Heard Sri Raj Kumar, learned counsel for the petitioner as well as Sri Rakesh Pandey assisted by Sri Shailesh Upadhyay, learned counsel for the respondents.
The petitioner has approached this Court challenging the order dated 31.03.2014 passed by the Additional District & Sessions Judge, Ghaziabad rejecting the petitioner's application for impleadment under Order 22 Rule 10 C.P.C. in Civil Appeal No. 68 of 2004, Mathan Singh and others versus Khajan Singh and others.
The respondent no. 9 executed a registered sale deed on 05.12.1986 in favour of the defendant/respondents no. 7 and 8 in respect of the suit property. The plaintiff/respondent-Ist set filed Original Suit No. 163 of 1989 in the court of Additional Civil Judge (Senior Division) Hapur Ghaziabad (Khajan Singh and others Versus Mathan Singh and others), seeking cancellation of the sale deed, during pendency of the suit, the defendant/respondents no. 7 and 8 executed a registered sale deed of the suit property on 20.12.2001 and 02.12.2003, respectively, in favour of the petitioner i.e. transferee pendente lite. The suit was decreed on 21.04.2004.
The defendant/respondents IInd set filed Civil Appeal No. 68 of 2004 before the District Judge, Ghaziabad and during the pendency of the appeal, respondent no. 7 filed an application under Order VI Rule 17 to amend the written statement which was rejected by the lower appellate court on 01.09.2014, aggrieved, the respondent no. 7 filed Writ Petition No. 63332 of 2005, Mathan Singh Versus Khajan Singh and this Court vide interim order dated 30.09.2005 stayed the further proceedings of Civil Appeal.
Respondent no. 7 moved an application to withdraw the writ petition on 03.12.2012. The petitioner apprehending that withdrawal of the writ petition would adversely affect his interest in the suit property, the petitioner/transferee pendente lite moved an impleadment application in the writ petition on 03.12.2012. Application to withdraw the writ petition was allowed on 12.12.2013 and this court directed the petitioner to resort to appropriate proceedings as admissible under law before the appellate court.
Pursuant to the order of this Court, the petitioner moved an application under Order 22 Rule 10 in the pending civil appeal on 16.12.2013 to which objections was filed by plaintiff/respondent-Ist set; the appellate court rejected the application for impleadment by the impugned order dated 31.03.2014 which is assailed in the present petition.
Submission of learned counsel for the petitioner is that the petitioner is transferee pendente lite and the conduct of the respondent nos. 7 and 8 clearly reflects that respondent nos. 7 and 8 had lost interest in the suit property and hence the application under Order 22 Rule 10 to protect the interest in the suit property; section 52 of the Transfer of Property Act does not impose any bar of being impleaded as party in civil appeal, section 52 only states that the transferee pendente lite will be bound by the decision of the suit. Since respondent nos. 7 and 8 had lost interest in the proceedings and have colluded with the plaintiff/respondent Ist set which is evident from the fact that respondent no. 7 had withdrawn the writ petition filed against the rejection of the amendment application, thus in case, the petitioner is not impleaded the appeal would be decided unattended by an uninterested party. The appellate proceedings was stayed by this court on 30.09.2005 and after withdrawal of the writ petition the impleadment application was filed.
In support of his submission learned counsel for the petitioner has relied upon Thomson Press (India) Limited Versus Nanak Builders and investors1, and Dhurandhar Prasad Singh Versus Jai Prakash University and others2.
In rebuttal, Sri Rakesh Pandey, learned counsel appearing for the respondent Ist set, submits that the suit property was transferred prior to the judgment and decree of the trial court and the petitioner being real daughter-in-law of Mathan Singh and real sister of Chandtari, defendant in suit and appellant in appeal, and Jaivir Singh husband of the petitioner is a witness to the sale deed executed in favour of the petitioner and is also appearing as counsel for the appellants Mathan Singh and Chandtari, as such, the petitioner was fully aware of the pendency of suit and it cannot be said that she was not aware of the decree dated 21.04.2004, the sale deed executed by Mahipal Singh (defendant no. 3) in favour of the defendant nos. 1 and 2 Mathan Singh and Chandtari were set aside, any sale deed executed by defendant nos. 1 and 2 in favour of the petitioner during the pendency of the suit would stand negated. It is further contended that the transaction itself was a sham transaction with the sole intention to defeat and negate the decree of the suit hence no interference is called for in the order passed by the lower appellate court.
