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Sunday, May 19, 2013

Order 1 Rule 10 of CPC for impleadment as defendants in a suit for specific performance of contract being Suit No. 3426 of 1991 filed by plaintiff-Respondent No.1.= 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 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. 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. 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"= The appeal is allowed and the appellant added as party defendant to the suit in question, in terms of the signed judgment.


IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION



Civil Appeal NO. 1518 of 2013

(Arising out of Special Leave Petition (Civil) No. 24159 of 2009)





Thomson Press (India) Ltd.
.....Appellant (s)



Vs.



Nanak Builders & Investors P.Ltd. & Ors. .....Respondent(s)







J U D G M E N T



M.Y. EQBAL, J.



Leave granted.



2. This appeal is directed against the order passed by the
division bench of the High Court of Delhi in FAO No. 295 of 2008 affirming
the order of the Single Judge and rejecting the petition filed by the
appellant under 
Order 1 Rule 10 of CPC for impleadment as defendants in a
suit for specific performance of contract being Suit No. 3426 of 1991 filed by plaintiff-Respondent No.1.


3. Although the case has a chequered history, the brief facts of
the case can be summarized as under :-

4. Mrs. Lakhbir Sawhney, Respondent No. 2 and son Mr. H.S.
Sawhney, the predecessor of Respondent No. 3 (a) to (d) were the owners of
the property known as "Ojha House" / "Sawhney Mansion", F-Block, Connaught
Place, New Delhi. (These respondents shall be referred as "the Sawhneys"
for the sake of convenience). M/s Nanak Builders and Investors Pvt. Ltd.,
Respondent No.1 is the plaintiff in the Suit. The plaintiff-Respondent
No.1 filed a suit in the High Court of Delhi being Suit No. 3426 of 1991
against the defendants-respondents Sawhneys' for a decree for specific
performance of agreement. The case of the plaintiff-respondent is that on
29.05.1986 the defendant-respondent entered into an agreement with the
plaintiff-respondent for sale of an area measuring about 4000 sq.ft. on the
1st Floor of F-26, Connaught Place, New Delhi on the consideration of Rs.
50 lakhs. Out of the said consideration, a sum of Rs. 1 lakh was paid by
the plaintiffs to the defendants vide cheque no. 0534224 drawn from Union
Bank of India, New Delhi. The aforesaid property shall be referred to as
the "suit property" which was in the tenancy of M/s Peerless General
Finance Company Limited. In the said agreement it was agreed inter alia
that if the premises is vacated and the plaintiff did not complete the sale
on the defendant, getting all permissions, sanctions etc., the defendant
shall have the right to forfeit the money. Plantiff's further case was
that M/s Peerless General Finance Company Limited has given a security
deposit of Rs. 25 lakhs approximately and did not vacate the premises and
called upon the defendants that they will vacate the premises only when the
defendants make the payment, that too on the expiry of the lease which
expired around September, 1990. It is alleged by the plaintiff that during
the intervening period, it has been making part payments from time to time
out of the said consideration amount. In May 1991, the defendants got the
said suit premises vacated from M/s Peerless General Finance Company
Limited. The plaintiffs have immediately approached the defendants to
receive the balance consideration but the same was avoided by the
defendant. A public notice was, therefore, issued in 'The Hindustan Times'
, New Delhi so that the defendants 'Sawhneys' do not sell, transfer or
alienate the said property to any other person. Lastly, it was alleged by
the plaintiff that despite being always ready and willing to complete the
transaction, the defendant avoided to obtain requisite permission /
sanction and clearance, hence the suit was filed. During the intervening
period some more development took place. One Living Media India Limited,
(in short LMI), said to be a group company of the Appellant M/s Thomson
Press (India) Limited offered the defendant-respondent to take the suit
premises on lease, some time in the year 1988. The defendants Sawhneys'
assured the LMI that lease would be granted after M/s Peerless vacated the
suit property. LMI, accordingly, sent a cheque to the defendants-Sawhneys'
as earnest money in respect of the lease. However, when Sawhneys' wanted
to resile from the agreed terms with LMI, a suit was filed by LMI being
Suit No. 2872 of 1990 against Sawhneys' in Delhi High Court for perpetual
injunction restraining the Sawhneys' from parting with possession of the
premises to any third party. The High Court passed the restrain order on
19.09.1990 with regard to the suit property and appointed a commissioner to
report as to who is in possession of suit premises. igh Court for perpetual
injunction restraining theSawhH

It appears that the aforesaid suit filed by LMI was compromised and an
order was passed on 08.04.1991 whereby, as per the compromise, the suit
property was leased out by defendant-Sawhneys' in favour of LMI and
possession of the property was given to it.

5. On 01.11.1991, the plaintiff-M/s Nanak Builders in the
meantime filed a suit against the defendant-respondent Sawhneys' being suit
no. 3426/1991 for specific performance of agreement to sell dated
29.05.1986. In the said suit pursuant to summons issued against the
defendants- Sawhneys' one Mr. Raj Panjwani, Advocate accepted notice on
behalf of Sawhneys' and stated before the Court that possession of the flat
in question is not with the defendants, rather with M/s LMI which delivered
to them by virtue of the lease. Mr. Panjwani further stated that till
disposal of the suit the property in question would not be transferred or
alienated by the defendants. The defendants- Sawhneys' also filed a
written statement in the said suit. It appears that the defendants-
Sawhneys' took loan from Vijaya Bank and to secure the loan, equitable
mortgage was created in respect of the suit property. In 1977 a suit was
filed by the Bank in Delhi High Court for recovery and redemption of the
mortgaged property. The said suit was decreed on 14.10.1998 and recovery
certificate was issued by DRT, Delhi. LMI, a group of the appellant
Company intervened and settled the decree by agreeing to deposit the loan
amount of Rs.1.48 crores. The LMI cleared all the dues, income tax
liability etc., of Sawhneys' for sale of the property in favour of LMI and
its associates. Finally, in between 31.01.2001 and 03.04.2001 five sale
deeds were executed by defendants-Sawhneys' in favour of the present
appellant herein M/s Thomson Press India Limited. On the basis of those
sale deeds the appellant moved an application under Order 1 Rule 10 CPC for
impleadment as defendants in a suit for specific performance filed by
Respondent No.1 herein M/s Nanak Builders and Investors Pvt. Ltd.

