In my opinion, the petitioner is a person who was clearly deceived
by respondent no.2 by contracting with him merely because
the respondent no.2 was getting double the price that was
agreed with the original plaintiff or respondent no.1 herein Mahadeo.
The petitioner prima facie did not have knowledge
when the sale deed was executed in his favour, either of the
pendency of the suit in the trial Court or of passing of the decree
in favour of respondent no.1 but was caught in a trap laid by
the respondent no. 2 who accepted the total consideration and
executed sale deed in his favour on 26.02.2013. As per the
doctrine of lis pendense under Section 52 of the T.P. Act the sale
deed in favour of the petitioner does not automatically become
void or illegal but the decree passed in the lis may be binding on
the petitioner. But then the rights of the person like the petitioner
who stood deceived, can certainly be worked out by the Court
ultimately by passing the decree instead of asking such person to
go and to file another suit. In my opinion, that would also
save the multiplicity of litigation or an avoidable second
litigation. As a matter of fact, such a person like the petitioner in
that event, would be able to put up his case for a bona fide
purchaser for value without any notice or knowledge and of
deception practised on him. It is not that Section 52 of the T.P.
Act closes the doors of justice to such a person in the litigation
merely because he came to know late about passing of the
decree, of pendency of the suit or the Appeal, as the case may
be. In the backdrop of the abovereferred
facts in the instant
case and in the light of the observations made by the Hon’ble
Supreme Court as quoted by me above, I think the petitioner
should have been allowed by the lower Appellate Court to
participate in the proceedings of Appeal which is pending before it
instead of driving him out of the Court.
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BENCH AT NAGPUR
WRIT PETITION NO: 5541 /2013
Shrikrushna Narayan Tupkari
v e r s u s
Mahadeo s/o Bansilal Dahale
CORAM: A.B.CHAUDHARI, J.
DATED : 27th February, 2014
Citation; 2014 (3) ALLMR 811 Bom
Read original judgment here; click here
1. Rule. Rule made returnable forthwith, with the consent
of the rival parties.
2. By means of present petition, the petitioner has put to
challenge the order dated 19.5.2013 passed by learned District
Judge2,
Akola (below Exh. 23) in Regular Civil Appeal No.
31/2013, by which the said Application (Exh.23) filed by the
present petitioner, was rejected.
3. In support of the Writ Petition Mr.A.S.Mehadia, learned
counsel for the petitioner challenged the impugned order on the
ground that the petitioner is a bona fide purchaser for value
without notice to the suit property and he came to know about
pendency of the Appeal against the judgment and decree for
specific performance of contract that was passed by the learned
trial Judge in RCS No. 388/2012 and, therefore, in order to save
his interest, filed Application (Exh.23) in the pending Appeal.
The lower Appellate Court rejected the Application (Exh.23)
only on the ground that the petitioner is a subsequent purchaser
and is a stranger to the litigation and in view of Section 52 of the
Transfer of Property Act (henceforth referred to as “ the T.P. Act”),
as per the doctrine of lis pendens, the decree is binding on him.
As such, he cannot be allowed to participate in the proceedings in
Appeal since he is neither a necessary party nor a proper party.
According to Mr.Mehadia, the petitioner was cheated by
respondent no.2 and he would be losing his hardearned
income
with which he purchased the suit property, he having no
knowledge about the suit or the decree that was passed, which is
ultimately challenged before the lower Appellate Court. He
submitted that the petitioner being a person who has been
deceived, cannot be denied the entry from the doors of the Court
in order that the petitioner can put up his case before the lower
Appellate Court and show his bona fides and the manner in which
he was deceived and also may get some relief if the Court finds
accordingly. But then, according to him, closing the doors of
justice to him would be doing severe injustice to him and also
will give rise of multifariousness of litigation. He, therefore,
prayed for allowing Application (Exh. 23).
