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CASE NO.: Appeal (civil)  5664 of 2006

PETITIONER: Sanjay Verma

RESPONDENT: Manik Roy and Ors

DATE OF JUDGMENT: 08/12/2006

BENCH: Dr. ARIJIT PASAYAT & S.H. KAPADIA

JUDGMENT: J U D G M E N T

Dr. ARIJIT PASAYAT, J. (Arising out of SLP (C) No.12513 of 2006)

Leave granted.

Challenge in this appeal is to the order passed by a  learned Single Judge of the Jharkhand High Court allowing  application filed by the respondents in terms of Order I Rule  10 of the Code of Civil Procedure, 1908 (in short the ’CPC’).   The applicants are transferees of the property in dispute  during the pendency of the suit.   Background facts in a nutshell are as follows:

Appellant filed a suit for specific performance of contract  against one Rajeshwari Devi, respondent No.3. The suit is  numbered as Title Suit No. 88 of 1991.  The prayer in the suit  was for a decree against the defendant for specific  performance of agreements dated 25.12.1986 and 27.12.1990  by directing to the defendant No.1 to execute registered sale  deeds. Further declaration was sought for to the effect that  said defendant No.1 had no right to execute four sale deeds in  favour of defendants 2, 3, 4 and 5.  Permanent injunction was  also sought for restraining the defendants from interfering in  any manner in the peaceful possession of the plaintiff.   

During the pendency of the suit an application in terms  of Order XXXIX Rules 1and 2 read with Section 151 CPC was  filed on behalf of appellant for temporary injunction.  Learned  Subordinate Judge-I, Dhanbad granted temporary injunction  in favour of the appellant.  After the order of injunction was  passed, Smt. Vinaya Devi, Defendant (respondent No.4 herein)  transferred a portion of suit land in favour of one Mihir Kumar  Chakraborty by Sale Deed dated 16.3.1993.  Defendant Sanjay  Prasad also transferred a portion of suit land in favour of one  Shyam Kumar Datta by registered Sale Deed dated 13.7.1993.  On 3.12.1997 said Shyam Kumar Datta further transferred a  portion of the suit land in favour of respondent No.1-Manik  Roy and Mihir Kumar Chakraborty vide registered sale deed  dated 3.12.1997. The respondents filed an application in  terms of Order I, Rule 10(2) CPC on 20.8.2005 for  impleadment to contest the suit and to permit them to file  written statement.  Learned Subordinate Judge held that both  Smt. Ahilya Jha and Manik Roy had admittedly purchased the

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suit property after 1991 without obtaining leave of the court  and thus the transfer is pendente lite and is clearly hit by  Section 52 of the Transfer of Property Act, 1882 (in short the  ’TP Act’). It was further observed that Manik Roy had  purchased the property on 3.12.1997. Ahilaya Jha applicant  had purchased the portion of the suit property on 9.12.2000.   The trial Court, therefore, rejected the prayer for impleadment.   Being aggrieved by the order dated 16.1.2006  respondents Manik Roy and Ahilaya Jha filed a writ petition  before the High Court which allowed the writ petition holding  that the respondents’ vendors were not parties to the suit and  there was nobody to represent and safeguard their interest  and therefore they are required to be added as parties in the  suit for the ends of justice.   

The High Court also noted that the trial Court had not  considered the effect of the fact that the respondents’ vendors  are not parties to the suit and there was no representation of  the writ petitioners and their vendors in the suit.

In support of the appeal, learned counsel for the  appellant submitted that the effect of Section 52 of the T.P. Act  has been completely lost sight of.

Learned counsel for the respondents on the other hand  submitted that plaintiff Sanjay is none other than the son of  late M.M. Sharma, who was an advocate who had appeared for  defendant Rajeshwari Devi in a suit for specific performance  which was decreed in favour of said Rajeshwari Devi on  23.12.1986.  A few days thereafter taking advantage of the  professional relationship between late Sh. M.M. Sharma,  father of the appellant and Smt. Rajeshwari Devi, the  agreements in question were executed.  There has been a  series of transactions and neither Rajeshwari Devi nor the  vendors of the respondents had shown any interest in the  dispute.  That being so the interest of the respondents is likely  to be prejudicially affected. Therefore, the High Court has  rightly interfered in the manner.  Strong reliance is placed on  paragraph 9 of Bibi Zubaida Khatoon v. Nabi Hassan Saheb  and Anr. (2004(1) SCC 191).

