--- 1 --- HIGH COURT OF MADHYA PRADESH : BENCH AT INDORE S.B.: HON'BLE MR. S. C. SHARMA, J WRIT PETITITION NO. 12687 / 2010 KANKESHWAR GRIHA NIRMAN SAHKARI SANSTHA MARYADIT, INDORE Vs. MANESH S/O BADRILAL AND NINE OTHERS. * * * * * O R D E R ( 10/3/2011) The petitioner before this Court, a Co-operative Society, registered under the Co-operative Societies Act, 1960, has filed this present petition being aggrieved by order dt. 4/10/10, passed by 8th Addl. Distt. Judge, Indore in C.O.S.No. 80-A/2009 by which an application preferred under Order 1 Rule 10 of the Code of Civil Procedure, filed by the plaintiff for impleadment of the State Bank of India and United Commercial Bank as proposed defendants, has been turned down and also the application preferred under Order 6 Rule 17 of the Code of Civil Procedure has also been turned down. The contention of the petitioner Co-operative Society --- 2 --- is that the father of respondent no.1 namely; Shri Badrilal and respondent No.2 namely; Ghanshyam were the owners of the agricultural land, situated at Survey No. 22/2 and 28/3 Patwari Halka No.16, Village Khajrana Tehsil and Distt. Indore and the same was sold by respondent No.3 Balmukund who was a registered power of attorney holder and was authorised to sell the property owned by Badrilal and Ghanshyam. The petitioner Society has further stated that sale deeds were executed on 22/4/96 and the petitioner Society was placed in possession of the suit property. The petitioner has further stated that in the year 2007, the Society came to know that respondent No.10 has encroached the land belonging to the petitioner Society and has also installed their board on the said land claiming themselves to be the owners. The petitioner has further stated that it came to their notice that respondent No.3 Balmukund has transferred the suit property vide sale deed dt. 22/1/98 in favour of respondent No.4 Society. The petitioners have further stated that the respondent No.4 has thereafter transferred the suit property vide sale deed dt. 10/7/2001, --- 3 --- 22/10/2001 in favour of respondents No.5, 6, 8 and 9 and respondents No. 5, 6, 8 and 9 have transferred the suit property in favour of respondent No.10 on 15/6/2007 and a notice was published on behalf of the petitioner on 29/12/07 and the same was replied by respondent No.4 through their counsel. The petitioner has further stated that respondents No. 1, 2 and 3 did not have any right, title or interest in respect of the suit property as the same was transferred on 22/4/96 to the petitioner and therefore any subsequent sale deed executed by the power of attorney holder in favour of respondent No.4 on 22/1/98 is null and void. The petitioner has also stated in the present writ petition that subsequent sale deeds in favour of respondents No.5, 6, 7, 8 and 9 and thereafter sale deeds in favour of respondent No.10 by respondents No. 5, 6, 7, 8 and 9 are also null and void. The petitioners have further stated that a suit for declaration, possession and permanent injunction was filed by the petitioner Society along with an application under Order 39 Rule 1 and 2 and the respondents did file a written statement as well as reply to the application for grant of injunction. --- 4 --- The petitioner has further stated that the application preferred under Order 39 R. 1 and 2 was dismissed and thereafter an appeal was preferred before this court ie., MA NO. 2552 / 2009 and this court vide order dt. 19/5/10 has disposed of the Misc. Appeal with certain directions. The petitioner has further stated that during the pendency of their application under Or. 39 R. 1 and 2 and also during the pendency of their appeal before this court it was brought to their notice that the property in question has been mortgaged with State Bank of India, Commercial Branch, GPO, Indore as well as with UCO Bank, Siyaganj Branch, Indore and a sum of Rs.41.50 crores has been obtained by way of loan against the suit property and therefore an application was preferred by the petitioner under Or. 1 Rule 10 for impleadment of the State Bank of India as well as United Commercial Bank. The petitioner has further stated that the application preferred by the petitioner Society has been dismissed by the impugned order dt. 4/10/10 passed by the trial Court. Learned sr. counsel arguing the matter on behalf of the petitioner has vehemently argued before this Court --- 5 --- that State Bank of India as well as United Commercial Bank are necessary parties as they have financed a sum of Rs.41 crores to respondent No.10 and the property has been mortgaged by the respondent No.10 with both the Banks. He has vehemently argued before this Court that under the provisions of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, the Banks in question are having a remedy to recover the loan amount without filing a suit, without approaching the Debts Recovery Tribunal and therefore both the Banks are necessary parties and the trial Court has erred in law in facts in rejecting the application preferred by the petitioner for impleadment. It has also been argued that the trial Court has