Allahabad High Court
Anil Kumar Singh vs Pappu And Others on 10 January, 2022
Author: Rajan Roy
Bench: Rajan Roy
HIGH COURT OF JUDICATURE AT ALLAHABAD, LUCKNOW BENCH A.F.R. RESERVED JUDGMENT Reserved on- 09.11.2021 Delivered on- 10.01.2022 Court No. - 4 Case :- CIVIL REVISION No. - 102 of 2019 Revisionist :- Anil Kumar Singh Opposite Party :- Pappu & Others Counsel for Revisionist :- Ashish Chaturvedi Counsel for Opposite Party :- Manish Mehrotra,Manoj Kumar Tiwari,Mohammad Aslam Khan,Mohd. Danish,Sudhanshu Chauhan,Virend Singh Hon'ble Rajan Roy,J.
This is a revision filed by the plaintiff under section 115 of the Code of Civil Procedure challenging an order dated 31.10.2019 passed by the Civil Judge, Junior Division, Lucknow, allowing an application bearing No. A-47 filed by the transferees pendent lite for impleadment.
The application A-47 has been allowed by the Court below on the finding that the applicants (respondent nos. 3 and 4 in the revision) are the bona fide purchasers whose presence is necessary in order to enable court to effectually and completely adjudicate upon and settle all the questions involved in the suit.
The facts of the case, in brief, are that respondent no. 1 and 2 (defendant nos. 1 and 2 in the suit) entered into an agreement to sell in respect to the suit property on 8.5.2015 with the revisionist-plaintiff, but failed to perform their part of the agreement, consequently a suit for specific performance of contract was filed by the revisionist on 5.10.2016 before the court below at Lucknow. The civil court issued summons which were served upon defendant nos. 1 and 2 on 20.10.2016. Thereafter, i.e., during pendency of the said suit bearing No. 1857 of 2016, Anil Kumar Singh v. Pappu & anr., defendant nos. 1 and 2 (respondent nos. 1 and 2 in the revision) executed a sale-deed in favour of defendant nos. 3 and 4 (respondent nos. 3 and 4 in the revision) on 23.11.2016 which, according to the revisionists' counsel was hit by section 52 of the Transfer of Property Act 1882. The defendant nos. 1 and 2 filed their written statement on 21.2.2018 and issues were framed by the Civil Court on 15.5.2018. On 1.12.2018 P.W. 1 was examined. He was cross-examined by the defendant nos. 1 and 2 on 13.12.2018. On 9.1.2019 P.W.2 was examined. He was cross-examined on 19.10.2019. In the interregnum when the matter was fixed for examination of Defence witness 2, respondent nos. 3 and 4 filed an application bearing no. A-47 for their impleadment on 5.7.2019 stating that they had purchased the suit property vide sale-deed dated 23.11.2016. It is this application which has been allowed by the impugned order dated 31.10.2019.
Contention of Sri N.K. Seth, learned counsel for the revisionist was that the plaintiff being the dominus litis cannot be compelled to implead stranger in the suit, especially a transferee pendent lite as neither any relief has been sought against him nor is he a necessary or proper party in the matter. It was his submission that the issues involved in the suit are between the plaintiff and defendant nos. 1 and 2 who had entered into an Agreement-to-sell and the plaintiffs are claiming their rights against the said defendants. In this regard he has placed reliance upon a decision of this court in the case of Gurmit Singh Bhatia v. Kiran Kant Robinson & ors., 2019 SCC OnLine SC 912 and another decision reported in (2020) 14 SCC 392, Mohamed Hussain Gulam Ali Shariffi v. Municipal Corporation of Greater Bombay & ors.
The other argument advanced by him was that the objections raised by the revisionist before the Civil Court were not even taken note of and without a proper consideration of relevant aspects of the matter the impugned order has been passed. He submitted that even the sale-deed was not annexed with the application by the respondent nos. 3 and 4. The application for impleadment did not even mention as to how and when they came to know about the pendency of the suit. Their impleadment at the stage of examination of defence witness 2 was prejudicial to the interest of the plaintiff and would delay the suit. The applicants were not bona fide purchasers. Purchase itself was hit by the doctrine of lis pendens. Sri Seth relied upon the decision reported in (2008) 7 SCC 144, Usha Sinha v. Dina Ram & ors.; and another decision reported in (2010) 6 Alld. LJ 425, Ram Swaroop Singh & ors. v. Karan Singh & ors.
