Shri Prakash Gobindram Ahuja vs Shri Ganesh Pandharinath Dhonde ... on 4 October, 2016
Bench: S.C. Dharmadhikari
Ms. Kalyani Tulankar a/w. Mr. Sandeep Pathak, i/by Mr. Sugandh D.
Deshmukh, for the Appellant.
CORAM : S.C. DHARMADHIKARI &
DR. SHALINI PHANSALKAR-JOSHI, J.J.
JUDGMENT : [Per Dr. Shalini Phansalkar-Joshi, J.]
1. As per the order passed by the Hon'ble the Acting Chief Justice, this
are framed by learned Single Judge of this Court [Coram : R.C. Chavan,
after putting transferees to notice that their rights would be
subject to the pending suit, or requiring the party to inform
Vasant Tatoba Hargude and others v. Dikkaya Muttaya
2. The facts of the Appeal, which may be relevant for deciding these
performance of Agreement to Sale. Along with the suit, appellant has also
filed an application for injunction at Exhibit-5, restraining Respondent No.7
the suit. It is the case of the Appellant that Respondent Nos.1 to 6 owned
Agreements of Sale for consideration of Rs.30,00,000/- and
Rs.17,40,000/-. Out of these two Agreements of Sale, the Agreement of
second Agreement of Sale remained to be registered. The appellant paid
earnest money. Respondent Nos.1 to 6, however, executed registered
2012. The appellant now apprehends that Respondent No.7 may create
3. The said application came to be rejected by the Trial Court vide its
case and balance of convenience was not in his favour. Moreover, the
him, if injunction was not granted. Aggrieved by this order, the appellant
4. When the Appeal came up for hearing before the learned Single
Judge, he referred to his earlier Judgment in Kachhi Properties Vs.
appeal was liable to be dismissed. Thereupon, learned counsel for the
Vs. Sitabai Chander Nikam & Ors.2, another learned Single Judge of this
Court [Coram : A.S. Oka, J.], after carefully considering the Judgment in
5. The learned Single Judge, before whom this Appeal was placed, in
observations thereon made by another learned Single Judge in Pralhad
1 2010 (5) Bom.C.R. 43
2 2011 (6) Bom.C.R. 619
Jamnadharji Mor Vs. Arjun Yeshwant Dhanwatey & Anr.3.
6. The learned Single Judge then heard learned counsel for the
pros and cons, so as to decide the controversy. After referring to number
heaping upon the judicial system an unwarranted burden. However,
3 2009 (4) Bom.C.R. 523
7. The learned Single Judge, therefore, thought it necessary to refer
the above referred questions for decision to a Division Bench. That is how
8. In this Appeal, with the able assistance of learned Senior Counsel
these questions of law for decision before the Division Bench. The learned
substantially or peripherally the controversy involved herein. Learned
9. It is in this backdrop that we have been called upon to decide the
protection, the party can be entitled to get the relief of interim injunction
10. To understand the exact nature of controversy and the
11. The first case which came to be decided in point of time is of Kachhi
Properties. In that case a common question was raised in a bunch of
the TP Act. The facts giving rise to those Appeals were also, more or less,
the same. It was common ground that the appellants in the said Appeals
repudiated the transfer and of the like nature. In these nature of suits, a
creating third party interests during pendency of the suit. In some of the
12. When these Appeals were placed before the learned Single Judge,
creation of third party interests is not issued, and could it be held that the
13. While deciding this question, the learned Single Judge referred to
statutorily provided by Section 52 of the TP Act. As on the same question
14. Learned Single Judge then referred to the provisions of Section 52
(ee). Learned Single Judge then also referred to the various decisions as
9. Nagubai Ammal v. B. Shama Rao, 1956 DGLS (soft) 38 :
AIR 1956 SC 593.
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10. Jayaram Mudaliar v. Ayyaswami, 1972 DGLS (soft) 220 :
1972 (2) SCC 200.
11. Rajendra Singh Vs. Santa Singh, 1973 DGLS (soft) 240 :
1973(2) S.C.C. 705.
12. Hadley v. London Bank of Scotland, 1865 (3) De GJ & S
13. Kishorsinh Ratansinh Jadeja v. Maruti Corporation, 2009
DGLS (soft) 449 : (2009) 11 SCC 229.
14. Sanjay Verma v. Manik Roy, 2006 DGLS (soft) 971 :
2006(13) SCC 608 : AIR 2007 SC 1332.
15. Bibi Zubaida Khatoon v. Nabi Hassan Saheb , 2003 DGLS
(soft) 625 : 2004 (1) SCC 191.
16. Sarvinder Singh v. Dalip Singh, 1997 (Supp) Bom.C.R. 53
(S.C.) : 1996 DGLS 1133 : 1996 (5) SCC 539.
17. Dhurandhar Prasad Singh v. Jai Prakash University 2001
DGLS (soft) 885 : 2001 (6) SCC 534 : AIR 2001 SCW
2674.
18. Moti Lal v. Karrabuldin, ILR 1898 (25) Cal 179.
19. Prannath Roy Chowdry v. Rookea Begum, 1857-60 (7)
MIA 323.
20. Usha Sinha v. Dina Ram, 2008 DGLS (soft) 365 : 2008(7)
SCC 144.
21. Vijayalakshmi Leather Industries Vs. K. Narayanan,
Lalitha, AIR 2003 Mad 203.
22. Silverline Forum (P) Ltd. v. Rajiv Trust, 1998 DGLS (soft)
378 : 1998 (3) SCC 723.
23. Rukhana Enterprises v. Ashoka Marketing Ltd., 2010 (1)
Bom.C.R. 765 (O.S.).
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24. Anand Nivas Private Ltd. v. Anandji Kalyanji 's Pedhi, 1963
DGLS (soft) 188 : AIR 1965 SC 414.
25. Veyindramuthu Pillai v. Maya Nandan [(1920) ILR 43 Mad
26. Gangubai Babiya Chaudhary v. Sitaram Bhalchandra
Sukhtankar, 1983 DGLS (soft) 168 : AIR 1983 SC 742.
27. Abdul Salam v. Sheikh Mehboob, 2006(3) Bom.C.R. 700
(N.B.) : 2006 (2) Mh.L.J. 277.
28. Keshrimal Jivji Shah v. Bank of Maharashtra , 2004(4)
Bom.C.R. 842 (O.S.) : 2004 (3) Mh.L.J. 893.
29. Dinkar Dada Mahadik v. Shrirang Dada Mahadik , 1992 B.C.I.
74 : 1992 Mh.L.J. 248.
15. Out of these authorities relied upon by learned counsel for the
parties, the learned Single Judge, after referring to the facts of those
authorities, found that so far as the decisions in Pramatha Nath Roy Vs.
Jagannath Kishore Lal Singh Deo4, Smt. Muktakesi Dawn and Ors. Vs.
Haripada Mazumdar and Anr.5, Nagubai Ammal and Ors. Vs. B. Shama
Rao & Ors.6, Jayaram Mudaliar Vs. Ayyaswami and Ors. 7 and Rajendra
Singh and Ors. Vs. Santa Singh and Ors. 8 are concerned, they are not
directly relevant to the controversy involved, as the issues raised therein
were not the one of grant of temporary injunction, but they pertain to only
the doctrine of lis pendens, as contained in Section 52 of the TP Act.
4 1913 (17) Cal.L.J. 427
5 AIR 1988 Calcutta 25
6 AIR 1956 SC 593
7 1972(2) SCC 200
8 1973(2) SCC 705
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16. Learned Single Judge found that the only Judgment which directly
deals with the question of grant of temporary injunction in cases where
plaintiff could have protection of Section 52 of the TP Act was, one of a
Division Bench of the Calcutta High Court in Smt. Muktakesi Dawn
(supra). Learned Single Judge reproduced para No.4 of the said
Judgment, which deals with the said question.
"4. Mr. Roy Chowdhury has secondly urged that an injunction
restraining the defendant from transferring the suit
property was absolutely unnecessary as no post-suit
transfer by the defendant can adversely affect the result of
the suit because of the provisions of section 52 of the T.P.
Act whereunder all such transfers cannot but abide by the
result of the suit. It is true that the doctrine of lis pendens
as enunciated in section 52 of the T.P. Act takes care of all
pendente lite transfers; but it may not always be good
enough to take fullest care of the plaintiff's interest vis-a-
vis such a transfer. The suit giving rise to the impugned
order is one for specific performance of sale in respect of
the suit property and if the defendant is not restrained from
selling the property to a third party and accordingly a third
party purchases the same bona fide for value without any
notice of the pending litigation and spends a huge sum for
the improvement thereof or for construction thereon, the
equity in his favour may intervene to persuade the Court to
decline, in the exercise of its discretion, the equitable relief
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of specific performance to the plaintiff at the trial and to
award damages only in favour of the plaintiff. It must be
noted that Rule 1 of Order 39 of the Code clearly provides
for interim injunction restraining the alienation or sale of
the suit property and if the doctrine of lis pendens as
enacted in section 52 of the T.P. Act was regarded to have
provided all the panacea against pendente lite transfers,
the Legislature would not have provided in Rule 1 for
interim injunction restraining the transfer of suit property.
Rule 1 of Order 39, in our view, clearly demonstrates that,
notwithstanding the Rule of lis pendens in section 52 of
the T.P. Act, there can be occasion for the grant of
injunction restraining pendente lite transfers in a fit and
proper case."
17. According to learned Single Judge, in this decision, the only reason
for holding that an injunction could still be issued, despite protection given
under Section 52 of TP Act, was found to be that, otherwise the
Legislature would not have provided under Order XXXIX, Rule 1 of CPC
for grant of an injunction restraining alienation or sale. While dealing with
the observations made in the said Judgment that, "Section 52 of the TP
Act was not a panacea and that in spite of rule of lis pendens, there could
be occasions for grant of temporary injunction", learned Single Judge, in
Para No.15 of its Judgment, observed as follows :-
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"15. There can be no doubt that there could always be cases
where rule of lis pendens may be inadequate to prevent
the mischief and a temporary injunction to prevent such
mischief would be warranted. This would imply that a
person claiming injunction in such a situation would
have to show that protection under section 52 of the TP
Act is not adequate. Merely because there is a power,
its exercise could not be sought as a matter of course;
or simply because its exercise is unlikely to hurt the
defendant; for, while granting injunction the Court must
see that plaintiff makes out a case of irreparable loss
and it is not for the defendant to prove that he would
suffer if an injunction is issued. After plaintiff proves
irreparable loss, comes the question of balance of
convenience or rather balance of inconvenience, when
the Court would enquire as to who would suffer greater
inconvenience and decide whether injunction ought to
be granted."
18. Then the learned Single Judge dealt with the Judgments in the
cases of Kishorsinh Ratansinh Jadeja Vs. Maruti Corporation and Ors. 9
and that of Sanjay Verma Vs. Manik Roy and Ors. 10 and found that while
dealing with the issue involved therein, as to whether the alienees
pendent lite would be necessary or proper parties to the suit, the Supreme
Court has held in the later Judgment of Sanjay Verma that if the alienation
is without the permission or leave of the Court, the transferees have no
9 2009(11) SCC 229
10 2006(13) SCC 608
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right of impleadment. Hence, plaintiff would be under no obligation to
chase the alienees or file proceedings against them. Alienees would not
even be able to raise an obstruction in execution proceedings. Thus, the
learned Single Judge held that protection afforded by Section 52 of TP Act
is sufficient and there is no need of granting temporary injunction on the
specious plea of avoiding multiplicity of proceedings.
19. The learned Single Judge then referred to the decisions of Supreme
Court in Silverline Forum (P) Ltd. (supra), Sarvinder Singh (supra), and
Anand Niwas Private Ltd. (supra) and held that, in view of Rule 102 of
Order XXI CPC, as transferee pendent lite cannot resist the execution, the
plaintiff need not worry at all about transfers pendent lite and so occasions
for invoking powers under Order XXXIX Rule 1 and 2 would arise only in
rare cases where plaintiff can demonstrate that Rule of Lis Pendens is
inadequate to protect his interests.
20. Learned Single Judge then also referred to the facts of the case in
Dhurandhar Prasad Singh Vs. Jai Prakash University and Ors. 11, which
dealt with the principles of lis pendens specified in Section 52 of the TP
Act as follows :-
11 2001(6) SCC 534
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"12. The principles specified in section 52 of the TP Act are
in accordance with equity, good conscience or justice
because they rest upon an equitable and just foundation
that it will be impossible to bring an action or suit to a
successful termination if alienations are permitted to
prevail. A transferee pendente lite is bound by the
decree just as much as he was a party to the suit. The
principle of lis pendens embodied in section 52 of the
TP Act being a principle of public policy, no question of
good faith or bona fide arises. The principle underlying
section 52 is that a litigating party is exempted from
taking notice of a title acquired during the pendency of
the litigation. The mere pendency of a suit does not
prevent one of the parties from dealing with the property
constituting the subject-matter of the suit. The section
only postulates a condition that the alienation will in no
manner affect the rights of the other party under any
decree which may be passed in the suit unless the
property was alienated with the permission of the
Court."
21. Thereafter, considering the other Judgments relied upon by learned
counsel for the parties, which are referred supra, learned Single Judge
dealt with the submission raised by learned counsel for the appellant
therein. It was to the effect that, for over 100 years, Section 52 of the TP
Act, as also Order XXXIX, Rule 1 of the CPC co-exist, and if for a century,
it has not been felt necessary to refuse injunctions to alienate on the
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ground that such claim is redundant in view of Section 52, there must be a
good reason and so such a restraint may not now be imposed. Learned
Single Judge felt that, "it was, undoubtedly, a point to ponder" and was
pleased to observe that, "in the face of judgments, which clearly hold that
such transferees pendente lite have no right to be impleaded or to even
obstruct the execution proceedings, wastage of judicial time in trial and
appellate Courts on an utter redundancy, which may only give some
mental solace to a plaintiff may have been tolerable in the past, but
cannot be allowed to continue now with tremendous pressure on judicial
time at all levels. Available time must be utilised judiciously by prioritizing
cases where there are real disputes demanding Judge's time. The
magnitude of the problem would become apparent from the fact that
almost 25 such appeals, claiming injunctions in disregard of section 52 of
the TP Act, have been lined up for adjudication today. Therefore, this
argument of letting things be as they are cannot be accepted."
