C.R.No.63 of 2006 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH C.R.No.63 of 2006 Date of Decision : 16.11.2009 Smt. Manju Goenka and another ...Petitioners Versus Rajesh Kumar and another ...Respondents CORAM:HON'BLE MR. JUSTICE HEMANT GUPTA 1. Whether Reporters of local papers may be allowed to see the judgment? 2. To be referred to the Reporters or not? 3. Whether the judgment should be reported in the Digest? Present: Mr. Atul Lakhanpal, Sr. Advocate, with M/s Hari Om Attri and R.S.Chahal, Advocates, for the petitioners. Mr. R.S.Mittal, Sr. Advocate, with Mr. Atul Gaur, Advocate, for the respondents. HEMANT GUPTA, J. Challenge in the present revision petition is to the order passed by the learned trial Court on 21.11.2005, whereby an application filed by the petitioners under Order 1 Rule 10 CPC, was dismissed. Plaintiff-respondent Nos.1 and 2 filed a suit for specific performance of an agreement to sell dated 25.9.1989 allegedly executed by the eight legal representatives of deceased Chandgi Ram in respect of land measuring 48 Kanals 10 Marlas. The suit was filed on 27.10.1995. Before the filing of the suit, six legal representatives of the deceased Chandgi Ram have executed sale deed in respect of their 3/4th share i.e. 36 Kanals 7½ Marlas on 15.6.1995 in favour of the plaintiffs. The suit for specific performance was filed in respect of remaining share C.R.No.63 of 2006 2 of two legal representatives of deceased Chandgi Ram i.e. 1/4th of the total share. When the case was fixed for evidence of the plaintiffs, when the petitioners moved an application for their impleadment as defendants on the allegations that they have purchased the suit property vide registered sale deed dated 9.9.2004 in pursuance of the agreements to sell dated 8.6.1989 and 20.3.1991. The said application has been declined by the learned trial Court, when it held to the following effect : “...The applicants have alleged to have purchased the land vide registered sale deed bearing No.7033 dated 9.9.2004 in pursuant to the agreements dated 8.6.1989 and 20.3.1991, whereas the agreement regarding the instant suit for specific performance was allegedly executed on 25.9.1989. In other words, the agreement dated 25.9.1989 was executed in between agreements 8.6.1989 and 20.3.1991. No explanation has been furnished regarding the sale deed dated 9.9.2004 as to how the delay of more than 15 years was caused. Therefore, the action of alienation cannot be held as bona fide. Even otherwise, as per the rulings cited as Kehar Singh Vs. Punjab Kaur and others, SLJ 88, 291 (supra), the question of purchase being bona fide is immaterial and further as is held in Bibi Zubaida Khatoon Vs. Nabi hassan Saheb and another AIR 2004(SC) 173 (supra), such persons cannot be impleaded as party, therefore, the application in hand being devoid of merit is dismissed.” Learned counsel for the petitioners has vehemently argued that C.R.No.63 of 2006 3 the petitioners are not to raise a plea that they are bona fide purchasers for value and consideration as they are the purchasers of the property after filing of the suit and that sale in their favour is hit by doctrine of lis pendens. But it is contended that in terms of Section 19 of the Specific Relief Act, 1963 (for short 'the Act'), the petitioners have acquired title by virtue of registered sale deed on the basis of prior agreement to sell, therefore, the petitioners are necessary party as assignees of the original vendors. It is contended that none of the judgments referred to by the learned trial Court is to the effect that such a vendee in a suit for specific performance cannot be impleaded. He has relied upon Anup Singh Vs. Smt. Chander Kanta Pruthi 1998(1) P.L.R. 818, Ram Sarup Vs. Raminder Singh 2004(2) P.L.R. 247, Amit Kumar Shaw & Another Vs. Farida Khatoon and Another, AIR 2005 (SC) 2209. Section 19 of the Specific Relief Act, 1963 (for short 'the Act') reads as under ; “19. 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) x x x (e) x x x” C.R.No.63 of 2006 4 On the other hand, learned counsel for the respondents has relied upon Section 15 of the Act to contend that in a suit for specific performance of an agreement to sell, the parties to the agreement alone are necessary parties. The petitioners are the strangers to the agreement to sell dated 25.9.1989, therefore, cannot be impleaded as the defendants in the suit for specific performance filed by the plaintiffs. Reliance was placed upon Bibi Zubaida Khatoon Vs. Nabi Hassan Saheb and another AIR 2004 Supreme Court 173, Bharat Karsondas Thakkar Vs. M/s Kiran Construction Co. & Others AIR 2008 SC 2134, Ramesh Chandra Pattnaik Vs. Pushpendra Kumari and others (2008) 10 SCC 708 and Saudagar Singh Vs. Harnek Singh and others 1989 PLJ 374 (P&H). I have heard learned counsel for the parties at some length and is of the opinion that the order passed by the learned trial Court suffers from patent illegality or irregularity. The plaintiffs have not led any evidence, when an application for impleadment was filed by the present petitioners. During the course of arguments, learned counsel for the respondents has pointed out that the plaintiffs are still leading their evidence. Undisputedly, the sale in favour of the petitioners is after the filing of the suit and, therefore, hit by doctrine of lis pendens. Since, the vendors have sold their property in favour of the petitioners, the said defendants-original vendors have no subsisting interest in defending the suit for specific performance. Having purchased the property during the pendency of the suit, the right of the