On the other hand, Sri M.A. Khan, learned counsel appearing for respondent nos. 3 and 4, i.e., the transferees pendent lite, submitted that they were necessary and proper parties for a complete and effective adjudication of the suit and the court below has rightly allowed the application for impleadment. He invited attention of the court to relevant clauses of the sale-deed to drive home the point that the sale-deed did not disclose the pendency of the suit proceedings between the plaintiff and defendant nos. 1 and 2 and that his clients were bona fide purchasers. He submitted that the suit proceedings are going on between the plaintiff and defendant nos. 1 and 2 in collusion. The transferees pendent lite are entitled to protect their rights as they would be bound by the decree passed in the suit and also have a right to challenge the said decree, therefore, no interference is called for in exercise of the revisional jurisdiction under section 115, C.P.C. In this regard he has relied on the decisions reported in (2012) 8 SCC 384, Vidur Implex and Traders Pvt. Ltd. & ors. v. Tosh Apartments Pvt. Ltd. & ors.; (1992) 2 SCC 524, Ramesh Hirachand Kundanmal v. Municipal Corporation of Greater Bombay & ors.; (2010) 111 RD 182, Dr. Shyam Chandra Srivastava v. Estate of Padmasri Smt. Savitri Sahni; (2005) 11 SCC 403, Amit Kumar Shaw & anr. v. Farida Khatoon & anr.; 2014 (4) ALJ 559, Shyama Devi v. A.D.J. Sultanpur & ors.; (1996) 5 SCC 379, Aliji Momonji & co. v. Lalji Mavji & ors.; (2017) 3 SCC 194, Richard Lee v. Girish Soni & anr.
Learned counsel appearing for the respondent nos. 1 and 2 informed the court that his clients were opposing the claim of the plaintiff as also the claim of defendant nos. 3 and 4 based on the sale-deed dated 23.11.2016 which in fact has been challenged by his clients seeking cancellation of the same, albeit, after filing of the application for impleadment by respondent nos. 3 and 4. He informed the court that his clients were contesting the suit and were not in collusion with the plaintiff or for that matter with the applicants/respondent nos. 3 and 4.
It has not been denied by the revisionist-plaintiff before this court that sale-deed was executed by the defendant nos. 1 and 2 in favour of the applicants/defendant nos. 3 and 4 on 23.11.2016 with respect to the property which is the subject matter of the suit bearing no. 1857 of 2016.
Before proceeding to consider the merits of the issue it would be worthwhile to refer to a few decisions as to the scope of revisional jurisdiction under section 115, C.P.C. by the High Court. A Four Judges' Bench of the Supreme Court of India had an occasion to consider this aspect of the matter in the case of Kesardeo Chamria v. Radha Kissen Chamria & ors., AIR 1953 SC 23. Relevant extract of the said judgment is quoted hereinbelow:
"17. We now proceed to consider whether a revision was competent against the order of 25th April, 1945, when no appeal lay. It seems to us that in this matter really the High Court entertained an appeal in the guise of a revision. The revisional jurisdiction of the High Court is set out in the 115th section of the Code of Civil Procedure in these terms:
"The High Court may call for the record of any case which has been decided by any court subordinate to such High Court and in which appeal lies thereto, and it such subordinate court appears:
(a) to have exercised a jurisdiction not vested in it by law, or
(b) to have failed to exercise a jurisdiction so vested, or
(c) to have acted in the exercise of its jurisdiction illegally or with material irregularity, the High Court may make such order in the case as it thinks fit." A large number of cases have been collected in the fourth edition of Chitaley & Rao's Code of Civil Procedure (Vol. 1), which only serve to show that the High Courts have not always appreciated the limits of the jurisdiction conferred by this section. In Mohunt Bhagwan Ramanuj Das v. Khetter Moni Dassn the High Court of Calcutta expressed the opinion that sub-clause (c) of Section 115 of the Civil Procedure Code, was intended to authorise the High Courts to interfere and correct gross and palpable errors of subordinate courts, so as to prevent grave injustice in non-appealable cases. This decision was, however, dissented from by the same High Court in Enat Mondul v. Baloram Dey but was cited with approval by Lort-Williams, 3., in Gulabchand Bangur v. Kabiruddin Ahmed. In these circumstances it is worthwhile recalling again to mind the decisions of the Privy Council on this subject and the limits stated therein for the exercise of jurisdiction conferred by this section on the High Courts.
18. As long ago as 1894, in Rajah Amir Hassen Khan y. Sheo Baksh Singhi the Privy Council made the following observations on Section 622 of the former Code of Civil Procedure, which was replaced by Section 115 of the Code of 1908:
"The question then is, did the Judges of the lower courts in this case, in the exercise of their jurisdiction, act illegally or with material irregularity. It appears that they had perfect jurisdiction to decide the case, and even if they decided wrongly, they did not exercise their jurisdiction illegally or with material irregularity."
In 1917 again in Balakrishna Udayar v. vasudeva Aiyar the Board observed:
"It will be observed that the section applies to jurisdiction alone, the irregular exercise or non-exercise of it, or the illegal assumption of it. The section is not directed against conclusions of law or fact in which the question of jurisdiction is not involved."