22. Learned Single Judge has, then, in para No.30 of its Judgment,
proceeded to sum up the legal position as follows :-
"(a) Section 52 of the TP Act provides adequate protection to
the parties from transfers pendente lite and such
transferees are neither required to be impleaded nor can
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claim impleadment. They cannot even resist execution
proceedings.
(b) In Mumbai (as also elsewhere as and when amended
provisions are made applicable) plaintiffs could (or rather
ought to) have notices of their suits registered under
Section 18 of the Indian Registration Act, in view of the
amended provision of the TP Act and the Registration Act.
They cannot seek to restrain adversary by an injunction
by refusing to go in for registration of the lis.
(c)
Rule 1 of Order XXXIX of the Civil Procedure Code
enabling Court to grant temporary injunctions to restrain
transfers pendente lite is only an enabling provision,
recognizing the power in the Court to issue such
injunction and does not imply that because there is power,
it must be exercised. The provision could be invoked only
if protection provided by Section 52 of the TP Act is shown
to be inadequate.
(d) In the face of protection provided by Section 52 of the TP
Act, Courts should be cautious in examining the claims by
plaintiffs of irreparable loss if injunction to restrain
alienations is refused.
(e) In suits for specific performance/right to develop against
the recorded/rightful owners, Courts may consider if an
injunction would cause greater inconvenience to a rightful
owner by being deprived the right to deal with his property
for the sake of a claim which is yet to mature into right and
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which metamorphosis rests in the discretion of the Court
and is not certain.
(f) Courts may consider necessity of imposing suitable
conditions to protect plaintiffs' interests short of granting
injunction - like seeking undertaking that no equities would
be claimed, on account of sale/development of properties;
effecting sales only after putting transferees to notice that
their rights would be subject to suit etc.. Interests of
prospective purchasers would also be protected if
plaintiffs in such cases register the lis, though it may be
optional."
23. The learned Single Judge was, thus, pleased to confirm the trial
Court's order refusing the relief of temporary injunction against pendente
lite alienation.
Legal position set out in Pralhad Jawale (supra)
24. In the case of Pralhad Jawale, another learned Single Judge of this
Court had an occasion to deal with the same controversy, which was
raised in the above said decision of Kachhi Properties. In this case, there
were two appeals against the orders of the Trial Judge passed in two
different suits rejecting the applications of the appellants / plaintiffs for
temporary injunction, for restraining the respondent / defendant from
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creating third party interests in the suit property during pendency of the
suit. The learned counsel for the respondents, while supporting the said
orders, brought to the notice of the learned Single Judge that the
impugned orders were in tune with the decision of this Court in Kachhi
Properties. Thereupon, learned counsel for the appellants made detailed
submission as to how the decision in the case of Kachhi Properties, apart
from the fact that it does not lay down any proposition of law, it has also
no binding effect, as the same has been delivered by ignoring the binding
precedents and specific provisions of law. While advancing these
submissions, learned counsel for the appellant placed reliance on several
decisions of the Apex Court and this Court.
25. Considering that there are large number of matters in which this
issue is involved, learned Single Judge heard the submissions advanced
by learned counsel for the parties, especially, having regard to the fact
that the Special Leave Petition preferred against the Judgment in the case
of Kachhi Properties has been summarily dismissed on 1st October 2010
by the Hon'ble Supreme Court by a non-speaking order. In view thereof,
the learned Single Judge proceeded to interpret the legal position, as
summarized in Para No.30 in the Judgment of Kachhi Properties.
26. While dealing therewith, learned Single Judge referred to Section
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52 of the TP Act and also to the amendment made therein by Section 2 of
the Bombay Amendment Act XIV of 1939 and found that there is no
notification issued making applicable the substituted Section 52 to other
parts of the State of Maharashtra, except the city of Mumbai. Hence,
learned Single Judge held that, the substituted Section 52 can be
applicable only to the suits filed in relation to the immovable properties
situate in the city of Mumbai, which consists of two Revenue Districts. In
the circumstances, ratio, if any, laid down by Clause (b) of para No.30 of
the decision in Kachhi Properties will not have any application to the suits
relating to the properties situated outside the city of Mumbai, in the
absence of any notification issued under the Bombay Amendment Act XIV
of 1939.
27. It was further held by learned Single Judge that, the Legislature
has, while amending Section 52 of the TP Act, by the same Bombay Act
XIV of 1939, amended Section 18 of the Registration Act, by adding
clause (ee) providing that registration of notices of pending suits or
proceedings, as referred to in Section 52, is optional. In other words, the
Legislature did not make registration of the notice of lis pendens
compulsory. Hence, in respect of the property situate in city of Mumbai
also, even if notice of lis pendens is not registered, no other consequence
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is provided, except the fact that Section 52 will have no application to the
transaction effected during pendency of the suit and the proceedings in
respect of the property concerned. As far as the properties situated in
other parts in the State of Maharashtra are concerned, Section 52 does
not require registration of notice of lis pendens. The learned Single Judge,
therefore, found that the protection offered by Section 52 of TP Act is not
adequate to restrain transfers pendent lite.
28.
Thereafter, referring to the legal effect of Section 52 of the Act, as
illustrated in the decision of Sanjay Verma, which was considered in the
case of Kachhi Properties also, the learned Single Judge held, in para
No.14, of his Judgment, that Section 52 of the TP Act does not put any
restraint on a party to the suit from alienating the suit property, but only
provides that the alienation will in no manner affect the rights of any party
under any decree, which may be passed in the suit. Thus, such pendent
lite transfer, even if effected without permission of the Court, is neither
illegal nor void.
29. The reference was then made by learned Single Judge to the
decision of the Supreme Court in the case of T.G. Ashok Kumar Vs.
Govindammal and Anr.12, wherein the Apex Court has noted certain
12 2011(1) All.M.R. 462
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deficiencies in Section 52 and made several suggestions, including a
suggestion that registration of notice of lis pendens should be made
compulsory. By placing reliance on the observations of the Apex Court, in
para No.10 of the said Judgment, learned Single Judge held that this
decision of the Apex Court also does not hold that a transfer pendent lite
is either illegal or void.
30. The learned Single Judge then made reference to another decision
of the Division Bench of this Court in the case of Keshrimal Jivji Shah &
Anr. Vs. Bank of Maharashtra & Ors.13, in which, in paragraph No.26, the
Division Bench was pleased to lay down the law that transfer of
immovable property made in violation of an order of injunction issued by
the Court of law confers no right, title or interest in the transferee, as it is
no transfer in the eyes of law. The learned Single Judge, therefore, held
that the effect of the order of prohibitory injunction restraining alienation
during the pendency of the suit can be distinguished from the effect of
Section 52 of the TP Act, which does not attach any illegality to a
transaction, which had taken place pendent lite. The learned Single Judge
was, therefore, pleased to hold that the order of prohibitory injunction
grants protection, which is not available under Section 52 of the TP Act, in
the event of a transfer pending the suit. Moreover, the party who breaches
13 2004 (4) Bom..C.R. 842
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the order of temporary injunction may have to face drastic consequences
provided in Rules 2A and 11 of Order XXXIX of the Code, which
consequences are in the nature of an order of detention or striking out the
defence.
31. Then, while turning to the position of law, as laid down in clause (a)
of paragraph No.30 of the Judgment of Kachhi Properties (supra), that the
transferees pendent lite are neither required to be impleaded nor can
claim impleadment, the learned Single Judge was pleased to observe
that, "the attention of the learned Single Judge in the case of Kachhi
Properties was not invited to the decision of the Apex Court in the case of
Amit Kumar Shaw & Anr. Vs. Farida Khatoon & Anr.14, wherein the Apex
Court had an occasion to consider the effect of Section 52 of the TP Act in
the context of provisions of Rule 10 of Order I, Rule 10 of Order XXII and
Section 146 of the Code and it was held that an alienee pendent lite
would ordinarily be joined as party to enable him to protect his interest, as
he is bound by the decree passed in the suit. It was further held that,
under Rule 10 of Order XXII, the alienee is entitled to be impleaded in the
suit or other proceedings, where his predecessor-in-interest has been
made a party to the litigation." The learned Single Judge hence held that,
"in view of what is held by the Apex Court in the decision of Amit Kumar
14 AIR 2005 SC 2209
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Shaw (supra), the last part of the observation in clause (a) of paragraph
No.30 of Kachhi Properties Judgment, that such transferee pendent lite
cannot claim impleadment, cannot be read as a binding precedent."
32. The learned Single Judge then proceeded to decide whether
Section 52 of the TP Act provides adequate protection to the parties from
transfer pendent lite and was pleased to hold that the first part of clause
(a) of paragraph No.30 in Kachhi Properties decision, does not lay down
an absolute proposition of law that in every case, a plaintiff will be
adequately protected by Section 52 of the TP Act. The power to grant
relief of temporary injunction under Rules 1 and 2 of Order XXXIX of the
said Code is always discretionary. Therefore, in a given case, considering
the facts of the case, the Court can always come to the conclusion that
the plaintiff may get adequate protection by virtue of Section 52 of the TP
Act.
33. While dealing with the last part of clause (c) of paragraph No.30 in
the decision of Kachhi Properties, that Rule 1 of Order XXXIX of the Code
can be invoked only if protection provided by Section 52 of TP Act is
shown to be inadequate, the learned Single Judge found that the attention
of the Court in Kachhi Properties was not invited to the decision of the
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Apex Court in the case of Maharwal Khewaji Trust (Regd.), Faridkot Vs.
Baldev Dass15, wherein the Apex Court was pleased to find substance in
the submissions of learned counsel therein that, unless and until a case of
an irreparable loss is made out by the parties to the suit, the Court should
not permit the nature of property being changed, which also includes
alienation or transfer of the property, which may lead to loss or damage
being caused to the party, who may ultimately succeed and may further
lead to multiplicity of proceedings and hence the order of the High Court
and the Appellate Court, permitting the Respondent to change the nature
of property by putting up construction as also by permitting the alienation
of property on whatever may be the condition on which the same was
done, was set aside and the order of the Trial Court, restraining
respondent from alienating the suit property and putting up any
construction thereon, was restored.
34. Learned Single Judge then noted that in the subsequent decision in
the case of N. Srinivasa Vs. Kuttukaran Machine Tools Limited 16, the Apex
Court had quoted with approval what is held by the said Court in
paragraph No.10 in its earlier decision in the case of Maharwal Khewaji
Trust (supra) and upheld the order of the Trial Court directing the parties
15 AIR 2005 SC 104
16 (2009) 5 SCC 182
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to maintain status-quo in the matter of transferring, alienating or creating
any third party interest in the suit property.
35. Thus, looking to the law, as laid down by the Apex Court from time
to time in various authorities, the learned Single Judge was pleased to
summarize as follows :-
"24. ..................... Looking to the law laid down by the Apex
Court, it is apparent that the Apex Court has not
accepted the proposition that the principles incorporated
in section 52 of the said Act of 1882 offer adequate
protection to the parties to a substantive civil suit or other
proceedings. What is held by the Apex Court is that
normally during the pendency of a substantive suit where
rights to immovable properties are in dispute, status quo
cannot be allowed to be altered which includes creation
of third party interests. In fact, the Apex Court in the
case of Maharwal Khewaji Trust (supra) has observed
that a defendant is required to make out a case that
irreparable loss or damage will be caused to him during
the pendency of the suit, if he is not allowed to alter the
status quo. It is a well settled requirement of law that
while exercising the powers under Rules 1 and 2 of
Order XXXIX of the said Code, the Court has to consider
the issues of prima facie case, irreparable loss and
balance of convenience. In the circumstances, in view of
the aforesaid binding precedents of the Apex Court, the
observation in Clause (c) of paragraph No. 30 that the
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provision of Rule 1 of Order XXXIX could be invoked
only if protection provided by section 52 is shown to be
inadequate cannot bind this Court. Therefore, even the
observation in first part of Clause (a) that section 52
provides adequate protection to the parties from
transfers pendent lite cannot be read as a binding
precedent. In any event, in view of the law laid down by
the Apex Court, it cannot be said that provisions of
section 52 of the said Act of 1882 in any manner put
fetters on the powers of Civil Court conferred by Rules 1
and 2 of Order XXXIX of the said Code. As stated
earlier, in a given case, while exercising discretionary
powers, the Court can always come to the conclusion in
peculiar facts of the given case, that in view of provisions
of section 52 of the said Act of 1882, equitable relief of
temporary injunction need not be granted.
25. Where there is an apprehension shown that the
defendant may transfer or alienate the suit property,
where all three ingredients are satisfied, the applicability
of section 52 of the said Act of 1882 will not take away
power of the Court to grant temporary injunction. As
noted earlier, a transaction effected in breach of section
52 is not rendered illegal or void, but a transaction
entered into in breach of order of temporary injunction is
held as illegal by the Division Bench of this Court. Apart
from this, the breach of injunction can visit the offending
party with very serious consequences under Rule 2 A of
Order XXXIX and Rule 11 of Order XXXIX of the said
Code.
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26. Where there is an apprehension established that the
defendant may create third party rights and all three
ingredients are satisfied, if temporary injunction is not
granted, it may result into multiplicity of proceedings
inasmuch as the alienee pendente lite may apply for
impleadment, which will result in delay in proceedings of
the suit.
