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2013 DIGILAW 699 (AP)

K. Srinivasulu v. Jaldu Subramanyam Chettu

2013-08-27

M.S.RAMACHANDRA RAO

body2013
JUDGMENT : 1. This application is filed under Order I Rule 10 of the Code of Civil Procedure, 1908, to implead the persons named therein as respondents 2 to 6 in the appeal. 2. Heard Sri P.V.Vidya Sagar for the appellant/petitioner and Sri K.V.Nageswara Rao for 1st respondent. 3. The petitioner is the appellant/plaintiff in the appeal. He filed O.S.No.100 of 1986 for specific performance of agreement of sale Ex.A-1 dt.12-02-1986 executed in his favour by 1st respondent in respect of an extent of Ac.4-00 cents of agricultural land out of Ac.7.80 cts. in Sy.No.398 of Settipalli village, Tirupati Urban Mandal, Chittoor District. The 1st respondent/defendant admitted the execution of Ex.A-1, but opposed the grant of relief of specific performance. Ultimately, after trial, the suit was dismissed with costs. 4. Challenging the same, A.S.No.454 of 1997 has been filed in this Court by the appellant/plaintiff. 5. in Sy.No.398 of Settipalli village, Tirupati Urban Mandal, Chittoor District. The 1st respondent/defendant admitted the execution of Ex.A-1, but opposed the grant of relief of specific performance. Ultimately, after trial, the suit was dismissed with costs. 4. Challenging the same, A.S.No.454 of 1997 has been filed in this Court by the appellant/plaintiff. 5. A.S.M.P.No.241 of 2012 is filed by the appellant contending that on 13-11-1997 this Court granted an injunction in C.M.P.No.5825 of 1997 restraining the 1st respondent from alienating the suit schedule property for a period of six weeks; that it was made absolute on 28-01-1998; that 1st respondent sold Acs.3-00 cents under registered sale deed dated 03-07-2006 (document No.3104/2006) in favour of respondent Nos.2 and 3; that under another registered sale deed dt.18-08-2007, the 1st respondent sold Ac.4-86 cents to the same persons; both the extents are contiguous to each other; that these alienations were made in violation of order of injunction granted on 13-11-1997 in C.M.P.No.5825 of 1997, which was made absolute on 28-01-1998; although an application in A.S.M.P.No.626 of 2010 was filed to punish the 1st respondent, the said application was dismissed on 26-04-2011 observing that the said order shall be without prejudice to any right of the petitioner to avail any other remedy available to him under law; that subsequently respondents 2 and 3 sold Ac.1-50 cents (out of Ac.3-00 cents purchased by them under registered sale deed dt.03-07-2006) in favor of 4th respondent under registered sale deed dt.05-12-1997 and the balance extent of Ac.1-50 cents in favour of 5th respondent under another sale deed of the same date; that through the General Power of Attorney N.Gangi Reddy, they sold half of the extent of Ac.4-86 cents (purchased by them under registered sale deed dt.18-08-2007) to the 6th respondent under another registered sale deed dt.03-12-2007; an extent of Ac.1-00 cents out of the suit schedule property forms part of the extent purchased by 6th respondent; that these sales were affected without seeking leave of the Court and they are not valid transactions; that the purchasers are necessary and proper parties to the appeal and they may be impleaded as respondents 2 to 6 in the appeal for effective adjudication of all the questions/issues in the appeal. The counsel for petitioner relied on Durga Prasad v. Deep Chand ( AIR 1954 SC 75 ), Ramesh Chandra Chandiok v. Chuni Lal Sabharwal ( AIR 1971 SC 1238 ) and Dwarka Prasad Singh v. Harikant Prasad Singh ( AIR 1973 SC 655 ). 6. Notice was ordered on this application to the proposed parties. Notices were served on the proposed respondent Nos.2, 3, 5 and 6. As regards 4th respondent, notice was taken out by substitute service and he was set ex parte by order dt.19-02-2013. In spite of service of notice on the proposed respondent Nos.2 to 6, there is no representation on their behalf at the time of hearing of this application. 7. The 1st respondent filed a counter-affidavit dt.23-04-2012 opposing this application and contended inter alia that it is not maintainable; that the petitioner has no locus standi to file it; there are no merits in the appeal and even the appeal is liable to be dismissed in limini; any observations made by this Court in its order dt.13.11.1997 referred to above, cannot be made basis for filing the application; that he was not aware of the sales made by respondent Nos.2 and 3 in favour of the other respondents; that any sales made by respondents would be subject to the doctrine of lis pendens enunciated in Section 52 of the Transfer of Property Act,1882; that a transferee pendente lite is not entitled to come on record as a matter of