Civil Procedure — Appeal by non-party / transferee pendente lite — Leave to appeal.
A person who is not a party to a suit may, with the leave of the appellate court, prefer an appeal from a decree or order if he is bound by, aggrieved by or otherwise prejudicially affected by it. Leave is discretionary and must be exercised judicially by reference to whether the applicant is a person aggrieved whose rights are affected by the decree or would be bound thereby; mere remote or indirect prejudice is insufficient. (Paras 25–44, 56)
Order I R.10 CPC & Order XXII R.10 CPC; Section 146 CPC — Relationship and scope.
Rejection of an application for impleadment under Order I R.10 CPC by the trial court (if not appealed) is not an absolute bar to seeking leave to appeal under Section 146 CPC or to being added under Order XXII R.10 CPC at the appellate stage. Section 146 and Order XXII R.10 are beneficent provisions to be construed liberally to advance justice; a transferee pendente lite may seek leave to be heard in appeal though he is not entitled as of right to be impleaded. (Paras 48–56, 52)
Transfer pendente lite (lis pendens) — Effect of Section 52, Transfer of Property Act, 1882.
A transfer during the pendency of litigation (not collusive) is not void ab initio; Section 52 makes such transfer subservient to the rights adjudicated in the suit. The transferee takes subject to the eventual decree in the litigation; nonetheless, transferees remain entitled to seek judicial protection of their interests where appropriate. (Paras 45–48)
Condonation of delay — Principle and application to transferee-appellants.
Condonation of long and unexplained delay requires satisfactory and particularised explanation showing sufficient cause; factors such as age or residence abroad and assurances by a vendor, without more, may not constitute sufficient cause for an inordinate delay (here, 586 days). The appellate court must be satisfied that refusal to condone delay would unjustly deny the transferee an opportunity to protect substantial and genuine rights — a conclusion dependent on facts of the case. (Paras 21–24, 56–58)
Discretion to permit transferee to litigate in appeal — Limits and considerations.
The appellate court must examine (i) whether the transferee was vigilant and had justifiable cause for delay; (ii) the nature and extent of prejudice to existing parties; (iii) whether the transferee’s rights will be bound by res judicata; and (iv) any indicia of collusion or mala fides. An order admitting a transferee to prosecute an appeal is permissible in appropriate cases but is not automatic. (Paras 42–44, 54–56)
Application of the law to facts — High Court’s order set aside.
On the facts, the High Court erred in condoning an unexplained and inordinate delay of 586 days and in granting leave to appeal to purchasers who acquired interest pendente lite in contravention of the injunction/Section 52 and whose impleadment application had been rejected at trial and left unchallenged. The impugned order granting condonation and leave to prefer appeal was unsustainable and is set aside. (Paras 22–24, 57–61)
Remedy preserved.
The transferees are not left remediless in the civil law: if they were duped or defrauded by their vendor, they remain free to pursue appropriate remedies against the vendor in a competent forum for recovery of consideration or other reliefs. (Para 61)
Held that : Appeals allowed; impugned High Court order condoning delay and granting leave to appeal set aside. Costs as per order in cause.
2025 INSC 121
Page 1 of 35
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 1180-1181 OF 2025
(arising out of S.L.P. (Civil) Nos. 5785-5786 of 2023)
H. ANJANAPPA & ORS. …APPELLANT(S)
VERSUS
A. PRABHAKAR & ORS. …RESPONDENT(S)
WITH
CIVIL APPEAL NOS. 1182-1183 OF 2025
(arising out of S.L.P. (Civil) Nos. 6724-6725 of 2023)
H. ANJANAPPA & ORS. …APPELLANT(S)
VERSUS
BEENA ANTHONY & ORS. …RESPONDENT(S)
J U D G M E N T
Page 2 of 35
J.B. PARDIWALA, J. :
1. Leave granted.
2. Since the issues raised in the above captioned appeals are the same,
the parties are also same and the challenge is also to the self-same judgment
and order passed by the High Court, those were taken up for hearing
analogously and are being disposed of by this common judgment and order.
3. The appeals arise from the order passed by the High Court of
Karnataka at Bengaluru dated 16.11.2022 in I.A. Nos. 1 & 3 of 2018
respectively in Regular First Appeal No. 1303 of 2018 by which the High
Court allowed the said I.A. Nos. 1 & 3 of 2018 respectively filed by the
respondents herein and thereby condoned the delay of 586 days in filing the
said appeal against the judgment and decree dated 16.09.2016 passed by the
Senior Civil Judge and JMFC, Devanahalli in Original Suit No. 458 of 2006
instituted for specific performance of contract. By the order passed in I.A.
Nos 1 & 3 of 2018 respectively, the High Court granted leave to appeal to
the Respondent Nos. 1 and 2 herein (subsequent purchasers) against the
original judgment and decree of specific performance as they were not
parties in the suit proceedings.
4. The facts giving rise to these appeals may be summarised as under.
Page 3 of 35
The description of the parties before this Court and before the Trial Court is
tabulated as follows:
BEFORE THIS
COURT
BEFORE THE
TRIAL COURT
REMARKS
Appellants Plaintiffs Agreement of Sale
Holders/Purchasers
Respondent Nos.