27. It must be observed that Clauses (d) to (f) of paragraph
No.30 of the said decision lay down mere guidelines. It
is obvious that the guidelines cannot affect the powers of
the Court, which are conferred by Rules 1 and 2 of Order
XXXIX of the said Code."
36. The learned Single Judge then laid down the conclusions drawn
from the aforesaid discussion as follows :-
"28 (i) as far as right of impleadment of transferre pendente lite is
concerned, what will bind this Court is what is held by the
Apex Court in the case of Amit Kumar Shaw & anr.
(supra);
(ii) in view of the binding precedents of the Apex Court, the
observation in Clause (c) of paragraph No.30 that the
provision of Rule 1 of Order XXXIX could be invoked only
if protection provided by section 52 is shown to be
inadequate cannot bind this Court. Even the observation
in first part of Clause (a) of paragraph No.30 that section
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52 provides adequate protection to the parties from
transfers pendent lite cannot be read as a binding
precedent. In any event, in view of the law laid down by
the Apex Court, it cannot be said that provisions of section
52 of the said Act of 1882 in any manner put fetters on the
powers of Civil Court conferred by Rules 1 and 2 of Order
XXXIX of the said Code. As stated earlier, in a given
case, while exercising discretionary powers, the Court can
always come to the conclusion in peculiar facts of the
given case, that in view of provisions of section 52 of the
said Act of 1882, equitable relief of temporary injunction
need not be granted."
Legal position discussed in present appeal
by learned Single Judge while making Reference
37. It may be recalled that in this Appeal, when the matter was argued
before the learned Single Judge [Coram : R.C. Chavan, J.] and learned
Single Judge remarked that in view of his Judgment in Kachhi Properties
(supra), the appellant/plaintiff had not made out a case that protection
under Section 52 of the TP Act was not adequate and the Appeal was
liable to be dismissed, learned counsel for the appellant brought to his
notice the Judgment in Pralhad Jawale (supra). Thereupon, the learned
Single Judge took "a fresh look, or, rather, a second fresh look", as stated
by him, to his decision in Kachhi Properties and the earlier decision in
Sharad Jamnadharji Mor (supra) and, in his elaborate and detailed order,
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endeavoured to justify how the legal position, as laid down by him in
Kachhi Properties in paragraph No.30, was just and correct. The learned
Single Judge again referred to various decisions earlier considered by him
in his Judgment in Kachhi Properties, including those decisions like
Keshrimal Jivji Shah and N. Srinivasa (supra), which were referred in
Pralhad Jawale's case, and arrived at the conclusion that what was
casually referred in N. Srinivasa as ratio of the Judgment in Maharwal
Khewaji Trust, were, in fact, the observations based on the facts and
circumstances of that case. Learned Single Judge then held that the law
of injunction is well settled and it is always for the party seeking injunction
to say that it will suffer irreparable loss, if an injunction is not issued.
38. Learned Single Judge then considered the provisions of Rule 98,
Rule 100 and Rule 102 of Order XXI of CPC in the light of the effect of
alienation pendent lite and found that plaintiff can derive no additional
advantage even if he has secured temporary injunction than the protection
given by Rule 98 of Order XXI of the Code. Learned Single Judge then
further held that one who is bound by the injunction is transferor and not
the transferee, who may not at all be a party to the suit. The learned
Single Judge then also relied upon the chart submitted by learned counsel
for the appellant analyzing the advantages and disadvantages of "lis
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pendens", under Section 52 of TP Act, and "order of temporary injunction",
under Rule 1 and 2 of Order XXXIX CPC, in various situations relating to
transfer of properties pending the suit and opined that, "the claims of full
protection or full advantage under Section 52 of the TP Act are illusory, as
Section 52 clearly makes transfers ineffective as against the parties to the
suit and nothing more". He further observed that, "at the cost of repetition,
it has to be stated that this vaccine of injunction neither prevents the
infection nor reduces the cost of treatment of such infection of obstruction.
It may only give an advantage to the legal profession in making the clients
go in for this illusory remedy. It is for those in the profession on either side
of the bar to examine and decide whether ethically they would like to be
parties to an expedition of making the clients seek an illusory protection at
substantial cost and expense in the trial as well as appellate Courts".
39. The learned Single Judge felt that, "this question assumes
importance in the light of the fact, which, in fact, should not require any
expert opinion that the Courts are over-burdened with work and,
therefore, cannot pay adequate attention to the genuine problems, which
litigants place before the Courts." After quoting extensively from the
research paper of Dr. Arun Mohan, a senior advocate from the Supreme
Court, learned Single Judge posed a question as to why Courts cannot
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think of avoiding mindless litigation, which serves no purpose, and, in his
view, applications for injunction to restrain creation of third party interest is
one such specie of this type of litigation. He further added, as was done in
Kachhi Properties, that there could always be cases, where litigant may
satisfy the Court of the necessity of seeking such injunction, by pointing
out that the protection provided by Section 52 of the TP Act is not
adequate.
40.
The learned Single Judge then also referred to 157th Report of the
Law Commission, wherein the Law Commission had considered various
provisions of Order XXI of the CPC, which recognize the principle of lis
pendens. Thus, after trying to, carefully and objectively, re-examine the
premises on which the Judgment in Kachhi Properties rested and not
finding any reason to alter the view taken therein, the learned Single
Judge was pleased to observe, in paragraph No.54, as follows :-
"54. ........................................ In fact, at the cost of
repetition, it has to be pointed out that the Hon'ble
Judge deciding Pralhad's case also agreed that Section
52 of the TP Act could provide protection to the plaintiff.
The observation of the Hon'ble Judge that the transfer
pendente lite is not held to be illegal or void is correct,
but since such transfers are ineffective against the
parties to the suit, that is all what the party needs. As
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far as observations of the Hon'ble Judge about the
judgment in Kachhi Properties having been given in
ignorance of the judgment of the Supreme Court in Amit
Kumar Shaw, it has humbly to be pointed out that Amit
Kumar Shaw does not hold that transferees pendente
lite have a right to be impleaded. It only lays down that
there could be circumstances where they ought to be
treated as proper parties. The observations based on
Maharwal Khewaji and N. Srinivasa have already been
elaborately discussed and they come in the context of
facts in those cases and cannot be read to mean that
the burden of proving irreparable loss need not be
discharged by the plaintiff or that initial burden to prove
that an injunction would not cause irreparable loss
would be on the defendant, who may not even be
before the Court when an ex-parte ad interim injunction
is granted. And, lest we forget, this would amount to
casting a negative burden."
41. Lastly, in paragraph No.55 of its Judgment, the learned Single
Judge came to the conclusion that, "ordinarily, with these observations,
the Appeal could have been dismissed as untenable and as resulting in
heaping upon the judicial system an unwarranted burden. However, since
conflicting judgments of the Courts of record tend to create confusion in
the trial Courts and result in uncertainty in law, and, since on this
question, there are at least three Hon'ble Judges, who seem to have
accepted that Section 52 of the TP Act affords adequate protection, which
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view has not found favour with the Hon'ble Judge deciding Pralhad, it may
be appropriate to have the matter referred to a larger Bench rather than
committing judicial indiscipline of taking a different view."
42. The learned Single Judge also felt that this is necessary since a
Division Bench of this Court in Vasant Tatoba Hargude & Ors. Vs. Dikkaya
Muttaya Pujari17, holds that Judgment later in point of time would be
binding in case there is a conflict in the Judgments of Courts of equal
strength. According to learned Judge, "this leads to a piquant situation, as
after the Judgment in Pralhad, another learned Judge of this Court,
deciding Rafique Barkatulla Khan Vs. Shahenshah18, which is later in
point of time, has followed the decision in Kachhi Properties".
43. In the light of all these facts, circumstances and legal position, the
learned Single Judge formulated the questions, reproduced in paragraph
No.1 above, for decision to a Division Bench and that is how the matter
came to be placed before us.
Our Discussion on Legal Position
44. Thus, after carefully considering the legal position, as spelt out in
17 AIR 1980 Bombay 341
18 2011 (3) Mah. L.R. 732
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these two decisions, we now deem it appropriate to resolve the conflicting
legal issues involved in this Reference, so as to answer the questions
referred for our decision.
Discussion on Question Nos.(I) to (IV)
45. As these questions are interlinked and deal with the efficacy of
Doctrine of Lis Pendens vis-a-vis the temporary injunction, they are
discussed together. As far as question No.5 is concerned, it is discussed
separately as in order to record the answer to question No.(V) referred
above, this Court has also to consider now the binding precedent of the
case law, in the event there is conflict between the decisions of the two
co-ordinate Benches.
46. In order to properly and effectually adjudicate this conflict of legal
opinion for the purpose of answering question Nos.(I) to (IV), in our view, it
would be necessary to consider the relevant provisions of Section 52 of
the TP Act; Section 18 (ee) of Registration Act, 1908, along with Rules 1,
2, 2A and 11 of Order XXXIX and Rule 98 and 100 of Order XXI of Code
of Civil Procedure, 1908, ("CPC" for short), coupled with legal position laid
down by the Apex Court and this Court in various of its decisions.
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47. Now coming first to the Doctrine of Lis Pendens, in order to
understand the exact scope, effect and legislative history of the said
Doctrine, as contained in Section 52 of TP Act, it will be interesting and
enlightening to refer to the 157th Law Commission Report, submitted in the
year 1998 and relied upon by learned senior counsel for the appellant. As
held by Law Commission in its 157th Report, the 'Doctrine of Lis Pendens'
is of ancient lineage. Originating, in the Civil Law, in the early ages, it has
been operative on the basis of the common law rule by virtue of which the
Judgment in a real action was regarded as over-reaching any alienation
made by the defendant during its pendency. In the course of time, the
doctrine was adopted by equity, being embodied in one of the Lord
Bacon's Ordinances "for the better and more regular administration of
justice in the Court of Chancery".
48. The oldest leading case on the Doctrine of Lis Pendens in India is
Faiyaz Husain Khan Vs. Munsiff Prag Narain19, in which the Privy Council
has referred to the leading case of English Court, namely, Bellamy Vs.
Sabine, wherein Turner, L.J. has explained the principle on which the
Doctrine of Lis Pendens rests. It was observed by the Privy Council that,
"the Doctrine of Lis Pendens, with which section 52 of the Act of 1882 is
concerned, is not as Turner L.J. observed in Bellamy v. Sabine "founded
19 29 ALL 339
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upon any of the peculiar tenets of a Court of Equity as to implied or
constructive notice. It is ........ a doctrine common to the Courts both of
law and of equity, and rests ....... upon this foundation, that it would plainly
be impossible that any action or suit could be brought to a successful
termination if alienations pendente lite were permitted to prevail." The
correct mode of stating the doctrine, as Cranworth L.C. observed in the
same case, is that "pendent lite neither party to the litigation can alienate
the property in dispute so as to affect his opponent."
49. In the cases of Jayaram Mudaliar and Rajendar Singh (supra), the
Hon'ble Supreme Court has quoted the definition of "Lis Pendens", as
given in the "Corpus Juris Secundum", as the expression of the principle
of the maxim "ut lite pendente nihil innovetur" (pending litigation nothing
new should be introduced). On that basis, the Hon'ble Supreme Court
defined "Lis Pendens" as follows :-
"Lis Pendens literally means a pending suit, and the
'Doctrine of Lis Pendens' has been defined as the
jurisdiction, power, or, control, which a court acquires over
property involved in a suit pending the continuance of the
action, and until final judgment therein."
50. As observed by the Hon'ble Supreme Court in Jayaram's case,
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"exposition of the doctrine indicate that the need for it arises from the very
nature of the jurisdiction of Courts and their control over the subject
matter of litigation, so that parties litigating before it may not remove any
part of the subject-matter outside the power of the Court to deal with it
and thus make the proceedings infructuous."
51. The object of Section 52 of the TP Act is thus not to defeat any just
and equitable claim, as observed by the Apex Court in the case of
Jayaram Mudliar (supra), but only to subject them to the authority of the
Court, which is dealing with the property, to which claims are put forward.
This principle applies not merely to actual transfer of rights, which are
subject matter of litigation, but to other dealings with it by any party to the
suit or proceedings, so as to affect the right of any other party thereto. If
one acquires property by way of transfer or otherwise pendent lite, he is
bound by the decree, which may be ultimately obtained in the proceedings
pending at the time of acquisition.
52. The Hon'ble Supreme Court in the case of Sarvinder Singh Vs.
Dalip Singh20 made this legal position further clear by observing that, "the
effect of the Doctrine of Lis Pendens is not to annul the transfer, but only
to render it subservient to the rights of the parties to the litigation. In other
20 1996 (6) SCALE 59
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words, the section 52 in fact, does not have the effect of wiping out a
transfer pendent lite altogether, but only subordinates it to the rights of
parties based on the decree to the suit. As between the parties to the
transfer, that is, the transferor and the transferee, transfer of the title is
perfectly valid, and operates to vest the title of the transferor in the
transferee. The words "so as to affect the rights of any other party thereto
under any decree or order which may be made therein" make it quite clear
that the transfer is good except to the extent that it might conflict with
rights decreed under the decree or order (vide T. Bhup Narain Singh v.
Nawab Singh, AIR 1957 Patna 729 at 731). A transfer or a dealing by a
party to a suit during the pendency of the suit or proceeding is not, ipso
facto void. It only cannot affect the rights of any other party to the suit
under any decree or order that may be made in the suit or proceeding."
[Emphasis Supplied]
53. This position is affirmed by the Supreme Court in the case of
Nagubai Vs. B. Sharma Rao (supra) by observing that, "the effect of
Section 52 of the TP Act is not to wipe out the sale made pendent lite but
to subordinate it to the rights based on the decree in the suit".
