Order I Rule 10 CPC, Section 52 of the Transfer of Property Act, and Section 19 of the Specific Relief Act, in a suit for specific performance - a third party who hold interest in the suit schedule property may be impleaded as parties to suit - as those are necessary parties to the disputes - Lower court dismissal order is set aside = High court allowed the appeal = Darji Krishna Murthy and 2 others...Petitioners 1.M.Shankar Reddy and 3 others...Respondents = public judis.nic.in/judis_andhra/filename=10619
Order I Rule 10 CPC, Section 52 of the Transfer of Property Act, and Section 19 of the Specific Relief Act, in a suit for specific performance - a third party who hold interest in the suit schedule property may be impleaded as parties to suit - as those are necessary parties to the disputes - Lower court dismissal order is set aside = High court allowed the appeal =
Order I Rule 10 CPC, Section 52 of the Transfer of Property Act, and Section 19 of the Specific Relief Act, and the said provisions of law read as follows:
The petitioners herein who are third parties to the suit filed the
present I.A.No.26 of 2012 under Order I Rule 10 read with Section 151 CPC,
seeking their impleadment in the suit as defendants 4 to 6.
The case of the
petitioners, as per the affidavit filed in support of the said I.A., is that the
defendants 1 to 3 / respondents 2 to 4 sold the suit schedule properties in
their favour by way of registered agreement of sale-cum-General Power of
Attorney with possession vide Document No.8701 of 2011 dated 06.08.2011 on the
file of Sub-Registrar, Sangareddy; ever since they are in absolute peaceful
possession and enjoyment of the suit schedule property; the alleged manager of
the pattadar also filed similar suit in O.S.No.340 of 2011 on the file of Court
of Principal Junior Civil Judge, Sangareddy, impleading the petitioners also as
defendants; the petitioners came to know of the filing of the present suit
recently and they are bona fide purchasers and are just and necessary parties
and their rights will be affected severely which cannot be compensated in any
manner.
Order I Rule 10 CPC:
Suit in the 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 as 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 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.
Section 52 of the Transfer of Property Act, 1882:
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."
Section 19 of the Specific Relief Act, 1963:
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 of the company.
Provided that the company has accepted the contract and communicated such
acceptance to the other party to the contract.
Therefore, it cannot be said that the said transaction is hit by Section 52 of the Transfer of Property Act.
Another significant aspect in the present case is that the defendants 1 to 3 remained
exparte and they are not contesting the suit.
Therefore, the persons prima
facie likely to be effected are the petitioners in the event of granting decree by the Court below in favour of the plaintiff.
Keeping in view the law laid
down by the Supreme Court, the provisions of Order I Rule 10 CPC and Section
16(b) of the Specific Relief Act and the pre suit transaction by registered
document dated 06.08.2011, this Court deems it appropriate that the proposed
parties / petitioners herein are proper and necessary parties for the litigation
for the present lis for effective adjudication of the issue involved in the
present lis.
23. It is also argued by the learned counsel for the petitioners that the
petitioners got document executed by impersonation and the said aspect cannot be
gone into in the present application.
24. For the reasons recorded supra, and having regard to the facts and
circumstances of the present case, this Court deems it appropriate to allow the
present revision and the CRP is accordingly allowed, setting aside the order
dated 02.07.2012 passed by the Court of the Judge, Family Court - cum - VII
Addl. District and Sessions Judge, Medak, at Sangareddy, in I.A.No.26 of 2012 in
O.S.No.120 of 2011 and, consequently I.A.No.26 of 2012 in O.S.No.120 of 2011 is
allowed and the petitioners stand impleaded as defendants 4, 5 and 6
respectively in O.S.No.120 of 2011. No order as to costs.
THE HON'BLE SRI JUSTICE A.V.SESHA SAI
CIVIL REVISION PETITION No. 3046 of 2012
01-10-2013
Darji Krishna Murthy and 2 others...Petitioners
1.M.Shankar Reddy and 3 others...Respondents
COUNSEL FOR PETITIONERS: Sri M.S.R. Subrahmanyam
COUNSEL FOR RESPONDENT: Sri Challa Gunaranjan
<Gist:
>Head Note:
?CITATIONS: 2011 (6) ALD 324
2011 (6) ALT 176
(2012) 1 SCC 656
(2008) 10 SCC 708
2009 (5) ALD 402
2010 (5) ALD 24 (SC)
2013 (3) ALD 111 (SC)
THE HON'BLE SRI JUSTICE A.V.SESHA SAI
CIVIL REVISION PETITION No. 3046 of 2012
ORDER:
This civil revision petition, under Article 227 of the Constitution of India,
calls in question the order dated 02.07.2012 passed by the Court of the Judge,
Family Court - cum - VII Addl. District and Sessions Judge, Medak, at
Sangareddy, dismissing I.A.No.26 of 2012 in O.S.No.120 of 2011 filed by the
third parties/petitioners herein under Order I Rule 10 of the Code of Civil
Procedure.
