2004 Supreme(SC) 1413

2004(8) Supreme 754
SUPREME COURT OF INDIA
(From Orissa High Court)
R.C. Lahoti, CJI, G.P. Mathur & P.K. Balasubramanyan, JJ.
Government of Orissa -Appellant
versus
M/s. Ashok Transport Agency & Ors. -Respondents
Civil Appeal No. 3209 of 2002
Decided on 5-11-2004
Counsel for the Parties :
For the Appellant : Altaf Ahmad, Sr. Advocate, and Ms. Kirti Mishra, Advocate.
For the Respondents : Subhash Sharma, Anukul Ch. Pradhan and Shiv Sagar Tiwari, Advocates.

IMPORTANT POINT
A person claiming under the defendant or judgment debtor could seek to challenge the decree or order that may be passed against defendant by way of appeal or otherwise in appropriate manner but it would not be open to it to challenge decree as void or unenforceable in execution in absence of any specific provision in the statute or order bringing about such a transfer or assignment.

Headnote:Civil Procedure Code, 1908-Order 22 Rule 10 and Section 146-Suit for recovery of Rs. 3,90,210/- filed by respondent against Ltd. Company-Government notification providing for amalgamation of defendant Company with State Corporation Ltd., a State Govt. Company-Defendant company did not bring to the notice of Court that defendant had got amalgamated with State Corporation and that it stood dissolved-Suit was decreed ex-parte against defendant-Execution filed against defendant Company, State Corporation and State Government-Executing Court held decree was executable against Corporation and State Government since they were successor-in-interest of judgment debtor-Revision against that order was dismissed by High Court-Appeal-Whether it was for plaintiff to have taken steps to bring on record the Corporation and State Government as parties to the suit or whether it was for successor-in-interest of defendant to seek to come on record-As per clause in amalgamation order, an obligation was cast on plaintiff to implead the Corporation as defendant in suit-Terms of amalgamation order were not properly appreciated by Executing Court and High Court-Impugned order was liable to be set aside and ex-parte decree also set aside.

       Held : Normally, in a case covered by Order XXII Rule 10 of the Code of Civil Procedure where rights are derived by an assignee or a successor-in-interest pending a litigation, it is for that assignee or transferee to come on record if it so chooses and to defend the suit. It is equally open to the assignee to trust its assignor to defend the suit properly, but with the consequence that any decree against the assignor will be binding on it and would be enforceable against it. Equally, in terms of Section 146 of the Code of Civil Procedure, a proceeding could be taken against any person claiming under the defendant or the judgment debtor. Similarly, a person claiming under the defendant or the judgment debtor could seek to challenge the decree or order that may be passed against the defendant, by way of appeal or otherwise, in the appropriate manner. But, it would not be open to it to challenge the decree as void or unenforceable in execution in the absence of any specific provision in that regard in the statute order bringing about such a transfer or assignment. Going by these general principles, it is possible to argue that it was for the Corporation, and subsequently for the State of Orissa, to get themselves impleaded in the suit and to prosecute a defence, not inconsistent with the defence already set up by the defendant in its written statement. Neither the Corporation nor the Government of Orissa took that step. In such a situation, normally, one would be inclined to the view that it is not open to the Corporation or to the Government of Orissa to challenge the executability of the decree as against them. It is in this context that the impact of Amalgamation Order has to be considered. (Para 7)

       On the wording of clause 7, an obligation was cast on the plaintiff to implead the Corporation as a defendant in the suit and to proceed with the same. It may be noted that at the relevant time, the suit stood dismissed for default and the same had not been restored though the application for restoration of the suit was pending. The suit was got restored after the amalgamation took place and the consequences as set out therein followed. On the terms of the Amalgamation Order, the plaintiff did have the right to proceed with the application for restoration and the suit as against the Corporation by taking appropriate steps in that behalf. We must also notice that it was the plain duty of the defendant and its counsel, to bring to the notice of the Court the fact of promulgation of the Amalgamation Order so as to enable the Court to pass appropriate orders regarding the continuance of the proceeding before it. All the same, that can only be a reason for the plaintiff not having taken the requisite steps at the relevant time. In the face of the Amalgamation Order, we are of the view that it was necessary for the plaintiff to have brought on record the Corporation and the State Government before proceeding with its suit and the search for a decree in its favour. The terms of the Amalgamation Order has not been properly appreciated by the Executing Court and the High Court when they allowed the plaintiff to proceed with the execution as against the Corporation and as against the Government of Orissa. (Para 8)

       We think that in this case, the proper order to be passed, in the interests of justice is to accede to the plea of the appellant to give it a chance to defend the suit especially in view of the relevant clauses of Amalgamation Order, 1991, by setting aside the orders impugned in this appeal and also by setting aside the ex parte decree and reviving the suit and by directing the trial court to try and dispose of the same afresh and in accordance with law, after bringing on record the Corporation, the Government of Orissa and TISCO, since the State had subsequently sold the assets to TISCO, and after giving the newly added defendants an opportunity to file their written statements, not inconsistent with the one already filed by the defendant. After giving of such an opportunity to the newly added defendants, it will be for that Court to proceed with the trial and disposal of the suit in accordance with law. (Para 9)