1-2
Not a party as their
impleadment application was
rejected. Order remained
unchallenged and hence,
attained finality
Lis Pendens
Purchasers (Alleged to
have purchased from
Subsequent Purchaser)
Respondent Nos.
3-5
LRs. Of Original Defendant
No. 1
Original Owner
Respondent No.
6
Defendant No. 2 GPA Holder
Respondent No.
7
Defendant No. 3 Subsequent Purchaser
For the sake of convenience, the parties shall be referred to in terms of their
status before the Trial Court.
(I) One Late Smt. Daisy Shanthappa – Original Defendant No.1 (since
deceased represented through her LRs-Respondents Nos. 3-5 herein) was
the absolute owner of lands bearing Sy. No. 176/42 measuring 32 acres and
Sy. No. 176/43 measuring 10 acres, situated adjacent to each other in
Bagalur Village, Jala Hobli, Bangalore North Taluk. The Suit Schedule
Page 4 of 35
Property was agreed to be sold to the plaintiffs, the appellants herein, vide
an Agreement of Sale dated 05.09.1995 for a total sale consideration of
Rs.20,00,000/- by the Defendant No.1 through her Power of Attorney holder
one Shri V. Chandramohan (Original Defendant No. 2/ Respondent No.6
herein). Earnest money of Rs.5,00,000/- was paid and the Defendant Nos. 1
& 2 undertook to get the unauthorized occupants in the Suit Schedule
Property evicted.
(II) Since the unauthorized occupants on the Suit Schedule Property
were not evicted by the Defendant Nos.1 & 2, a Supplementary Agreement
dated 10.03.1997 was executed extending the time for execution of Sale
Deed. Out of the entire sale consideration of Rs.20,00,000/- a substantial
amount of Rs.15,00,000/- was paid by the appellants herein to the Defendant
No. 1.
(III) While such being the case, and during the subsistence of Sale
Agreement in favour of the Plaintiffs, the Defendant No.1 having lost her
right over the suit schedule property in pursuance of the general power of
attorney executed in favour of Defendant No.2, which has been acted upon,
allegedly executed a Sale Deed in favour of Respondent No. 7/Defendant
No. 3 selling land to an extent of 40 acres out of 42 acres for a sum of
Rs.40,00,000/-. The plaintiffs became aware of the aforementioned sale
Page 5 of 35
transfer, when the Defendant No.3 attempted to change the revenue records
in his name.
(IV) Aggrieved by the same, the plaintiffs filed O.S. No.1093/2003 (later
renumbered as O.S. No.458/2006) before the Court of Principal Civil Judge
(Sr. Dn.) Bengaluru Rural District (hereinafter referred to as the Trial Court)
inter alia seeking Specific Performance of the Agreement of Sale. The Trial
Court upon appreciating the case of the plaintiffs admitted the suit and on
17.12.2003 passed a specific Order of Temporary Injunction restraining the
Defendant Nos. 1-3 from alienating and creating third party rights in the Suit
Schedule Property.
(V) The Defendant No.3 however, in contravention of specific order of
injunction and during the subsistence of the order of injunction, sold a
portion of Suit Schedule Property to the extent of 4 Acres (and 6 Acres) in
Sy. No. 176/43 in favour of Respondents Nos. 1-2 herein.
(VI) It is relevant to note that the Defendant No.1 executed a Deed of
Confirmation in favour of the plaintiffs admitting the Agreement of Sale in
favour of the plaintiffs and further acknowledged the receipt of a substantial
sum of Rs. 15,00,000/- out of Rs.20,00,000/- in furtherance of the
Agreement of Sale dated 05.09.1995 and further stating that the sale made
by her in favour of Defendant No.3 was due to the fact that she was being
misled by some persons of oblique mindsets.
Page 6 of 35
(VII) At this stage, on 10.07.2007, the Respondent Nos. 1-2 respectively
herein filed an Interlocutory Application - I.A. No.4 in O.S. No.458/2006
seeking to implead themselves as Defendants in the said suit. The said I.A.
No.4 was however rejected by the Trial Court vide Order dated 06.08.2014
on the ground that the Respondent Nos. 1-2 herein had purchased the portion
of Suit Schedule Property without the permission of the court, during the
pendency of suit and in contravention of a Specific Order of Injunction
against alienation and creation of third party rights. The same being contrary
to Section 52 of the Transfer of Property Act, 1882 (for short, “Transfer of
Property Act”). The said order of rejection of impleadment never came to be
challenged in appeal and thereby, the said issue has attained finality.
(VIII) Thereafter, the Trial Court upon appreciation of evidence on record
passed its final Judgment and Decree in O.S. No. 458/2006 decreeing the
suit of the plaintiffs and granting relief of specific performance with a
specific direction to execute a sale deed within a period of 2 months.
Assailing the legality of the said Order, the Defendant No. 3 (who is the
Vendor of Respondent Nos. 1 & 2 herein) filed R.F.A. No.396/2017 before
the High Court which came to be dismissed on 04.07.2017.