right; that if respondent Nos.2 to 6 are impleaded, it would complicate the issues in the appeal and might lead to prolonging of the litigation; and therefore, this application be dismissed. The learned counsel for 1st respondent Sri K.V.Nageswara Rao relied on Kedarnath Lal (died ) by his legal representatives and another Vs. Sheonarain and others (AIR 1970 Supreme Court 1717), Chappidi Subbareddy (died) and others Vs. Chappidi Narapureddy and others ( 2006 (2) ALT 490 (D.B.)), P.Vimaladevi and others Vs. C.Subojini and others ( 2008 (2) ALT 11 ), Uppalapati Vijaya Lakshmi Vs. Cherukuri Lokanadha Rao (died) per L.R. and another ( 2012 (1) ALT 348 ) and K.Madhavilatha and others Vs. C.P.Rajendra Naidu and others ( 2012 (3) ALT 233 ) . 8. I have noted the submissions of both parties. 9. In A.Nawab John and others Vs. V.N.Subramaniyam ( (2012) 7 S.C.C. 738 ), the Supreme Court held : “19. Cherukuri Lokanadha Rao (died) per L.R. and another ( 2012 (1) ALT 348 ) and K.Madhavilatha and others Vs. C.P.Rajendra Naidu and others ( 2012 (3) ALT 233 ) . 8. I have noted the submissions of both parties. 9. In A.Nawab John and others Vs. V.N.Subramaniyam ( (2012) 7 S.C.C. 738 ), the Supreme Court held : “19. Such being the scope of Section 52, two questions arise: whether a pendent elite purchaser : (1) is entitled to be impleaded as a party to the suit?; (2) once impleaded what are the grounds on which he is entitled to contest the suit? 20. This Court on more than one occasions held that when a pendent elite purchaser seeks to implead himself as a party-defendant to the suit, such application should be liberally considered. This Court also held in Saila Bala Dassi V. Nirmala Sundari Dassi ( AIR 1958 SC 394 ) that, ‘justice requires’, a pendent elite purchaser ‘should be given an opportunity to protect his rights’. It was a case, where the property in dispute had been mortgaged by one of the respondents to another respondent. The mortgagee filed a suit, obtained a decree and ‘commenced proceedings for sale of the mortgaged property’. The appellant Saila Bala, who purchased the property from the judgment-debtor subsequent to the decree sought to implead herself in the execution proceedings and resist the execution. That application was opposed on various counts. This Court opined that Saila Bala was entitled (under Section 146 CPC) to be brought on record to defend her interest because, as a purchaser pendent elite, she would be bound by the decree against her vendor. 21. There is some divergence of opinion regarding the question, whether a pendent elite purchaser is entitled, as a matter of right, to get impleaded in the suit, this Court in Amit Kumar Shaw V. Farida Khatoon [ (2005) 11 SCC 403 ] held that : (SCC p 411, para 16) : ‘16. …. 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. …. 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 pendent elite to the extent he has acquired interest from the defendant is vitally interested in the litigation, where the transfer is of the entire interest of the defendant; the latter having no more interest in the property may not properly defend the suit. He may collude with the plaintiff. Hence, though the plaintiff is under no obligation to make a lis pendens transferee a party, under Order 22 Rule 10 an alienee pendente lite may be joined as a party. As already noticed, the court has discretion in the matter which must be judicially exercised and an alienee would ordinarily be joined as a party to enable him to protect his interests. The court has held that a transferee pendente lite of an interest in immovable property is a representative-in-interest of the party from whom he has acquired that interest. He is entitled to be impleaded in the suit or other proceedings where 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”. (emphasis supplied). 22. The preponderance of opinion of this Court is that a pendente lite purchaser’s application for impleadment should normally be allowed or ‘considered liberally’.” (emphasis mine) 10. In Thomson Press (India) Limited Vs. Nanak Builders and Investors Private Limited and others ( (2013) 5 S.C.C. 397 ), the Supreme Court held : “55. We are not on virgin ground insofar as that question is concerned. Decisions of this Court have dealt with similar situations and held that a transferee pendente lite can be added as a party to the suit lest the transferee suffered prejudice on account of the transferor losing interest in the litigation post transfer. In Khemchand Shankar Choudhari V. Vishnu Hari Patil [ (1983)1 SCC 18 ], this Court held that : (SCC p.21, para 6). ‘6. In Khemchand Shankar Choudhari V. Vishnu Hari Patil [ (1983)1 SCC 18 ], this Court held that : (SCC p.21, para 6). ‘6. … The position of a person on whom any interest has devolved on account of a transfer during the pendency of a suit or a proceeding is somewhat similar to the position of an heir or a legatee of a party who dies during the pendency of a suit or a proceeding..’ Any such heir, legatee or transferee cannot be turned away when she applies for being added as a party to the suit. The following passage in this regard is apposite: (SCC pp.20-21 para 6) “6. Section 52 of the Transfer of Property Act no doubt lays down that a transferee pendente lite of an interest in an immovable property which is the subject matter of a suit from any of the parties to the suit will be bound in so far as that interest is concerned by the proceedings in the suit. Such a transferee is a representative in interest of the party from whom he has acquired that interest. Rule 10 of Order 22 of the Code of Civil Procedure clearly recognises the right of a transferee to be impleaded as a party to the proceedings and to be heard before any order is made. It may be that if he does not apply to be impleaded, he may suffer by default on account of any order passed in the proceedings. But if he applies to be impleaded as a party and to be heard, he has got to be so impleaded and heard. He can also prefer an appeal against an order made in the said proceedings but with the leave of the appellate court where he is not already brought on record. The position of a person on whom any interest has devolved on account of a transfer during the pendency of any suit or a proceeding is somewhat similar to the position of an heir or a legatee of a party who dies during the pendency of a suit or a proceeding, or an official receiver who takes over the assets of such a party on his insolvency. An heir or a legatee or an official receiver or a transferee can participate in the execution proceedings even though their names may not have been shown in the decree, preliminary or final. An heir or a legatee or an official receiver or a transferee can participate in the execution proceedings even though their names may not have been shown in the decree, preliminary or final. If they apply to the court to be impleaded as parties they cannot be turned out. (Emphasis supplied) 56. To the same effect is the decision of this Court in Amit Kumar Shaw v. Farida Khatoon (2005) 11 SCC 403 where this Court held that a transferor pendente lite may not even defend the title properly as he has no interest in the same or collude with the Plaintiff in which case the interest of the purchaser pendente lite will be ignored. To avoid such situations the transferee pendente lite can be added as a party Defendant to the case provided his interest is substantial and not just peripheral. This is particularly so where the transferee pendente lite acquires interest in the entire estate that forms the subject matter of the dispute. This Court observed: ‘16. The doctrine of lis pendens applies only where the lis is pending before a court. Further pending the suit, the transferee is not entitled as of right to be made a party to the suit, though the court has a discretion to makehim a party. But the transferee pendente lite can be added as a proper party if his interest in the subject-matter of the suit is substantial and not just peripheral. A transferee pendente lite to the extent he has acquired interest from the Defendant is vitally interested in the litigation, where the transfer is of the entire interest of the Defendant; the latter having no more interest in the property may not properly defend the suit. He may collude with the Plaintiff. Hence, though the Plaintiff is under no obligation to make a lis pendens transferee a party, under Order 22 Rule 10 an alienee pendente lite may be joined as party. As already noticed, the court has discretion in the matter which must be judicially exercised and an alienee would ordinarily be joined as a party to enable him to protect his interests. The Court has held that a transferee pendente lite of an interest in immovable property is a representative-in-interest of the party from whom he has acquired that interest. As already noticed, the court has discretion in the matter which must be judicially exercised and an alienee would ordinarily be joined as a party to enable him to protect his interests. The Court has held that a transferee pendente lite of an interest in immovable property is a representative-in-interest of the party from whom he has acquired that interest. He is entitled to be impleaded in the suit or other proceedings where the transferee pendente lite is made a party to the litigation; he is entitled to be heard in the matter on the merits of the case.’ To the same effect is the decision of this Court in Rikku Dev V.Som Dass [ (1976) 1 SCC 103 ”. 