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Pranakrushna And Others v. Umakanta Panda And Others
Structured Summary of the Opinion (Agrawal, C.J.)
Factual and Procedural Background
The petitioners (plaintiffs) instituted a suit for declaration of title over certain landed property and sought a permanent injunction restraining opposite party No. 1 (the defendant) from alienating the suit property. The trial court granted an interim injunction on 20-4-1981, which was made absolute on 30-9-1981.
The hearing of the suit concluded on 8-10-1985 and judgment was fixed for 17-10-1985. On 11-10-1985, opposite parties 2 to 4 (the interveners) applied for addition as parties under O.1, R.10(2) of the Civil Procedure Code, alleging that they had purchased the suit property from the defendant under registered sale deeds executed between 28-1-1982 and 18-1-1984. The plaintiffs opposed the intervention on the grounds that the alienations were in violation of the injunction and hit by the doctrine of lis pendens and therefore void; and that the interveners were neither necessary nor proper parties.
The trial court allowed the application for intervention and permitted the interveners to file a written statement on the basis that the decision in the suit would directly affect them. The plaintiffs sought revision under S.115 Civil P.C. A learned single Judge (P.C. Misra, J.) expressed doubts about the correctness of a prior Orissa High Court decision (Kusuma Dei v. Malati Bewa) and referred the matter to a Division Bench for determination.
Legal Issues Presented
- Whether alienations made in violation of an order of injunction (pendente lite) are void, or merely voidable/bindable under the doctrine of lis pendens (s.52 of the Transfer of Property Act) and relevant provisions of the Civil Procedure Code (e.g., O.39); and specifically whether the decision in Kusuma Dei v. Malati Bewa (AIR 1969 Orissa 195) is correct on this point.
- Whether a transferee from the defendant pendente lite (i.e., a purchaser who acquired the property while the suit was pending) is a "necessary" or "proper" party under O.1, R.10(2) of the Civil Procedure Code such that the court may or should add that person as a party at the late stage when the hearing has concluded and judgment is imminent.
Arguments of the Parties
Petitioners' (Plaintiffs') Arguments
- The alienations made by the defendant were in violation of the order of injunction and therefore void in law.
- The transactions were also hit by the doctrine of lis pendens and therefore void as against the plaintiffs' claim.
- On the facts and circumstances, the interveners were neither necessary nor proper parties; their presence was not required for the court to adjudicate the suit effectively and completely.
Interveners' Arguments
- They relied on the decision in Kusuma Dei v. Malati Bewa (AIR 1969 Orissa 195) to the effect that alienations in contravention of an injunction are not void; the only consequence is that the transferor may be punished and the transfer may nonetheless affect the transferee's title.
- Because the decision in the suit would directly affect them, they contended they were necessary parties to be added under O.1, R.10(2).
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Kusuma Dei v. Malati Bewa, AIR 1969 Orissa 195 | Held that alienations made in violation of an injunction are not void; the primary consequence is punishment of the offender and such transfers can have effect on the transferee's title. | The court agreed with this decision, adopting the view that transfers pendente lite in breach of an injunction are not automatically void and that the doctrine of lis pendens (s.52 T.P. Act) does not render such transactions nullities. |
| Lal Chand v. Sohan Lal, AIR 1938 Lah 220 | Held that non-compliance with an order of injunction makes the offender liable to punishment and that a completed sale in contravention of an injunction is not a nullity for want of jurisdiction. | Referenced as supportive authority for the proposition that breach of injunction does not by itself render the sale void; relied upon in affirming the position taken in Kusuma Dei. |
| (English decision) (1841) 49 ASR 252 | The English view (noted) that transferee pendente lite is bound by the result of the suit and therefore some English authorities suggest injunctions against alienation may not be necessary. | The court noted this as a contrasting position but observed that Indian courts have taken a different view — supporting additional protection by injunction in India despite lis pendens. |
| AIR 1919 Mad 772; AIR 1920 Nag 12; AIR 1954 All 422; AIR 1951 Hyd 167 | Decisions of various High Courts adopting a view similar to Kusuma Dei: lis pendens does not make pending transfers void; such transfers bind the transferee and may be voidable as against the affected party. | These decisions were cited to show the "consensus of the Indian courts" supporting the proposition that transfers pendente lite are not void but are subject to the ultimate decree. |
| Narayan Chandra Garai v. Matri Bhandar Pvt. Ltd., AIR 1974 Cal 358 | Held that a person who seeks to be added on the ground that a party to the suit had agreed to sell land to him was neither a necessary nor a proper party where the question could be adjudicated without adding him. | Applied by the court as a similar situation supporting the conclusion that interveners (transferees) were not necessary or proper parties under O.1, R.10(2). |
| Shri Basant Ram v. Smt. Hans Devi, ILR (1974) Him Pra 276 | Cited as authority that supports the petitioners' contention (i.e., against addition of the transferees as parties). | Noted by the court as supportive of the petitioners' position; used as part of the body of authority informing the decision on necessity/propriety of adding parties. |
Court's Reasoning and Analysis
The court's analysis proceeded in two linked stages: (1) the legal effect of alienations made in breach of an injunction; and (2) whether transferees pendente lite are necessary or proper parties to a pending suit such that they can be added under O.1, R.10(2), especially at a late stage.
