Sri Jagannath Mahaprabhu vs Pravat Chandra Chatterjee And … on 6 November, 1991

13 minutes read

Orissa High Court

Equivalent citations: AIR 1992 Ori 47, 1992 I OLR 17

Author: R Patnaik

Bench: R Patnaik, P Misra, G Patnaik

JUDGMENT R.C. Patnaik, J.

1. This matter has come before this Full Bench to consider the correctness of the decision of a Division Bench of this Court in the case of Pranakrushna v. Umakanta Panda, AIR 1989 Orissa 148, laying down the rule that in a suit for declaration of title a transferee from the defendant pendente lite is neither a necessary nor a proper party and is not entitled to be impleaded inasmuch as he would be bound by the decree in the suit, having regard to the principles contained in Section 52 of the Transfer of Property Act.

2. The motion of opposite parties 2 and 3, the purchasers pendente lite from opposite party No. 1 — defendant, having been allowed by the Munsif, Puri, in Original Suit No. 169 of 1982, the plaintiff has moved this Court for revision of the said order on the ground that a purchaser pendente lite having regard to the provisions contained in Section 52 of the Transfer of Property Act is neither a necessary nor a proper party under Order 1, Rule 10(2) of the Code of Civil Procedure nor is he entitled to be be impleaded under Order 22, Rule 10(1). Hence, the exercise of discretion by the trial Court in allowing such purchaser to be impleaded as a party is in excess of jurisdiction and jurisdiction has been exercised illegally and with material irregularity.

3. The petitioner instituted the suit for a decree for eviction of the defendant, recovery of possession and damages for illegal occupation. Opposite Party No. 1 denied the assertions of the petitioner and his title. By registered sale deed dated 27-2-84, a portion of the property involved in the suit was sold by opposite party No. 1 in favour of opposite parties 2 and 3 who filed an application on 1-10-1985 under Order 1, Rule 10 of the Code of Civil Procedure to be impleaded as parties. Despite objection of the petitioner, by the impugned order the learned munsif allowed their prayer holding that though no doubt the transfer was hit by the rule of lis pendens, inasmuch as the defendant-opposite party No. 1 might not be interested after sale in properly conducting the suit and that might cause prejudice to the lis pendens purchasers, they should be arrayed as parties under Order 22, Rule 10 of the Code of Civil Procedure.

4. Learned counsel for the petitioner has strongly relied upon a decision of this Court in Pranakrushna v. Umakanta Panda, AIR 1989 Orissa 148, where a Division Bench of this Court held (at pp. 150-151 of AIR):

“Under the provision of Rule 10(2) of Order 1, the Court may add the name of any person to the suit who ought to have been joined, either as plaintiff or defendant, or whose presence before the Court is necessary. In my considered opinion, in a suit of this nature, a transferee from the defendant pendente lite is neither a necessary nor a proper party inasmuch as he would be bound by the decree in the suit in view of the principle contained in Section 52 of the Transfer of Property Act. The intervenors could not have been added as parties to the suit in the beginning. In the circumstance can it be said that the presence of the intervenors was necessary to adjudicate upon and settle the questions involved in the suit effectually and completely? The answer must be given in the negative. A person is not to be added as a defendant merely because he would be affected by the judgment. The main consideration is whether or not the presence of such person is necessary to enable the Court to adjudicate upon and settle the questions involved in the suit. I find a somewhat similar situation happening in a case before the Calcutta High Court in Narayan Chandra Garai v. Matri Bhandar Pvt. Ltd., AIR 1974 Cal 358. There also, a party sought to be added on the ground that the party to the suit who had been injuncted had agreed to sell the land to him. The Court held that he was neither a necessary nor a proper party as the question involved in the suit could be worked out without anyone else being brought on the record. Rule 10 cannot be read as requiring all persons who have or claim to have or likely to have any sort of right, title or interest in respect of the subject-matter of a suit to be made parties.

Mr. Kar also relied on the case of Shri Basant Ram v. Smt. Bans Devi, ILR (1974) Him Pra 276 which fully supports his contention. ……. I must hold that the intervenors were neither necessary nor proper parties for adjudication of the points involved in the suit and therefore the principles of Order 1, Rule 10 of the Code are not attracted. ……”

Learned counsel for the petitioner has relied upon and referred us to a Full Bench decision of the Kerala High Court in Lakshmanan v. Kamal, AIR 1959 Kerala 67, where it was held (at p. 71 of AIR):

“The effect of Section 52 is to render void as against the decree-holder in a suit in which any right to immovable property was in dispute and entitle him to ignore all transfers or other dealing with it by the judgment-debtor from the time of the institution of the suit till the complete satisfaction or discharge of the decree which would affect the decree-holder’s rights under the decree or any order made in the suit.

