M/s. Supreme General Films Exchange Ltd. vs Maharaja Sir Brijnath Singhji Deo of Maihar || Lis Pendense || Case Summary

Sambhav Chhabra
2 days ago
3 min read

M/s. Supreme General Films Exchange Ltd. vs Maharaja Sir Brijnath Singhji Deo of Maihar

M/s. Supreme General Films Exchange Ltd. vs Maharaja Sir Brijnath Singhji Deo of Maihar

Facts

The original owners of the Plaza Talkies cinema, the Bhatias, had borrowed money from the Plaintiff (Maharaja) and executed a registered mortgage deed on the theater in 1951 as security.
The Plaintiff also became the assignee of a decree obtained by another creditor, the Central Bank of India, against the Bhatias, in the execution of which the theater was attached on May 4, 1955.
The Defendant (M/s. Supreme General Films Exchange Ltd.), which was already a tenant holding over, obtained a new lease deed for the theater from the Bhatias on March 30, 1956. This lease was executed as part of a compromise decree in a separate specific performance suit filed by the Defendant against the Bhatias.
The Plaintiff filed a suit seeking a declaration that the Defendant's lease of 1956 was void and ineffective against his rights under the mortgage and the assigned decree, arguing that it was executed after the attachment of the property and during the pendency of litigation.

Issues

Whether the suit for a mere declaration that the lease was void, without asking for any consequential relief (like possession), was maintainable under Section 42 of the Specific Relief Act, 1877 (now Section 34 of the 1963 Act).
Whether the lease executed in favor of the Defendant Company on March 30, 1956, was void because it was made (a) during the pendency of the suit/mortgage or (b) while the property was under attachment.

Laws Involved

Section 42 of the Specific Relief Act, 1877 (now Section 34 of the 1963 Act): This provision allows a person entitled to any legal character or right in property to file a suit for a declaration against someone denying that title. The central point of contention was whether this section is exhaustive (the only way to get a declaratory decree) or merely one way.
Section 52 of the Transfer of Property Act, 1882 (Doctrine of Lis Pendens): This doctrine states that during the pendency of a suit or proceeding in which the right to immovable property is directly and specifically in question, the property cannot be transferred or otherwise dealt with by any party to the suit so as to affect the rights of any other party under any decree or order which may be made therein. In simple terms, you can't sell or lease property under litigation to defeat the claims in the suit.
Section 64 of the Code of Civil Procedure, 1908: This provision makes any private transfer or delivery of property void if it is made contrary to an attachment placed on that property by a court.

Judgement

The Supreme Court dismissed the appeal, upholding the High Court's decision that the Defendant’s lease was void and the Plaintiff’s suit was maintainable.

Reasoning

On Declaratory Relief (Section 42, Specific Relief Act): The Court affirmed the principle that Section 42 is not exhaustive of all types of declaratory reliefs. Courts have the power to grant declaratory decrees in appropriate cases outside the strict requirements of Section 42. Since the Plaintiff had a sufficient legal interest in the property (as a mortgagee and an assignee of a decree-holder with an attachment), the declaration was necessary to clear the cloud on the title and ensure a fair price upon sale.
On Lis Pendens (Section 52, T.P. Act): The Court held that the lease of 1956 was void as it was struck by the doctrine of lis pendens (Section 52, T.P. Act). The lease purported to create entirely new rights pendente lite (during the pendency of litigation, specifically the mortgage suit and the execution proceedings).
On Attachment (Section 64, C.P.C.): The Court accepted the concurrent finding that the property was under attachment on May 4, 1955, and this attachment was still in existence when the impugned lease was executed on March 30, 1956. Therefore, the lease was also void under Section 64 of the C.P.C.