2. The facts and circumstances leading to the filing of the present revision
are as under:
3. The 1st respondent herein instituted the suit, being O.S.No.120 of 2011,
against the respondents 2 to 4 herein seeking the following reliefs:
a) Decree be passed directing the defendants to receive the balance sale
consideration of Rs.1,50,000/- and execute and register sale deed in favour of
the plaintiff or his nominees for A,B, and C schedule properties.
b) That in the event of the failure of the defendants to receive the balance
sale consideration, the plaintiff may be permitted to deposit the same in this
Hon'ble Court and this Hon'ble Court may be pleased to appoint a commissioner to
execute the sale deed as prayed for.
c) That in the event of this Hon'ble Court come to a conclusion that decree
for specific performance can not be granted, this Hon'ble Court may be pleased
to grant a money decree for a sum of Rs.11,00,000/- against the defendants
person and property with interest at the rate of 24% per annum.
d) Perpetual injunction be granted restraining the defendants, their agent,
servants or any other person on their behalf from alienating the A, B, and C
Schedule properties in any manner to any third parties.
e) Perpetual injunction be granted restraining the defendants, their agents,
servants, nominees or any person on their behalf from interfering in the
peaceful possession of the plaintiff over Schedule A, B, and C properties.
f) Cost of the suit be awarded.
g) Any other relief or reliefs be granted.
4. Plaint schedule properties are agricultural lands admeasuring Ac.15-13
guntas in S.No.120/7, 120/9 (old) and New S.Nos.120/29, 120/30 and Ac.7.27
guntas situated in Sy.No120/13 (old) and Sy.No.120/32 (new) of Peddakanjarla
village, Patancheru Mandal, Medak District.
The suit agreement of sale is dated
09.11.1999 and the 1st respondent herein instituted the present suit on
22.12.2011.
The petitioners herein who are third parties to the suit filed the
present I.A.No.26 of 2012 under Order I Rule 10 read with Section 151 CPC,
seeking their impleadment in the suit as defendants 4 to 6.
The case of the
petitioners, as per the affidavit filed in support of the said I.A., is that the
defendants 1 to 3 / respondents 2 to 4 sold the suit schedule properties in
their favour by way of registered agreement of sale-cum-General Power of
Attorney with possession vide Document No.8701 of 2011 dated 06.08.2011 on the
file of Sub-Registrar, Sangareddy; ever since they are in absolute peaceful
possession and enjoyment of the suit schedule property; the alleged manager of
the pattadar also filed similar suit in O.S.No.340 of 2011 on the file of Court
of Principal Junior Civil Judge, Sangareddy, impleading the petitioners also as
defendants; the petitioners came to know of the filing of the present suit
recently and they are bona fide purchasers and are just and necessary parties
and their rights will be affected severely which cannot be compensated in any
manner.
5. Resisting the said I.A.No.26 of 2012, the plaintiff/1st respondent herein
filed counter affidavit, contending inter alia that the petition is not
maintainable and that he purchased the property by way of an agreement of sale
dated 09.11.1999 from the defendants 1 to 3 and paid more than 85% of the sale
consideration and that the defendants delivered actual and physical possession
to him and that the alleged agreement of sale-cum-General Power of Attorney
dated 06.08.2011 was created by impersonating the signatures of defendants 1 to
3 and that he purchased the property in the year 1999 and the alleged agreement
of sale-cum-General Power of Attorney was executed after more than 10 years of
the suit agreement of sale dated 09.11.1999. Eventually, disputing the locus
standi of the petitioners, the plaintiff/respondent prayed for dismissal of
I.A.No.26 of 2012.
6. The learned Addl. District and Sessions Judge, Medak, at Sangareddy, by
virtue of an order dated 02.07.2012, dismissed I.A.No.26 of 2012. Calling in
question the validity and legal acceptability of the said order, the present
revision petition has been filed under Article 227 of the Constitution of India,
urging the following grounds:
(a) The order of the learned District Judge dismissing the application filed
under Order I Rule 10 to implead the petitioners as party-defendants to the
suit, is contrary to law, vitiated by material irregularities and is liable to
be interdicted by exercise of superintendence power under Art.227 of the
Constitution of India.
(b) The learned Judge should have seen that petitioners are necessary and
proper parties to the suit as the schedule property was conveyed in their favour
by the defendants under a registered Instrument even prior to institution of the
present suit by the plaintiff against the defendants for specific performance of
agreement of sale, that the learned Judge committed fundamental mistake in
observing that the petitioners are claiming under independent title and
therefore are not necessary parties, which on the face, perverse, and thus
refused to exercise the discretion resulting jurisdictional error.
(c) The learned Judge should have seen that no effective decree could be
passed in the absence of the petitioners and in that view, should have impleaded
them to the suit.
(d) The reliance placed by the learned Judge on Supreme Court decision is
erroneous as the facts in that reported decision are clearly distinguishable and
is not applicable to the facts and circumstances of the case.
(e) The order under revision, if allowed to stand will occasion failure of
justice and cause irreparable injury to the petitioner.
7. Now the points for consideration and determination by this Court in the
present C.R.P. are as follows:
(1) Whether the petitioners satisfy the necessary ingredients of Order I Rule
10 CPC and whether they are proper and necessary parties for the present suit?
(2) Whether the presence of the petitioners is necessary for proper
adjudication of the issue in the suit?
(3) Whether the learned District Judge is justified in dismissing the I.A and
whether the interference of this Court under Article 227 of the Constitution of
India is warranted in the facts of the case?
8. Heard Sri M.S.R. Subrahmanyam, counsel for the petitioners and Sri C.
Gunaranjan, counsel for the 1st respondent/plaintiff and perused material
available on record including the order impugned in the present civil revision
petition.
9. It is contended by the learned counsel for the petitioners that the Court
below is not justified in dismissing the application filed by the petitioners
and that since the petitioners made out a case for their entry into the
litigation under Order I Rule 10 CPC, the Court below ought to have permitted
the petitioners to come on record to safeguard their interest in the property.
10. To bolster his submissions, the learned counsel for the petitioners placed
reliance on the judgments of this Court in the case of PALLAPU MOHANARAO (DIED)
BY LRS. V. THAMMISETTY SUBBA RAO AND OTHERS1, and MITTA SANJEEVA REDDY AND ANOTHER v. SHAIK FAKRUDDIN AND ANOTHER2.
