1. C. M. A. No. 381 of 1951 is an appeal by the five appellants against the order of the learned Subordinate Judge dismissing their application, I. A. No. 1106 of 1951 in A. S. No. 215 of 1950, to implead them as respondents 2 to 6 in the said appeal. The facts out of which the application arose were these: One Kaliammal, the paternal grandmother of minor Eswaramurthi, purchased under two sale deeds of 11-7-1929 and 20-9-1929 certain properties. Minor Eswaramurthi through his next friend instituted O. S. No. 432 of 1947, District Munsif's Court, Gobichettipalayam, for a declaration of his title to the suit properties and for possession of the same. He based his suit on the allegation that the properties in question were purchased benami in the name of Kaliammal, his paternal grandmother, by his paternal grandfather, the husband of Kaliammal, from and out of the income of the joint family properties, and that therefore he was entitled to recover possession of the properties.
Kaliammal was the sole defendant in the action, and her defence was that the properties were purchased by her from out of her own funds, and that the minor had no right or claim to the suit properties. On these allegations issues were framed, covering the contentions of the parties, and after an elaborate trial, the learned District Munsif found that the properties belonged to the grandmother, and that they were not purchased benami by the paternal grandfather of the plaintiff in the name of the grandmother for the benefit of the joint family. A decree in the suit was passed on 11-3-1950.
2. Thereafter the minor plaintiff preferred an appeal against that decree on 3-7-1950 to the Sub Court, Coimbatore, in A. S. No. 215 of 1950. After the appeal was filed, Kaliammal executed a settlement deed on 9-9-1950, Ex. A. 1, in favour of her grand-daughters (daughter's daughters), Nanjammal, Marayammal and Kaliammal, whereunder she reserved a life estate for herself and settled the vested remainder on the granddaughters. On the same day under Ex. A. 2 the properties were leased in favour of Kolandal Gounder and Pongallappa Goundan. On 15-6-1951 two applications, I. A. No. 1105 of 1951 and I. A. No. 1105 of 1951, were filed by the donees under the settlement deed, the first application being for permission to defend the appeal which was wholly unnecessary, and the other for impleading them as respondents 2 to 6 in the appeal. While these applications were pending, on 2-7-1951, two applications were filed on behalf of the minor plaintiffs, I. A. No. 1314 of 1951 for leave to enter into a compromise with the sole defendant Kaliammal, and I. A. 1315 of 1951 to record the compromise.
The compromise was based upon a release deed executed by Kaliammal on 13-6-1951, Ex. B. 1, and registered on 14-6-1951. Under this release deed Kaliammal purported to admit the title of the plaintiff to the suit properties on the allegation that the funds for the acquisition of the properties were provided by the grandfather from out of the joint family properties. She also stated in that relinquishment deed that under the evil advice of one Marappa Goundan who was indisposed towards the family she executed a settlement deed on 9-9-1950, Ex. A. 1, without any consideration and without any necessity, and that it was only a nominal document not intended to be given effect to. It was for this reason, it was stated, that she did not cancel the settlement deed by a separate document.
3. The application to implead the appellants as parties was taken up for consideration by the learned Subordinate Judge earlier, and he dismissed it on the ground that the compromise evidenced by the relinquish men t deed, Ex. B. 1 lawfully terminated the suit even though the compromise was not recorded, for according to him the recording the compromise & the passing of the decree in terms thereof were merely consequential to the compromise, though it was filed in court. It was against this order that this appeal was preferred by the appellants.
4. This order is dated 25-7-1951. After this order, the learned Judge took up the petition to record the compromise, and on 28-7-1951 he accorded sanction to the next friend of the plaintiff to enter into the compromise and directed that the compromise should be recorded. A decree followed thereafter. The appellants by way of abundant caution also preferred an appeal with the leave of this court against the order directing the compromise to be recorded in C. M. A. No. 126 of 1952. The result of this appeal will follow the result of C. M. A. No. 381 of 1951. It is therefore necessary in the first instance to deal with the contentions in C. M. A. No. 381 of 1951.
5. Under Order 22, Rule 10, Civil P. C. when there is an assignment or devolution of 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. An alienation 'pendente lite' is subject to the rule of 'lis pendens' enacted in Section 52, T. P. Act, and the alienee if he is not impleaded as a party and does not object to any compromise behind his back between his alienor and the other party to the suit, would be bound by the compromise reached between them, unless thereafter he would be able to establish in a separate suit that the compromise was collusive and fraudulent. His right to get himself impleaded as a party and to object to a compromise arrived at between his alienator and the opposite party has been recognised in this court by the Full Bench decision in -- 'Veeraghava Reddi v. Subba Reddi', AIR 1920 Mad 391 (PB) (A). It was there laid down that an alienee 'pendente lite' who had been added as a party to the litigation was entitled to object to a decree being passed in terms of a compromise arrived at between his alienor and the opposite party. Seshagiri Aiyar J. at p. 47 of the report observed: "It follows from these provisions of the Civil Procedure Code that although a purchaser 'pendente lite' takes the transfer subject to the result of the litigation, and if he is not impleaded as a party ha will be bound by any lawful compromise or adjustment which may be entered into between the plaintiff and his transferor, the moment that he becomes a defendant, the only detraction of right of which he subjects himself is the result of the litigation which has been openly and in his presence tried and decided upon.
