Impleadment of a subsequent Transferee in a pending suit is not a matter of right

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.

On a combined reading of Order 1 Rule 10, Order XXII Rule 10 of the Code of Civil Procedure and Section 52 of the Transfer of Property Act, can an application for substitution by a subsequent transferee be rejected and the subsequent purchaser be non-suited altogether was the prime question that arose for consideration before the Supreme Court in the matter namely Amit Kumar Shaw & Anr. vs. Farida Khatoon & Anr., decided on 13.04.2005 [(2005) 11 SCC 403 = AIR 2005 SC 2209].

The Court observed that 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 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. Such right, however, will include necessarily an enforceable legal right.

An 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. Under Order XXII, Rule 10, no detailed inquiry at the stage of granting leave is contemplated. The Court only has 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.

Section 52 of the Transfer of Property Act is an expression of the principle “pending a litigation nothing new should be introduced”. It provides that pendente lite, neither party to the litigation, in which any right to immovable property is in question, can alienate or otherwise deal with such property so as to affect his appointment. This provision is based on equity and good conscience and is intended to protect the parties to litigation against alienations by their opponent during the pendency of the suit. In order to constitute a lis pendens, the following elements must be present:
1.    There must be a suit or proceeding pending in a Court of competent jurisdiction.
2.    The suit or proceeding must not be collusive.
3.    The litigation must be one in which right to immovable property is directly and specifically in question.
4.    There must be a transfer of or otherwise dealing with the property in dispute by any party to the litigation.
5.    Such transfer must affect the rights of the other party that may ultimately accrue under the terms of the decree or order.

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 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. 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. 

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.