In 1949 in Venkatagiri Ayyangar v. Hindu Religious Endowments Board, Madrass the Privy Council again examined the scope of Section 115 and observed that they could see no justification for the view that the section was intended to authorise the High Court to interfere and correct gross and palpable errors of subordinate courts so as to prevent grave injustice in non-appealable cases and that it would be difficult to formulate any standard by which the degree of error of subordinate courts could be measured. It was said -
"Section 115 applies only to cases in which no appeal lies, and, where the legislature has provided no right of appeal, the manifest intention is that the order of the trial court, right or wrong, shall be final. The section empowers the High Court to satisfy itself on three matters, (a) that the order of the subordinate court is within its jurisdiction; (b) that the case is one in which the court ought to exercise jurisdiction; and (c) that in exercising jurisdiction the court has not acted illegally. that is, in breach of some provision of law, or with material irregularity, that is, by committing some error of procedure in the course of the trial which is material in that it may have affected the ultimate decision. If the High Court is satisfied on those three matters, it has no power to interfere because it differs, however from the conclusions of the subordinate court on questions of fact or law."
19. Later in the same year in Joy Chand Lal Babu v. Kamalaksha Choudhuryis Their Lordships had again adverted to this matter and reiterated what they had said in their earlier decision. They pointed out:
"There have been a very large number of decisions of Indian High Courts on Section 115 to many of which Their Lordships have been referred. Some of such decisions prompt the observation that High Courts have not always appreciated that although error in a decision of a subordinate court does not by itself involve that the subordinate court has acted illegally or with material irregularity so as to justify Interference in revision under sub-section (c), nevertheless, if the erroneous decision results in the subordinate court exercising jurisdiction not vested in it by law, or failing to exercise a jurisdiction so vested, a case for revision arises under sub-section (a) or sub-section (b) and sub-section (c) can be ignored."
20. Reference may also be made to the observations of Bose, 3. in his order of reference in Narayan Sonaji v. Sheshrao Vithobail wherein it was said that the words "illegally" and "material irregularity" do not cover either errors of fact or law. They do not refer to the decision arrived at but to the manner in which it is reached. The errors contemplated relate to material defects of procedure and not to errors of either law or fact after the formalities which the law prescribes have been complied with."
Though section 115 C.P.C. has undergone some changes over the years, especially so far as its application in the State of U.P. is concerned and in addition to the requirements contained in Clause (a) to (c) of section 115, C.P.C. which are required to be satisfied for exercise of such revisional jurisdiction, now, by virtue of the U.P. Act 14 of 2003, two other requirements are required to be satisfied, (i) the order if it had been made in favour of the party applying for revision, would have finally disposed off the suit or other proceeding; or (ii) the order, if allowed to stand, would occasion a failure of justice or cause irreparable injury to the party against whom it is made. However, as far as clauses (a), (b) and (c) laying down the jurisdictional parameters for exercise of revisional jurisdiction under section 115(1), C.P.C. they stand as it is, therefore, to this extent the law as laid down in Kesardeo Chhamaria (supra) applies even today as to the meaning and purport of the said clauses.
It is not in dispute that the suit has been filed by the revisionist-plaintiff for specific performance of contract against the defendant nos. 1 and 2 who had entered into an Agreement-to-sell with the plaintiff. The defendant nos. 3 and 4 are not parties to the said Agreement-to-sell, but, they have purchased the property which is the subject matter of such Agreement-to-sell, during pendency of suit proceedings.
Now it is very well settled that section 52 of the Transfer of Property Act and the doctrine of lis pendens on which it is based do not operate to annul such transfers pendent lite, but, they operate to render the same subservient to the rights of the parties to a litigation. Such transfer is neither illegal nor void ab initio, but the subsequent purchaser is bound by the litigation between the parties to the suit. A reference may be made in this regard to the decision of the Supreme Court of India in the case of Thomson Press (India) Ltd. V. Nanak Builders & Investors (P.) Ltd., (2013) 5 SCC 397 (Paras 26 to 29). If such sale is in violatioi of any injunction or restraint order than the legal position may be different, but that is not the case here.
Now the question before this court is as to whether the court below has committed a jurisdictional error so as to require interference by this court in exercise of its revisional power under section 115 C.P.C. as it applies in the State of U.P. or not ?
It is implicit in this question as to whether the court below has rightly exercised its jurisdiction in allowing the application of the transferees pendent lite for impleadment in the suit of the revisionist which is for specific performance of contract and in which relief claimed is the defendant nos. 1 and 2, or not ?
In this context we may first refer to the provisions contained in Order I Rule 10 which reads as under:
"10. Suit in name of wrong plaintiff.-(1) 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 prxdings, 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 puty improperly joined, whether as plaintiff or defendant, be struck out, and that the name of any person who ought to have been joined, as plaintiff or defendant, or whose presence before the Court may be necessary in order to enable the Count 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 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.