6. The learned Single Judge of the Delhi High Court after
hearing the parties dismissed the application on the ground that there was
an injunction order passed way back on 04.11.1991 in the suit for specific
performance restraining the defendants-Sawhneys' from transferring or
alienating the suit property passed, the purported sale deeds executed by
the defendants in favour of the appellant was in violation of the
undertaking given by the respondents which was in the nature of injunction.
Aggrieved by the said order, the appellant filed an appeal being FAO
No.295 of 2008 which was heard by a Division Bench. The Division Bench
affirmed the order of the Single Judge and held that in view of the
injunction in the form of undertaking given by the respondents-Sawhneys'
and recorded in the suit proceedings, how the property could be purchased
by the appellants in the year 2008. The appellant aggrieved by the
aforesaid orders filed this Special Leave Petition.

7. Mr. Sunil Gupta, learned senior counsel appearing for the
appellant assailed the impugned orders as being illegal, erroneous in law
and without jurisdiction. Learned senior counsel firstly contended that
the appellant being the purchaser of the suit property is a necessary and
proper party for the complete and effective adjudication of the suit.
According to him, the denial of impleadment will be contrary to the
principles governing Order 1 Rule 10 (2) of the CPC though he submitted
that impleadment as a party is not a matter of right but a matter of
judicial discretion to be exercised in favour of a necessary and proper
party. Ld. Senior counsel further submitted that where a subsequent
purchaser has purchased a suit property and is deriving its title through
the same vendor then he would be a necessary party provided it has
purchased with or without notice of the prior contract. He further
submitted that after one transaction a pendency of the suit arising there
from, Section 52 of the Transfer of Property Act does not prohibit the
subsequent transaction of transfer of property nor even declares the same
to be null and void. Ld. Senior counsel, however, has not disputed the
legal proposition that the court would be justified in denying impleadment
at the instance of the applicant who has entered a subsequent transaction
knowing that there is a court injunction in a pending suit restraining and
prohibiting further transaction or alienation of the property. Ld. Senior
counsel put heavy reliance on the decisions of the Supreme Court in
Kasturi v. Iyyamperumal & Ors. 2005(6) SCC 733, for the proposition
that an application by the subsequent purchaser for impleadment in a suit
for specific performance by a prior transferee does not alter the nature
and character of the suit and such a transferee has a right and interest to
be protected and deserves to be impleaded in the suit.

8. Mr. Gupta, strenuously argued that High Court has not
considered the question whether the appellant-purchaser had any knowledge
of the order of injunction dated 04.11.1991 before entering the sale
transaction in 2001. He has submitted that even assuming that Sawhneys'
had such a knowledge, the same cannot be held as an objection to the
exercise of judicial discretion in favour of the appellant being impleaded
in the suit on the application of the appellant itself.

9. Per contra, Mr. Mahender Rana, learned counsel appearing
for Respondent No.1 firstly contended that the suit is at the stage of
final hearing and almost all the witnesses have been examined and at this
stage the petition for impleadment cannot be and shall not be allowed. Ld.
Counsel drew our attention to the legal notice dated 24.06.1990 and the
notice dated 12.02.1990 published in the newspaper and submitted that not
only the Sawhneys' but the appellant and its sister concern had full notice
and knowledge of the pendency of the suit and the order of injunction on
the basis of the undertaking given by Sawhneys' that the suit property
shall not be assigned or alienated during the pendency of the suit.
Learned counsel further contended that as a matter of fact the vendor
Sawhneys' had committed fraud by incorporating in the sale deed that there
was no agreement or any injunction passed in any suit or proceedings. In
that view of the matter the application for impleadment has been rightly
rejected by the High Court. He placed reliance on Vidhur Impex and Traders
Pvt. Ltd. v. Tosh Apartments Pvt. Ltd. & Ors. 2012 (8) SCC 384 and Surjit
Singh and Others v. Harbans Singh and Others (1995) 6 SCC 50.

10. Before discussing the decision of the Supreme Court relied
upon by the parties, we would like to highlight some of the important facts
and developments in the case which are not disputed by the parties.

11. As noted above, plaintiff-respondent No.1 filed the suit
for specific performance on 01.11.1991 against the defendants Sawhneys for
the specific performance of the agreements dated 29.05.1986. In the said
suit, the defendants Sawhneys through Mr. Raj Panjwani, Advocate accepted
summons on their behalf and filed vakalatnama. The said Advocate Mr.
Panjwani, inter-alia, stated before the Court that the defendants would not
transfer or alienate the flat in question. The order dated 04.11.1991 was
incorporated in the order sheet as under:

"Mr. Panjwani accepts notice. Mr. Panjwani states that the
possession of the flat in question is not with the defendants. The
possession is with M/s. Living Media India Limited which was
delivered to them under the orders of this Court. Mr. Panjwani
states that till the disposal of this application the defendants
would not transfer or alienate the flat in question. Let the reply
be filed within 6 weeks with advance copy to the counsel for the
plaintiff, who may file the rejoinder within 2 weeks thereafter.
List this I.A. for disposal on 10.3.1992."





12. It is also not in dispute that before the institution of
the suit the plaintiff-respondent got a notice published in the newspaper
on 12.02.1990 in Hindustan Times, Delhi Edition. When this came to the
notice of the appellant, the sister concern of the appellant, namely, M/s.
Living Media India Limited sent a legal notice to the defendants Sawhneys'
dated 24.06.1990 and called upon him to execute the lease deed in respect
of the suit property in terms of the agreement. In the said notice dated
24.06.1990 the sister concern of the appellant in paragraph 8 stated as
under:

"That a Public Notice appeared in the Hindustan Times
Delhi Edition on 12.2.1990. As per this notice one M/s Nanak
Buildings and Investor Pvt.Ltd. claim that you have entered into
an Agreement to sell the premises in question to them. A copy of
this notice is being endorsed to their counsel mentioned in the
Public Notice. My client further learns that you have approached a
number of property brokers also for the disposal of the property."






13. The question, therefore, that falls for consideration is
as to whether if the appellant who is the transferee pendente lite having
notice and knowledge about the pendency of the suit for specific
performance and order of injunction can be impleaded as party under Order 1
Rule 10 on the basis of sale deeds executed in their favour by the
defendants Sawhneys'.

14. Before coming to the question involved in the case, we
would like to discuss the decisions of this Court relied upon by the
parties.

