# THOMSON PRESS (INDIA) LTD v. NANAK BUILDERS & INVESTORS P. LTD. & ORS

- **Citation:** [2013] 2 S.C.R. 74
- **Court:** Supreme Court of India
- **Decided:** 2013-02-21
- **Case number:** Civil Appeal No. 1518 of 2013
- **Bench:** T.S. Thakur, M.Y. Eqbal
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/thomson-press-india-ltd-v-nanak-builders-investors-p-ltd-ors-28748
- **Pages:** 42

## Headnote

Code of Civil Procedure, 1908:
c
0. 1, r.10, 0.22, r.10 - Suit for specific performance of
contract - During pendency of the suit defendant transferring
the property - Application by appellant-transferee for
impleadment as defendant - HELD: Appellant entered into
a clandestine transaction with the defendants and got the
0 property transferred in its favour - Therefore, the appellant
cannot be held to be a bonafide purchaser, without notice - It
is true that the application which the appellant made was only
under 0. I r.10 CPC but the enabling provision of 0.22, r. 10
CPC could always be invoked if the fact situation so
E demanded - In the facts and circumstances of the case and
also for the ends of justice, the appellant is to be added as
party-defendant in the suit -Specific Relief Act, 1963- s. 19
- Transfer of Property Act, 1882 - s.52 - Doctrine of /is
pendens.
F
The plaintiff-respondent no. 1 filed a suit on 1.11.1991
against the defendants-respondents for specific
performance of the agreement dated 29.5.1986,
whereunder the defendants had agreed to sell the suit
property to the plaintiff-respondent no. 1. Appearance
G was put on behalf of the defendants and on the basis of
the statement made on their behalf court on 4.11.1991
passed an interim order not to alienate the suit property.
However, between 31.1.2001 and 3.4.2001 five sale deeds
were executed by the defendants in favour of the
H
74
-
THOMSON PRESS (INDIA) LTD. v. NANAK
75
BUILDERS & INVESTORS P.L TD.
appellant. On the basis of these sale deeds the appellant A
moved an application under 0.1, r.10. CPC, for
impleadment as defendant in the suit for specific
performance filed by the plaintiff-respondent no. 1. The
Single Judge of the High Court rejected the application.
The FAO filed by the appellant was also dismissed by the
B
Division Bench of the High Court.
In the instant appeal, the question for consideration
before the Court was: "whether the appellant who is the
transferee pendente lite having notice and knowledge C
about the pendency of the suit for specific performance
and order of injunction can be impleaded as party under
Order 1 Rule 10 on the basis of sale deeds executed in
/ its favour by the defendants"
Allowing the appeal, the Court
D
HELD: (Per M.Y. Eqbal, J.)
1.1 Order 1 Rule 10 of the Code of Civil Procedure,
1908 which empowers the court to add any person as
party at any stage of the proceedings if the presence of E
such person before the court is necessary or proper for
effective adjudication of the issue involved in the suit.
Sub-rule (2) of Rule 10 gives a wider discretion to the
court to meet every case or defect of a party and to
proceed with a person who is either a necessary party
F
or a proper party whose presence in the court is essential
for effective determination of the issues involved in the
suit. [para 27 & 28] [100-8-C; 101-D-E]
Ramesh Hirachand Kundanmal v. Municipal Corporation G
of Greater Bombay & Ors. 1992 (2) SCR 1=1992 (2) SCC
524 • referred to.
1.2 From a bare reading of s.19 of the Specific Relief
AGt1 it is manifest that a Gontract for lipecific perform1mce
H
•
76
SUPREME COURT REPORTS
(2013) 2 S.C.R.
A may be enforced against the parties to the contract and
the persons mentioned in the said section. Clause (b) of
s.19 makes it very clear that a suit for specific
performance cannot be enforced against a person who
is a transferee from the vendor for valuable consideration
B and without notice of the original contract which is
sought to be enforced in the suit. [para 31] [103-E-F]
1.3 In the instant case, even before the institution of
suit for specific performance when the plaintiff came to
know about the activities of the defendants to deal with
C the property, a public notice was published at the
instance of the plaintiff in a newspaper on 12.02.1990
informing the public in general about the agreement with
the plaintiffs. In response to the said notice the sister
concern of the appellant served a legal notice dated
'D

## Text

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A
B
[2013] 2 S.C.R. 74
THOMSON PRESS (INDIA) LTD.
v.
NANAK BUILDERS & INVESTORS P. LTD. & ORS.
(Civil Appeal No. 1518 of 2013)
FEBRUARY 21, 2013
[T.S. THAKUR AND M.Y. EQBAL, JJ.]
Code of Civil Procedure, 1908:
c
0. 1, r.10, 0.22, r.10 - Suit for specific performance of
contract - During pendency of the suit defendant transferring
the property - Application by appellant-transferee for
impleadment as defendant - HELD: Appellant entered into
a clandestine transaction with the defendants and got the
0 property transferred in its favour - Therefore, the appellant
cannot be held to be a bonafide purchaser, without notice - It
is true that the application which the appellant made was only
under 0. I r.10 CPC but the enabling provision of 0.22, r. 10
CPC could always be invoked if the fact situation so
E demanded - In the facts and circumstances of the case and
also for the ends of justice, the appellant is to be added as
party-defendant in the suit -Specific Relief Act, 1963- s. 19
- Transfer of Property Act, 1882 - s.52 - Doctrine of /is
pendens.
