Important point
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.

Headnote:(i) Civil Procedure Code, 1908—Order 1 Rule 10; Order XXII Rule 10—Transfer of Property Act, 1882—Section 52—Application for substitution by a subsequent transferee—Maintainability during the pendency of appeal—Appellants, subsequent transferees came to know about pendency of appeals which necessitated them to file applications for substitution in the second appeals—Appellants have properly, sufficiently and satisfactorily explained the delay in approaching the Court—Bona fide in their explanation in not coming to the Court at the earliest point of time—High Court committed serious error in not ordering applications for substitution filed by appellants—Presence of appellants being absolutely necessary in order to decide the appeals on merits.
       Held : 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.
       The power of a Court to add a party to a proceeding can not 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 include necessarily an enforceable legal right. The application under Order XXII 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 03.11.1989. The suit was contested by two sets of defendants, one set of defendants was Birendra Nath Dey and Kalyani Dey and other set of defendants was Jagat Mohan Das alone. The appeals were preferred by the parties. Both the appeals were heard and by a 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 132A, 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 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 about 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 are 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 S.A.Nos. 631 and 632 of 1993 were filed by Fakir Mohammad, Farida Khatoon & Ors. Respondent Nos. herein. It was also informed that the said appeals were 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. (Paras 9, 10 and 11)
       Under Order XXII, 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. (Para 12)
       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 O 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. (Para 14)
       In the instant case, the applications for substitution were filed by the respective appellants in the second appeals which are still pending on the file of the High Court though it was filed in the year 1993. The appellants have properly, sufficiently and satisfactorily explained the delay in approaching the Court. We see bona fide in their explanation in not coming to the Court at the earliest point of time. Therefore, the appellants who are transferees pendente lite should be made as parties to the pending second appeals as prayed for by them. In our opinion, the High Court has committed serious error in not ordering the applications for substitution filed by the appellants. In our view, the presence of the appellants are absolutely necessary in order to decide the appeals on merits. Since the High Court has committed error by rejecting the appellants’ applications for substitution treating the same as additional parties and thereby rendering the appellants non-suited. We have no hesitation in setting aside the said orders and permit the appellants to come on record by way of substitution as prayed for. The High Court proceeded on a wrong premise that the appellants had made the application for addition of party whereas the application under consideration was for substitution as the owner had sold the suit property to the appellants and had no interest in the pending litigation. (Para 17)
       (ii) Transfer of Property Act, 1882 —Section 52—Doctrine of lis pendens —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—Court has discretion in the matter which must be judicially exercised—An alienee would ordinarily be joined as a party to enable him to protect his interests.
       Held : 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 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 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. (Para 16)

Judgment

Dr. AR. Lakshmanan, J.—Leave granted.

2. These two appeals are directed against the judgment and order dated 15.06.2004 passed by the High Court at Calcutta in C.A.N.No. 2642 of 2004 in S.A.No. 631 of 1993 and in C.A.N.No. 2643 of 2004 in S.A.No. 632 of 1993 whereby the High Court dismissed the applications filed by the appellants for substitution of their names, namely, Amit Kumar Shaw and Anand Kumar Shaw as contesting respondents in place and stead of Birendra Nath Dey and Smt. Kalyani Dey, both since deceased and represented by their legal heirs in their place. According to the appellants, the respondents above named had sold the suit property to the appellants, who are the only persons interested in the said suit property.

3. The service of notice is complete in both the matters but no one has entered appearance on behalf of the respondents.

4. The short facts are as follows :

The property in question originally belonged to Khetra Mohan Das and subsequently by way of lease and transfer; the said property ultimately came in the hands of Birendra Nath Dey and Smt. Kalyani Dey. There were troubles in between the original owner and the said Birendra Nath Dey and Smt. Kalyani Dey and as a result of that, the suit was filed. One Fakir Mohammad claimed his right, title and interest in respect of the property in question by way of adverse possession. Ultimately, both the appeals being Title Appeal No. 400 of 1989 and Title Appeal No. 7 of 1990 were allowed by a common judgment and decree dated 25.06.1992 and the suit was remanded back for rehearing before the trial Court. Being aggrieved by the said decree, Fakir Mohammad filed S.A.Nos. 631 and 632 of 1993 challenging the said judgment of the first appellate Court. On 15.12.1995, by a deed of assignment Birendra Nath Dey assigned his leasehold interest in respect of 132A, Circular Garden Reach Road, Calcutta in favour of the present appellants. Similarly, by a sale deed on 15.12.1995, Kalyani Dey sold and transferred 132B Circular Garden Reach Road, Calcutta in favour of the present appellants. Therefore, the appellants filed applications for recording their names in the Municipal records. At that time, the appellants, for the first time, came to know about the pendency of the above two appeals. Immediately thereafter, the appellants filed the petitions praying for adding them as a party in connection with those two appeals. In this factual background, the following questions of law arise for consideration by this Court in these appeals:

“1) Whether on a combined reading of Order 1 Rule 10, Order XXII Rule 10 of the Code of Civil Procedure, 1908 and Section 52 of the Transfer of Property Act, 1882, an application for substitution by a subsequent transferee can be rejected and he be non-suited altogether?

2) Whether a decree for adverse possession is set aside in First Appeal in the year 1992 and no stay application was filed for long 12 years (till 2004) in the Second Appeal, whether a transferee interregnum from the owner/defendant, without knowledge of the second appeal, is a necessary party or whether their application for substitution can be rejected, when there is no allegation of mala fide or ill motive?

3) Whether the High Court has not committed serious error while concluding that the presence of the appellants is not necessary in order to decide the appeal and there is no merit in the application for addition of party though the application was made by the appellants for substitution of their names in place and stead of contesting defendant No. 10, who sold the suit property to the appellants?

4) Whether the High Court has not committed error by rejecting the appellants’ application for substitution treating the same as addition of party and thereby rendering the appellants non-suited and remediless?

5. We heard Mr. L. Nageswara Rao, learned senior counsel, appearing for the appellants and perused the pleadings, the annexures and the impugned order passed b

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2005 Supreme(SC) 628

Important pointThe 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.

Important point
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.