Madras High Court
K.P.Rajendran vs N.R.Nachimuthu on 1 November, 2010
Author: R.S.Ramanathan
Bench: R.S.Ramanathan
IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 1 -11 - 2010 CORAM The Hon'ble Mr. Justice R.S.Ramanathan C.R.P.(PD) No.3556 of 2010 and M.P.No.1 of 2010 1. K.P.Rajendran 2. Andavar @ Loganathan ... Revision Petitioners Vs. 1. N.R.Nachimuthu 2. R.Gopalan 3. V.Gopinath 4. R.Uma Maheswari ... Respondents Civil Revision Petition filed under Article 227 of the Constitution of India as against the order dated 18.01.2010 in I.A.No.545 of 2009 in O.S.No.7 of 2007 on the file of the Principal District Judge, Erode. For Petitioners : Mr.A.K.Kumaraswamy For Respondents 1 to 3 : Mr. N.Manoharan O R D E R
The plaintiffs in O.S.No.7 of 2007, on the file of the Principal District Judge, Erode, are the revision petitioners.
2. The suit was filed by the revision petitioners for specific performance of an agreement of sale entered into between the plaintiffs and the respondents 1 and 2 on 16.07.2003 and for injunction. During the pendency of the suit, the third respondent was impleaded as third defendant and the suit was dismissed for default on 17.04.2008 and before the restoration of the suit, on 14.07.2008, the respondents 3 and 4 colluded and sold the property to the fourth respondent and therefore, the revision petitioners filed an application to implead the fourth respondent, who is the subsequent purchaser, as one of the defendants in that suit. That petition was dismissed by the Lower Court and aggrieved by the same, this revision is filed.
3. Mr.A.K.Kumarasamy, the learned counsel appearing for the revision petitioners submitted that admittedly, the fourth respondent purchased the property, during the pendency of the suit and she purchased the property from the defendants and therefore, she is a necessary party to the proceedings and hence, she has to be impleaded as one of the parties, so as to get a binding decree against all persons having interest in the suit property. The learned counsel also relied upon Section 19 of Specific Relief Act, 1963 (hereinafter referred to as the said "Act") and submitted that any other person claiming under parties to the suit by a title arising subsequently to the contract are bound by the decree and the specific performance of a contract may be enforced against them and therefore, the fourth respondent is a necessary party to the proceedings. In support of his contention, the learned counsel relied upon the judgments reported in (2007 (4) L.W. 865) in the matter of ( Sumtibai & others Vs. Paras Finance Co. Mankanwar, etc., & others), 2001 (3) C.T.C. 452 in the matter of (M.P.Kanoi and four others Vs. Mr. Palani Prop. M.P.Builders), 2010 (2) C.T.C. 275 in the matter of (H.Rahamathulla Vs. R.Murugaiyan and another) and 2009 (1) C.T.C. 775 in the matter of ( V.Ravimenon Vs. R.Ebinessar)
4. Mr.N.Manoharan, the learned counsel appearing for the respondents submitted that the fourth respondent is not a necessary party or proper party and she was not a party to the contract. Therefore, she cannot be impleaded as one of the parties to the proceedings. Moreover, the suit for specific performance cannot be converted into a suit for title and even assuming that the fourth respondent purchased the property, during the pendency of the suit , she is a pendente lite purchaser, who is hit by Section 52 of the Transfer of Property Act, 1882. Therefore, she is bound by the decree and there is no necessity to implead her as one of the parties to the proceedings. The learned counsel further submitted that the fourth respondent purchased the property, when the suit was dismissed for default on 17.04.2008, and before the suit was restored, and therefore, the fourth respondent cannot be stated to be a pendente lite purchaser and the doctrine of lis pendens will not apply to her. Therefore, she is a third party and she is not bound by the decree. In support of his contention, the learned counsel relied upon the judgments reported in 1995 (3) S.C.C. 147 in the matter of (Anil Kumar Singh Vs. Shivnath Mishra), 2001 (4) C.T.C. 730 in the matter of (S.G.Kannappan Vs. S.Murugesan and another), and 2010 (3) C.T.C. 480 in the matter of (Krishnan Vs. P.Palanisamy and others).
5. To appreciate the contentions of both the parties, we will have to refer to Sections 15 and 19 of the said Act. As per Section 15 of the said Act, a specific performance of a contract may be obtained by "any party thereto" or " their representative in interest" or the member of "any party thereto". Section 19 of the said Act says that a 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)...
d)...
e)...
6. Therefore, a combined reading of Sections 15 and 19 of the said Act, makes it clear that the parties to the contract and their representatives in interest can claim enforcement of the contract and the contract can be enforced against either party or any other person claiming under him by a title arising subsequently to the contract.