F
The plaintiff-respondent no. 1 filed a suit on 1.11.1991
against the defendants-respondents for specific
performance of the agreement dated 29.5.1986,
whereunder the defendants had agreed to sell the suit
property to the plaintiff-respondent no. 1. Appearance
G was put on behalf of the defendants and on the basis of
the statement made on their behalf court on 4.11.1991
passed an interim order not to alienate the suit property.
However, between 31.1.2001 and 3.4.2001 five sale deeds
were executed by the defendants in favour of the
H
74
-
THOMSON PRESS (INDIA) LTD. v. NANAK
75
BUILDERS & INVESTORS P.L TD.
appellant. On the basis of these sale deeds the appellant A
moved an application under 0.1, r.10. CPC, for
impleadment as defendant in the suit for specific
performance filed by the plaintiff-respondent no. 1. The
Single Judge of the High Court rejected the application.
The FAO filed by the appellant was also dismissed by the
B
Division Bench of the High Court.
In the instant appeal, the question for consideration
before the Court was: "whether the appellant who is the
transferee pendente lite having notice and knowledge C
about the pendency of the suit for specific performance
and order of injunction can be impleaded as party under
Order 1 Rule 10 on the basis of sale deeds executed in
/ its favour by the defendants"
Allowing the appeal, the Court
D
HELD: (Per M.Y. Eqbal, J.)
1.1 Order 1 Rule 10 of the Code of Civil Procedure,
1908 which empowers the court to add any person as
party at any stage of the proceedings if the presence of E
such person before the court is necessary or proper for
effective adjudication of the issue involved in the suit.
Sub-rule (2) of Rule 10 gives a wider discretion to the
court to meet every case or defect of a party and to
proceed with a person who is either a necessary party
F
or a proper party whose presence in the court is essential
for effective determination of the issues involved in the
suit. [para 27 & 28] [100-8-C; 101-D-E]
Ramesh Hirachand Kundanmal v. Municipal Corporation G
of Greater Bombay & Ors. 1992 (2) SCR 1=1992 (2) SCC
524 • referred to.
1.2 From a bare reading of s.19 of the Specific Relief
AGt1 it is manifest that a Gontract for lipecific perform1mce
H
•
76
SUPREME COURT REPORTS
(2013) 2 S.C.R.
A may be enforced against the parties to the contract and
the persons mentioned in the said section. Clause (b) of
s.19 makes it very clear that a suit for specific
performance cannot be enforced against a person who
is a transferee from the vendor for valuable consideration
B and without notice of the original contract which is
sought to be enforced in the suit. [para 31] [103-E-F]
1.3 In the instant case, even before the institution of
suit for specific performance when the plaintiff came to
know about the activities of the defendants to deal with
C the property, a public notice was published at the
instance of the plaintiff in a newspaper on 12.02.1990
informing the public in general about the agreement with
the plaintiffs. In response to the said notice the sister
concern of the appellant served a legal notice dated
'D 24.06.1990 on the defendants referring to the 'agreement
to sell' entered into between the plaintiffs and the
defendants. Even after the institution of the suit, the
counsel who appeared for the defendants gave an
undertaking not to transfer and alienate the suit property.
E Notwithstanding the order passed by the court regarding
the undertaking given on behalf of the defendants, and
having full notice and knowledge of all these facts, the
sister concern of the appellant entered into series of
transactions and finally the appellant got the sale deeds
F executed in its favour by the defendants in respect of suit
property. Taking into consideration all these facts, this
Court holds that the appellant entered into a clandestine
transaction with the defendants and got the property
transferred in their favour. Therefore, the appellant
G cannot be held to be a bonafide purchaser, without
notice. [para 33, 34 and 35] [103-D-H; 104-A-E]
1.4 A decree for specific performance of a contract
-
may be enforced against a person claiming under the
H plaintiff, and title acquired subsequent to the contract.
THOMSON PRESS (INDIA) LTD. v. NANAK
77
BUILDERS & INVESTORS P.LTD.
There is no dispute that such transfer made in favour of A
the subsequent purchaser is subject to the rider provided
u/s 52 of the Transfer of Property Act and the restrain order
passed by the court. Section 52 of the Transfer of Property
Act, 1882 speaks about the doctrine of lis pendens. The
doctrine is based on the ground that it is necessary for B
the administration of justice that the decision of a court in
a suit should be binding not only on the litigating parties
but on those who derive title pendente lite. The provision
of this Section does not indeed annul the conveyance or
the transfer otherwise, but renders it subservient to the c
rights of the parties to a litigation. [Para 23-24 and 37] [97G; 98-E-F; 104-G-H; 105-A]
Kasturi v. lyyamperumal & Ors. 2005 (3) SCR 864
= 2005(6) SCC 733; Vidhur lmpex and Traders Pvt. Ltd. v.
D
Tosh Apartments Pvt. Ltd. & Ors. 2012 (8) SCC 384; Surjit
Singh and Others v. Harbans Singh and Others 1995
(3) Suppl. SCR 354 = (1995) 6 SCC 50; Anil Kumar Singh
vs. Shivnath Mishra alias Gadasa Guru 1994 (5) Suppl.
