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Wednesday, September 30, 2015

Merely due to the assignment or release of the rights during the pendency of the appeal, the appellant did not in any manner lose the right to continue the appeal. Merely by transfer of the property during the pendency of the suit or the appeal, plaintiff or appellant, as the case may be, ordinarily has a right to continue the appeal. It is at the option of the assignee to move an application for impleadment. = Or. 22 of C.P.C = In order to appreciate the points involved, it would be necessary to refer to the provisions of Order 22 of the Code, Rules 3 and 4 whereof prescribe procedure in case of devolution of interest on the death of a party to a suit. Under these Rules, if a party dies and right to sue survives, the court on an application made in that behalf is required to substitute legal representatives of the deceased party for proceeding with a suit but if such an application is not filed within the time prescribed by law, the suit shall abate so far as the deceased party is concerned. Rule 7 deals with the case of creation of an interest in a husband on marriage and Rule 8 deals with the case of assignment on the insolvency of a plaintiff. Rule 10 provides for cases of assignment, creation and devolution of interest during the pendency of a suit other than those referred to in the foregoing Rules and is based on the principle that the trial of a suit cannot be brought to an end merely because the interest of a party in the subject-matter of the suit has devolved upon another during its pendency but such a suit may be continued with the leave of the court by or against the person upon whom such interest has devolved. But, if no such step is taken, the suit may be continued with the original party and the person upon whom the interest has devolved will be bound by and can have the benefit of the decree, as the case may be, unless it is shown in a properly constituted proceeding that the original party being no longer interested in the proceeding did not vigorously prosecute or colluded with the adversary resulting in decision adverse to the party upon whom the interest had devolved. The legislature while enacting Rules 3, 4 and 10 has made a clear-cut distinction. In cases covered by Rules 3 and 4, if right to sue survives and no application for bringing the legal representatives of a deceased party is filed within the time prescribed, there is automatic abatement of the suit and procedure has been prescribed for setting aside abatement under Rule 9 on the grounds postulated therein. In cases covered by Rule 10, the legislature has not prescribed any such procedure in the event of failure to apply for leave of the court to continue the proceeding by or against the person upon whom interest has devolved during the pendency of a suit which shows that the legislature was conscious of this eventuality and yet has not prescribed that failure would entail dismissal of the suit as it was intended that the proceeding would continue by or against the original party although he ceased to have any interest in the subject of dispute in the event of failure to apply for leave to continue by or against the person upon whom the interest has devolved for bringing him on the record.=ORDER XXII, RULES 10 AND 11. “10. 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). Under Rule 10 Order 22 of the Code, when there has been a devolution of interest during the pendency of a suit, the suit may, by leave of the court, be continued by or against persons upon whom such interest has devolved and this entitles the person who has acquired an interest in the subject-matter of the litigation by an assignment or creation or devolution of interest pendente lite or suitor or any other person interested, to apply to the court for leave to continue the suit. But it does not follow that it is obligatory upon them to do so. If a party does not ask for leave, he takes the obvious risk that the suit may not be properly conducted by the plaintiff on record, and yet, as pointed out by Their Lordships of the Judicial Committee in Moti Lal v. Karrabuldin [ILR (1898) 25 Cal. 179] he will be bound by the result of the litigation even though he is not represented at the hearing unless it is shown that the litigation was not properly conducted by the original party or he colluded with the adversary. It is also plain that if the person who has acquired an interest by devolution, obtains leave to carry on the suit, the suit in his hands is not a new suit, for, as Lord Kingsdown of the Judicial Committee said ina cause of action is not prolonged by mere transfer of the title. It is the old suit carried on at his instance and he is bound by all proceedings up to the stage when he obtains leave to carry on the proceedings.This Court in Jaskirat Datwani v. Vidyavati & Ors. [2002 (5) SCC 647], while relying upon Dhurandhar Prasad (supra), has laid down that even if no step is taken by assignee, suit may be continued by the original party and the person upon whom the interest has devolved will be bound by the decree, particularly when such party had the knowledge of the proceedings. Ordinarily, the person is bound by the decree until and unless it is shown that the decree was based upon fraud or collusion etc. Resultantly, we are of the opinion that the High Court has gravely erred in law in dismissing the appeal on the aforesaid ground. Thus, its judgment and order being unsustainable, are hereby set aside. We remit the appeal to the High Court for deciding the same afresh in accordance with law after hearing the parties. The appeal is allowed. No order as to costs.