11. Per contra, it is argued by the learned counsel for the 1st
respondent/plaintiff, Sri C. Gunaranjan, that the learned Addl. District Judge
is perfectly justified in dismissing the application filed by the petitioners as
they are neither proper nor necessary parties to the litigation. It is further
contended that the presence of the petitioners who are strangers to the suit
agreement of sale is not necessary for adjudication of the issue involved in the
suit. He placed reliance on the judgments of the Hon'ble Supreme Court in the
case of SURAJ LAMP AND INDUSTRIES PRIVATE LIMITED (THROUGH DIRECTOR) v. STATE OF HARYANA AND ANOTHER3; and RAMESH CHANDRA PATTNAIK v. PUSHPENDRA KUMARI AND OTHERS4.
12. The present suit is for specific performance of agreement of sale. The
provisions of law which are germane and relevant for the purpose of resolving
the controversy in the present revision are
Order I Rule 10 CPC, Section 52 of
the Transfer of Property Act, and Section 19 of the Specific Relief Act, and the
said provisions of law read as follows:
Order I Rule 10 CPC:
Suit in the 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 as 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 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.
Section 52 of the Transfer of Property Act, 1882:
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."
Section 19 of the Specific Relief Act, 1963:
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 of the company.
Provided that the company has accepted the contract and communicated such
acceptance to the other party to the contract.
13. The object and intention of the legislature in inserting Order I Rule 10
of CPC is to avoid and to avert multiplicity of litigation, which is uncongenial
for the peace and tranquility in the society.
14. A reading of the said provision of law makes it very much evident that the
Courts are given wider discretion under the said provision to meet every case or
defect of a party and to proceed with a person who is either necessary or proper
party whose presence in the Court is essential for effective determination of
the issues involved in the suit.
15. While dealing with the application under Order I Rule 10 CPC in a suit for
specific performance of agreement of sale, the impact and effect of the
provisions of Section 52 of the Transfer of Property Act and Section 19(b) of
the Specific Relief Act cannot be lost sight of. The object and intention of
the legislature in incorporating such type of provisions is to safeguard the
innocent and bonafide purchasers of properties for valuable considerations and
to avoid multiple transactions in respect of the same property. Independent
assessment and consideration and analysis based on the facts of each case has to
be undertaken while dealing with the applications filed under Order I Rule 10
CPC and there is no straight jacket formula for deciding the rights of the
proposed parties to gain entry into the suit. Under Section 19(b) of the
Specific Relief Act bona fide transactions are protected. It is a settled and
well established proposition of law that the relief of specific performance is a
discretionary and equitable relief and the same cannot be granted for mere
asking and in fact all the surrounding circumstances and the bonafides of the
parties to the transaction will have to be assessed for granting the said
relief.
16. In the case of INDUBAI AND ANOTHER v. RAJENDRA KUMAR BHANDARI AND
ANOTHER5, this Court, at paragraphs 4 to 6 held as follows:
"The suit filed by the 1st respondent herein is the one, for the relief of
specific performance of an agreement of sale, or in the alternative, a decree
for refund of the amount advanced. The petitioners do not dispute that they
have purchased the suit schedule property. The 1st respondent filed the
application to implead the petitioners as parties to the suit. It is true that
an individual cannot be subjected to unnecessary litigation and he cannot be
made to answer a person with whom he does not have any privity of contract or
other relation. This principle, however, needs a different approach, when it
comes to the suits for specific performance. Though the ultimate obligation, in
the event of a suit decree for specific performance being passed, would rest
upon the vendor under the agreement in the context of recovery of possession or
neutralizing the subsequent developments, it becomes essential to add everyone,
who had a right or interest, vis--vis the property, either as on the date of
the agreement of sale, or subsequent thereto.
The law of specific performance places a peculiar type of obligation on a
person, who does not hold perfect title, but has entered into agreement of sale.
He is required to clear the hurdles or to perfect his title exclusively for the
purpose of conveying the same to the vendee. Reference may be made to Sections
13 and 17 of the Specific Relief Act, 1963. when such is the burden placed upon
the party to the agreement of sale, it becomes imperative that everyone, who has
acquired title, or interest over the property, is made a party to the
proceedings, which in turn, would pave the way for effective and complete
adjudication.
One of the objects underlying the process of adjudication is to avoid
multiplicity of proceedings. In case the efforts made by the 1st respondent to
implead the petitioners herein as parties to the present suit are thwarted, they
shall have to institute another suit against the petitioners in the event of the
present suit being decreed. By the same logic, separate suits have to be filed
against persons, who acquire title or interest from time to time. Many a time,
wantonly or deliberately, the parties, who are enjoying the property may bring
about such situations that is exactly the event, which is sought to be avoided,
by permitting the applications to be filed under Order I Rule 10 CPC."
17. This Court, in PALLAPU MOHANARAO (1 SUPRA), while referring to the
judgments of the Hon'ble Supreme Court, held at paragraph 5 as follows:
"Basically, it is for the plaintiff in a suit, to identify the parties against
whom he has any grievance and to implead them as defendants in the suit filed
for necessary relief. He cannot be compelled to face litigation with the
persons against whom he has no grievance. Where, however, any third party is
likely to suffer any grievance, on account of the outcome of the suit, he shall
be entitled to get himself impleaded. The question as to whether an individual
is a proper or necessary party to a suit, would depend upon the nature of relief
claimed in the suit and the right or interest projected by the persons, who
propose to get themselves impleaded. No hard and fast rule can be weighed, that
would cover a possible situation in this regard."