SCR 135 = (1995) 3 SCC 147; Savitri Devi v. District Judge,
Gorakhpur and Others 1999 (1) SCR 725 = (1999) 2 SCC E
577; Vijay Pratap and Others v.
Sambhu Saran Sinha and
Others 1996 (4) Suppl. SCR 173 = (1996) 10 SCC 53; Gouri
Dutt Maharaj v. Sukur Mohammed & Ors. AIR (35) 1948;
Kedar Nath Lal & Anr. v. Ganesh Ram & Ors. 1970
(2) SCR 204 =AIR 1970 SC 1717; and Rajender Singh & F
Ors. v. Santa Singh & Ors. 1974 (1) SCR 381 =AIR 1973 SC
2537; Kafiladdin and Others vs. Samiraddin and Others, AIR
1931 Calcutta 67; Durga Prasad and Another v. Deep
Chand and Others 1954 SCR 360 = AIR (1954) SC 75
Ramesh Chandra v. Chunil Lal 1971 (2) SCR 573 =AIR G
(1971) SC 1238; Dwarka Prasad Singh and Others vs.
Harikant Prasad Singh and Others (1973) SC 655 - referred
to.
1.5 In the facts and circumstances of the case and H
78
SUPREME COURT REPORTS
(2013] 2 S.C.R.
A also for the ends of justice, the appellant is to be added
as party-defendant in the suit. The impugned orders
passed by the High Court are set aside. It is clarified that
the appellant after impledment as party-defendant shall
be permitted to take all such defences which are available
B to the vendors as the appellant derived title, if any, from
the vendor on the basis of purchase of the suit property
subsequent to the agreement with the plaintiff and during
the pendency of the suit. [para 42-43] [107-C-EJ
c
Per T.S. Thakur. J. <Concurring)
1.1 Sale of immovable property in the teeth of an
earlier agreement to sell is immune from specific
performance of an earlier contract of sale only if the
transferee has acquired the .title for valuable
D consideration, in good faith and without notice of the
original contract. In the instant case, the appellant was
not protected against specific performance of the
contract in favour of the plaintiff, for even though the
transfer in favour of the appellant was for valuable
E consideration it was not in good faith nor was it without
notice of the original contract. The appellant is not a
bona fide purchaser and is, therefore, not protected
against specific performance of the contract between the
plaintiffs and the owner defendants in the suit. [para 3, 4
F and 14(1)] [108-E-F; 109-C-D; 115-C]
Nagubai Ammal & Ors. v. B. Shama Rao & Ors. AIR
1856 SC 593; Vi nod Seth v. Devinder Bajaj 2010 (7)
SCR 424 = (2010) 8 SCC 1; Nawab John & Ors. v. V.N.
Subramanyam 2012 (6) SCR 369 = (2012) 7 SCC 738;
G Jayaram Mudaliar v. Ayyaswami and Ors. 1973 (1) SCR 139 =
(1972) 2 sec 200 - referred to.
1.2 Therefore, the transfer of the suit property
pendete lite is not void ab initio and that the purchaser
H of any such property takes the bargain subject to the
•
THOMSON PRESS (INDIA) LTD. v. NANAK
79
BUILDERS & INVESTORS P.L TD.
rights of the plaintiff in the pending suit. Even where the A
sale deed is executed in breach of an injunction issued
by a competent court, there is no reason why the breach
of any such injunction should render the transfer whether
by way of an absolute sale or otherwise ineffective. The
party committing the breach may doubtless incur the B
liability to be punished for the breach committed by it but
the sale by itself may remain valid as between the parties
to the transaction subject only to any directions which the
competent court may issue in the suit against the vendor.
The transfer in favour of the appellant pendente lite is c
effective in transferring title to the appellant but such title
shall remain subservient to the rights of the plaintiff in the
suit and subject to any direction which the Court may
eventually pass therein. [para 9 and 14] [111-C-E; 115-D]
1.3 As regards the right of a transferee pendete lite, D
to seek addition as a party defendant to the suit under 0.
I, r.10 of the Code of Civil Procedure, 1908, it is well settled
that no one other than parties to an agreement to sell is
a necessary and proper party to a suit. [para 1 O] [111-F]
E
1.4 However, the prayer made by the appellant can be
allowed under 0. 22, r. 10 CPC. A simple reading of 0.22, r.10
would show that in cases of 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 F
the person to or upon whom such interest has come or
devolved. It is true that the application which the appellant
made was only under 0. I r.10 CPC but the enabling
provision of 0.22, r. 10 CPC could always be invoked if the
fact situation so demanded. [para 11] [112-C-E]
G
1.5 This Court has held that a transferee pendete lite
can be added as a party to the suit lest the transferee
suffered prejudice on account of the transferor losing
interest in the litigation post transfer. [para 12] [112-G-H]
I
H
80
SUPREME COURT REPORTS
[2013) 2 S.C.R.
