Friday, 2 October 2015

When decree passed by court will be binding on assignee who purchased suit property during pendency of suit?

 This Court in Jaskirat Datwani v. Vidyavati & Ors. [2002 (5) SCC 647],
while relying upon Dhurandhar Prasad (supra), has laid down that even if no step
is taken by assignee, suit may be continued by the original party and the person
upon whom the interest has devolved will be bound by the decree, particularly
when such party had the knowledge of the proceedings. Ordinarily, the person is
bound by the decree until and unless it is shown that the decree was based upon
fraud or collusion etc.

Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.7889 OF 2015
(Arising out of S.L.P. [C] No.36889 of 2013)
Sharadamma 
Vs.
Mohammed Pyrejan (D) through LRs. & Anr.
Dated;September 23, 2015.
Citation:(2016)1SCC 730



ARUN MISHRA, J.
1. Heard learned counsel for the parties.
2. Leave granted.
3. This is an appeal against the judgment and order dated 24.9.2013 passed by
the High Court of Karnataka at Bangalore in Regular First Appeal No.1735 of
2011, dismissing the appeal filed by the plaintiff-appellant on the ground that she
had released her interest in the suit property in favour of her daughter Smt.
Padmavathi on 11.4.2011 and said Padmavathi, in turn, had transferred the
property in favour of Mr. G.R. Ramesh vide sale deed dated 20.4.2011.
Consequently, she had lost her right to continue the appeal preferred as against
dismissal of the suit vide judgment and order dated 16.6.1990.
4. The facts, in brief, indicate that Sharadamma, plaintiff-appellant had filed
Original Suit No.6020 of 1998 on 5.8.1998 for the purposes of declaration of title
and for restoration of possession on the strength of registered sale deed dated
10.11.1965. The plaintiff had also claimed a sum of Rs.3,000/- towards past
damages and a further sum of Rs.20/- per day as continuing damages. The suit was
dismissed by the trial court against which the plaintiff had preferred regular first
appeal before the High Court. The same has been dismissed on the aforesaid
ground by the impugned judgment and order.
5. We have heard learned counsel for the parties and opine that the impugned
judgment is patently illegal. Merely due to the assignment or release of the rights
during the pendency of the appeal, the appellant did not in any manner lose the
right to continue the appeal. Merely by transfer of the property during the
pendency of the suit or the appeal, plaintiff or appellant, as the case may be,
ordinarily has a right to continue the appeal. It is at the option of the assignee to
move an application for impleadment. Considering the provisions contained in
Order 22 Rule 10 and Order 22 Rule 11 of the Code of Civil Procedure, the
impugned judgment and order of the High Court cannot be allowed to be sustained.
Order 22 Rule 10 and Order 22 Rule 11CPC are extracted hereunder :
ORDER XXII, RULES 10 AND 11.
“10. Procedure in case of assignment before final order in
suit.- (1) In other cases of an assignment, 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).
x x x x x
11. Application of Order to appeals.- In the application of this
Order to appeals, so far as may be, the word “plaintiff” shall be
held to include an appellant, the word “defendant” a
respondent, and the word “suit” an appeal.”
6. A bare reading of the provisions of Order XXII Rule 10 makes it clear that
the legislature has not envisaged the penalty of dismissal of the suit or appeal on
account of failure of the assignee to move an application for impleadment and to
continue the proceedings. Thus, there cannot be dismissal of the suit or appeal, as
the case may be, on account of failure of assignee to file an application to continue
the proceedings. It would be open to the assignor to continue the proceedings
notwithstanding the fact that he ceased to have any interest in the subject-matter of