18. In PALLAPU MOHANARAO (1 SUPRA) this Court also referred to the judgment of
the Apex Court in MUMBAI INTERNATIONAL AIRPORT PVT. LTD., v. REGENCY CONVENTION
CENTRE & HOTELS PVT. LTD. AND OTHERS6 and paragraph 12.4 of the judgment which
is extracted in the said judgment reads as under:
"If an application is made by a plaintiff for impleading someone as a proper
party, subject to limitation, bonafides etc., the Court will normally implead
him, if he is found to be a proper party. On the other hand, if a non-party
makes an application seeking impleadment as a proper party and Court finds him
to be a proper party, the Court may direct his addition as a defendant; but if
the Court finds that his addition will alter the nature of the suit or introduce
a new cause of action, it may dismiss the application even if he is found to be
a proper party, if it does not want to widen the scope of the specific
performance suit; or the Court may direct such applicant to be impleaded as a
proper party, either unconditionally or subject to terms. For example, if 'D'
claiming to be a co-owner of a suit property, enters into an agreement for sale
of his share in favour of 'P' representing that he is the co-owner with half
share, and 'P' files a suit for specific performance of the said agreement of
sale in respect of the undivided half share, the Court may permit the other co-
owner who contends that 'D' has only one-fourth share, to be impleaded as an
additional defendant as a proper party, and may examine the issue whether the
plaintiff is entitled to specific performance of the agreement in respect of
half a share or only one fourth share; alternatively the Court may refuse to
implead the other co-owner and leave open the question in regard to the extent
of share of the vendor-defendant to be decided in an independent proceeding by
the other co-owner, or the plaintiff; alternatively the Court may implead him
but subject to the term that the dispute, if any, between the impleaded co-owner
and the original defendant in regard to the extent of the share will not be the
subject-matter of the suit for specific performance, and that it will decide in
the suit, only the issues relating to specific performance, that is whether the
defendant executed the agreement/contract and whether such contract should be
specifically enforced. In other words, the Court has the discretion to either
allow or reject an application of a person claiming to be a proper party,
depending upon the facts and circumstances and no person has a right to insist
that he should be impleaded as a party, merely because he is a proper party."
19. In the case of SURAJ LAMP (3-supra), cited by the counsel for the 1st
respondent/plaintiff, the Hon'ble Supreme Court at paragraph 23 held that sale
agreement/General Power of Attorney/ Will transaction would not convey any title
nor creates any interest in the immovable property and the Supreme Court further
held at paragraph 24 that they cannot be recognized as deeds of title except to
the limited extent of Section 53(a) of the Transfer of Property Act. In the
said judgment, the Supreme Court at paragraph 25 also held that the said
decision should be made applicable prospectively to avoid hardship and the said
judgment is dated 11.10.2011.
20. In the case of RAMESH CHANDRA (4 supra), the Supreme Court held that the
proposed respondent was not a necessary party for determination of the
genuineness or otherwise of the agreement of sale which was said to have been
entered into between the petitioner and the 1st respondent.
21. At this juncture, it is also relevant to refer to the judgment of the Apex
Court in the case of THOMSON PRESS (INDIA) LTD., v. NANAK BUILDERS & INVESTORS
P. LTD. AND OTHERS7. In the said judgment, the apex Court while reviewing the
entire law on the subject at paragraphs 22, 23, 24, 28, 31, 37, 48 and 42 held
as follows:
"In the case of Vidhur Impex's case ((2012) 8 SCC 384), 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 herein below:
"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 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.
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."
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 and others, AIR 1948 PC 147, 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".
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.
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.
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.
The second aspect which the proposed judgment succinctly deals with is the
effect of a sale pendente lite. The legal position in this regard is also
fairly well settled. A transfer pendente lite is not illegal ipso jure but
remains subservient to the pending litigation. In Nagubai Ammal and others v.
B. Shama Rao and others, 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 right 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."
There is, therefore, little room for any doubt that the transfer of the suit
property pendente 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.
22. Coming to the case on hand,
the suit agreement of sale was executed as
long back as in 09.11.1999 and the 1st respondent herein instituted the present suit on 22.12.2011 and the proposed parties / petitioners herein are tracing out their right to the property by virtue of a registered sale agreement-cum-General
Power of Attorney dated 06.08.2011.
Therefore, it cannot be said that the said
transaction is hit by Section 52 of the Transfer of Property Act.
Another
significant aspect in the present case is that the defendants 1 to 3 remained
exparte and they are not contesting the suit.
Therefore, the persons prima
facie likely to be effected are the petitioners in the event of granting decree by the Court below in favour of the plaintiff. Keeping in view the law laid
down by the Supreme Court, the provisions of Order I Rule 10 CPC and Section
16(b) of the Specific Relief Act and the pre suit transaction by registered
document dated 06.08.2011, this Court deems it appropriate that the proposed
parties / petitioners herein are proper and necessary parties for the litigation
for the present lis for effective adjudication of the issue involved in the
present lis.
23. It is also argued by the learned counsel for the petitioners that the
petitioners got document executed by impersonation and the said aspect cannot be
gone into in the present application.
24. For the reasons recorded supra, and having regard to the facts and
circumstances of the present case, this Court deems it appropriate to allow the
present revision and the CRP is accordingly allowed, setting aside the order
dated 02.07.2012 passed by the Court of the Judge, Family Court - cum - VII
Addl. District and Sessions Judge, Medak, at Sangareddy, in I.A.No.26 of 2012 in
O.S.No.120 of 2011 and, consequently I.A.No.26 of 2012 in O.S.No.120 of 2011 is
allowed and the petitioners stand impleaded as defendants 4, 5 and 6
respectively in O.S.No.120 of 2011. No order as to costs.
