Vijayalakshmi Leather Industries Private Limited
v.
K. Narayanan And Others
(High Court Of Judicature At Madras)
Civil Miscellaneous Appeal No. 93 Of 2003 | 27-01-2003
The appeal is against the order dated 16.8.2002 in E.P.78 of 1997 in M.H.C.S.73 of 1981 on the file of Sub Court, Poonamallee. The first respondent filed the suit C.S.No.73 of 1981 on the file of this court for partition of the suit property and for allotment of half of his share. A preliminary decree was passed on 7.11.1985.
2.Subsequent to the preliminary decree, the first respondent filed an application 5412 of 1988 in C.S.73 of 1981 for passing final decree. An Advocate-Commissioner was appointed to suggest the mode of division. Subsequently this court passed the final decree on 25.4.1989. On the basis of the final decree, the first respondent also filed E.P.78 of 1997 on the file of the Sub Court, Poonamallee, praying for delivery of vacant possession of the disputed item herein.
3.The appellants got themselves impleaded in the said execution petition as sixth respondent and disputed the claim of the first respondent in the E.P. Overruling the objections raised by the appellant herein, the executing court ordered delivery. As against which the appeal has been filed.
4.The learned senior counsel contended that Order 21, Rule 98 and Order 21, Rule 101 C.P.C have no application to the transfers from a transferee pendente lite. The restrictions imposed therein will be applicable only to the first transferee pendente lite from the party to the proceeding and it has no application to the subsequent transfers in a chain of events.
5.After hearing the arguments on this point, we reserved orders. At that time the learned senior counsel for the appellant submitted that he wants to enlighten the court with some authorities on this issue and being a debatable question the appeal can be admitted. As we are not inclined to admit the appeal, since so far as this issue is concerned already we reserved order in another O.S.A, we directed the learned senior counsel for the appellant to submit his written argument. In the written arguments, the learned senior counsel has stated that on 4.9.1984 the respondents 2 to 6 herein who are the defendants in the suit sold Item No.5 of the plaint schedule in favour of M/s.Eastland Mamufacturing Co. The said item stood in the name of one Loganathan, the brother of the first respondent. The respondents 2 to 6 are the legal representatives of the said Loganathan. The final decree was passed on 26.4.1989. The respondents 2 to 6 remained exparte. In the final decree the first respondent and the respondents 2 to 6 were allotted half share each in Item No.5 of the plaint schedule property. Under five sale deeds dated 20.7.1989, 21.7.1989, 22.7.1989 and 16.5.1990 (two sale deeds), the appellant purchased the property from the transferee Eastland Manufacturing Co who purchased the same during the pendency of the suit. The pendency of the suit is not mentioned in the sale deeds. The appellants were not party to the proceeding. The appellant has no knowledge about the pendency of the proceeding. The appellant invested huge amount and constructed 10,000 sq.ft. building for business. The first respondent and the respondents 2 to 6 being family members they colluded together and defrauded the appellant. The remedy for the first respondent is to proceed against the respondents 2 to 6, since the second respondent is the Receiver. Rule 97 to 104 C.P.C refers only the transferee from the judgment debtor and not to any purchaser or any one claiming title or interest under the purchaser of the judgment debtor. He also relied upon the judgment reported in JAYARAM MUDALIAR v. AYYASWAMI (AIR 1973 SC 569 [LQ/SC/1972/221] ) and KADERNATH v. SHEONARAIN (AIR 1970 SC 1717 [LQ/SC/1969/319] ).
6.We carefully considered the above contentions of the learned senior counsel as well as the written argument. There is a fallacy in the argument of the learned senior counsel. Though Order 21, Rule 98 and 102 refer to the transferee from the judgment debtor, in our considered view, the term transferee from the judgment debtor would also include the transferee of a transferee from the judgment debtor. If the words transferee of the judgment debtor mentioned in these Rules are to be given such a narrow interpretation, then the purpose of the restriction of transfer pendente lite and also the purpose of making certain provisions of C.P.C inapplicable to such transfer will become redundant. It is the duty of the court to give full effect to the meaning of every word for the purpose for which the statute is enacted. In fact Rule 98 and 102 of Order 21 C.P.C must be read along with Section 52 of the Transfer of Property Act. Section 52 of the Transfer of Property Act reads as follows:
"52. Transfer of property pending suit relating thereto.
