Page 1

        REPORTABLE   

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 8397 OF 2015  

(Arising out of Special Leave Petition (C) NO. 10721 OF 2012)

Avenue Supermarts Pvt. Ltd.                                 .... Appellant(s)

Versus

Mrs. Nischint Bhalla & Ors.                   .... Respondent(s)

J U D G M E N T

R.K. Agrawal, J.

1) Leave granted.

2) The  present  appeal  has  been  filed  against  the  judgment  and  

order dated 01.03.2012 passed by the Division Bench of  the High  

Court of Bombay in Appeal No. 271 of 2009 in Notice of Motion No. 21  

of 2006 in Suit No. 3706 of 1995.   Before the High Court, an appeal  

was filed against the order dated 10.02.2009 passed by the learned  

single  Judge  of  the  High  Court  on  a  Notice  of  Motion  taken  by  

Defendant Nos. 4A, 4B and 5 respectively in the aforementioned suit  

for enforcement and implementation of certain orders passed by the  

Court on consent of the parties to the suit.

1

Page 2

3) However, before the Division Bench, the original Defendant Nos.  

4A, 4B and 5 sought withdrawal of the Notice of Motion No. 21 of  

2006 filed by them in the Suit No. 3706 of 1995.  The Division Bench  

of the High Court opined that as the Notice of Motion taken out by  

Defendant Nos. 4A, 4B and 5 seeking interim reliefs and now they  

seek  withdrawal  of  that  motion,  they  cannot  be  prevented  from  

withdrawing the same with the liberty to seek appropriate relief  to  

which they may be entitled in the changed circumstances.   It had  

further held that as a result of the withdrawal of the motion, the order  

of the learned single Judge passed on the motion dated 10.02.2009  

does not survive for consideration rendering this appeal infructuous.

4) Brief facts:

(a) One Smt Durga Devi Hitkari was owner of various properties at  

Mumbai.  She died in the year 1991.  It appears that there was some  

dispute  between  her  heirs  regarding  the  estate  left  by  her.   The  

plaintiffs therein filed the present suit for administration of estate of  

the deceased.  The Notice of Motion being No. 3441 of 1995 in the suit  

was  taken  by  the  plaintiffs  therein  praying  for  appointment  of  a  

receiver  on  the  properties  left  by  Late  Smt  Durga  Devi  and  for  

temporary  injunction  restraining  the  defendants  therein  from  

disposing or selling or creating any third party rights or interest in the  

2

Page 3

property.   

(b) A  learned  single  Judge  of  the  High  Court,  vide  order  dated  

04.08.1998  disposed  of  the  Notice  of  Motion  by  restraining  the  

defendants, their agents and servants from creating any third party  

interest in or encumbering or selling or transferring or alienating in  

any manner whatsoever the immovable properties bearing Survey No.  

97 of Mandavi Division, admeasuring 202 sq. yards, Plot No. 66 at  

Chembur, Ghatkopar, Mahul Road, admeasuring 502 sq. yards and  

ground Ist, 6th and 7th floor of Sky Lark Building known as Hitkari  

House along with certain other directions.   

(c) On 01.12.1999, the said Award was made rule of the court by  

the High Court and a decree in terms of the said Award was passed in  

Arbitration Petition No. 148 of 1997.  

(d) Being aggrieved, defendants therein moved this Court by filing  

special  leave  petition  being  No.  9168  of  2000.  Before  this  Court,  

learned  counsel  for  the  parties  filed  consent  terms of  compromise  

duly signed by the parties.  Vide order dated 11.12.2000, the special  

leave petition got  disposed of  in terms of  the consent terms dated  

11.12.2000.  However, the said order was passed without prejudice to  

the  parties  to  move  the  High  Court  of  Bombay  for  probate  

proceedings.  The High Court, vide order dated 15.04.2004, disposed  

3

Page 4

of the Notice of Motion No. 2998 of 2001 filed in Suit No. 3706 of  

1995 in terms of the minutes of the order.

(e) In  the  minutes,  the  earlier  order  of  the  learned  single  Judge  

dated  04.08.1998  restraining  the  defendants  from  transferring  

immovable  property  situated  at  Chembur  was  modified  and  

Defendant Nos. 1, 4 and 6 were permitted to take all necessary steps  

to sell the said property on the terms and conditions mentioned in the  

minutes.   

