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2017 DIGILAW 715 (JK)

Joginder Kour v. Gandharb Singh

2017-08-22

JANAK RAJ KOTWAL

body2017
JUDGMENT: Janak Raj Kotwal, J. 1. This is appellants' appeal against order dated 15.04.2013, whereby learned trial court has dismissed an application under Order 22 Rule 10 Code of Civil Procedure (CPC) filed by appellant No. 1 for his substitution as plaintiff on account of the pendente lite sale of the suit property by the plaintiff (appellant No. 2) to him. Heard learned Senior Advocate, Mr. L.K. Sharma appearing on behalf of the appellants and Mr. R.P. Sharma, Advocate appearing on behalf of the respondents. 2. The suit filed before the trial court by the plaintiff is for declaration to the effect that he is owner of the suit house and that the compromise deed dated 08.02.1986 between him and respondent (defendant) No. 1 in civil suit, titled, Des Raj v. Capt. Gandharb Singh and compromise decree dated 08.02.1986 passed by the Sub Registrar (Munsiff), Jammu in that suit are null and void. In addition, the plaintiff has sought possession of the house as consequential relief. The appellant No. 1 sought substitution as plaintiff in terms of Order 22 Rule 10 CPC on the ground that during the pendency of the suit he has purchased the suit property from the plaintiff vide sale deed dated 03.02.2012, registered on 04.02.2012 so there is assignment of the interest of the plaintiff in the suit property in his favour and she can contest the suit more effectively. 3. Defendants (herein respondents) opposed the application before the trial court taking the plea that the alleged sale deed has been executed in breach of the order directing maintenance of status quo passed by the court. The sale deed ex facie is a sham document and relates to a property, which is not in existence. Learned trial court noticed that possession of the suit house has been sought by the plaintiff as a consequential relief. He was not in possession of the suit property of which he executed the sale deed and that the trial court by its order dated 04.09.1986 had directed the maintenance of status quo on spot. Learned court also noticed that in the sale deed in question the plaintiff (vendor) has declared himself as full owner in possession of the suit property and sale deed also shows that possession was given to the vendee. Learned court also noticed that in the sale deed in question the plaintiff (vendor) has declared himself as full owner in possession of the suit property and sale deed also shows that possession was given to the vendee. Learned trial court, therefore, recorded following observations and dismissed the application: "So on the face, this document is sham document as plaintiff is admittedly not in possession of property. This document further has been executed when there was status quo and no permission has been sought from court in term of section 52 of T.P. Act. When document sale deed is invalid and sham, it does not confer any right upon applicant-Joginder Kour, so as to become party in term of order 22 Rule 10 C.P.C. I have carefully gone through law cited by applicant. There is no dispute with regard to law, but is not applicable in present set of circumstances." 4. Learned Senior Advocate appearing on behalf of the appellants submitted that the doctrine of lis pendens contemplated under section 52 of the Transfer of the Property Act (for short the TPA) does not annul the transaction/transfer of the property made during the pendency of a lis. Learned Senior Advocate relied upon a Supreme Court judgment in Thomas Press (India) Ltd. v. Nanak Builders and Investors P. Ltd. & Ors., AIR 2013 SC 2389 . Mr. Sharma argued that learned trial court has fallen in error by returning the finding in regard to the validity of the sale deed, while dealing with the application for substitution. 5. Per contra, Mr. R.P. Sharma, learned counsel appearing on behalf of the respondents argued that the sale deed is ex facie illegal and a sham document. Learned counsel sought to point out that admittedly the original plaintiff (vendor) was out of possession of the suit house and has sought restoration of the possession as consequential relief, whereas the sale deed would show that the vendee has been placed in possession by the vendor. Reading out section 52 of the TPA, learned counsel sought to point out that the doctrine of lis pendens imposes complete ban on the transfer of the subject matter of the suit by any of the parties to the suit during pendency of the suit and any suit sale is illegal and void ab initio. 6. Reading out section 52 of the TPA, learned counsel sought to point out that the doctrine of lis pendens imposes complete ban on the transfer of the subject matter of the suit by any of the parties to the suit during pendency of the suit and any suit sale is illegal and void ab initio. 