erred in law in not considering the legal aspect of the impleadment though the right of the petitioner u/S. 52 of the Transfer of Property Act is protected. Learned counsel has placed reliance upon a judgment delivered by the Apex Court in the case of Amit Kumar Shaw and another Vs. Farida Khatoon and another (2005) 11 SCC 403. He has placed reliance upon paragraphs 9, 10, 11, 12, 13, 14, 15 and 16. Learned counsel appearing for the respondents No.1 and 2 --- 6 --- and learned counsel appearing for the respondent No.10 have argued before this Court that the trial court has rightly rejected the application preferred under Or. 1 R. 10 of the Code of Civil Procedure. Learned counsel for the parties have also argued that the interest of the petitioner is already protected by virtue of Sec. 52 of the Transfer of Property Act and this court while passing an order in MA NO. 2552 / 2009 on 19/5/10 has already protected the interest of the petitioner by directing as under : 18. Thus, I am of the considered opinion that though the appellant has prima facie case in its favour, but the balance of convenience is in favour of respondent No.10 and if any interim injunction is granted at this stage, the respondent No.10 will suffer irreparable injury. 19. The interest of the appellant is protected by the principles of lis-pendens as contained in Section 52 of the Transfer of Property Act and it is not a fit case for issuing temporary injunction restraining the respondent No.10 from alienating or creating third party right in the matter or changing the nature of the suit land by raising construction thereon. 20. It is worth noting that learned senior counsel for the respondent No.10 during the course of argument had very fairly stated that in order to avoid complication in the matter, the respondent No.10 is ready to incorporate the statement in the transfer deed to inform --- 7 --- the purchasers that present litigation is pending in respect of the property and the purchaser will be bound by the outcome of litigation. Counsel for the parties have also prayed for expeditious disposal of the suit and have stated that they would cooperate in the trial of the suit. 21. In view of the aforesaid, the present appeal is disposed of without interfering in the order of the Trial Court, but by directing as under :- (1) The Trial Court will make an endeavor to decide the suit itself by 31st of December, 2010. (2) No party will seek unnecessary adjournment and all the parties will cooperate in the expeditious trial of the suit. (3) The respondent No.10 while executing any agreement or deed of transfer in respect of the suit land in favour of third party will incorporate a condition therein mentioning about the pendency of the present litigation and informing the proposed purchaser that they would be bound by the outcome of the present suit. (4) The Trial Court will decide the suit on its own merit, without being influenced by any of the observations made by this Court on merits of the controversy involved in the matter. No costs. Learned counsel for the respondents have also drawn attention of this Court towards the application under Or. 1 R. 10 of the Code of Civil Procedure and their contention is that --- 8 --- impleadment of Bank has got nothing to do with the merits of the case and presence or absence of the Banks in question is certainly not at all going to alter or affect the decision of the trial Court in any manner of whatsoever kind. It has also been argued that impleadment of Banks is not at all necessary in the matter of adjudication of the dispute which is pending before the trial Court between the petitioner and respondent No.1 to 9. Learned counsel appearing for respondents has argued before this Court that the present petition has been filed only to hamper the construction work which is going on at the site in question after availing financial assistance from the State Bank of India as well as UCO Bank that too it is an afterthought on behalf of the petitioner after their application for grant of injunction under Or. 39 R. 1 and 2 of the Code of Civil Procedure has been dismissed by the trial Court and this court has also not granted any injunction while passing an order in MA NO. 2552 / 2009. learned counsel for the respondent No.10 has placed reliance upon a judgment delivered by the apex court in the case of Kasturi Vs. Iyyamperumal and others 2005 (3) MPLJ 261 and his contention is that necessary party is one in whose absence no decree can be passed by the trial Court while proper party is one --- 9 --- whose presence before the Court is necessary to enable the court to efectually and completely adjudicate upon and settle all questions involved in the suit though no relief has been claimed against such persons. His contention is that the respondent Banks are certainly not at all necessary parties and the trial Court has rightly dismissed the application preferred under Or. 1 R. 10 of the Code of Civil Procedure keeping in view the judgment delivered by the apex court in the aforesaid case. Learned counsel for the respondent No.10 has also placed reliance