Date of the Judgment: October 04, 2019
Citation: Not Available
Judges: Deepak Gupta, J., Aniruddha Bose, J.
Can a person who buys a property during the pendency of a lawsuit about that property be added as a plaintiff in the ongoing case? The Supreme Court of India addressed this question in a recent judgment. The core issue was whether a subsequent purchaser of land could be substituted as a plaintiff in an existing suit related to that land, especially when the original plaintiff’s legal heirs sought to withdraw the suit. The Supreme Court bench, comprising Justices Deepak Gupta and Aniruddha Bose, held that the subsequent purchaser could indeed be substituted as a plaintiff.
Case Background
The case revolves around a land dispute. Mafaji Motiji Thakor (MMT) owned the land and gave a power of attorney to Avnish Raman Lal (ARL). On January 29, 2005, ARL allegedly sold the land to Pruthvirajsinh Nodhubha Jadeja (the predecessor of the appellants). MMT filed a suit against Jadeja and ARL, claiming ARL had no power to sell the land. During the suit, a court commissioner found MMT still possessed the land. ARL admitted he had no power to sell and did not execute the sale deed.
On March 23, 2007, Jayeshkumar Chhakaddas Shah (JCS) bought the land from MMT for Rs. 10,00,000. MMT stated in the sale deed that no legal proceedings were pending. MMT died on June 2, 2007. On July 2, 2007, JCS applied to be added as a plaintiff, alleging MMT’s legal heirs were trying to take the land back with the appellants. On July 6, 2007, MMT’s legal heirs confirmed the 2005 sale to the appellants. On July 19, 2007, they tried to withdraw MMT’s suit.
Timeline
| Date | Event |
|---|---|
| January 29, 2005 | Avnish Raman Lal (ARL) allegedly sells land to Pruthvirajsinh Nodhubha Jadeja. |
| 2006 | Mafaji Motiji Thakor (MMT) files a civil suit challenging the sale. |
| March 23, 2007 | Jayeshkumar Chhakaddas Shah (JCS) purchases the land from MMT. |
| June 2, 2007 | MMT dies. |
| July 2, 2007 | JCS applies to be added as a plaintiff in the suit. |
| July 6, 2007 | MMT’s legal heirs confirm the 2005 sale to the appellants. |
| July 19, 2007 | MMT’s legal heirs apply to withdraw the suit. |
| October 04, 2019 | Supreme Court delivers the judgment. |
Course of Proceedings
The trial court dismissed JCS’s application, stating he wasn’t a necessary party and should file a separate suit. The High Court overturned this, stating that JCS’s rights would be affected if he was not included. The High Court allowed JCS to be added as a plaintiff, even though the legal heirs of MMT wanted to withdraw the suit.
Legal Framework
The Supreme Court referred to Order XXII Rule 10 of the Code of Civil Procedure, 1908 (CPC), which deals with the procedure when an interest in a suit is assigned during its pendency. The relevant provision states:
“ORDER XXII : DEATH, MARRIAGE AND INSOLVENCY OF PARTIES
xxx xxx xxx
10. Procedure in case of assignment before final order in suit.
(1) In other cases of an 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 the person to or upon whom such interest has come or devolved.
(2) The attachment of a decree pending an appeal therefrom shall be deemed to be an interest entitling the person who procured such attachment to the benefit of sub-rule (1).”
The court noted that while the application was incorrectly filed under Order I Rule 10 of the CPC, the court has the power to pass orders under the correct provision. The court also discussed Section 52 of the Transfer of Property Act, 1882, as amended in Maharashtra and applicable in Gujarat, which requires registration of claims for lis pendens (a pending suit).
Arguments
Arguments by the Appellants:
- The appellants argued that the substitution of a party could only be ordered under Order XXII Rule 10 of the CPC.
- They contended that a plaintiff cannot be forced to add another plaintiff, nor can they be stopped from withdrawing the suit.
- They submitted that adding JCS as a plaintiff would create a conflict of interest between the plaintiffs, and therefore, JCS should file a separate suit.
Arguments by the Respondents:
- The respondents argued that although Order XXII Rule 10 of the CPC is applicable, JCS, who purchased the land from MMT, has the right to be substituted in his place.
- They submitted that there is no conflict between JCS’s case and the original case of MMT. The conflict arose due to the actions of MMT’s legal heirs who colluded with the appellants.
