A trial judge said a compromise decree had no evidentiary value, a High Court judge said the gift deed was never disputed, and the suit challenging it was on the file

Justices Sanjay Kumar and Sanjeev Sachdeva decreed a 2007 suit outright, holding both judgments below rested on fundamental errors, and noted that no respondent appeared despite a status quo order.

“Tracing its origin to a family settlement executed as long back as on 19.04.1959, this litigation beseeches closure.” That is how the judgment opens, and the point of it is that a judgment of the Telangana High Court of 12 December 2022 had failed to deliver that closure. On 14 October 2026 the Supreme Court supplied it by allowing the appeal and decreeing the suit as prayed for.

The settlement

B. Venkat Reddy was married to Manikyamma and they had three sons, Sudhakar Reddy, Madhusudhan Reddy and Janardhan Reddy. Venkat Reddy and his eldest son Sudhakar Reddy died in 1948 during the Razakar Movement. Sudhakar Reddy's widow Anasuyamma adopted Venkatraji Reddy on 25 May 1975.

On 19 April 1959 Manikyamma, Anasuyamma, Madhusudhan Reddy and Janardhan Reddy executed a family settlement delineating their separate shares in the ancestral properties. Manikyamma was given 53 acres 10 guntas in Karkalpahad village. Anasuyamma was given lands across four villages totalling 91 acres 22 guntas. Madhusudhan Reddy was allotted 1 acre 30 guntas in Karkalpahad and 60 acres 19 guntas in Vasudevapuram, 62 acres 9 guntas in all. Janardhan Reddy received 131 acres 7 guntas across three villages.

The compromise

In 1977 Anasuyamma and her adopted son sued for partition of schedules A, B and C. Purchasers from Madhusudhan Reddy filed their own suit for declaration of title and injunction, which was transferred and tried together. By common judgment of 21 April 1984 the trial court decreed the purchasers' suit and partly decreed the partition suit, directing partition of schedules B and C, and dismissed the suit as to schedule A on the ground that it was covered by the 1959 family settlement.

Madhusudhan Reddy appealed. While that appeal and another by Janardhan Reddy's daughter Nirmala were pending, a compromise was reached between Anasuyamma and her adopted son on one side and Madhusudhan Reddy on the other, reduced to writing in a document titled “Settlement of Dispute” dated 24 February 1986 and recorded by the High Court on 27 June 1988 on a petition under Order XXIII Rule 3. Under it, Anasuyamma and Venkatraji Reddy gave up their claim to a one-third share in the schedule B house property at Himayatnagar, Hyderabad, which went to Madhusudhan Reddy absolutely; Madhusudhan Reddy in turn gave up his claim to a share in his mother Manikyamma's properties, which were surrendered to them; they also gave up their claim to a one-third share in the schedule C house property at Karkalpahad; and ₹2,20,000 was paid to them. By judgment of 7 September 1990 the High Court allowed Madhusudhan Reddy's appeal in the light of that compromise and a settlement with Janardhan Reddy's son, and dismissed Nirmala's appeal leaving her to work out her rights by a separate suit.

The gift

On 24 April 2007 Madhusudhan Reddy executed a registered gift deed in favour of Siddhartha Reddy, the son of Janardhan Reddy's son, gifting lands in Survey Nos. 2, 70, 130, 135, 136 and 137 of Karkalpahad village. The allotment under the 1959 settlement shows that none of those lands had fallen to his share — he had been given only 1 acre 30 guntas in Survey No. 15 of that village. The lands in the gift deed had been allotted to Manikyamma, and he had given up his claim to them in the 1986 compromise, which carried the imprimatur of the High Court through the 1990 judgment.

Anasuyamma and her adopted son, along with his sister by birth Gunna Malinidevi, sued in 2007 for declaration of title over the suit lands, a declaration that the gift deed was null and void, mutation in the revenue records, and a permanent injunction. Malinidevi had purchased 1 acre 22 guntas in Survey No. 2 from Venkatraji Reddy under a registered sale deed of 15 May 1998. Anasuyamma died during the pendency of the suit.

Two findings that could not stand

By judgment of 9 April 2012 the Senior Civil Judge, Mahabubnagar, dismissed the suit. “Surprisingly,” the Supreme Court recorded, the judge opined that the compromise decree of 7 September 1990 had no evidentiary value, and so completely ignored the compromise between Madhusudhan Reddy and the plaintiffs and proceeded to hold against them.

The appeal was dismissed by the Telangana High Court on 12 December 2022. The learned Judge set out the chronology and the arguments at great length and then failed to draw the correct inferences from the 1959 settlement and the 1986 compromise with its High Court approval. Non-application of mind, the Court said, is patent from the observation that execution of the gift deed of 24 April 2007 “was never disputed” — in saying which the Judge lost sight of the fact that the very suit, filed on 21 August 2007, challenged that gift deed. Compounding the error, the Judge observed that Manikyamma died during the pendency of the suit and was not entitled to any share, so that Venkatraji Reddy's claim to be in enjoyment of property allotted to her had no merit; that finding rested on a failure to notice the contents of the 1959 settlement, which Madhusudhan Reddy had himself accepted, and of the 1986 compromise by which he gave up his claim to Manikyamma's share in exchange for full rights in the Himayatnagar house.

The Court also recorded what the respondents did. Despite service of notice, none of them chose to appear. Madhusudhan Reddy and Venkat Reddy had died even during the pendency of the High Court appeal and were shown as represented by their legal heirs; the array included Siddhartha Reddy, Madhusudhan Reddy's widow, Venkat Reddy's widow and daughters, and the third parties to whom Siddhartha Reddy had sought to alienate some of the lands. By order dated 16 May 2023 the Court had directed that status quo as on that date be maintained as to the nature of and possession over the disputed lands. Despite such an order being passed against them, none came forward to contest the appeal. “Their failure to do so speaks for itself.”

Founded on such fundamental errors, the judgments of the High Court and the trial court could not be sustained. The appeal was allowed, the judgment and decree of 12 December 2022 in the appeal suit and of 9 April 2012 in the original suit were set aside, and the suit was directed to stand decreed as prayed for. There were no orders as to costs.