15. In the case of Anil Kumar Singh vs. Shivnath Mishra
alias Gadasa Guru (1995) 3 SCC 147, in a suit for specific performance of
contract a petition was filed under Order 6 Rule 17 CPC seeking leave to
amend the plaint by impleading the respondent as party defendant in the
suit. The contention of the petitioner was that the vendor had colluded
with his sons and wife and obtained a collusive decree in a suit under the
U.P. Zamindari Abolition and Land Reforms Act. It was contended that by
operation of law they became the co-sharers of the property to be conveyed
under the Agreement and, therefore, he is a necessary party. The trial
court dismissed the petition and on revision the High Court of Allahabad
affirmed the order. In an appeal this Court, refused to interfere with
the order and observed.

"In this case, since the suit is based on agreement of
sale said to have been executed by Mishra, the sole defendant in
the suit, the subsequent interest said to have been acquired by
the respondent by virtue of a decree of the court is not a matter
arising out of or in respect of the same act or transaction or
series of acts or transactions in relation to the claim made in
the suit."




"The question is whether the person who has got his
interest in the property declared by an independent decree but not
a party to the agreement of sale, is a necessary and proper party
to effectually and completely adjudicate upon and settle all the
question involved in the suit. The question before the court in a
suit for the specific performance is whether the vendor had
executed the document and whether the conditions prescribed in the
provisions of the Specific Relief Act have been complied with for
granting the relief of specific performance."




"Sub-rule(2) of Rule 10 of Order 1 provides that the Court
may either upon or without an application of either party, add any
party whose presence before the Court may be necessary in order to
enable the Court effectually and completely to adjudicate upon and
settle all questions involved in the suit. Since the respondent
is not a party to the agreement of sale, it cannot be said that
without his presence the dispute as to specific performance cannot
be determined. Therefore, he is not a necessary party."



16. In the case of Surjit Singh (Supra) a similar question
arose for consideration before this Court. In that case, on the death of
one Janak Singh, being the head of the family a suit for partition and
separate possession was filed by and between the parties. A preliminary
decree was passed and while proceeding for final decree was pending, the
trial court passed an order restraining all the parties from alienating or
otherwise transferring in any manner any part of the property involved in
the suit. In spite of the aforesaid order one of the party assigned the
right under the preliminary decree involving wife of his lawyer. On the
basis of the assigned deed the assignee made an application under Order 22
Rule 10 CPC for impleadment as party to the proceeding. The petition was
allowed by the trial court and affirmed in appeal by the Additional
District Judge and then in revision by the High Court. The matter came
before this Court allowing the appeal and set aside the orders passed by
the courts below. This Court observed :-

"As said before, the assignment is by means of a
registered deed. The assignment had taken place after the passing
of the preliminary decree in which Pritam Singh has been allotted
1/3rd share. His right to property to that extent stood
established. A decree relating to immovable property worth more
than hundred rupees, if being assigned, was required to be
registered. That has instantly been done. It is per se property,
for it relates to the immovable property involved in the suit. It
clearly and squarely fell within the ambit of the restraint order.
In sum, it did not make any appreciable difference whether
property per se had been alienated or a decree pertaining to that
property. In defiance of the restraint order, the
alienation/assignment was made. If we were to let it go as such,
it would defeat the ends of justice and the prevalent public
policy. When the Court intends a particular state of affairs to
exist while it is in seisin of a lis, that state of affairs is not
only required to be maintained, but it is presumed to exist till
the Court orders otherwise. The Court, in these circumstances has
the duty, as also the right, to treat the alienation/assignment as
having not taken place at all for its purposes. Once that is so,
Pritam Singh and his assignees, respondents herein, cannot claim
to be impleaded as parties on the basis of assignment. Therefore,
the assignees-respondents could not have been impleaded by the
trial court as parties to the suit, in disobedience of its orders.
The principles of lis pendens are altogether on a different
footing. We do not propose to examine their involvement presently.
All what is emphasised is that the assignees in the present facts
and circumstances had no cause to be impleaded as parties to the
suit. On that basis, there was no cause for going into the
question of interpretation of paragraphs 13 and 14 of the
settlement deed. The path treaded by the courts below was, in our
view, out of their bounds. Unhesitatingly, we upset all the three
orders of the courts below and reject the application of the
assignees for impleadment under Order 22 Rule 10 CPC."


17. In the case of Savitri Devi v. District Judge, Gorakhpur and
Others (1999) 2 SCC 577, a 3 Judges' Bench of this Court considered a
similar question under Order 1 Rule 10 CPC. The fact of the case was that
the appellant filed a suit for maintenance and for creation of charge over
the ancestral property. She also applied for an interim order of
injunction restraining her sons from alienating the property during the
pendency of the suit. But a vakalatnama was filed on behalf of the
defendants and 4th defendant also filed an affidavit purporting to be on
behalf of the defendants, expressing their concern that during the pendency
of the case the suit property will not be sold. In the light of consent of
the counsel the Court passed an order on 18.08.1992 directing the parties
not to transfer the disputed property till the disposal of the suit. In
spite of the aforesaid order one of the defendants sold 1/4th share of the
land to the 3rd respondent and 1/4th share in another land to the 4th
respondent on 19.08.1992 and further sold 1/4th share to the 5th
respondent. On the basis of this transfer the transferee-Respondent Nos.3-
5 filed an application under Order 1 Rule 10 CPC for impleading them as
parties to the suit. The application was allowed at all stages. This
court noticed the relevant facts which has been incorporated in paragraph 4
of the decision which is reproduced hereunder :-
"The trial court passed a detailed order on 14-7-1997
granting the application of Respondents 3 to 5 and directed the
plaintiff to implead them as defendants in the suit. In the order
of the trial court, reference has been made to an application
filed by the first defendant to the effect that he was not earlier
aware of the case and the 4th defendant had forged his signature
and filed a bogus vakalatnama. He had also alleged that the order
of injunction was obtained fraudulently on 18-8-1992. The trial
court has also referred to an application under Section 340 CrPC
filed by the first defendant and observed that the same had been
dismissed by order dated 20-12-1992. There is also a reference in
the order of the trial court in the High Court filed by the
plaintiff for quashing orders dated 10-11-1995 and 19-4-1996
passed in the suit and a miscellaneous civil appeal arising from
the suit wherein Respondents 3 to 5 had been impleaded as parties.
It is seen from the order of the trial court that certain
proceedings under Order XXXIX Rule 2-A CPC concerning the question
of attachment of the properties sold were also pending. It is only
after taking note of all those facts, the trial court allowed the
application of Respondents 3 to 5 to implead them as parties to
the suit."



