Delhi District Court
M/S D.L.F. Universal Ltd. vs . D.W.B. on 6 October, 2012
SUIT NO. 787/1983 M/S D.L.F. UNIVERSAL LTD. VS. D.W.B. 06.10.2012. ORDER
This order will decide two applications, one under Order 12 Rule 6 CPC and Order 7 Rule 1 R/W Section 151 CPC filed on behalf of defendant no. 1 and another under Section 151 CPC for dismissal of suit filed by defendant nos. 2 to 5. Both the applications will be dealt with together since the same relief of dismissal of suit has been sought under both the applications and a common reply has been submitted by the plaintiff.
2 Brief facts of the case are that the plaintiff had filed a suit for permanent injunction against defendant no.1 praying that the defendant be restrained from interfering in the possession of the suit property. Later, the suit for recovery of possession was filed by the plaintiff against defendant nos. 1 to 5 praying that a decree for possession in respect of the suit property be passed in favour of the plaintiff and against the defendants. Vide order dated 06.03.1985, both the suits i.e for injunction and recovery of possession were consolidated and common issues arising from the pleadings of the parties were framed by the Ld. predecessor of this court.
3 It is the case of the defendant that a settlement deed was executed between the plaintiff and the MCD on 24.07.1989 as Suit No. 787/1993 Page 1 of 16 per which the property bearing Khasra No. 48 i.e. the suit property was vested exclusively with the MCD. As per the Settlement Deed, it was agreed between the parties that "DLF shall have no right, title or claim and the same shall vest in MCD and MCD shall be full and complete owner in respect thereof. Out of the aforesaid sites, DLF had already leased, seven sites to two Charitable Trusts viz. (i) Lal Chand Public Charitable Trust and (ii) Ch. Lal Chand Memorial Charitable Trust as per Annexure-D, annexed hereto and accordingly in respect of such leased sites, MCD shall become the lessor in place of DLF and shall honour the terms and conditions of the existing perpetual lease deeds and commitments made by DLF and commitments already made by the aforesaid Trusts." The defendant has further contended that Lal Chand Public Charitable Trust had also moved an application under Order 22 Rule 10 CPC dated 13.09.1996 in para 3 (ii) of which, it was mentioned that the plaintiff did not have any right, title or interest in the property and MCD was the exclusive owner thereof.
4 It is the case of the defendant that since during the pendency of the litigation, the plaintiff had entered into a settlement with MCD and had given up all its right, title and interest in the suit property in favour of MCD thereby, making MCD the exclusive owner thereof, the plaintiff has no right to continue the present suit. Since, MCD has not come forward to proceed with the present suit, it has become infructuous and is therefore, liable to be dismissed.
Suit No. 787/1993 Page 2 of 165 It is also the case of the defendant that Lal Chand Public Charitable Trust is the mere front company of the plaintiff and its Trustees' office is the same as that of the plaintiff. Sh. Swarup Chand Ansal who has signed the affidavit and pleadings in the suit before the trial court on behalf of the plaintiff, is also the power of attorney of Lal Chand Public Charitable Trust and the trustees namely Sh. K.P. Singh, Sh. Rajiv Singh and T.C. Goel are also the promoters/owners/directors of the plaintiff company.
6 It is further their case that the application of Lal Chand Public Trust under Order 22 Rule 10 CPC was dismissed by the Ld. Predecessor of this court on 23.09.2004 and was affirmed in appeal by Sh. Raj Kumar Chauhan, Ld. ADJ on 18.08.2006 and Hon'ble Ms. Justice Indermeet Kaur on 19.12.2011. Therefore, Lal Chand Public Trust also has no right to be represented in the present suit.
7 The plaintiff, in para A of preliminary objections of its reply, has admitted the contention of the defendant to the extent that during the pendency of the suit, vide settlement deed dated 24.07.1989, the property in question got transferred to and vested with the MCD. However, the plaintiff has contended the application of the defendant on the ground that merely because the property now vests with the MCD, it does not mean that the plaintiff is not permitted to continue the proceedings against the defendants.
8 It is the case of the plaintiff that in spite of assignment, creation or devolution of any interest during the pendency of the Suit No. 787/1993 Page 3 of 16 suit, the transferor/assignor will retain the right of proceeding with the suit. In case of any transfer/assignment, it is not even mandatory for the transferee/assignee to file an application to be impleaded or substituted in place of transferor/assignor. Therefore, what remains to be seen from the contentions of both the parties is whether the transferor/assignor can continue with the present suit or not.
9 In this regard, the relevant law is contained in Order 22 Rule 10 of the Code of Civil Procedure, which provides as under:-
"Procedure in case of assignment before final order in suit - (1) In other case 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)."