A
Khemchand Shanker Choudhary v. Vishnu Hari Patil
1983 (1) SCR 898 = (1983) 1 SCC 18; and Amit Kumar Shaw
v. Farida Khatoon 2005 (3) SCR 509 = (2005) 11 SCC 403;
Rikhu Dev, Che/a Bawa Harjug Dass v. Som Dass
(deceased) through his Che/a Shiama Dass, 1976 (1)
B
SCR 487 = (1976) 1 sec 103 - relied on.
1.6 Since the appellant has purchased the entire
estate that forms the subject matter of the suit, the
appellant is entitled to be added as a party defendant to
the suit. The appellant shall as a result of his addition
C raise and pursue only such defenses as were available
and taken by the original defendants and none other.
[para 14] [115-E-F]
Case Law Reference:
D As per M.Y. Eqbal, J.
2005 (3) SCR 864
referred to
para 7
2012 (8) sec 384
referred to
para 9
E
1995 (3) Suppl. SCR 354 referred to
para 10
1994 (5) Suppl. SCR 135 referred to
para 15
1999 (1) SCR 725
referred to
para 17
F
1996 (4) Suppl. SCR 173 referred to
para 20
AIR (35) 1948
referred to
para 24
1970 (2) SCR 204
referred to
para 25
1974 (1) SCR 381
referred to
para 26
G
1992 (2) SCR 1
referred to
para 29
AIR 1931 Calcutta 67
referred to
para 38
1954 SCR360
referred to
para 39
H
THOMSON PRESS (INDIA) LTD. v. NANAK
81
BUILDERS & INVESTORS P.L TD.
1971 (2) SCR 573
referred to
para 40
As per T.S. Thakur, J.
AIR 1986 SC 593
referred to
para 5
2010 (7) SCR 424
referred to
para 6
2012 (6) SCR 369
referred to
para 7
1973 (1) SCR 139
referred to
para 8
1983 (1) SCR 898
relied on
para 12
2005 (3) SCR 509
relied on
para 13
1976 (1) SCR 487
relied on
para 14
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
1518 of 2013.
From the Judgment & Orders dated 15.12.2008 of the
High Court of Delhi at New Delhi in FAO (OS) No. 295 of 2008.
A
B
c
D
Sunil Gupta, Pramod Dayal, Nikuknj Dayal, S.D. Salwan,
Aditya Garg for the Appellant.
E
Mahender Rana, Ramesh N. Keshwani, Ram Lal Roy,
Deevesh Nagrath, Utkarsha Kohli, Nitish K. Sharma, Dr. Vipin
Gupta for the Respondents.
The Judgments of the Court were delivered by
. M.Y. EQBAL, J. 1. Leave granted.
F
2. This appeal is directed against the order passed by the
division bench of the High Court of Delhi in FAQ No. 295 of G
2008 affirming the order of the Single Judge and rejecting the
petition filed by the appellant under Order 1 Rule 10 of CPC
for impleadment as defendants in a suit for specific
performance of contract being Suit No. 3426 of 1991 ffied by
plaintiff-Respondent No.1.
H
82
SUPREME COURT REPORTS
(2013] 2 S.C.R. ·
A
3. Although the case has a chequered history, the brief
facts of the case can be summarized as under :-
4. Mrs. Lakhbir Sawhney, Respondent No. 2 and son Mr.
H.S. Sawhney, the predecessor of Respondent No. 3 (a) to (d)
B were the owners of the property known as "Ojha House" I
"Sawhney Mansion", F-Block, Connaught Place, New Delhi.
(These respondents shall be referred as "the Sawhneys" for the
sake of convenience). M/s Nanak Builders and Investors Pvt.
Ltd., Respondent No.1 is the plaintiff in the Suit. The plaintiffC Respondent No.1 filed a suit in the High Court of Delhi being
Suit No. 3426 of 1991 against the defendants-respondents
Sawhneys' for a decree for specific performance of agreement.
The case of the plaintiff-respondent is that on 29.05.1986 the
defendant-respondent entered into an agreement with the
plaintiff-respondent for sale of an area measuring about 4000
D sq.ft. on the 1st Floor of F-26, Connaught Place, New Delhi on
the consideration of Rs. 50 lakhs.
Out of the said
consideration, a sum of Rs. 1 lakh was paid by the plaintiffs to .
the defendants vide cheque no. 0534224 drawn from Union
Bank of India, New Delhi. The aforesaid property shall be
E referred to as the "suit property" which was in the tenancy of
M/s Peerless General Finance Company Limited. In the said
agreement it was agreed inter alia that if the premises is
vacated and the plaintiff did not complete the sale on the
defendant, getting all permissions, sanctions etc., the defendant
F shall have the right to forfeit the money. Plantiffs further case
was that Mis Peerless General Finance Company Limited has
given a security deposit of Rs. 25 lakhs approximately and did
not vacate the premises and called upon the defendants that
they will vacate the premises only when the defendants make
G the payment, that too on the expiry of the lease which expired
around September, 1990. It is alleged by the plaintiff that during
the intervening period, it has been making part payments from
time to time out of the said consideration amount. In May 1991,
the defendants got the said suit premises vacated from M/s
H Peerless General Finance Company Limited. The plaintiffs
THOMSON PRESS (INDIA) LTD. v. NANAK
83
BUILDERS & INVESTORS P.L TD. [M.Y. EQBAL, J.]
have immediately approached the defendants to receive the
A
balance consideration but the same was avoided by the
defendant. A public notice was, therefore, issued in 'The
Hindustan Times',
New Delhi so that the defendants
'Sawhneys' do not sell, transfer or alienate the said property
to any other person. Lastly, it was alleged by the plaintiff that
B
despite being always ready and willing to complete the
transaction, the defendant avoided to obtain requisite
permission I sanction and clearance, hence the suit was filed.
