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2018 DIGILAW 123 (AP)

K. v. Rajasekhar VS M/s. Kedarnath Coop. Housing Society Ltd.

2018-02-16

U.DURGA PRASAD RAO

body2018
ORDER : The important point for consideration in this leave application is, whether the purchasers of the suit property from one of the parties to the suit, who have not come on record either in the suit or during the First Appeal, have a right to file Second Appeal independently, inspite of the Second Appeal filed by their vendor is pending? 2. The petitioners who seek leave to file the Second Appeal are the purchasers either from the 2nd defendant or his vendees pending the suit and First Appeal. 3. The factual matrix of the case in brief is thus: a. The plaintiff filed the suit against defendants 1 to 6 seeking specific performance of agreement of sale dated 11.03.1982 executed by D.1 and for a declaration that the sale deeds executed by D.1 with the connivance of D.3 in favour of D.2 and D.4 and subsequent sale deeds executed by D.2 in favour of D.5 and D.6 pending the suit as non-est in law and for their cancellation. b. The defendants have contested the suit and the further details of plaint and written statement are not much germane at this juncture. c. The suit was decreed by the Trial Court holding that plaintiff was entitled to decree for specific performance and D.2, D.4 to D.6 were not bonafide purchasers for value without notice. d. D.1 filed AS No.10/2006 and D.2 and D.4 filed AS No.8/2006 and the learned V Additional District Judge (FTC), Ranga Reddy District by a common judgment, dismissed both the appeals confirming the judgment of the Trial Court. e. Aggrieved, D.1 filed SA No.643/2014 and D.2 and D.4 also filed SA No.846/2014 before this Court which were admitted and pending. 4. At this juncture, the petitioners filed SA (SR) No.26761/2015 and applied for leave to file the said appeal. Their case is that some of them purchased tiny plots from the 2nd defendant and other petitioners purchased plots from the vendees of the 2nd defendant either during the pendency of the suit or the First Appeal for valuable consideration without any notice of the alleged Ex.A.1 agreement to sell or the suit proceedings. Most of them have constructed compound walls and basements around their respective plots and some of them have raised even bigger structures. The plots were clearly divided with 80ft inner roads. Most of them have constructed compound walls and basements around their respective plots and some of them have raised even bigger structures. The plots were clearly divided with 80ft inner roads. While the matter stood thus, before filing the appeal, the plaintiff started painting the compound walls of the petitioners in a stealthy manner during the night time in the month of July, 2015. Further, the plaintiff had erected a temporary structure on 40ft road overnight and on the enquiry made by the petitioners, they came to know about the particulars of the suit and First Appeal. The petitioners would contend that the judgment obtained by the plaintiff is illegal and liable to be set aside. When the petitioners questioned the 2nd defendant, he started giving evasive replies and suggesting compromise with the plaintiff from which it would appear, both of them colluded to defraud the petitioners who are the bonafide purchasers of the plots. Hence in order to protect the interest of the petitioners, the Second Appeal is filed by them challenging the decree and judgment in AS No.8 of 2006. Since they are not parties in the original proceedings, leave is sought for. 5. The 1st respondent/plaintiff filed counter and opposed the petition inter alia contending that the appeal is a collusive one and the petitioners who ought to have joined as parties in the suit and First Appeal but did not do so, have no right to file the Second Appeal. 6. Heard arguments of Sri M.V. Durga Prasad, learned counsel for petitioners and Sri P. Shiv Kumar, learned counsel for 1st respondent. 7. Learned counsel for petitioners strenuously argued that the petitioners are the bonafide purchasers of small plots for valuable consideration either from 2nd defendant or his vendees without notice of the suit proceedings and they have also raised structures and they have come to know about the litigation before filing of the Second Appeal when the plaintiff started painting their walls. Referring to Sec.146 and Order 22 Rule 10 CPC, learned counsel strenuously argued that merely because the petitioners did not seek to add themselves as parties during the suit or First Appeal, that does not mean their request to accord leave to file an independent Second Appeal should be rejected. Referring to Sec.146 and Order 22 Rule 10 CPC, learned counsel strenuously argued that merely because the petitioners did not seek to add themselves as parties during the suit or First Appeal, that does not mean their request to accord leave to file an independent Second Appeal should be rejected. Since the petitioners are purchasers pendente lite and bound by the decree to be passed