petitioners are not worse than the rights of their vendors. The petitioners are entitled to defend the suit on the same pleas as were raised by their vendors or the pleas, which C.R.No.63 of 2006 5 are/were available to the vendors. But any plea, which is peculiar to the petitioners being purchasers pendente lite cannot be permitted to be raised by the petitioners. Under Section 19(b) of the Act, the decree of specific performance is enforceable against any person claiming title under any party to the agreement subsequent to the contract. Therefore, the decree for specific performance can be granted in favour of the plaintiffs and against the petitioners in terms of clause (b) of the Act. In fact, such decree alone is the appropriate decree, which can be granted in favour of the plaintiffs on proof of the facts alleged by them. The sale in favour of the petitioners though not binding on the plaintiffs, is binding on the vendors. Only a transferee, who has paid his consideration and without notice of the original contract can avoid the decree for specific performance in terms of clause (b) of Section 19 of the Act. The said plea is not available to the petitioners as they are purchasers during the pendency of the suit. Thus, in terms of Section 19 of the Act, an effective enforceable decree can appropriately be granted in the presence of the petitioners rather than in their absence. In Durga Prasad and another Vs. Deep Chand and others AIR 1954 Supreme Court 75, the Court has considered the nature of decree required to be granted in a suit for specific performance of the contract when the vendor has transferred his interest in the suit property. The Court has considered three forms of decree. (i) To declare the subsequent purchase void as against the prior transferee and direct conveyance by the vendor alone; (ii) Both vendor and vendee should join; and (iii) execution of the conveyance by the subsequent purchaser C.R.No.63 of 2006 6 alone. The Court negated first and third option and held that proper form of the decree is to direct specific performance of the contract by directing the subsequent transferee to join in the conveyance. It was held to the following effect : "42. In our opinion, the proper form of decree is to direct specific performance of the contract between the vendor and the plaintiff and direct the subsequent transferee to join in the conveyance so as to pass on the title which resides in him to the plaintiff. He does not join in any special convenants made between the plaintiff and his vendor, all he does is to pass on his title to the plaintiff." The judgments referred to by the learned counsel for the respondents are clearly distinguishable and are not applicable to the facts of the present case. In Bibi Zubaida Khatoon's case (supra), the Court has held that the transferee pendente lite should ordinarily be joined as a party to enable him to protect his interest. In the aforesaid case, pendency of the suit for a long time was the reason given by the trial Court to reject the application for impleadment. However, in the present case, though the suit is pending since the year 1995, but the plaintiffs have not started their evidence even in the year 2005, when the impugned order was passed. Therefore, the oridinary rule as mentioned in the aforesaid judgment is to implead the transferee pendente lite. The relevant extract from the aforesaid judgment reads as under : "It is not disputed that the present petitioner purchased the property during pendency of the suit and without seeking leave of the Court as required by S. 52 of the Transfer of Property Act. The petitioner being a transferee pendente lite without leave of the Court cannot, as of right, seek impleadment as a party in the suits which are long pending since 1983. It is true C.R.No.63 of 2006 7 that when the application for joinder based on transfer pendente lite is made, the transferee should ordinarily be joined as party to enable him to protect his interest. But in instant case, the trial Court has assigned cogent reasons for rejecting such joinder stating that the suit is long pending since 1983 and prima facie the action of the alienation does not appear to be bona fide. The trial Court saw an attempt on the part of the petitioner to complicate and delay the pending suits."(emphasis supplied..) In Bharat Karsondas Thakkar's case (supra), the applicant sought the impleadment on the basis of an agreement to sell alone. It was found that on the basis of a separate agreement to sell, the right with the applicant, is to seek specific performance of the said agreement. It was found that the claim of the applicant neither falls within Sections 15 or 19 of the Act. In Ramesh Chandra Pattnaik's case (supra) again, the applicant has sought impleadment on the basis of an agreement to sell. The Court has found that the right of such an applicant is to seek specific performance of the agreement. Similar is the judgment in Saudagar Singh's case (supra), who has also sought impleadment on the basis of agreement to sell. On the other hand, in Amit Kumar Shaw's case (supra), the question which arose for consideration was whether an application for substitution by a subsequent transferee can be rejected on the combined reading of Order 1 Rule 10, Order XXII Rule 10 of the Code of Civil Procedure and Section 52 of the Transfer of Property Act, 1882. It was held to the following effect : "12. Under Order XXII Rule 10, no detailed inquiry at the stage of granting leave is contemplated. The Court has only to C.R.No.63 of 2006 8 be prima facie satisfied for exercising its discretion in granting leave for continuing the suit by or against the person on whom the interest has devolved by assignment or devolution. The question about the existence and validity of the assignment or devolution can be considered at the final hearing of the proceedings. The Court has only to be prima facie satisfied for exercising its discretion in granting leave for continuing the suit. 13. In this connection, the provisions of Section 52 of the Transfer of Property Act, 1882 which has been extracted above may be noted. 