In support of his submission, Sri Rakesh Pandey assisted by Sri Shailesh Upadhyaya, learned counsel for the respondents has relied upon the following cases i.e. Vidur Impex and Traders Private Limited and others Versus Tosh Apartments Private Limited and others3, Smt. Saila Bala Dassi, Versus Sm. Nirmala Sundari Dassi and another4 and Jaskirat Datwani Versus Vidyavati and others5.
Rival submissions fall for consideration.
The question that arises for consideration is as to whether transferee pendente lite can be impleaded at the appellate stage on an application filed under Order XXII rule 10 C.P.C.
It is well settled that the principle of lis pendens is a doctrine based on the principle that it is necessary for the administration of justice that the decision of a court in a suit should be binding not only on the litigating parties but on those who derive title pendente lite. The provision of section 52 of Transfer of Property Act does not indeed annul the conveyance or the transfer otherwise, but renders it subservient to the rights of the parties to a litigation.
The Supreme Court in Rajender Singh and others Versus Santa Singh and others6, while approving the principle laid down in Jayaram Mudaliar vs Ayyaswami And Ors.7 held as follows:-
"15. The doctrine of lis pendens was intended to strike at attempts by parties to a litigation to circumvent the jurisdiction of a court, in which a dispute on rights or interests in immovable property is pending, by private dealings which may remove the subject matter of litigation from the ambit of the court's power to decide a pending dispute of frustrate its decree.. Alienees acquiring any immovable property during a litigation over it are held to be bound, by an application of the doctrine, by the decree passed in the suit even though they may not have been impleaded in it. The whole object of the doctrine of Its pendens is to subject parties to the litigation as well as others, who seek to acquire rights in immovable property which are the subject matter of a litigation, to the power and jurisdiction of the Court so as to prevent the object of a pending action from being defeated."
The Supreme Court in Vinod Seth Versus Devendra Bajaj8, held that Section 52 of the Transfer of Property Act, 1882 does not render transfers affected during the pendency of the suit void but only render such transfers subservient to the rights as may be eventually determined by the court.
In Thomson Press (supra) the Supreme Court after considering the law on Section 52 of the Transfer of Property Act held that transferee pendente lite who had purchased the entire suit property is entitled to be added as a party- defendant to the suit.
The facts of Thomson Press (supra) was that after institution of the suit the counsel who appeared for the defendant gave an undertaking not to transfer and alienate the suit property. Notwithstanding the order passed by the court regarding the undertaking given and after full notice and knowledge of all these facts, the appellant entered into a series of transactions and finally transferred the suit property. Taking into consideration the entire facts, the court came to the conclusion that the appellant entered into a clandestine transaction and hence the appellant cannot be held to be a bona fide purchaser without notice.
The application made under Order 1 Rule 10 C.P.C. and not under Order 22 rule 10 by the transferee pendente lite to seek addition as the party defendant to the suit was rejected by the courts below including the high court. The Supreme Court held that the application under Order 1 rule 10 should have been allowed by invoking the enabling provision of Order XXII rule 10 C.P.C. The Supreme Court in paragraph 54 observed as follows:-
"54..................what has troubled us is whether independent of Order I Rule 10 CPC the prayer for addition made by the appellant could be considered in the light of the above provisions and, if so, whether the appellant could be added as a party-defendant to the suit. Our answer is in the affirmative. It is true that the application which the appellant made was only under Order I Rule10 CPC but the enabling provision of Order XXII Rule 10 CPC could always be invoked if the fact situation so demanded. It was in any case not urged by counsel for the respondents that Order XXII Rule 10 could not be called in aid with a view to justifying addition of the appellant as a party-defendant. Such being the position all that is required to be examined is whether a transferee pendete lite could in a suit for specific performance be added as a party defendant and, if so, on what terms.
