TaxTMI 
TaxTMI 
2025 (1) TMI 1850
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....se were taken up for hearing analogously and are being disposed of by this common judgment and order. 3. The appeals arise from the order passed by the High Court of Karnataka at Bengaluru dated 16.11.2022 in I.A. Nos. 1 & 3 of 2018 respectively in Regular First Appeal No. 1303 of 2018 by which the High Court allowed the said I.A. Nos. 1 & 3 of 2018 respectively filed by the respondents herein and thereby condoned the delay of 586 days in filing the said appeal against the judgment and decree dated 16.09.2016 passed by the Senior Civil Judge and JMFC, Devanahalli in Original Suit No. 458 of 2006 instituted for specific performance of contract. By the order passed in I.A. Nos 1 & 3 of 2018 respectively, the High Court granted leave to appeal to the Respondent Nos. 1 and 2 herein (subsequent purchasers) against the original judgment and decree of specific performance as they were not parties in the suit proceedings. 4. The facts giving rise to these appeals may be summarised as under. The description of the parties before this Court and before the Trial Court is tabulated as follows: BEFORE THIS COURT BEFORE THE TRIAL COURT REMARKS Appell....
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....e aware of the aforementioned sale transfer, when the Defendant No. 3 attempted to change the revenue records in his name. (IV) Aggrieved by the same, the plaintiffs filed O.S. No. 1093/2003 (later renumbered as O.S. No. 458/2006) before the Court of Principal Civil Judge (Sr. Dn.) Bengaluru Rural District (hereinafter referred to as the Trial Court) inter alia seeking Specific Performance of the Agreement of Sale. The Trial Court upon appreciating the case of the plaintiffs admitted the suit and on 17.12.2003 passed a specific Order of Temporary Injunction restraining the Defendant Nos. 1-3 from alienating and creating third party rights in the Suit Schedule Property. (V) The Defendant No. 3 however, in contravention of specific order of injunction and during the subsistence of the order of injunction, sold a portion of Suit Schedule Property to the extent of 4 Acres (and 6 Acres) in Sy. No. 176/43 in favour of Respondents Nos. 1-2 herein. (VI) It is relevant to note that the Defendant No. 1 executed a Deed of Confirmation in favour of the plaintiffs admitting the Agreement of Sale in favour of the plaintiffs and f....
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....ecreeing the Suit of the plaintiffs. After almost 2 years of passing of the Judgment and Decree dated 16.09.2016 in O.S. No. 458/2006 and 11 years from the filing of the Impleadment Application, the Respondent Nos. 1 & 2 herein preferred RFA No. 1303/2018 before the High Court challenging the said Decree. (X) The Respondent Nos. 1 & 2 filed I.A. No. 1 & 3 of 2018 seeking condonation of delay of 586 days in preferring RFA No. 1303/2018, and also prayed for leave to appeal. The said I. A.s were opposed by the plaintiffs. The High Court, however, vide the impugned order allowed both the I.A. Nos. 1 & 3 of 2018 respectively by condoning the inordinate and unexplained delay of 586 days and further permitting the Respondents Nos. 1 and 2 herein to prefer the appeal by granting leave. 5. Being aggrieved by the same, the plaintiffs are here before this Court with the present appeals. SUBMISSIONS ON BEHALF OF THE PLAINTIFFS/APPELLANTS 6. Mr. Anand Sanjay M. Nuli, the learned senior counsel appearing for the appellants (original plaintiffs) vehemently submitted that the High Court committed a serious error in condoning the unexplained....
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....sers pendente lite i.e., Defendant No. 3 and the plaintiffs, is writ large on the face of the record. He submitted that the bar on transfer of immovable property which is subject matter of a litigation under Section 52 of the Transfer of Property Act is not applicable to the present case as Section 52 expressly excludes from its ambit collusive proceedings and, therefore, the High Court correctly granted an opportunity to his clients to establish this fact by allowing them to prefer an Appeal. 12. He submitted that unfortunately the Defendant No. 3 colluded with the plaintiffs in order to get the suit decreed vide judgment dated 16.09.2016 as is borne out from the following facts: (i) Defendant No. 3 did not cross-examine the witnesses of the Plaintiffs; (ii) Defendant No. 3 did not lead any rebuttal evidence in the suit; (iii) Despite filing an appeal against the decree dated 16.09.2016, he withdrew the Appeal without stating any reason on 04.07.2017, and (iv) In fact, even after having succeeded in the suit and obtaining a decree dated 16.09.2016, the plaintiffs did not get the same executed and have allowed the Defendant....
