If Transferee Pendente Lite Does Not Come On Record, He Is Bound By Judgment Even Though He Remains Unrepresented: SC
The Apex Court observed that a transferee pendente lite is not entitled to come on record as a matter of right.
The Supreme Court in a recent Judgment held that, if the transferee pendente lite does not come on record, the concept of him 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.
The Court held thus a batch of Civil Appeals challenging the Order of the Karnataka High Court by which it allowed Applications and condoned the delay of 586 days in filing the Appeal.
The two-Judge Bench comprising Justice J.B. Pardiwala and Justice R. Mahadevan took note of the following important points –
1. 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;
2. A transferee pendente lite is not entitled to come on record as a matter of right;
3. 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;
4. The impleadment of a transferee pendente lite would depend upon the nature of the suit and appreciation of the material available on record;
5. 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;
6. 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;
7. The sale transaction pendente lite is hit by the provisions of Section 52 of the Transfer of Property Act; and,
8. 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.
Senior Advocate Anand Sanjay M. Nuli appeared on behalf of the Appellants while Senior Advocate Gautam Narayan appeared on behalf of the Respondents.
Brief Facts
The Defendant-deceased represented through her Legal Representatives (LRs) i.e., the Respondents, was the absolute owner of lands. The Suit Schedule Property was agreed to be sold to the Plaintiffs i.e., the Appellants vide an Agreement of Sale in 1995 for a total sale consideration of Rs. 20 lakhs by the Defendant through her Power of Attorney holder. Earnest money of Rs. 5 lakhs was paid and the Defendants undertook to get the unauthorized occupants in the property evicted. Since the unauthorized occupants were not evicted, a Supplementary Agreement was executed extending the time for execution of Sale Deed and out of the entire sale consideration, a substantial amount of Rs. 15 lakhs was paid by the Appellants. During the subsistence of Sale Agreement in favour of the Plaintiffs, the Defendant having lost her right over the property in pursuance of the general of power of attorney, allegedly executed a Sale Deed in favour of another, selling the land for Rs. 40 lakhs.
Being aggrieved, the Plaintiffs filed a Suit before the Principal Civil Judge (Trial Court) and it passed an Order of Temporary Injunction, restraining the Defendants from alienating and creating third party rights in the property. However, one of the Defendants in contravention of such Order, sold a portion of property in favour of Respondent Nos. 1-2. The said Respondents filed an Interlocutory Application seeking to implead themselves as Defendants in the Suit but the same was rejected. Thereafter, the Trial Court passed a final Judgment, decreeing the Suit and granting relief of Specific Performance. The Defendant No. 3 (Vendor) assailed this but the High Court dismissed the plea. After almost 2 years of the Judgment and 11 years from filing the Impleadment Application, the Respondent Nos. 1-2 preferred an Application before the High Court, challenging the Decree and seeking condonation of delay of 586 days. This was allowed, permitting them to prefer Appeal by granting leave. Challenging this, the Plaintiffs approached the Apex Court.
Reasoning
The Supreme Court in view of the above facts, observed, “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.”
The Court further noted that a Decree passed against the Defendant is available for execution against the transferee or assignee of the Defendant-Judgment-Debtor and it does not make any difference whether such transfer or assignment has taken place after the passing of the Decree or before the passing of the Decree without notice or leave of the Court.
“… the 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”, it said.
The Court added that a lis pendens transferee though not brought on record under Order XXII Rule 10 of the Civil Procedure Code (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.
“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”, it concluded.
Accordingly, the Apex Court allowed the Appeals and set aside the impugned Order.
Cause Title- H. Anjanappa & Ors. v. A. Prabhakar & Ors. (Neutral Citation: 2025 INSC 121)
Appearance:
Appellants: Senior Advocate Anand Sanjay M Nuli, Advocates Agam Sharma, Dharam Singh, Suraj Kaushik, Nanda Kumar K B, Akhila Wali, and Akash Kukreja.
Respondents: Senior Advocate Gautam Narayan, AOR Asmita Singh, Advocates Prashanth Kumar D, Abheet Mangleek, Tushar Nair, Anirudh Anand, and Punishk Handa.