The court may in this this context fruitfully refer to the decision of the Supreme Court in the case of Thomson Press India Ltd. (supra) wherein after considering the provisions of Order I Rule 10, C.P.C. it has been held ... "From the bare reading of the aforesaid provision, it is manifest that sub-rule (2) of Rule 10 gives a wider discretion to the court to meet every case or defect of a party and to proceed with a person who is either a necessary party or a proper party whose presence in the court is essential for effective determination of the issues involved in the suit."
The court may also refer to another decision of the Supreme Court in the case of Ramesh Hirachand Kundanmal v. Municipal Corpn. of Greater Bombay (1992) 2 SCC 524, which has also been considered in the case of Thomson Press India ltd., wherein it has been held as under ...
"14. It cannot be said that the main object of the rule is to prevent multiplicity of actions though it may incidentally have that effect. But that appears to be a desirable consequence of the rule rather than its main objective. The person to be joined must be one whose presence is necessary as a party. What makes a person a necessary party is not merely that he has relevant evidence to give on some of the questions involved; that would only make him a necessary witness. It is not merely that he has an interest in the correct solution of some question involved and has thought of relevant arguments to advance. The only reason which makes it necessary to make a person a party to an action is so that he should be bound by the result of the action and the question to be settled, a therefore, must be a question in the action which cannot be effectually and completely settled unless he is a party. The line has been drawn on a wider construction of the rule between the direct interest or the legal interest and commercial interest. It is, therefore, necessary that the person must be directly or legally interested in the action the answer i.e. he can say that the litigation may lead to result which will affect him legally that is by curtailing his legal rights. is difficult to say that the rule contemplates joining as a defendant a person whose only object is to prosecute his own cause of action. Similar provision was considered in Amon v. Raphael Tuck & Sons Ltd., (1956) 1 QB 357, wherein after quoting the observations of Wynn-Parry, J. in Dollfus Mieg et Compagnie SA v. Bank of England, (1950) 2 All ER 605, that the true test lies not so much in an analysis of what are the constituents of the applicants' rights, but rather in what would be the result on the subject-matter of the action if those rights could be established, Devlin, J. has stated: (Amon casels, QB p. 371) ... the test is: "May the order for which the plaintiff is asking directly affect the intervener in the enjoyment of his legal rights?"
The provisions of Order XXII Rule 10 also need to be referred and they read as under :
"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)."
In the context of the above quoted provision of Order XXII Rule 10 the court may refer to a Three Judge Bench decision of the Supreme Court of India reported in (2005) 1 SCC 536, Government of Orissa v. Ashok Transport Agency & ors., wherein it has been held .... "9. Normally, in a case covered by Order 22 Rule 10 of the Code of Civil Procedure where rights are derived by an assignee or a successor-in-interest pending a litigation, it is for that assignee or transferee to come on record if it so chooses and to defend the suit. It is equally open to the assignee to trust its assignor to defend the suit properly, but with the consequence that any decree against the assignor will be binding on it and would be enforceable against it. Equally, in terms of Section 146 of the Code of Civil Procedure, a proceeding could be taken against any person claiming under the defendant or the judgment-debtor. Similarly, a person claiming under the defendant or the judgment-debtor could seek to challenge the decree or order that may be passed against the defendant, by way of appeal or otherwise, in the appropriate manner. But, it would not be open to it to challenge the decree as void or unenforceable in execution in the absence of any specific provision in that regard in the statute or order bringing about such a transfer or assignment."
In the case of Thomson Press India Ltd. (supra) Hon'ble Mr. Justice T.S. Thakur as he then was, while rendering his supplementing opinion held in the facts of the said case that the application which the appellant made was only under Order I Rule 10, C.P.C., but enabling provision of Order XXII Rule 10 C.P.C. could always be invoked if the facts situation so demanded.
The Supreme Court in the case of Amit Kumar Shaw & anr. V. Farida Khatoon & anr., (2005) 11 SCC 403, opined that under Order XXII Rule 10 no detailed inquiry at the stage of granting relief is contemplated. The court has only to be prima facie satisfied for exercising its discretion in granting relief for continuing the suit by or against the person on who the interest has devolved by assignment or devolution. The question about the existence and validity of the assignment and devolution can be considered at the final hearing of the proceedings.
It is also necessary to refer to the provisions of section 146 C.P.C. which read as under:
"146, C.P.C.: Save as otherwise provided by this Code or by any law for the time being in force, where any proceeding may be taken or application made by or against any person then the proceeding may be taken or the application may be made by or against any person claiming under him."
