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

3. The respondent No.1 filed suit No.894 of 1986 against the appellant for specific performance of the agreement of sale dated 08.06.1979 by which the appellant is said to have agreed to sell the suit property to respondent No.1 and in the alternative directing the appellant to pay a sum of Rs. 10,75,021.05 with further interest on the sum of Rs. 4,52,778/at the rate of 18% per annum from the date of the suit till payment or realization. According to the appellant, the said agreement has been rescinded on 28.11.1984. The respondent No.1 is said to have assigned the interest to respondent No.2, their sister concern.4. In the year 2014, respondentConstruction Company Limited filed Chamber Summons No. 187/2014 stating that subsequent to the filing of the suit, with the consent of respondent No.2, Plaintiff No.1/respondent No.1 had assigned its interest to respondent No.3 for a consideration of Rs. 23,31,000/by an agreement for sale dated 24.08.1987. The Chamber Summons was filed to implead respondent No.3 as Plaintiff No.3 and praying to amend the suit pursuant to the agreement of sale in its favour. The appellant opposed the Chamber Summons on the ground that the respondent No.3 was not a bona fide assignee or a necessary party and that the issues in the suit were framed on 31.01.2014 and that there has been an inordinate delay of 27 years in filing the application which has not been explained. It was also contended that the agreement dated 08.06.1979 in favour of respondent No.1 itself was terminated on 28.11.1984 and the respondent No.1/Plaintiff No.1 could not have transferred any right to the respondents.5. The Single Judge held that the issue as to whether the interest of respondent Nos.1 and 2 can be transferred to respondent No.3 has to be tried in the suit and not at that stage and delay in filing the application cannot be a ground for not impleading the respondent No.3. The chamber judge held that the agreement dated 08.06.1979 permits assignment of rights and there is no requirement therein for permission being taken from the appellant. The court relied on the Madras High Court judgment in Mrs. Saradambal Ammal v. E. R. Kandasamy Goundar and Others (1947) 2 MLJ 374 wherein it was held that such assignment of contractual rights was permissible under Order XXII Rule 10 CPC. The Single Judge also relied upon the judgment of the Bombay High Court in Jawaharlal v. Smt. Saraswatibai Babulal Joshi and Others AIR 1987 Bom. 276, wherein it was held that the detailed enquiry was not needed under Order XXII Rule 10 CPC and that there need be only a prima facie satisfaction that the interest has been assigned and the grounds on merits need not be considered. The court noted that though the suit was filed in 1986, the same was listed for the first time only in 2000 and then in 2007, in 2008 and later in 2014. Observing that no prejudice will be caused to the appellant, the Chamber Summons was allowed vide order dated 16.04.2014 and costs of Rs. 10,000/was directed to be paid to the appellant. Being aggrieved, the appellant preferred the Letters Patent Appeal which came to be dismissed holding that the proposed amendment did not affect the case of the appellant on merits and that the appellant could challenge the assignment in favour of respondent No.3 after the final decree. Being aggrieved by the dismissal of Letters Patent Appeal, the appellant has preferred this appeal.

Court's reasoning:
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.