(f) Bids were invited for the sale of the property at Chembur and  

the appellant herein gave bid of Rs. 20,15,00,000/- which was found  

to be highest and accepted by the parties also.  No challenge was  

made to the sale contemplated under the provisions of the Code of  

Civil  Procedure, 1908 (in short ‘the Code’).   As there was delay in  

execution of the agreement, Defendant Nos. 4A, 4B and 5 made an  

application by way of Notice of Motion being No. 21 of 2006 to the  

court  for  completion  and  confirmation  of  the  sale  process.   The  

learned single Judge of the High Court, vide order dated 10.02.2009  

confirmed the sale process and directed execution of the documents  

in favour of the appellant.   

(g) The original  Defendant  Nos.  2,  6  and 7  challenged the  order  

dated 10.02.2009 by way of Letters Patent Appeal being No. 271 of  

4

Page 5

2009  before  the  Division  Bench  of  the  High  Court.   The  original  

Defendant  Nos.  4A,  4B  and  5  did  not  challenge  the  order  dated  

10.02.2009.   

(h) At  the appellate  stage,  original  Defendant  Nos.  4A,  4B and 5  

made an oral application for withdrawal of the notice of motion filed  

by them.  The Division Bench of the High Court,  vide order dated  

01.03.2012, allowed the withdrawal of the Motion while holding that  

the  order  of  the  learned  single  Judge  dated  10.02.2009  does  not  

survive for consideration rendering the appeal infructuous.  Against  

the  said  order,  the  appellant  has  preferred  this  appeal  by  way  of  

special leave.

5) Heard learned senior counsel for the parties.  

Rival submissions:

6) Learned senior counsel for the appellant submitted that when  

the rights of the parties had been crystallized and findings have been  

rendered  in  favour  of  the  appellant  herein  and  against  the  

respondents and the same have been confirmed, the Division Bench  

of the High Court, without considering the effect thereon on the rights  

already accrued to the parties, could not have permitted withdrawal  

of the Notice of Motion at the instance of the original Defendant Nos.  

4A,  4B and 5.   In the alternative,  it  is  submitted that  even if  the  

5

Page 6

Division  Bench  could  have  allowed  withdrawal  of  the  original  

application, it had no occasion or cause to observe that on withdrawal  

of the original application, the order of the learned single Judge dated  

10.02.2009  could  not  survive  for  consideration  which  in  effect  

amounts to allowing the appeal without making any comments on the  

merits or otherwise on the order dated 10.02.2009.

7) He further submitted that the Division Bench was not justified  

in granting liberty to the parties to the suit to apply for appointment  

of receiver in respect of subject property for sale thereon as the sale in  

favour of the appellant herein had been in execution of the First and  

the  Second decree which can only  be set  aside on an appropriate  

application being made in accordance with the provisions of  Order  

XXI  of  the  Code  and  not  otherwise.   Even  if  the  suit  was  to  be  

withdrawn that would not lead to setting aside of the sale in favour of  

the appellant  herein unless recourse to appropriate proceedings in  

accordance with the provisions of Order XXI of the Code is made.

8) Learned  senior  counsel  for  the  appellant  relied  upon  the  

following decisions in support of his contention viz.,  R. Rathinavel  

Chettiar and Another vs. V. Sivaraman and Others (1999) 4 SCC  

89, Sneh Gupta vs. Devi Sarup and Others (2009) 6 SCC 194 and  

Janatha  Textiles  and  Others vs.  Tax  Recovery  Officer  and  

6

Page 7

Another (2008) 12 SCC 582.

9) Learned senior counsel for the respondents, however, submitted  

that  as  the  order  dated  10.02.2009  passed  by  the  learned  single  

Judge was on a Notice of Motion filed by Defendant Nos. 4A, 4B and  

5, it was always open for the said defendants to withdraw the Notice  

of Motion in the appeal itself and once the court has permitted the  

withdrawal of Notice of Motion, the order, if any, passed on the said  

Notice of Motion, does not survive.

Discussion:

10) We have given our anxious consideration to the various pleas  

raised by learned senior counsel for the parties.  It is not in dispute  

that vide order dated 04.08.1998 in Administration Suit No. 3706 of  

1995, the learned single Judge had restrained the defendants, their  

agents and servants therein from creating any third party interest in  

or encumbering or selling or transferring or alienating in any manner  

whatsoever amongst other properties the immovable property situated  

at  Chembur,  Ghatkoper,  Mahul  Road  bearing  Plot  No.  66  

admeasuring 502 sq. yards also.  When the matter was taken up by  

way of special leave petition being No. 9168 of 2000 before this Court,  

the  parties  had  signed  the  consent  terms  and  vide  order  dated  

11.12.2000, this Court had disposed of the special leave petition in  

7

Page 8

terms of  the  consent  terms dated 11.12.2000.   However,  the  said  

order was passed without prejudice to the parties to move the High  

Court for probate proceedings.   