It is also relevant to refer to section 19 of the Specific Relief Act 1963, especially clause (b) thereof which reads as under :
"19. Relief against parties and persons claiming under them by subsequent title.--Except as otherwise provided by this Chapter, specific performance of a contract may be enforced against--
(a) either party thereto;
(b) any other person claiming under him by a title arising subsequently to the contract, except a transferee for value who has paid his money in good faith and without notice of the original contract;
(c) any person claiming under a title which, though prior to the contract and known to the plaintiff, might have been displaced by the defendant;
(d) when a company has entered into a contract and subsequently becomes amalgamated with another company, the new company which arises out of the amalgamation;
(e) when the promoters of a company have, before its incorporation, entered into a contract for the purpose of the company and such contract is warranted by the terms of the incorporation, the company: Provided that the company has accepted the contract and communicated such acceptance to the other party to the contract."
This clause was considered by the Supreme Court in the case of Thomson Press India Ltd. (supra) and with reference to clause (b) of section 19 it was observed ... "From the bare reading of the aforesaid provision, it is manifest that a contract for specific performance may be enforced against the parties to the contract and the persons mentioned in the said section. Clause (b) of Section 19 makes it very clear that a suit for specific performance cannot be enforced against a person who is a transferee from the vendor for valuable consideration and without notice of the original contract which is sought to be enforced in the suit."
In this context their Lordship referred to a decision of the Calcutta High Court in the case of Kafiladdin v. Samiraddin, AIR 1931 Calcutta 67, wherein the English law on the point was considered. It is relevant to quote para 39 to 40 of the decision in Thomson Press India Ltd. (supra) in this regard, which are as follows:
"39. As discussed above, a decree for specific performance of a contract may be enforced against a person who claimed under the plaintiff (sic 9 defendant), and title acquired subsequent to the contract. There is no dispute that such transfer made in favour of the subsequent purchaser is subject to the rider provided under Section 52 of the Transfer of Property Act and the restraint order passed by the Court.
40. The aforesaid question was considered by the Calcutta High Court in Kafiladdin v. Samiraddin20, where Their Lordships referred to the English law on this point and quoted one of the passages of the book authored by Dart, on Vendors and Purchasers', 8th Edn., Vol. 2, which reads as under: (Kafiladdin case) 'Equity will enforce specific performance of the contract for sale against the vendor himself and against all persons claiming under him by a title arising subsequently to the contract except purchasers for valuable consideration who have paid their money and taken a conveyance without notice to the original contract.' "
The decision of the Supreme Court in Thomson Press India Ltd. was in respect of suit proceedings which were for specific performance of contract just as in this case.
In Thomson Press India Ltd. (supra) the question as to what would be the form of decree to be passed in a suit for specific performance, especially one in which the suit property has been transferred pendent lite came up for consideration and in this context the Supreme Court referred to a decision of the Calcutta High Court in the case of Kafilladdin (supra) as also another decision of the Supreme Court in the case of Durga Prasad v. Deep Chand, AIR 1954 Supreme Court 75, as also its decision in the case of R.C. Chandiok v. Chunni Lal Sabbarwal, (1970) 3 SCC 140, and discussing the same held as under:
"Discussing elaborately, the Court finally observed: (Kafladdin case) "This statement of the law is exactly what is meant by the first two clauses of Section 27 of the Specific Relief Act. It is not necessary to refer to the English cases in which decrees have been passed against both the contracting party and the subsequent purchaser. It is enough to mention some of them: Daniels v. Davison [(1803-13), All ER Rep 432], Potter v. Sanders, [(1846) 6 Hare 1] and Lightfoot v. Heron [(160 ER 835). The question did not pertinently arise in any reported case in India; but decrees in cases of specific performance of contract have been passed in several cases in different forms. In Chunder Kant Roy v. Krishna Sunder Roy, ILR (1884) 10 Cal 710, the decree passed against the contracting party only was upheld. So it was in Kannan v. Krishnan ILR (1890) 13 Mad 324. In Himatlal Motilal v. Vasudev Ganesh Mhaskar ILR (1912) 36 Bom 446, the decree passed against the contracting defendant and the subsequent purchaser was approved. In Faki Ibrahim v. Faki Gulam Mohidin, AIR 1921 Bom 459, the decree passed against the subsequent purchaser only was adopted. In Gangaram v. Laxman Ganoba Shet Chaudole, ILR (1916) 40 Bom 498, the suit was by the subsequent purchaser and the decree was that he should convey the property to the person holding the prior agreement to sale. It would appear that the procedure adopted in passing decrees in such cases is not uniform. But it is proper that English procedure supported by the Specific Relief Act should be adopted. The apparent reasoning is that unless both the contracting party and the subsequent purchaser join in the conveyance it is possible that subsequently difficulties may arise with regard to the plaintiff's title."