Once he is in the array of parties what could have been done by way of compromise or adjustment if he is not before the court should not be allowed to interfere with his claim for a fair trial and a decision of the merits." (6) It was for this purpose that the application was filed on behalf of the appellants to implead them as parties. Under Order 22, Rule 10, it is no doubt true that the court has got discretion to implead or not to implead persons as parties, but that discretion, it has been repeatedly laid down, should be exercised judicially and not arbitrarily. In the present case, the suit had not terminated when the application for impleading the appellants as parties was filed; besides the application was made long prior to the application to record the compromise filed on behalf of the minor plaintiff. It was therefore the duty of the court to have decided whether the prayer of the appellants should or should not be granted on the merits. It may be observed that so far as this application was concerned, Kaliammal though alive did not file a counter affidavit opposing the application or disputing the validity of the settlement deed on any ground. The only ground she urged in the relinquishment deed against the settlement deed was that it was nominal document not intended to be operative. On behalf of the plaintiffs, however, a counter affidavit was filed raising the plea that the deed was brought about by the undue influence of the son-in-law of Kaliammal, which was never Kaliammal's case.
7. In dismissing the application of the appellants, the learned Judge relied strongly upon the decision of our learned brother, Chandra Reddi J., reported in -- 'Doraikannu Asari v. Nataraja Chetty', 1951-2 Mad LJ 26 (B). In that case, after a compromise was recorded an alienee 'pendente lite' applied to implead himself as a party to the appeal. The learned Judge was of opinion in view of the authorities cited before him that when the compromise was recorded the proceedings in the suit came to an end, and that there was no jurisdiction in the court to deal with an application filed under Order 22, Rule 10, Civil P. C. to implead an alienee 'pendente lite' as a party.
Assuming the view taken by the learned judge on the facts of the case before him to be correct, the principle of that decision would not apply to the present case, as the application to implead as a party was, as stated above, filed long prior to the date of the application to record the compromise. It was wrong to assume, as the learned Judge in the Court below did, that merely because a party has got a compromise in his pocket, that would be sufficient to terminate the litigation. Order 23, Rule 3 requires that it must be 'proved' to the satisfaction of the court that the subject-matter of the suit was adjusted wholly or in part by a lawful agreement or compromise. There can be no proof of such compromise, when the compromise reduced to writing is not produced into court. It is therefore wrong to hold that the mere existence of the compromise in the hands of the party would be sufficient to terminate the suit so as to preclude the court from exercising its jurisdiction under Order 22, Rule 10, Civil P. C.
The decision of our learned brother, Chandra Reddi J., referred to above, does not go to that extent. It is a case in which, as pointed out above, the compromise was recorded, and it was only thereafter that the application to implead as a party was filed. Of course, there was no decree in that case passed on the basis of the compromise. The attention of the learned Judge however was not drawn to two decisions in which a different view was taken, namely, -- 'Lakshan Chunder v. Nikunjamoni Dassi', AIR 1924 Cal 188 (C), which was followed in this court in -- 'Seethai Achi v. Meyappa Chettiar', AIR 1934 Mad 337 (D) by a Bench. The view taken in -- 'AIR 1924 Cal 188 (C)', is that until there is actually a decree made in the case the litigation does not terminate. It is unnecessary for us to express any final opinion on this question, as it is not necessary for the decision of this case.
8. It was argued on behalf of the respondents that an application to implead as a party merely to oppose the compromise should not be entertained. . We are unable to accept this argument. If the application to implead as a party was ordered on the date on which it was made, the appellants would be parties, and they would be entitled in any application subsequently made for recording the compromise, to oppose the compromise as intended to defeat their rights. Merely because the court took time to dispose of the application the parties should not be made to suffer on that account. It has been pointer out by this court in -- 'AIR 1934 Mad 337 at p. 342 (D)', that when an application under Order 22, Rule 10 is made, it is open to the court to make an enquiry and pass the necessary order. Merely because the settlement deed was disputed by one party or the other, the jurisdiction of the court to enquire into the matter is not taken away, and such an enquiry is not foreign to the scope of the appeal in which the application was made, as was, if we may say so with respect, erroneously hold by our learned brother, Chandra Reddi J. at p. 23 in -- '1951-2 Mad LJ 28 (B)'.
Had the attention of the learned Judge been drawn to the decision in -- 'AIR 1934 Mad 337 (D)' and the observations at p. 342 based upon the decision of the Calcutta High Court in --'Surendra v. Nityendra', AIR 1926 Cal 173 (E), probably the learned Judge would not have taken the view he did. The decision in -- 'AIR 1934 Mad 337 (D)', is important in more than one respect, as it considers elaborately the scope of Order 22, Rule 10 and the right of a party to get himself impleaded in a pending action to assert his rights under a compromise entered into between himself, a stranger to the suit, and the parties to the action. It also considers that when once a suit is filed, the withdrawal of the suit by plaintiff does not automatically end the litigation so as to preclude the court from considering the question regarding a compromise and the impleading of a party interested in that compromise to the action.
9. For the foregoing reasons we think that the order of the learned Subordinate Judge cannot be sustained, and must be set aside. The result is that the application, I, A. No. 1106 of 1951, must be remanded to the lower court for disposal according to law. The result of allowing C. M. A. No. 381 of 1951 is that the order in I. A. Nos. 1314 and 1315 of 1951 also must be vacated, and C. M. A. No. 126 of 1952 must be allowed. The appellants are entitled to their costs in this court, but in the circumstances we order costs only in C. M. A. No. 381 of 1951.