"55. We are not on virgin ground insofar as that question is concerned. Decisions of this Court have dealt with similar situations and held that a transferee pendente lite can be added as a party to the suit lest the transferee suffered prejudice on account of the transferor losing interest in the litigation post transfer. In Khemchand Shankar Choudhari v. Vishnu Hari Patti9, this Court held that:
"6......The position of a person on whom any interest has devolved on account of a transfer during the pendency of a suit or a proceeding is somewhat similar to the position of an heir or a legatee of a party who dies during the pendency of a suit or a proceeding....."
Any such heir, legatee or transferee cannot be turned away when she applies for being added as a party to the suit. The following passage in this regard is apposite:
"6. Section 52 of the Transfer of Property Act no doubt lays down that a transferee pendente lite of an interest in an immovable property which is the subject matter of a suit from any of the parties to the suit will be bound in so far as that interest is concerned by the proceedings in the suit. Such a transferee is a representative in interest of the party from whom he has acquired that interest. Rule 10 of Order 22 of the Code of Civil Procedure clearly recognises the right of a transferee to be impleaded as a party to the proceedings and to be heard before any order is made. It may be that if he does not apply to be impleaded, he may suffer by default on account of any order passed in the proceedings. But if he applies to be impleaded as a party and to be heard, he has got to be so impleaded and heard. He can also prefer an appeal against an order made in the said proceedings but with the leave of the appellate court where he is not already brought on record. The position of a person on whom any interest has devolved on account of a transfer during the pendency of any suit or a proceeding is somewhat similar to the position of an heir or a legatee of a party who dies during the pendency of a suit or a proceeding, or an official receiver who takes over the assets of such a party on his insolvency. An heir or a legatee or an official receiver or a transferee can participate in the execution proceedings even though their names may not have been shown in the decree, preliminary or final. If they apply to the court to be impleaded as parties they cannot be turned out.
The transferor pendente lite may not defend the title properly as he is not interested in the property or may collude with the plaintiff in which case the interest of the purchaser pendente lite will be ignored, to avoid such situations the transferee pendete lite can be added as a party defendant to the case provided his interest is substantial and not just peripheral.
The Supreme Court relying on its earlier decision in Amit Kumar Shaw Versus Farida Khatoon10 observed as follows:-
"A transferor pendente lite may not even defend the title properly as he has no interest in the same or collude with the plaintiff in which case the interest of the purchaser pendente lite will be ignored. To avoid such situations the transferee pendente lite can be added as a party defendant to the case provided his interest is substantial and not just peripheral. This is particularly so where the transferee pendente lite acquires interest in the entire estate that forms the subject matter of the dispute. This Court observed:
"16. 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, where the transfer is of the entire interest of the Defendant; the latter having no more interest 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 22 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.
The Supreme Court in Dhurandhar Prasad Singh (supra), explaining the scope of rule 3, 4 and 10 of Order XXII, opined as follows:-
"6.............The Legislature while enacting Rules 3,4 and 10 has made clear-cut distinction. In cases covered by Rules 3 and 4, if right to sue survives and no application for bringing legal representatives of a deceased party is filed within the time prescribed, there is automatic abatement of the suit and procedure has been prescribed for setting aside abatement under Rule 9 on the grounds postulated therein. In cases covered by Rule 10, the Legislature has not prescribed any such procedure in the event of failure to apply for leave of the court to continue the proceeding by or against the person upon whom interest has devolved during the pendency of a suit which shows that the Legislature was conscious of this eventuality and yet has not prescribed that failure would entail dismissal of the suit as it was intended that the proceeding would continue by or against the original party although he ceased to have any interest in the subject of dispute in the event of failure to apply for leave to continue by or against the person upon whom the interest has devolved for bringing him on the record.
