Transferee pendente lite in breach of injunction cannot demand impleadment; receiver may be appointed to protect disputed property.

In a suit for specific performance, a transferee pendente lite who acquires title in breach of an injunction and after undue delay is not a necessary or proper party for impleadment under Order 1 Rule 10(2) CPC. The transfers made contrary to the restraint order lacked legal sanctity for that purpose, so refusal to add the purchasers was upheld. A receiver may also be appointed to preserve the suit property where there is a real risk of further alienation or frustration of the proceedings. The later protective order was sustained because the earlier Delhi litigation and injunction had not been properly disclosed in the subsequent proceedings.

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Issues: (i) Whether purchasers claiming through transfers made during the pendency of a suit for specific performance, and in violation of an injunction order, were entitled to be impleaded as defendants. (ii) Whether the Delhi High Court was justified in appointing a receiver to take possession of the suit property despite earlier proceedings and a receiver appointed by the Calcutta High Court.

Issue (i): Whether purchasers claiming through transfers made during the pendency of a suit for specific performance, and in violation of an injunction order, were entitled to be impleaded as defendants.

Analysis: The governing principle under Order 1 Rule 10(2) of the Code of Civil Procedure, 1908 is that impleadment lies only where the person is a necessary or proper party for effective and complete adjudication. In a suit for specific performance, the Court may implead a transferee whose conduct is above board and whose application is made within a reasonable time after knowledge of the litigation. However, where the transfer is made in breach of an injunction, the transaction lacks legal sanctity for the purpose of the suit and does not confer a right to insist on impleadment. The applicants had also approached the Court after a long and unexplained delay, and their transactions were treated as clandestine and contrary to the restraint order.

Conclusion: The purchasers were not entitled to be impleaded as defendants, and the refusal to add them as parties was correct.

Issue (ii): Whether the Delhi High Court was justified in appointing a receiver to take possession of the suit property despite earlier proceedings and a receiver appointed by the Calcutta High Court.

Analysis: The Court applied the settled principle that a receiver may be appointed to preserve the subject-matter of litigation where there is a real risk of waste, alienation, or frustration of the pending suit. The Delhi High Court had already seized of the suit and had passed an injunction much earlier than the later proceedings in Calcutta. The parties before the Calcutta High Court had not disclosed the pending Delhi litigation and the restraint orders. Once the correct position emerged, judicial propriety required that the later order yield to the earlier one. The circumstances showed repeated violations of the injunction and a serious likelihood of further alienation unless the property was protected by a receiver.

Conclusion: The appointment of the receiver by the Delhi High Court was justified, and the plea based on comity of jurisdictions failed.

Final Conclusion: The challenge to the High Court orders failed because the applicants could not claim a right to participate in the specific performance suit on the basis of transfers made in defiance of an injunction, and the protective order appointing a receiver was upheld to preserve the property and prevent further abuse of process.

Ratio Decidendi: A transferee pendente lite who acquires title through a transfer made in violation of an injunction order and after undue delay is neither a necessary nor a proper party in a suit for specific performance, and the court may appoint a receiver to preserve the property where clandestine dealings threaten the efficacy of the pending suit.

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