10 In support of its case, the defendants have placed reliance upon the following judgments:-
i) Monghi Bai Vs. Cooverji Umersy AIR 1939 PC 170 wherein, it was held that:
"No doubt, it is true that parties who have assigned the whole of their interest pendentelite cannot ask for judgment in respect of their rights and Suit No. 787/1993 Page 4 of 16 interest which is no longer theirs. But, it does not follow that their assignees are thereby precluded from recovering. If it were so, no assignments of property during the course of a trial would be possible. Such a contention is, on the face of it, improbable."
ii) Dhulji Vs. Vijay Kumar (1998) AIHC 4101, in which, it was held in para 6 that:
"From the perusal of O. 22 R. 10 C.P.C. it is clear that in case 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. Rule 10 C.P.C. considers two situations. It clearly states that a person in whose favour the rights have devolved may continue with the suit or the suit may be continued against the person in whose favour the rights have devolved. The two Courts have not appreciated the legal provisions in their true perspective. Rule 10 of Order 22 does nowhere say that even after culmination or termination of the plaintiff's right in the property he can continue with the suit for an on behalf of third party who has refused to join as a party in the suit. Rule 10 is a rule of equity. It says that if somebody steps in the shoes of the plaintiff, he may continue with the suit, in another situation if somebody steps in the shoes of the defendant by purchasing the property or getting certain rights in his favour, then the plaintiff may continue his suit against such a party. The equity right goes with S. 52 of Transfer of Property Act to show that if party commits breach of the statutory injunction then the other party would not be permitted to suffer. If the Suit No. 787/1993 Page 5 of 16 defendant during the pendency of the suit transfers his right, then the plaintiff with the permission of the Court may continue his suit against such person upon whom the rights have devolved. A person feeling that after transfer of the property the plaintiff may not look after his property or may not look after his interest properly, may seek permission of the Court to join as co-plaintiff and may continue with the suit against the defendant. Rule 10 C.P.C. would not clothe the plaintiff with any right to continue with the suit when on his own showing he has no existing right title or interest in the property. Having alienated his right title and the interest in the property he cannot sue any person or a third party. The moment he transfers his right and title, it is such transferee who is entitled to sue such defendant for such reliefs which he deems proper. In the instant case, the persons were noticed and were given an option to join as co-plaintiff but despite being aware of their rights, they refused to join as co- plaintiffs and informed the Court that they have taken care of their own rights by filling a separate suit. If such transferees have already instituted a suit for the reliefs based on the rights appreciated by them, then the plaintiff cannot be permitted to continue with the suit only on the ground that under O. 22, Rule 10 C.P.C., he has a right to continue with the suit. The two Courts below have not appreciated the legal provisions properly. As the plaintiff had lost his right title and interest in the property he was not entitled to continue with the suit. The Court below was not justified in holding that in view of provisions of Order 22, Rule 10 CPC, the plaintiff could continue with the suit and was entitled to a decree. The error is apparent on the face of the record. After the property was transferred in favour of third party, the plaintiff Suit No. 787/1993 Page 6 of 16 lost his right to continue with the suit. The suit ought to have been dismissed by the Courts below."
iii) Gauri Shankar Vs. Naveen Chand (Dead) through LRs Smt. Snehlata & Another, 2004 (3) MPLJ 246, wherein, it was held that:
"The suit for eviction after the sale of suit house by the owner could not have been prosecuted further without bringing the transferee on record."
11 From the above cases, it is clear that when the interest in the property is vested in a third party, then the transferee/assignee only has the right to proceed further with the case and after divesting itself from the property, the transferor/assignor is not left with any right, title or interest in the property and therefore, he has no right to proceed with the case further.
12 On the other hand, Ld. counsel for the plaintiff has placed reliance upon the judgment of Dhurandhar Prasad Singh Vs. Jai Prakash University & Others (2001) 6 Supreme Court Cases 534, wherein, it was held in para 6 that:-
"Rule 10 provides for cases of assignment, creation and devolution of interest during the pendency of a suit other than those referred to in the foregoing Rules and is based on the principle that the trial of a suit cannot be brought to an end merely because the interest of a party in the subject-matter of the suit has devolved upon another during its pendency but Suit No. 787/1993 Page 7 of 16 such a suit may be continued with the leave of the court by or against the person upon whom such interest has devolved. But, if no such step is taken, the suit may be continued with the original party and the person upon whom the interests has devolved will be bound by and can have the benefit of the decree, as the case may be, unless it is shown in a properly constituted proceeding that the original party being no longer interested in the proceeding did not vigorously prosecute or colluded with the adversary resulting in decision adverse to the party upon whom the interest had devolved. The legislature while enacting Rules 3, 4 and 10 has made a clear-cut distinction. In cases covered by Rules 3 & 4, if right to sue survives and no application for bringing the 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."