41. The Supreme Court in Durga Prasad v. Deep Chand, AIR 1954 SC 75 referred to the aforementioned decision of the Calcutta High Court in Kafiladdin case and finally held: (Durga Prasad case) "42. In our opinion, the proper form of decree is to direct specific performance of the contract between the vendor and the plaintiff and direct the subsequent transferee to join in the conveyance so as to pass on the title which resides in him to the plaintiff. He does not join in any special covenants made between the plaintiff and his vendors all he does is to pass on his title to the plaintiff. This was the course followed by the Calcutta High Court in Kafiladdin v. Samiraddin, and appears to be the English practice. (See Fry on Specific Ivrformance, 6th Ed., p. 90. para 207 and also Potter v. Sanders) We direct accordingly."
42. Again in R.C. Chandiok v. Chuni Lal Sabharwal this Court refened to their earlier decision and observed: (SCC p. 146, para 9) "9. It is common ground that the plot in dispute has been transferred by the respondents and therefore the proper form of the decree would be the same as indicated at SCR p. 369 in Durga Prasad v. Deep Chand viz.
'to direct specific performance of the contract between the vendor and the plaintiff and direct the subsequent transferee to join in the conveyance so as to pass on the title which resides in him to the plaintiff. He does not join in any special covenants made between the plaintiff and his vendor; all he does is to pass on his title to the plaintiff (AIR p. 81, para 42) We order accordingly. The decree of the courts below is hereby set aside and the appeal is allowed with costs in this Court and the High Court"
43. This Court again in Dwarka Prasad Singh v. Harikant Prosod Singh subscribed to its earlier view and held that in a suit for specific performance against a person with notice of a prior agreement of sale is a necessary party.
44. Having regard to the law discussed hereinabove and in the facts and circumstances of the case and also for the ends of justice the appellant is to be added as party-defendant in the suit. The appeal is, accordingly, allowed and the impugned orders passed by the High Court are set aside.
45. Before parting with the order, it is clarified that the appellant after impleadment as party-defendant shall be permitted to take all such defences which are available to the vendor Sawhneys as the appellant derived title, if any, from the vendor on the basis of purchase of the suit property subsequent to the agreement with the plaintiff and during the pendency of the suit."
From the aforesaid it is evident as was held in Kafilladdin's case (supra) that unless both the contracting party and the subsequent purchaser join in the conveyance it is possible that subsequent difficulties may arise with regard to the plaintiff's title, that is why in Durga Prasad (supra) the Supreme Court held that the proper form of decree is to direct the specific performance of contract between the vendor and the plaintiff and direct the subsequent person to join in the conveyance so as to pass on the title which resides in him to the plaintiff. He does not join in any special covenants made between the plaintiff and his vendor; All he does is to pass on his title to the plaintiff.
Based on the aforesaid discussion the appellant's appeal in Thomson Press India Ltd. (supra) was allowed with the observations that it should be added as a party-defendant in the suit and orders of the High Court to the contrary were set aside, however, it was further held that the appellant after impleadment as party-defendant shall be permitted to take all such defences which are available to the vendors as the appellant derived title, if any, from the vendor on the basis of the purchase of the suit property subsequent to the Agreement with the plaintiff and during the pendency of the suit. In fact, it has also been held by the Supreme Court in the case of Ashok Transport Agency (supra) that such a transferee pendent lite who is impleaded in the suit as defendant cannot take a defence inconsistent with the defence already set up by the defendant in its written statement, i.e., the vendor from whom he has purchased the property during pendency of the suit.
Thus, the presence of such a transferee pendent lite is also necessary for proper resolution of the dispute as ultimately if the suit of the plaintiff is allowed, then the direction will be to this subsequent transferee to execute the sale-deed in favour of the plaintiff and this will avoid further complications, as observed by the Supreme Court hereinabove. Moreover, the Supreme Court also considered the aspect as to what happens if the original defendant looses interest in the litigation or colludes with the plaintiff, therefore, to protect the rights of the subsequent purchasee in this regard also it is necessary to implead him as a defendant in the suit. In fact, a transferee pendent lite has been held to be in a position somewhat similar to the position of an heir or legatee of a party who dies during the pendency of a suit or proceeding. Reference may be made in this regard to para-55 of the supplementing opinion rendered by Hon'ble Justice T.S. Thakur in the case of Thomos Press India Ltd. (supra) wherein reliance has been placed upon a decision of the Supreme Court in the case of Khem Chand Shankar Chaudhari v. Vishnu Hari Patil, (1983) 1 SCC 18, and the decision of the Supreme Court in the case of Amit Kumar Shaw (supra).
We may also refer to the decision of the Supreme Court in the case of Amit Kumar Shaw (supra) which though not a case relating to a suit for specific performance of contract, nevertheless, considered the entitlement of a transferee pendent lite to be impleaded in terms of Order I Rule 10, Order XXII Rule 10 and section 146 of the C.P.C. In the said case the Supreme Court held as under :
"14. 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 Order 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.
15. 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 suchproperty 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 qust 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 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.