[Emphasis Supplied]
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54. While explaining the rationale behind Section 52 of the TP Act, the
Law Commission Report, in paragraph No.3.11, observed that;
"The rationale underlying section 52 is simple enough and easily
intelligible. If a party against whom relief is claimed were to be
allowed to transfer his right pendente lite, then the plaintiff would
be indirectly compelled to make the transferee a party to the
litigation. If the first transferee is himself free to transfer his own
right, then (on such a transfer), the plaintiff would be indirectly
compelled to make the second transferee a party. The process
could thus turn out to be endless, and so would be the hardship
that might be experienced by the plaintiff, unless some restriction
on the right of transfer is imposed by law.
It is precisely this object which section 52 has in view, when it
enacts that the transfer or other dealing shall not affect the rights
of any other party thereto under any decree or order to be
passed in the suit (except with the authority of the court). Thus,
the section, in effect, freezes proprietary rights as they stood at
the time when the suit was instituted. No subsequent
transactions can make a change in the situation as it existed
when the suit was commenced. The law throws its cloak of
protection around the party's rights, protecting those rights
against the onslaughts of subsequent transfers. It is to be
pointed out that the section does not totally invalidate the
transfer. It only prevents the transfer from affecting the right of
any other party. In other words, it introduces its own scheme of
priority, its own scale of superior and inferior rights,
consequential to transfer pendente lite. [Emphasis Supplied]
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The underlying principle is that a litigant who has obtained a
judgment is entitled, not to be deprived of it, without any solid
grounds. Interest rei publicae ut sit finis litium. (Public interest
requires finality in litigation)"
55. The Law Commission, therefore, felt that as the principle of lis
pendens embodied in Section 52 of the TP Act, being a principle of public
policy, no question of good faith or bona fides arises. Hence, the
transferee from one of the parties to the suit cannot assert or claim any
right, title or interest adverse to any of the rights and interests acquired by
another party under the decree in the suit. As a result, the interests of
transferee in such transactions are definitely affected. Even the bonafide
purchaser or the purchaser acting in good faith is not saved by the
existing provisions of Section 52 of the TP Act. Hence, the Law
Commission felt that there is definitely a need to strike a proper balance
between the public convenience which seeks to bar the transfer of title
during the pendency of suit or proceedings and interests of persons, who
buy the property in dispute in good faith and acting bona fide; especially,
when the Doctrine of Lis Pendens applies not merely to actual transfers of
rights, which are subject matter of litigation, but to other dealings with it by
any party to the suit or proceedings, so as to affect the right of any other
party thereto.
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56. The Law Commission, therefore, in its report, after referring to the
laws operating in the U.K. and other countries, recommended amendment
in Section 18 of the Indian Registration Act, 1908, on the lines of the
Bombay Amendment Act. In view thereof, the Rule of Lis Pendens now
applies only when a notice of pendency of the suit, in which any right to
involve property is directly and specifically in question, is registered under
Section 18(ee) of the Registration Act. The Law Commission, accordingly,
suggested corresponding amendment in Section 52 of the TP Act, on the
lines of Bombay Amendment Act XIV of 1939.
57. As far as State of Maharashtra is concerned, as observed by the Law
Commission in its Report, the provisions of Section 52 of the TP Act already
stand amended by Bombay Act XIV of 1939. They read as follows:
52. Transfer of property pending suit relating thereto.-
(1) During the pendency in any Court having authority
within the limits of India excluding the State of
Jammu and Kashmir established beyond such limits
by the Central Government, of any suit or
proceeding which is not collusive and in which any
right to immovable property is directly and
specifically in question, if a notice of the pendency
of such suit or proceeding is registered under
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section 18 of the Indian Registration Act, 1908, the
property after the notice is so registered 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.
(2) Every notice of pendency of a suit or proceeding
referred to in sub-section (1) shall contain the
following particulars, namely:-
(a) the name and address of the owner of
immovable property or other person whose
right to the immovable property is in question;
(b) the description of the immovable property the
right to which is in question;
(c) the Court in which the suit or proceeding is
pending;
(d) the nature and title of the suit or proceeding;
and
(e) the date on which the suit or proceeding was
instituted.
Explanation.- For the purposes of this section, the
pendency of a suit or proceeding shall be deemed to
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commence from the date of the presentation of the
plaint or the institution of the proceedings in a Court of
competent jurisdiction, and to continue until the suit or
proceeding has been disposed of by a final decree or
order and compete satisfaction or discharge of such
decree or order has been obtained, or has become
unobtainable by reason of the expiration of any period
of limitation prescribed for the execution thereof by
any law for the time being in force.
58. Section 2 of the Bombay Amendment Act XIV of 1939 provides that
the Amendment Act shall apply to properties situated wholly or partly in
the City of Bombay (now Mumbai) from the date of notification in the
official gazette (which has been issued) and provides for similar
notification extending applicability of the Amending Act to other areas to
be issued (which is not shown to have been issued). Thus the amended
provisions apply to properties in Mumbai and the unamended section
applies to rest of the State.
59. Simultaneously, Section 18 of the Registration Act, 1908 is also
amended by adding Clause (ee) to provide for registration of notices of
pending suits as follows :-
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Section 18 of the Registration Act, 1908
S.18 Document of which registration is optional
Any of the following documents may be registered
under this Act, namely:
(a) Instruments (other than instrument of gift and
wills) which purport or operate to create, declare,
assign, limit or extinguish, whether in present or
in future, any right, title or interest, whether
vested or contingent, of a value less than one
hundred rupees, to or in immovable property;
(b) Instruments acknowledging the receipt or
payment of any consideration of account of the
creation, declaration, assignment, limitation or
extinction of any such right, title or interest;
(c) Leases of immovable property for any term not
exceeding one year, and leases exempted under
Section 17;
(cc) Instruments transferring or assigning any decree
or order of a Court or any award when such
decree or order or award purports or operates to
create, declare, assign, limit or extinguish,
whether in present or in future any right title or
interest, whether vested or contingent, or a value
less than one hundred rupees, to or in
immovable property;
(d) Instruments (other than wills) which purport or
operate to create, declare, assign, limit or
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extinguish any right, title or interest to or in
movable property;
(e) Wills;
(ee) notices of pending suits or proceedings
referred to in Section 52 of the Transfer of
Property Act, 1882; and
(f) All other documents not required by Section 17
to be registered.
60. As the questions posed for our consideration deal essentially with
the inter-play between the Doctrine of Lis Pendens and Temporary
Injunction, in this context, now we may consider the provisions of Order
XXXIX Rule 1 and 2 of CPC, which can be reproduced as follows :-
"ORDER XXXIX
TEMPORARY INJUNCTIONS AND INTERLOCUTORY ORDERS
Temporary injunctions
1. Cases in which temporary injunction may be granted.-
Where in any suit it is proved by affidavit or otherwise-
(a) that any property in dispute in a suit is in danger of
being wasted, damaged or alienated by any party to
the suit, or wrongfully sold in execution of a decree,or
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(b) that the defendant threatens, or intends, to remove or
dispose of his property with a view to [defrauding] his
creditors,
[(c) that the defendant threatens to dispossess, the
plaintiff or otherwise cause injury to the plaintiff in
relation to any property in dispute in the suit,]
the Court may by order grant a temporary injunction to
restrain such act, or make such other order for the
purpose of staying and preventing the wasting, damaging,
alienation, sale, removal or disposition of the property [or
dispossession of the plaintiff, or otherwise causing injury
to the plaintiff in relation to any property in dispute in the
suit] as the Court thinks fit, until the disposal of the suit or
until further orders.
2. Injunction to restrain repetition or continuance of
breach.-
(1) In any suit for restraining the defendant from
committing a breach of contract or other injury of
any kind, whether compensation is claimed in the
suit or not, the plaintiff may, at any time after the
commencement of the suit, and either before or
after judgment, apply to the Court for a temporary
injunction to restrain the defendant from committing
the breach of contract or injury complained, of, or
any breach of contract or injury of a like kind arising
out of the same contract or relating to the same
property or right.
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(2) The Court may by order grant such injunction, on
such terms as to the duration of the injunction,
keeping an account, giving security, or otherwise as
the Court thinks fit."
61. In this context, it is also necessary to reproduce Rule 2A and 11 of
Order XXXIX CPC, which deals with the consequences of non-obedience
of Court's order of interim injunction.
"2A. Consequence
injunction-
ig of disobedience or breach of
(1) In the case of disobedience of any injunction
granted or other order made under rule 1 or rule 2
or breach of any of the terms on which the
injunction was granted or the order made, the Court
granting the injunction or making the order, or any
Court to which the suit or proceeding is transferred,
may order the property of the person guilty of such
disobedience or breach to be attached, and may
also order such person to be detained in the civil
prison for a term not exceeding three months,
unless in the meantime the Court directs his
release.
(2) No attachment made under this rule shall remain in
force for more than one year, at the end of which
time, if the disobedience or breach continues, the
property attached may be sold and out of the
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proceeds, the Court may award such compensation
as it thinks fit to the injured party and shall pay the
balance, if any, to the party entitled thereto."
Order XXXIX Rule 11 of Code of Civil Procedure, 1908
11.
Procedure on parties defying orders of Court and
committing breach of undertaking to the Court -
(1) Where the Court orders any party to a suit or
proceeding to do or not to do a thing during the
pendency of the suit or proceeding, or where any party
to a suit or proceeding gives any undertaking to the
Court to do or to refrain from doing a thing during the
pendency of the suit or proceeding, and such party
commits any default in respect of or contravenes such
order or commits a breach of such undertaking, the
Court may dismiss the suit or proceeding, if the default
or contravention or breach is committed by the plaintiff
or the applicant, or strikes out the defences, if the
default or contravention or breach is committed by the
defendant or the opponent.
(2) The Court may, on sufficient cause being shown
and on such terms and conditions, as it may deem fit to
impose, restore the suit or proceeding or may hear the
party in defence, as the case may be, if the party that
has been responsible for the default or contravention
or breach, as aforesaid, makes or amends for the
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default or contravention or breach to the satisfaction of
the Court:
Provided that, before passing any order under this sub-
rule, notice shall be given to the parties likely to be
affected by the order to be passed - See Mah. Govt.
Gaz., 15-9-1983, Pt. 4, Ka. p. 422 (1-10-1983)."
62. As the questions referred for our consideration also pertain to the
provisions of Order XXI Rule 98 and 100 CPC, it would be necessary to
reproduce those provisions also, which have been amended by the
Bombay Amendment Act, 1983.
Order XXI Rule 98 of Code of Civil Procedure, 1908
Orders after adjudication
98 (1) Upon the determination of the questions referred to in
rule 101, the Court shall, in accordance with such
determination and subject to the provisions of sub-rule
(2) -
(a) make an order allowing the application and
directing that the applicant be put into the
possession of the property or dismissing the
application; or
(b) pass such other order as, in the circumstances
of the case, it may deem fit.
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(2) Where, upon such determination, the Court is
satisfied that the resistance or obstruction was
occasioned without any just cause by the
judgment-debtor or by some other person at
his instigation or on his behalf, or by any
transferee where such transfer was made
during the pendency of the suit or execution
proceedings, it shall direct that the applicant be
put into possession of the property, and where
the applicant is still resisted or obstructed in
obtaining possession, the Court may also, at
the instance of the applicant, order the
judgment-debtor, or any person acting at his
instigation or on his behalf, to be detained in
the civil prison for a term, which may extend to
thirty days. The Court may also order the
person or persons whom it holds responsible
for such resistance or obstruction to pay jointly
or severally in addition to costs, reasonable
compensation to the decree-holder or the
purchaser, as the case may be, for the delay
and expenses caused to him in obtaining
possession. Any order made under this rule
shall have the same force and be subject to
the same conditions as to appeal or otherwise
as if it were a decree. (As substituted by the
Bombay Amendment of 1983).
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Rule 100 in Order XXI of CPC - Order to be passed
upon application complaining of dispossession -
Upon the determination of the questions referred to in
Rule 101, the Court shall, in accordance with such
determination -
(a) make an order allowing the application and
directing that the applicant be put into
possession of the property or dismissing the
application; or
(b) pass such other order, as in the circumstances
of the case, it may deem fit.
Proviso :-
Where it is determined that the application is made by
a person to whom the judgment-debtor has
transferred the property after the institution of the suit
in which the decree was passed, the Court shall
dismiss the application under sub-rule (a) above. (As
added by Bombay Amendment, while deleting Rule
102).
63. On the bare perusal of these provisions, thus, it can be said that
Section 52 of TP Act does not restrain the parties to the suit from entering
into alienation. It only makes such alienations subservient to the decision
of the suit or proceedings. Whereas, order of temporary injunction
restrains the parties from entering into any such alienation and if any party
does so, it provides for consequences of detention and attachment of the
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property. Rules 98 and 100 of Order XXI of the Code provide that
objection to execution raised by alienee pendent lite does not require any
inquiry and Court shall dismiss his application.
64. In our considered view, two things must be emphasized to underline
the difference and distinction between lis pendens, Section 52 of TP Act
and Order XXXIX CPC dealing with temporary injunction, which, with
great respect, has escaped the attention of the learned Single Judge
deciding Kachhi Properties (supra) and passing the referring order.
Section 52 of the TP Act is relied upon, but the language thereof needs to
be carefully perused and understood. The title of Section 52 itself is
indicative of the intent of the Legislature, which is "Transfer of property
pending suit relating thereto", The section itself speaks of pendency in any
Court having authority within the limits of India, excluding the State of
Jammu and Kashmir, of any suit or proceeding which is not collusive and
in which any right to immovable property is directly and specifically in
question. The section states that during the pendency of such suit, 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.