The explanation specifically enjoins that the prohibition against transfer or dealings is to take effect from the date of the presentation of the plaint or the institution of the proceedings in a Court of competent jurisdiction and remain in force until complete satisfaction or discharge of the decree has been obtained or has become unobtainable by reason of the expiration of any period of limitation prescribed y law.

If a transfer or other dealing with a suit property pendente lite is void as against the decree-holder and he is entitled to ignore it and it cannot affect his rights under the decree, no purpose will be served by bringing on record, after the transfer, the transferee or the person in whose favour the property has been dealt with should be brought on record in such cases would only be to hold out a premium to persons who desire to escape from their legal obligations and unnecessarily protract legal proceedings, and would defeat the very purpose for which Section 52 of the Transfer of Property Act has been enacted.”

4A. Before we proceed to grapple with the problem, we may refer to a decision of this Court in Uchhab Patra v. Brundaban Mallik, AIR 1969 Orissa 142, where G. K. Misra, J. (as he then was) observed in a case of transferee from the plaintiffs seeking execution of the decree granted to the transferor-plaintiff, as follows'(at p. 143 of AIR);

“Order 22, Rule 10(1) of the Civil P. C. lays down that 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.

This rule thus enables the transferee with the leave of the Court to continue the suit. The appellant could have made an application in the suit itself to be impleaded as a plaintiff in place of Brundaban Padhan. In fact, he did not do so. The question is whether he is precluded from continuing the execution after the decree was passed in favour of the plaintiff despite the transfer during the pendency of the suit.”

The learned Judge referred to a case (Rai Charan Mandal v. Biswanath Mandal, AIR 1915 Cal 103), where it was held that though the plaintiff could prosecute the suit to its conclusion notwithstanding a devolution of his interest in the property, Order 22, Rule 10 was an alternative procedure which guards against the danger that the original plaintiff being no longer interested in the proceedings may not vigorously prosecute them or may even collude with the adversary. Reference was also made by him to the decision in the case of Joti Lal Sah v. Sheodhayan Prashad Sah, AIR 1936 Pat 420. In Rusi Behera v. Mst. Pancha Behera, (1976) 42 Cut LT 330, referring to Uchhab Patra’s case, (AIR 1969 Orissa 142) (supra), B. K. Ray, J. observed :

“That decision, therefore, is a clear authority for the view that during the pendency of a suit a party to it can transfer its interest in the property which is the subject-matter of the litigation to another. ……. Law is well settled that a transferee from a party to a suit gets interest in the suit property and has as a right to be substituted in the place of the transferor in the suit itself under the provisions of Order 22, Rule 10, Civil Procedure Code. Order 22, Rule 10, Civil Procedure Code enables the transferee to continue the proceeding with the leave of the Court. It does not bar the transferor continuing the suit for the benefit of his Successor. Order 22, Rule 10, Civil Procedure Code is an alternative procedure which guards against the dangers that the original plaintiff being no longer interested in the proceedings may not vigorously prosecute them or may even collude with the adversary …….”

5. Unfortunately and regretably, the two single Judge decisions of this Court, referred to above, were not brought to the notice of the Division Bench of this Court deciding Prana-krushna’s case (AIR 1989 Orissa 148) (supra), which relied upon the case of Narayan Chandra Garai v. Matri Bhandar, AIR 1974 Cal 358. There an application was filed under Order 1, Rule 10 of the Code of Civil Procedure by a person who had entered into an agreement for sale of property from a defendant who had been restrained by an order of injunction not to sell the same and it was held that since his presence was not necessary to enable the Court to effectually adjudicate and settle the questions involved in the suit and the question at issue between the parties could be worked out without any one else being brought on record, a stranger should not be added as a party merely because he or she would be incidentally affected by the judgment. To the same effect is the decision in Basant Ram v. Smt. Hans Devi, ILR (1974) Him Pra 276, which was relied upon by the Division Bench. ..

6. To appreciate the question involved, it is necessary to bear in mind the principles embodied in Section 52 of the Transfer of Property Act. Section 52 reads as under:

“52. 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 proceeding which is not collusive and in which any right to immoveable 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.”

The principle embodied in Section 52 borrowed from the Common Law doctrine was aptly stated by Turner, L. J. in Bellamy v. Sabine, (1857) 1 Deg and J 566, in the following words:

“It is, as I think, a doctrine common to the Courts both of Law and Equity, and rests, as I apprehend, upon this foundation that it would plainly be impossible that any action or suit could be brought to a successful termination, if alienations pendente lite were permitted to prevail. The plaintiff would be liable in every case to be defeated by the defendant’s alienating before the judgment or decree, and would be driven to commence his proceedings de novo, subject again to be defeated by the same course of proceeding.”

