitted borrowing of Rs. 1,50,000/-. According to the plaintiff, the defendants were represented by an Advocate. A Compromise/Settlement was entered into between the plaintiff and the defendants on 01.06.1995. The defendants agreed to pay to the plaintiff a sum of Rs.2,50,000/- in a monthly installment of Rs.5,000/- within three years. Learned Trial Court accordingly decreed the suit in terms of the compromise vide judgment and decree dated 01.06.1995. That the plaintiff filed an execution petition being Execution Petition No. 232 of 1996 before the Court of City Civil Judge, Bangalore on 28.02.1996. The judgment debtor-defendant entered appearance through an advocate on 21.06.1996 in the execution petition. That the judgment debtor-defendant filed objections in the execution petition and contended that the decree dated 01.06.1995 was obtained by fraud. By order dated 03.03.1998, the Executing Court overruled the objections of the judgment debtor-defendant and specifically observed that the objections of the judgment debtor that the decree has been obtained by fraud, mis-representation etc., are overruled. By overruling the objections raised by the judgment debtor, learned Executing Court specifically observed that the judgment debtor has failed to lead any evidence in support of his objections that the decree was obtained by fraud or mis-representation. That, thereafter, learned Executing Court issued sale proclamation of the mortgaged property on 21.11.1998. The mortgaged property was put to sale by the Executing Court. The appellant in Civil Appeal No. 1845 of 2010 was declared the highest bidder. He deposited 25% of the bid amount on 11.02.1999 itself on the day on which the sale was conducted. The auction purchaser offered Rs.4,50,000/- and his bid was accepted by the Executing Court. After the bid of the auction purchaser was accepted, the judgment debtors filed LA. No. 03 of 1999 on 19.02.1999 in the Execution Petition under Section 151 C.P.C. before the learned Additional City Civil Judge (Executing Court) to stay further proceedings with regard to sale of the subject mortgaged property. On 22.02.1999, the judgment debtors filed another LA. No. 04 of 1999 in the Execution Petition under Order XXI read with Rule 90 and Order XXI read with Rule 47 and Section 151 CPC to set aside the court auction/sale dated 11.02.1999 and 18.02.1999 with respect to the subject mortgaged property. By order dated 30.10.1999 the learned Executing Court dismissed both the aforesaid applications. While dismissing LA. No. 3 of 1999, the learned Executing Court observed that the earlier order dated 03.03.1998 was a speaking order and the objections raised by the judgment debtors were overruled and the same had attained the finality as the same has not been assailed by the judgment debtor before any competent Appellate Forum. Learned Executing Court also further observed that the Executing Court cannot go behind the decree so as to decide the question of correctness and validity of the decree, when the decree has become final. The learned Executing Court dismissed LA. No. 04 of 1999 on the ground that the judgment debtors have not deposited the decretal amount of Rs.4,50,000/- together with interest in terms of Order XXI Rule 90 and therefore it does not entitle them to any relief for setting aside the sale as per the requirement of Order XXI Rule 90. That, thereafter, the sale of the mortgaged property came to be confirmed in favour of the auction purchaser on 17.11.1999. Sale certificate was issued by the Court in favour of the auction purchaser and the sale was registered with the Sub-Registrar on 23.11.1999. That the judgment debtors thereafter on 24.11.1999 filed Civil Revision Application No. 3699 of 1999 before the High Court against the order dated 30.10.1999 passed by the learned Executing Court in LA. No. 4 of 1999 which was thereafter converted into MFA No. 3934 of 2000. The judgment debtors thereafter filed another Civil Revision Application No. 3700 of 1999 in the High Court against the order dated 30.10.1999 passed by the learned Executing Court in LA. No. 3 of 1999. The High Court vide its order dated 06.01.2000 dismissed Civil Revision Application No. 3700 of 1999 by observing that the issue regarding fraud has attained finality as the order dated 03.03.1998 passed by the learned Executing Court overruling the objections of the judgment debtor had attainted finality and the same remained unchallenged. Having realized that the judgment debtors were required to challenge the order dated 03.03.1998 overruling the objections, thereafter, after a period of two years from date of the order dated 03.03.1998, the judgment debtors filed Civil Revision Application No. 3297 of 2000 before the High Court. Thereafter and having realized that non-challenging of the judgment and decree dated 01.06.1995 passed by the learned Trial Court in O.S. No. 3376 of 1995 shall come in their way, after a period of five years from the date of passing the judgment and decree dated 01.06.1995, the judgment debtors filed an appeal being RFA no. 274 of 2001 in the High Court. The said appeal was preferred in the year 2001. It is the case on behalf of the plaintiff that before the High Court a Compromise Petition was prepared on 10.06.2004 wherein the judgment debtors agreed to pay Rs. 6,96,062/- in full and final settlement of the decree passed by the learned Trial Court. However, at the time of filing of the Compromise Petition, the judgment debtors withdrew from the compromise agreed by them. Thereafter, the aforesaid first appeal proceeded further. The High Court vide order dated 19.09.2005 called for a finding/report from the Principal City Civil Judge and directed him to hold an enquiry as to whether the decree passed in O.S. No. 3376 of 1995 was obtained by fraud. The propriety and legality of the said order of calling for a report/finding from the learned Principal City Civil Judge shall be dealt with hereinafter at an appropriate stage. That the learned Principal City Civil Judge submitted the report dated 06.12.2005 before the High Court wherein he recorded the finding that the decree in O.S. No. 3376 of 1995 had been obtained by fraud. Relying upon the report submitted by the Principal City Civil Judge dated 06.12.2005 and having opined that the decree in O.S. No. 3376 of 1995 was obtained by fraud, the High Court vide its impugned judgment and order dated 16.09.2006 has allowed the appeals being RFA No. 274 of 2001, MFA No. 3934 of 2000 and CRP No. 3297 of 2000 and the operative part of the impugned common judgment and order passed by the High Court is as under: "RFA No. 274/2001 is allowed with cost. The order and decree passed by the Court of XV Addl. City Civil Judge, Bangalore in O.S. No. 3376/1995 dated 1.6.1995 is set aside and suit is remitted to the Addl. City Civil Judge, Bangalore, for fresh disposal, in accordance with law. Defendants are permitted to file written statement within sixty days from today before the trial court. MFA No. 3394 /2000 is allowed. Order dated 30.10.1999 is set aside. However, it is open to the auction purchaser to make an application before the trial court for refund of the amount deposited by him and reimbursement of the amount spent by him for registration of the sale deed and other expenses incurred by him and trial court shall consider the said application and dispose of the same, in accordance with law. CRP No.3297/2000 is allowed. Order dated 3.3.98 is set aside." 2.2 Feeling aggrieved and dissatisfied with the impugned common judgment and order passed by the High Court in allowing the appeals and quashing and setting aside the judgment and decree dated 01.06.1995 passed in O.S. No. 3376 of 1995; quashing and setting aside the order dated 30.10.1999 passed by the learned Executing Court and quashing and setting aside the order dated 03.03.1998 passed by the learned Executing Court in overruling the objection raised by the judgment debtors, the original defendants as well as the successful auction purchaser have preferred the present appeals.