4. Per contra, Mr.U.J. Deshpande, learned counsel for the
respondent no.1 argued that his client holds a decree in his
favour for specific performance of contract in respect of the earlier
contract with the respondent no.2 that was eventually passed
without contest from the respondent no.2 and he is entitled to
take advantage of the decree passed by the competent court of
law in his favour. The petitioner, according to Mr.Deshpande, is
a mere stranger. His transaction, if any, is hit by doctrine of lis
pendens contemplated under Section 52 of the T.P. Act He relied
on the decisions reported in 2013 (2) Civil L.J. 503 (Vidur Impex
vs. Tosh Apartmentrs & others); AIR 2005 SC 2813 (1)
Kasturi vs. Iyyamperumal and others; and argued that it is
consistently held that such a person is not a necessary party to
the suit or in the Appeal. He,therefore, prayed for dismissal of the
Petition.
5. Mr. B.N.Mohta, learned counsel appearing on behalf of
respondent no.2 supported the impugned order.
6. Upon hearing the learned counsel for the rival parties
and upon perusal of the impugned order, so also the various
judgments of the Hon’ble Supreme Court, I think it will be proper
to state few relevant facts in this case.
7. The respondent no.1Mahadeo
filed the Suit for
specific performance of contract against the respondent no.2
Smt.
Priyawanda in respect of the suit property namely, a house
at Emerald Colony, Geetanagar, Akola vide Special Civil Suit No.
170/2010 (new RCS No. 388/2012). The suit was filed on the
ground that the respondent no.2 had entered into an agreement
of sale with respondent no.1 on 16.02.2010 for a total
consideration of Rs. 4,25,000/and
that the sale deed would be
completed by 16.05.2010. The said suit proceeded and ultimately
a decree came to be passed on 11.2.2013 in faovur of respondent
no.1 and against the respondent no.2. It appears that the suit
was not contested by respondent no.2. The respondent no.2
approached the petitioner and agreed to sell the same suit
property to the petitioner for a total sum of Rs. 9,00,000/:::
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with a condition that the petitioner should clear the outstanding
loan amount from Vidarbha Premier Housing Cooperative Society.
The petitioner agreed and accordingly he cleared all the dues
and obtained sale deed from the respondent no.2 on 26.2.2013.
The Respondent no.2 preferred an Appeal before the lower
Appellate Court vide R.C.A. No.31/2013. In the said Appeal,
the present petitioner filed Application (Exh.23) for addition of
party under Order 1 Rule 10 of the Civil Procedure Code on the
ground that he was not aware about the suit that was filed and
decree that was passed and he almost paid the double the price
than that of respondent no.1 and got the sale deed in his favour,
while there was no sale deed in favour of the respondent no.1
though there was decree passed on 11.02.2013 in his favour. The
petitioner, therefore, submitted that he was deceived by the
respondent no.2 and he being a bona fide purchaser for value
without any notice, was entitled to be added as a party to the
Appeal so that his grievance can also be taken into consideration
while deciding the Appeal.
8. The lower Appellate Court considered plethora of
judgments and eventually found that the petitioner was a
stranger and in view of the doctrine of lis pendens, he was not
required to be added as a party to the Suit since as per Section 52
of the T.P. Act, the decree would be binding on him. The petitioner
approached the Court at a very belated stage i.e. after passing of
the judgment and decree and the right of the original plaintiff/
respondent no.1 has been confirmed by passing a decree in his
favour. According to the Court, the petitioner is neither a
necessary party nor a proper party.
9. In my opinion, the above facts will have to be taken
into consideration to find out whether the petitioner is a necessary
or property party or not. In Ramesh Kundanmal vs. Municipal
Corporation of Greater Bombay : (1992) 2 SCC 524 in
Paragraph 6, the Hon’ble Supreme Court has observed thus,
“6.......................A necessary party is one without
whom no order can be made effectively. A proper
party is one in whose absence an effective order
can be made but whose presence is necessary for
a complete and final decision on the question
involved in the proceeding. The addition of parties
is generally not a question of initial jurisdiction of
the Court but of a judicial discretion which has to
be exercised in view of all the facts and
circumstances of a particular case.”