14. An alienee pendente lite is bound by the final decree that may be passed in the suit. Such an alienee can be brought on record both under this rule as also under Order 1 Rule 10. Since under the doctrine of lis pendens a decree passed in the suit during the pendency of which a transfer is made binds the transferee, his application to be brought on record should ordinarily be allowed. 15. xxx xxx xxx 16. The doctrine of lis pendens applies only where the lis is pending before a Court. Further pending the suit, the transferee is not entitled as of right to be made a party to the suit, though the Court has a discretion to make him a party. But the transferee pendente lite can be added as a proper party if his interest in the subject matter of the suit is substantial and not just peripheral. A transferee pendente lite to the extent he has acquired interest from the defendant is vitally interested in the litigation, whether 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 discretion in the matter which must be C.R.No.63 of 2006 9 judicially exercised and an alienee would ordinarily be joined as a party to enable him to protect his interest. 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 the transferee pendente lite is made a party to the litigation; he is entitled to be heard in the matter on the merits of the case." The question, whether the transferee pendente lite can be impleaded as the party-defendant has been considered by the Division Bench of Andhra Pradesh High Court in a judgment reported as Chappidi subbareddy (died) and others Vs. Chappidi Narapureddy and others 2006 (2) Civil Court Cases 659. After considering all the judgments including Saila Bala Vs. Nirmala Sundari, AIR 1958 SC 394 and Amit Kumar Shaw's case (supra), the Court found that the following aspects need to be considered before impleading transferee pendente lite : "Firstly, 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 1 Rule 10 C.P.C. or under Order 22 Rule 10 C.P.C., as a general principle; Secondly, a transferee pendente lite is not entitled to come on record as a matter of right; 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; (Emphasis added) Fourthly, the impleadment of a transferee pendente lite would depend upon the nature of the suit and appreciation of the material available on record; Fifthly, where a transferee pendente lite does not ask for leave and come on record that would obviously be at his peril, and C.R.No.63 of 2006 10 the suit may be improperly conducted by the plaintiff on record; Sixthly, merely because such transferee pendente lite does not come on record, the concept of his (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; Seventhly, the sale transaction pendente lite is hit by the provisions of Section 52 of the Transfer of Property Act; and Eighthly, a transferee pendente lite, being an assignee of interest in the property, as envisaged under Order 22, Rule 10 C.P.C., can seek leave of the Court to come on record on his own or at the instance of either party to the suit." I entirely endorse the principles culled down by the Division bench of Andhra Pradesh High Court. A transferee pendente lite can be permitted to come on record with the permission of the Court. Such transferee can seek leave of the Court to come on record on his own or at the instance of either party to the suit. Since, in the present case, the transferee has sought impleadment to defend his interest in the suit property, therefore, such transferee is entitled to be impleaded as the party-defendant. In view of the aforesaid judgment of the Hon'ble Supreme Court and also the judgments of this Court in Anup Singh' s and Ram Sarup's cases (supra), I am of the opinion that the order passed by the learned trial Court is not sustainable. The learned trial Court has declined the application on the ground that how the sale deed has been executed after delay of 15 years and, therefore, action of alienation cannot be held to be bona fide. Such finding could be returned by the learned trial Court only after opportunity to lead evidence is granted to C.R.No.63 of 2006 11 the parties. Such opportunity of evidence could be granted only if the petitioners are impleaded as a party. Therefore, the finding of lack of bona fide without giving any opportunity of proof of such fact is clearly erroneous and cannot be sustained in law. Consequently, the impugned order passed by the learned trial Court is set aside. The petitioners are ordered to be impleaded as assignees of the vendors in terms of Order 22 Rule 10 CPC. The petitioners shall be entitled to continue with the suit on the grounds, which are/were available to their vendors. However, the petitioners shall not be entitled to raise any plea on the basis of their independent interest as the transfer in their favour is during the pendency of the civil suit and hit by doctrine of lis pendens. Civil revision is allowed in above terms. Parties to appear before the learned trial Court on 18.12.2009 for further proceedings. 16.11.2009 (HEMANT GUPTA) Vimal JUDGE