However, the crucial words are "under any decree or order, which may be
made therein". Such transfer cannot be except under the authority of the
Court and on such terms, as it may impose. An Explanation has been
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added so as to explain what is meant by pendency of the suit or
proceeding. We have already explained the ambit and scope of this
provision. However, it must be understood that it operates to cover
transfer of property pending suit. It deals with both, transfer or otherwise
dealing with, and if that affects the rights of any party to the suit and is
made, except under the authority of the Court and on such terms, as it
may impose, then, that alone is impermissible.
65.
Order XXXIX of CPC provides for grant of temporary injunctions and
interlocutory orders. Order XXXIX Rule 1 provides for cases in which
temporary injunction may be granted and Order XXXIX Rule 2 provides
for injunction to restrain repetition or continuance of breach. The injunction
under Order XXXIX Rule 2 can be granted for restraining the defendant
from committing a breach of contract or other injury of any kind, whether
compensation is claimed in the suit or not, the plaintiff, in such a suit, at
any time after the commencement of the suit, and either before or after
judgment, apply to the Court for a temporary injunction to restrain the
defendant from committing the breach of contract or injury complained of,
or any breach of contract or injury of a like kind arising out of the same
contract or relating to the same property or right. Order XXXIX Rule 2(2)
empowers the Court to impose terms.
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66. The sweep of this injunction order and the power to grant it must be
seen in the back-drop of the cases in which Order XXXIX Rule 1 permits
grant of temporary injunction. It, firstly, enables the Court to grant an
injunction in any suit. Secondly, Order XXXIX Rule 1(a) enables the grant
of temporary injunction in the event any property in dispute in a suit is in
danger of being wasted, damaged or alienated by any party to the suit or
wrongfully sold in execution of a decree. This is an injunction which can
be claimed by any party to the suit and can be granted, provided the
conditions for grant of the same are fulfilled. Therefore, it is erroneous to
assume that the temporary injunction is always and necessarily granted at
the instance of the plaintiff and to prevent the property in dispute in the
suit from being wasted, damaged or alienated or wrongfully sold in
execution of a decree. Clause (b) of Order XXXIX Rule 1 CPC enables
grant of temporary injunction, where the defendant to the suit threatens or
intends to remove or dispose of his property with a view to defrauding his
creditors and clause (c) enables grant of injunction when the defendant
threatens to dispossess the plaintiff or otherwise cause injury to the
plaintiff in relation to any property in dispute in the suit.
67. Thus, a temporary injunction may be granted so as to preserve the
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property in dispute in a suit and to prevent its wastage, damage or
alienation by any party to the suit or its wrongful sale in execution of a
decree. It can also be granted to restrain the defendant from
dispossessing the plaintiff or otherwise causing injury to the plaintiff in
relation to any property in dispute in the suit. The words "any property" are
of wide amplitude. The injunction can also be granted when the defendant
threatens or intends to remove or dispose of his property with a view to
defrauding his creditors. In comparison to Section 52 of the TP Act, which
deals with any suit or proceeding in which any right to immovable property
is directly and specifically in question, the immovable property in regard to
which the right is directly and specifically in question cannot be transferred
or otherwise dealt with by any party to the suit or proceeding so as to
affect the right of any other party thereto; Order XXXIX Rule 1 speaks of
"any suit" and by sub-clauses (a) to (c), takes care of a situation where
any property in dispute in a suit is in danger of being wasted, damaged or
alienated by any party to the suit or wrongfully sold in execution of a
decree. Therefore, it is not restricted to only a right in immovable property.
Secondly, it takes care of a situation where defendant to the suit threatens
or intends to remove or dispose of his property with a view to defrauding
his creditors. Lastly and importantly, it takes care of a threat of the
defendant to dispossess the plaintiff or otherwise cause injury to the
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plaintiff in relation to any property in dispute in the suit. Therefore, it is not
a situation only of transfer of immovable property, which is dealt with in
Rule 1 of Order XXXIX CPC. It is also not controlled by the nature of the
suit or proceeding. The same also is not restricted to transfer or otherwise
dealing with the immovable property, if that is in dispute in the suit, but
prevents its wastage, damage or alienation, as above.
68. Further, we have found from the language of Order XXXIX Rule 1
CPC itself that the Court may, by order, grant temporary injunction to
restrain such act or make such other order for the purpose of staying and
preventing the wasting, damaging, alienation, sale, removal or disposition
of the property or otherwise causing injury to the plaintiff in relation to any
property in dispute in the suit. Pertinently, the order granting a temporary
injunction to restrain the above acts or such other order for the purpose of
staying and preventing the wasting, damaging, etc. can be passed and its
duration is until the disposition of the suit or until further orders.
[ Emphasis Supplied ].
69. With greatest respect to the learned Single Judge making the
Reference and the parties before us, what we have noted is that Order
XXXIX CPC not only deals with temporary injunction and which is the field
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covered by the Order XXXIX Rule 1 and Order XXXIX Rule 2, but
provides for the consequences of disobedience or breach of injunction in
Order XXXIX Rule 2A. By Order XXXIX Rule 3 and 3A, the entire
procedure to be followed for granting injunction is set out. By Order XXXIX
Rule 4, the Court has been empowered on an application made to it by
any party dissatisfied with the injunction order to apply for its discharge,
variation or setting aside. The further consequence of obtaining an
injunction by knowingly making a false or misleading statement in relation
to a material particular is set out in the first Proviso to the said Rule. By
second Proviso to Order XXXIX Rule 4, the Court is empowered to
discharge, vary or set aside the order of injunction, if that is necessitated
by a change in the circumstances or on reaching the satisfaction that the
order has caused undue hardship to the party. It has to be done after
giving an opportunity of being heard to the party applying for its vacation,
discharge or setting aside, the same has caused undue hardship to that
party.
70. We have, therefore, very wide sweep of the powers of granting
injunction, while granting it and after granting it. Importantly, Order XXXIX
Rule 5 clarifies that injunction to Corporation binds its officers, whose
personal action it seeks to restrain.
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71. By Order XXXIX Rule 6, the Court is empowered to make
interlocutory orders and which are not of injunction, but permitting sale of
any movable property, being the subject-matter of such suit or attached
before Judgment in such suit; if that is subject to speedy and natural
decay, or if that is required for any other just and sufficient cause, which
makes it desirable to have it sold at once. Order XXXIX Rule 7 permits,
detention, preservation, inspection etc. of subject-matter of the suit and
interlocutory order can be made in that behalf. How such orders have to
be made is provided by Rule 8. By Order XXXIX Rule 9, party may be put
in immediate possession of land, the subject-matter of the suit. Therefore,
where land of the nature and categories specified in Order XXXIX Rule 9
is the subject-matter of a suit, then, in the eventuality set out and specified
in Order XXXIX Rule 9, such property can be immediately put in
possession of any other party to the suit claiming to have an interest
therein. By Order XXXIX Rule 10, an interlocutory order in a suit for
money or some other thing capable of delivery can be granted on an
admission. The details with regard to such admission are also set out in
Order XXXIX Rule 10, coupled with a discretion in the Court to make an
interlocutory order or deposit of the money in Court or delivery of the thing
capable of delivery, if that thing capable of delivery is admitted to be held
in trust or that it belongs or is due to another party.
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72. The power to grant temporary injunction in a mandatory form also
flows from the same provision, namely, Order XXXIX Rule 1 CPC. A
temporary injunction in a mandatory form is distinct and separate from a
mandatory injunction. The object of such a temporary injunction is to
preserve status-quo and to prevent irretrievable injury and grant of the
same is not a matter of quest.
73. By the Bombay High Court Amendment, 1983, the consequences
for parties defying orders of Court or of committing breach of undertaking
to the Court are spelt out. Once we appreciate the wide ranging powers
conferred and vesting in a Court so as to enable it to render justice for
passing an effective and binding order, then, it is futile to urge that
presence of Section 52 of the TP Act, which takes care only of one
situation, at best, acts as a fetter or places an embargo on the power of
the Court to grant injunction. We hope that this much is enough to explain
the fallacy in the understanding of these distinct legal provisions.
74. We, at once, clarify that the exercise of the discretionary power, as
noted above, is depending upon a satisfaction to be reached by the Court
and which is also defined in Order XXXIX Rule 1 and 2 CPC. The exercise
of discretionary power in favour of the party, therefore, necessarily
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involves the satisfaction of the Court to be reached by applying germane
and relevant tests and on a consideration of the materials placed before it.
The exercise of discretion must depend upon the facts and circumstances
in each case. There are defined guiding principles for granting injunction
in the matter of discretion and the Court is not bound to grant such relief
merely because it is lawful to do so. The exercise of discretion must be
sound and reasonable and not arbitrary. The equitable principles have a
defined place in this exercise of discretion. Therefore, it is further futile
and unnecessary to discuss whether pendency of application seeking
temporary injunction and interlocutory orders slows down the speed and
pace in delivery of justice. Once the power to grant injunction is
discretionary and sound and not uncontrolled, unrestricted or unbridled,
then, there is no reason to be unnecessarily apprehensive. There are in-
built checks and safeguards in the system and in the law itself to prevent
any abuse of these discretionary powers by the parties and an arbitrary,
erroneous and illegal exercise of the discretion by the Court.
75. As held in the case of Vareed Jacob Vs. Sosamma Geevarghese
and Ors.21, "the source of power of the court to grant interim relief is under
Section 94. However, exercise of that power can only be done if the
circumstances of the case fall under the rules. Therefore, when a matter
21 AIR 2004 SC 3992
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comes before the court, the Court has to examine the facts of each case and
ascertain whether the ingredients of Section 94 read with the rules in an
order are satisfied and accordingly grant an appropriate relief. It is only in
cases where circumstances do not fall under any of the rules prescribed that
the Court can invoke its inherent power under Section 151 CPC. Accordingly,
the courts have to grant relief of attachment before judgment, if the
circumstances fall under O. 38 CPC. Similarly, Courts will grant temporary
injunction if the case satisfies Order 39. So depending on the circumstances
falling in the prescribed rules, the power of the Court to grant specified reliefs
would vary. Therefore, each set of rules prescribed are distinct and different
from the other and therefore, one cannot equate rules of temporary
injunction with rules of attachment before judgment although all are broadly
termed as interlocutory orders."
76. Thus, having considered all these legal provisions, now we may
turn once again to the questions of law referred to us. The first four
questions of law necessarily refer to the issue, 'as to whether the
protection given under Section 52 of the TP Act to the party against the
transfer pendent lite is sufficient or equivalent to the protection given to
the party against such transfer under Order XXXIX Rule 1 and 2 CPC'.
77. For deciding these questions, essentially, one has to again go to the
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provisions of Section 52 of the TP Act, which are reproduced earlier and
which are considered once again, in detail, in the latest Judgment of the
Hon'ble Supreme Court in the case of Thomson Press (India) Limited Vs.
Nanak Builders and Investors Private Limited and Ors., (2013) 5 SCC
397. In this case, the Apex Court has, in para No.26 of its Judgment, after
reproducing Section 52 of the TP Act, was pleased to observe that,
"it is well settled that the Doctrine of Lis Pendens is a
doctrine based on the ground that it is necessary for
the administration of justice that the decision of a
court in a suit should be binding not only on the
litigating parties but also on those who derive title
pendent lite. The provision of this section does not
indeed annul the conveyance or the transfer
otherwise, but to render it subservient to the rights of
the parties to a litigation."
78. The Apex Court then relied upon the decision of the Privy Council in
Gouri Dutt Maharaj Vs. Sk. Sukur Mohammed, AIR 1948 PC 147,
wherein, while discussing the principle of lis pendens, it was observed
that, "the broad purpose of Section 52 is to maintain the status-quo
unaffected by the act of any party to the litigation pending its determination."
79. The Apex Court also considered in this decision the observations
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made by it in the case of Kedar Nath Lal Vs. Ganesh Ram, AIR 1970 SC
1717, which referred the earlier decision in Samarendra Nath Sinha Vs.
Krishna Kumar Nag, AIR 1967 SC 1440, that the purchaser pendent lite
under this doctrine is bound by the result of the litigation on the principle that
since the result must bind the party to it so must it bind the person deriving
his right, title and interest from or through him.
80. In para No.29 of its Judgment, the Apex Court also reaffirmed the
legal position relating to Section 52 of the TP Act, as considered by it in
Rajender Singh (supra), in which the Supreme Court, with approval of the
principles laid down in Jayaram Mudaliar (supra), reiterated that;
"15. The doctrine of lis pendens was intended to strike at
attempts by parties to a litigation to circumvent the
jurisdiction of a court, in which a dispute on rights or
interests in immovable property is pending, by private
dealings which may remove the subject-matter of
litigation from the ambit of the court's power to decide a
pending dispute or frustrate its decree. Alienees
acquiring any immovable property during a litigation over
it are held to be bound, by an application of the doctrine,
by the decree passed in the suit even though they may
not have been impleaded in it. The whole object of the
doctrine of lis pendens is to subject parties to the
litigation as well as others, who seek to acquire rights in
immovable property, which are the subject-matter of a
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litigation, to the power and jurisdiction of the court so as
to prevent the object of a pending action from being
defeated."
81. In his separate supplementing Judgment, the Hon'ble Justice T.S.
Thakur (as His Lordship was then) dealt with the effect of the sale pendent
lite in view of the principles of lis pendens and was pleased to refer to
earlier Judgment of Supreme Court in Nagubai Ammal (supra), wherein
while interpreting Section 52 of the TP Act, it was observed that, "a
transfer pendent lite is not illegal ipso jure but remains subservient to the
pending litigation". In para 25 of the said Judgment of Nagubai Ammal
(supra), it was held as follows :-
"25. ....... the words 'so as to affect the rights of any other
party thereto under any decree or order which may be
made therein', make it clear that the transfer is good
except to the extent that it might conflict with rights
decreed under the decree or order. It is in this view that
transfers pendent lite have been held to be valid and
operative as between the parties thereto."