                                                                  Reportable

                        IN THE SUPREME COURT OF INDIA

                        CIVIL APPELLATE JURISDICTION

                        CIVIL APPEAL NO.7889  OF 2015
                (Arising out of S.L.P. [C] No.36889 of 2013)


Sharadamma                              … Appellant


Vs.



Mohammed Pyrejan (D) through LRs. & Anr.     … Respondents



                               J U D G M E N T



ARUN MISHRA, J.



1.    Heard learned counsel for the parties.

2.    Leave granted.

3.    This is an appeal against  the  judgment  and  order  dated  24.9.2013
passed by the High Court of Karnataka at Bangalore in Regular  First  Appeal
No.1735 of 2011, dismissing the appeal filed by the  plaintiff-appellant  on
the ground that she had released  her  interest  in  the  suit  property  in
favour of her daughter Smt. Padmavathi on 11.4.2011 and said Padmavathi,  in
turn, had transferred the property in favour of Mr. G.R.  Ramesh  vide  sale
deed dated 20.4.2011. Consequently, she had lost her right to  continue  the
appeal preferred as against dismissal of the suit vide  judgment  and  order
dated 16.6.1990.

4.    The facts, in brief,  indicate  that  Sharadamma,  plaintiff-appellant
had filed Original Suit No.6020 of 1998 on  5.8.1998  for  the  purposes  of
declaration of title and for restoration of possession on  the  strength  of
registered sale deed dated 10.11.1965. The plaintiff had also claimed a  sum
of Rs.3,000/- towards past damages and a further sum of Rs.20/- per  day  as
continuing damages. The suit was dismissed by the trial court against  which
the plaintiff had preferred regular first appeal before the High Court.  The
same has been dismissed on the aforesaid ground  by  the  impugned  judgment
and order.

5.    We have heard learned counsel for  the  parties  and  opine  that  the
impugned judgment is patently illegal.  Merely  due  to  the  assignment  or
release of the rights during the pendency of the appeal, the  appellant  did
not in any manner lose the right to continue the appeal. Merely by  transfer
of the property during the pendency of the suit or the appeal, plaintiff  or
appellant, as the case may be,  ordinarily  has  a  right  to  continue  the
appeal. It is at the option of the  assignee  to  move  an  application  for
impleadment. Considering the provisions contained in Order 22  Rule  10  and
Order 22 Rule 11 of the Code of Civil Procedure, the impugned  judgment  and
order of the High Court cannot be allowed to be sustained. Order 22 Rule  10
and Order 22 Rule 11CPC are extracted hereunder :

ORDER XXII, RULES 10 AND 11.
“10. 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).

                                  x x x x x

11. Application of Order to appeals.- In the application of  this  Order  to
appeals, so far as may be, the word “plaintiff” shall be held to include  an
appellant, the word  “defendant”  a  respondent,  and  the  word  “suit”  an
appeal.”



6.    A bare reading of the provisions of Order XXII Rule 10 makes it  clear
that the legislature has not envisaged the penalty of dismissal of the  suit
or appeal on account of failure of the assignee to move an  application  for
impleadment  and  to  continue  the  proceedings.  Thus,  there  cannot   be
dismissal of the suit or appeal, as the case may be, on account  of  failure
of assignee to file an application to continue the proceedings. It would  be
open to the assignor to continue the proceedings  notwithstanding  the  fact
that he ceased to have any interest in the  subject-matter  of  dispute.  He
can continue the proceedings for the benefit of assignee.  The  question  is
no more res integra. This Court in Dhurandhar Prasad Singh  v.  Jai  Prakash
University & Ors. [2001 (6) SCC 534] has laid down thus :



