Case: Life Insurance Corp. Of India Vs. Sanjeev Builders Pvt Ltd

creation or devolution of any interest during the pendency of a suit, the suit may, by leave of the Court, be continued by or against the person to or upon whom such interest has come or devolved.(2) The attachment of a decree pending an appeal therefrom shall be deemed to be an interest entitling the person who procured such attachment to the benefit of sub-rule (1).Under Order XXII Rule 10 CPC, when there has been an assignment or devolution of interest during the pendency of a suit, the suit may, by leave of the Court, be continued by or against person to or upon whom such interest has been assigned or devolved and this entitles the person who has acquired an interest in the subject-matter of the litigation by an assignment or creation or devolution of interest pendente lite or suitor or any other person interested, to apply to the Court for leave to continue the suit. When the plaintiff assigns/transfers the suit during the pendency of the suit, the assignee is entitled to be brought on record and continue the suit. Order XXII Rule 10 CPC enables only continuance of the suit by the leave of the court. It is the duty of the court to decide whether leave to be granted or not to the person or to the assignee to continue the suit. The discretion to implead or not to implead parties who apply to continue the suit must be exercised judiciously and not arbitrarily.13. The High Court was not right in holding that mere alleged transfer/assignment of the agreement would be sufficient to grant leave to respondent No.3 to continue the suit. From the filing of the suit in 1986, over the years, valuable right of defence accrued to the appellant; such valuable right of defence cannot be defeated by granting leave to the third respondent to continue the suit in the application filed under Order XXII Rule 10 CPC after 27 years of filing of the suit. The learned Single Judge was not right in saying that impleading respondent No.3 as Plaintiff No.3 would cause no prejudice to the appellant and that the issues can be raised at the time of trial.14. In a suit for specific performance, application for impleadment must be filed within a reasonable time. Considering the question of impleadment of party in a suit for specific performance after referring to various judgments, in Vidur Impex and Traders Private Limited and Others v. Tosh Apartments Private Limited and Others, 2012(4) R.C.R.(Civil) 308 : 2012(4) Recent Apex Judgments (R.A.J.) 363 : (2012) 8 SCC 384 summarized the principles as under:-"41. 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:41.1. 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.41.2. 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.41.3. 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.41.4. 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.41.5. 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.41.6. However, if the applicant is guilty of contumacious conduct or is beneficiary of a clandestine transaction or a 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."In light of the above principles, considering the case in hand, in our view, the application filed for impleading respondent No.3 as Plaintiff No.3 was not filed within reasonable time. No explanation is offered for such an inordinate delay of 27 years, which was not kept in view by the High Court.15. Be it noted that an application under Order XXII Rule 10 CPC seeking leave of the court to continue the suit by the assignee/third respondent was not actually filed. Chamber Summons No.187 of 2014 was straight away filed praying to amend the suit which would have been the consequential amendment, had the leave to continue the suit been granted by the court.16. As pointed out earlier, the application was filed after 27 years of filing of the suit. Of course, the power to allow the amendment of suit is wide and the court should not adopt hyper technical approach. In considering amendment applications, court should adopt liberal approach and amendments are to be allowed to avoid multiplicity of litigations. We are conscious that mere delay is not a ground for rejecting the amendment. But in the case in hand, the parties are not rustic litigants; all the respondents are companies and the dispute between the parties is a commercial litigation. In such facts and circumstances, the amendment prayed in the Chamber Summons filed under Order XXII Rule 10 CPC ought not to have been allowed, as the same would cause serious prejudice to the appellant. In our view, the impugned order, allowing Chamber Summons No.187 of 2014 filed after 27 years of the suit would take away the substantial rights of defence accrued to the appellant and the same cannot be sustained.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]11. Applying the above principle to the case in hand, we find that the order allowing the application impleading respondent No.3 as assignee (Order XXII Rule 10 CPC) after 27 years of filing of the suit vitally affects the valuable rights of the appellant. The order allowing amendment of plaint by impleading respondent No.3 as Plaintiff No.3 on the basis of alleged assignment of agreement dated 24.08.1987 decides a vital question which concerns the rights of the parties and hence is a judgment to maintain the Letters Patent Appeal. In our view, allowing of such application after 27 years of filing suit for specific performance would cause serious prejudice to thedepriving valuable right of defence available to the appellant and hence the order of Single Judge allowing the Chamber Summons is a judgment within the meaning of Clause 15 of the Letters Patent Appeal.12. The stand of respondent No.3 is that it claims as an assignee of the rights of respondent Nos.1 and 2 and that it has the right to continue the suit under Order XXII Rule 10 CPC and the provisions of limitation, do not apply to such an application.The High Court was not right in holding that mere alleged transfer/assignment of the agreement would be sufficient to grant leave to respondent No.3 to continue the suit. From the filing of the suit in 1986, over the years, valuable right of defence accrued to the appellant; such valuable right of defence cannot be defeated by granting leave to the third respondent to continue the suit in the application filed under Order XXII Rule 10 CPC after 27 years of filing of the suit. The learned Single Judge was not right in saying that impleading respondent No.3 as Plaintiff No.3 would cause no prejudice to the appellant and that the issues can be raised at the time of trial.14. In a suit for specific performance, application for impleadment must be filed within a reasonablelight of the above principles, considering the case in hand, in our view, the application filed for impleading respondent No.3 as Plaintiff No.3 was not filed within reasonable time. No explanation is offered for such an inordinate delay of 27 years, which was not kept in view by the High Court.15. Be it noted that an application under Order XXII Rule 10 CPC seeking leave of the court to continue the suit by the assignee/third respondent was not actually filed. Chamber Summons No.187 of 2014 was straight away filed praying to amend the suit which would have been the consequential amendment, had the leave to continue the suit been granted by the court.16. As pointed out earlier, the application was filed after 27 years of filing of the suit. Of course, the power to allow the amendment of suit is wide and the court should not adopt hyper technical approach. In considering amendment applications, court should adopt liberal approach and amendments are to be allowed to avoid multiplicity of litigations. We are conscious that mere delay is not a ground for rejecting the amendment. But in the case in hand, the parties are not rustic litigants; all the respondents are companies and the dispute between the parties is a commercial litigation. In such facts and circumstances, the amendment prayed in the Chamber Summons filed under Order XXII Rule 10 CPC ought not to have been allowed, as the same would cause serious prejudice to the appellant. In our view, the impugned order, allowing Chamber Summons No.187 of 2014 filed after 27 years of the suit would take away the substantial rights of defence accrued to the appellant and the same cannot be sustained.