82. The Hon'ble Supreme Court then also relied upon its decision in
Vinod Seth Vs. Devinder Bajaj, AIR 1956 SC 593, wherein also it was
affirmed that, Section 52 of the TP Act does not render transfers effected
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during the pendency of the suit void, but only render such transfers
subservient to the rights, as may be eventually determined by the Court.
83. The Hon'ble Supreme Court then thought it appropriate to refer to
paragraph No.42 of the Judgment in Vinod Seth's case (supra), which
reads as follows :-
"42. It is well settled that the doctrine of lis pendens does not
annul the conveyance by a party to the suit, but only
renders it subservient to the rights of the other parties to
the litigation. Section 52 will not therefore render a
transaction relating to the suit property during the
pendency of the suit void but render the transfer
inoperative insofar as the other parties to the suit.
Transfer of any right title or interest in the suit property or
the consequential acquisition of any right, title or interest,
during the pendency of the suit will be subject to the
decision in the suit." [Emphasis Supplied]
84. Then Hon'ble Supreme Court observed that, the decision in the
case of A. Nawab John Vs. V.N. Subramaniyam, (2012) 7 SCC 738, is a
recent reminder of the principle of law enunciated in the earlier decisions,
as in that case the Court summed up the legal position thus :-
"18. ...... '12. ....... The mere pendency of a suit does not
prevent one of the parties from dealing with the
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property constituting the subject-matter of the suit. The
section only postulates a condition that the alienation
will in no manner affect the rights of the other party
under any decree which may be passed in the suit
unless the property was alienated with the permission
of the court." [Emphasis Supplied]
85. The Hon'ble Supreme Court then was pleased to finally refer to its
decision in Jayaram Mudaliar (supra), in which the observations made on
the Doctrine of Lis Pendens in Commentaries on the Laws of Scotland, by
Bell, are extracted with approval, in paragraph No.43, as follows :-
"43. ..... Bell, in his Commentaries on the Laws of Scotland
said, that it was grounded on the maxim : Pendente lite
nibil innovandum. He observed :
'It is a general rule which seems to have been
recognized in all regular systems of jurisprudence, that
during the pendence of an action, of which the object is
to vest the property or obtain the possession of real
estate, a purchaser shall be held to take that estate as
it stands in the person of the seller, and to be bound by
the claims which shall ultimately be pronounced'."
86. Thus, after taking recourse to all its earlier decisions, in paragraph
No.53, the Hon'ble Supreme Court has summed up its conclusion as
follows :-
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"53. There is, therefore, little room for any doubt that the
transfer of the suit property pendent lite is not void ab
initio and that the purchaser of any such property takes
the bargain subject to the rights of the plaintiff in the
pending suit. (Although the above decisions do not deal
with a fact situation where the sale deed is executed in
breach of an injunction issued by a competent court, we
do not see any reason why the breach of any such
injunction should render the transfer whether by way of
an absolute sale or otherwise ineffective. The party
committing the breach may doubtless incur the liability
to be punished for the breach committed by it but the
sale by itself may remain valid as between the parties
to the transaction subject only to any directions which
the competent court may issue in the suit against the
vendor)."
87. The effect and impact in legal terms on the alienation or transfer of
an immovable property in the teeth of an order of injunction is distinct and
that a prohibitory or preventive order passed by a competent court
restrains the party to it from indulging in the above acts. If that is
breached, the consequences are that the transaction may not be void but
it is illegal. We are concerned in this reference with the issue of presence
of Section 52 of TP Act, 1882; is it enough protection and whether an
order of injunction would still be required or should be passed to take care
of the apprehension of the plaintiff ?
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88. Thus, from the above-said emphatic pronouncement of the Apex
Court, it is crystal clear that the principle of lis pendens contained in
Section 52 of the TP Act, neither restrains the party from alienating the
property, nor it has the effect of rendering such transaction pendent lite
ipso facto or ipso jure illegal or void. It also does not make such
transaction void ab-initio, nor the transfer ineffective. It only makes the
alienation subservient to the decision of the Court. As it does not
contemplate the Court passing any order of restraining the party to the
suit from alienating the said property, the party, thus, alienating the
property during pendency of the litigation does not incur any
consequences for breach of any order of the Court.
89. Thus, the object of Section 52 of the TP Act is merely to make the
alienation subservient to the decision of the Court and not to restrain the
parties from entering into it or making it void, ab-initio or illegal or making
the party subject to consequences for breach of order of the Court. Thus,
the effect of the Doctrine of Lis Pendens is not to annul the conveyance,
but only to render it subservient to the rights of the parties to the litigation.
As held by the Apex Court in the case of Sanjay Verma (supra), "the
principle underlying Section 52 of TP Act is that a litigating party is
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exempted from taking notice of a title acquired during the pendency of the
litigation. The mere pendency of a suit does not prevent one of the parties
from dealing with the property constituting the subject matter of the suit.
The section only postulates a condition that the alienation will in no
manner affect the rights of the other party under any decree, which may
be passed in a suit."
90. Thus, as far as Section 52 of TP Act is concerned, it is apparent that
it does not put any restraint on a party to the suit from alienating suit
property, nor does it render the alienation illegal or void.
91. In this respect, we can also make reference to the decision of the
Apex Court in the case of T.G. Ashok Kumar Vs. Govindammal and Anr.,
2011 (1) ALL M.R. 462, wherein Apex Court has again reiterated that
Section 52 of TP Act does not declare a pendent lite transfer by a party to
the suit as void or illegal and the only effect of such transfer is that the
transferee is bound by the decision in the pending litigation.
92. As against it, the object of Order XXXIX Rule 1 and 2 CPC is to
totally restrain a party, pending the litigation, from creating any third party
interests in the suit property and ensuring that the suit property remains in
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the same condition as it was on the date of filing of the suit. Thus, the
object of Order XXXIX Rule 1 and 2 CPC, under which the order of
injunction is passed, is totally different from that of Section 52 of the TP
Act. This provision restrains the party from entering into any sort of
transaction or alienation, whatever may be the circumstances or whatever
may be the exigencies.
93. If we consider the effect of breach of such order of interim
injunction, then, the consequences are laid down in Rule 2A and Rule 11
CPC. As stated in Rule 2A of Order XXXIX CPC, in the case of
disobedience of any injunction granted or other order made under Rule 1
or 2 or even in the case of breach of any of the terms on which the
injunction was granted or order made, the Court may order the property of
the person guilty of such disobedience or breach to be attached and may
also order such person to be detained in civil prison. Thus, the
consequences of disobedience or breach of injunction order entails
attachment and sale of the property of the concerned person or even
detention of such person in civil prison. Rule 11 of Order XXXIX of
Bombay Amendment also lays down that in case of breach of any order
passed by the Court, suit of the party committing the breach is liable to be
dismissed or if the party committing such breach is defendant, then his
defence is liable to be struck off.
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94. The provisions of the Contempt of Courts Act, 1971 also lay down
the consequences for committing the breach of any order passed by the
Court, including the order of interim injunction, and such consequences
again provide for punishment for contempt of Court.
95. Thus, it is not only the purport, import and object of Order XXXIX
Rule 1 and 2 of CPC of granting the relief of interim injunction restraining
the other party from creating third party interest in the property pending
the suit, is different than that of the Principle of Lis Pendens contained in
Section 52 of TP Act, but even the consequences for the breach of such
order are different, as it may entail into punishment, which consequences
are not at all contemplated under Section 52 of TP Act.
96. Moreover, as against the transfer made pendent lite, the transfer
made in violation of injunction order is held to be no transfer in the eyes of
the law. The legal position in this respect is well settled that, if any
property is alienated in the face of order of interim injunction passed by
the Court, such alienation becomes ipso facto illegal and not at all binding
on the parties thereto. It confers no right, title or interest on the transferee.
This legal position is very well illustrated in the Division Bench Judgment
of this Court in the case of Keshrimal Jivji Shah (supra), to which one of
us [Coram : S.C. Dharmadhikari, J.] was a Member.
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97. The question raised before the Division Bench in this case was
exactly 'as to whether the transfer of an immovable property in
contravention of a prohibitory or injunction order of a Court is illegal or
void?' It was argued by learned counsel for the petitioner that there is no
provision either in CPC or elsewhere which makes transfer of immovable
property done in violation of an injunction order or a prohibitory order, null
and void. It was contended that the law visits parties acting in violation of
orders of Court with serious penalties, in view of the provisions of Order
XXXIX Rules 1, 2, 2A of CPC and Bombay Amendment i.e. Rule 11, but it
does not render the transaction itself null and void or of no legal effect. It
was urged that, once the law does not make such provision, then it is not
permissible for the Courts to hold that transfer in favour of petitioners is
void. It was further contended by learned counsel for the petitioners in the
said case that, the right, title and interest in the immovable property does
not come to an end merely because a restraint is placed by Court of law
on its alienation or disposal and if this is the legal position, then, there was
no impediment in respondent No.2 transferring the said property in favour
of petitioners.
98. As against it, learned counsel for the respondent therein has
submitted that, a transaction, which is entered into either to defeat the
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order of Court of law or to violate it, confers no right, title or interest in
favour of the transferee. If parties are allowed to claim an advantage from
a transaction, which is in violation of an order of Court of law, then, drastic
consequences will follow. Entire respect for Rule of law and administration
of justice is gone, if, despite prohibitory orders, immovable properties are
alienated or disposed of with impunity. Such an approach is contrary to
public policy.
99.
While dealing with these rival contentions, this Court felt it
necessary to refer to the decision of the Hon'ble Supreme Court in the
case of Sujit Singh & Ors. Vs. Harbans Singh & Ors., 1995 (6) SCC 50,
wherein the Hon'ble Supreme Court was pleased to observe as follows :-
"23. .................. In defiance of the restraint order, the
alienation / assignment was made. If we were to let it go
as such, it would defeat the ends of justice and the
prevalent public policy. When the Court intends a
particular state of affairs to exist while it is in seisin of a
lis, that state of affairs is not only required to be
maintained, but it is presumed to exist till the Court
orders otherwise. The Court, in these circumstances has
the duty, as also the right to treat the alienation /
assignment as having not taken place at all for its
purposes. Once that is so, Pritam Singh and his
assignees, respondents herein, cannot claim to be
impleaded as parties on the basis of assignment.
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Therefore, the assignees-respondents could not have
been impleaded by the trial Court as parties to the suit,
in disobedience of its orders. The principles of lis
pendens are altogether on a different footing. We do not
propose to examine their involvement presently. All that
is emphasized is that the assignees in the present facts
and circumstances had no cause to be impleaded as
parties to the suit. ................"
100. The Division Bench in this case also referred to the decision in
Ramchandra Ganpat Shinde Vs. State of Maharashtra, 1994 (1)
Bom.C.R. 460, wherein the Hon'ble Supreme Court, in paragraph Nos.12
and 13, has observed as under :-
"12. Mr. Justice Arthur J. Venderbilt in his "The Change of Law
Reforms 1955" at pages 4 and 5, stated that :
............ It is the courts and not in the legislature that our
citizens primarily feel the keen, the cutting edge of the
law. If they have respect for the work of their courts, their
respect for law will survive the short comings of every
other branch of the Government; but if they lost their
respect for the work of the courts, their respect for the law
and order will vanish with it to the great detriment of
society."
13. Respect for law is one of the cardinal principles for an
effective operation of the Constitution, law and the popular
Government. The faith of the people is the source and
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succor to invigorate justice intertwined with the efficacy of
law. The principle of justice is ingrained in our conscience
and though ours is a nascent democracy which has now
taken deep roots in our ethos of adjudication - be it
judicial, quasi judicial or administrative as hallmark, the
faith of the people in the efficacy of judicial process would
be disillusioned, if the parties are permitted to abuse its
process and allowed to go scot free. It is but the primary
duty and highest responsibility of the Court to correct such
orders at the earliest and restore the confidence of the
litigant public, in the purity of fountain of justice; remove
stains on the efficacy of judicial adjudication and respect
for rule of law, lest people would lose faith in the courts
and take recourse to extra constitutional remedies which
is a death-knell to the rule of law."
101. The Division Bench then also made reference to the case of Satya
Brata Biswal Vs. Kalyan Kumar Kisku & Ors., AIR 1994 SC 1837, in which,
while outlining the importance of rule of law, administration of justice and the
role of courts, the Supreme Court has observed :
"29. Apart from the fact whether A.K. Ghosh had a legal
authority to sub-lease or not, it was not open to him to
grant a sub-lease in violation of the order. It is no use
contending as Mr. Chidambaram, learned counsel for
the respondents, does, that there was a bar to such a
sub-lease under the terms of the status qua order. It has
the effect of violating the preservation of status of the
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property. This will all the more be so when this was
done without the leave of the Court to disturb the state
of things as they then stood. It would amount to
violation of the order. The principle contained in the
maxim : Aactus Curiae Neminem Gravatt" has no
application at all to the facts of this case when in
violation of status qua order a sub-tenancy has been
created. Equally, the contention that even a trespasser
cannot be evicted without recourse to law is without
merit, because the state of affairs in relation to property
as on 15-9-1988 is what the Court is concerned with.
Such an order be circumvented by parties with impunity
and expect the Court to confer its blessings. It does not
matter that to the contempt proceedings Somani
Builders was not a party. It cannot gain an advantage in
derogation of the rights of the parties, who were
litigating originally. If the right of sub-tenancy is
recognized, how is status qua as of 15-9-1988
maintained? Hence, the grant of sub-lease contrary to
the order of status-quo is clearly illegal. All actions
including the grant of sub-lease are clearly illegal."