8. The effect of failure to seek leave or bring on record the person upon whom the interest has devolved during the pendency of the suit was subject matter of consideration before this Court in various decisions. In the case of Sm. Saila Bala Dassi v. Sm. Nirmala Sundari Dassi and another AIR 1958 Supreme Court 394, T.L.Venkatarama Aiyar, J. speaking for himself and on behalf of S.R.Das, C.J. and A.K.Sarkar and Vivian Bose, JJ. laid down the law that if a suit is pending when the transfer in favour of a party was made, that would not affect the result when no application had been made to be brought on the record in the original court during the pendency of the suit."
In Dhurandhar Prasad Singh (supra), the Supreme Court held that plain language of rule 10 does not suggest that leave can be sought by that person alone upon whom the interest has devolved but it can also be sought by any other party or person interested.
In Sm. Saila Bala Dassi (supra), the application under Order XXII rule 10 for impleadment was made at the appellate stage and the Supreme Court held that the application may not be maintainable under Order XXII rule 10 C.P.C. but would fall within section 146 of the C.P.C. It was argued that the application made to the appellate court could not be sustained under Order XXII rule 10 as the transfer in favour of the appellant was made prior to the filing of the appeal and not during its pendency. Countering the argument, the Supreme Court held as follows:-
"In our opinion, the application filed by the appellant falls within s. 146 of the Civil Procedure Code, and she is entitled to be brought on record under that section. Section 146 provides that save as otherwise provided by the Code, any proceeding which can be taken by a person may also be taken by any person claiming under him..............................
.....................The right to file an appeal must therefore be held to carry with it the right to continue an appeal which had been filed by the person under whom the applicant claims, and the petition of the appellant to be brought on record as an appellant in Appeal No. 152 of 1955 must be held to be maintainable under s. 146."
The Supreme Court in Vidur Impex and Traders Private Limited (supra), after considering its earlier judgment in BiBi Jubaida Khatoon Versus Nabi Hassan Saheb and anothers11, held as follows:-
"40. In Bibi Zubaida Khatoon v. Nabi Hassan, this Court was called upon to consider the correctness of the High Court's order, which declined to interfere with the order passed by the trial Court dismissing the applications filed by the appellant for impleadment as party to the cross suits of which one was filed for redemption of mortgage and the other was filed for specific performance of the agreement for sale. While dismissing the appeal, this Court referred to the judgments in Sarvinder Singh v. Dalip Singh (supra) and Dhurandhar Prasad Singh v. Jai Prakash University and observed that there is no absolute rule that the transferee pendente lite shall be allowed to join as party in all cases without leave of the Court and contest the pending suit.
41. Though there is apparent conflict in the observations made in some of the aforementioned judgments, the broad principles which should govern disposal of an application for impleadment are:
41.1. The Court can, at any stage of the proceedings, either on an application made by the parties or otherwise, direct impleadment of any person as party, who ought to have been joined as plaintiff or defendant or whose presence before the Court is necessary for effective and complete adjudication of the issues involved in the suit.
41.2. A necessary party is the person who ought to be joined as party to the suit and in whose absence an effective decree cannot be passed by the Court.
41.3. A proper party is a person whose presence would enable the Court to completely, effectively and properly adjudicate upon all matters and issues, though he may not be a person in favour of or against whom a decree is to be made.
41.4. If a person is not found to be a proper or necessary party, the Court does not have the jurisdiction to order his impleadment against the wishes of the plaintiff.
41.5. In a suit for specific performance, the Court can order impleadment of a purchaser whose conduct is above board, and who files application for being joined as party within reasonable time of his acquiring knowledge about the pending litigation.
41.6. However, if the applicant is guilty of contumacious conduct or is beneficiary of a clandestine transaction or a transaction made by the owner of the suit property in violation of the restraint order passed by the Court or the application is unduly delayed then the Court will be fully justified in declining the prayer for impleadment."