__________________________
JUSTICE A.V. SESHA SAI
01st October, 2013
Order I Rule 10 CPC, Section 52 of the Transfer of Property Act, and Section 19 of the Specific Relief Act, and the said provisions of law read as follows:
The petitioners herein who are third parties to the suit filed the
present I.A.No.26 of 2012 under Order I Rule 10 read with Section 151 CPC,
seeking their impleadment in the suit as defendants 4 to 6.
The case of the
petitioners, as per the affidavit filed in support of the said I.A., is that the
defendants 1 to 3 / respondents 2 to 4 sold the suit schedule properties in
their favour by way of registered agreement of sale-cum-General Power of
Attorney with possession vide Document No.8701 of 2011 dated 06.08.2011 on the
file of Sub-Registrar, Sangareddy; ever since they are in absolute peaceful
possession and enjoyment of the suit schedule property; the alleged manager of
the pattadar also filed similar suit in O.S.No.340 of 2011 on the file of Court
of Principal Junior Civil Judge, Sangareddy, impleading the petitioners also as
defendants; the petitioners came to know of the filing of the present suit
recently and they are bona fide purchasers and are just and necessary parties
and their rights will be affected severely which cannot be compensated in any
manner.
Order I Rule 10 CPC:
Suit in the 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 as 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 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.
Section 52 of the Transfer of Property Act, 1882:
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."
Section 19 of the Specific Relief Act, 1963:
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 of the company.
Provided that the company has accepted the contract and communicated such
acceptance to the other party to the contract.
the suit agreement of sale was executed as
long back as in 09.11.1999 and the 1st respondent herein instituted the present suit on 22.12.2011 and the proposed parties / petitioners herein are tracing out their right to the property by virtue of a registered sale agreement-cum-General Power of Attorney dated 06.08.2011. Therefore, it cannot be said that the said transaction is hit by Section 52 of the Transfer of Property Act.
Another significant aspect in the present case is that the defendants 1 to 3 remained
exparte and they are not contesting the suit.
Therefore, the persons prima
facie likely to be effected are the petitioners in the event of granting decree by the Court below in favour of the plaintiff.
Keeping in view the law laid
down by the Supreme Court, the provisions of Order I Rule 10 CPC and Section
16(b) of the Specific Relief Act and the pre suit transaction by registered
document dated 06.08.2011, this Court deems it appropriate that the proposed
parties / petitioners herein are proper and necessary parties for the litigation
for the present lis for effective adjudication of the issue involved in the
present lis.
23. It is also argued by the learned counsel for the petitioners that the
petitioners got document executed by impersonation and the said aspect cannot be
gone into in the present application.
24. For the reasons recorded supra, and having regard to the facts and
circumstances of the present case, this Court deems it appropriate to allow the
present revision and the CRP is accordingly allowed, setting aside the order
dated 02.07.2012 passed by the Court of the Judge, Family Court - cum - VII
Addl. District and Sessions Judge, Medak, at Sangareddy, in I.A.No.26 of 2012 in
O.S.No.120 of 2011 and, consequently I.A.No.26 of 2012 in O.S.No.120 of 2011 is
allowed and the petitioners stand impleaded as defendants 4, 5 and 6
respectively in O.S.No.120 of 2011. No order as to costs.
THE HON'BLE SRI JUSTICE A.V.SESHA SAI
CIVIL REVISION PETITION No. 3046 of 2012
01-10-2013
Darji Krishna Murthy and 2 others...Petitioners
1.M.Shankar Reddy and 3 others...Respondents
COUNSEL FOR PETITIONERS: Sri M.S.R. Subrahmanyam
COUNSEL FOR RESPONDENT: Sri Challa Gunaranjan
<Gist:
>Head Note:
?CITATIONS: 2011 (6) ALD 324
2011 (6) ALT 176
(2012) 1 SCC 656
(2008) 10 SCC 708
2009 (5) ALD 402
2010 (5) ALD 24 (SC)
2013 (3) ALD 111 (SC)
THE HON'BLE SRI JUSTICE A.V.SESHA SAI
CIVIL REVISION PETITION No. 3046 of 2012
ORDER:
This civil revision petition, under Article 227 of the Constitution of India,
calls in question the order dated 02.07.2012 passed by the Court of the Judge,
Family Court - cum - VII Addl. District and Sessions Judge, Medak, at
Sangareddy, dismissing I.A.No.26 of 2012 in O.S.No.120 of 2011 filed by the
third parties/petitioners herein under Order I Rule 10 of the Code of Civil
Procedure.
2. The facts and circumstances leading to the filing of the present revision
are as under:
3. The 1st respondent herein instituted the suit, being O.S.No.120 of 2011,
against the respondents 2 to 4 herein seeking the following reliefs:
a) Decree be passed directing the defendants to receive the balance sale
consideration of Rs.1,50,000/- and execute and register sale deed in favour of
the plaintiff or his nominees for A,B, and C schedule properties.
b) That in the event of the failure of the defendants to receive the balance
sale consideration, the plaintiff may be permitted to deposit the same in this
Hon'ble Court and this Hon'ble Court may be pleased to appoint a commissioner to
execute the sale deed as prayed for.
c) That in the event of this Hon'ble Court come to a conclusion that decree
for specific performance can not be granted, this Hon'ble Court may be pleased
to grant a money decree for a sum of Rs.11,00,000/- against the defendants
person and property with interest at the rate of 24% per annum.
d) Perpetual injunction be granted restraining the defendants, their agent,
servants or any other person on their behalf from alienating the A, B, and C
Schedule properties in any manner to any third parties.
e) Perpetual injunction be granted restraining the defendants, their agents,
servants, nominees or any person on their behalf from interfering in the
peaceful possession of the plaintiff over Schedule A, B, and C properties.
f) Cost of the suit be awarded.
g) Any other relief or reliefs be granted.