13 He has also placed reliance upon the judgment of Suit No. 787/1993 Page 8 of 16 Rikhu Dev, Chela Bawa Harjug Das Vs. Son Dass (Deceased) through his Chela Shyama Das AIR 1975 SC 2159, wherein, it was held in para 8 that:
"...trial of a suit cannot be brought to an end merely because the interest of a party in the subject matter of the suit has devolved upon another during the pendency of the suit but that suit may be continued against the person acquiring the interest with the leave of the court."
14 The plaintiffs have also referred to the judgment of Sukhdip Singh Vs. Arjan Singh Mihan Singh and Another AIR 1961 Punjab 326 (V 48 C 96) in which, it was held in para 10 that:
"It is incontrovertible that the scope of Order 22 Rule 10 is enabling, the underlying principle of which is that the progress of a suit or an appeal should not be arrested merely by reason of a devolution of the interest of a party in its subject matter with the leave of the court. The person acquiring the interest of a party to legal proceedings may continue the same, but it does not by itself incapacitate the original party from continuing the proceedings and the former is both bound by and can enjoy the benefit of the steps taken by the later."
15 They have further placed reliance on the judgment of Satyawati Sharma (Decd) through LRs. Vs. Indian Overseas Bank & Ors. 130 (2006) DLT 128, wherein, the Hon'ble High Court of Delhi had held that:
"18. A bare reading of the said provision shows that it is only an enabling provision that Suit No. 787/1993 Page 9 of 16 permits and allows a transferee to move an application for being impleaded as a party because of the pendente lite transfer. However, it is not mandatory for a person to move any application under Order 22, Rule 10 of the Code, in case of transfer/assignment, unlike Order 22 Rule 3 of the Code where legal representatives must move an application or the suit will abate. There is no penal provision under Order 22 Rule 10 or in the entire Code in case a transferee/assignee does not move an application. Suit does not abate and cannot be dismissed on the ground that the transferee or assignee has not been brought on record. A transferee therefore, need not always be impleaded and made a party. The law permits the original plaintiff to continue the proceedings against the defendant. However, the tranferee or the person who acquires rights under the assignment is bound by the decree, judgment or order passed by the Court unless the original plaintiff i.e. the transferor has played a fraud."
16 Perusal of the judgments in Dhurandhar Prasad case and Rikhu Dev case show that it was the defendant in the respective cases whose interest had been divested and the court had come to the conclusion that the suit of the plaintiff cannot be arrested merely because the interest of the defendant has been divested in favour of another person.
17 However, in the present case, it is the interest of the plaintiff that has devolved upon another party and it is the plaintiff who had divested himself of the right, title or interest in the suit property. Therefore, the reasoning in cases of Dhurandhar Prasad Suit No. 787/1993 Page 10 of 16 (Supra) and Rikhu Dev (Supra) cannot be applied in the present case.
18 Even in the case of Satyawati Sharma(Supra), the Hon'ble High Court of Delhi has dealt with the assignment of interest by the plaintiff in favour of respondent nos. 6 to 11 who were already parties to the case. Therefore, the judgment does not deal with the situation where the assignees are not made a party and the suit is continued by the original plaintiff in its original capacity. In fact, the plaintiff(her LRs) could continue with the suit because the assignment itself was disputed. As the present case is different in facts and the assignment is admitted by the plaintiff, this court is not bound by the judgment in the case of Satyawati Sharma(Supra).
19 It was in 1939 that the three judges bench of the Hon'ble Privy Council held that the suit shall abate if the transferee/assignee is not sought to be brought on record. Since then, the Hon'ble Supreme Court and the Hon'ble High Courts of various states have given various conflicting views, however, the view and judgment of the Hon'ble Privy Council has not been overruled by a bench of a higher strength. It is well settled law that the law laid down by the Supreme Court is binding on any subsequent bench of lesser or equal strength. It is also settled law the judgment of Hon'ble Privy Council also holds good till it has been overruled by a higher bench of the Hon'ble Supreme Court.
Suit No. 787/1993 Page 11 of 1620 Since, the judgment pronounced by the Hon'ble Privy Council in the case of Mongibhai (supra) was passed by a three judges bench, it still holds good and this court is bound by the judgment passed in that case. Therefore, the transferor/assignor of the interest cannot be permitted to continue the suit in his own right or in the right of the assignee.
21 The question that arises in the present scenario is that how can the plaintiff be allowed to proceed with the matter when he has no interest left in the suit property. Even if it is presumed that the suit is proceeded with, then can a decree be passed in his favour when he has no right in the suit property? Further, even if a decree is passed in his favour, what right would he have to get that decree executed?