(IX) It is in the aforestated backdrop that the Respondent Nos.1 & 2
respectively, in spite of a Specific Order of Injunction against the Defendant
No. 3 (Vendor of the Respondent Nos.1 & 2) of not creating third party
Page 7 of 35
rights, purchased the suit property in contravention of Section 52 of the
Transfer of Property Act. More importantly the application for impleadment
in the Suit also came to be rejected and having not been challenged by the
contesting Respondent Nos. 1 & 2, the issue had attained finality. After
dismissal of the appeal filed by their Vendor i.e., Defendant No. 3,
Respondent Nos 1 & 2 proceeded to challenge the order of Trial Court
decreeing the Suit of the plaintiffs. After almost 2 years of passing of the
Judgment and Decree dated 16.09.2016 in O.S. No.458/2006 and 11 years
from the filing of the Impleadment Application, the Respondent Nos. 1 & 2
herein preferred RFA No.1303/2018 before the High Court challenging the
said Decree.
(X) The Respondent Nos. 1 & 2 filed I.A. No.1 & 3 of 2018 seeking
condonation of delay of 586 days in preferring RFA No.1303/2018, and also
prayed for leave to appeal. The said I. A.s were opposed by the plaintiffs.
The High Court, however, vide the impugned order allowed both the I.A.
Nos. 1 & 3 of 2018 respectively by condoning the inordinate and
unexplained delay of 586 days and further permitting the Respondents Nos.
1 and 2 herein to prefer the appeal by granting leave.
5. Being aggrieved by the same, the plaintiffs are here before this Court
with the present appeals.
Page 8 of 35
SUBMISSIONS ON BEHALF OF THE PLAINTIFFS/APPELLANTS
6. Mr. Anand Sanjay M. Nuli, the learned senior counsel appearing for
the appellants (original plaintiffs) vehemently submitted that the High Court
committed a serious error in condoning the unexplained and inordinate delay
of 586 days in preferring the regular first appeal and also by granting leave
to file appeal to the Respondent Nos. 1 and 2 i.e., subsequent purchasers of
the suit property. According to the learned counsel, it is not just enough for
the Respondent Nos. 1 and 2 respectively to say that they were not aware of
the suit proceedings before the Trial Court. The Respondent Nos. 1 and 2
had, in fact, preferred an application for being impleaded in the suit as
defendants and such application which was filed on 10.07.2007 came to be
rejected vide order dated 06.08.2014. The said order was never challenged
by the Respondent Nos. 1 and 2 herein and it has attained finality.
7. Mr. Nuli submitted that having purchased the suit property pendente
lite on 05.04.2004 and that too in contravention of the order of temporary
injunction dated 17.12.2003 passed by the Trial Court, the Respondent Nos.
1 and 2 respectively do not deserve any indulgence. It was argued that the
Respondent Nos. 1 and 2 cannot be said to be bona fide purchasers of the
suit property for value without notice.
8. In such circumstances referred to above, the learned senior counsel
prayed that there being merit in his appeals, those may be allowed.
Page 9 of 35
SUBMISSIONS ON BEHALF OF RESPONDENT NOS. 1 AND 2
RESPECTIVELY
9. Mr. Gautam Narayan, the learned senior counsel appearing for the
subsequent purchasers i.e. Respondent Nos. 1 and 2 submitted that no error,
not to speak of any error of law, may be said to have been committed by the
High Court in passing the impugned order. According to the learned counsel,
there is no question of law involved in the present appeals warranting any
interference with the impugned order passed by the High Court. He would
submit that his clients are bona fide subsequent purchasers of the suit
property and as subsequent purchasers, they have a substantial interest in the
suit property and also in the final outcome of the suit.
10. The learned counsel submitted that the order passed by the Trial
Court, in itself, would not render the transfer made to the subsequent
purchasers ineffective and the validity of such transfer is always subject to
the outcome of the litigation.
11. The learned counsel submitted that in the present case, collusion
between the vendor of the answering respondents who are subsequent
purchasers pendente lite i.e., Defendant No. 3 and the plaintiffs, is writ large
on the face of the record. He submitted that the bar on transfer of immovable
property which is subject matter of a litigation under Section 52 of the
Transfer of Property Act is not applicable to the present case as Section 52
Page 10 of 35
expressly excludes from its ambit collusive proceedings and, therefore, the
High Court correctly granted an opportunity to his clients to establish this
fact by allowing them to prefer an Appeal.
12. He submitted that unfortunately the Defendant No. 3 colluded with
the plaintiffs in order to get the suit decreed vide judgment dated 16.09.2016
as is borne out from the following facts:
(i) Defendant No. 3 did not cross-examine the witnesses of the
Plaintiffs;
(ii) Defendant No. 3 did not lead any rebuttal evidence in the suit;
(iii) Despite filing an appeal against the decree dated 16.09.2016,
he withdrew the Appeal without stating any reason on 04.07.2017, and
(iv) In fact, even after having succeeded in the suit and obtaining
a decree dated 16.09.2016, the plaintiffs did not get the same executed
and have allowed the Defendant No.3 to enter into a registered
agreement of sale dated 12.09.2019 for the suit property for a
consideration of Rs.20 crores with third parties.