11) The learned single Judge of  the High Court,  vide order dated  

15.04.2004, had taken on record the minutes of the order and the  

Notice of Motion was disposed of in terms of the minutes of the order.  

In  the  minutes  of  the  order,  the  order  of  injunction  in  respect  of  

immovable property at Chembur was varied to the limited extent so as  

to enable Defendant Nos. 1, 4 and 6 to take all necessary steps to sell  

the  said  property  on  the  terms  and  conditions  mentioned  in  the  

minutes.  It is not necessary to reproduce the minutes of the order.  

Suffice  it  to  mention  that  in  terms  of  the  minutes,  the  appellant  

herein submitted its bid of Rs. 20,15,00,000/- which was found to be  

the highest and was accepted by the parties.  In the Notice of Motion  

being  No.  21  of  2006 filed  by  Defendant  Nos.  4A,  4B and  5,  the  

learned single Judge, vide order dated 10.02.2009, had held that the  

offer made by the respondent therein who is the appellant before us  

stood accepted by all the parties to the suit.  While allowing the Notice  

of  Motion,  the  learned  single  Judge  gave  certain  directions  in  the  

operative part of the order dated 10.02.2009.  For ready reference, the  

directions given in the order dated 10.02.2009 passed by the learned  

8

Page 9

single Judge are reproduced below:-

“Order (1). The respondents shall deposit a sum of Rs. 2,28,15000/- with  the Prothonotary & Senior Master, High Court, Bombay within one  week  from the  date  of  signature  on  the  detail  order,  who  should  forthwith invest the said amount in any nationalized Bank as fixed  deposit.  (2). The Advocate for the defendant Nos. 4A, 4B and 5 shall return  the  Pay  Order  dated 5-8-2005 for  the amount  of  R.2,28,15,000/-  back to the respondents against the aforesaid deposit to be made by  the respondents for cancellation of the same.  (3). Within one week therefrom, the defendant Nos. 2, 4A, 4B, 5  and 6 shall handover the original title deeds of the Chembur property  to the Prothonotary and Senior Master, who shall keep the same in  safe custody. Within one week therefrom, the Court Receiver shall  take formal possession of the Chembur property and get it vacated  from  the  defendants  and  any  party  claiming  through  them.  The  Receiver  shall  then intimate  to  the  respondents  about  the  vacant  possession  being  available  and  within  one  week  therefrom  the  respondents  shall  deposit  the  remaining  consideration  of  Rs.  17,86,85,000/- with the court receiver High Court, Bombay.  In case  the amount is not deposited within one week as directed, then the  deposit amount of Rs. 2,28,15,000/- shall stand forfeited and shall  be handed over to the credit of the suit.  (4). In  case  the  amount  is  deposited  as  directed  above,  the  defendant Nos. 2, 4A, 4B, 5 and 6 and Shri Sanjay Sawhney (the heir  of  the defendant No.  8)  shall  execute register  and duly  admit  the  execution  before  the  Sub-Registrar  of  an  irrevocable  Power  of  Attorney in the format annexed at Exhibit-12 to the affidavit in reply  of the respondents dated 18-10-2007, at the cost and expenses of the  respondents. The Court Receiver shall then handover the possession  of the Chembur property to the respondents and shall also handover  the  original  title  deeds  and  thereafter  the  Prothonotary  &  Senior  Master shall handover the original title deeds to the respondents.  (5). In case the defendants above-mentioned fail to execute the Power  of Attorney, as aforesaid, then the Court Receiver shall execute the  same and register it at the costs and expenses of the respondents  and further if the respondents want, they shall also execute the deed  of conveyance at the costs of the respondents.  (6). The  respondents  to  indemnify  and  keep  indemnified  the  defendants against all actions, demands, claims, costs, charges and  expenses by reason of any claim on account of any act or omission of  the Attorneys under the Power of Attorney to be executed in their  favour.  (7)  After  the  completion  of  the  aforesaid  sale  in  favour  of  the  respondents,  the  parties  shall  be  entitled  to  distribution  of  the  amount and any one of them may apply to the Court for distribution  of the same in terms of the order of the Supreme Court dated 11-12-