During the intervening period some more development took
place. One Living Media India Limited, (in short LMI), said to c
be a group company of the Appellant M/s Thomson Press
(India) Limited offered the defendant-respondent to take the suit
premises on lease, some time in the year 1988. The
defendants Sawhneys' assured the LMI that lease would be
granted after M/s Peerless vacated the suit property. LMI,
D
accordingly, sent a cheque to the defendants-Sawhneys' as
earnest money in respect of the lease. However, when
Sawhneys' wanted to resile from the agreed terms with LMI, a
suit was filed by LMI being Suit No. 2872 of 1990 against
Sawhneys' in Delhi High Court for perpetual injunction
restraining the Sawhneys' from parting with possession of the
E
premises to any third party. The High Court passed the restrain
order on 19.09.1990 with regard to the suit property and
appointed a commissioner to report as to who is in possession
of suit premises. It appears that the aforesaid suit filed by LMI
was compromised and an order was passed on 08.04.1991
whereby, as per the compromise, the suit property was leased
out by defendant-Sawhneys' in favour of LMI and possession
of the property was given to it.
F
5. On 01.11.1991, the plaintiff-Mis Nanak Builders in the
G
meantime filed a suit against the defendant-respondent
Sawhneys' being suit no. 3426/1991 for specific performance
of agreement to sell dated 29.05.1986. In the said suit
pursuant to summons issued against the defendants-
. Sawhneys' one Mr. Raj Panjwani, Advocate accepted notice H
84
SUPREME COURT REPORTS
[2013] 2 S.C.R.
A on behalf of Sawhneys' and stated before the Court that
possession of the flat in question is not with the defendants,
rather with Mis LMI which delivered to them by virtue of the
lease. Mr. Panjwani further stated that till disposal of the suit
the property in question would not be transferred or alienated
B by the defendants. The defendants- Sawhneys' also filed a
wr'itten statement in the said suit. It appears that the
defendants-Sawhneys' took loan from Vijaya Bank and to
secure the loan, equitable mortgage was created in respect of
the suit property. In 1977 a suit was filed by the Bank in Delhi
c High Court for recovery and redemption of the mortgaged
property. The said suit was decreed on 14.10.1998 and
recovery certificate was issued by ORT, Delhi. LMI, a group
of the appellant Company intervened and settled the decree by
agreeing to deposit the loan amount of Rs.1.48 crores. The
0
LMI cleared all the dues, income tax liability etc., of Sawhneys'
for sale of the property in favour of LMI and its associates. ·
Finally, in between 31.01.2001 and 03.04.2001 five sale deeds
were executed by defendants-Sawhneys' in favour of the
present appellant herein Mis Thomson Press India Limited. On
the basis of those sale deeds the appellant moved an
E application under Order 1 Rule 10 CPC for impleadment as
defendants in a suit for specific performance filed by
Respondent No.1 herein Mis Nanak Builders and Investors Pvt.
Ltd.
F
6. The learned Single Judge of the Delhi High Court after
hearing the parties dismissed the application on the ground that
there was an injunction order passed way back on 04.11.1991
in the suit for specific performance restraining the defendantsSawhneys' from transferring or alienating the suit property
G passed, the purported sale deeds executed by the defendants
in favour of the appellant was in violation of the undertaking
given by the respondents which was in the nature of injunction.
Aggrieved by the said order, the appellant filed an appeal being
FAO No.295 of 2008 which was heard by a Division Bench.
H The Division Bench affirmed the order of the Single Judge and
THOMSON PRESS (INDIA) LTD. v. NANAK
85
BUILDERS & INVESTORS P.L TD. [M.Y. EQBAL, J.]
held that in view of the injunction in the form of undertaking
A
given by the respondents-Sawhneys' and recorded in the suit
proceedings, how the property could be purchased by the
appellants in the year 2008. The appellant aggrieved by the
aforesaid orders filed this Special Leave Petition.
7. Mr. Sunil Gupta, learned senior counsel appearing for
B
the appellant assailed the impugned orders as being illegal,
erroneous in law and without jurisdiction. Learned senior
counsel firstly contended that the appellant being the purchaser
. of the suit property is a necessary and proper party for the
complete and effective adjudication of the suit. According to c
him, the denial of impleadment will be contrary to the principles
governing Order 1Rule10 (2) of the CPC though he submitted
that impleadment as a party is not a matter of right but a matter
of judicial discretion to be exercised in favour of a necessary ·
and proper party.
Ld. Senior counsel further submitted that
D
where a subsequent purchaser has purchased a suit property
and is deriving its title through the same vendor then he would
be a necessary party provided it has purchased with or without
notice of the prior contract. He further submitted that after one
transaction a pendency of the suit arising there from, Section· E
52 of the Transfer of Property Act does not prohibit the
_.
subsequent transaction of transfer of property nor even
dedares the same to be null and void. Ld. Senior counsel,
however, has not disputed the legal proposition that the court
would be justified in denying impleadment at the instance of the
F
applicant who ·has entered a subsequent transaction knowing
that there is a court injunction in a pending suit restraining and
prohibiting further transaction or alienation of the property .. Ld.