In Anilkumar Singh vs. Shivnath Mishra (1995) 3
SCC 147, in paragraph 7 the Hon’ble Supreme Court observed
thus,
“7. By operation of above quoted rule though
the Court may have power to strike out the name
of a party improperly joined or add a party either
on application or without application of either
party, but the condition precedent is that the Court
must be satisfied that the presence of the party to
be added, would be necessary in order to enable
the Court to effectually and completely adjudicate
upon and settle all questions involved in the suit.
To bring a person as partydefendant
is not a
substantive right but one of procedure and the
Court has discretion in its proper exercise. The
object of the rule is to bring on record and the
persons who are parties to the dispute relating to
the subjectmatter
so that the dispute may be
determined in their presence at the same time
without any protection, inconvenience and to avoid
multiplicity of proceedings.”
In Mumbai International Airport (P) Ltd. vs.
Regency Convention Centre: (2010) 7 SCC 417, in paragraph
15, the Hon’ble Supreme Court observed thus,
“15....................A ‘proper party’ is a party who,
though not a necessary party, is a person whose
presence would enable the Court to completely,
effectively and adequately adjudicate upon all
matter sin dispute in the suit, though he need not
be a person in favour of or against whom the
decree is made.”
It also observed in paragraph 22 as under :“
22.......................The said subrule
is not about
the right of a nonparty
to be impleaded as a
party, but about the judicial discretion of the Court
to strike out or add parties at any stage of a
proceeding. The discretion under the subrule
can
be exercised either suo motu or on the application of
the plaintiff or the defendant, or on an application
of a person who is not a party to the suit.”
The three Judges’ judgment in the case of Kasturi
vs. Iyyamperumal, (2005) 6 SCC 733, the Apex Court in
paragraph 7 has observed thus;
“7. In our view, a bare reading of this
provision, namely, second part of Order 1 Rule 10
subrule
(2) CPC would clearly show that the
necessary parties in a suit for specific performance
of a contract for sale are the parties to the contract
or if they are dead, their legal representatives as
also a person who had purchased the contracted
property from the vendor. In equity as well as in
law, the contract constitutes rights and also
regulates the liabilities of the parties. A purchaser
is a necessary party as he would be affected if he
had purchased with or without notice of the
contract, but a person who claims adversely to the
claim of a vendor is, however, not a necessary
party. From the above, it is now clear that two
tests are to be satisfied for determining the
question who is a necessary party. Tests are – (1)
there must be a right to some relief against such
party in respect of the controversies involved in
the proceedings; (2) no effective decree can be
passed in the absence of such party.”
In Amit Kumar Shaw vs. Farida Khatoon :(2005)
11 SCC 403, two judges of the Hon’ble Surpeme Court in para
16 observed thus,
“16. The doctrine of lis pendense 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 subjectmatter
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, where 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.”
10. Taking upon the conspectus of the view taken by the
Hon’ble Supreme Court in the earlier judgments, in the case of
Vidur Impex & Traders Pvt.Ltd. vs. Tosh Apartments Pvt.Ltd.
And others : (2012) 8 SCC 384 finally in paragraph 41, the Apex
Court laid down the following principles:
“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. (emphasis supplied)
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.”
11. Upon perusal of paragraph 41 of the aforesaid
judgment of the Hon’ble Supreme Court, in my view, there is no
straightjacket
formula in respect of such cases whether to allow
or disallow a subsequent purchaser on record of the suit or
appeal as necessary or proper party to the suit. In the light of the
dictum laid down by the Hon’ble Supreme Court in the suit for
specific performance of contract for which I have supplied the
emphasis above, and in the light of the facts of the present case,
in my opinion, the petitioner is a person who was clearly deceived
by respondent no.2 by contracting with him merely because
the respondent no.2 was getting double the price that was
agreed with the original plaintiff or respondent no.1 hereinMahadeo.