upon the judgment delivered by the apex court in the case of Sarvinder Singh Vs. Dalip Singh and others [ 1997 (1) MPLJ 324] and his contention is that keeping in view the aforesaid judgment, the trial court was justified in rejecting the application for impleadment. Learned counsel for the respondents have prayed for dismissal of the writ petition. Heard learned counsel for the parties at length and perused the record. Heard learned counsel for the parties at length and perused the record. The matter is being disposed of at the admission stage itself with the consent of the parties. In the present case, the petitioner Society, registered --- 10 --- under the Co-operative Societies Act being aggrieved by order dt. 4/10/10 passed by 8th Addl. Distt. Judge, Indore, in COS No. 80-A/2009 has filed this present petition. Learned Judge has dismissed the application preferred under Or. 1 R. 10 of the Code of Civil Procedure in respect of impleadment of the State Bank of India and United Commercial Bank as defendants. An application preferred under Or. 6 R. 17 has also been turned down. In the present case, the suit land was transferred by way of sale deed by respondent No.3 Balmukund who was a registered power of attorney holder and was authorised to sell the suit property owned by Badrilal and Ghanshyam. The sale deeds were executed on 22/4/96 and after executing the sale deeds the petitioner Society was delivered possession of the suit property. The said Balmukund has later on transferred the suit property vide sale deed dt. 22/1/99 in favour of respondent No.4 Society and thereafter the respondent No.4 Society has transferred the suit property vide sale deed dt. 10/7/01 and 22/10/01 in favour of respondent Nos. 5, 6, 8 and 9. The respondent Nos. 5, 6, 8 and 9 have transferred the suit --- 11 --- property in favour of respondent No.10 on 15/6/07. The contention of the petitioner Society is that the suit property was transferred by power of attorney holder in their favour through a sale deed on 22/4/96 and therefore all subsequent sales are null and void. The petitioner's have thereafter preferred a suit for declaration, possession and permanent injunction. An application for impleadment was preferred under Or. 1 R. 10 of the Code of Civil Procedure for impleadment of State Bank of India and United Commercial Bank as defendants and it is an admitted fact that a sum of Rs.41 crores has been financed to respondent No.10 by State Bank of India as well as by United Commercial Bank. It is also true that the Banks in question can certainly take action against the defaulting borrower under the provisions of The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 without filing a suit and without approaching the Debts Recovery Tribunal. This Court has carefully gone through the judgment relied upon by the learned sr. counsel in the case of Amit Kumar Shaw and another Vs. Farida Khatoon and another (supra). The --- 12 --- Apex Court in the aforesaid case in paragraphs 9 to 16 has held as under : 9. The object of Order 1 Rule 10 is to discourage contests on technical pleas, and to save honest and bona fide claimants from being non-suited. The power to strike out or add parties can be exercised by the court at any stage of the proceedings. Under this rule, a person may be added as a party to a suit in the following two cases: (1) when he ought to have been joined as plaintiff or defendant, and is not joined so, or (2) when, without his presence, the questions in the suit cannot be completely decided. 10. The power of a court to add a party to a proceeding cannot depend solely on the question whether he has interest in the suit property. The question is whether the right of a person may be affected if he is not added as a party. Such right, however, will necessarily include an enforceable legal right. 11. The application under Order 22 Rule 10 can be made to the appellate court even though the devolution of interest occurred when the case was pending in the trial court. In the instant case, the suit was decreed in favour of Fakir Mohammad by judgment and decree dated 3-11-1989. The suit was contested by two sets of defendants, one set of defendants was Birendra Nath Dey and Kalyani Dey and the other set of defendants was Jagat Mohan Das alone. The appeals were preferred by the parties. Both the appeals were heard and by a --- 13 --- common judgment and order dated 25-6-1992, the said appeals were allowed and the judgment and decree passed by the Munsif was set aside. By a deed of assignment dated 15-12-1995, the said Birendra Nath Dey assigned his leasehold right in respect of 132-A, Circular Garden Reach Road, presently known as 132-A, Karl Marx Sarani, Kolkata in favour of the appellants. By a deed of sale executed on 15-12-1995, duly registered with the Additional Registrar of Assurances, Calcutta, Kalyani Dey sold the property being No. 132-B of the above address to the other appellant. The second appeals filed by the parties were pending on the file of the High Court at Calcutta. The appellants had no knowledge of the second appeals. Thereafter on verification, the