Senior counsel put heavy reliance on the decisions of the
Supreme Court in Kasturi v.
/yyamperumal & Ors. 2005(6)
SCC 733, for the proposition that an application by the
G
, subsequent purchaser for impleadment in a suit for specific
performance by a prior transf~ree does not alter the nature and
character of the ~uit and such a transferee has a right and -
interest to be protected and deserves to be impleaded in the
suit.
H
86
SUPREME COURT REPORTS
[2013) 2 S.C.R.
A
8. Mr. Gupta, strenuously argued that High Court has not
considered the question whether the appellant-purchaser had ,
any knowledge of the order of injunction dated 04.11.1991
before entering the sale transaction in 2001. He has submitted
that even assuming that Sawhneys' had such a knowledge, the
8 same cannot be held as an objection to the exercise of judicial
discretion in favour of the appellant being impleaded in the suit
on the application of the appellant itself.
9. Per contra, Mr. Mahender Rana, learned counsel
appearing for Respondent No.1 firstly contended that the suit
C is at the stage of final hearing and almost all the witnesses have
been examined and at this stage the petition for impleadment
· cannot be and shall not be allowed. Ld. Counsel drew our
attention to the legal notice dated 24.06.1990 and the notice
dated 12.02.1990 published in the newspaper and submitted
D that not only the Sawhneys' but the appellant and its sister
concern had full notice and knowledge of the pendency of the
suit and the order of injunction on the basis of the undertaking
given by Sawhneys' that the suit property shall not be assigned
or alienated during the pendency of the suit. Learned counsel
E further contended that as a matter of fact the vendor Sawhneys'
had committed fraud by incorporating in the sale deed that there
was no agreement or any injunction passed in any suit or
proceedings. In that view of the matter the application for
impleadment has been rightly rejected by the High Court. He
F placed reliance on Vidhur /mpex and Traders Pvt. Ltd. v. Tosh
Apartments Pvt. Ltd. & Ors. 2012 (8) SCC 384 and Surjit
Singh and Others v. Harbans Singh and Others (1995) 6 SCC
50.
10. Before discussing the decision of the Supreme Court
G relied upon by the parties, we would like to highlight some of
the important facts and developments in the case which are not
disputed by the parties .
. 11. As noted above, plaintiff-respondent No.1 filed the suit
H for specific performance on 01.11.1991 against the defendants
THOMSON PRESS (INDIA) LTD. v. NANAK
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BUILDERS & INVESTORS P.L TD. [M.Y. EQBAL, J.]
Sawhneys for the specific performance of the agreements
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dated 29.05.1986. In the said suit, the defendants Sawhneys
through Mr. Raj Panjwani, Advocate accepted summons on
their behalf and filed vakalatnama. The said Advocate Mr.
Panjwani, inter-alia, stated before the Court that the defendants
would not transfer or alienate the flat in question. The order
B
dated 04.11.1991 was incorporated in the order sheet as
under:
"Mr. Panjwani accepts notice. Mr. Panjwani states that the
possession of the flat in question is not with the
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defendants. The possession is with Mis. Living Media
India Limited which was delivered to them under the orders
of this Court. Mr. Panjwani states that till the disposal of
this application the defendants would not transfer or
alienate the flat in question. Let the reply be filed within 6
weeks with advance copy to the counsel for the plaintiff,
D
/
who may.file the rejoinder within 2 weeks thereafter._ List
this I.A. for disposal on 10.3.1992."
12. It is also not in dispute that before the institution of the
suit the plaintiff-respondent got a notice published in the
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newspaper on 12.02.1990 in Hindustan Times, Delhi Edition.
When this came to the notice of the appellant, the sister
concern of the appellant, namely, M/s. Living Media India
Limited sent a legal notice to the defendants Sawhneys' dated
24.06.1990 and called upon him to execute the lease deed in
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respect of the suit property in terms of the agreement. In the
said notice dated 24.06.1990 tl)e sister concern of the
appellant in paragraph 8 stated as under:
"That a Public Notice appeared in the Hindustan Times
Delhi Edition on 12.2.1990. As per this notice one M/s
G
Nanak Buildings and Investor Pvt.Ltd. claim that you have
entered into an Agreement to sell the premises in question
to them. A copy of this notice is being endorsed to their
counsel.mentioned in the Public Notice. My client further
learns that you have approached a number of property
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brokers also for the disposal of the property."
13. The question, therefore, that falls for consideration is
as to whether if the appellant who is the transferee pendente
lite having notice and knowledge about the pendency of the suit
8
for specific performance and order of injunction can be
impleaded as party under Order 1 Rule 10 on the basis of sale
deeds executed in their favour by the defendants Sawhneys'.
14. Before coming to the question involved in the case, we
would like to discuss the decisions of this Court relied upon by
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the parties.