18. This Court further noticed the point taken by the appellant
based on the principles laid down in Surjit Singh's case (supra). Allowing
the application this Court held :-
"The facts set out by us in the earlier paragraphs
are sufficient to show that there is a dispute as to whether the
first defendant in the suit was a party to the order of injunction
made by the Court on 18-8-1992. The proceedings for punishing him
for contempt are admittedly pending. The plea raised by him that
the first respondent had played a fraud not only against him but
also on the Court would have to be decided before it can be said
that the sales effected by the first defendant were in violation
of the order of the Court. The plea raised by Respondents 3 to 5
that they were bona fide transferees for value in good faith may
have to be decided before it can be held that the sales in their
favour created no interest in the property. The aforesaid
questions have to be decided by the Court either in the suit or in
the application filed by Respondents 3 to 5 for impleadment in the
suit. If the application for impleadment is thrown out without a
decision on the aforesaid questions, Respondents 3 to 5 will
certainly come up with a separate suit to enforce their alleged
rights which means a multiplicity of proceedings. In such
circumstances, it cannot be said that Respondents 3 to 5 are
neither necessary nor proper parties to the suit."





19. While referring Surjit Singh's case this Court noticed that in
that case there was no dispute that the assignors and the assignees had
knowledge of the order of injunction passed by the Court. On those facts,
this Court held that the deed of assignment was not capable of conveying
any right to the assignee and the order of impleadment of the assignees as
parties was unsustainable.


20. In the case of Vijay Pratap and Others v. Sambhu Saran
Sinha and Others (1996) 10 SCC 53 a petition was filed under Order 1 Rule
10 of the CPC in suit for specific performance for impleading him as party
in place of his father on the ground that the father during his lifetime
alleged to have entered into a compromise. The trial court rejecting the
petition held that the petitioners are neither necessary or proper parties
to the suit. On revision this Court dismissing the same held as under :-

"The trial court accordingly held that the petitioners are
neither necessary nor proper parties to the suit. On revision, the
High Court upheld the same. Shri Sanyal, the learned counsel for
the petitioners contended that their father had not signed the
relinquishment deed and the signatures appended to it were not
that of him. The deed of relinquishment said to have been signed
by the father of the petitioners was not genuine. These questions
are matters to be taken into consideration in the suit before the
relinquishment deed and compromise memo between the other
contesting respondents were acted upon and cannot be done in the
absence of the petitioners. The share of the petitioners will be
affected and, therefore, it would prejudice their right, title and
interest in the property. We cannot go into these questions at
this stage. The trial court has rightly pointed that the
petitioners are necessary and proper parties so long as the
alleged relinquishment deed said to have been signed by the
deceased father of the petitioners is on record. It may not bind
petitioners but whether it is true or valid or binding on them are
all questions which in the present suit cannot be gone into. Under
those circumstances, the courts below were right in holding that
the petitioners are not necessary and proper parties but the
remedy is elsewhere. If the petitioners have got any remedy it is
open to them to avail of the same according to law."




21. In Kasturi's case (supra) a three Judges' Bench of this Court
said that in a suit for specific performance of contract for sale an
impleadment petition was filed for addition as party defendant on the
ground that the petitioners were claiming not under the vendor but adverse
to the title of the vendor. In other words, on the basis of independent
title in the suit property the petitioner sought to be added as a necessary
party in the suit. Rejecting the petition this Court held as under :-

"As noted herein earlier, two tests are required to be
satisfied to determine the question who is a necessary party, let
us now consider who is a proper party in a suit for specific
performance of contract for sale. For deciding the question who
is a proper party in the suit for specific performance the guiding
principle is that the presence of such a party is necessary to
adjudicate the controversies involved in the suit for specific
performance of the contract for sale. Thus, the question is to be
decided keeping in mind the scope of the suit. The question that
is to be decided in a suit for specific performance of the
contract for sale is to the enforceability of the contract entered
into between the parties to the contract. If the person seeking
addition is added in such a suit, the scope of the suit for
specific performance would be enlarged and it would be practically
converted into a suit for title. Therefore, for effective
adjudication of the controversies involved in the suit, presence
of such parties cannot be said to be necessary at all. Lord
Chancellor Cottenham in Tasker v. Small 1834 (40) English Report
848 made the following observations :
"It is not disputed that, generally, to a bill for
specific performance of a contract for sale, the parties to
the contract only are the proper parties; and, when the
ground of this jurisdiction of Courts of Equity in suits of
that kind is considered it could not properly be otherwise.
The Court assumes jurisdiction in such case, because a Court
of law, giving damages only for the non-performance of the
contract, in many cases does not afford an adequate remedy.
But, in equity, as well as in law, the contract constitutes
the right and regulates the liabilities of the parties; and
the object of both proceedings is to place the party
complaining as nearly as possible in the same situation as
the defendant had agreed that he should be placed in. It is
obvious that persons, strangers to the contract, and,
therefore, neither entitled to the right, nor subject to the
liabilities which arise out of it, are as much strangers to a
proceeding to enforce the execution of it as they are to a
proceeding to recover damages for the breach of it."
(Emphasis supplied)
...........