102. The Division Bench then expressed its inability to accept the
contention of petitioners' counsel that, the decision of the Supreme Court
in Sujit Singh's case (supra) should be read as restricted to proceedings
under Order XXII Rule 10 CPC and the same cannot be extended to
defiance of injunction order issued under Order XXXIX Rule 1 CPC. It was
held in paragraph No.26 that;
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"26. ................. Once the issue is placed on the pedestal of
public policy and the very faith of litigants in Rule of law
and administration of justice, then it is not possible to
make the distinction or bifurcation suggested by Shri.
Naphade. It would mean that consequences of nullifying
such transaction not being provided by the statute, it
would not lose its legal efficacy even if it is in utter
disregard to or in violation of or breach of prohibitory
order or order of injunction issued by a Court of law. It
would mean that parties can breach and violate Court
orders openly and with impunity and neither they nor the
beneficiaries suffer any consequences. It is time that we
recognize the principle that transfer of immovable
property in violation of an order of injunction or prohibition
issued by Court of law, confers no right, title or interest in
the transferee, as it is no transfer at all. The transferee
cannot be allowed to reap advantage or benefit from
such transfer merely because he is not party to the
proceedings in which order of injunction or other
prohibitory direction or restraint came to be issued. It is
enough that the transferor is a party and the order was in
force. These two conditions being satisfied, the transfer
must not be upheld. If this course is not adopted, then the
tendency to flout orders of courts which is increasing day
by day can never be curbed. The Court exercises its
powers on the foundation of respect and regard for its
authority by litigating public. People would loose faith and
respect completely if the Court does not curb and prevent
this tendency. The note of caution of the Supreme Court
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must be consistently at the back of everybody's mind.
Therefore, Shri. Naphade is not right in the distinction
which he is trying to make." [Emphasis Supplied]
103. The Division Bench was also pleased to reject the contention of the
learned counsel for the petitioners therein that, the order of injunction will
bind only the transferor and not the world at large, as ownership rights are
neither taken away nor restricted in any manner by order of injunction or
other preventing directions. It was held that, "the order of injunction
reaches and touches a party to the lis. Hence, when during pendency of
an order of injunction, immovable property, which is subject-matter of
restraint or injunction, is transferred, there is no choice but to declare the
transaction as illegal." [Emphasis Supplied].
104. It was further held that, "an order issuing interlocutory injunction is
issued with a view to preserve and protect the status-quo during the
pendency of litigation. The true effect of such an order is, therefore,
preservation of status-quo prevailing as on the date of issuance of the
order. Any alteration in the status qua as prevailing and directed to be
maintained by the Court of law is not permissible except with leave or
sanction of Court. It is well settled that if courts are not to honour and
implement their own orders and encourage party litigants, be they public
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authorities, to invent methods of their own to short circuit and give a go by
to the obligations and liabilities incurred by them under orders of courts,
the Rule of law will become casualty in the process - a consequence to
be jealously avoided? by all and at any rate by the highest courts in the
State."
105. The Court in this case was also pleased to hold that, "the Court
cannot allow a party to get away with violation of its prohibitory orders and
uphold the transactions contrary to and in violation of its directions on the
spacious plea that only way in which the Court can regulate such acts is
to visit the guilty party with penalties. It is time that the Courts reach the
transaction itself and put an end to purported rights created thereby.
Failing which, it will become possible for the parties to retain fruits and
benefits of such acts by suffering penalties. It is well settled that no
person can take advantage of his own wrong."
106. Thus, this Court came to the categorical conclusion that a
prohibitory order has the effect of placing restriction on powers of
disposition and respondent No.2 therein could not have illegally created a
sub-lease in favour of the petitioners. In unflinching words, it was held
that, "the transfer despite the order of injunction had no legal effect and
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such transfer was illegal and cannot be recognized. Consequently,
transferee gets no valid title nor does he acquire any rights or interests in
the immovable property." [Emphasis Supplied].
107. In the case of Satya Brata Biswal Vs. Kalyan Kumar Kisku & Ors.
(supra) relied upon by learned senior counsel for the appellant in this
appeal also, the Supreme Court was also pleased to hold that, the
granting of sub-lease contrary to the order of status-quo, which was done
in the teeth of such order, is clearly illegal and all actions taken, including
the grant of sub-lease, are clearly illegal. It was held that, such an order of
status-quo, as passed by the Court, cannot be circumvented by parties
with impunity and expect the Court to confer its blessings. It does not
matter that to the contempt proceedings, sub-lessee was not a party. It
cannot gain an advantage in derogation to the rights of the parties, who
were litigating originally. [Emphasis Supplied]
108. Thus, it is apparent that, both, "the Principle of Lis Pendens" and
"the order of temporary injunction", have not only different objects but the
breaches thereof have also different consequences. The transaction made
in breach of injunction order is apparently and patently illegal and binds no
party, even the purchaser. Whereas, transaction effected during lis
pendens does not attract the taint of illegality. It remains legal, valid and
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binding on the parties, subject to the outcome of the litigation. It also does
not entail the consequences of penalty or contempt, as there is no order
passed by the Court in Doctrine of Lis Pendens.
109. As a result, from the perspective of litigating parties also, the
"Doctrine of Lis Pendens" and "Order of Temporary Injunction" have
different effects. The apprehension of action under Section 2A Rule 11 of
CPC of attachment of property and the punishment of contempt of courts
act as deterrent to the party against whom order of injunction is running.
This deterrent has the further effect of avoiding multiplicity of transactions
and procedings. The Doctrine of Lis Pendens does / cannot create such
deterrent effect as it does not entail drastic consequence of attachment of
property, detention in civil prison, suit being dismissed or defence being
struck off, as the case may be, or punishment for contempt of court.
110. Alienation of property lis pendens is merely in the nature of a
gamble, which party may willingly enter into without any apprehension of
above-said consequences as such party has always the chance of
winning the case and thereby retaining the property. The only
consequence the party may face, is of loosing that property and nothing
more. In that respect also, the transaction will always remain binding
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between transferor and purchaser. Therefore, alienee can very much
receive purchase-price from transferor as such transaction does not suffer
from any taint of illegality. As against it, the order of temporary injunction
can and does avoid multiplicity and complications by deterring the party at
the threshold itself from entering into transactions, which effect Doctrine of
Lis Pendens does not have.
111. The learned Single Judge in the case of Prakash Jawale (supra)
has considered in detail some of these Judgments, which make
appropriate distinction between the principle of lis pendens and the order
of interim injunction in the context of the object and effect of both the
provisions on the pending litigation and alienation. Learned Single Judge
in Prakash Jawale's case has also considered the above-said Judgment
of Keshrimal Jivji Shah, rendered in the case of transfer pendent lite, in
the teeth of order of interim injunction as illegal and not binding and
thereafter held that, "transfer of immovable property in violation of order of
injunction confers no right, title and interest on the transferee, as it is no
transfer in the eyes of the law and hence it is no transaction at all. It has
to be distinguished from the effect of Section 52 of the TP Act, which does
not attach any illegality to a transaction which had taken place pendent
lite. Thus, the order of prohibitory injunction grants protection, which is not
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available under Section 52 of the TP Act, in the event of a transfer
pending the suit." In our own analysis of legal position, we, therefore, find
the conclusions drawn by the learned Single Judge in Prakash Jawale's
case to be based on sound reasoning and in tune with Apex Court's
decisions.
112. The learned Single Judge in Prakash Jawale's case has then also
rightly considered the effect of the registration of lis pendens on the
transaction. Admittedly, at present the provisions of the Amendment Act
XIV of 1939 apply only to the properties situate wholly or partly in the city
of Mumbai. The substituted Section 52 of the TP Act, which deals with the
registration of the notice of pendency of the suit, can apply to the other
areas only when the notification to that effect is issued under Section (2)
of the said Act. It is, admittedly, not in dispute even till date that there is no
such notification issued making applicable the substituted Section 52 of
the TP Act to other parts of the State of Maharashtra. Furthermore, even
the substituted Section 52 of the TP Act, would apply even in respect of
immovable properties in the city of Mumbai, only in a case where the
notice of pendency of suit or proceedings is registered under the Indian
Registration Act. Though by the provision of the said Amendment Act XIV
of 1939, in Section 18 of the Registration Act, clause (ee) has been
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added, it provides that registration of notices of pending suits or
proceedings referred to in Section 52 of the TP Act is only optional.
113. Thus, the Legislature, has not made registration of notice of lis
pendens compulsory under the Registration Act. Non-registration of a
document governed by Section 18 of the Registration Act does not visit a
person with any adverse consequences, as registration of the document is
itself optional. Therefore, conjoint reading of the provisions of Section 52
of the TP Act and Section 18 of the Registration Act, makes it clear that
even in respect of the property situated in the city of Mumbai, if the notice
of lis pendens is not registered, as it is optional, no other consequence
follows, except the fact that Section 52 of the TP Act will have no
application to the transaction effected during the pendency of the suit and
the proceedings in respect of the properties concerned. Thus, even the
amendments made in Section 52 of the TP Act and in Section 18 of the
Registration Act also do not make the transaction illegal as such,
whereas, the transaction made in breach of the injunction order is illegal
and not binding.
114. Thus, if we once again have the comparative analysis of the
provisions of Section 52 of the TP Act and that of Order XXXIX Rule 1 and
2 of CPC, it is clear that the protection granted by the order of interim
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injunction is much more and far effective than that of the protection
granted under Section 52 of the TP Act.
115. Once it is held to be so, it automatically follows that even if plaintiff
registers the notice of his suit under section 18(ee) of the Registration Act,
it will not secure the plaintiff more than what an injunction could secure.
Even accepting that transferees pendent lite, in view of such registration,
are deemed to have notice of such pendency of the lis and could not claim
to be transferees without notices, such transfers do not have the effect of
rendering the transaction illegal, which consequence is entailed in case of
transaction, if it is in breach of injunction order. Therefore, it has to be held
that registration of the suit or proceedings, though preferable and
desirable, cannot be a substitute to the order of interim injunction, in terms
of extending protection to the parties.
116. This brings us to consider the proposition of law laid down by the
learned Single Judge in question No.1 while making reference that, "the
transferees pendent lite are not required to be or entitled as of right to be
impleaded as party to the suit and cannot resist execution proceedings in
view of the provisions of Order XXIX Rule 100 of CPC, as amended by
this Court."
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117. In our view, with greatest respect, this proposition of law, as laid
down by the learned Single Judge, while framing question No.1 for
reference, itself is not based on correct legal position, in view of the
various decision of the Apex Court.
118. The decision directly on this point is of Amit Kumar Shaw Vs. Farida
Khatoon, (2005) 11 SCC 403, wherein the Apex Court had an occasion to
consider the effect of Section 52 of TP Act in the context of the provisions
of Rule 10 of Order I; Rule 10 of Order XXII; and Section 146 of the Code
and it was held as under :-
"16. The doctrine of lis pendens applies only where the lis is
pending before a court. Further pending the suit, the
transferee is not entitled as of right to be made a party to
the suit, though the court has a discretion to make him a
party. But the transferee pendent lite can be added as a
proper party if his interest in the subject-matter of the suit
is substantial and not just peripheral. A transferee pendent
lite to the extent he has acquired interest from the
defendant is vitally interested in the litigation, where the
transfer is of the entire interest of the defendant; the latter
having no more interest in the property may not properly
defend the suit. He may collude with the plaintiff. Hence,
though the plaintiff is under no obligation to make a lis
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pendens transferee a party under Order 22 Rule 10 an
alienee pendent lite may be joined as party. As already
noticed, the court has discretion in the matter which must
be judicially exercised and an alienee would ordinarily be
joined as a party to enable him to protect his interests.
[Emphasis Supplied]
The court further held that, "a transferee pendent lite of an
interest in immovable property is a representative-in-
interest of the party from whom he has acquired that
interest. He is entitled to be impleaded in the suit or other
proceedings where his predecessor-in-interest is made a
party to the litigation; he is entitled to be heard in the
matter on the merits of the case." [Emphasis Supplied]
119. One can, in this respect, also place reliance upon the observations
of the Apex Court in the case of Khemchand Shankar Choudhari Vs.
Vishnu Hari Patil, (1983) 1 SCC 18. In paragraph No.6, it was held as
under :
"6. Section 52 of the Transfer of Property Act no doubt lays
down that a transferee pendent lite of an interest in an
immovable property, which is the subject-matter of a
suit from any of the parties to the suit, will be bound
insofar as that interest is concerned by the proceedings
in the suit. Such a transferee is a representative in
interest of the party from whom he has acquired that
interest. Rule 10 of Order 22 of the Code of Civil
Procedure clearly recognises the right of a transferee to
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be impleaded as a party to the proceedings and to be
heard before any order is made. It may be that if he
does not apply to be impleaded, he may suffer by
default on account of any order passed in the
proceedings. But if he applies to be impleaded as a
party and to be heard, he has got to be so impleaded
and heard. He can also prefer an appeal against an
order made in the said proceedings but with the leave
of the appellate court where he is not already brought
on record." [Emphasis Supplied]
120. In the latest decision of the Apex Court in the case of Thomson
Press (India) Ltd. (supra), once again the Apex Court had an occasion to
deal with legal position. In this case, despite having notice and knowledge
of injunction order passed by the Court prohibiting transaction or
alienation of suit property pending suit, the suit property was purchased
by the appellant. Appellant then filed an application for impleadment under
Order I Rule 10 CPC in a suit for specific performance of contract. The
Division Bench of Delhi High Court rejected the said application, affirming
the order of the learned Single Judge. Hence, the appellant approached
the Supreme Court. The exact question, which fell for consideration in this
decision, therefore, before the Apex Court was, as to whether the
appellant, who is the transferor pendent lite, having notice and knowledge
about pendency of the suit for specific performance and order of
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injunction, can be impleaded as party under Order I Rule 10 CPC on the
basis of Sale Deed executed in his favour by the defendant?
