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Thursday, May 26, 2016

A decree passed against the defendant is available for execution against the transferee or assignee of the defendant judgment-debtor and it does not make any difference whether such transfer or assignment has taken place after the passing of the decree or before the passing of the decree without notice or leave of the Court.; a lis pendens transferee, though not brought on record under Order 22 Rule 10 of the CPC, is entitled to move an application under Order 9 rule 13 to set aside a decree passed against his transferor-the defendant in the suit.

CASE NO.:
Appeal (civil)  400 of 2004

PETITIONER:
RAJ KUMAR

RESPONDENT:
SARDARI LAL

DATE OF JUDGMENT: 20/01/2004

BENCH:
R.C. LAHOT1 & ASHOK BHAN

JUDGMENT:
JUDGMENT

2004 (1)SCR 838

The Judgment of the Court was delivered by R.C. LAHOTI, J. Leave granted.

During the pendency of a civil suit relating to an immovable property,
respondent No.4 herein purchased the suit property from the defendants
(respondent Nos. 2 & 3) by a registered deed of sale dated 24.9.1995. the
respondent No.4, it appears, was not aware of the pendency of the suit;
rather the vendors stated in the deed of sale that the property was not a
subject matter of any litigation. On 27.11.1995, the suit was decreed ex-
parte against the defendants (respondent nos. 2 & 3). On 30.5.1998, the
respondent No.4 filed an application under Order 9 Rule 13 of the CPC
seeking setting aside of the decree and also making a prayer under Order 22
Rule 10 of the CPC for being brought on record. Prayer was also made for
condoning the delay in filling the application inasmuch as the ex-parte
decree was not in the knowledge of the respondent No.4. The trial Court has
allowed the application condoning the delay in filling the same and held
that a sufficient cause for setting aside the decree within the meaning of
Order 9 Rule 13 of the CPC was made out. The appellant preferred a civil
revision in the High Court which has been dismissed.

The only plea raised and vehemently urged by Shri S.N. Mishra, the learned
senior counsel for the appellant before this Court, as was done before the
trial Court and the High Court too. is that an application under Order 9
Rule 13 of the CPC can be filed only by a defendant and by no one else. The
respondent No.4 is a transferee pendente lite and in the absence of his
having promptly taken steps under Order 22 Rule 10 of the CPC for being
brought on record, he remains bound by the result of the suit. He must
suffer the consequences of an adverse decree passed against his vendors who
have not chosen to lay any challenge to the ex-parte decree, submitted the
learned counsel.

We have heard Shri S.N. Mishra the learned senior counsel for the appellant
and Shri Manoj Swarup. learned counsel for the respondent No.4 We are
satisfied that there is no merit in the appeal and the same is liable to be
dismissed.

The doctrine of Us pendens expressed in the maxim 'at lite Pender 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 law as
a representative-in-interest of the judgment-debtor and held bound by the
decree passed against the judgment-debtor though neither the defendant has
chosen to bring the transferee on record by apprising his opponent and the
Court of the transfer made by him nor the transferee has chosen to come on
record by taking recourse to Order 22 Rule 10 of the CPC. In case of an
assignment creation or devolution of any interest during the pendency of
any suit. Order 22 Rule 10 of the CPC confers a discretion on the Court
hearing the suit to grant leave for the person in our 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.

The present case has a peculiar feature. The transfer took place during the
pendency of the suit but the decree passed ex-parte in the suit is sought
to be set aside not by the defendant on record but by a person who did not
come or was not brought on record promptly and hence apparently appears to
be a third party. However, as we have already stated hereinabove, the
person would be a representative-in interest of the defendant judgment-
debtor

The solution lies in Section 146 of the Code of Civil Procedure, 1908. It
provides -

"146. Proceedings by or against representatives -Save as otherwise provided
by this Court or by any law for the time being in force, where any
proceeding may be taken or application made by or against any person, then
the proceeding may be taken or application may be made by or against any
person claiming under him."

A Us pendens transferee from the defendant, though not arrayed as a party
in the suit, is still a person claiming under the defendant. The same
principle of law is recognized in a different perspective by Rule 16 of
Order 21 of the CPC which speaks of transfer or assignment inter vivos or
by operation of law made by the plaintiff-decree-holder. The transferee may
apply for execution of the decree of the Court which passed it and the
decree will be available for execution in the same manner and subject to
the same conditions as if the application were made by the decree-holder.
It is interesting to note that a provision like Section 146 of the CPC was
not be found in the preceding Code and was for the first time incorporated
in the CPC of 1908. In Order 21 Rule 16 also an explanation was inserted
through amendment made by Act No. 104 of 1976 w.e.f. 1.2.1977 where by the
operation of Section 146 of CPC was allowed to prevail independent of Order
21 Rule 16 CPC.

A decree passed against the defendant is available for execution against
the transferee or assignee of the defendant-judgment-debtor and it does not
make any difference whether such transfer or assignment has taken place
after the passing of the decree or before the passing of the decree without
notice or leave of the Court.