7. In this case, it is admitted that after filing of the suit, the fourth respondent purchased the property from the other defendants and therefore, she is coming under Section 19(b) of the said Act. Further, under Section 19(b) of the said Act, if the subsequent purchaser is able to prove that he is transfree for value, who paid the money in good faith and without notice of the original contract, the specific performance of contract cannot be enforced against him and therefore, the subsequent purchaser is entitled to get the suit dismissed filed by the prospective purchaser under the agreement of sale, if he is able to prove that he is bona fide purchaser for value and he purchased the property without notice of the original contract. Therefore, the subsequent purchaser, who purchased the subject matter of the suit from one of the parties is a necessary party to have a binding decree against other parties. Further, the Hon'ble Supreme Court in the judgment reported in 2005 (6) S.C.C. 733 in the matter of (Kasturi Vs. Iyyamperumal and others) : 2005 (2) C.T.C. 676 (SC), held as follows:-
"In a suit for specific performance of a contract for sale, the lis between the appellant purchaser and the respondent vendor shall only be gone into and it is also not open to the Court to decide whether the third party have acquired any title and possession of the contracted property, as that would not be germane for decision in the suit for specific performance of the contract for sale. Two tests by which a person, who is seeking addition in a pending suit for specific performance of the contract for sale must be satisfied. Two 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. Applying the said two tests in the present case the third party or strangers to contract are not necessary parties as effective decree could be passed in their absence, as they had not purchased the contracted property from the vendor after the contract was entered into. They were also not necessary parties as they would not be affected by the contract entered into between the appellant purchaser and the respondent vendor. Therefore, the order of Courts below allowing the application for addition of parties in the pending suit for specific performance of contract for sale filed at the instance of third party to contract would be illegal and liable to be set aside.
In a suit for specific performance of a contract for sale, the issue to be decided is the enforceability of the contract entered into between the appellantpurchaser and the respondent-vendor and whether contract was executed by the appellant and the respondent for sale of the contracted property, whether the plaintiffs were ready and willing to perform their part of the contract and whether the appellant is entitled to a decree for specific performance of the contract for sale against the respondent. It is an admitted position that the third party or stranger to contract did not seek their addition in the suit on the strength of the contract, in respect of which the suit for specific performance of the contract for sale has been filed. Admittedly, they based their claim on independent title and possession of the contracted property. It is therefore, obvious that in the event, they are added or impleaded in the suit, the scope of the suit for specific performance of the contract for sale shall be enlarged from the suit for specific performance to a suit for title and possession, which is not permissible in law. Therefore, a third party or a stranger to the contract cannot be added so as to convert a suit of one character into a suit of different character. This addition, if allowed, would lead to a complicated litigation by which the trial and decision of serious questions which are totally outside the scope of the suit would have to be gone into. As the decree of a suit for specific performance of the contract for sale, if passed, cannot at all, affect the right, title and interest of the third party in respect of the contracted property they would not at all, be necessary to be added in the suit for specific performance of the contract for sale. Moreover, the appellant, who has filed the present suit for specific performance of the contract for sale is dominus litus and cannot be forced to add parties against whom he does not want to fight unless it is a compulsion of the rule of law."
Therefore, when a third party claims independent title to the suit property, he cannot be impleaded.
8. In the judgment reported in 2008 (13) S.C.C. 658 in the matter of ( Bharat Karsondas Thakkar Vs. Kiran Construction Company and others) the Hon'ble Supreme Court has held that if a person does not fall within the category of "parties to the agreement" as stated in Section 15 or does not come within ambit of the said Act, which provides for relief against the parties and the persons claiming under them by subsequent title, such person is not a necessary party. As stated supra, the fourth respondent is claiming title through the defendants 1 to 3, who are the parties to the agreement and therefore, she comes within the scope of Section 19(b) of the said Act and therefore, she is a proper and necessary party to be impleaded.
9. Furthermore, it is made clear that in the judgments reported in 1995 (3) S.C.C. 447 (supra) and 2008 (5) M.L.J. 424 (SC) in the matter of ( Bharat Karsondas Thakkar Vs. Kiran Construction Company and others) : 2010 (3) C.T.C. 480 (supra) that the third party, who is claiming independent title to the suit property cannot be impleaded in a suit for specific performance, so as to convert the same into a suit for title. Therefore, when the parties sought to be impleaded is not claiming any independent title and they are claiming title through one of the parties, they are necessary and proper party and they are liable to be impleaded as parties to the suit. The same principal has been laid down by the Hon'ble Supreme Court in the judgment reported in A.I.R. 1999 S.C 976 in the matter of (Savitri Devi Vs. District Judge, Gorakhpur). Further, in the judgment reported in 1954 SCR 360 : A.I.R. 1954 SC 75 in the matter of ( Lala Durga Prasad Vs. Lala Deep Chand) the Hon'ble Supreme Court held as follows:-
" that in case the suit filed by the prior purchaser is decree, then the form of decree should be suit as to direct specific performance of the contract between the vendor and the prior transferee and to direct the subsequent transferee to join in the conveyance so as to pass on the title which resides in him to the prior transferee. It was observed that the only work required to be performed by the subsequent transferee was to pass on his title to the prior transferee".
10. Therefore, in the event of any decree being passed in favour of the revision petitioner, the fourth respondent has to execute sale deed along with the respondents 1 to3 and therefore, in order to bind the fourth respondent, he is a necessary party. Without appreciating the same, the Lower Court relied upon the judgments reported in 2001 (4) C.T.C. 730 (supra) and 1995 (3) S.C.C. 147 (supra), and dismissed the application. As stated supra, in the aforesaid two judgments, the third party claimed independent title to the suit property and sought to be impleaded as one of the parties and that was negatived by the Courts.
11. Other the other hand, the fourth respondent herein is claiming title through the parties to the agreement and hence, he is bound by the decree that may be passed against the defendants and therefore, she is a necessary party to the proceedings. Therefore, the order of the Lower Court is set aside and this revision petition is allowed. Consequently, connected Miscellaneous Petition is closed. No costs.
sd To The Principal District Judge, Erode