15. In the case of Anil Kumar Singh ·vs. Shivnath Mishra
alias Gadasa Guru (1995) 3 SCC 147, in a suit for specific
performance of contract a petition was filed under Order 6 Rule
0
17 CPC seeking leave to amend the plaint by impleading the
respondent as party defendant in the suit. The contention of
the petitioner was that the vendor had colluded with his sons
and wife and obtained a collusive decree in a suit under the
U.P. Zamindari Abolition and Land Reforms Act. It was
E
contended that by operation of law they became the co-sharers
of the property to be conveyed under the Agreement and,
therefore, he is a necessary party. The trial court dismissed
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the petition and on revision the High Court of Allahabad
-
affirmed the order. In an appeal this Court, refused to interfere
with the order and observed.
"In this case, since the suit is based on agreement
of sale said to have been executed by Mishra, the sole
defendant in the suit, the subsequent interest said to have
been acquired by the respondent by virtue of a decree of
the court is not a matter arising out of or in respect of the
same act or transaction or series of acts or transactions
in relation to the claim made in the suit."
"The question is whether the person who has got his
interest in the property declared by an independent decree
THOMSON PRESS (INDIA) LTD. v. NANAK
89BUILDERS & INVESTORS P.L TD. [M.Y. EQBAL, J.)
but not a party to the agreement of sale, is a necessary
A
and proper party to effectually and completely adjudicate
upon and settle all the question involved in the suit. The
question before the court in a suit for the specific
performance is whether the vendor had executed the
document and whether the conditions prescribed in the
B
provisions of the Specific Relief Act have been complied
with for granting the relief of specific performance."
"Sub-rule(2) of Rule 10 of Order 1 provides that the
Court may either upon or without an application of either
C
party, add any party whose presence before the Court may
be necessary in order to enable the Court effectually and
completely to adjudicate upon and settle all questions
involved in the suit. Since the respondent is not a party to
the agreement of sale, it cannot be said that without his
presence the dispute as to specific performance cannot
D
be determined. Therefore, he is not a necessary party."
16. In the case of Surjit Singh (Supra) a similar question
arose for consideration before this Court. In that case, on the
death of one Janak Singh, being the head of the family a suit
E
for partition and separate possession was filed by and between
the parties. A preliminary decree was passed and while
proceeding for final decree was pending, the trial court passed
an order restraining all the parties from alienating or otherwise
transferring in any manner any part of the property involved in
F
the suit. In spite of the aforesaid order one of the party assigned
the right under the preliminary decree involving wife of his
lawyer. Ori the basis of the assigned deed the assignee made
an application under Order 22 Rule 10 CPC for impleadment
as party to the proceeding. The petition was allowed by the trial
G
court and affirmed in appeal by the Additional District Judge
and then i~ revision by the High Court. The matter came before
this Court allowing the appeal and set aside the order's passed
by the courts below. This Court observed :-
"As said before, the assignment is by means of a
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registered deed. The assignment had taken place after
the passing of the preliminary decree in which Pritam
Singh has been allotted 1/3rd share. His right to property
to that extent stood established. A decree relating to
immovable property worth more than hundred rupees, if
being assigned, was required to be registered. That has
instantly been done. It is per se property, for it relates to
the immovable property involved in the suit. It clearly and
squarely fell within the ambit of the restraint order. In sum,
it did not make any appreciable difference whether
property per se had been alienated or a decree pertaining
to that property. In defiance of the restraint order, the
alienation/assignment was made. If we were to let it go
as such, it would defeat the ends of justice and the
prevalent public policy. When the Court intends a particular
state of affairs to exist while it is in seisin of a lis, that state
of affairs is not only required to be maintained, but it is
presumed to exist till the Court orders otherwise. The
Court, in these circumstances has the duty, as also the
right, to treat the alienation/assignment as having not taken
place at all for its purposes. Once that is so, Pritam Singh
and his assignees, respondents herein, cannot claim to
be impleaded as parties on the basis of assignment.
Therefore, the assignees-respondents could not have
been impleaded by the trial court as parties to the suit, in
disobedience of its orders. The principles of lis pendens
are altogether on a different footing. We do not propose
to examine their involvement presently. All what is
emphasised is that the assignees in the present facts and
circumstances had no cause to be impleaded as parties
to the suit. On that basis, there was no cause for going
into the question of interpretation of paragraphs 13 and
14 of the settlement deed. The path treaded by the courts
below was, in our view, out of their bounds. Unhesitatingly,
we upset all the three orders of the courts below and reject
the application of the assignees for impleadment under
Order 22 Rule 10 CPC."
THOMSON PRESS (INDIA) LTD. v. NANAK
91
BUILDERS & INVESTORS P.L TD. [M.Y. EQBAL, J.]
17. In the case of Savitri Devi
v.
District Judge, A
Gorakhpur and Others (1999) 2 SCC 577, a 3 Judges' Bench
of this Court considered a similar questio.n under Order 1 Rule
10 CPC. The fact of the case was that the appellant filed a suit
for maintenance and for creation of charge over the ancestral
property. She also applied for an interim order of injunction B
restraining her sons from alienating the property during the
pendency of the suit. But a vakalatnama was filed on behalf of
the defendants and 4th defendant also filed an affidavit
purporting to be on behalf of the defendants, expressing their
concern that during the pendency of the case the suit property c
will not be sold. In the light of consent of the counsel the Court
passed an order on 18.08.1992 directing the parties not to
transfer the disputed property till the disposal of the suit. In spite
of the aforesaid order one of the defendants sold 1 /4th share
of the land to the 3rd respondent and 1/4th share in another D
land to the 4th respondent on 19.08.1992 and further sold 1/
4th share to the 5th respondent. On the basis of this transfer
the transferee-Respondent Nos.3-5 filed an application under
Order 1 Rule 10 CPC for impleading them as parties to the suit.