ultimately and as their valuable rights will be jeopardised unless they challenge the decree and judgment in First Appeal by way of filing the Second Appeal, leave may be granted to them. He placed reliance on the following decisions: 1. Joy vs. Narayana Menon, 1999 SCC Online Ker 250 : (1999) 2 KLT 503 2. Raj Kumar vs. Sardari Lal and others, (2004) 2 SCC 601 3. Amit Kumar Shaw and another vs. Farida Khatoon and another, AIR 2005 SC 2209 (1) : (2005) 11 SCC 403 4. K. Srinivasalu vs. Jaldu Subramanyam Chetty and others, 2013 (6) ALD 784 8. Per contra, learned counsel for respondents opposed the leave on the main plank of argument that the petitioners in collusion with the 2nd defendant have purchased the pockets of suit property from the 2nd defendant pending the suit and First Appeal, knowing fully well about the pending litigation between the plaintiff and defendants. Hence, they cannot be termed as bonafide purchasers for value without notice. Their rights are susceptible to the decree, ultimately to be passed in the Second Appeal already filed by the 2nd defendant. If at all, they wanted to protect their rights, they ought to have come on record either in the suit or in the First Appeal but they did not choose to do so. Now, only with a view to create multiplicity of proceedings and retard the proceedings in the Second Appeal filed by the 2nd defendant, they have filed the instant Second Appeal. Learned counsel would strenuously argue that the petitioners have no independent right dehors the 2nd defendant and hence, they cannot institute a Second Appeal separately. Now, only with a view to create multiplicity of proceedings and retard the proceedings in the Second Appeal filed by the 2nd defendant, they have filed the instant Second Appeal. Learned counsel would strenuously argue that the petitioners have no independent right dehors the 2nd defendant and hence, they cannot institute a Second Appeal separately. At best, they may request the Court to permit them to join as parties in the Second Appeal already filed by the 2nd defendant and observe the proceedings as a watchdog and if they apprehend that the 2nd defendant has not been scrupulously prosecuting the appeal and thereby their rights are jeopardised, they may, then, seek the permission of the Court to prosecute the Second Appeal with the pleas that are available to the 2nd defendant. Sans that, an independent Second Appeal at the instance of the purchasers of the 2nd defendant is against the canons of the law, that too, when their vendors appeal is pending before the Court for adjudication. He placed reliance on the decision in Amit Kumar Shaw and another vs. Farida Khatoon and another (3 supra). 9. Heard both sides. 10. The admitted facts are that the petitioners are the purchasers pending suit and First Appeal either directly from the 2nd defendant or from his vendees. They have not chosen to come on record as parties before the Courts below. Ofcourse, their contention is that they were bonafide purchasers for value without notice of the pending litigation and they came to know about it very recently. Their knowledge or ignorance about the pending litigation is of no much consequence in view of Section 52 of Transfer of Property Act, which propounds the doctrine of lis pendens expressed in maxim ut lite pendente nihil innoveture (during a litigation nothing new should be introduced). The effect of transfer pendente lite and the rights and obligations of such third party purchasers is no more a virgin field to be explored. 11. (a) With regard to the doctrine of lis pendens, the Apex Court in Raj Kumars case (2 supra), observed thus: Para 5: The doctrine of lis pendens expressed in the maxim ut lite pendente nihil innovetur (during a litigation nothing new should be introduced) has been statutorily incorporated in Section 52 of the Transfer of Property Act, 1882. 11. (a) With regard to the doctrine of lis pendens, the Apex Court in Raj Kumars case (2 supra), observed thus: Para 5: The doctrine of lis pendens expressed in the maxim ut lite pendente nihil innovetur (during a litigation nothing new should be introduced) has been statutorily incorporated in Section 52 of the Transfer of Property Act, 1882. A defendant cannot, by alienating property during the pendency of litigation, venture into depriving the successful plaintiff of the fruits of the decree. The transferee pendente lite is treated in the eye of the 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 (emphasis supplied). In case of an assignment, creation or devolution of any interest during the pendency of any suit, Order 22 Rule 10 CPC confers a discretion on the court hearing the suit to grant leave for the person in or upon whom such interest has come to vest or devolve to be brought on record. Bringing of a lis pendens transferee on record is not as of right but in the discretion of the court. Though not brought on record the lis pendens transferee remains bound by the decree. b. In Amit Kumar Shaws case (3 supra), the Apex Court observed as follows: Para 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 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. 