Section 52 of the T.P. Act reads as follows:

"During the pendency in any court having  authority within the limits of India 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."

In Bibi Zubaida Khatoon’s case (supra) on which learned  counsel for respondents had placed reliance in fact goes  against the stand of the respondents. Though a casual reading  of paragraph 9 supports the stand taken by the respondents,  it is to be noted that the factual position was entirely different.  In fact a cross suit has been filed in the suit in that case.  Respondents being transferees pendente lite without leave of  the court cannot as of right seek impleadment in the suit

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which was in the instant case pending for a very long time.  In  fact in para 10 of the judgment this Court has held that there  is absolutely no rule that the transferee pendente lite without  leave of the Court should in all cases contest the pending suit.   In Sarvinder Singh v. Dalip Singh and Ors. (1996(5) SCC 539)  it was observed in para 6 as follows:

"6. Section 52 of the Transfer of Property Act  envisages that:

"During the pendency in any court  having authority within the limits of  India ... of any suit or proceeding  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 the decree or order  which may be made therein, except  under the authority of the court and  on such terms as it may impose."

It would, therefore, be clear that the  defendants in the suit were prohibited by  operation of Section 52 to deal with the  property and could not transfer or otherwise  deal with it in any way affecting the rights of  the appellant except with the order or  authority of the court. Admittedly, the  authority or order of the court had not been  obtained for alienation of those properties.  Therefore, the alienation obviously would be  hit by the doctrine of lis pendens by operation  of Section 52. Under these circumstances, the  respondents cannot be considered to be either  necessary or proper parties to the suit."

In Dhurandhar Prasad Singh v. Jai Prakash University  and Others (2001(6) SCC 534) it was noted as follows: "7. Under Rule 10 Order 22 of the Code, when  there has been a devolution of interest during  the pendency of a suit, the suit may, by leave  of the court, be continued by or against  persons upon whom such interest has  devolved and this entitles the person who has  acquired an interest in the subject-matter of  the litigation by an assignment or creation or  devolution of interest pendente lite or suitor or  any other person interested, to apply to the  court for leave to continue the suit. But it does  not follow that it is obligatory upon them to do  so. If a party does not ask for leave, he takes  the obvious risk that the suit may not be  properly conducted by the plaintiff on record,  and yet, as pointed out by Their Lordships of  the Judicial Committee in Moti Lal v.  Karrabuldin (ILR (1898 ) 25 Cal 179) he will be  bound by the result of the litigation even  though he is not represented at the hearing  unless it is shown that the litigation was not  properly conducted by the original party or he

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colluded with the adversary. It is also plain  that if the person who has acquired an interest  by devolution, obtains leave to carry on the  suit, the suit in his hands is not a new suit,  for, as Lord Kingsdown of the Judicial  Committee said in Prannath Roy Chowdry v.  Rookea Begum [(1857-60) 7 MIA 323), a cause  of action is not prolonged by mere transfer of  the title. It is the old suit carried on at his  instance and he is bound by all proceedings  up to the stage when he obtains leave to carry  on the proceedings."

The principles specified in Section 52 of the T.P. Act are  in accordance with equity, good conscience or justice because  they rest upon an equitable and just foundation that it will be  impossible to bring an action or suit to a successful  termination if alienations are permitted to prevail. A transferee  pendente lite is bound by the decree just as much as he was a  party to the suit.  The principle of lis pendens embodied in  Section 52 of the T.P. Act being a principle of public policy, no  question of good faith or bona fide arises.  The principle  underlying Section 52 is that a litigating party is exempted  from taking notice of a title acquired during the pendency of  the litigation. The mere pendency of a suit does not prevent  one of the parties from dealing with the property constituting  the subject matter of the suit.  The Section only postulates a  condition that the alienation will in no manner affect the  rights of the other party under any decree which may be  passed in the suit unless the property was alienated with the  permission of the Court.     

Above being the position, the High Court’s view is clearly  indefensible and is set aside.

Learned counsel for the respondents submitted that  since they are not parties in the suit, their interest will get  jeopardized.  It is a trite law that if a person is not a party to a  suit, the decree does not affect him unless the judgment is in  rem and not in personem.

Appeal deserves to be allowed which we direct, but  without any order as to costs.