In light of the aforesaid facts, he submitted that the High Court was
justified in granting permission to the answering respondents to prefer an
appeal against the decree dated 16.09.2016 in order to defend their rights.
Page 11 of 35
13. He further submitted that the impugned order is also justified in the
context of settled law that a subsequent purchaser should ordinarily be
allowed to implead himself in pending proceedings in order to protect his
interests when the transferor fails to do so.
14. He submitted that the approach of the High Court in the impugned
order is only a logical extension of the aforesaid principle in so far as it only
extends to subsequent purchasers, i.e., the answering respondents, the
opportunity to defend their interests in the face of ex facie collusion by their
vendors with plaintiffs in the suit.
15. No prejudice would be caused to the plaintiffs if the Respondent
Nos. 1 and 2 are merely allowed to agitate their appeal on merits keeping in
view the fact that they are subsequent purchasers for value who were duped
by their vendor.
16. He submitted that the condonation of delay in preferring the appeals
is justified in view of Section 17 of the Limitation Act, 1963 read with
Section 5 thereof.
17. He submitted that his clients, both of whom are senior citizens, were
residing with their children in Scotland when their application for
impleadment was rejected by the Trial Court and were assured by Defendant
No. 3 that he would defend their interest in the suit and therefore due to the
Page 12 of 35
trust and faith reposed in him, they did not make any efforts to prosecute the
suit or the Appeal.
18. In the last, the learned counsel submitted that the lis pendens
purchasers although not arrayed as parties in the suit, yet they are the persons
who could be said to be claiming as defendants under Section 146 of the
Code of Civil Procedure, 1908 (for short “CPC”).
19. In such circumstances referred to above, the learned senior counsel
prayed that there being no merit in the present appeals, those may be
dismissed.
ANALYSIS
20. Having heard the learned counsel appearing for the parties and
having gone through the materials on record, the only question that falls for
our consideration is whether the High Court committed any error in passing
the impugned order.
21. The High Court in the impugned order observed as under:-
“13. In these two applications, we are concerned with the
prayer for leave to prosecute the appeal and condonation of
delay. It is not disputed that appellants have purchased 4
acres of land out of the suit schedule property. They did file
an application to implead themselves in the suit, but
unsuccessfully. One of the main ground urged in support of
the application for condonation of delay is that they were
Page 13 of 35
assured by their vendor-third defendant that he would protect
their interest.
14. Shri Holla, pointed out in para 18 of the judgment that
the learned trial Judge has adverted to the evidence of P.W. 2
and his evidence has remained unchallenged as he was not
subjected to cross-examination and none of the defendants
stepped into the witness box. Further the third defendant has
filed R.F.A.No.396/2017 and withdrew the same. It is pleaded
in the affidavit in support of the application for condonation
of delay that the appellants are aged 75 and 66 years
respectively and living with their children in Scotland. This
averment has remained unrebutted.
15. Keeping in view the fact that appellants have purchased
the immovable property measuring 4 acres, that they are
senior citizens and their vendor has not defended the suit nor
prosecuted the first appeal filed before this Court, we are of
the opinion that rights of the parties cannot be scuttled by
dismissal of the application seeking condonation of delay.
Curiously appellants' vendor namely the third defendant/
respondent No.8, though served and represented by advocate
has remained absent. Thus, the allegations made against him
in appellants' affidavit have remained uncontroverted.
Therefore, in our considered view, the instant applications
merit consideration.
16. In view of the above, I.As.No.1 & 3 of 2018 are allowed
subject to appellants paying cost of Rs. 25,000/- for each of
the applications and cumulatively Rs.50,000/- to the
plaintiffs/ respondent Nos.1 to 3.”
22. Thus, a plain reading of the impugned order passed by the High
Court would indicate that what weighed with the High Court was the fact
that the Respondent Nos. 1 and 2 respectively are aged 75 and 66 years and
are living with their children in Scotland. The High Court proceeded further
to observe that the Respondent Nos. 1 and 2 have purchased 4 acres of land
Page 14 of 35
out of a large chunk of subject property and their vendor i.e. the original
owner failed to protect their interest in the suit proceedings.
23. We are of the view that the High Court committed an egregious error
in condoning delay of 586 days in filing the regular first appeal on mere
asking. We are not convinced with the sufficient cause assigned by the
Respondent Nos. 1 and 2 respectively for the delay of 586 days. In the facts
and circumstances of the case, it cannot be said that the Respondent Nos. 1
and 2 were vigilant of their so called rights. The High Court should have
put an end to the entire litigation by declining to condone the delay itself far
from granting leave to appeal.