On the first issue, the Chief Justice examined the scheme of S.64 (private alienation after attachment) and Order 39 of the Civil Procedure Code, and reviewed authorities, including Kusuma Dei (AIR 1969 Orissa 195) and Lal Chand (AIR 1938 Lah 220). He accepted the analysis in Kusuma Dei that, unlike S.64 which expressly bars private alienation after attachment, there is no comparable statutory embargo in the context of an injunction under O.39 that automatically renders transfers void. The court concluded that the doctrine of lis pendens (s.52 T.P. Act) does not make pending transfers void; rather, such transfers bind the transferee and are only voidable or subject to the ultimate decree, and the person obtaining an injunction gains additional remedies (such as prosecution and attachment under O.39, R.2A) as a deterrent against breach.
The court rejected the petitioners' submission that an injunction "suspends his right to transfer and therefore he could not convey" a marketable title. The judge distinguished an injunction from an attachment (custodia legis), noting that an injunction merely prohibits a particular action whereas attachment affects the right in a manner that may make the property in custodia legis.
On the second issue (addition of parties), the court analysed O.1, R.10(2), which permits adding persons "who ought to have been joined" or whose presence is necessary. The Chief Justice held that a transferee pendente lite is neither a necessary nor a proper party because he is bound by the decree under s.52 T.P. Act; his presence is not required for the effective and complete adjudication of the questions in the suit. The court emphasized the practical consequences of allowing belated additions — here, the interveners applied after hearing had concluded and judgment was imminent — which would render existing evidence otiose and potentially require a trial de novo. Absent evidence of fraud or collusion or a miscarriage of justice, a court should not permit such late additions.
On these grounds the court concluded that the trial court committed an error of jurisdiction in permitting the interveners to be added and to file a written statement at such a belated stage.
Holding and Implications
Holding: Application allowed; the impugned order allowing the interveners (opposite parties 2 to 4) to be added and to file written statement is set aside.
Direct consequences for the parties:
- The interveners (transferees pendente lite) are not to be treated as necessary or proper parties to the suit for the purposes of O.1, R.10(2) at the stage when hearing had concluded and judgment was imminent.
- The trial court's allowance of their application and permission to file written statement was an apparent error of jurisdiction and has been quashed.
- No order as to costs was made because no one appeared on behalf of the opposite parties.
Broader implications: The court did not purport to establish a new legal principle but affirmed the existing approach adopted in Kusuma Dei and other High Court authorities that transfers pendente lite in breach of an injunction are not automatically void; they are subject to the ultimate decree under the doctrine of lis pendens. The decision clarifies that, notwithstanding that legal position, transferees are generally not necessary parties to the suit and late-stage addition will not be permitted except in exceptional circumstances (fraud, collusion or miscarriage of justice). The opinion does not state that it is creating a novel precedent beyond these affirmations.
Agrawal, C.J:— This revision by the plaintiffs under S. 115 of the Civil P.C (for short, ‘the Code’), which is directed against an order of the trial court allowing an application for intervention filed by opposite parties 2 to 4, apparently appears simple. But some issues of seminal importance are raised for our determination in view of order of the learned single Judge referring he matter to a Division Bench doubting the correctness of the decision of another learned Judge of this Court.