(3.) Shri Rahul Arya, learned advocate appearing on behalf of the original plaintiff has vehemently submitted that the High Court has committed an error in quashing and setting aside the consent decree and also in quashing and setting aside the orders dated 01.06.1995 and 30.10.1999. It is vehemently submitted that the High Court has materially erred in relying upon the report submitted by the learned Principal City Civil Judge that the decree in O.S. No. 3376 of 1995 has been obtained by fraud. It is vehemently submitted that as such even the defendants admitted in the proceedings before the Principal City Civil Judge that he had mortgaged the property for Rs. 1,00,000/- under the registered mortgage deed and that he took a further sum of Rs.50,000/- from Shantilal by executing a pro-note in his favour. It is submitted that he also admitted that the amount was not repaid. It is submitted that in fact and as an after-thought, the defendant came up with a case that he repaid the money. However, even as observed by the learned Principal City Civil Judge, he could not prove the payment. It is submitted that the conduct on the part of the defendant that he has come up with a case that the consent decree in O.S. No. 3376 of 1995 was obtained by fraud is dishonest attempt to get out of the consent decree. 3.1 It is submitted that in fact the original defendant No. 1 had put his signature on the Vakalatnama, written statement and the compromise deed. It is submitted therefore that it is not a case of forged signature. It is further submitted that calling the report from the Principal City Civil Judge and directing him to hold an enquiry as to whether the decree was obtained by fraud itself was contrary to the provisions of the CPC and such a procedure is unknown to law. It is submitted that as such by referring the matter to the learned Principal City Civil Judge, the High Court gave ample opportunity to the defendants to fill in the lacuna. It is submitted that as such the learned Executing Court by passing the order dated 03.03.1998 specifically observed that the judgment debtors have failed to prove by leading cogent evidence that the decree was obtained by fraud. It is submitted that as such after two years of the order dated 03.03.1998 overruling the objections raised by the judgment debtors, a revision was filed belatedly and as an afterthought. 3.2 It is submitted that as such the first appeal itself before the High Court against the consent decree was not maintainable in view of the provisions of Section 96 read with Order XXIII of the CPC. It is submitted that the High Court has not properly appreciated and considered the fact that against the consent decree, the appeal shall not be maintainable. It is submitted that the High Court has materially erred in holding that the appeal would be maintainable. 3.3 It is further submitted that the High Court has failed to appreciate that the judgment debtors - original defendants challenged the consent decree dated 01.06.1995 only in the year 2001. It is submitted that in between number of proceedings were initiated before the Executing Court and the orders were passed by the Executing Court dated 03.03.1998, 30.10.1999 and even the mortgaged property was auctioned and the sale certificate was issued in favour of the auction purchaser in the month of November 1999 itself and the judgment debtors-original defendants did not challenge the consent decree on the ground that it was obtained by fraud till 2001. It is submitted therefore that the conduct of the respondents suffers from delay and laches. 3.4 It is further submitted that the High Court has failed to appreciate that pursuant to the compromise decree, execution proceedings were filed, sale notice had been issued, immovable property was sold, sale came to be confirmed in favour of the auction purchaser and the auction purchaser paid the sale consideration in the court and even thereafter the sale certificate was issued and registered before the Sub-Registrar in the year 1999 itself. 3.5 It is further submitted by the learned advocate appearing on behalf of the original plaintiff that the judgment debtors failed to deposit the amount of sale consideration before the Executing Court, which was required to be deposited under Order XXI Rule 90 of the CPC. It is submitted that therefore the High Court has materially erred in quashing and setting aside not only the consent decree, but also the orders dated 01.06.1995 and 30.10.1999. 3.6 It is submitted that the learned Principal City Civil Judge erred in believing the plea of the judgment debtors-original defendants that as the compromise process and the written statement were in English and he was knowing only the vernacular language, he did not know what was there in the written statement and the consent compromise deed. It is submitted that the original defendants have signed the mortgage deed which was in English and was also signed by them on each and every page, it cannot be construed that the defendants were familiar only with the vernacular language.;