"Keeping the principles as stated above in mind, let us
now, on the admitted facts of this case, first consider whether
the respondent Nos.1 and 4 to 11 are necessary parties or not. In
our opinion, the respondent Nos. 1 and 4 to 11 are not necessary
parties 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 and the respondent Nos. 2 and 3. In the
case of Anil Kumar Singh v. Shivnath Mishra alias Gadasa Guru,
1995 (3) SCC 147, it has been held that since the applicant who
sought for his addition is not a party to the agreement for sale,
it cannot be said that in his absence, the dispute as to specific
performance cannot be decided. In this case at paragraph 9, the
Supreme Court while deciding whether a person is a necessary party
or not in a suit for specific performance of a contract for sale
made the following observation:


"Since the respondent is not a party to the agreement for
sale, it cannot be said that without his presence the dispute
as to specific performance cannot be determined. Therefore,
he is not a necessary party."
(Emphasis Supplied)



22. In the case of Vidhur Impex (supra), the Supreme Court again
had the opportunity to consider all the earlier judgments. The fact of the
case was that a suit for specific performance of agreement was filed. The
appellants and Bhagwati Developers though totally strangers to the
agreement, came into picture only when all the respondents entered into a
clandestine transaction with the appellants for sale of the property and
executed an agreement of sale which was followed by sale deed. Taking note
all the earlier decisions, the Court laid down the broad principles
governing the disposal of application for impleadment. Paragraph 36 is
worth to be quoted hereinbelow:

"Though there is apparent conflict in the observations
made in some of the aforementioned judgments, the broad principles
which should govern disposal of an application for impleadment
are:




1. The Court can, at any stage of the proceedings, either on
an application made by the parties or otherwise, direct
impleadment of any person as party, who ought to have been joined
as Plaintiff or Defendant or whose presence before the Court is
necessary for effective and complete adjudication of the issues
involved in the Suit.




2. A necessary party is the person who ought to be joined as
party to the Suit and in whose absence an effective decree cannot
be passed by the Court.




3. A proper party is a person whose presence would enable the
Court to completely, effectively and properly adjudicate upon all
matters and issues, though he may not be a person in favour of or
against whom a decree is to be made.




4. If a person is not found to be a proper or necessary
party, the Court does not have the jurisdiction to order his
impleadment against the wishes of the Plaintiff.




5. In a Suit for specific performance, the Court can order
impleadment of a purchaser whose conduct is above board, and who
files Application for being joined as party within reasonable time
of his acquiring knowledge about the pending litigation.




However, if the applicant is guilty of contumacious conduct or is
beneficiary of a clandestine transaction or a transaction made by
the owner of the suit property in violation of the restraint order
passed by the Court or the Application is unduly delayed then the
Court will be fully justified in declining the prayer for
impleadment."






23. It would also be worth to discuss some of the relevant laws in
order to appreciate the case on hand. Section 52 of the Transfer of
Property Act speaks about the doctrine of lis pendens. Section 52 reads as
under:

"52. Transfer of property pending suit relating thereto. -
During the [pendency] in any Court having authority [within the
limits of India excluding the State of Jammu and Kashmir] or
established beyond such limits] by [the Central Government] [***]
of [any] suit or proceedings which is not collusive and in which
any right to immovable property is directly and specifically in
question, the property cannot be transferred or otherwise dealt
with by any party to the suit or proceeding so as to affect the
rights of any other party thereto under any decree or order which
may be made therein, except under the authority of the Court and
on such terms as it may impose.



[Explanation - For the purposes of this section, the pendency of
a suit or proceeding shall be deemed to commence from the date of
the presentation of the plaint or the institution of the
proceeding in a Court of competent jurisdiction, and to continue
until the suit or proceeding has been disposed of by a final
decree or order and complete satisfaction or discharge of such
decree or order has been obtained, or has become unobtainable by
reason of the expiration of any period of limitation prescribed
for the execution thereof by any law for the time being in force."



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. 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 (35) 1948, observed as under:

"The broad purpose of Section 52 is to maintain the status
quo unaffected by the act of any party to the litigation pending
its determination. The applicability of the section cannot depend
on matters of proof or the strength or weakness of the case on one
side or the other in bona fide proceedings. To apply any such test
is to misconceive the object of the enactment and in the view of
the Board, the learned Subordinate Judge was in error in this
respect in laying stress, as he did, on the fact that the
agreement of 8.6.1932, had not been registered."



25. In the case of Kedar Nath Lal & Anr. v. Ganesh Ram & Ors.
AIR 1970 SC 1717, this Court referred the earlier decision (1967 (2) SCR
18) and observed:

"The purchaser pendente lite under this doctrine is bound
by the result of the litigation on the principle that since the
result must bind the party to it so it must bind the person
driving his right, title and interest from or through him. This
principle is well illustrated in Radhamadhub Holder vs. Monohar 15
I.A. 97 where the facts were almost similar to those in the
instant case. It is true that Section 52 strictly speaking does
not apply to involuntary alienations such as court sales but it is
well-established that the principle of lis pendens applies to such
alienations.(See Nilkant v. Suresh Chandra 12 I.A.171 and Moti Lal
v. Karrab-ul-Din 24 I.A.170."



26. The aforesaid Section 52 of the Transfer of Property Act again
came up for consideration before this Court in the case of Rajender Singh &
Ors. v. Santa Singh & Ors. AIR 1973 SC 2537 and Their Lordship with
approval of the principles laid down in 1973 (1) SCR 139 reiterated:

"The doctrine of lis pendens was intended to strike at
attempts by parties to a litigation to circumvent the
jurisdiction of a court, in which a dispute on rights or
interests in immovable property is pending, by private dealings
which may remove the subject matter of litigation from the ambit
of the court's power to decide a pending dispute of frustrate
its decree. Alienees acquiring any immovable property during a
litigation over it are held to be bound, by an application of
the doctrine, by the decree passed in the suit even though they
may not have been impleaded in it. The whole object of the
doctrine of lis pendens is to subject parties to the litigation
as well as others, who seek to acquire rights in immovable
property which are the subject matter of a litigation, to the
power and jurisdiction of the Court so as to prevent the object
of a pending action from being defeated."



27. In the light of the settled principles of law on the doctrine
of lis pendens, we have to examine the provisions of Order 1 Rule 10 of
the Code of Civil Procedure. Order 1 Rule 10 which empowers the Court to
add any person as party at any stage of the proceedings if the person whose
presence before the court is necessary or proper for effective adjudication
of the issue involved in the suit. Order 1 Rule 10 reads as under:

"10. Suit in name of wrong plaintiff.-

(1) Where a suit has been instituted in the name of the
wrong person as plaintiff or where it is doubtful whether it has
been instituted in the name of the right plaintiff, the Court may
at any stage of the suit, if satisfied that the suit has been
instituted through a bona fide mistake, and that it is necessary
for the determination of the real matter in dispute so to do,
order any other person to be substituted or added as plaintiff
upon such terms a the Court thinks just.