9

Page 10

2000 and the order of this Court         dated 15-4-2004. (8).  The  respondents  shall  pay  to  the  Court  Receiver  the  costs,  charges and expenses of the Receiver to be worked out on the basis  of actuals incurred and estimated by the Court Receiver and not on  the  basis  of  commission  and  the  Court  Receiver  shall  stand  discharged without any further order of this Court.  (9). In case of any difficulty, liberty to the party to approach the  Court.  At this  stage,  the learned senior counsel  appearing for  the  defendant Nos. 6 and 7 makes oral request for stay of operation of  this order for a period of six weeks. Request granted. The effect and  operation of this order is stayed for a period of six weeks from the  date of signature on the detail order”.  

12) From a  reading  of  the  directions  given  by  the  learned  single  

Judge  in  the  operative  portion  of  the  order  dated  10.02.2009  

reproduced above, we find that the learned single Judge had directed  

the appellant herein who was the respondent before learned single  

Judge to deposit a sum of Rs. 2,28,15,000/- with the Prothonotary &  

Senior  Master,  High  Court  of  Bombay  within  one  week  and  the  

advocate for the Defendant Nos. 4A, 4B and 5 was directed to return  

the pay order dated 05.08.2005 for the amount of Rs. 2,28,15,000/-  

back to the respondents therein against the aforesaid deposit.  The  

Defendant Nos. 2, 4A, 4B, 5 and 6 were further directed to handover  

the original title deeds of Chembur property to the Prothonotary &  

Senior Master, High Court of Bombay to be kept in safe custody and  

the court receiver to take formal possession of the Chembur property  

within one week and get it vacated from the defendants therein and  

any party claiming through them.  After intimation to the respondents  

about  the  vacant  possession  being  available,  the  respondent  

10

Page 11

(appellant  herein),  was  required  to  deposit  the  remaining  

consideration of Rs. 17,86,85,000/- with the court receiver.  In case  

the amount is not deposited within one week as directed, the deposit  

of Rs. 2,28,15,000/- would stand forfeited and was to be handed over  

to  the credit  of  the suit.   It  was further  directed that  in case the  

amount is deposited as directed, the Defendant Nos. 2, 4A, 4B, 5 and  

6  and  heir  of  Defendant  No.  8  shall  allow  the  execution  of  an  

irrevocable Power of Attorney in the prescribed format before the sub-

Registrar.   The court  receiver  was then directed to  hand over  the  

possession of the Chembur property to the respondent and was also  

directed to handover the original title deeds to the respondent.  The  

conveyance deed was also directed to be executed at the cost of the  

respondent.   

13) The  order  dated  10.02.2009,  in  fact,  gave  certain  directions  

regarding the sale of the immovable property at Chembur in favour of  

the respondent therein who is the appellant before us.   The order  

dated  10.02.2009  was  brought  up  in  appeal  by  some  of  the  

defendants.  Those defendants, who were appellants in Appeal  No.  

271  of  2009,  had  not  sought  for  any  withdrawal  of  appeal.   The  

question is as to whether Defendant Nos. 4A, 4B and 5, on whose  

Notice of Motion No. 21 of 2006, the order dated 10.02.2009 has been  

11

Page 12

passed giving directions for confirmation of the sale and execution of  

the conveyance deed etc., of the immovable property at Chembur in  

favour of the present appellant, can be permitted to withdraw and the  

order  dated  10.02.2009  can  be  said  to  be  not  surviving  for  

consideration.   

14) In the case of  R. Rathnivel (supra), this Court has considered  

the question as to whether at a stage where the rights of the parties  

are crystallized can be divested of the rights under the decree simply  

because of withdrawal of the suit at the appellate stage or not.  This  

Court has held as follows:-

“12. What is essential is that the matter must have been finally  decided so that it becomes conclusive as between the parties to the  suit  in respect  of  the subject-matter  of  the suit  with reference  to  which relief is sought. It is at this stage that the rights of the parties  are crystallised and unless the decree is reversed, recalled, modified  or set aside, the parties cannot be divested of their rights under the  decree. Now, the decree can be recalled, reversed or set aside either  by the court which had passed it as in review, or by the appellate or  revisional court. Since withdrawal of suit  at the appellate stage, if  allowed, would have the effect of destroying or nullifying the decree  affecting thereby rights of the parties which came to be vested under  the decree, it cannot be allowed as a matter of course but has to be  allowed rarely only when a strong case is made out.  It  is for  this  reason that the proceedings either in appeal or in revision have to be  allowed to have a full trial on merits.”