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 alience pendente lite may be joined as party. As already noticed, the court has discretion in the matter which must be judicially exercised and an alience 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 his predecessor-in-interest is made a party to the litigation; he is entitled to be heard in the matter on the merits of the case."
We may also in this context refer to the decision of the Hon'ble Supreme Court of India in the case of Gurmit Singh Bhatia (supra) upon which great reliance was placed by learned counsel for the revisionist. The said decision has considered the three Judge Bench decision in the case of Kasturi v. Iyyamperumal and ors., (2005) 6 SCC 733. The Supreme court in the case of Kasturi (supra) had the occasion to consider the question - Whether in a suit for specific performance of a contract for sale of a property instituted by a purchaser against the vendor, a stranger or a third party to the contract claiming to have an independent title or possession over the contracted property is entitled to be added as a party-defendant in the suit ? In the said case the person seeking impleadment was claiming adversely to the claim of the vendor, meaning thereby he was setting up a title independent of the parties to the suit, therefore, the Supreme Court declined his claim as it would enlarge the scope of the suit which was a suit for specific performance to one which would become a suit for title viz.-a-viz. the parties thereto, however, the Supreme Court held that in that very context in no uncertain terms that a person who had purchased the contracted property from the vendor was a necessary party. In this context the Supreme Court considered the scope of Order I Rule 10 C.P.C., specifically sub-Rule (2) of order I Rule 10, C.P.C., which empowers the court to add a person who ought to have been joined 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. The court opined as under:
"7. In our view, a bare reading of this provision, namely, second part of Order 1 Rule 10 sub-rule (2) CPC would clearly show that the necessary parties in a suit for specific performance of a contract for sale are the parties to the contract or if they are dead, their legal representatives as also a person who had purchased the contracted property from the vendor. In equity as well as in law, the contract constitutes rights and also regulates the liabilities of the parties. A purchaser is a necessary party as he would be affected if he had purchased with or without notice of the contract, but a person who claims adversely to the claim of a vendor is, however, not a necessary party. From the above, it is now clear that two tests are to be satisfied for determining the f question who is a necessary party. Tests are (1) there must be a right to some relief against such party in respect of the controversies involved in the proceedings; (2) no effective decree can be passed in the absence of such party."
A three Judge Bench of this court in the case of Kasturi (supra) has very categorically held, as quoted hereinabove, that necessary parties in a suit for specific performance of contract for sale are the parties to the contract or if they are dead, their legal representatives as also a person who had purchased the contracted party from the vendor. It has gone on to hold that "a purchaser is a necessary party, as he would be effected if he has purchased with or without notice of the contract".
In this context it also considered the provisions of section 19 of the Specific Relief Act which have already been quoted hereinabove and opined that this section is exhaustive on the question as to who are the parties against whom a contract for specific performance may be enforced. The Supreme Court in Kasturi (supra) very categorically observed in para-8 of the report - "We may look to this problem from another angle. Section-19 of the Specific Relief Act 1963 provides relief against parties and persons claiming under them by subsequent title. After considering section 19(a) to (e) of the Specific Relief Act 1963 the Supreme Court observed -
"9. We have carefully considered sub-sections (a) to (e) of Section 19 of the Act. From a careful examination of the aforesaid provisions of clauses (a) to (e) of the Specific Relief Act we are of the view that the persons seeking addition in the suit for specific performance of the contract for sale who were not claiming under the vendor but they were claiming adverse to the title of the vendor do not fall in any of the categories enumerated in sub-sections (a) to (e) of Section 19 of the Specific Relief Act."
Thus, a subsequent purchaser pendent lite is also covered under section 19, but not a person who is not claiming under the vendor, but are claiming against the title of the vendor. Clause (b) of section 19 has already been referred earlier. According to it, a transferee pendente lite who has purchased the property for value in good faith without notice of the original contract is an exception to the person against whom relief of specific performance can be sought. This, therefore, is an aspect which will have to be seen in the suit proceedings for which presence of the respondent nos. 3 and 4 is necessary, especially as, they will be bound by the decree passed therein.
Now as already stated in the facts of the said case as the applicant who was seeking impleadment was a stranger in the sense that he was claiming independent and adverse title to the parties to the suit, therefore, in that context the Supreme Court of India observed that the plaintiff was not under a compulsion to implead such a party he being dominus litis, therefore, observations in para-18 of the said decision have to be read accordingly. In Kasturi's case (supra) the applicants seeking impleadment was claiming title adverse to the parties to the suit, therefore, it was held that the plaintiff being dominus litis could not be compelled to implead him as there was no compulsion in law to implead such a person. This does not mean that a subsequent purchaser pendent lite who is claiming through one of the parties/vendors and has acquired an interest in the property would not be a necessary party. In fact, the decision in Kasturi (supra) very categorically states that he would be a necessary and proper party.
