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CASE NO.: Appeal (civil)  2592 of 2005

PETITIONER: Amit Kumar Shaw & Anr.

RESPONDENT: Farida Khatoon & Anr.

DATE OF JUDGMENT: 13/04/2005

BENCH: Ashok Bhan & Dr. AR. Lakshmanan

JUDGMENT: J U D G M E N T (Arising out of S.L.P.(C) No.17780 of 2004)

WITH

CIVIL APPEAL NO.     OF 2005 (Arising out of S.L.P.(C) No. 18076 of 2004)

Dr. AR. Lakshmanan, J.

       Leave granted.  

       These two appeals are directed against the judgment and order dated  15.06.2004 passed by the High Court at Calcutta in C.A.N. No. 2642 of 2004   in  S.A.No. 631 of 1993 and in C.A.N. No. 2643 of 2004 in S.A.No. 632 of 1993 whereby  the High Court dismissed the applications filed by the appellants for substitution of their  names, namely, Amit Kumar Shaw and Anand Kumar Shaw as contesting respondents  in place and stead of Birendra Nath Dey and Smt. Kalyani Dey, both since deceased  and represented by their legal heirs in their place.  According to the appellants, the  respondents above named had sold the suit property to the appellants, who are the only  persons interested in the said suit property.

The service of notice is complete in both the matters but no one has entered  appearance on behalf of the respondents.   

The short facts are as follows: The property in question originally belonged to Khetra Mohan Das and  subsequently by way of lease and transfer; the said property ultimately came in the  hands of Birendra Nath Dey and Smt. Kalyani Dey.  There were troubles in between the  original owner and the said Birendra Nath Dey and Smt. Kalyani Dey and as a result of  that, the suit was filed.  One Fakir Mohammad claimed his right, title and interest in  respect of the property in question by way of adverse possession.  Ultimately, both the  appeals being Title Appeal No. 400 of 1989 and Title Appeal No. 7 of 1990 were  allowed by a common judgment and decree dated 25.06.1992 and the suit was  remanded back for rehearing before the trial Court.  Being aggrieved by the said  decree, Fakir Mohammad filed S.A.Nos. 631 and 632 of 1993 challenging the said  judgment of the first appellate Court.  On 15.12.1995, by a deed of assignment Birendra  Nath Dey assigned his leasehold interest in respect of 132A, Circular Garden Reach  Road, Calcutta in favour of the present appellants.   Similarly, by a sale deed on  15.12.1995, Kalyani Dey sold and transferred 132 B Circular Garden Reach Road,  Calcutta in favour of the present appellants.  Therefore, the appellants filed applications  for recording their names in the Municipal records. At that time, the appellants, for the  first time, came to know about the pendency of the above two appeals.  Immediately  thereafter, the appellants filed the petitions praying for adding them as a party in  connection with those two appeals.  In this factual background, the following questions  of law arise for consideration by this Court in these appeals:

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"1)     Whether on a combined reading of Order 1 Rule 10, Order  XXII Rule 10 of the Code of Civil Procedure, 1908 and  Section 52 of the Transfer of Property Act, 1882, an  application for substitution by a subsequent transferee can  be rejected and he be non-suited altogether?

2)      Whether a decree for adverse possession is set aside in  First Appeal in the year 1992 and no stay application was  filed for long 12 years (till 2004) in the Second Appeal,  whether a transferee interregnum from the  owner/defendant, without knowledge of the second appeal,  is a necessary party or whether their application for  substitution   can be rejected, when there is no allegation of  mala fide or ill motive?

3)      Whether the High Court has not committed serious error  while concluding that the presence of the appellants is not  necessary in order to decide the appeal and there is no  merit in the application for addition of party though the  application was made by the appellants for substitution of  their names in place and stead of contesting defendant  No.10, who sold the suit property to the appellants?

4)      Whether the High Court has not committed error by  rejecting the appellants’ application for substitution treating  the same as addition of party and thereby rendering the  appellants non-suited and remediless?   

We heard Mr. L. Nageswara Rao, learned senior counsel, appearing for the  appellants and perused the pleadings, the annexures and the impugned order passed  by the High Court.