dispute. He can continue the proceedings for the benefit of assignee. The question
is no more res integra. This Court in Dhurandhar Prasad Singh v. Jai Prakash
University & Ors. [2001 (6) SCC 534] has laid down thus :
“6. In order to appreciate the points involved, it would be
necessary to refer to the provisions of Order 22 of the Code,
Rules 3 and 4 whereof prescribe procedure in case of
devolution of interest on the death of a party to a suit. Under
these Rules, if a party dies and right to sue survives, the court
on an application made in that behalf is required to substitute
legal representatives of the deceased party for proceeding with
a suit but if such an application is not filed within the time
prescribed by law, the suit shall abate so far as the deceased
party is concerned. Rule 7 deals with the case of creation of an
interest in a husband on marriage and Rule 8 deals with the case
of assignment on the insolvency of a plaintiff. Rule 10 provides
for cases of assignment, creation and devolution of interest
during the pendency of a suit other than those referred to in the
foregoing Rules and is based on the principle that the trial of a
suit cannot be brought to an end merely because the interest of
a party in the subject-matter of the suit has devolved upon
another during its pendency but such a suit may be continued
with the leave of the court by or against the person upon whom
such interest has devolved. But, if no such step is taken, the suit
may be continued with the original party and the person upon
whom the interest has devolved will be bound by and can have
the benefit of the decree, as the case may be, unless it is shown
in a properly constituted proceeding that the original party
being no longer interested in the proceeding did not vigorously
prosecute or colluded with the adversary resulting in decision
adverse to the party upon whom the interest had devolved. The
legislature while enacting Rules 3, 4 and 10 has made a
clear-cut distinction. In cases covered by Rules 3 and 4, if right
to sue survives and no application for bringing the legal
representatives of a deceased party is filed within the time
prescribed, there is automatic abatement of the suit and
procedure has been prescribed for setting aside abatement under
Rule 9 on the grounds postulated therein. In cases covered by
Rule 10, the legislature has not prescribed any such
procedure in the event of failure to apply for leave of the
court to continue the proceeding by or against the person
upon whom interest has devolved during the pendency of a
suit which shows that the legislature was conscious of this
eventuality and yet has not prescribed that failure would
entail dismissal of the suit as it was intended that the
proceeding would continue by or against the original party
although he ceased to have any interest in the subject of
dispute in the event of failure to apply for leave to continue
by or against the person upon whom the interest has
devolved for bringing him on the record.
7. Under Rule 10 Order 22 of the Code, when there has been a
devolution of interest during the pendency of a suit, the suit
may, by leave of the court, be continued by or against persons
upon whom such interest has 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. But it does not follow
that it is obligatory upon them to do so. If a party does not ask
for leave, he takes the obvious risk that the suit may not be
properly conducted by the plaintiff on record, and yet, as
pointed out by Their Lordships of the Judicial Committee in
Moti Lal v. Karrabuldin [ILR (1898) 25 Cal. 179] he will be
bound by the result of the litigation even though he is not
represented at the hearing unless it is shown that the litigation
was not properly conducted by the original party or he colluded
with the adversary. It is also plain that if the person who has
acquired an interest by devolution, obtains leave to carry on the
suit, the suit in his hands is not a new suit, for, as Lord
Kingsdown of the Judicial Committee said in Prannath Roy
Chowdry v. Rookea Begum [(1857-60) 7 MIA 323], a cause of
action is not prolonged by mere transfer of the title. It is the old
suit carried on at his instance and he is bound by all
proceedings up to the stage when he obtains leave to carry on
the proceedings.
x x x x x
26. The plain language of Rule 10 referred to above does not
suggest that leave can be sought by that person alone upon
whom the interest has devolved. It simply says that the suit may
be continued by the person upon whom such an interest has
devolved and this applies in a case where the interest of the
plaintiff has devolved. Likewise, in a case where interest of the
defendant has devolved, the suit may be continued against such
a person upon whom interest has devolved, but in either
eventuality, for continuance of the suit against the persons upon
whom the interest has devolved during the pendency of the suit,
leave of the court has to be obtained. If it is laid down that leave
can be obtained by that person alone upon whom interest of a
party to the suit has devolved during its pendency, then there
may be preposterous results as such a party might not be
knowing about the litigation and consequently not feasible for
him to apply for leave and if a duty is cast upon him then in
such an eventuality he would be bound by the decree even in
cases of failure to apply for leave. As a rule of prudence, initial
duty lies upon the plaintiff to apply for leave in case the factum
of devolution was within his knowledge or with due diligence
could have been known by him. The person upon whom the
interest has devolved may also apply for such a leave so that his
interest may be properly represented as the original party, if it
ceased to have an interest in the subject-matter of dispute by
virtue of devolution of interest upon another person, may not
take interest therein, in ordinary course, which is but natural, or
by colluding with the other side. If the submission of Shri
Mishra is accepted, a party upon whom interest has devolved,
upon his failure to apply for leave, would be deprived from
challenging correctness of the decree by filing a properly
constituted suit on the ground that the original party having lost
interest in the subject of dispute, did not properly prosecute or
defend the litigation or, in doing so, colluded with the
adversary. Any other party, in our view, may also seek leave as,
for example, where the plaintiff filed a suit for partition and
during its pendency he gifted away his undivided interest in the
Mitakshara coparcenary in favour of the contesting defendant,
in that event the contesting defendant upon whom the interest
of the original plaintiff has devolved has no cause of action to
prosecute the suit, but if there is any other co-sharer who is
supporting the plaintiff, he may have a cause of action to
continue with the suit by getting himself transposed to the
category of plaintiff as it is well settled that in a partition suit
every defendant is a plaintiff, provided he has cause of action
for seeking partition. Thus, we do not find any substance in this
submission of learned counsel appearing on behalf of the
appellant and hold that prayer for leave can be made not only
by the person upon whom interest has devolved, but also by the
plaintiff or any other party or person interested.”
(emphasis supplied)
7. This Court in Jaskirat Datwani v. Vidyavati & Ors. [2002 (5) SCC 647],
while relying upon Dhurandhar Prasad (supra), has laid down that even if no step
is taken by assignee, suit may be continued by the original party and the person
upon whom the interest has devolved will be bound by the decree, particularly
when such party had the knowledge of the proceedings. Ordinarily, the person is
bound by the decree until and unless it is shown that the decree was based upon
fraud or collusion etc.
8. Resultantly, we are of the opinion that the High Court has gravely erred in
law in dismissing the appeal on the aforesaid ground. Thus, its judgment and order
being unsustainable, are hereby set aside. We remit the appeal to the High Court
for deciding the same afresh in accordance with law after hearing the parties. The
appeal is allowed. No order as to costs.
…………………………J.
(Kurian Joseph)
New Delhi; ………………………..J.
September 23, 2015. (Arun Mishra) 
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