And Lord Cranworth said :

“It is scarcely correct to speak of Us pendens as affecting a purchaser through the doctrine of notice, though undoubtedly the language of the Courts often so describes its operation. It affects him not because it amounts to notice, but because the law does not allow litigant parties to give to others, pending the litigation, rights to the property in dispute, so as to prejudice the opposite party.”

The rule is based not on the doctrine of notice but on principle of expediency and public policy. Hence, no question of good faith or bona fides arises.

7. The effect of Section 52, therefore, is that a lis pendens transferee is bound by the decree whether on contest, ex parte or on compromise. The plaintiff is under no obligation to implead a lis pendens transferee. We do not agree with the view expressed by the Full Bench of the Kerala High Court in Lakshmanan v. Kamal (AIR 1959 Kerala 67) (supra) that “the effect of Section 52 is to render void as against the decree-holder transfer or other dealing with the suit property pendente lite and he is entitled to ignore it” because Section 52 has been enacted with a view to safeguarding the interest of the plaintiff so that his decree is not defeated at the instance of a third party in whose favour there has been a lis pendens transfer. Our view is fortified by a decision of the Supreme Court in Nagubai Ammal v. B. Shama Rao, AIR 1956 SC 593. It has been observed (at p. 602 of AIR):

“….. .That sale was no doubt pendente lite, but the effect of S. 52 is not to wipe it out altogether but to subordinate it to the rights based on the decree in the suit. As between the parties to the transaction, however, it was perfectly valid, and operated to vest the title of the transferor in the transferee. . . . .”

The contention that the words “the property cannot be transferred” in Section 52 rendered a transfer which fell within the mischief of Section 52 non est was repelled with the following observation (at p. 602 of AIR):

“This contention gives no effect to the words “so as to affect the rights of any other party thereto under any decree or order which may be made therein”, which make it clear that the transfer is good except to the extent that it might conflict with rights decreed under the decree or order. It is in this view that transfers pendente lite have been held to be valid and operative as between the parties thereto.”

And it was observed (at p. 602 of AIR):

“……We are, therefore, unable to accede to the contention of the appellants that a transferor pendente lite must, for purposes of Section 52, be treated as still retaining title to the properties.”

8. We hope, the aforesaid discussion would have made it clear that 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 in the property may not properly defend the suit. He may collude with the plaintiff. That is the reason why G. K. Misra, J. (as he then was) observed that Order 22, Rule 10(1) enabled the transferee to continue the suit with the leave of the Court and though there was no bar operating against the transferor continuing the suit for the benefit of the transferee, Order 22, Rule 10 was an alternative procedure which safeguarded against the danger that the original plaintiff being no longer interested in the proceedings might not vigorously prosecute the same or might even collude with the adversary and B. K. Ray, J. concurred with the aforesaid view in Rusi Behera’s case (1976 (42) Cut LT 330) (supra). 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. The plaintiff is not bound to make him a party. But the Court has discretion in the matter which must be judicially exercised j and an alienee would ordinarily be joined as a party to enable him to protect his interests I (See Mulla Transfer of Property Act, seventh edition, page 253). Rule 10(1) of Order 22, reads as under:

” 10. Procedure in case of a 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.”

Reference may be made to a decision of the Full Bench in Chacko Pyli v. Iype Varghese, AIR 1956 Trav-Co 147.

9. Though in Basant Ram’s case (ILR (3974) Him Pra 276) (supra), it has been held that a lis pendens transferee is not a proper party, we are of the view that even if a lis pendens transferee is not a necessary party and the plaintiff can ignore the transfer even if he has notice thereof and a decree or order obtained by him would be binding on the lis pendens transferee, when a motion is made by the lis pendens transferee to be impleaded as a party, the court may, in exercise of its discretion judicially, add him as a proper party to prevent multiplicity of suits.

10. Assuming that he is not a proper party, he may be impleaded as an assignee under the provisions of Order 22, Rule 10(1). Even if an application has been filed under Order 1, Rule 10, labelling of the application being misconceived, the court should ignore the labelling of the application as one under Order 1, Rule 10 and treat the same as one filed under Order 22, Rule 10(1), C.P.C., if the ingredients thereof are satisfied. This aspect of the law was not brought to the notice of the Division Bench which decided Pranakrushna’s cse (AIR 1989 Orissa 148) (supra) and rejected the application of the pendente lite transferee solely upon a consideration of the principles embodied in Order 1, Rule 10, CPC.

11. In the result, leave to be impleaded as parties sought by opposite parties 2 and 3 having been allowed by the court in exercise of discretion judicially, we see no merit in this revision and dismiss the same. But in the facts and circumstances, there would be no order as to costs. Records be sent down immediately. The trial court should dispose of the matter within three months from today.

P. C. Misra, J.

12. I agree.

G. B. Patnaik, J.

13. I agree.

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