Mr. L.Nageswara Rao, learned senior counsel, appearing for the appellants  submitted that the presence of the appellants is absolutely necessary in order to  effectively and completely adjudicate the issues in between the parties.  As against the  similar argument before the High Court, learned counsel for the respondents therein  submitted that a person is not to be added as a defendant merely because he or she  would be incidentally affected by the judgment and that the main consideration should  be whether or not the presence of such a person is necessary to enable the Court to  effectually and completely adjudicate upon and settle the questions involved in the suit.   It was also submitted before the High Court that in a suit for declaration of title, a  transferee from the defendant pendente lite is neither a necessary party nor a proper  party inasmuch as he would be bound by the decree in the suit in view of the principle  laid down in Section 52 of the Transfer of Property Act, 1882.  While disposing of the  applications, the High Court held as under:  "So far as the case in our hand is concerned, it is the admitted  position that the litigation was going on in between the parties for a  long time and the parties were contesting the said suit and  subsequently the appeals.  The dispute in between the parties was in  respect of the validity of the grant of the lease as well as a claim of title  by way of adverse possession.  So those disputes in between the  parties have got no connection whatsoever with the present  applicants.  The presence of the applicants is in no way required for  effectively adjudicate the appeals and as such the presence of the  applicants in my opinion is not at all necessary.  In this respect, it can  be said that the applicants purchased the property during the  pendency of the appeal and in all probability with the knowledge of the  said pendency.  An attempt has been made by the applicants to show  that they were not aware about the pendency of the appeals.  But this  claim, in my opinion, is not believable since the litigation is going on for  more than 40 years.  Moreover being a purchaser, it is the duty of the  applicants to make proper enquiry before the purchase.  Section 52 of

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the Transfer of Property Act has clearly prohibited the transfer of  property which is subject matter of a pending suit.  The purchase, in  this respect, can only be done with the permission of the Court.   Admittedly no permission has been obtained and as such, this transfer  in favour of the applicants is certainly hit by the doctrine of lis pendens  as provided under Section 52 of the Act.  So, the applicants cannot  claim at this stage that their interest is going to be affected unless they  are made a party in this appeal.  In my considered opinion, the  presence of the applicants is not at all necessary in order to decide the  appeals in question effectively and conclusively.  As such, I hold that  there is no merit in the applications of the applicants praying for adding  them as parties in these two appeals.

Therefore, from my above discussion, I am of the opinion, that  there is no merit in the present applications and as such the  applicants’ prayer for adding them as parties in these two appeals are  rejected.  Both the CAN applications are thus disposed of."    

It is beneficial to reproduce Order 1 Rule 10, Order XXII Rule 10 of the Code of  Civil Procedure, 1908 and Section 52 of the Transfer of Property Act, 1882 which read  as under: Order 1 Rule 10     

(1)     Suit in name of wrong plaintiff - Where a suit has  been instituted in the name of the wrong person as  plaintiff or where it is doubtful whether it has been  instituted in the name of the right plaintiff, the Court  may at any stage of the suit, if satisfied that the suit  has been instituted through a bona fide mistake,  and that it is necessary for the determination of the  real matter in dispute so to do, order any other  person to be substituted or added as plaintiff upon  such terms as the Court thinks just.

(2)     Court may strike out or add parties  - The Court  may at any stage of the proceedings, either upon or  without the application of either party, and on such  terms as may appear to the Court to be just, order  that the name of any party improperly joined,  whether as plaintiff or defendant, be struck out, and  that the name of any person who ought to have  been joined, whether as plaintiff or defendant, or  whose presence before the Court may be necessary  in order to enable the Court effectually and  completely to adjudicate upon and settle all the  questions involved in the suit, be added.

(3)      No person shall be added as a plaintiff suing  without a next friend or as the next friend of a  plaintiff under any disability without his consent.

(4)     Where defendant added, plaint to be amended  -  Where a defendant is added, the plaint shall, unless  the Court otherwise directs, be amended in such  manner as may be necessary, and amended copies  of the summons and of the plaint shall be served on  the new defendant and, if the Court thinks fit, on the  original defendant.

(5)     Subject to the provisions of the Indian Limitation  Act, 1877 (15 of 1877), section 22, the proceedings  as against any person added as defendant shall be  deemed to have begun only on the service of the  summons."

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Order XXII Rule 10                 Procedure in case of assignment before final order in suit  (1)     In other cases of an assignment, creation or devolution of  any interest during the pendency of a suit, the suit may, by  leave of the Court, be continued by or against the person to  or upon whom such interest has come or devolved.