(2) Court may strike out or add parties.-The Court may at
any stage of the proceedings, either upon or without the
application of either party, and on such terms as may appear to
the Court to be just, order that the name of any party improperly
joined, whether as plaintiff or defendant, be struck out, and that
the name of any person who ought to have been joined, whether as
plaintiff or defendant, or whose presence before the Court may be
necessary in order to enable the Court effectually and completely
to adjudicate upon and settle all the questions involved in the
suit, be added.




(3) No person shall be added as a plaintiff suing without
a next friend or as the next friend of a plaintiff under any
disability without his consent.




(4) Where defendant added, plaint to be amended.-Where a
defendant is added, the plaint shall, unless the Court otherwise
directs, be amended in such manner as may be necessary, and
amended copies of the summons and of the plaint shall be served on
the new defendant and, if the Court thinks fit, on the original
defendant.

(5) Subject to the provisions of the Indian Limitation
Act, 1877 (15 of 1877), section 22, the proceedings as against any
person added as defendant shall be deemed to have begun only on
the service of the summons."



28. From the bare reading of the aforesaid provision, it is
manifest that sub-rule (2) of Rule 10 gives a wider discretion to the Court
to meet every case or defect of a party and to proceed with a person who is
a either necessary party or a proper party whose presence in the Court is
essential for effective determination of the issues involved in the suit.

29. Considering the aforesaid provisions, this Court in the case of
Ramesh Hirachand Kundanmal v. Municipal Corporation of Greater Bombay &
Ors. 1992 (2) SCC 524 held as under:

"It cannot be said that the main object of the rule is to
prevent multiplicity of actions though it may incidentally have
that effect. But that appears to be a desirable consequence of the
rule rather than its main objectives. The person to be joined must
be one whose presence is necessary as a party. What makes a person
a necessary party is not merely that he has relevant evidence to
give on some of the questions involved; that would only make him a
necessary witness. It is not merely that he has an interest in the
correct solution of some questions involved and has thought of
relevant arguments to advance. The only reason which make it
necessary to make a person a party to an action is that he should
be bound by the result of the action and the question to be
settled, therefore, must be a question in the action which cannot
be effectually and completely settled unless he is a party. The
line has been drawn on a wider construction of the rule between
the direct interest or the legal interest and commercial interest.
It is, therefore, necessary that the person must be directly or
legally interested in the action in the answer, i.e., he can say
that the litigation may lead to a result which will affect him
legally that is by curtailing his legal rights. It is difficult to
say that the rule contemplates joining as a defendant whose only
object is to prosecute his own cause of action. Similar provision
was considered in Amon v. Raphael Tuck & Sons Ltd. (1956) 1 All
E.R. 273, wherein after quoting the observations of Wynn-Parry,J.
in Dollfus Mieg et Compagnie S.A. v. Bank of England (1950) 2 All
E.R. 611, that the true test lies not so much in an analysis of
what are the constituents of the applicants' rights, but rather in
what would be the result on the subject matter of the action if
those rights could be established, Devlin,J. has stated:

The test is 'May the order for which the plaintiff is
asking directly affect the intervener in the enjoyment of his
legal rights."





30. At this juncture, we would also like to refer Section 19 of the
Specific Relief Act which reads as under:



"19. Relief against parties and persons claiming under them by
subsequent title. - Except as otherwise provided by this Chapter,
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) any person claiming under a title which, though prior
to the contract and known to the plaintiff, might have been
displaced by the defendant;

(d) when a company has entered into a contract and
subsequently becomes amalgamated with another company, the new
company which arises out of the amalgamation;

(e) when the promoters of a company have, before its
incorporation, entered into a contract for the purpose of the
company and such contract is warranted by the terms of the
incorporation, the company;



Provided that the company has accepted the contract and
communicated such acceptance to the other party to the contract."






31. From the bare reading of the aforesaid provision, it is
manifest that a contract for specific performance may be enforced against
the parties to the contract and the persons mentioned in the said section.
Clause (b) of Section 19 makes it very clear that a suit for specific
performance cannot be enforced against a person who is a transferee from
the vendor for valuable consideration and without notice of the original
contract which is sought to be enforced in the suit.

32. In the light of the aforesaid discussion both on facts and law,
we shall now examine some of the relevant facts in order to come to right
conclusion.

33. As noticed above, even before the institution of suit for
specific performance when the plaintiff came to know about the activities
of the Sawhneys' to deal with the property, a public notice was published
at the instance of the plaintiff in a newspaper "The Hindustan Times" dated
12.02.1990 (Delhi Edn.) informing the public in general about the agreement
with the plaintiffs. In response to the said notice the sister concern of
the appellant M/s Living Media India Limited served a legal notice on the
defendants- Sawhneys' dated 24.06.1990 whereby he has referred the
'agreement to sell' entered into between the plaintiffs and the defendants-
Sawhneys'.

34. Even after the institution of the suit, the counsel who
appeared for the defendants-Sawhneys' gave an undertaking not to transfer
and alienate the suit property. Notwithstanding the order passed by the
Court regarding the undertaking given on behalf of the defendants-
Sawhneys', and having full notice and knowledge of all these facts, the
sister concern of the appellant namely Living Media India Ltd. entered into
series of transaction and finally the appellant M/s. Thomson Press got a
sale deed executed in their favour by Sawhneys' in respect of suit
property.

35. Taking into consideration all these facts, we have no
hesitation in holding that the appellant entered into a clandestine
transaction with the defendants-Sawhneys' and got the property transferred
in their favour. Hence the appellant - M/s Thomson Press cannot be held to
be a bonafide purchaser, without notice.

36. On perusal of the two orders passed by the single judge and the
Division Bench of the High Court, it reveals that the High Court has not
gone into the question as to whether if a person who purchases the suit
property in violation of the order of injunction, and having sufficient
notice and knowledge of the Agreement, need to be added as party for
passing an effective decree in the suit.

37. As discussed above, a decree for specific performance of a
contract may be enforced against a person claimed under the plaintiff, and
title acquired subsequent to the contract. There is no dispute that such
transfer made in favour of the subsequent purchaser is subject to the rider
provided under Section 52 of the Transfer of Property Act and the restrain
order passed by the Court.

38. The aforesaid question was considered by the Calcutta High
Court in the case of Kafiladdin and others vs. Samiraddin and others,
AIR 1931 Calcutta 67 where Lordship referred the English Law on this point
and quoted one of the passage of the Book authored by Dart, on "Vendors
and Purchasers" Edn.8, Vol.2, which reads as under :-

"Equity will enforce specific performance of the contract for sale
against the vendor himself and against all persons claiming under
him by a title arising subsequently to the contract except
purchaser for valuable consideration who have paid their money and
taken a conveyance without notice to the original contract."