24. Having taken the view that the High Court committed an egregious
error in condoning the delay, we could have closed this matter without
observing or saying anything further by setting aside the impugned order
passed by the High Court. However, we would like to say something also as
regards the grant of leave to appeal by the High Court in favour of the
Respondent Nos. 1 and 2 respectively, more particularly in light of two
submissions canvassed by Mr. Nuli, the learned counsel appearing for the
appellants herein. The first submission canvassed by the learned counsel is
that once the impleadment application filed by the Respondent Nos. 1 and 2
respectively herein invoking the provisions of Order I Rule 10 CPC came to
be rejected by the Trial Court and the said order attained finality, thereafter
Page 15 of 35
there is no question of seeking leave to appeal against the final decree
granting specific performance, and the second submission canvassed by the
learned counsel is that the findings recorded by the Trial Court while
rejecting the impleadment application would operate as re judicata in the
appeal that may be filed by the transferee pendente lite against the final
decree of specific performance.
LAW GOVERNING THE GRANT OF LEAVE TO APPEAL
25. Sections 96 and 100 respectively of the Code of Civil Procedure,
1908 (for short, the “CPC”) provide for preferring an appeal from any
original decree or from decree in appeal respectively. The aforesaid
provisions do not enumerate the categories of persons who can file an
appeal. However, it is a settled legal proposition that a stranger cannot be
permitted to file an appeal in any proceedings unless he satisfies the court
that he falls within the category of aggrieved persons. It is only where a
judgment and decree prejudicially affects a person who is not a party to the
proceedings, he can prefer an appeal with the leave of the appellate court.
[see : Sri V.N. Krishna Murthy and another vs. Sri Ravikumar and others
(Civil Appeal Nos.2701-2704 of 2020, decided on 21st August 2020)].
26. A five-Judge Bench of the Privy Council in Nagendra Nath Dey vs.
Suresh Chandra Dey, AIR 1932 PC 165, speaking through Sir Dinshaw
Page 16 of 35
Mulla observed that there is no definition of appeal in the CPC, but there is
no doubt that any application by a party to an appellate Court, asking it to
set aside or revise a decision of a subordinate Court, is an appeal within the
ordinary acceptation of the term, and that it is no less an appeal because it is
irregular or incompetent.
27. A party to a suit adversely affected by a decree or any of his
representatives-in-interest may file an appeal. But a person who is not a
party to a decree or order may, with the leave of the court, prefer an appeal
from such decree or order if he is either bound by a decree or order or is
aggrieved by it or is otherwise prejudicially affected by it.
28. In Adi Pherozshah Gandhi vs. H.M.Seervai, AIR 1971 SC 385, a
Constitution Bench of this Court in paragraph 46 held thus:
“46. Generally speaking, a person can be said to be
aggrieved by an order which is to his detriment, pecuniary or
otherwise or causes him some prejudice in some form or
other. A person who is not a party to a litigation has no right
to appeal merely because the judgment or order contains
some adverse remarks against him. But it has been held in a
number of cases that a person who is not a party to suit may
prefer an appeal with the leave of the appellate court and
such leave would not be refused where the judgment would
be binding on him under Explanation 6 to section 11 of the
Code of Civil Procedure.”
29. In Smt. Sukhrani (dead) by L.R’s and others vs. Hari Shanker and
others, AIR 1979 SC 1436, the interlocutory order was not challenged.
Page 17 of 35
The same was challenged after the final order was passed by the court. This
Court in paragraph 5 of the report held thus:
“5. It is true that at an earlier stage of the suit, in the
proceeding to set aside the award, the High Court recorded a
finding that the plaintiff was not entitled to seek reopening of
the partition on the ground of unfairness when there was
neither fraud nor misrepresentation. It is true that the
plaintiff did not further pursue the matter at that stage by
taking it in appeal to the Supreme Court but preferred to
proceed to the trial of his suit. It is also true that a decision
given at an earlier stage of a suit will bind the parties at later
stages of the same suit. But it is equally well settled that
because a matter has been decided at an earlier stage by an
interlocutory order and no appeal has been taken therefrom
or no appeal did lie, a higher Court is not precluded from
considering the matter again at a later stage of the same
litigation.”
30. We may also refer to the observations of this Court in the case of
Smt. Jatan Kumar Golcha vs. Golcha Properties Private Limited, reported
in (1970) 3 SCC 573. The same reads thus:
“It is well settled that a person who is not a party to the suit
may prefer an appeal with the leave of the Appellate Court
and such leave should be granted if he would be prejudicially
affected by the Judgment.”
31. This Court in the case of State of Punjab and others vs. Amar Singh
and another, reported in (1974) 2 SCC 70, while dealing with the
maintainability of appeal by a person who is not party to a suit, has observed
thus:
Page 18 of 35
“Firstly, there is a catena of authorities which, following the
dictum of Lindley, L.J., in re Securities Insurance Co.,
[(1894) 2 Ch 410] have laid down the rule that a person who
is not a party to a decree or order may with the leave of the
Court, prefer an appeal from such decree or order if he is
either bound by the order or is aggrieved by it or is
prejudicially affected by it.”
32. In the case of Baldev Singh vs. Surinder Mohan Sharma and
others, reported in (2003) 1 SCC 34, this Court held that an appeal under
Section 96 of the CPC would be maintainable only at the instance of a person
aggrieved by and dissatisfied with the judgment and decree. While dealing
with the concept of person aggrieved, it was observed in paragraph 15 as
under:
“A person aggrieved to file an appeal must be one whose
right is affected by reason of the judgment and decree sought
to be impugned.”