4. Plaint schedule properties are agricultural lands admeasuring Ac.15-13
guntas in S.No.120/7, 120/9 (old) and New S.Nos.120/29, 120/30 and Ac.7.27
guntas situated in Sy.No120/13 (old) and Sy.No.120/32 (new) of Peddakanjarla
village, Patancheru Mandal, Medak District.
The suit agreement of sale is dated
09.11.1999 and the 1st respondent herein instituted the present suit on
22.12.2011.
The petitioners herein who are third parties to the suit filed the
present I.A.No.26 of 2012 under Order I Rule 10 read with Section 151 CPC,
seeking their impleadment in the suit as defendants 4 to 6.
The case of the
petitioners, as per the affidavit filed in support of the said I.A., is that the
defendants 1 to 3 / respondents 2 to 4 sold the suit schedule properties in
their favour by way of registered agreement of sale-cum-General Power of
Attorney with possession vide Document No.8701 of 2011 dated 06.08.2011 on the
file of Sub-Registrar, Sangareddy; ever since they are in absolute peaceful
possession and enjoyment of the suit schedule property; the alleged manager of
the pattadar also filed similar suit in O.S.No.340 of 2011 on the file of Court
of Principal Junior Civil Judge, Sangareddy, impleading the petitioners also as
defendants; the petitioners came to know of the filing of the present suit
recently and they are bona fide purchasers and are just and necessary parties
and their rights will be affected severely which cannot be compensated in any
manner.
5. Resisting the said I.A.No.26 of 2012, the plaintiff/1st respondent herein
filed counter affidavit, contending inter alia that the petition is not
maintainable and that he purchased the property by way of an agreement of sale
dated 09.11.1999 from the defendants 1 to 3 and paid more than 85% of the sale
consideration and that the defendants delivered actual and physical possession
to him and that the alleged agreement of sale-cum-General Power of Attorney
dated 06.08.2011 was created by impersonating the signatures of defendants 1 to
3 and that he purchased the property in the year 1999 and the alleged agreement
of sale-cum-General Power of Attorney was executed after more than 10 years of
the suit agreement of sale dated 09.11.1999. Eventually, disputing the locus
standi of the petitioners, the plaintiff/respondent prayed for dismissal of
I.A.No.26 of 2012.
6. The learned Addl. District and Sessions Judge, Medak, at Sangareddy, by
virtue of an order dated 02.07.2012, dismissed I.A.No.26 of 2012. Calling in
question the validity and legal acceptability of the said order, the present
revision petition has been filed under Article 227 of the Constitution of India,
urging the following grounds:
(a) The order of the learned District Judge dismissing the application filed
under Order I Rule 10 to implead the petitioners as party-defendants to the
suit, is contrary to law, vitiated by material irregularities and is liable to
be interdicted by exercise of superintendence power under Art.227 of the
Constitution of India.
(b) The learned Judge should have seen that petitioners are necessary and
proper parties to the suit as the schedule property was conveyed in their favour
by the defendants under a registered Instrument even prior to institution of the
present suit by the plaintiff against the defendants for specific performance of
agreement of sale, that the learned Judge committed fundamental mistake in
observing that the petitioners are claiming under independent title and
therefore are not necessary parties, which on the face, perverse, and thus
refused to exercise the discretion resulting jurisdictional error.
(c) The learned Judge should have seen that no effective decree could be
passed in the absence of the petitioners and in that view, should have impleaded
them to the suit.
(d) The reliance placed by the learned Judge on Supreme Court decision is
erroneous as the facts in that reported decision are clearly distinguishable and
is not applicable to the facts and circumstances of the case.
(e) The order under revision, if allowed to stand will occasion failure of
justice and cause irreparable injury to the petitioner.
7. Now the points for consideration and determination by this Court in the
present C.R.P. are as follows:
(1) Whether the petitioners satisfy the necessary ingredients of Order I Rule
10 CPC and whether they are proper and necessary parties for the present suit?
(2) Whether the presence of the petitioners is necessary for proper
adjudication of the issue in the suit?
(3) Whether the learned District Judge is justified in dismissing the I.A and
whether the interference of this Court under Article 227 of the Constitution of
India is warranted in the facts of the case?
8. Heard Sri M.S.R. Subrahmanyam, counsel for the petitioners and Sri C.
Gunaranjan, counsel for the 1st respondent/plaintiff and perused material
available on record including the order impugned in the present civil revision
petition.
9. It is contended by the learned counsel for the petitioners that the Court
below is not justified in dismissing the application filed by the petitioners
and that since the petitioners made out a case for their entry into the
litigation under Order I Rule 10 CPC, the Court below ought to have permitted
the petitioners to come on record to safeguard their interest in the property.
10. To bolster his submissions, the learned counsel for the petitioners placed
reliance on the judgments of this Court in the case of PALLAPU MOHANARAO (DIED)
BY LRS. V. THAMMISETTY SUBBA RAO AND OTHERS1, and MITTA SANJEEVA REDDY AND ANOTHER v. SHAIK FAKRUDDIN AND ANOTHER2.