The petitioner prima facie did not have knowledge
when the sale deed was executed in his favour, either of the
pendency of the suit in the trial Court or of passing of the decree
in favour of respondent no.1 but was caught in a trap laid by
the respondent no. 2 who accepted the total consideration and
executed sale deed in his favour on 26.02.2013. As per the
doctrine of lis pendense under Section 52 of the T.P. Act the sale
deed in favour of the petitioner does not automatically become
void or illegal but the decree passed in the lis may be binding on
the petitioner. But then the rights of the person like the petitioner
who stood deceived, can certainly be worked out by the Court
ultimately by passing the decree instead of asking such person to
go and to file another suit. In my opinion, that would also
save the multiplicity of litigation or an avoidable second
litigation. As a matter of fact, such a person like the petitioner in
that event, would be able to put up his case for a bona fide
purchaser for value without any notice or knowledge and of
deception practised on him. It is not that Section 52 of the T.P.
Act closes the doors of justice to such a person in the litigation
merely because he came to know late about passing of the
decree, of pendency of the suit or the Appeal, as the case may
be. In the backdrop of the abovereferred
facts in the instant
case and in the light of the observations made by the Hon’ble
Supreme Court as quoted by me above, I think the petitioner
should have been allowed by the lower Appellate Court to
participate in the proceedings of Appeal which is pending before it
instead of driving him out of the Court.
12. There is a serious omission in the relevant legislation
for the last several years due to which persons like the petitioner
have been suffering hardship and misery and high risks in the
property transactions in the country. It is a matter of anxiety
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that no corrective step has yet been taken by the legislature
though the issue very much concerns the people in the entire
country. A little care was taken by Bombay Act No.14/1939 by
providing for Bombay Amendment to Section 52, but then the
said amendment of the requirement by amended provision has
not been made applicable to the areas other than only the Greater
Bombay in the State of Maharashtra. It is, therefore, strange that
in the State of Maharashtra itself, the said amendment of 1939
which is beneficial of the people at large in the State, has not
been made applicable in the entire State, except Greater Bombay
till the next date. It is in the above background, the Apex Court in
the year 2010 while rendering decision in the case of T.G.
Ashok Kumar vs. Govindammal and another : (2010) 14 SCC
370, made a very significant suggestion to the lawmakers
but
even then no corrective steps have been yet taken by either of
the Legislature. It would be appropriate to quote the relevant
paragraphs from the said judgment :
“ A related suggestion to the lawmakers:
19. It is necessary to refer to the hardship,
loss, anxiety and unnecessary litigation caused on
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account of the absence of a mechanism for
prospective purchasers to verify whether a
property is subject to any pending suit or a decree
or attachment. At present, a prospective
purchaser can easily find out about any existing
encumbrance over a propertty either by inspection
of the registration registers or by securing a
certificate relating to encumbrances (that is,
copies of entries in the registration registers) from
the jurisdictional SubRegistrar
under Section 57
of the Registration Act, 1908. But a prospective
purchaser has no way of ascertaining whether
there is any suit or proceeding pending in respect
of the property, if the person offering the property
for sale does not disclose it or deliberately
suppresses the information. As a result, after
parting with the consideration (which is many a
time the lifetime savings), the purchaser gets the
shock of his life when he comes to know that the
property purchased by him is subject to litigation,
and that it may drag on for decades and
ultimately deny him title to the property. The
pendente lite purchaser will have to wait for the
litigation to come to an end or he may have to
take over the responsibility of conducting the
litigation if the transferor loses interest after the
sale. The purchaser may also face objections to
his being impleaded as a party to the pending
litigation on the ground that being a lis pendense
purchaser, he is not a necessary a party. All these
inconveniences, risks, hardships and misery could
be avoided and the property litigations could be
reduced to a considerable extent, if there is some
satisfactory and reliable method by which a
prospective purchaser can ascertain whether any
suit is pending (or whether the property is subject
to any decree or attachment) before he decides
to purchase the property.