2. The facts briefly noted are as follows:—
The petitioners instituted a suit for declaration of their title over certain landed property in which a relief of permanent injunction restraining the defendant-opposite party No. 1 from alienating the suit property was also made. On 20-4-1981, the court passed an order of interim injunction which was ultimately made absolute on 30-9-1981.
3. In due course, the hearing of the suit was taken up and was completed on 8-10-1985, 17-10-85 was fixed for delivery of judgment. At this stage, on 11-10-1985, the inverveners (opposite parties 2 to 4) made an application for their addition as parties to the suit under the provisions of O. 1, R. 10(2) of the Code on the ground that they had purchased the suit property from the defendant under four registered sale deeds between 28-1-1982 and 18-1-1984. The prayer was resisted by the plaintiff, inter alia, on the ground that the alienations having been made in violation of the order of injunction and also hit by the doctrine of lis pendens, the transactions were void in the eye of law. The further stand of the plaintiff-petitioners was that in any view of the matter, on the facts and in the circumstances of the case, the interveners were neither necessary nor proper parties and that their presence was not necessary to enable the court to effectively and completely adjudicate the questions involved in the suit.
4. The trial court, however, by the impugned order allowed the application for intervention and allowed the interveners to file written statement on the ground that as the decision in the suit would directly affect them, they were necessary parties to the suit.
5. When the case was being heard by P.C Misra, J. a contention was advanced on behalf of the petitioners before him that the alienations being invalid on account of the order of injunction, the persons to this illegality could not be implemented as parties. On behalf of the interveners, reference was made to the decision of G.K Misra, J. (as the then was) in Kusuma Dei v. Malati Bewa, AIR 1969 Orissa 195 where it has been held that such alienations are not void inasmuch as the only consequence of such transfers in violation of the order of injunction is that the transferor (person injuncted) is liable to be punished and that they would have effect on the validity of title unto the transferee. P.C Misra, J. could not reconcile himself with the above view as, according to him, the order of injunction prohibiting a person from alienating the property ‘suspends his right to tranfer and therefore he could not convey’ any marketable title.
6. have given my anxious consideration to the doubts raised by the learned Judge regarding the correctness of the decision in Kusuma Dei's case. In that case, the learned Judge compared the effect of private alienation of property after attachment with reference to the provision of S. 64 and alienation after an order of injunction passed under O. 39, R. 1 or 2 of the Code. Section 64 bars private alienation of property and declares such alienation to be void. But in the absence of any such embargo, he took the view that the said principle should not be applied to an order of injunction. The learned Judge took support from a decision of the Lahore High Court in Lal Chand v. Sohan Lal, AIR 1938 Lah 220 where the above view was taken, i.e, that the effect of non-compliance with an order of injunction is only to make the offender liable to the punishment prescribed in O. 39, R. 2(3) and that a completed sale in contravention of an order of injunction under O. 39, R. 3 is not a nullity being without jurisdiction.
Considering the basic question and examining the scheme of S. 64 and O. 39 of the Code and the authorities on the subject, I feel myself in respectful agreement with the view expressed by G.K Misra, J. Although the view of the English Court has been that since a transferee pendente lite from a party would be bound by the result of the suit, no injunction need be granted against a party that he should not make any alienation of the property in suit. (See (1841) 49 ASR 252), the consensus of the Indian courts is that the fact that a party is protected by lis pendens is no ground why he should not also be further protected by an order of injunction restraining the other party from alienating the property. There is abundance of authorities of the Indian courts that the doctrine of lis pendens contained in s. 52 of the T.P Act does not completely bar transaction pending in a suit in which the right to that property is in question and therefore the transfer relating to the property in dispute is not void. It simply lays down that if such a transfer takes place, the subsequent transferee will be bound by the ultimate decree that may be passed in the suit. All such transfers, therefore, are only voidable and that too at the option of the affected party to the proceeding. Apart from the decision of the Lahore High Court which had taken this view, I find that the High Courts of Madras, Nagpur, Allahabad and Hyderabad have also taken somewhat similar views in AIR 1919 Mad 772; AIR 1920 Nag 12; AIR 1954 All 422 and AIR 1951 Hyd 167. I, therefore, with due reference to P.C Misra, J. find myself unable to subscribe to his doubt expressed in the referring order. It may, however, appear to some mind that if in spite of an order of in junction a marketable title can be conveyed by the person restrained by a court of law and the person claiming protection under the order of injunction has again to vindicate his right, against the purchaser, then what at all would be the advantage of getting the order of injunction inasmuch as even without any such order, the transaction would be hit by the doctrine of lis pendens.