11. Per contra, it is argued by the learned counsel for the 1st
respondent/plaintiff, Sri C. Gunaranjan, that the learned Addl. District Judge
is perfectly justified in dismissing the application filed by the petitioners as
they are neither proper nor necessary parties to the litigation. It is further
contended that the presence of the petitioners who are strangers to the suit
agreement of sale is not necessary for adjudication of the issue involved in the
suit. He placed reliance on the judgments of the Hon'ble Supreme Court in the
case of SURAJ LAMP AND INDUSTRIES PRIVATE LIMITED (THROUGH DIRECTOR) v. STATE OF HARYANA AND ANOTHER3; and RAMESH CHANDRA PATTNAIK v. PUSHPENDRA KUMARI AND OTHERS4.
12. The present suit is for specific performance of agreement of sale. The
provisions of law which are germane and relevant for the purpose of resolving
the controversy in the present revision are
Order I Rule 10 CPC, Section 52 of
the Transfer of Property Act, and Section 19 of the Specific Relief Act, and the
said provisions of law read as follows:
Order I Rule 10 CPC:
Suit in the 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 as 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 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.
Section 52 of the Transfer of Property Act, 1882:
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."
Section 19 of the Specific Relief Act, 1963:
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 of the company.
Provided that the company has accepted the contract and communicated such
acceptance to the other party to the contract.
13. The object and intention of the legislature in inserting Order I Rule 10
of CPC is to avoid and to avert multiplicity of litigation, which is uncongenial
for the peace and tranquility in the society.
14. A reading of the said provision of law makes it very much evident that the
Courts are given wider discretion under the said provision to meet every case or
defect of a party and to proceed with a person who is either necessary or proper
party whose presence in the Court is essential for effective determination of
the issues involved in the suit.
15. While dealing with the application under Order I Rule 10 CPC in a suit for
specific performance of agreement of sale, the impact and effect of the
provisions of Section 52 of the Transfer of Property Act and Section 19(b) of
the Specific Relief Act cannot be lost sight of. The object and intention of
the legislature in incorporating such type of provisions is to safeguard the
innocent and bonafide purchasers of properties for valuable considerations and
to avoid multiple transactions in respect of the same property. Independent
assessment and consideration and analysis based on the facts of each case has to
be undertaken while dealing with the applications filed under Order I Rule 10
CPC and there is no straight jacket formula for deciding the rights of the
proposed parties to gain entry into the suit. Under Section 19(b) of the
Specific Relief Act bona fide transactions are protected. It is a settled and
well established proposition of law that the relief of specific performance is a
discretionary and equitable relief and the same cannot be granted for mere
asking and in fact all the surrounding circumstances and the bonafides of the
parties to the transaction will have to be assessed for granting the said
relief.
16. In the case of INDUBAI AND ANOTHER v. RAJENDRA KUMAR BHANDARI AND
ANOTHER5, this Court, at paragraphs 4 to 6 held as follows:
"The suit filed by the 1st respondent herein is the one, for the relief of
specific performance of an agreement of sale, or in the alternative, a decree
for refund of the amount advanced. The petitioners do not dispute that they
have purchased the suit schedule property. The 1st respondent filed the
application to implead the petitioners as parties to the suit. It is true that
an individual cannot be subjected to unnecessary litigation and he cannot be
made to answer a person with whom he does not have any privity of contract or
other relation. This principle, however, needs a different approach, when it
comes to the suits for specific performance. Though the ultimate obligation, in
the event of a suit decree for specific performance being passed, would rest
upon the vendor under the agreement in the context of recovery of possession or
neutralizing the subsequent developments, it becomes essential to add everyone,
who had a right or interest, vis--vis the property, either as on the date of
the agreement of sale, or subsequent thereto.
The law of specific performance places a peculiar type of obligation on a
person, who does not hold perfect title, but has entered into agreement of sale.
He is required to clear the hurdles or to perfect his title exclusively for the
purpose of conveying the same to the vendee. Reference may be made to Sections
13 and 17 of the Specific Relief Act, 1963. when such is the burden placed upon
the party to the agreement of sale, it becomes imperative that everyone, who has
acquired title, or interest over the property, is made a party to the
proceedings, which in turn, would pave the way for effective and complete
adjudication.
One of the objects underlying the process of adjudication is to avoid
multiplicity of proceedings. In case the efforts made by the 1st respondent to
implead the petitioners herein as parties to the present suit are thwarted, they
shall have to institute another suit against the petitioners in the event of the
present suit being decreed. By the same logic, separate suits have to be filed
against persons, who acquire title or interest from time to time. Many a time,
wantonly or deliberately, the parties, who are enjoying the property may bring
about such situations that is exactly the event, which is sought to be avoided,
by permitting the applications to be filed under Order I Rule 10 CPC."
17. This Court, in PALLAPU MOHANARAO (1 SUPRA), while referring to the
judgments of the Hon'ble Supreme Court, held at paragraph 5 as follows:
"Basically, it is for the plaintiff in a suit, to identify the parties against
whom he has any grievance and to implead them as defendants in the suit filed
for necessary relief. He cannot be compelled to face litigation with the
persons against whom he has no grievance. Where, however, any third party is
likely to suffer any grievance, on account of the outcome of the suit, he shall
be entitled to get himself impleaded. The question as to whether an individual
is a proper or necessary party to a suit, would depend upon the nature of relief
claimed in the suit and the right or interest projected by the persons, who
propose to get themselves impleaded. No hard and fast rule can be weighed, that
would cover a possible situation in this regard."