Applying the law on the facts of the present case, it is not in dispute that the suit property was transferred in favour of the petitioner who is real daughter-in-law of Mathan Singh and real sister of Chandtari defendant in suit and appellant in appeal and the husband of the petitioner, Jaivir Singh is the witness to the sale deed and is also appearing as the counsel for the appellant Mathan Singh and Chandtari as such the petitioner was well aware of the pendency of the suit and it cannot be said that he was not aware of the decree dated 21.04.2004. The decree is thus binding upon the petitioner.
The defendant/appellant/respondent filed an appeal against the decree and during the pendency of the appeal an application under Order VI rule 17 for amendment of the written statement was moved which was rejected by the lower appellate court on 01.09.2014. Aggrieved, the respondents filed writ petition before this Court and the Court on 30.09.2005 stayed further proceedings of the appeal pending before the lower appellate court. Instead of contesting the writ petition, the respondent moved an application to withdraw the writ petition and the petitioner apprehending that the withdrawal of the writ petition would adversely affect his interest in the suit property, moved an impleadment application in the writ petition on 03.12.2012. The application to withdraw the writ petition was allowed and the petitioner was directed to resort to appropriate proceedings, as admissible under law, before the appellate court.
The petitioner filed an application under Order 22 rule 10 C.P.C. wherein the petitioner detailed the reasons for being impleaded in the pending appeal stating therein that the relations between the parties had strained and the appellant was demanding Rs. 10 lakhs in order to protect the petitioner's interest or else the appeal would not be pursued. The learned lower appellate court rejected the application of the petitioner on the ground that the petitioner had full knowledge of the pending suit as being close relative of the appellant/respondent and did not get himself impleaded during the pendency of the suit inspite of having sufficient time and further the petitioner had not approached the court with clean hand as he has not disclosed the relationship with the appellant.
The lower appellate court did not discuss as to whether the appellants have lost interest in the appeal and the petitioners during the pendency of the suit did not get impleaded as they were assured being close relatives that their interest would be watched and protected, but it appears, that after filing of the writ petition and its sudden withdrawal without any reason clearly establishes that the appellant had either lost interest in the pending appeal or had colluded with the opposite party or the petitioners were being subjected to harassment for extracting extra money as alleged by the petitioner in the application under Oder XXII rule 10.
In the opinion of the Court, the application of the petitioner was maintainable under Order XXII rule 10 read with Section 146 C.P.C. and section 19 sub- clause (b) of the Specific Relief Act. The petitioner may not be a necessary party to the proceedings but is a proper party. In order to defend his interest in the suit property and relying on the principles of law as stated in Saila Bala (supra) wherein the Supreme Court categorically held that transferee pendente lite could file a separate appeal or become a party in the pending appeal in order to defend its interest.
An appeal is continuation of a suit. A decree passed by the appellate court would be construed to be decree passed by the court of first instance. In Dayawati Versus Inderjit, AIR 1996 SCC 1423, the Supreme Court held as follows:-
"An appeal has been said to be 'the right of entering a superior court, and invoking its aid and interposition to redress the error of the court below'. The only difference between a suit and appeal is that an appeal only reviews and corrects the proceedings in a cause already constituted but does not create the cause".
The observation of Supreme Court in Sangram Singh Versus Election Tribunal, Kotah and another, AIR 1955 SC 425, is as follows:-
"A Code of procedure must be regarded as such. It is procedure, something designed of facilitate justice and further its ends; not a penal enactment for punishment and penalties; not a thing designed to trip people up."
In the facts and circumstances of the case and for the reasons and law stated herein above, the impugned order dated 31.03.2014 passed by the learned Additional District and Sessions Judge, Court No. 12, Ghaziabad is unsustainable and is quashed.
Since the petitioner has purchased the entire suit property which forms the subject matter of the suit, the petitioner is entitled to be added as the appellant to the appeal.
The writ petition is, accordingly, allowed.
No costs.
Order Date :- 10/07/2014 kkm