11. In Durga Prasad (1 supra), the apex court observed that in a purchaser’s suit for specific performance, where the property has changed hands pending suit, 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. The same principle was reiterated in Ramesh Chandra Chandiok (2 supra). In Dwarka Prasad Singh (3 supra), the Supreme Court held that in a suit for specific performance against a purchaser with notice of a prior agreement-of-sale, the vendor is a necessary party and conveyance has to be executed by him although the subsequent purchaser has also to join so as to pass on title which resides in him to plaintiff. 12. In Kedarnath Lal (4 supra), relied on by 1st respondent the Supreme Court observed : “16. The second ground of attack is that before the proceeding commenced before the Registrar these fields had been attached and therefore, the doctrine of lis pendens again cannot apply. We are unable to accept this argument either. If the property was acquired pendent elite, the acquirer is bound by the decree ultimately obtained in the proceedings pending at the time of acquisition. This result is not avoided by reason of the earlier attachment. Attachment of property is only effective in preventing alienation but it is not intended to create any title to the property. On the other hand, Section 52 places a complete embargo on the transfer of immovable property right to which is directly and specifically in question in a pending litigation. Attachment of property is only effective in preventing alienation but it is not intended to create any title to the property. On the other hand, Section 52 places a complete embargo on the transfer of immovable property right to which is directly and specifically in question in a pending litigation. Therefore the attachment was ineffective against the doctrine. Authority for the clear position is hardly necessary but if one is desired it will be found in Moti Lal V Karrab-ul-Din, (1897) 24 Ind App 170 (PC).” This decision merely deals with effect of a transfer pendente lite and does not deal with issue of impleadment of a transferee pendente lite. 13. In Chappidi Subbareddy (5 supra), a Division Bench of this Court held: “24. From a conspectus of all the aforesaid judgments, touching upon the present aspect, broadly, the following wound emerge; Firstly, for the purpose of impleading a transferee pendent elite, the facts and circumstances should be gone into and basing on the necessary facts, the court can permit such a party to come on record, either under Order I Rule 10 C.P.C. or under Order 22 Rule 10 C.P.C, as a general principle; Secondly, a transferee pendent elite is not entitled to come on record as a matter of right; Thirdly, there is no absolute rule that such a transferee pendent elite, with the leave of the Court should, in all cases, be allowed to come on record as a party (Emphasis added). Fourthly, the impleadment of a transferee pendent elite would depend upon the nature of the suit and appreciation of the material available on record; Fifthly, where a transferee pendente lite does not ask for leave and come on record that would obviously be at his peril, and the suit may be improperly conducted by the plaintiff on record; Sixthly, merely because such transferee pendent elite does not come on record, the concept of his (transferee pendent elite) not being bound by the judgment does not arise and consequently he would be bound by the result of the litigation, though he remains unrepresented; Seventhly, the sale transaction pendent elite is hit by the provisions of Section 52 of the Transfer of Property Act; and Eighthly, a transferee pendent elite, being an assignee of interest in the property, as envisaged under Order 22, Rule 10 C.P.C, can seek leave of the Court to come on record on his own or at the instance of either party to the suit.”(emphasis mine) Thus an application to implead a purchaser pendente lite can be filed even by the plaintiff/purchaser in a suit for specific performance. 14. In P.Vimaladevi (6 supra), a learned Single Judge of this Court held that addition of parties to a suit without any definite purpose is prone to complicate the scope of litigation and that if the plaintiffs have any independent cause of action against the proposed respondents, they can file a separate suit and claim relief. In that case, the suit for declaration of title and recovery of possession of property was filed wherein the defendants set up independent title to the suit schedule property. The defendants thereafter filed an application to implead a party only to elicit information from him about the transactions which led to execution of sale deeds in their favour. The trial Court dismissed the application and the same was confirmed by the High Court stating that if the defendants wanted to elicit any information from a party, they can summon