(2)     The attachment of a decree pending an appeal therefrom  shall be deemed to be an interest entitling the person who  procured such attachment to the benefit of sub-rule(1)."

Section 52 of the Transfer of Property Act    Transfer of property pending suit relating thereto - During  the pendency in any Court having authority within the limits of  India excluding the State of Jammu and Kashmir or established  beyond such limits by the Central Government of any suit or  proceedings which is not collusive and in which any 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 or proceeding so as to affect the rights of any  other party thereto under any decree or order which may be  made therein, except under the authority of the Court and on  such terms as it may impose.

Explanation  - For the purposes of this section, the pendency  of a suit or proceeding shall be deemed to commence from the  date of the presentation of the plaint or the institution of the  proceeding in a Court of competent jurisdiction, and to continue  until the suit or proceeding has been disposed of by a final  decree or order and complete satisfaction or discharge of such  decree or order has been obtained, or has become  unobtainable by reason of the expiration of any period of  limitation prescribed for the execution thereof by any law for the  time being in force."               

On a combined reading of Order 1 Rule 10, Order XXII Rule 10 of the Code of  Civil Procedure and Section 52 of the Transfer of Property Act, can an application for  substitution by a subsequent transferee be rejected and the subsequent purchaser be  non-suited altogether is the prime question for consideration in these appeals.

The object of Order 1 Rule 10 is to discourage contests on technical pleas, and  to save honest and bona fide claimants from being non-suited.  The power to strike out  or add parties can be exercised by the Court at any stage of the proceedings.  Under  this Rule, a person may be added as a party to a suit in the following two cases: (1)     When he ought to have been joined as plaintiff or defendant, and is  not joined so, or (2)     When, without his presence, the questions in the suit cannot be  completely decided.   

The power of a Court to add a party to a proceeding can not depend solely on  the question whether he has interest in the suit property.  The question is whether the  right of a person may be affected if he is not added as a party.  Such right, however, will  include necessarily an enforceable legal right. The application under Order XXII Rule 10 can be made to the appellate Court  even though the devolution of interest occurred when the case was pending in the trial  Court.  In the instant case, the suit was decreed in favour of Fakir Mohammad by  judgment and decree dated 03.11.1989.  The suit was contested by two sets of  defendants, one set of defendants was Birendra Nath Dey and Kalyani Dey and other  set of defendants was Jagat Mohan Das alone.  The appeals were preferred by the  parties.  Both the appeals were heard and by a common judgment and order dated  25.6.1992, the said appeals were allowed and the judgment and decree passed by the  Munsif was set aside.  By a deed of Assignment dated 15.12.1995, the said Birendra  Nath Dey assigned his leasehold right in respect of 132 A Circular Garden Reach

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Road, presently known as 132 A, Karl Marx Sarani), Kolkata in favour of the appellants.   By a deed of sale executed on 15.12.1995, duly registered with the Additional Registrar  of Assurances, Calcutta, Kalyani Dey Sold the property being 132 B of the above  address to the other appellant.  The second appeals filed by the parties were pending  on the file of the High Court at Calcutta.  The appellants had no knowledge of the  second appeals.  Thereafter on verification, the appellants came to know about the  pendency of the appeals which necessitated them to file the applications for  substitution in the second appeals.  In the meanwhile, the appellants filed the  applications before the Municipal authorities for mutation of their names in respect of  the property on 24.12.2002 and the Municipal authority informed the appellants that  they are not in a position to mutate the names of the appellants of the property in  question because of the pendency of the two second appeals before the High Court at  Calcutta.  Thereafter the appellants engaged an advocate to find out whether any such  appeals have been filed by the parties.  The advocate so engaged informed the  appellants that two appeals being S.A.Nos. 631 and 632 of 1993 were filed by Fakir  Mohammad, Farida Khatoon & Ors. Respondent Nos. herein.  It was also informed that  the said appeals were admitted by the High Court but the impugned judgment and  order was neither prayed for stay nor stayed.  Therefore, it was also submitted by the  appellants that since the appellants have become the absolute owners of the property,  their interest will be highly prejudiced and they will be vitally affected, if any order is  passed by the High Court without hearing the appellants in the matter.  Therefore, they  prayed that the appellants are to be substituted in place and stead of the present  respondents, since they have no existing and subsisting right, title or interest in the  property. Under Order XXII, Rule 10, no detailed inquiry at the stage of granting leave is  contemplated.  The Court has only to be prima facie satisfied for exercising its  discretion in granting leave for continuing the suit by or against the person on whom the  interest has devolved by assignment or devolution.  The question about the existence  and validity of the assignment or devolution can be considered at the final hearing of  the proceedings.  The Court has only to be prima facie satisfied for exercising its  discretion in granting leave for continuing the suit.   In this connection, the provisions of Section 52 of the Transfer of Property Act,  1882 which has been extracted above may be noted.   