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....ur consideration is whether the High Court committed any error in passing the impugned order. 21. The High Court in the impugned order observed as under:- "13. In these two applications, we are concerned with the prayer for leave to prosecute the appeal and condonation of delay. It is not disputed that appellants have purchased 4 acres of land out of the suit schedule property. They did file an application to implead themselves in the suit, but unsuccessfully. One of the main ground urged in support of the application for condonation of delay is that they were assured by their vendor-third defendant that he would protect their interest. 14. Shri Holla, pointed out in para 18 of the judgment that the learned trial Judge has adverted to the evidence of P.W. 2 and his evidence has remained unchallenged as he was not subjected to cross-examination and none of the defendants stepped into the witness box. Further the third defendant has filed R.F.A.No.396/2017 and withdrew the same. It is pleaded in the affidavit in support of the application for condonation of delay that the appellants are aged 75 and 66 years respectively and living with their children in Scotland.....
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.... Court in favour of the Respondent Nos. 1 and 2 respectively, more particularly in light of two submissions canvassed by Mr. Nuli, the learned counsel appearing for the appellants herein. The first submission canvassed by the learned counsel is that once the impleadment application filed by the Respondent Nos. 1 and 2 respectively herein invoking the provisions of Order I Rule 10 CPC came to be rejected by the Trial Court and the said order attained finality, thereafter there is no question of seeking leave to appeal against the final decree granting specific performance, and the second submission canvassed by the learned counsel is that the findings recorded by the Trial Court while rejecting the impleadment application would operate as re judicata in the appeal that may be filed by the transferee pendente lite against the final decree of specific performance. LAW GOVERNING THE GRANT OF LEAVE TO APPEAL 25. Sections 96 and 100 respectively of the Code of Civil Procedure, 1908 (for short, the "CPC") provide for preferring an appeal from any original decree or from decree in appeal respectively. The aforesaid provisions do not enumerate the categories of persons who c....
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....5. It is true that at an earlier stage of the suit, in the proceeding to set aside the award, the High Court recorded a finding that the plaintiff was not entitled to seek reopening of the partition on the ground of unfairness when there was neither fraud nor misrepresentation. It is true that the plaintiff did not further pursue the matter at that stage by taking it in appeal to the Supreme Court but preferred to proceed to the trial of his suit. It is also true that a decision given at an earlier stage of a suit will bind the parties at later stages of the same suit. But it is equally well settled that because a matter has been decided at an earlier stage by an interlocutory order and no appeal has been taken therefrom or no appeal did lie, a higher Court is not precluded from considering the matter again at a later stage of the same litigation." 30. We may also refer to the observations of this Court in the case of Smt. Jatan Kumar Golcha vs. Golcha Properties Private Limited, reported in (1970) 3 SCC 573. The same reads thus: "It is well settled that a person who is not a party to the suit may prefer an appeal with the leave of the Appellate Court and such leave sho....
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....the court cannot enlarge the scope of locus, where the parties are fighting litigations; (e) the pleas of the said person did not disclose as to how and in what manner he would be prejudiced if the compromise decree was allowed to stand; (f) that the challenge by the said person was not bona fide; and, (g) even if the compromise decree was a judgment in rem, the said person could not have challenged the same as he was not aggrieved therefrom. 34. In the case of A. Subash Babu vs. State of A.P. and another, reported in (2011) 7 SCC 616, this Court held as under: "The expression 'aggrieved person' denotes an elastic and an elusive concept. It cannot be confined that the bounds of a rigid, exact and comprehensive definition. Its scope and meaning depends on diverse, variable factors such as the content and intent of the statute of which contravention is alleged, the specific circumstances of the case, the nature and extent of the complainant's interest and the nature and extent of the prejudice or injuries suffered by him." 35. The expression 'person aggrieved' does not include a person who suffers from a psychological or an imaginary injury; a person aggrieved must, th....
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....ho is affected by the order he has no right but the court of appeal may in its discretion allow him to prefer an appeal." (Emphasis supplied) 38. Bhagwati J. referred to the decision of the Madras High Court in Indian Bank Limited, Madras vs. Seth Bansiram Jashamal Firm through its Managing Partner, AIR 1934 Mad 360, and accepted it as authority for the position that no person who is not a party to a suit or proceeding has a right of appeal. But if he was aggrieved by a decision of the court, the remedy open to him was to approach the appellate court and ask for leave to appeal which the appellate court would grant in proper cases. The learned Judge cites a passage from the decision in In re Securities Insurance Company, (1894) 2 Ch D 410, where Lindley L.J. said that the practice of the Courts of Chancery, both before and after 1862, was well-settled that while a person who was a party could appear without any leave a person who without being a party was either bound by the order or was aggrieved by it or was prejudicially affected by it could not appeal without leave. 39. The law has been succinctly explained as regards the grant of leave to appeal in In re Markham Markh....