appellants came to know of the pendency of the appeals which necessitated them to file the applications for substitution in the second appeals. In the meanwhile, the appellants filed the applications before the municipal authorities for mutation of their names in respect of the property on 24-12-2002 and the municipal authority informed the appellants that they were not in a position to mutate the names of the appellants of the property in question because of the pendency of the two second appeals before the High Court at Calcutta. Thereafter the appellants engaged an advocate to find out whether any such appeals have been filed by the parties. The advocate so engaged informed the appellants that two appeals being SAs Nos. 631 and 632 of 1993 were filed by Fakir Mohammad, Farida Khatoon and others, respondents herein. It was also informed that the said appeals were --- 14 --- admitted by the High Court but the impugned judgment and order was neither prayed for stay nor stayed. Therefore, it was also submitted by the appellants that since the appellants have become the absolute owners of the property, their interest will be highly prejudiced and they will be vitally affected, if any order is passed by the High Court without hearing the appellants in the matter. Therefore, they prayed that the appellants are to be substituted in place and stead of the present respondents, since they have no existing and subsisting right, title or interest in the property. 12. Under Order 22 Rule 10, no detailed inquiry at the stage of granting leave is contemplated. The court has only to 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 --- 15 --- made binds the transferee, his application to be brought on record should ordinarily be allowed. 15. Section 52 of the Transfer of Property Act is an expression of the principle “pending a litigation nothing new should be introduced”. It provides that pendente lite, neither party to the litigation, in which any right to immovable property is in question, can alienate or otherwise deal with such property so as to affect his appointment. This section is based on equity and good conscience and is intended to protect the parties to litigation against alienations by their opponent during the pendency of the suit. In order to constitute a lis pendens, the following elements must be present: 1. There must be a suit or proceeding pending in a court of competent jurisdiction. 2. The suit or proceeding must not be collusive. 3. The litigation must be one in which right to immovable property is directly and specifically in question. 4. There must be a transfer of or otherwise dealing with the property in dispute by any party to the litigation. 5. Such transfer must affect the rights of the other party that may ultimately accrue under the terms of the decree or order. 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 --- 16 --- 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, where the transfer is of the entire interest of the defendant; the latter having no more interest in the property may not properly defend the suit. He may collude with the plaintiff. Hence, though the plaintiff is under no obligation to make a lis pendens transferee a party, under Order 22 Rule 10 an alienee pendente lite may be joined as party. As already noticed, the court has discretion in the matter which must be judicially exercised and an alienee would ordinarily be joined as a party to enable him to protect his interests. The court has held that a transferee pendente lite of an interest in immovable property is a representative-in-interest of the party from whom he has acquired that interest. He is entitled to be impleaded in the suit or other proceedings where his predecessor-in-interest is made a party to the litigation; he is entitled to be heard in the matter on the merits of the case. This Court is of the considered opinion that in order to avoid multiplicity of judicial proceedings as the State Bank of India and United Commercial Bank are holding charge over the property are certainly necessary party to the suit and the learned trial Judge should have taken into account that public money has been financed to respondent No.10 and the property in question has been mortgaged by respondent No. 10 with State Bank of --- 17 --- India and United Commercial Bank. In order to avoid multiplicity of judicial proceedings the application preferred under Or. 1 R. 10 of the Code of Civil Procedure should have been allowed and the trial court has erred in law and facts in rejecting the application preferred by the present petitioner. Resultantly, keeping in view the judgment delivered by the apex court, this Court is of the considered opinion that the order dt. 4/10/10 passed by the 8th Addl. Distt. Judge, Indore, in C.O.S.NO. 80-A/2009 deserves to be set aside. Resultantly, the impugned order dt. 4/10/10 is hereby quashed and the applications preferred by the petitioner Society under Or. 1 R. 10 and Or. 6 R. 17 of the Code of Civil Procedure are hereby allowed. The writ petition stands allowed. No order as to costs. (S. C. SHARMA) J U D G E KR