Supreme Court allows transposition of defendants as plaintiffs in property dispute: R.Dhanasundari vs. A.N. Umakanth (2019) INSC 188 (06 March 2019)

Date of the Judgment: 06 March 2019
Citation: (2019) INSC 188
Judges: Uday Umesh Lalit, J. and Dinesh Maheshwari, J.

Can a defendant in a property dispute be allowed to become a plaintiff if the original plaintiffs want to withdraw the case? The Supreme Court of India recently addressed this question in a case where the original plaintiffs sought to withdraw their suit after a settlement with some of the defendants. The Court had to decide whether certain defendants, who were previously plaintiffs, could be transposed as plaintiffs to continue the case. This judgment clarifies the circumstances under which such a transposition is permissible under the Code of Civil Procedure, 1908.

Case Background

The case began with a suit filed by A.C. Nataraja Mudaliar, who sought to cancel a sale deed dated 23 March 1985. The sale deed was executed by A.V. Manoharan (Defendant No. 1) in favor of R. Dhanasundari (Defendant No. 2). The original plaintiff, A.C. Nataraja Mudaliar, claimed that the property belonged to a partnership firm, which was dissolved, and the property was vested with him.

After the original plaintiff’s death, his legal heirs were added as plaintiffs. One of the sons, A.N. Umakanth (Plaintiff No. 5), was given power of attorney. He then sold the property to three individuals, who were later added as plaintiffs (Plaintiff Nos. 9 to 11). Subsequently, the other legal heirs revoked A.N. Umakanth’s power of attorney and had him and the purchasers transposed as defendants (Defendant Nos. 3 to 6).

Later, the original plaintiffs sought to withdraw the suit, stating they had settled with Defendant Nos. 1 and 2. However, Defendant Nos. 3 to 6 objected and requested to be transposed as plaintiffs to continue the suit.

Timeline

Course of Proceedings

The suit was initially filed in the Court of the Principal Subordinate Judge, Chengalpattu, and later transferred to the District Munsif Court, Chengalpattu. The suit was originally decreed ex parte but was later restored. During the proceedings, the original plaintiffs sought to withdraw the suit, which led to the application for transposition by the defendants who were previously plaintiffs. The Trial Court allowed the transposition, which was upheld by the High Court of Judicature at Madras.

Legal Framework

The Supreme Court considered the provisions of Order I Rule 10 and Order XXIII Rule 1 and Rule 1-A of the Code of Civil Procedure, 1908.

Order I Rule 10(2) of the Code of Civil Procedure, 1908 states:

“(2) Court may strike out or add parties . – The Court may at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appeared to the Court to be just, order that the name of any party improperly joined, whether as plaintiff or defendant, be struck out, and that the name of any person who or to have been joined, whether as plaintiff or defendant, or whose presence before the Court may be necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the suit be added.”

Order XXIII Rule 1-A of the Code of Civil Procedure, 1908 states:

“R.1-A. When transposition of defendants as plaintiff may be permitted.- Where a suit is withdrawn or abandoned by a plaintiff under Rule 1, and a defendant applies to be transposed as a plaintiff under Rule 10 of Order 1, the Court, shall, in considering such application, have due regard to the question whether the applicant has a substantial question to be decided as against any of the other defendants.”

The Court clarified that Order I Rule 10 aims to include all parties to a dispute, and Order XXIII Rule 1-A allows a defendant to become a plaintiff if the original plaintiff withdraws the suit, provided the defendant has a substantial question to be decided against another defendant.

Arguments

The appellant (Defendant No. 2) argued that:

• The defendants seeking transposition (Defendant Nos. 3 to 6) had no cause of action against Defendant Nos. 1 and 2 since their transaction occurred after the suit was filed.
• The plaintiffs have the right to withdraw the suit, and this right cannot be curtailed.
• Subsequent purchasers cannot seek cancellation of a sale deed executed earlier.

The respondents (original plaintiffs) supported the appellant’s arguments, contending that the subsequent purchasers should file a separate suit.

The respondent No. 1 (Defendant No. 3) argued that:

• Defendant Nos. 3 to 6 have an identical interest in seeking cancellation of the sale deed.
• They should be allowed to be transposed as plaintiffs to continue the suit.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section. However, the core issue was whether the defendants (Defendant Nos. 3 to 6) could be transposed as plaintiffs when the original plaintiffs sought to withdraw the suit.