33. In the aforesaid judgment, a compromise decree was passed in a suit
between husband and wife to the effect that their marriage stood dissolved
from an earlier date by virtue of a memorandum of customary dissolution of
marriage. The said decree was sought to be challenged by a person who was
having a property dispute with the husband and who had filed complaints
against the husband to the employer of the husband, in contravention of the
Employment Rules having contracted a second marriage. This Court, while
holding that the person who was seeking to challenge the decree had no locus
Page 19 of 35
standi to do so, held: (a) that there is no dispute that as against the decree,
an appeal would be maintainable in terms of Section 96 of the CPC; such an
appeal, however would be maintainable only at the instance of a person
aggrieved by and dissatisfied with the judgment and decree; (b) that the
dispute between the said person and the husband was in relation to a property
and the said person, save for making complaints to the employer of the
husband, had nothing to do with the marital status of the husband; (c) locus
of a person to prefer an appeal in a matter of this nature is vital; (d) the court
cannot enlarge the scope of locus, where the parties are fighting litigations;
(e) the pleas of the said person did not disclose as to how and in what manner
he would be prejudiced if the compromise decree was allowed to stand; (f)
that the challenge by the said person was not bona fide; and, (g) even if the
compromise decree was a judgment in rem, the said person could not have
challenged the same as he was not aggrieved therefrom.
34. In the case of A. Subash Babu vs. State of A.P. and another,
reported in (2011) 7 SCC 616, this Court held as under:
“The expression ‘aggrieved person’ denotes an elastic and an
elusive concept. It cannot be confined that the bounds of a
rigid, exact and comprehensive definition. Its scope and
meaning depends on diverse, variable factors such as the
content and intent of the statute of which contravention is
alleged, the specific circumstances of the case, the nature and
extent of the complainant’s interest and the nature and extent
of the prejudice or injuries suffered by him.”
Page 20 of 35
35. The expression ‘person aggrieved’ does not include a person who
suffers from a psychological or an imaginary injury; a person aggrieved
must, therefore, necessarily be one, whose right or interest has been
adversely affected or jeopardized (see : Shanti Kumar R. Canji vs. Home
Insurance Co. of New York, (1974) 2 SCC 387 and State of Rajasthan &
Ors. vs. Union of India & Ors., (1977) 3 SCC 592).
36. We may also refer to a Division Bench decision of the Madras High
Court in the case of Srimathi K. Ponnalagu Ammani vs. The State of
Madras represented by the Secretary to the Revenue Department, Madras
and Ors., reported in AIR 1953 Madras 485. The High Court laid down the
test to find out when it would be proper to grant leave to appeal to a person
not a party to a proceeding against the decree or judgment passed in such
proceedings in following words:
“Now, what is the test to find out when it would be proper to
grant leave to appeal to a person not a party to a proceeding
against the decree or judgment in such proceedings? We think
it would be improper to grant leave to appeal to every person
who may in some remote or indirect way be prejudicially
affected by a decree or judgment. We think that ordinarily
leave to appeal should be granted to persons who, though not
parties to the proceedings, would be bound by the decree or
judgment in that proceeding and who would be precluded
from attacking its correctness in other proceedings.”
37. We may look into the decision in the case of Province of Bombay
vs. W.I. Automobile Association, reported in AIR 1949 Bombay 141, and
Page 21 of 35
the English practice on which that decision is based. In the Province of
Bombay case, Chagla C.J. and Bhagwati J. held that a person not a party to
a suit may prefer an appeal if he is affected by the order of the Trial Court
provided he obtained leave from the Court of appeal. The learned Chief
Justice observed as follows:
“The Civil Procedure Code does not in terms lay down as to
who can be a party to an appeal. But it is clear and this fact
arises from the very basis of appeals, that only a party against
whom a decision is given has a right to prefer an appeal. Even
in England the position is the same. But it is recognised that
a person who is not a party to the suit may prefer an appeal
if he is affected by the order of the trial Court, provided he
obtains leave from the Court of appeal; therefore whereas in
the case of a party to a suit he has a right of appeal, in the
case of a person not a party to the suit who is affected by the
order he has no right but the court of appeal may in its
discretion allow him to prefer an appeal.”
(Emphasis supplied)
38. Bhagwati J. referred to the decision of the Madras High Court in
Indian Bank Limited, Madras vs. Seth Bansiram Jashamal Firm through
its Managing Partner, AIR 1934 Mad 360, and accepted it as authority for
the position that no person who is not a party to a suit or proceeding has a
right of appeal. But if he was aggrieved by a decision of the court, the
remedy open to him was to approach the appellate court and ask for leave to
appeal which the appellate court would grant in proper cases. The learned
Judge cites a passage from the decision in In re Securities Insurance
Company, (1894) 2 Ch D 410, where Lindley L.J. said that the practice of
Page 22 of 35
the Courts of Chancery, both before and after 1862, was well-settled that
while a person who was a party could appear without any leave a person
who without being a party was either bound by the order or was aggrieved
by it or was prejudicially affected by it could not appeal without leave.