22 The suit on behalf of the current plaintiff has virtually become infructuous since he has no right to claim the possession of the suit property. It is, now, the assignee/ transferee who has the right to claim the possession. It was quite rightly held in the case of Dhulji (Supra) that:
"Rule 10 of Order 22 does nowhere say that even after culmination or termination of the plaintiff's right in the property he can continue with the suit for an on behalf of third party who has refused to join as a party in the suit...Rule 10 C.P.C. would not clothe the plaintiff with any right to continue with the suit when on his own showing he has no existing right title or interest in the property. Having alienated his right title Suit No. 787/1993 Page 12 of 16 and the interest in the property he cannot sue any person or a third party. The moment he transfers his right and title, it is such transferee who is entitled to sue such defendant for such reliefs which he deems proper."
23 Order 22 Rule 10 CPC is an enabling provision that provides that the assignee/transferee can be made a party in case of assignment/ transfer taking place during the pendency of proceedings. It only enables the assignee/transferee to proceed with the same matter as filed by his assignor/transferor instead of filing a fresh suit. Clearly, Order 22 Rule 10 CPC nowhere provides that if the interest has been devolved upon another person, then it can be continued by the original plaintiff/defendant.
24 It is imperative to see, at this juncture, that the provision is contained in the chapter that deals with the abatement of suits. It is crystal clear that the chapter provides for the contingencies in which the suit shall abate or not abate and also the ways to prevent it from abating. Order 22 Rules 3 and 4 CPC deals with the situation where one of the parties to the suit dies. It provides that on an application, the court shall cause the legal representative of the deceased plaintiff/defendant to be made a party and shall proceed with the suit. The natural interpretation of this provision is that if the plaintiff/defendant dies, and an application is filed to get the legal representatives on record, then the suit shall proceed with after making them the parties. However, if the application is not filed, the suit shall abate.
Suit No. 787/1993 Page 13 of 1625 In contrast, Order 22 Rule 7 CPC provides "suit not abated by marriage of female party". This provision makes it amply clear that if the female plaintiff or defendant gets married, then the suit will not abate merely by virtue of her getting married.
26 Coming to Order 22 Rule 10 CPC it is clear that it deals with the situation in which the interest of one of the parties is assigned or transferred to another person. It provides that "in other cases of an assignment, creation or devolution of any interest during the pendency of a suit, may, by leave of the Court, be continued by or against the person to or upon whom such interest has come or devolved". As seen above, the legislature in its collective wisdom has mentioned in Rule 7 that on marriage of a female person, the suit will not abate while it has not mentioned in Rule 10 the suit will not abate in case of assignment or devolution of interest.
27 As compared to Rules 3 and 4, Rule 10 also provides for a situation in which the abatement of a suit can be prevented. Ld. Counsel for the plaintiff had submitted that Order 22 Rule 10 CPC provides that the assignee MAY by leave of the court be made a party while in Rules 3 and 4, the court shall make the legal representatives a party. This distinction cannot be said to be enough for concluding that the suit does not abate in cases of assignment. In fact cases falling within the precincts of Rules 3 and 4 should be distinguished from those falling within the precincts of Suit No. 787/1993 Page 14 of 16 Rule 10. In case of death, the interest of the original party does not get extinguished but due to uncertainties of life, it is inherited by its legal representatives however, in case of assignment, the original party voluntarily extinguishes its rights and surrenders them to a third party. It is the latter situation, which makes the suit infructuous vis-a-vis the original party/assignor/transferor and therefore, leaves it to the discretion of the court whether the assignee can be permitted to proceed with the suit or not.
28 Therefore, in the view of this court, Order 22 Rule 10 CPC cannot be interpreted to mean that if the plaintiff transfers/assigns his interest in favour of some other party, then the suit will proceed be it at the instance of the assignor or the assignee. In fact, it should be interpreted to mean that the on assignment of interest, the suit cannot be continued by the assignor/transferor unless the assignee/transferee has been made a party.
29 Moreover, in another civil case bearing suit no. 6/81 against the MCD, DWB already stands declared as an owner and therefore, any suit by MCD is barred by res judicata. Since, MCD has no right to file any suit on its own behalf, it cannot be permitted to get a judgment in its favour by going around the circle and letting DLF get a decree and deliver the possession to it. What it cannot do in its own right, it cannot even get it done by someone else. Therefore, the plaintiff cannot even be permitted to proceed with the suit on behalf of MCD.
Suit No. 787/1993 Page 15 of 1630 Since, in view of the above discussion, the plaintiff has no right to proceed with the present suit, the applications of the defendants are allowed and the suit of the plaintiff is dismissed.
File be consigned to Record Room.
Announced in the open court on this 6th day of October, 2012. (Ruchi Aggarwal) Civil Judge, Central-02 Tis Hazari Courts,Delhi.
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