6. It is not denied that appellant No. 2 (plaintiff) has sold the suit property to appellant No. 1 during pendency of the suit in regard to the same property filed by him against the respondents (defendants). The sale, therefore, is hit by the doctrine of lis pendens within the meaning of section 52 of the TPA. 7. The doctrine of lis pendens, which is based on English common law maxim "ut lite pendente nihil innoventure", that is, during litigation nothing new should be introduced, aims at prevention of multiplicity of litigation. It is not denied also that at the time of the sale of the suit property by appellant No. 2 to appellant No. 1, the order of interim injunction passed by the trial court directing maintenance of status quo in regard to the suit property was in operation and in that it can be said that the sale was made in breach of the interim injunction issued by the trial court. It is in such a factual backdrop, that the question raised for consideration of this Court in this appeal is, whether the learned trial court has erred in refusing the appellant No. 1 (vendee) impleadment as plaintiff in the suit filed by appellant No. 2 (vendor). 8. The doctrine of lis pendens imposes restriction on pendente lite transfer of the suit property in order to avoid multiplicity of litigation so that litigation does not become interminable if any of the parties to an action could create any right in favour of a third party during the pendency of the suit. It is, however, well settled that the effect of pendente lite transfer of interest in the suit property does not wipe out such a transfer altogether nor does it annul or render it illegal. It is, however, well settled that the effect of pendente lite transfer of interest in the suit property does not wipe out such a transfer altogether nor does it annul or render it illegal. The legal consequence of pendente lite transfer would be that, he who purchases during the pendency of an action is held bound by the judgment that may be passed in favour of or against the person from whom he drives title and the general principle that judgment of a court binds only the parties or their privies will not apply. This legal position in regard to section 52 of the TPA has been stated by the Supreme Court as early as in the year 1956 in Nagubai v. Shama Rao, AIR 1956 SC 593 in terms that "the effect of section 52 is not to wipe it out altogether but to subordinate it to the rights based on the decree in the suit. As between the parties to the transaction, however, it was perfectly valid, and operated to vest the title of the transferor in the transferee." 9. The effect of pendente lite transfer came to be considered by the Supreme Court recently in Thomson Press (India) Ltd. v. Nanak Builders and Investors P. Ltd. (supra). Supreme Court in this case has in addition considered the effect of a pendente lite transfer made in breach of an injunction issued by the court in which the lis is pending. It has been reiterated that section 52 of the TPA does not annul or render void ab initio the pendente lite transfer of the suit property, but renders it subservient to the rights of the parties to the litigation. The pendente lite transfer would not be illegal even if it is made in breach of an order of temporary injunction in force at the time of such transfer. Paragraphs 24 and 52 of the judgment are relevant and are extracted: "24. It is well settled that the doctrine of lis pendens is a doctrine based on the ground that it is necessary for the administration of justice that the decision of a court in a suit should be binding not only on the litigating parties but on those who derive title pendente lite. It is well settled that the doctrine of lis pendens is a doctrine based on the ground that it is necessary for the administration of justice that the decision of a court in a suit should be binding not only on the litigating parties but on those who derive title pendente lite. The provision of this Section does not indeed annul the conveyance or the transfer otherwise, but to render it subservient to the rights of the parties to a litigation. Discussing the principles of lis pendens, the Privy Council in the case of Gouri Dutt Maharaj v. Sukur Mohammed & Ors., AIR 1948 PC 147 , observed as under:" "52. There is, therefore, little room for any doubt that the transfer of the suit property pendente lite is not void ab initio and that the purchaser of any such property takes the bargain subject to the rights of the plaintiff in the pending suit. Although, the above decisions do not deal with a fact situation where the sale deed is executed in breach of an injunction issued by a competent Court, we do not see any reason why the breach of any such injunction should render the transfer whether by way of an absolute sale or otherwise ineffective. The party committing the breach may doubtless incur the liability to be punished for the breach committed by it but the sale by itself may remain valid as between the parties to the transaction subject only to any directions which the competent Court may issue in the suit against the vendor." 