Treatment of the Issue by the Court

Authorities

The Supreme Court relied on the following case:

• Anil Kumar Singh v. Shivnath Mishra: (1995) 3 SCC 147 – The Court cited this case to explain the object of Order I Rule 10 of the Code of Civil Procedure, 1908, which is to bring all parties related to the dispute on record to avoid multiplicity of proceedings.

The Supreme Court considered the following legal provisions:

• Order I Rule 10 of the Code of Civil Procedure, 1908 – This provision deals with the addition, deletion, and substitution of parties, including the transposition of a party from one status to another.
• Order XXIII Rule 1 of the Code of Civil Procedure, 1908 – This provision allows a plaintiff to seek permission for withdrawal of a suit or abandonment of a part of a claim.
• Order XXIII Rule 1-A of the Code of Civil Procedure, 1908 – This provision allows for the transposition of a defendant as a plaintiff when the original plaintiff withdraws the suit, provided the defendant has a substantial question to be decided against another defendant.

Judgment

Authorities Viewed by the Court:

• Anil Kumar Singh v. Shivnath Mishra: (1995) 3 SCC 147: The Supreme Court followed this authority to highlight the objective of Order I Rule 10 of the Code of Civil Procedure, 1908, which is to ensure that all parties to a dispute are brought on record to avoid multiple proceedings.

What weighed in the mind of the Court?

The Court was primarily influenced by the need to ensure that all parties with a legitimate interest in the property dispute had an opportunity to have their claims adjudicated. The Court emphasized that the defendants seeking transposition were not strangers to the suit; they were previously plaintiffs and had a direct stake in the outcome of the litigation. The Court also noted that the defendants had a substantial question to be decided against the other defendants.

The Court’s decision was influenced more by the legal principles governing transposition of parties and the need to avoid multiplicity of litigation than the factual aspects.

The Court considered the argument that the subsequent purchasers had no cause of action and rejected it. The Court reasoned that the right of the defendant No. 3 (earlier the plaintiff No. 5) to challenge the sale deed between defendant No. 1 and defendant No. 2 did not get annulled only by his earlier transposition as the defendant.

The Court stated, “The very nature of the provisions contained in Rule 1-A ibid. leaves nothing to doubt that the powers of the Court to grant such a prayer for transposition are very wide and could be exercised for effectual and comprehensive adjudication of all the matters in controversy in the suit.”

The Court also noted, “In the given status of parties and the subject matter of the suit, when the plaintiffs entered into an arrangement with defendant Nos. 1 and 2 and sought permission to withdraw under Order XXIII Rule 1 CPC, the right of defendant Nos. 3 to 6 to continue with the litigation on their claim against defendant Nos. 1 and 2 immediately sprang up and they were, obviously, entitled to seek transposition as plaintiffs under Order XXIII Rule 1-A CPC.”

The Court further clarified, “The right of the said defendant No. 3 (earlier the plaintiff No. 5) to challenge the sale deed between defendant No. 1 and defendant No. 2 did not get annulled only by his earlier transposition as the defendant; and he cannot be considered bound by the arrangement between the existing plaintiffs and the defendant Nos. 1 and 2.”

Key Takeaways

• A defendant can be transposed as a plaintiff if the original plaintiff seeks to withdraw the suit, provided the defendant has a substantial question to be decided against another defendant.
• The court has wide powers to allow transposition to ensure comprehensive adjudication of the dispute and to avoid multiplicity of proceedings.
• Subsequent purchasers of a property involved in a dispute have a right to seek adjudication of their claims.

Directions

No specific directions were given by the Supreme Court in this judgment.

Development of Law

The ratio decidendi of this case is that a defendant with a substantial claim against another defendant can be transposed as a plaintiff if the original plaintiff withdraws the suit. This decision reinforces the principle that the court has the power to ensure that all parties with a legitimate interest in a dispute have an opportunity to have their claims adjudicated, even if it requires a change in their status in the litigation.

Conclusion

The Supreme Court upheld the decision of the High Court, allowing the transposition of defendants as plaintiffs. This judgment clarifies the scope of Order XXIII Rule 1-A read with Order I Rule 10 of the Code of Civil Procedure, 1908, emphasizing that the court can allow such transpositions to ensure that all parties with a legitimate interest in a dispute have their claims adjudicated, especially when the original plaintiffs seek to withdraw the suit.