During the pendency in any court having authority within the limits of India excluding the State of Jammu and Kashmir Government or established beyond such limits by the Central Government of any suit or proceedings which is not collusive and in which any right to immovable property is directly and specifically in question, the property cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the rights of any other party thereto under any decree or order which may be made therein, except under the authority of the court and on such terms as it may impose."
From the above provision, it could be seen that during the pendency of the proceedings, in any court, in which any right to immovable property is in question, the property cannot be transferred or otherwise dealt with by any party to the suit so as to affect the right of any other party thereto under any decree or order which may be made therein except under the authority of the court.
7.It is a clear statutory bar on the parties to the proceedings from transferring any property which is the subject matter of the litigation. In view of such statutory bar, any transfer made by any of the party to the proceeding pendente lite is non-est in the eye of law because the transferee will be entitled for the right of his transferor alone and nothing more. The restriction imposed also includes that the transfer should not be made in such a manner to affect the right of other party. From the words under the authority of the court it is needless to explain that the party who wants to transfer the property pendente lite must get the prior permission of the court.
7-A.It may be worthwhile to refer the judgment of the Apex Court in SARVINDER SINGH v. DALIP SINGH (1996) 5 SCC 539 [LQ/SC/1996/1190] ) where the learned Judges held as follows:
"It would, therefore, be clear that the defendants in the suit were prohibited by operation of Section 52 to deal with the property and could not transfer or otherwise deal with it in any way affecting the rights of the appellant except with the order or authority of the court. Admittedly, the authority or order of the court had not been obtained for alienation of those properties. Therefore, the alienation obviously would be hit by the doctrine of lis pendens by operation of Section 52."
When such statutory restriction or prohibition is there and inspite of the same if any party to the litigation transfers any of the property which is the subject matter of the proceeding, then the purchaser is getting the property subject to the result of the litigation and only the right of his transferor.
8.We are unable to appreciate the contention of the learned senior counsel for the appellant that the appellant was not a party to the proceeding and he was not impleaded as a party and consequently the decree is not binding on him. The learned senior counsel for the appellant totally forgot that the appellant purchased the property from the transferee of the party to the litigation. He, at the best, can step into the shoes of his vendor and cannot have any independent claim or right. In such circumstance, it is not open to the appellant to claim that he is a bona fide purchaser without notice of the litigation.
9.A single Judge of this court in CHENCHULAKSHMI v. JANARDAN SINGH (2000(1) MLJ 349)(para 17) held as follows:
"Before I refer to the judgment of the lower court and the argument of the learned counsel for the appellant, I would refer to the fact that under Section 52 of the Transfer of Property Act where any suit or proceedings is pending with reference to a property, which is directly and specifically in question, the property cannot be transferred or otherwise dealt with by any party to the suit or proceedings so as to affect the rights of any other party thereto under any decree or order which may be made therein, except under the authority of the court and on such terms as it may impose. Therefore, there is no scope for a purchaser of property pendente lite to contend that he is a bona fide purchaser for value without notice or to say that he was not aware of the proceeding and had no notice of the pendency of the proceeding. It has become necessary to point out this aspect for the reason that in his evidence, P.W.1 would say that he was not aware of the pendency of the proceeding and had no notice. Even assuming for a moment that the evidence tendered by him is true, even then that will not save him from the tentacles of Section 52 of the Transfer of Property Act. Equally, the contention that property was purchased paying valuable consideration, is of no avail since Section 52 of the Transfer of Property Act does not purport to exclude purchaser of the property for value from its operation. On the other hand, the section is emphatic in its terms that the property cannot be transferred or otherwise dealt with by any party to the suit except under the authority of the court and on such terms as it may impose. I have also referred to absence of pleadings on the aspect of fraud and collusion."
We respectfully endorse the view of the learned single Judge. When that be the case, it is also not open to the appellant herein who purchased the property from the transferee of a party to the litigation to plead that he has made the huge investment in the property and on that basis he should be allotted the portion which is under his occupation or he is entitled for any equity as of right.
10.Coming to Rule 102 of Order 21 C.P.C, this Rule envisages that nothing in Rules 98 and 100 shall apply to resistance or obstruction in execution of a decree for the possession of immovable property by a person to whom the judgment debtor has transferred the property after the institution of the suit in which the decree was passed.