10. The pendente lite transferee of the suit property therefore, acquires a legal right in the property purchased by him and is bound by the judgment and the decree passed in the suit as the vendor would had been, even if he is not impleaded in the suit. However, as there is a likelihood of the vendor pendente lite losing interest in the litigation after having transferred the property to a third party and the transferee suffering prejudice so order 22 Rule 10 makes a provision enabling such a transferee to seek impleadment in the pending suit. However, as there is a likelihood of the vendor pendente lite losing interest in the litigation after having transferred the property to a third party and the transferee suffering prejudice so order 22 Rule 10 makes a provision enabling such a transferee to seek impleadment in the pending suit. In Raj Kumar v. Sardari Lal & Ors., (2004) 2 SCC 601 , Supreme Court has held that "transferee pendente lite is treated in the eye of law as a representative-in-interest of the judgment-debtor and held bound by the decree passed against the judgment-debtor though neither has the defendant chosen to bring the transferee on record by apprising his opponent and the court of the transfer made by him nor has the transferee chosen to come on record by taking recourse to Order 22 Rule 10 CPC". 11. Order 22 Rule 10 CPC enables a pendente lite transferee to seek leave of the court for being brought on record as party to the suit or proceeding. It is well settled, however, that Rule 10 confers a discretion on the court to grant leave for such a transferee to be brought on record but does not confer a right on the transferee to be brought on record. The right of a transferee pendente lite to seek addition as a party to the suit has also been considered by the Supreme Court in Thomson Press (India) Ltd. (supra). The Court has referred with approval to an earlier decision of the Court in Khemchand Shankar Choudhari v. Vishnu Hari Patil, (1983) 1 SCC 18 in terms that "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 legatee of a party who dies during a pendency of a suit or a proceeding. Any such heir, legatee or transferee cannot be turned away when she applied for being added as a party to the suit". Reference has also been made to another earlier decision of the Court in Amit Kumar Shah v. Farida Khatoon, (2005) 11 SCC 403 in terms that "a transferor pendente lite may not even defend the title in 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." In Amit Kumar Shah's case, the Supreme Court has held also that "the court has discretion in the matter which must be judicially exercised and an alienee would ordinarily be joined as party to enable him to protect his interest." It is further held that "transferee pendente lite of an interest in immovable property is a representative-in-interest of the party from whom he has acquired the 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". 12. In the case on hand a comparison of the suit property described in the plaint and the subject matter of the sale as described in the sale deed would show that the appellant No. 2 (original plaintiff) has sold the entire suit property to appellant No. 1. This sale is not invalidated or rendered illegal by virtue of the same having been effected during pendency of the suit or in breach of the interim injunction directing maintenance of status quo passed by the trial court. However, the sale is subservient to the result of the suit. It being a sale by the plaintiff, the transferee (vendee) even if the suit is granted will get only what would have been available to the plaintiff under the judgment and decree. It, however, needs to be noticed that the original plaintiff having sold the entire suit property, there is likelihood of his (now his LRs) losing interest in the litigation to the prejudice of the vendee. Not only that, if the suit is allowed without impleading the vendee as party, there is possibility of the original plaintiff (now his LRs) having no interest in execution of the decree and the vendee facing legal complications in getting the decree executed in his favour. Not only that, if the suit is allowed without impleading the vendee as party, there is possibility of the original plaintiff (now his LRs) having no interest in execution of the decree and the vendee facing legal complications in getting the decree executed in his favour. It would be, therefore, in the interest of justice and to avoid the multiplicity of the litigation that the appellant No. 1 (vendee) is impleaded as party-plaintiff to contest the suit from the stage the interest in the suit property has been transferred to him by virtue of the sale deed executed in his favour by the original plaintiff. Learned trial court has fallen in error in refusing impleadment by taking the view that sale has been effected without seeking permission of the court during currency of the order directing maintenance of status quo and that the sale deed is invalid and sham. 13. Viewed thus, this appeal has merit and is allowed. The impugned order passed by the learned trial court is set aside and appellant No. 1 is impleaded as plaintiff in the suit pending before the trial court. Disposed of.