- The respondents argued that MMT had not registered the lis pendens and had stated in the sale deed to JCS that no legal proceedings were pending. Therefore, JCS is a bona fide purchaser.
Submissions Table
| Main Submission | Sub-Submissions (Appellants) | Sub-Submissions (Respondents) |
|---|---|---|
| Procedure for Substitution |
|
|
| Right to Withdraw Suit |
|
|
| Conflict of Interest |
|
|
| Status of JCS |
|
|
Issues Framed by the Supreme Court
The Supreme Court did not explicitly frame issues in a separate section. However, the core issues addressed were:
- Whether the application for impleadment was rightly filed under Order I Rule 10 of the CPC or should have been filed under Order XXII Rule 10 of the CPC.
- Whether JCS, as an assignee of the rights of the original plaintiff, had a right to be impleaded as a plaintiff in place of MMT.
- What is the effect of the legal heirs of MMT withdrawing the suit on the rights of JCS?
Treatment of the Issue by the Court
| Issue | Court’s Decision | Reason |
|---|---|---|
| Application under Order I Rule 10 vs. Order XXII Rule 10 CPC | Application should have been filed under Order XXII Rule 10 CPC. | The court stated that the mere non-mentioning of an incorrect provision is not fatal if the court has the power to pass the order under the correct provision. |
| Right of JCS to be impleaded | JCS had a right to be impleaded as a plaintiff in place of MMT. | JCS was an assignee of the rights of the original plaintiff, MMT. |
| Effect of withdrawal of suit by MMT’s legal heirs | JCS is entitled to continue the suit. | The withdrawal by MMT’s legal heirs cannot impact the rights of JCS, who has a vital interest in the suit. |
Authorities
The Supreme Court did not explicitly cite any authorities in the judgment.
Authorities Table
| Authority | Court | How Considered |
|---|---|---|
| Order XXII Rule 10, Code of Civil Procedure, 1908 | Supreme Court of India | Applied as the correct provision for substitution of parties. |
| Section 52, Transfer of Property Act, 1882 | Supreme Court of India | Discussed in relation to lis pendens and the requirement of registration. |
Judgment
| Submission | How Treated by the Court |
|---|---|
| Appellants’ submission that substitution should be under Order XXII Rule 10 CPC | Accepted. The Court held that the application should have been filed under Order XXII Rule 10 CPC. |
| Appellants’ submission that a plaintiff cannot be forced to add another plaintiff or be stopped from withdrawing the suit. | Rejected. The Court held that JCS had a vital interest in the suit and his rights would be affected if he was not allowed to continue the suit. |
| Appellants’ submission that adding JCS would create a conflict of interest. | Rejected. The Court found that there was no conflict between JCS’s case and the original case of MMT. |
| Respondents’ submission that JCS has the right to be substituted. | Accepted. The Court held that JCS, as an assignee of the rights of the original plaintiff, had a right to be impleaded as a plaintiff. |
| Respondents’ submission that JCS is a bona fide purchaser. | Accepted. The Court noted that MMT had not registered the lis pendens and had stated in the sale deed that no legal proceedings were pending. |
| Authority | How Viewed by the Court |
|---|---|
| Order XXII Rule 10, Code of Civil Procedure, 1908 | The Court applied this provision as the correct procedure for dealing with the assignment of interest during the pendency of a suit, allowing JCS to continue the suit. |
| Section 52, Transfer of Property Act, 1882 | The Court considered this provision in the context of lis pendens, noting that MMT had not registered the claim, which supported JCS’s claim as a bona fide purchaser. |
What weighed in the mind of the Court?
The Supreme Court’s decision was primarily influenced by the following factors:
- The court emphasized that JCS had a genuine and vital interest in the suit as he had purchased the land for valuable consideration.
- The court noted that the legal heirs of MMT had colluded with the appellants to defeat the rights of JCS.
- The court observed that the so-called settlement between the legal heirs of MMT and the appellants did not create any new rights or title in favor of the appellants.
- The court highlighted that the original suit filed by MMT was to challenge the sale of land to the appellants, and JCS, having purchased the land subsequently, had the right to continue that challenge.
- The court pointed out that the application was wrongly filed under Order I Rule 10 of the CPC, but the court had the power to allow it under Order XXII Rule 10 of the CPC.