39. The law has been succinctly explained as regards the grant of leave
to appeal in In re Markham Markham vs. Markham, (1881) 16 Ch D 1; In
re Padstow Total Loss and Collision Assurance Association, (1882) 20 Ch.
D 137 at p. 142; Attorney General vs. Marquis of Ailesbury, (1885) 16
QBD 408 at p. 412, and In re Ex Tsar of Bulgaria, (1921) 1 Ch D 107 at
p. 110. The position is thus stated in the Annual Practice for 1951 at page
1244:
“Persons not parties on the record may, by leave obtained on
an 'ex parte' application to the Court of appeal, appeal from
a judgment or order affecting their interests, as under the old
practice.”
40. Halsbury's Laws of England, Vol. 26, page 115, gives the same rule
in a different form:
“A person who is not a party and who has not been served
with such notice (notice of the judgment or order) cannot
appeal without leave, but a person who might properly have
been a party may obtain leave to appeal.”
Page 23 of 35
41. In more or less similar terms, the rule and its limits are stated in Seton
on Judgments and Orders, 7th Edn., Vol. 1, at p. 824:
“Where the appellant is not a party to the record he can only
appeal by leave to be obtained on motion 'ex parte' from the
Court of Appeal..... Leave to appeal will not be given to a
person not a party unless his interest is such that he might
have been made a party.”
(Emphasis supplied)
42. On the anvil of the decisions cited supra, the instant case may be
examined. Admittedly, the application filed by the Respondent Nos. 1 and 2
respectively under Order I Rule 10 CPC for being impleaded as party to the
suit was rejected by the Trial Court. The said order was not challenged. In
view of the authoritative pronouncement of the cases cited supra, the
conclusion is irresistible that rejection of the application filed under Order I
Rule 10 CPC is per se not a ground to reject the application for leave to file
appeal. The appellate court has to see whether the transferee pendente lite is
aggrieved by a decree or is otherwise prejudicially affected by it. The
appellate court has to examine that if the decree is allowed to stand, the same
will operate res judicata.
43. The principles governing the grant of leave to appeal may be
summarised as under:
i. Sections 96 and 100 of the CPC respectively provide for preferring an
appeal from an original decree or decree in appeal respectively;
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ii. The said provisions do not enumerate the categories of persons who can
file an appeal;
iii. However, it a settled legal proposition that a stranger cannot be
permitted to file an appeal in any proceedings unless he satisfies the
court that he falls within the category of an aggrieved person;
iv. It is only where a judgment and decree prejudicially affects a person
who is not a party to the proceedings, he can prefer an appeal with the
leave of the court;
v. Aperson aggrieved, to file an appeal, must be one whose right is affected
by reason of the judgment and decree sought to be impugned;
vi. The expression “person aggrieved” does not include a person who
suffers from a psychological or an imaginary injury;
vii. It would be improper to grant leave to appeal to every person who may
in some remote or indirect way be prejudicially affected by a decree or
judgment; and
viii. Ordinarily leave to appeal should be granted to persons who, though not
parties to the proceedings, would be bound by the decree or judgment in
that proceeding and who would be precluded from attacking its
correctness in other proceedings.
44. The issue can also be examined from a different angle.
45. Section 52 of the Transfer of Property Act reads thus:
Page 25 of 35
“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 immoveable 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.”
46. A transfer pendete lite is not illegal ipso jure but remains subservient
to the pending litigation. In Nagubai Ammal & Ors. vs. B. Shama Rao &
Ors., AIR 1956 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.”
47. 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
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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.”
48. In Thomson Press (India) Ltd. vs. Nanak Builders & Investors P.
Ltd., [2013] 2 SCR 74, Justice T.S. Thakur (As His Lordship then was),
while concurring with Justice M.Y. Eqbal, summed up the legal position as
follows:
“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.
Page 27 of 35
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.”
(Emphasis supplied)
49. We shall now look into Section 146 CPC. 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.”
Page 28 of 35
50. A lis 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
XXI 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 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 relevant
to note that a provision like Section 146 of the CPC was not be found in the
preceding Code of Civil Procedure, 1859 and was for the first time
incorporated in the CPC. In Order XXI Rule 16 also an explanation was
inserted through amendment made by Act No. 104 of 1976 w.e.f. 01.02.1977
where by the operation of Section 146 CPC was allowed to prevail
independent of Order XXI Rule 16 CPC.
51. 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.
Page 29 of 35
52. The law laid down by a four-Judge Bench of this Court in Smt. Saila
Bala Dassi vs. Sm. Nirmala Sundari Dassi and Anr., [1958] SCR 1287, is
apt for resolving the issue arising for decision herein. A transferee 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 XXII 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
Order 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 XXII
Rule 10 of the CPC. 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 XXII Rule 10. Whoever is entitled to be but has not been brought on
record under Order XXII 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 CPC. 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
Page 30 of 35
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. [See : Raj Kumar vs. Sardari Lal, (2004) 2 SCC 601]
53. In Dhurandhar Prasad Singh vs. Jai Prakash University, reported
in (2001) 6 SCC 534, this Court held that the plain language of Order XXII
Rule 10 CPC 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
Page 31 of 35
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 Mr. Nuli
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.