20. It is of some interest that a solution
has been found to this problem in the State of
Maharashtra by an appropriate local amendment
to Section 52 of the Act, by Bombay Act 14 of
1939. Section 52, as applicable in Maharashtra
and Gujarat, reads thus ( the amendment is shown
in Italics):
52. Transfer of property pending suit
relating thereto: (1) During the pendency
in any court having authority within the
limits of India excluding the State of Jammu
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and Kashmir or established beyond such
limits by the Central Government of any suit
or proceeding which is not collusive and
in which any right to immovable property is
directly and specifically in question, if a
notice of the pendency of such suit or
proceeding is registered under Section 18 of
the Indian Registration Act, 1908, the
property after the notice is so registered
cannot be transferred or otherwise dealt
with by any party to the suit or proceeding
so as to affect the rights of any other party
thereto under any decree or order which
may be made therein, except under the
authority of the court and on such terms as
it may impose.
(2) Every notice of pendency of a suit or
proceeding referred to in subsection
(1) shall
contain the following particulars, namely;
(a) the name and address of the owner of
immovable property or other person whose
right to the immovable property is in
question;
(b) the description of the immovable
property,the right to which is in question;
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(c) the court in which the suit or
proceeding is pending;
(d) the nature and title of the suit or
proceeding; and
(e) the date on which the suit or proceeding
was instituted.”
(emphasis supplied)
21. We hope that the Law Commission and
Parliament considers such amendment or other
suitable amendment to cover the existing void in
title verification or due diligence procedures.
Provision can also be made for compulsory
registration of such notice sin respect of decrees
and in regard to attachments of immovable
properties.
22. We may also refer to another related
area where registration should be made
compulsory to reduce property litigation. At
present in most of the States, agreements to sell
are not compulsorily registrable as they do not
involve transfer of any right, title or interest in an
immovable property. Unscrupulous property
owners enter into agreements of sale and take
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huge earnest money deposits/ advances, and then
sell the property to others thereby plunging the
original agreementholder
and the subsequent
purchaser into litigation. Registration of
agreements of sale will reduce such litigation. It
will also assist in putting an end to the prevalent
practice of entering into agreements of sale
showing the real consideration and then
registering the sale deed for only a part of the real
consideration.
23. If all agreements of sale are
compulsorily registered, that will go a long way
to discourage generation and circulation of black
money in real estate matters, as also
undervaluation of documents for purposes of
stamp duty. It will also discourage the growth of
land mafia and musclemen who dominate the
real estate scene in various parts of the country.
Prevention of a malaise, is always better than
allowing a malaise to develop and then trying to
cure it.”
CONCLUSION:
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13. In the above circumstances, the anxiety expressed by
the Apex Court as above, ought to be taken care of by the
Parliament as well as State Legislature. The State Legislature
ought to extend the said amendment of Bombay Act No.14/1939
to the entire State of Maharashtra rather than resting it only to
Greater Bombay. Except saying this, this Court cannot say
anything more.
14. Turning back to the present litigation having recorded
the conclusions by me as above, the following order will have to
be passed:ORDER
i) Writ Petition No.5541/2013 is allowed.
ii) The impugned order dated 19.05.2013 (below Exh.23)
passed by learned District Judge2,
Akola in R.C.A. No.31/2013
is set aside.
iii) The Application (Exh. 23) filed by the petitioner is allowed.
The petitioner be added as a party to the Appeal in R.C.A. No.
31/2013. The amendment shall be carried out within four weeks.
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The Appeal shall be heard thereafter.
iv) No order as to costs.
v) The Registrar of this Court to send copy of this judgment to
the Ministry of Law & Justice, Shastri Bhawan, New Delhi and
Chief Secretary, Maharashtra State, Mantralaya, Mumbai32,
for
information and necessary action.
JUDGE
sahare
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