him as a witness but they cannot seek his impleadment. This decision has no application to the facts of the case as such is not the position here. 15. The trial Court dismissed the application and the same was confirmed by the High Court stating that if the defendants wanted to elicit any information from a party, they can summon him as a witness but they cannot seek his impleadment. This decision has no application to the facts of the case as such is not the position here. 15. In Uppalapati Vijayalakshmi (7 supra), a decree of specific performance was declined by the trial Court, but while doing so, the trial Court held that 2nd defendant therein, who has purchased the property from 1st defendant, is not a bonafide purchaser. When this was challenged in appeal, a learned Single Judge of this Court held that the question of the liability of the subsequent purchasers or alienees arises only when the plaintiff is found entitled for a decree of specific performance, and if the Court is of the view that the relief of specific performance cannot be granted against the defendant No.1, it is beyond the power of the Court to consider as to whether the sale transaction in favour of the 2nd defendant is a bona fide one or not and to further hold that the sale transaction is a nominal one. This decision is equally inapplicable as the correctness of the decision of the trial Court in the judgment impugned in this appeal refusing the relief of specific performance is not being decided now. Only the issue whether respondent Nos.2 to 6 can be impleaded in the appeal or not, is being considered. 16. In K. Madhavilatha (8 supra), in a suit filed by 1st respondent against respondent Nos.2 and 3, the petitioners filed applications to implead themselves in the suit which was dismissed by the trial Court. Challenging the same, they filed Civil Revision Petitions in the High Court. This Court held that when an application for impleadment of a party is filed, all that the Court needs to consider is, whether the applicant has made out a prima facie case on his interest in the subject matter of the dispute and whether his presence is necessary for proper and effectual adjudication of the dispute. This Court held that when an application for impleadment of a party is filed, all that the Court needs to consider is, whether the applicant has made out a prima facie case on his interest in the subject matter of the dispute and whether his presence is necessary for proper and effectual adjudication of the dispute. As the petitioners were claiming independent interest in the property, it held that they are not bound by any decree passed in favor of the 1st respondent and it is open for them to institute substantive proceedings to protect their possession and interest over the suit schedule property. In the present case, the proposed parties have obtained interest in the plaint schedule property through the 1st respondent pending appeal and they are not having any independent claim against petitioner or respondent. So this decision is also of no assistance to 1st respondent. 17. Admittedly, the proposed parties have acquired interest in the entire property which is the subject matter of the appeal. In such a situation it is possible that the 1st respondent may not properly defend the appeal or he may collude with the appellant. Although the appellant was under no obligation to make respondent Nos.2 to 6 as parties to the appeal, this Court has discretion to do so, by invoking Order XXII Rule 10 of the Code of Civil Procedure, 1908 as such a course of action would also protect the interest of the respondent Nos.2 to 6. Therefore following the decisions in A.Nawab John and others (9 supra), Thomson Press (India) Limited (10 supra) and Chappidi Subbareddy (5 supra), I hold they ought to be impleaded as parties to the appeal. It is true that Section 52 of the Transfer of Property Act, 1882, would be attracted and the transferees of a property pending disposal of a suit or an appeal would be bound by the result of the suit or appeal. But on the said ground it cannot be held that they need not be impleaded in the appeal. 18. Therefore, I reject the contention of the 1st respondent that the appellant has no locus standi to implead respondent Nos.2 to 6 in view of Section 52 of the Transfer of Property Act, 1882, and that the application A.S.M.P. should be dismissed. 19. 18. Therefore, I reject the contention of the 1st respondent that the appellant has no locus standi to implead respondent Nos.2 to 6 in view of Section 52 of the Transfer of Property Act, 1882, and that the application A.S.M.P. should be dismissed. 19. For the above reasons, this application is allowed, and respondent Nos.2 to 6 herein are impleaded as respondent Nos.2 to 6 in the appeal. No costs.