Discussing elaborately, the Court finally observed:-

"The statement of the law is exactly what is meant by the first
two clauses of S.27, Specific Relief Act. It is not necessary to
refer to the English cases in which decrees have been passed
against both the contracting party and the subsequent purchaser.
It is enough to mention some of them : Daniels v. Davison (2),
Potters v. Sanders (3), Lightfoot v. Heron(4). The question
did not pertinently arise in any reported case in India; but
decrees in case of specific performance of contract have been
passed in several cases in different forms. In Chunder Kanta Roy
v. Krishna Sundar Roy (5) the decree passed against the
contracting party only was upheld. So it was in Kannan v.
Krishan (6). In Himmatlal Motilal v. Basudeb(7) the decree
passed against the contracting defendant and the subsequent
purchaser was adopted. In Gangaram v. Laxman(9) the suit was by
the subsequent purchaser and the decree was that he should convey
the property to the person holding the prior agreement to sale.
It would appear that the procedure adopted in passing decrees in
such cases is not uniform. But it is proper that English
procedure supported by the Specific Relief Act should be adopted.
The apparent reasoning is that unless both the contracting party
and the subsequent purchaser join in the conveyance it is possible
that subsequently difficulties may arise with regard to the
plaintiff's title."




39. The Supreme Court referred the aforementioned decision of the
Calcutta High Court in the case of Durga Prasad and Another v. Deep
Chand and others AIR (1954) SC 75, and finally held:-

"In our opinion, 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. He
does not join in any special convenants made between plaintiff and
his vendor; all he does is to pass on his title to the plaintiff.
This was the course followed by the Calcutta High Court in -
Kafiladdin v. Samiraddin, AIR 1931 Cal 67 (C) and appears to be
the English practice. See Fry on Specific Performance, 6th Ed.
Page 90, paragraph 207; also - 'Potter v. Sanders', (1846) 67 ER.
We direct accordingly."




40. Again in the case of Ramesh Chandra v. Chunil Lal (1971) SC
1238, this Court referred their earlier decision and observed:-

"It is common ground that the plot in dispute has been
transferred by the respondents and therefore the proper form of
the decree would be the same as indicated at page 369 in Lala
Durga Prasad v. Lala Deep Chand, 1954 SCR 360 = (AIR 1954 SC 75)
viz., "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. He does not join in any special covenants
made between the plaintiff and his vendor; all he does is to pass
on his title to the plaintiff". We order accordingly. The decree
of the courts below is hereby set aside and the appeal is allowed
with costs in this court and the High Court."




41. This Court again in the case of Dwarka Prasad Singh and others
vs. Harikant Prasad Singh and others (1973) SC 655 subscribed its earlier
view and held that in a suit for specific performance against a person with
notice of a prior agreement of sale is a necessary party.

42. Having regard to the law discussed hereinabove and in the facts
and circumstances of the case and also for the ends of justice the
appellant is to be added as party-defendant in the suit. The appeal is,
accordingly, allowed and the impugned orders passed by the High Court are
set aside.

43. Before parting with the order, it is clarified that the
appellant after impledment as party-defendant shall be permitted to take
all such defences which are available to the vendor Sawhneys' as the
appellant derived title, if any, from the vendor on the basis of purchase
of the suit property subsequent to the agreement with the plaintiff and
during the pendency of the suit.

..................................J.
(T.S. Thakur)



...................................J.
(M.Y.Eqbal)


New Delhi
February 21, 2013




IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 1518 OF 2013
(Arising out of S.L.P (Civil) No.24159 of 2009)


Thomson Press (India) Ltd. .... Appellant (s)
Vs.
Nanak Builders & Investors P. Ltd. & Ors. ....Respondent (s)

J U D G M E N T


T.S. Thakur, J.


I have had the advantage of going through the order proposed by my
Esteemed Brother M.Y. Eqbal, J. While I entirely agree with the conclusion
that the appellant ought to be added as a party-defendant to the suit, I
wish to add a few lines of my own.

There are three distinct conclusions which have been drawn by Eqbal,
J. in the judgment proposed by his Lordship. The first and foremost is that
the appellant was aware of the "agreement to sell" between the plaintiff
and the defendants in the suit. Publication of a notice in the Hindustan
Times, Delhi Edition, and the legal notice which Living Media India
Limited, appellant's sister concern, sent to the defendants indeed left no
manner of doubt that the appellant was aware of a pre-existing agreement to
sell between the plaintiff and the defendants. It is also beyond dispute
that the sale of the suit property in favour of the appellant was in breach
of a specific order of injunction passed by the trial Court. As a matter
of fact, the sale deeds executed by the defendants falsely claimed that
there was no impediment in their selling the property to the appellant even
though such an impediment in the form of a restraint order did actually
exist forbidding the defendants from alienating the suit property. The High
Court was in that view justified in holding that the sale in favour of the
appellant was a clandestine transaction which finding has been rightly
affirmed in the order proposed by my Esteemed Brother, and if I may say so
with great respect for good and valid reasons.

In the light of the above finding it is futile to deny that the
specific performance prayed for by the plaintiff was and continues to be
enforceable not only against the original owner defendants but also against
the appellant their transferee. Sale of immovable property in the teeth of
an earlier agreement to sell is immune from specific performance of an
earlier contract of sale only if the transferee has acquired the title for
valuable consideration, in good faith and without notice of the original
contract. That is evident from Section 19(b) of the Specific Relief Act
which is to the following effect:

"19.Relief against parties and persons claiming under them by
subsequent title - Except as otherwise provided by this Chapter,
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) xxxxxxxx

(d) xxxxxxxx

(e) xxxxxxxx




There is thus no gainsaying that the appellant was not protected
against specific performance of the contract in favour of the plaintiff,
for even though the transfer in favour of the appellant was for valuable
consideration it was not in good faith nor was it without notice of the
original contract.