The law laid down by a four-Judges Bench of this Court in Smt. Saila Bala
Dassi v. Sm. Nirmala Sundari Dassi and Anr., [1958] SCR 1287. is apt for
resolving the issue arising for decision herein. A tansferee of property
from defendant during the pendency of the suit sought himself to be brought
on record at the stage of appeal. The High Court dismissed the application
as it was pressed only by reference to Order 22 Rule 10 of the CPC and it
was conceded by the applicant that, not being a person who had obtained a
transfer pending appeal, he was not covered within the scope of Older 22
Rule 10. In an appeal preferred by such transferee this Court upheld the
view of the High Court that a transferee prior to the filing of the appeal
could not be brought on record in appeal by reference to Order 22 Rule 10
of the CIV. However, the Court held that an appeal is a proceeding for the
purpose of Section 146 and further the expression "'claiming under' is wide
enough to include cases of devolution and assignment mentioned in Order 22
Rule 10. Whoever is entitled to be but has not been brought on record under
Order 22 Rule 10 in a pending suit or proceeding would be entitled to
prefer an appeal against the decree or order passed therein if his assignor
could have filed such an appeal, there being no prohibition against it in
the Code A person having acquired an interest in suit property during the
pendency of the suit and seeking to be brought on record at the stage of
the appeal can do so by reference to section 146 of the CPC which provision
being a beneficent provision should be construed liberally and so as to
advance justice and not in a restricted or technical sense. Their Lordships
held that being a purchaser pendente lite, a person will be bound by the
proceedings taken by the successful party in execution of decree and
justice requires that such purchaser should be given an opportunity to
protect his rights. In sm. Salla Bala Dassi case (supra) an earlier
decision of this Court in Jugalkishore Saraf v. M/s. Raw Cotton Co. Ltd.,
[1955] I SCR 1369 was followed. It was a case where during the pendency of
a suit for recovery of a debt from the defendant the plaintiff in that suit
had transferred to a third person all the book and other debts. This Court
held that the position of the transferor vis-a-vis the transferee is
nothing more than that of a benamidar for the latter and when the decree is
passed for the recovery of that debt it is the latter who is the real owner
of the decree. When the transferee becomes the owner of the decree
immediately on its passing, he must, in relation to the decree, be also
regarded as person claiming under the transferor. The transferee is
entitled under Section 146 to make an application for execution which the
original decree-holder could do.

The executing Court can apply its mind to the simple equitable principle
which operates to transfer the beneficent interest in the after-acquired
decree under Section 146. As the assignee from the plaintiff of the debt
which was the entire subject matter of the suit the transferee was entitled
to be brought on record under Order 22 Rule 10 and must, therefore, be also
regarded as a representative of the plaintiff within the meaning of Section
47 of the CPC.

In Sardar Govindrao Mahadik and Anr. v. Devi Sahai and Ors.. [1982] 1 SCC
237, this held that an application not falling under Order 22 Rule 10 of
the CPC stricto sensu could yet be held to be maintainable by having
recourse to Section 146 of the CPC.

The appellant cannot dispute that the decree though passed against the
respondent Nos. 2 and 3 could be executed even against the respondent No.4,
he being a Us pendens transferee though not having been joined in the suit
as a party. Such a person can prefer an appeal being a person aggrieved.
Clearly the person who is liable to be proceeded against in execution of
the decree, or can file an appeal against in decree, though not a party to
the suit or decree does have locus standi to move an application for
setting aside an ex-parte decree, passed against the person in whose shoes
he has stepped in. In the expression employed in Rule 13 of Order 9 of the
CPC that "in any case in which a decree is passed ex-parte against a
defendant he may apply for an order to set it aside' the word 'he' cannot
be construed with such rigidity and so restrictively as to exclude the
person who has stepped into the shoes of the defendant, from moving an
application for setting aside the ex-parte decree especially in the
presence of Section 146 of the CPC.

Incidentally we may observe that in Surjit Singh and Ors. v. Harbans Singh
and Ors., [1995] 6 SCC 50, the assignees pendente lite were refused by this
Court to be brought on record as they had purchased the suit property after
the passing of the preliminary decree and in clear defiance of the restrain
order passed by the Court injuncting any alienation/assignment. It was a
case of exercising discretion not to grant leave under Order 22 Rule 10 of
the CPC, in the circumstance of the case, as in the opinion of this court
permitting impleadment and recognizing the alienation/assignment would
amount to defeating the ends of justice and the prevalent public policy.
That case is clearly distinguishable.

We hold that a lis pendens transferee, though not brought on record under
Order 22 Rule 10 of the CPC, is entitled to move an application under Order
9 rule 13 to set aside a decree passed against his transferor-the defendant
in the suit.

As to the availability of sufficient cause for setting aside the decree
within the meaning of Order 9 Rule 13 of the CPC and for condoning the
delay under Section 5 of the Limitation Act, the finding in favour of
respondent No.4 is purely one of fact and well reasoned.

The attack against the locus standi of respondent No. 4 to maintain the
application under Order 9 Rule 13 of the CPC fails and so does the appeal.

The appeal is dismissed with no order as to the costs.

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