7A. This plea prima facie may raise the finger. But on going deeper, there would appear an apparent distinction between an alienation made in violation of the order of injunction and that without any such order. The person obtaining an order of injunction has got some additional advantage of prosecuting the offender and also getting his properties attached and sold as laid down under O. 39, R. 2A of the Code. This would work out a deterrent for his indulging in the act of violation of the order of injunction. The order of injunction, in my view, does not in any way militate against the right, title and interest of the offender in the property in question like an order of attachment of the property which makes the property in custodia legis. The order of restraint does not in that way deprive or suspend any right of a person, but only aims at a prohibition to act in a particular manner. In a case of attachment also, private alienations are not invalidated for all purposes; but it is only as against the claims enforceable under the attachment. I would, therefore, reject the contention of Mr. Kar for the petitioners that the alienation in question would be void in the eye of law.
8. This, however, would not conclude the matter, the main question that still remains to be answered in spite of the above legal position is whether the application for intervention should have been allowed.
Under the provision of R. 10(2) of O. 1, the Court may add the name of any person to the suit who ought to have been joined, either as plaintiff or defendant, or whose presence before the court is necessary. In my considered opinion, in a suit of this nature, a transferee from the defendant pendente lite is neither a necessary nor a proper party inasmuch as he would be bound by the decree in the suit in view of the principle contained in s. 52 of the T.P Act. The interveners could not have been added as parties to the suit in the beginning. In the circumstance can it be said that the presence of the interveners was necessary to adjudicate upon and settle the questions involved in the suit effectually and completely? The answer must be given in the negative. A person is not to be added as a defendant merely because he would be affected by the judgment. The main consideration is whether or not the presence of such person is necessary to enable the court to adjudicate upon and settle the questions involved in the suit. I find a some what similar situation happening in a case before the Calcutta High Court in Narayan Chandra Garai v. Matri Bhandar Pvt. Ltd., AIR 1974 Cal 358. There also, a party sought to be added on the ground that the party to the suit who had been injuncted had agreed to sell the land to him. The Court held that he was neither a necessary nor a proper party as the question involved in the suit could be worked out without anyone else being brought on the record. Rule 10 cannot be read as requiring all persons who have or claim to have or likely to have any sort of right, title or interest in respect of the subject-matter of a suit to be made parties.
Mr. Kar also relied on the case of Shri Basant Ram v. Smt. Hans Devi, ILR (1974) Him Pra 276 which fully supports his contention.
9. Having considered the principles in view of the observations made in the referring order, I must hold that the intervenors were neither necessary nor proper parties for adjudication of the points involved in the suit and, therefore, the principles of O. 1, R. 10 of the Code are not attracted. The trial court has, therefore, committed an apparent error of jurisdiction in allowing the application of opposite parties 2 to 4. The power to add parties does not mean that it should be exercised in a casual manner that the suit or proceeding should be tried de novo. The intervenors had been purchasing the suit lands at different times spread over a long period, but they applied for their addition at a very belated stage when the proceedings had come to a close. The added parties should not be allowed to reopen the matters already over by the time they appear on the scene unless a case of fraud or collusion is established and the Court comes to hold that miscarriage of justice has taken place. The application was made by the intervenors when the hearing had been concluded and the case was posted for judgment. To allow them to file written statement at that stage would render the entire evidence on record otiose and the hearing would have to start afresh. The trial court has, therefore, gone beyond its limitations.
10. The result is that the application must succeed. It is accordingly allowed and the impugned order is set aside. Since nobody has appeared on behalf of the opposite parties, I make no order as to costs.
A.K Padhi, J.:— 11. I agree.
Application allowed.
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