Transferee Pendente Lite Not Entitled To Get Impleaded In Suit As A Matter Of Right : Supreme Court Summarises Principles

The Supreme Court today (January 29) ruled that a pendente lite transferee(someone who purchases a suit property during the pendency of the litigation) has no automatic right to be impleaded in a suit. It said only in exceptional cases, where the transferee's rights are adversely affected or jeopardized, a leave would be granted to the pendente lite transferee (who wasn't impleaded in the suit) to appeal against the decree.A bench of Justice JB Pardiwala and Justice R Mahadevan summarised the principles as follows :i. First, for the purpose of impleading a transferee pendente lite, the facts and circumstances should be gone into and basing on the necessary facts, the Court can permit such a party to come on record, either under Order I Rule 10 CPC or under Order XXII Rule 10 CPC, as a general principle;ii. Secondly, a transferee pendente lite is not entitled to come on record as a matter of right;iii. Thirdly, there is no absolute rule that such a transferee pendente lite, with the leave of the Court should, in all cases, be allowed to come on record as a party;iv. Fourthly, the impleadment of a transferee pendente lite would depend upon the nature of the suit and appreciation of the material available on record;v. Fifthly, where a transferee pendente lite does not ask for leave to come on record, that would obviously be at his peril, and the suit may be improperly conducted by the plaintiff on record;vi. Sixthly, merely because such transferee pendente lite does not come on record, the concept of him (transferee pendente lite) not being bound by the judgment does not arise and consequently he would be bound by the result of the litigation, though he remains unrepresented;vii. Seventhly, the sale transaction pendente lite is hit by the provisions of Section 52 of the Transfer of Property Act; and,viii. Eighthly, a transferee pendente lite, being an assignee of interest in the property, as envisaged under Order XXII Rule 10 CPC, can seek leave of the Court to come record on his own or at the instance of either party to the suit.In this case, Respondent Nos. 1 and 2 were purchasers of a property against which a suit for specific performance of agreement to sell was pending. Their plea for impleadment was dismissed by the trial court and attained finality because no appeal was preferred against its dismissal. Aggrieved by the trial court's decision to order the execution of the sale deed in favor of the plaintiff, Respondent No.1 and 2 being pendente lite transferees (not impleaded in the suit) appealed to the Karnataka High Court. Noting that Respondents No.1 and 2 were adversely affected by the trial court's decision and they were senior citizens living abroad, the High Court granted them leave to appeal despite not being impleaded in the suit.Against this decision of the High Court, the plaintiff appealed to the Supreme Court contending that the High Court erred in granting leave to appeal to Respondent No.1 and 2 without being impleaded in the suit.Setting aside the High Court's decision, the judgment authored by Justice Pardiwala observed the High Court erred in granting leave to Respondents No.1 and 2 to appeal against the trial court's decision despite their plea for impleadment was rejected and attained finality. According to the Court, no stranger to the suit can file an appeal unless he satisfies the court that he falls within the category of an aggrieved person. It is only when an individual's right or interest has been adversely affected or jeopardized, that the court can grant leave to appeal despite not being party to the suit. It is a settled principle of law under Section 52 of the Transfer of Property Act, 1882 ("TPA") that although pendente lite transfers are not void, they are always subject to the final resolution of the suit.In this case, the transfer of the suit property to Respondents No. 1 and 2 occurred during the ongoing suit and was subject to the case's outcome under Section 52 TPA. Since the trial court ruled against them, they cannot be considered adversely affected, entitling them to leave to appeal without being impleaded in the suit. “Having regard to the fact that the Respondent Nos. 1 and 2 respectively purchased the suit property during the pendency of the suit instituted for specific performance and that too, while the injunction against the original owner (transferor) was operating, the Respondent Nos. 1 and 2 respectively could not be said to have even made out any good case for grant of leave to appeal.”, the Court observed. The Court rejected the argument of Respondents Nos. 1 & 2 that they were entitled to be impleaded as they were cheated. The Court said that “If the Respondent Nos. 1 & 2 feel that they have been duped or cheated by the Respondent No. 7/Defendant No. 3, then it shall be open for them to avail appropriate legal remedy before the appropriate forum in accordance with law for the purpose of recovery of the amount towards sale consideration paid at...

Transferee Pendente Lite Not Entitled To Get Impleaded In Suit As A Matter Of Right : Supreme Court Summarises Principles

Yash Mittal

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