The second aspect which the proposed judgment succinctly deals with
is the effect of a sale pendete lite. The legal position in this regard is
also fairly well settled. A transfer pendete lite is not illegal ipso jure
but remains subservient to the pending litigation. In Nagubai Ammal & Ors.
v. B. Shama Rao & Ors. AIR 1856 SC 593, this Court while interpreting
Section 52 of the Transfer of Property Act observed:


"...The words "so as to affect the rights of any other party
thereto under any decree or order which may be made therein",
make it clear that the transfer is good except to the extent
that it might conflict with rights decreed under the decree or
order. It is in this view that transfers pendente lite have been
held to be valid and operative as between the parties thereto."




To the same effect is the decision of this Court in Vinod Seth v.
Devinder Bajaj (2010) 8 SCC 1 where this Court held that Section 52 does
not render transfers affected during the pendency of the suit void but only
render such transfers subservient to the rights as may be eventually
determined by the Court. The following passage in this regard is apposite:



"42. It is well settled that the doctrine of lis pendens does
not annul the conveyance by a party to the suit, but only
renders it subservient to the rights of the other parties to the
litigation. Section 52 will not therefore render a transaction
relating to the suit property during the pendency of the suit
void but render the transfer inoperative insofar as the other
parties to the suit. Transfer of any right, title or interest in
the suit property or the consequential acquisition of any right,
title or interest, during the pendency of the suit will be
subject to the decision in the suit."




The decision of this Court in A. Nawab John & Ors. v. V.N. Subramanyam
(2012) 7 SCC 738 is a recent reminder of the principle of law enunciated in
the earlier decisions. This Court in that case summed up the legal position
thus:



"18 ........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."





We may finally refer to the decision of this Court in Jayaram Mudaliar
v. Ayyaswami and Ors. (1972) 2 SCC 200 in which were extracted with
approval observations made on the doctrine of lis pendens in "Commentaries
of Laws of Scotland, by Bell". This Court said:


"43...........Bell, in his commentaries on the Laws of Scotland
said that it was grounded on the maxim: "Pendente lite nibil
innovandum". He observed:


It is a general rule which seems to have been recognised in
all regular systems of jurisprudence, that during the
pendence of an action, of which the object is to vest the
property or obtain the possession of real estate, a
purchaser shall be held to take that estate as it stands in
the person of the seller, and to be bound by the claims
which shall ultimately be pronounced."





There is, therefore, little room for any doubt that the transfer of
the suit property pendete 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.

The third dimension which arises for consideration is about the right
of a transferee pendete lite to seek addition as a party defendant to the
suit under Order I, Rule 10 CPC. I have no hesitation in concurring with
the view that no one other than parties to an agreement to sell is a
necessary and proper party to a suit. The decisions of this Court have
elaborated that aspect sufficiently making any further elucidation
unnecessary. The High Court has understood and applied the legal
propositions correctly while dismissing the application of the appellant
under Order I, Rule 10 CPC. What must all the same be addressed is whether
the prayer made by the appellant could be allowed under Order XXII Rule 10
of the CPC, which is as under:



"Procedure in case of assignment before final order in suit. -
(1) In other cases 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)."



A simple reading of the above provision would show that in cases of
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. What has
troubled us is whether independent of Order I Rule 10 CPC the prayer for
addition made by the appellant could be considered in the light of the
above provisions and, if so, whether the appellant could be added as a
party-defendant to the suit. Our answer is in the affirmative. It is true
that the application which the appellant made was only under Order I Rule
10 CPC but the enabling provision of Order XXII Rule 10 CPC could always be
invoked if the fact situation so demanded. It was in any case not urged by
counsel for the respondents that Order XXII Rule 10 could not be called in
aid with a view to justifying addition of the appellant as a party-
defendant. Such being the position all that is required to be examined is
whether a transferee pendete lite could in a suit for specific performance
be added as a party defendant and, if so, on what terms.

We are not on virgin ground in so far as that question is concerned.
Decisions of this Court have dealt with similar situations and held that a
transferee pendete 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 Shanker Choudhary v. Vishnu
Hari Patil (1983) 1 SCC 18, this Court held that 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:



"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. If they apply to the
court to be impleaded as parties they cannot be turned out."
(emphasis supplied)



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 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. 
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. 

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 Rikhu Dev, Chela
Bawa Harjug Dass v. Som Dass (deceased) through his Chela Shiama Dass,
(1976) 1 SCC 103.

To sum up:
1) The appellant is not a bona fide purchaser and is, therefore, not
protected against specific performance of the contract between the
plaintiffs and the owner defendants in the suit.
(2) The transfer in favour of the appellant pendente lite is effective in
transferring title to the appellant but such title shall remain
subservient to the rights of the plaintiff in the suit and subject to
any direction which the Court may eventually pass therein.
(3) Since the appellant has purchased the entire estate that forms the subject matter of the suit, the appellant is entitled to be added as a party defendant to the suit.

(4) The appellant shall as a result of his addition raise and pursue only such defenses as were available and taken by the original defendants
and none other.

With the above additions, I agree with the order proposed by my
Esteemed Brother, M.Y. Eqbal, J. that this appeal be allowed and the appellant added as party defendant to the suit in question.




........................................J.
(T.S. Thakur)
New Delhi
February 21, 2013

ITEM NO.1A COURT NO.9 SECTION XIV

S U P R E M E C O U R T O F I N D I A

RECORD OF PROCEEDINGS

C.A. No................/2013 @

Petition(s) for Special Leave to Appeal (Civil) No(s).24159/2009

(From the judgement and order dated 15/12/2008 in FAO No.295/2008 of The
HIGH COURT OF DELHI AT N. DELHI)

THOMSON PRESS (INDIA) LTD. Petitioner(s)

VERSUS

NANAK BUILDERS & INVESTRS.P.LTD & ORS. Respondent(s)

Date: 21/02/2013 This Petition was called on for JUDGMENT today.



For Petitioner(s) Mr. Pramod Dayal,Adv.

For Respondent(s) Mr. R.N. Keshwani,Adv.



Dr. (Mrs.) Vipin Gupta ,Adv

The Court made the following

J U D G M E N T

Hon'ble Mr. Justice T.S. Thakur and Hon'ble Mr. Justice M.Y.
Eqbal pronounced concurring Judgments in the matter.

Leave granted.

The appeal is allowed and the appellant added as party defendant
to the suit in question, in terms of the signed judgment.





|(N.K. Goel) | |(Veena Khera) |
|Court Master | |Court Master |


(Signed "Reportable" Judgments are placed on the file)





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