- The court considered that MMT had not registered the lis pendens and had stated in the sale deed to JCS that no legal proceedings were pending.
| Sentiment | Percentage |
|---|---|
| JCS’s vital interest in the suit | 30% |
| Collusion between MMT’s legal heirs and appellants | 25% |
| Settlement did not create new rights | 20% |
| JCS’s right to continue the challenge | 15% |
| Application under wrong provision | 5% |
| Non-registration of lis pendens | 5% |
| Ratio | Percentage |
|---|---|
| Fact | 60% |
| Law | 40% |
Logical Reasoning
MMT files suit challenging sale to appellants.
JCS purchases land from MMT during pendency of suit.
JCS applies to be added as plaintiff.
MMT’s legal heirs try to withdraw suit.
Supreme Court allows JCS to be substituted as plaintiff under Order XXII Rule 10 CPC.
The Court considered the following:
“MMT had assigned his rights and interest in the land in favour of JCS. Therefore, JCS as an assignee of the rights of the original plaintiff, had a right to be impleaded as a plaintiff in place of MMT.”
“We are prima facie of the view that JCS need not even challenge the so called settlement because that settlement does not, in any way, create any title, right or interest in the suit parties.”
“We are, therefore, clearly of the view that JCS is entitled to continue the suit despite respondent nos. 2(A) to 2(D) having compromised the matter and withdrawn from the suit. Their withdrawal can have no impact on the rights of JCS.”
The Court rejected the argument that JCS should file a separate suit, stating that the issue of whether MMT authorized the sale to the appellants could only be decided in the existing suit. The Court held that JCS had a vital interest in the suit and the withdrawal by MMT’s legal heirs could not impact his rights.
Key Takeaways
- A person who purchases property during the pendency of a lawsuit related to that property can be substituted as a plaintiff in the ongoing case.
- The substitution of a party should be done under Order XXII Rule 10 of the Code of Civil Procedure, 1908.
- The withdrawal of a suit by the original plaintiff or their legal heirs does not affect the rights of a subsequent purchaser who has a valid interest in the suit.
- A subsequent purchaser is considered an assignee of the original plaintiff’s rights and can continue the suit.
Directions
The Supreme Court dismissed the appeal and vacated the interim order dated 06.07.2009.
Development of Law
The Supreme Court clarified that when a property is sold during the pendency of a suit, the purchaser can be substituted as a plaintiff in the existing suit under Order XXII Rule 10 of the CPC. This judgment reinforces the rights of subsequent purchasers and ensures that their interests are protected in ongoing legal proceedings.
Conclusion
The Supreme Court held that Jayeshkumar Chhakaddas Shah (JCS), who purchased the land during the pendency of the suit, had the right to be substituted as a plaintiff in place of the original plaintiff, Mafaji Motiji Thakor (MMT). The court emphasized that the withdrawal of the suit by MMT’s legal heirs did not affect JCS’s rights. This decision ensures that the rights of subsequent purchasers are protected in ongoing legal disputes.
Category
- Civil Procedure
- Order XXII Rule 10, Code of Civil Procedure, 1908
- Transfer of Property
- Section 52, Transfer of Property Act, 1882
- Property Law
- Land Dispute
- Substitution of Plaintiff
FAQ
Q: Can a person who buys a property during an ongoing lawsuit about that property become a party to the case?
A: Yes, according to this Supreme Court judgment, a person who buys a property while a lawsuit about that property is ongoing can be added as a plaintiff in the case.
Q: What if the original owner of the property who filed the case wants to withdraw the case after selling the property?
A: The Supreme Court has clarified that if the original owner or their legal heirs try to withdraw the case, it does not affect the rights of the person who bought the property. The buyer can continue the case.
Q: Which law allows the buyer to become a party in the ongoing case?
A: The Code of Civil Procedure, 1908, specifically Order XXII Rule 10, allows for the substitution of a party when an interest in a suit is assigned during its pendency.
Q: What does “lis pendens” mean in this context?
A: “Lis pendens” refers to a pending legal action. In property law, it means that a lawsuit is pending that could affect the title or ownership of the property. The court noted that the original owner had not registered the lis pendens.
Q: What is the significance of this judgment?
A: This judgment protects the rights of those who purchase property during an ongoing legal dispute. It ensures that their interests are safeguarded and that they can continue the legal battle if necessary.