This Court after referring to the various decisions of the High Courts  

have come to the conclusion that where a decree passed by the trial  

Court is challenged in appeal, it would not be open to the plaintiff, at  

that stage, to withdraw the suit so as to destroy that decree.  In para  

12

Page 13

22, this court held as under:-

“22. In view of the above discussion, it comes out that where a  decree passed by the trial court is challenged in appeal, it would not  be open to the plaintiff, at that stage, to withdraw the suit so as to  destroy that decree. The rights which have come to be vested in the  parties  to  the  suit  under  the  decree  cannot  be  taken  away  by  withdrawal of the suit at that stage unless very strong reasons are  shown that the withdrawal would not affect or prejudice anybody’s  vested rights. The impugned judgment of the High Court in which a  contrary view has been expressed cannot be sustained.”

15) In  Janatha Textiles (supra), this Court has held that it is an  

established principle of law that in a third party auction-purchaser’s  

interest  in  the  auctioned  property  continues  to  be  protected  

notwithstanding that the underlying decree is subsequently set aside  

or otherwise.

16) In  Sneh Gupta (supra),  this  Court  has  held  that  a  right  to  

withdraw a suit in the suitor would be unqualified, if no right has  

been vested in any other party.       

Conclusion:

17) Applying the principles given in the aforementioned decisions to  

the  facts  of  the  present  case,  we  find  that  in  the  order  dated  

10.02.2009,  the  learned  single  Judge  while  allowing  the  Notice  of  

Motion No. 21 of 2006 had held that the highest offer made by the  

respondent  therein  (appellant  before  us)  stood  accepted  by  all  the  

parties to the suit and thereafter passed certain directions to deposit  

the bid amount, execution of the conveyance deed etc.  Thus a vested  

13

Page 14

right has been created in favour of the respondent therein, that is, the  

present  appellant  and  that  cannot  be  set  at  naught  simply  by  

permitting the Defendant Nos. 4A, 4B and 5 to withdraw the Notice of  

Motion filed by them.  It was for the Division Bench to decide the  

appeal on merits instead of permitting the withdrawal of the Notice of  

Motion  and  observing  that  the  order  of  the  learned  single  Judge  

passed  on  that  Motion  dated  10.02.2009  does  not  survive  for  

consideration.   

18) In view of the foregoing discussion, the order dated 01.03.2012  

passed  by  the  High  Court  of  Bombay  under  appeal  cannot  be  

sustained and is  hereby set  aside.   The High Court  is  directed to  

decide  the  appeal  afresh  on  merits  in  accordance  with  law.   The  

appeal is hereby allowed.       

...…………….………………………J.                     (RANJAN GOGOI)                                  

.…....…………………………………J.              (R.K. AGRAWAL)                              

NEW DELHI; OCTOBER 8, 2015.

14

Page 15

ITEM NO.1A               COURT NO.12               SECTION IX (For judgment)                S U P R E M E  C O U R T  O F  I N D I A                        RECORD OF PROCEEDINGS

Civil Appeal No. 8397 of 2015 (Arising from Special Leave Petition (C)  No. 10721/2012

AVENUE SUPERMARTS PVT. LTD.                        Petitioner(s)                                 VERSUS NISCHINT BHALLA & ORS.                             Respondent(s) Date : 08/10/2015 This appeal was called on for pronouncement of  

judgment today. For Petitioner(s)  Mr. E. C. Agrawala, AOR                       For Respondent(s) Ms. Anushree Menon, Adv.                   Mr. Vikas Mehta, AOR

Mr. Puneet Singh Bindra, Adv. Mr. Aslam Ahmed, Adv. Mr. Gagan Gupta, AOR

                    Hon'ble Mr. Justice R.K. Agrawal pronounced the reportable  

judgment of the Bench comprising Hon'ble Mr. Justice Ranjan Gogoi  and His Lordship.  

Leave granted. The  appeal  is  allowed  in  terms  of  the  signed  reportable  

judgment as follows:

“In view of the foregoing discussion, the order dated  01.03.2012 passed by the High Court of Bombay under   appeal cannot be sustained and is hereby set aside.  The  High Court is directed to decide the appeal afresh on  merits in accordance with law.  The appeal is hereby   allowed.”       

(R.NATARAJAN)        (SNEH LATA SHARMA)  Court Master       Court Master

(Signed reportable judgment is placed on the file)  

15