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 XXII 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. 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. c. In A. Nawab John and others vs. V.N. Subramaniyam, (2012) 7 SCC 738 the Apex Court observed thus: Para 18: It is settled legal position that the effect of Section 52 is not to render transfers effected during the pendency of a suit by a party to the suit void; but only to render such transfers subservient to the rights of the parties to such suit, as may be, eventually, determined in the suit. In other words, the transfer remains valid subject, of course, to the result of the suit. The pendente lite purchaser would be entitled to or suffer the same legal rights and obligations of his vendor as may be eventually determined by the court. 12. The mere pendency of a suit does not prevent one of the parties from dealing with the property constituting the subject-matter of the suit. The section only postulates a condition that the alienation will in no manner affect the rights of the other party under any decree which may be passed in the suit unless the property was alienated with the permission of the court. The section only postulates a condition that the alienation will in no manner affect the rights of the other party under any decree which may be passed in the suit unless the property was alienated with the permission of the court. (Sanjay Verma v. Manik Roy [(2006) 13 SCC 608 : AIR 2007 SC 1332 ], SCC p. 612, para 12.) Para 19: Such being the scope of Section 52, two questions arise: whether a pendente lite 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? Para 20: This Court on more than one occasion held that when a pendente lite 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 pendente lite purchaser should be given an opportunity to protect his rights. In the same decision, the Apex Court in Para 21 observed that there is some divergence of opinion regarding a question whether a pendente lite purchaser is entitled as a matter of right to get impleaded in the suit. It referred Amit Kumar Shaws case (3 supra), wherein it was held that the transferee is not entitled as of right to be made as 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 party if his interest in the subject matter of the suit is substantial and not just peripheral. In A. Nawab Johns case (5 supra), the Apex Court however held that its preponderance of opinion was that a pendente lite purchasers application for impleadment should normally be allowed or considered liberally. d. In K. Srinivasulus case (4 supra), a learned Single Judge of this Court while considering A. Nawab Johns case (5 supra) and other cases, held that pendente lite transferee have to be impleaded as parties to the appeal. e. In Joys case (1 supra) more or less similar view was expressed. In that case, it appears, since the original vendors have not preferred the appeal, purchasers were permitted to file the appeal. 12. e. In Joys case (1 supra) more or less similar view was expressed. In that case, it appears, since the original vendors have not preferred the appeal, purchasers were permitted to file the appeal. 12. From the above precedential jurisprudence, the following points would emerge: i. The effect of Sec.52 of T.P Act is not to render transfers pendency of suit by a party void but only render such transfers subservient to the result of the suit and transferee who is a representative in interest of his transferor is bound by the decree. ii. Whether or not the transferee is joined as a party to the suit or other proceedings, nevertheless he is bound by the decree. iii. Though the transferee cannot as a matter of right claim to be impleaded as a party to the suit or proceedings, still the pendente lite purchasers application for impleadment should normally be allowed or considered liberally. iv. It is to be noted that in the decisions referred supra, the pendente lite transferees were either permitted to be impleaded as parties in the pending matters or permitted to file appeals when the partyvendors did not file the appeals. 13. When the above precedential jurisprudence is applied to the instant case, here the 2nd defendant has already filed SA No.846/2014 and the same is pending. Thus it is not a case where the vendor has not taken out the matter in appeal. In that view, the petitioners cannot be permitted to institute a separate appeal as their cause is not dehors of the 2nd defendant as rightly argued. On the other hand, the petitioners can seek for their impleadment as parties in the aforesaid appeal and watch the proceedings and in the event of their arriving at a righteous apprehension that the 2nd defendant is not prosecuting the appeal in the proper manner and thereby causing prejudice to their interest, they can seek permission of this Court to prosecute the appeal. 14. With the above observations, this leave petition is dismissed. Consequently, the Registry is directed to return the appeal.