11.It is the contention of the learned counsel for the appellant that the objection specified under Rule 98 and 100 may be applicable to the transferee of the judgment debtor alone and this provision cannot be made applicable for a chain of transactions where transferee of the judgment debtor had transferred his interest to others like the appellant.
12.As already stated, the contention of the learned counsel for the appellant cannot be accepted. When Section 52 of the Transfer of Property Act makes it clear that no party to the proceeding can transfer any property which is the subject matter of litigation, the transferee from the party to the proceeding or the judgment debtor cannot have any valid independent title than that of the judgment debtor. Hence the transfer made by one of the parties to the proceeding pendente lite is subject to the result of the litigation and there is no absolute transfer of right or title in favour of the transferee. Hence by way of subsequent transfers, such subsequent transferee can derive whatever the right their transferor i.e., the transferee from the judgment debtor or the party to the proceeding had and nothing more. When the transferee from the judgment debtor has no absolute or perfect title and the rights being subject to the result of the litigation, it is not known as to how the transferee from the transferee of the judgment debtor can have a better right than his vendor or his vendors vendor.
13.If such contention of the learned senior counsel for the appellant is to be accepted, then we are closing our eyes regarding the intention of the statute. It is obvious while interpreting the provisions of the statute, the court must give due weight to the intention of the statute in order to give effect to the provisions. If any narrow interpretation is given and thereby the purpose of the statute is being defeated, the courts must be careful to avoid such interpretations. If we look at Section 52 of the Transfer of Property Act and Rule 102 of Order 21 C.P.C, it is very clear that the intention of the Parliament with which the statute had been enacted is that the rights of one of the parties to the proceeding pending before the court cannot be prejudiced or taken away or adversely affected by the action of the other party to the same proceeding. In the absence of such restriction one party to the proceeding, just to prejudice the other party, may dispose of the properties which is the subject matter of the litigation or put any third party in possession and keep away from the court. By such actions of the party to the litigation the other party will be put to more hardship and only to avoid such prejudicial acts by a party to the litigation these provisions are in existence. When inspite of such statutory restrictions, for the transfer of the properties, which are the subject matter of litigation by a party to the proceeding, the courts are duty bound to give effect to the provisions of the statute.
14.If the contention of the learned senior counsel, giving a narrow interpretation to both the provisions are to be accepted, then it will open the flood gates of the transfers pending the litigation; when especially the intention of the legislature is to avoid such transfers.
15.When the words transferred the property in Rule 102 of Order 21 C.P.C as well as Section 52 of the Transfer of Property Act to be understood in a wide sense as to include both the transfer of title as well as transfer of possession and also include both voluntary and involuntary transfers to give full effect to the provisions of the as held in the case of MANAGASABHAI PATHAR v. POORNATHAMMAL (1947 II MLJ 97), we are unable to agree with the submissions made by the learned senior counsel.
16.Apart from this, the learned senior counsel for the appellant in his written argument has submitted that there is collusion by respondents 2 to 6 in transferring the property. The appellant being a purchaser subsequent to the final decree, they are transferees from the earlier transferee pendente lite. The encumbrance certificate may not reveal the pending litigation. When that be the case, it is not open to the counsel or the party to contend that the appellant relied upon the encumbrance certificate to find out the encumbrance over the property and in the absence of any encumbrance in the certificate, it is open to the appellant as well as his counsel to come to the conclusion that the property is free of encumbrance. It is a well known fact that the encumbrance certificate would reveal only the registered mortgages, transfers through registered documents. When that be the case, we are unable to appreciate the contentions of the learned senior counsel for the appellant raised in the written submissions made in the written argument that the appellant is a bonafide purchaser, having himself satisfied the title of his vendor and encumbrances through the certificate. When the appellant purchased the property after the final decree, it is not clear as to how the senior counsel contended that the decree is not binding on the appellant as he was not a party to the proceedings.
17.Merely because the respondents 2 to 6 remained exparte, it cannot be said that there is collusion or fraud. It is not the case of the appellant herein that the first respondent is not entitled for the half share in the suit property. When the first respondent is entitled for half share in the suit property, how can there be collusion or fraud. Perhaps the respondents 2 to 6 having parted with the properties to the transferor of the appellant herein, they might have remained exparte. On that basis, it cannot be said that there is any collusion or fraud on their part. As already stated, being a purchaser pendente lite the appellant can step into the shoes of the respondents 2 to 6 and have the properties allotted to them.