“6. In order to appreciate the points involved, it  would  be  necessary  to
refer to the provisions of Order 22 of the  Code,  Rules  3  and  4  whereof
prescribe procedure in case of devolution of interest  on  the  death  of  a
party to a suit. Under these Rules,  if  a  party  dies  and  right  to  sue
survives, the court on an application made in that  behalf  is  required  to
substitute legal representatives of the deceased party for  proceeding  with
a suit but if such an application is not filed within  the  time  prescribed
by law, the suit shall abate so far as  the  deceased  party  is  concerned.
Rule 7 deals with the case of creation  of  an  interest  in  a  husband  on
marriage and Rule 8 deals with the case of assignment on the  insolvency  of
a plaintiff.  Rule  10  provides  for  cases  of  assignment,  creation  and
devolution of interest during the  pendency  of  a  suit  other  than  those
referred to in the foregoing Rules and is based on the  principle  that  the
trial of a suit cannot be brought to an end merely because the  interest  of
a party in the subject-matter of the suit has devolved upon  another  during
its pendency but such a suit may be continued with the leave  of  the  court
by or against the person upon whom such interest has devolved.  But,  if  no
such step is taken, the suit may be continued with the  original  party  and
the person upon whom the interest has devolved will  be  bound  by  and  can
have the benefit of the decree, as the case may be, unless it is shown in  a
properly constituted proceeding that the  original  party  being  no  longer
interested in the proceeding did not vigorously prosecute or  colluded  with
the adversary resulting in decision adverse  to  the  party  upon  whom  the
interest had devolved. The legislature while enacting Rules 3, 4 and 10  has
made a clear-cut distinction. In cases covered by Rules 3 and  4,  if  right
to sue survives and no application for bringing  the  legal  representatives
of a deceased party is filed within the time prescribed, there is  automatic
abatement of the suit and procedure has been prescribed  for  setting  aside
abatement under Rule 9 on the grounds postulated therein. In  cases  covered
by Rule 10, the legislature has not prescribed any  such  procedure  in  the
event of failure to apply for leave of the court to continue the  proceeding
by or against  the  person  upon  whom  interest  has  devolved  during  the
pendency of a suit which shows that the legislature was  conscious  of  this
eventuality and yet has not prescribed that failure would  entail  dismissal
of the suit as it was intended that the  proceeding  would  continue  by  or
against the original party although he ceased to have any  interest  in  the
subject of dispute in the event of failure to apply for  leave  to  continue
by or against the person upon whom the interest has  devolved  for  bringing
him on the record.



7. Under Rule 10 Order 22 of the Code, when there has been a  devolution  of
interest during the pendency of a suit,  the  suit  may,  by  leave  of  the
court, be continued by or  against  persons  upon  whom  such  interest  has
devolved and this entitles the person who has acquired an  interest  in  the
subject-matter of the litigation by an assignment or creation or  devolution
of interest pendente lite or suitor  or  any  other  person  interested,  to
apply to the court for leave to continue the suit. But it  does  not  follow
that it is obligatory upon them to do so.  If  a  party  does  not  ask  for
leave, he takes  the  obvious  risk  that  the  suit  may  not  be  properly
conducted by the plaintiff on record, and  yet,  as  pointed  out  by  Their
Lordships of the Judicial Committee in Moti Lal v. Karrabuldin  [ILR  (1898)
25 Cal. 179] he will be bound by the result of the  litigation  even  though
he is not represented at the hearing unless it is shown that the  litigation
was not properly conducted by the original party or  he  colluded  with  the
adversary. It is also plain that if the person who has acquired an  interest
by devolution, obtains leave to carry on the suit, the suit in his hands  is
not a new suit, for, as Lord Kingsdown of the  Judicial  Committee  said  in
Prannath Roy Chowdry v. Rookea Begum [(1857-60)  7  MIA  323],  a  cause  of
action is not prolonged by mere transfer of the title. It is  the  old  suit
carried on at his instance and he is bound by  all  proceedings  up  to  the
stage when he obtains leave to carry on the proceedings.