54. In Amit Kumar Shaw vs. Farida Khatoon, AIR 2005 SC 2209, this
Court held that a transferee pendente lite to the extent he has acquired
interest from the defendant is vitally interested in the litigation, where the
transfer is of the entire interest of the defendant; the latter having no more
interest in the property may not properly defend the suit. He may collude
with the plaintiff. Hence, though the plaintiff is under no obligation to make
a lis pendens transferee a party, under Order XXII Rule 10 an alienee
pendente lite may be joined as party. As already noticed, the court has
Page 32 of 35
discretion in the matter which must be judicially exercised and an alienee
would ordinarily be joined as a party to enable him to protect his interests.
The court has held that a transferee pendente lite of an interest in immovable
property is a representative-in-interest of the party from whom he has
acquired that interest. He is entitled to be impleaded in the suit or other
proceedings where his predecessor-in-interest is made a party to the
litigation; he is entitled to be heard in the matter on the merits of the case.
This judgment has been followed in Thomson Press (India) Ltd. (supra).
55. In fact, the scope of Order I Rule 10 and Order XXII Rule 10 CPC
is similar. Therefore, the principles applicable to Order XXII Rule 10 CPC,
in order to bring a purchaser pendente lite on record, are applicable to Order
I Rule 10 CPC. Under Order I Rule 10(2) CPC, the Court is required to
record a finding that person sought to be impleaded as party in the suit is
either necessary or proper party. While Section 146 and Order XXII Rule 10
CPC confers right upon the legal representative of a party to the suit to be
impleaded with the leave of the Court and continue the litigation. While
deciding an application under Section 146 and Order XXII Rule 10 CPC,
the Court is not require to go in the controversy as to whether person sought
to be impleaded as party in the suit is either necessary or proper party. If the
person sought to be impleaded as party is legal representative of a party to
Page 33 of 35
the suit, it is sufficient for the Court to order impleadment/substitution of
such person.
56. Thus, a lis pendens transferee though not brought on record under
Order XXII Rule 10 CPC, is entitled to seek leave to appeal against the final
decree passed against this transferor, the defendant in the suit. However,
whether to grant such leave or not is within the discretion of the court and
such discretion should be exercised judiciously in the facts and
circumstances of each case.
57. Having regard to the fact that the Respondent Nos. 1 and 2
respectively purchased the suit property during the pendency of the suit
instituted for specific performance and that too, while the injunction against
the original owner (transferor) was operating, the Respondent Nos. 1 and 2
respectively could not be said to have even made out any good case for grant
of leave to appeal.
58. From a conspectus of all the aforesaid judgments, touching upon the
present aspect, broadly, the following would emerge:
i. First, for the purpose of impleading a transferee pendente lite, the
facts and circumstances should be gone into and basing on the
necessary facts, the Court can permit such a party to come on record,
either under Order I Rule 10 CPC or under Order XXII Rule 10 CPC,
as a general principle;
Page 34 of 35
ii. Secondly, a transferee pendente lite is not entitled to come on record
as a matter of right;
iii. Thirdly, there is no absolute rule that such a transferee pendente lite,
with the leave of the Court should, in all cases, be allowed to come
on record as a party;
iv. Fourthly, the impleadment of a transferee pendente lite would depend
upon the nature of the suit and appreciation of the material available
on record;
v. Fifthly, where a transferee pendente lite does not ask for leave to
come on record, that would obviously be at his peril, and the suit may
be improperly conducted by the plaintiff on record;
vi. Sixthly, merely because such transferee pendente lite does not come
on record, the concept of him (transferee pendente lite) not being
bound by the judgment does not arise and consequently he would be
bound by the result of the litigation, though he remains
unrepresented;
vii. Seventhly, the sale transaction pendente lite is hit by the provisions
of Section 52 of the Transfer of Property Act; and,
viii. Eighthly, a transferee pendente lite, being an assignee of interest in
the property, as envisaged under Order XXII Rule 10 CPC, can seek
leave of the Court to come record on his own or at the instance of
either party to the suit.
Page 35 of 35
CONCLUSION
59. In the overall view of the matter, we are convinced that the impugned
order passed by the High Court is unsustainable in law.
60. In the result, the appeals succeed and are hereby allowed. The
impugned order passed by the High Court is set aside.
61. If the Respondent Nos. 1 & 2 feel that they have been duped or cheated
by the Respondent No. 7/Defendant No. 3, then it shall be open for them to
avail appropriate legal remedy before the appropriate forum in accordance
with law for the purpose of recovery of the amount towards sale
consideration paid at the time of execution of the sale deed.
62. Pending application(s), if any, stand disposed of accordingly.
…………………………………………J
(J.B. PARDIWALA)
…………………………………………J
(R. MAHADEVAN)
New Delhi
January 29, 2025