18.The Apex Court in the case of DHANNA SINGH v. BALJINDER KAUR (1997) 5 SCC 476 [LQ/SC/1997/643] ) held as follows:
"Apart from the doctrine of lis pendens under Section 52 of the T.P. Act, the subsequent purchaser does not get any right to lead to any evidence, as he stepped into the shoes of the first defendant, who had given up the right to lead evidence."
But in this case, the purchaser pendente lite from the first defendant sought permission to let in evidence. Since the first defendant had given up his right to lead evidence, the court held that it is not open to the transferee pendente lite to claim independent right to lead evidence. Hence it is very clear that the purchaser pendente lite can succeed to the interest of his vendor who is the party to the proceeding.
19.In the case of RAM HARAKH v. HAMIDK AHMED KHAN (1998) 7 SCC 484 [LQ/SC/1997/1163] ) the Apex Court had an occasion to deal with the entries made by the Revenue Authorities pending the litigation, where the Apex Court held as follows:
"Still the nature of the entry effected by them will have to be decided on the touchstone of common sense and on the broad probabilities of the case. The plaintiffs had already filed suits as early as on 14.10.1947 against the appellants and when the said suits were pending it would be doing violence to common sense to presume that they would not contest such entry being made in favour of the appellants pending litigation concerning their right to the very same land. Therefore, the said Entry 1356 Fasli made in favour of the appellants during the pending litigation must necessarily be treated to have been surreptitiously made behind the back of the respondents. If it was made after hearing them they would have certainly resisted by challenging the same before higher authorities when they had already filed civil litigation which was already pending and which went ultimately up to the High Court. For all these reasons, the finding of the revisional authority that the entry is illegal and incompetent implies that the same was effected surreptitiously and fraudulently. Once that conclusion is reached the entry would cease to have any legal efficacy for buttressing the case of the appellants."
20.If the facts by way of the contentions of the learned senior counsel are considered with the aid of the principles laid down by the Apex Court and the discussion made by us above, this court is of the view that the appeal is devoid of any merits and consequently the same is dismissed in limine.
Consequently stay C.M.P.513 of 2003 is closed.
Advocates List
For the Petitioner M. Kalyanasundaram, Senior Counsel. For the Respondents ----
For Petitioner
- Shekhar Naphade
- Mahesh Agrawal
- Tarun Dua
For Respondent
- S. Vani
- B. Sunita Rao
- Sushil Kumar Pathak
Bench List
HON'BLE MR. JUSTICE S. JAGADEESAN
HON'BLE MR. JUSTICE D. MURUGESAN
Eq Citation
(2003) 1 MLJ 530
AIR 2003 MAD 203
LQ/MadHC/2003/127
HeadNote
Civil Procedure Code, 1908, Or. 21 Rr. 98, 101 and 102 — Applicability — Transfer pendente lite — Words 'transferred the property' in Or. 21 R. 102 C.P.C. as well as S. 52 TP Act to be understood in a wide sense as to include both transfer of title as well as transfer of possession and also include both voluntary and involuntary transfers — Words 'transferee from the judgment debtor' in Or. 21 Rr. 98 and 102 C.P.C would also include the transferee of a transferee from the judgment debtor — Transfer of Property Act, 1882, S. 52 — Limitation Acts/Statutes — Limitation Act, 1963, S. 3 — Lis pendens — Applicability of doctrine of, to subsequent transferees — Held, transferee from party to proceeding or judgment debtor cannot have any valid independent title than that of judgment debtor — Hence transfer made by one of the parties to proceeding pendente lite is subject to result of litigation and there is no absolute transfer of right or title in favour of transferee — By way of subsequent transfers, such subsequent transferee can derive whatever the right their transferor i.e., transferee from judgment debtor or party to proceeding had and nothing more — When transferee from judgment debtor has no absolute or perfect title and rights being subject to result of litigation, it is not known as to how transferee from transferee of judgment debtor can have a better right than his vendor or his vendor's vendor — Transfer of Property Act, 1882, Ss. 52 and 53 — Subsequent transferee — Rights of.