                                  x x x x x

26. The plain language of Rule 10 referred to above does  not  suggest  that
leave can be sought  by  that  person  alone  upon  whom  the  interest  has
devolved. It simply says that the suit may be continued by the  person  upon
whom such an interest has devolved and this applies  in  a  case  where  the
interest of the plaintiff has devolved. Likewise, in a case  where  interest
of the defendant has devolved, the suit may  be  continued  against  such  a
person upon whom interest has  devolved,  but  in  either  eventuality,  for
continuance of the suit against the  persons  upon  whom  the  interest  has
devolved during the pendency of the suit, leave  of  the  court  has  to  be
obtained. If it is laid down that leave  can  be  obtained  by  that  person
alone upon whom interest of a party to the  suit  has  devolved  during  its
pendency, then there may be preposterous results as such a party  might  not
be knowing about the litigation and consequently not  feasible  for  him  to
apply for leave and if a duty is cast upon him then in such  an  eventuality
he would be bound by the decree even  in  cases  of  failure  to  apply  for
leave. As a rule of prudence, initial duty lies upon the plaintiff to  apply
for leave in case the factum of devolution was within his knowledge or  with
due diligence could have been  known  by  him.  The  person  upon  whom  the
interest has devolved may also apply for such a leave so that  his  interest
may be properly represented as the original party, if it ceased to  have  an
interest in the  subject-matter  of  dispute  by  virtue  of  devolution  of
interest upon another person, may not take  interest  therein,  in  ordinary
course, which is but natural, or by colluding with the other  side.  If  the
submission of Shri Mishra is  accepted,  a  party  upon  whom  interest  has
devolved, upon his failure to  apply  for  leave,  would  be  deprived  from
challenging correctness of the decree by filing a properly constituted  suit
on the ground that the original party having lost interest  in  the  subject
of dispute, did not properly prosecute  or  defend  the  litigation  or,  in
doing so, colluded with the adversary. Any other party,  in  our  view,  may
also seek leave as, for example,  where  the  plaintiff  filed  a  suit  for
partition and during its pendency he gifted away his undivided  interest  in
the Mitakshara coparcenary in favour of the contesting  defendant,  in  that
event the contesting defendant  upon  whom  the  interest  of  the  original
plaintiff has devolved has no cause of action to prosecute the suit, but  if
there is any other co-sharer who is supporting the plaintiff, he may have  a
cause of action to continue with the suit by getting himself  transposed  to
the category of plaintiff as it is well settled that  in  a  partition  suit
every defendant is a plaintiff, provided he has cause of action for  seeking
partition. Thus, we do not find any substance in this submission of  learned
counsel appearing on behalf of the appellant and hold that prayer for  leave
can be made not only by the person upon  whom  interest  has  devolved,  but
also by the plaintiff or any other party or person interested.”

                                                   (emphasis supplied)


7.    This Court in Jaskirat Datwani v.  Vidyavati  &  Ors.  [2002  (5)  SCC
647], while relying upon Dhurandhar Prasad (supra), has laid down that  even
if no step is taken by assignee, suit  may  be  continued  by  the  original
party and the person upon whom the interest has devolved will  be  bound  by
the  decree,  particularly  when  such  party  had  the  knowledge  of   the
proceedings. Ordinarily, the person is bound by the decree until and  unless
it is shown that the decree was based upon fraud or collusion etc.

8.    Resultantly, we are of the opinion that the  High  Court  has  gravely
erred in law in dismissing the appeal on the  aforesaid  ground.  Thus,  its
judgment and order being unsustainable, are hereby set aside. We  remit  the
appeal to the High Court for deciding the same  afresh  in  accordance  with
law after hearing the parties. The appeal is allowed. No order as to costs.




                                             …………………………J.
                                             (Kurian Joseph)




New Delhi;                                   ………………………..J.
September 23, 2015.                          (Arun Mishra)

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