In Gurmit Singh Bhatia (supra) apart from the fact that there was an injunction restraining the original defendant from transferring the property, which is not the case here, it appears that the facts were similar to that of Kasturi, where a complete stranger was claiming title against parties to the suit, as, otherwise, in Kasturi (supra) a three Judge Bench has clearly held that a subsequent purchaser claiming through one of the parties to the suit, who is not claiming independent title, is a necessary party in a suit for specific performance, therefore, the decision in Gurmit Singh Bhatia does not help the cause of the revisionist herein in view of the Three Judge Bench decision in the case of Kasturi (supra), as, in this case the respondent nos. 3 and 4 herein are not claiming any independent title adverse to the parties to the suit, i.e., the defendant nos. 1 and 2 (the vendors), but are claiming through them.
As already discussed, considering the form and nature of decree which is to be passed in a suit for specific performance wherein the transferee pendent lite is required to join in a conveyance/execution of sale-deed, as, the vendor-defendant is no longer its owner and it is the transferee pendente lite who shall execute the sale-deed/contract, the respondent nos. 3 and 4 are proper parties. Presence of respondent nos. 3 and 4 is also required in the suit for protection of their interest in the event of any collusion between the plaintiff and defendant nos. 1 and 2. This will avoid long drawn execution proceedings and multiplicity of litigation. Moreover, the respondent nos. 3 and 4 will be bound by such decree and will have right of appeal against it.
This apart, as their claim is of being bona fide purchasers for value without notice of Agreement-to-sell entered into between the plaintiff and defendant nos. 1 and 2, therefore, they are entitled to raise this plea in their defence in view of the exception contained in section 19(b) of the Specific Relief Act 1963 as quoted and discussed earlier, according to which, a decree for specific performance may be enforced against either party thereto; any person claiming under him by a title arising subsequently to the Contract except a transferee for value who has paid his money in good faith and without notice of the original Contract. Thus, respondent nos. 3 and 4 are necessary parties in the facts of this case. The Three Judge Bench in the case of Kasturi (supra) also supports the claim of the respondent nos. 3 and 4, as already discussed.
In the case at hand the court below has allowed the application for impleadment of respondent nos. 3 and 4 who claim that they are bona fide purchasers. Of course this court has also considered the provisions contained in the sale-deed wherein there was no disclosure by the vendor, i.e., defendant nos, 1 and 2 about pendency of the suit proceedings between the plaintiff and them. This of course is only for the purpose of impleadment proceedings.
Furthermore, learned counsel for the defendant no. 1 has opposed the application for impleadment of defendant nos. 3 and 4 before the court below and has also filed a suit for cancellation of the sale-deed dated 23.11.2016 all of which clearly point out at least at this stage that there is no collusion between the defendant nos. 1 and 2 on the one hand and defendant nos. 3 and 4 on the other.
It is also not a case where a temporary injunction was operating restraining the defendant nos. 1 and 2 from alienating the property and, in spite of it the defendant nos. 1 and 2 sold the property to defendant nos. 3 and 4. As already stated transfer pendent lite does not render the sale void, but only makes it subservient to the result of the suit.
On account of the interim order dated 31.10.2019 passed in this revision the suit proceedings have already remained stalled for more than years.
In view of the law which has been discussed hereinabove and considering the scope of a revision under section 115, C.P.C. in the light of the decision in the case of Kesardeo Chhamaria (supra) it cannot be said that the court below has committed any jurisdictional error attracting clause (a) to (c) of section 115, C.P.C. nor that the order if it was made in favour of the revisionist would not have disposed off the proceedings for impleadment nor that the order, impugned herein, if allowed to stand, would occasion a failure of justice or cause irreparable injury to the party against whom it is made. As already noticed, in the facts of the case, the presence of the transferee pendent lite is necessary for complete and effective adjudication of the suit and issues involved therein and the court below has exercised its discretion in the matter, which does not require any interference under Article 115, C.P.C.
The fact that the sale-deed was executed on 23.11.2016 whereas the application for impleadment was filed on 5.7.2019 is not of much relevance in the facts of the case, in view of the discussion made hereinabove, especially as, suit proceedings have remained stalled for two years during pendency of the revision.
However, the order of the learned trial court is clarified to the extent that the defendant nos. 3 and 4 shall not be permitted to raise any defence inconsistent with the defence of defendant nos. 1 and 2 and only such defence would be available to them as are and would be available to the defendant nos. 1 and 2 from whom they have derived title and as is permissible under section 19(b) of the Act 1963. Subject to this clarification of the order impugned, no interference is called for in exercise of powers under section 115, C.P.C. The revision is accordingly dismissed.
Any observation made in this judgment is only for the purposes of impleadment proceedings and shall not have any bearing on the merits of the issues involved before the Trial Court including the claim of the respondent nos. 3 and 4 that they are bona fide purchasers.
Order Date :- 10.01.2022 A.Nigam