The application was allowed at all stages. This court noticed
the relevant facts which has been incorporated in paragraph 4 E
of the decision which is reproduced hereunder :-
"The trial court passed a detailed order on 14-7-1997
granting the application of Respondents 3 to 5 and directed
the plaintiff to implead them as defendants in the suit. In F
the order of the trial court, reference has been made to an ·
application filed by the first defendant to the effect that he
was not earlier aware of the case and the 4th defendant
had forged his signature and filed a bogus vakalatnama.
He had also alleged that the order of injunction was G
obtained fraudulently on 18-8-1992. The trial court has also
referred to an application under Section 340 CrPC filed by
the first defendant and observed that the same had been ·
dismissed by order dated 20-12-1992, There is also a
reference in the order of the trial court in the High Court H
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filed by the plaintiff for quashing orders dated 10-11-1995
and 19-4-1996 passed in the suit and a miscellaneous civil
appeal arising from the suit wherein Respondents 3 to 5
had been impleaded as parties. It is seen from the order
of the trial court that certain proceedings under Order
XXXIX Rule 2-A CPC concerning the question of
attachment of the properties sold were also pending. It is
only after taking note of all those facts, the trial court
allowed the application of Respondents 3 to 5 to implead
them as parties to the suit."
18. This Court further noticed the point taken by the
appellant based on the principles laid down in Su!jit Singh's
case (supra). Allowing the application this Court held :-
"The facts set out by us in the earlier paragraphs are
sufficient to show that there is a dispute as to whether the
first defendant in the suit was a party to the order of
injunction made by the Court on 18-8-1992. The
proceedings for punishing him for contempt are admittedly
pending. The plea raised by him that the first respondent
had played a fraud not only against him but also on the
Court would have to be decided before it can be said that
the sales effected by the first defendant were in violation
of the order of the Court. The plea raised by Respondents
3 to 5 that they were bona fide transferees for value in good
faith may have to be decided before it can be .held that
the sales in their favour created no interest in the property.
The aforesaid questions have to be decided by the Court
either in the suit or in the application filed by Respondents
3 to 5 for impleadment in the suit. If the application for
impleadment is thrown out without a decision on the
aforesaid questions, Respondents 3 to 5 will certainly
come up with a separate suit to enforce their alleged rights
which means a multiplicity of proceedings. In such
circumstances, it cannot be said that Respondents 3 to 5
are neither necessary nor proper parties to the suit."
THOMSON PRESS (INDIA) LTD. v. NANAK
93
BUILDERS & INVESTORS P.L TD. [M.Y. EQBAL, J.]
19. While referring Surjit Singh's case this Court noticed
A
that in that case there was no dispute that the assignors and
the assignees had knowledge of the order of injunction passed
by the Court. On those facts, this Court held that the deed of
assignment was not capable of conveying any right to the
assignee and the order of impleadment of the assignees as
B
parties was unsustainable.
·
20. In the case of Vijay Pratap and Others
v. Sambhu
Saran Sinha and Others (1996) 10 SCC 53 a petition was
filed under Order 1 Rule 10 of the CPC in suit for specific
performance for impleading him as party in place of his father
C
on the ground that the father during his lifetime alleged to have
entered into a compromise. The trial court rejecting the petition
held that the petitioners are neither necessary or proper parties
to the suit. On revision this Court dismissing the same held
as under:-
D
"The trial court accordingly held that the petitioners are
neither necessary nor proper parties to the suit. On
revision, the High Court upheld ·the same. Shri Sanyal, the
learned counsel for the petitioners contended that their
E
father had not signed the relinquishment deed and the
signatures appended to it were not that of him. The deed
of relinquishment said to have been signed by the father
of the petitioners was not genuine. These questions are
matters to be taken into consideration in the suit before
F
the relinquishment deed and compromise memo between
the other contesting respondents were acted upon and
cannot be· done in the absence of the petitioners. The
share of the petitioners will be affected and, therefore, it
would prejudice their right, title and interest in the property.
G
We cannot go into these questions at this stage. The trial
court has rightly pointed that the petitioners are necessary
and proper parties so long as the alleged relinquishment
deed said to have been signed by the deceased father of
the petitioners is on record. It may not bind petitioners but H
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whether it is true or valid or binding on them are all
questions which in the present suit cannot be gone into.
Under those circumstances, the courts below were right in
holding that the petitioners are not necessary and proper
parties but the remedy is elsewhere. If the petitioners have
B
got any remedy it is open to them to avail of the same
according to law."
21. In Kasturi's case (supra) a three Judges' Bench of this
Court said that in a suit for specific performance of contract
C for sale an impleadment petition was filed for addition as party
defendant on the ground that the petitioners were claiming not
under the vendor but adverse to the title of the vendor.