18. In PALLAPU MOHANARAO (1 SUPRA) this Court also referred to the judgment of
the Apex Court in MUMBAI INTERNATIONAL AIRPORT PVT. LTD., v. REGENCY CONVENTION
CENTRE & HOTELS PVT. LTD. AND OTHERS6 and paragraph 12.4 of the judgment which
is extracted in the said judgment reads as under:
"If an application is made by a plaintiff for impleading someone as a proper
party, subject to limitation, bonafides etc., the Court will normally implead
him, if he is found to be a proper party. On the other hand, if a non-party
makes an application seeking impleadment as a proper party and Court finds him
to be a proper party, the Court may direct his addition as a defendant; but if
the Court finds that his addition will alter the nature of the suit or introduce
a new cause of action, it may dismiss the application even if he is found to be
a proper party, if it does not want to widen the scope of the specific
performance suit; or the Court may direct such applicant to be impleaded as a
proper party, either unconditionally or subject to terms. For example, if 'D'
claiming to be a co-owner of a suit property, enters into an agreement for sale
of his share in favour of 'P' representing that he is the co-owner with half
share, and 'P' files a suit for specific performance of the said agreement of
sale in respect of the undivided half share, the Court may permit the other co-
owner who contends that 'D' has only one-fourth share, to be impleaded as an
additional defendant as a proper party, and may examine the issue whether the
plaintiff is entitled to specific performance of the agreement in respect of
half a share or only one fourth share; alternatively the Court may refuse to
implead the other co-owner and leave open the question in regard to the extent
of share of the vendor-defendant to be decided in an independent proceeding by
the other co-owner, or the plaintiff; alternatively the Court may implead him
but subject to the term that the dispute, if any, between the impleaded co-owner
and the original defendant in regard to the extent of the share will not be the
subject-matter of the suit for specific performance, and that it will decide in
the suit, only the issues relating to specific performance, that is whether the
defendant executed the agreement/contract and whether such contract should be
specifically enforced. In other words, the Court has the discretion to either
allow or reject an application of a person claiming to be a proper party,
depending upon the facts and circumstances and no person has a right to insist
that he should be impleaded as a party, merely because he is a proper party."
19. In the case of SURAJ LAMP (3-supra), cited by the counsel for the 1st
respondent/plaintiff, the Hon'ble Supreme Court at paragraph 23 held that sale
agreement/General Power of Attorney/ Will transaction would not convey any title
nor creates any interest in the immovable property and the Supreme Court further
held at paragraph 24 that they cannot be recognized as deeds of title except to
the limited extent of Section 53(a) of the Transfer of Property Act. In the
said judgment, the Supreme Court at paragraph 25 also held that the said
decision should be made applicable prospectively to avoid hardship and the said
judgment is dated 11.10.2011.
20. In the case of RAMESH CHANDRA (4 supra), the Supreme Court held that the
proposed respondent was not a necessary party for determination of the
genuineness or otherwise of the agreement of sale which was said to have been
entered into between the petitioner and the 1st respondent.
21. At this juncture, it is also relevant to refer to the judgment of the Apex
Court in the case of THOMSON PRESS (INDIA) LTD., v. NANAK BUILDERS & INVESTORS
P. LTD. AND OTHERS7. In the said judgment, the apex Court while reviewing the
entire law on the subject at paragraphs 22, 23, 24, 28, 31, 37, 48 and 42 held
as follows:
"In the case of Vidhur Impex's case ((2012) 8 SCC 384), 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 herein below:
"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 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.
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."
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 and others, AIR 1948 PC 147, 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".
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.
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.
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.
The second aspect which the proposed judgment succinctly deals with is the
effect of a sale pendente lite. The legal position in this regard is also
fairly well settled. A transfer pendente lite is not illegal ipso jure but
remains subservient to the pending litigation. In Nagubai Ammal and others v.
B. Shama Rao and others, 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 right 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."
There is, therefore, little room for any doubt that the transfer of the suit
property pendente 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.
22. Coming to the case on hand,
the suit agreement of sale was executed as
long back as in 09.11.1999 and the 1st respondent herein instituted the present suit on 22.12.2011 and the proposed parties / petitioners herein are tracing out their right to the property by virtue of a registered sale agreement-cum-General
Power of Attorney dated 06.08.2011.
Therefore, it cannot be said that the said
transaction is hit by Section 52 of the Transfer of Property Act.
Another
significant aspect in the present case is that the defendants 1 to 3 remained
exparte and they are not contesting the suit.
Therefore, the persons prima
facie likely to be effected are the petitioners in the event of granting decree by the Court below in favour of the plaintiff. Keeping in view the law laid
down by the Supreme Court, the provisions of Order I Rule 10 CPC and Section
16(b) of the Specific Relief Act and the pre suit transaction by registered
document dated 06.08.2011, this Court deems it appropriate that the proposed
parties / petitioners herein are proper and necessary parties for the litigation
for the present lis for effective adjudication of the issue involved in the
present lis.
23. It is also argued by the learned counsel for the petitioners that the
petitioners got document executed by impersonation and the said aspect cannot be
gone into in the present application.
24. For the reasons recorded supra, and having regard to the facts and
circumstances of the present case, this Court deems it appropriate to allow the
present revision and the CRP is accordingly allowed, setting aside the order
dated 02.07.2012 passed by the Court of the Judge, Family Court - cum - VII
Addl. District and Sessions Judge, Medak, at Sangareddy, in I.A.No.26 of 2012 in
O.S.No.120 of 2011 and, consequently I.A.No.26 of 2012 in O.S.No.120 of 2011 is
allowed and the petitioners stand impleaded as defendants 4, 5 and 6
respectively in O.S.No.120 of 2011. No order as to costs.
__________________________
JUSTICE A.V. SESHA SAI
01st October, 2013
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