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....categories of persons who can file an appeal; iii. However, it a settled legal proposition that a stranger cannot be permitted to file an appeal in any proceedings unless he satisfies the court that he falls within the category of an aggrieved person; iv. It is only where a judgment and decree prejudicially affects a person who is not a party to the proceedings, he can prefer an appeal with the leave of the court; v. A person aggrieved, to file an appeal, must be one whose right is affected by reason of the judgment and decree sought to be impugned; vi. The expression "person aggrieved" does not include a person who suffers from a psychological or an imaginary injury; vii. It would be improper to grant leave to appeal to every person who may in some remote or indirect way be prejudicially affected by a decree or judgment; and viii. Ordinarily leave to appeal should be granted to persons who, though not parties to the proceedings, would be bound by the decree or judgment in that proceeding and who would be precluded from attacking its correctness in other proceedings. 44. The issue can also be examined from a different angle. ....
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....& Investors P. Ltd., [2013] 2 SCR 74, Justice T.S. Thakur (As His Lordship then was), while concurring with Justice M.Y. Eqbal, summed up the legal position as follows: "There is, therefore, little room for any doubt that the transfer of the suit property pendete lite is not void ab initio and that the purchaser of any such property takes the bargain subject to the rights of the plaintiff in the pending suit. Although the above decisions do not deal with a fact situation where the sale deed is executed in breach of an injunction issued by a competent Court, we do not see any 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 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 third dimension which arises for consideration is about the right of a transferee pendete lite to seek addition as a party defendant to the suit under Order I, Rule 10 CP....
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....d by this Court or by any law for the time being in force, where any proceeding may be taken or application made by or against any person, then the proceeding may be taken or application may be made by or against any person claiming under him." 50. A lis pendens transferee from the defendant, though not arrayed as a party in the suit, is still a person claiming under the defendant. The same principle of law is recognized in a different perspective by Rule 16 of Order XXI of the CPC which speaks of transfer or assignment inter vivos or by operation of law made by the plaintiff-decree-holder. The transferee may apply for execution of the decree of the Court and the decree will be available for execution in the same manner and subject to the same conditions as if the application were made by the decree-holder. It is relevant to note that a provision like Section 146 of the CPC was not be found in the preceding Code of Civil Procedure, 1859 and was for the first time incorporated in the CPC. In Order XXI Rule 16 also an explanation was inserted through amendment made by Act No. 104 of 1976 w.e.f. 01.02.1977 where by the operation of Section 146 CPC was allowed to prevail indepe....
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....d Singh vs. Jai Prakash University, reported in (2001) 6 SCC 534, this Court held that the plain language of Order XXII Rule 10 CPC does not suggest that leave can be sought by that person alone upon whom the interest has devolved. It simply says that the suit may be continued by the person upon whom such an interest has devolved and this applies in a case where the interest of the plaintiff has devolved. Likewise, in a case where interest of the defendant has devolved, the suit may be continued against such a person upon whom interest has devolved, but in either eventuality, for continuance of the suit against the persons upon whom the interest has devolved during the pendency of the suit, leave of the court has to be obtained. If it is laid down that leave can be obtained by that person alone upon whom interest of a party to the suit has devolved during its pendency, then there may be preposterous results as such a party might not be knowing about the litigation and consequently not feasible for him to apply for leave and if a duty is cast upon him, then in such an eventuality he would be bound by the decree even in cases of failure to apply for leave. As a rule of prudence, init....
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....Rule 10(2) CPC, the Court is required to record a finding that person sought to be impleaded as party in the suit is either necessary or proper party. While Section 146 and Order XXII Rule 10 CPC confers right upon the legal representative of a party to the suit to be impleaded with the leave of the Court and continue the litigation. While deciding an application under Section 146 and Order XXII Rule 10 CPC, the Court is not require to go in the controversy as to whether person sought to be impleaded as party in the suit is either necessary or proper party. If the person sought to be impleaded as party is legal representative of a party to the suit, it is sufficient for the Court to order impleadment/substitution of such person. 56. Thus, a lis pendens transferee though not brought on record under Order XXII Rule 10 CPC, is entitled to seek leave to appeal against the final decree passed against this transferor, the defendant in the suit. However, whether to grant such leave or not is within the discretion of the court and such discretion should be exercised judiciously in the facts and circumstances of each case. 57. Having regard to the fact that the Respondent Nos. 1 ....