An alienee pendente lite is bound by the final decree that may be passed in the  suit.  Such an alienee can be brought on record both under this rule as also under O 1  Rule 10.  Since under the doctrine of lis pendens a decree passed in the suit during the  pendency of which a transfer is made binds the transferee, his application to be brought  on record should ordinarily be allowed.      

Section 52 of the Transfer of Property Act is an expression of the principle  "pending a litigation nothing new should be introduced".  It provides that pendente lite,  neither party to the litigation, in which any right to immovable property is in question,  can alienate or otherwise deal with such property so as to affect his appointment.  This  Section is based on equity and good conscience and is intended to protect the parties  to litigation against alienations by their opponent during the pendency of the suit.  In  order to constitute a lis pendens, the following elements must be present:

1.      There must be a suit or proceeding pending in a Court of competent  jurisdiction. 2.      The suit or proceeding must not be collusive. 3.      The litigation must be one in which right to immovable property is directly  and specifically in question.  4.      There must be a transfer of or otherwise dealing with the property in  dispute by any party to the litigation.  5.      Such transfer must affect the rights of the other party that may ultimately  accrue under the terms of the decree or order.   

The doctrine of lis pendens applies only where the lis is pending before a Court.   Further pending the suit, the transferee is not entitled as of right to be made a party to  the suit, though the Court has a discretion to make him a party.   But the transferee  pendente lite can be added as a proper party if his interest in the subject matter of the  suit is substantial and not just peripheral.  A transferee pendente lite to the extent he  has acquired interest from the defendant is vitally interested in the litigation, whether  the transfer is of the entire interest of the defendant; the latter having no more interest

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in the property may not properly defend the suit.  He may collude with the plaintiff.   Hence, though the plaintiff is under no obligation to make a lis pendens transferee a  party; under Order XXII Rule 10 an alienee pendente lite may be joined as party.  As  already noticed, the Court has discretion in the matter which must be judicially  exercised and an alienee would ordinarily be joined as a party to enable him to protect  his interests.  The Court has held that a transferee pendente lite of an interest in  immovable property is a representative-in-interest of the party from whom he has  acquired that interest.  He is entitled to be impleaded in the suit or other proceedings  where the transferee pendente lite is made a party to the litigation; he is entitled to be  heard in the matter on the merits of the case.

In the instant case, the applications for substitution were filed by the respective  appellants in the second appeals which are still pending on the file of the High Court  though it was filed in the year 1993.  The appellants have properly, sufficiently and  satisfactorily explained the delay in approaching the Court.  We see bona fide in their  explanation in not coming to the Court at the earliest point of time.  Therefore, the  appellants who are transferees pendente lite should be made as parties to the pending  second appeals as prayed for by them.  In our opinion, the High court has committed  serious error in not ordering the applications for substitution filed by the appellants.  In   our view, the presence of the appellants are absolutely necessary in order to decide the  appeals on merits.  Since the High Court has committed error by rejecting the  appellants’ applications for substitution treating the same as additional parties and  thereby rendering the appellants non-suited.  We have no hesitation in setting aside the  said orders and permit the appellants to come on record by way of substitution as  prayed for.  The High Court proceeded on a wrong premise that the appellants had  made the application for addition of party whereas the application under consideration  was for substitution as the owner had sold the suit property to the appellants and had  no interest in the pending litigation.   

In our opinion, the presence of the appellants was absolutely necessary since  the appellants are the only persons who has got subsisting right, title and interest in the  suit.  The appellants are at liberty to contest the matter on merits.

Consequently, the appeals shall stand allowed.  However, there shall be no  order as to costs.