121. While answering this question, the Hon'ble Supreme Court referred
to its number of earlier decisions in the cases of Anil Kumar Singh Vs.
Shivnath Mishra, (1995) 3 SCC 147; Surjit Singh Vs. Harbans Singh,
(1995) 6 SCC 15; Savitri Devi Vs. District Judge, Gorakhpur, (1999) 2
SCC 577; Vijay Pratap Vs. Sambhu Saran Sinha, (1996) 10 SCC 53;
Kasturi Vs. Iyyamperumal, (2005) 6 SCC 733; and Vidur Impex and
Traders (P) Ltd. Vs. Tosh Apartments (P) Ltd., (2012) 8 SCC 384, and
allowed appellant's application for impleadment as party-defendant.
122. In his separate Supplementing Judgment, Hon'ble Justice T.S.
Thakur (as His Lordship then was), after referring to the effect of Lis
Pendens on the transfers, was pleased to conclude that, "though a
transferee pendent lite cannot seek as of right addition as a party-
defendant to the suit under Order I Rule 10 CPC, he can be added as a
party under Order XXII Rule 10 CPC, so that he should not suffer
prejudice on account of the transferor loosing interest in the litigation post
transfer." Relying upon above-said observations in the Judgments of Amit
Kumar Shaw and Khemchand Shankar Chowdhary, His Lordship was
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pleased to hold that even though appellant in the case was not a bonafide
purchaser and is, therefore, not protected against specific performance of
the contract, as he has purchased the entire estate that formed the
subject-matter of the suit, he is entitled to be added as a party-defendant
to the suit under the provisions of Order XXII Rule 10 CPC. [Emphasis
Supplied]
123. In our considered, opinion, this Judgment of the Apex Court, thus,
clinches the legal issue. Hence, the proposition laid down by learned
Single Judge while formulating question No.1 that, "transferees pendent
lite are not required to be or entitled as of right to be impleaded as parties
to the suit", cannot be called as laying down correct legal position.
124. Of-course, it need not be stated that, whether, either under Order I
Rule 10 CPC or Order XXII Rule 10 CPC, transferee pendent lite can be
or should be made a party to the suit or not, always depends on the facts
and circumstances of the particular case. Especially, depending upon the
interest, which he has acquired in the suit property, that is to say, whether
the interest he has acquired is substantial or just peripheral. If the
transferee pendent lite acquires interest in the entire estate that forms
subject matter of the disputed property, then he becomes vitally interested
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in the litigation. The transferor of the property, having no more interest in
the property, in that situation, may not properly defend the suit and may
collude with the plaintiff. Therefore, such transferee can apply to become
a party to the suit and as held by the Hon'ble Supreme Court in above-
said decision of Thomson Press (India) Ltd. (supra), he is entitled to be
joined as a party to the suit to enable him to protect his interest.
125. In view of this legal position, there cannot be any blanket
proposition that transferees pendent lite are not required to be or entitled
to be, as of right, impleaded as parties to the suit. Everything depends on
the interest in the property, which such transferee has acquired during
pendency of the litigation. If the interest is substantial, then, as held by the
Apex Court, he becomes entitled to be impleaded as party to the suit. In
that situation, he may also become entitled to resist the execution
proceedings. His claim cannot be thrown out merely because Order XXI
Rule 100 CPC, as amended by this Court, states that the obstruction
raised by transferee pendent lite need not be considered and his
application deserves to be straightway dismissed. Therefore, further
proposition of law laid down by learned Single Judge in formulating
question No.1 that Rule 100 leaves no discretion to the executing Court
and provides that application by transferee pendent lite shall be rejected;
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cannot be treated as laying down correct legal position. It would always be
a question of fact situation in such cases; to be determined not only by
having a mere look at the documents by which the property is transferred
and by looking at the date of filing of the suit, as observed by learned
Single Judge, but also at the other aspects as to whether such transferee
has got substantial interest in the property or not.
126. Thus, it has to be held that the two legal propositions on the basis of
which the learned Single Judge has formulated question No.(I) as to
whether Section 52 of TP Act provides adequate protection to the parties
from transfers pendent lite, are not laying down correct legal position.
Hence, it has to be held that question No.(I) is not based on correct legal
premises.
127. Hence, in that way, not formulated correctly.
128. Now, without referring to those two legal premises, if we once again
come to the question whether Section 52 of TP Act grants adequate
protection so as to refuse the relief of temporary injunction or in the
alternate, to call upon the party seeking order of temporary injunction to
show that provisions of Section 52 of TP Act do not afford adequate
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protection, as stated in question No.(III) referred for our reference, then it
has to be stated that, in addition to the protection referred above, which
order of temporary injunction affords, the necessary advantage of order of
temporary injunction is also that, it avoids multiplicity of proceedings and
brings an end to further complications, which advantage Doctrine of Lis
Pendens does not have. The order of injunction stops the party at the
threshold itself from creating third party interests in the suit property. In
absence thereof, not only the party to the suit but even alienee may also
keep on creating further third party interest, thereby defeating plaintiff's
rights endlessly. Moreover, if such alienee changes the nature of the suit
property by carrying out construction thereon and if he or others claiming
through him asserts that he/they are bonafide purchasers for value and
without notice, his interests in the suit property and the equities created in
his favour, may defeat the plaintiff's equitable right to get the specific
performance of the suit property and thereby frustrate the very object of
the suit itself. It is, therefore, always desirable to take fullest care of the
plaintiff's interest and right in the suit property vis-a-vis such transfer by
granting relief of temporary injunction, as Section 52 conspicuously lags
behind in granting such protection or making improvement therein by
spending huge amount.
129. In our considered opinion, the learned Single Judge in the case of
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Prakash Jawale (supra) has considered in its proper perspective all these
aspects and after referring to the provisions of Order XXXIX Rule 1 and 2
of the CPC, the learned Single Judge has rightly held in Prakash Jawale's
case that, the power to grant relief of temporary injunction under these
provisions is always discretionary and, therefore, in a given case,
considering the facts of the case, the Court can always come to the
conclusion that the plaintiff may get adequate protection by virtue of
Section 52 of TP Act. But calling upon the plaintiff in each and every case
to show that the protection granted under Section 52 of the TP Act is not
adequate and thereafter only to pass the order of injunction, will be totally
against the settled principles under which the order of interim injunction is
passed. It is a well settled requirement of law that while exercising the
powers under Rules 1 and 2 of Order XXXIX CPC, the Court has to
consider the issues of prima facie case; of irreparable loss and balance of
convenience, where there is an apprehension shown that the defendant
may transfer or alienate the suit property. Normally, if all these three
ingredients are satisfied, the applicability of Section 52 of the TP Act
cannot take away power of the Court to grant temporary injunction.
130. The provisions of Section 52 of the TP Act cannot act as a further
hurdle in the plaintiffs seeking the relief of injunction. While exercising
discretionary powers, the Court can always come to a conclusion, in the
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particular facts of the given case, that in view of the provisions of Section
52 of the TP Act, equitable relief of temporary injunction need not be
granted. However, calling upon the plaintiff in each and every case to
further satisfy the Court in addition to the three settled principles of prima
facie case; balance of convenience and irreparable loss to show that the
provisions of Section 52 of the TP Act do not offer an adequate protection
is to read something, in the Legislation or the settled law, which is not
there. However, we hasten to add that in appropriate cases and
depending upon host of other relevant factors, including the conduct of the
litigant, the Court may not exercise its discretion and refuse the interim
injunction. While refusing it, the Court may take into account the presence
of Section 52 of the TP Act, 1882 and, inter alia, indicate that to be one of
the reason to refuse the equitable relief. Thus, there may not be need for
the party to establish and prove that presence of Section 52 of TP Act
does not afford him sufficient protection but in refusing the interim
injunction, the order of the Court may note its presence on the statute
book and refuse to assist the litigant. Everything must depend on the facts
and circumstances of each case and no general rule can be laid down.
131. As to the fourth question formulated by learned Single Judge,
'whether it would be appropriate, in cases of claims for temporary
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injunction to restrain transfers pendent lite, to consider imposition of
conditions short of granting injunction, which should protect the plaintiffs'
interest, like, seeking an undertaking that no equities would be claimed on
account of sale or development of properties; effecting sales only after
putting transferees to notice that their rights would be subject to the
pending suit, or requiring the party to inform the Court promptly of creation
of every such interest', in our considered opinion, the Court can always, in
appropriate cases, impose such conditions. Those conditions, at times,
may be in addition to or as part of the order of temporary injunction.
However, mere imposition of such conditions cannot dispense with the
effective relief of temporary injunction. As a matter of fact, the imposition
of condition, like, seeking an undertaking that no equities would be
claimed on account of sale or development of properties, is merely in the
nature of the principle of lis pendens. Similarly, directing conditions of
effecting a sale only after putting transferees to notice or requiring the
party to inform the Court promptly of creation of every such interest, are in
the same nature which are covered under the Doctrine of Lis Pendens.
Merely requiring the other party to inform the Court promptly of creation of
every such interest, cannot solve the plaintiff's difficulty in getting the
property, because, then, such party would have to be impleaded in the
suit. Even calling upon the party to effect sale only after putting
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transferees to notice that their right would be subject to the pending suit,
is again in the nature of the notice contemplated by registration of the lis
pendens under amended Section 52 of TP Act. Once we have held that
the consequences of alienation effected in breach of lis pendens and in
breach of injunction order, are totally different and principle of lis pendens
in Section 52 of TP Act do not offer adequate protection on that score,
then, imposition of these additional conditions in place of granting relief of
temporary injunction, cannot be an answer or substitute for not granting of
the order of temporary injunction. Once again, it is open to the Court to
mould the relief. It may not necessarily make an order of injunction but
can clarify, in the event it finds that presently or right now there is no need
to pass a restraint order, that before alienating or transferring the property,
the party should seek prior leave of the Court or make any alienation or
transfer conditional upon further orders of the Court in the lis.
132. This brings us to the last aspect on which learned Single Judge in
this case has considered, the issue relating to the overburdening of the
Courts with work. According to learned Single Judge, "this question
assumes importance in the light of the fact, which, in fact, should not
require any expert opinion, that the Courts are over-burdened with work
and, therefore, cannot pay adequate attention to genuine problems, which
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litigants place before the Courts." After referring to the research paper of
Dr. Arun Mohan, a Senior Advocate from the Supreme Court, according to
which, today, 90% of our Court time and resources (Civil Courts) are
consumed in attending to uncalled for litigation, which is created and
carried on only because our current procedures and practices hold out an
incentive for the wrong-doer, the learned Single Judge opined that, "in
such a scenario, the Court should consider avoiding mindless litigation,
which serves no purpose" and in his view, "applications for injunction to
restrain creation of third party interest is one such specie of this type of
litigation, which could conveniently be avoided."
133. With greatest respect, though there cannot be and need not be any
dispute about the proposition that the Courts should avoid mindless
litigation, which serves no purpose, considering the constraints on the
time and resources of the Courts, in our view, the Court cannot call the
litigation as 'mindless', merely because there may be some other
provisions also in which some relief can be granted. Once it is held that
the very object, scope and effect of the provisions of Section 52 of the TP
Act and Rules 1 and 2 of Order XXXIX of CPC is different and they
operate in two different fields and in such situation, Section 52 of TP Act
does not afford adequate and effective protection, as is afforded by Order
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XXXIX Rule 1 and 2 CPC, then the litigation in the nature of applications
for temporary injunction, cannot be called as 'mindless litigation'. It is not
simplicitor a case that, "the order of injunction only gives an advantage to
the legal profession in making the clients go in for this illusory remedy and
it is for those in the profession on either side of Bar, to examine and
decide whether ethically they would like to be parties to an expedition of
making the clients seek an illusory protection at substantial cost and
expense in the trial as well as Appellate Courts", as observed by the
learned Single Judge. But, it is a matter of making available the
protection, which is given to a party under the statutory law, without
putting any further fetters on such protection, even assuming that such
provision may be for advantage of legal profession. Moreover, the
protection afforded by the order of injunction can in no way be called as
illusory, but it is definitely an effective protection, as the aforesaid
discussion reveals. It saves the plaintiff from multiplicity of proceedings
and also avoids his right to get property being defeated by purchaser
creating equities in his favour with investment by making improvement in
suit property or by carrying on construction thereon. The relief of interim
injunction being discretionary one and such discretion is to be exercised
under well settled principles of law, as enunciated and crystalized from
time to time by the various decisions of the Apex Court and this Court, it is
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also not a case that merely because there is a power, it has to be
exercised. This power is to be exercised on the well-grounded legal
principles and it is to be exercised because it affords effective protection
to the plaintiff than the one afforded under Section 52 of the TP Act.
134. Though we will not and cannot deny the reality that our Courts are
over-burdened with work, however, that fact will never justify our refusing
to act according to law. The law confers some statutory rights on the
parties, like making application for temporary injunction restraining other
party from creating third party interest in the property during pendency of
suit. Grant of such injunction after proper exercise of the discretion by the
Court affords certain and better protection to the party against multiplicity
of proceedings, against the alienee claiming equity and thereby defeating
the plaintiff's rights to possession etc. The Court, therefore, cannot refuse
to exercise its discretion in the grant of refusal of such protection on the
specious plea that it is over-burdened and reject such applications
simplicitor or put additional fetters on plaintiff's right, which are not
contemplated by law. The Courts are meant to uphold the rule of law by
implementing the statutory provisions of law; by exercising the discretion
vested in it by law. Refusal to do so cannot be an answer to get rid from
over-burdening of work. The solution for the overburdening of Court may
be found somewhere else, but definitely and certainly not in refusing to
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exercise the discretion vested in the Court by law or putting additional
fetters on that discretion, which the Legislature in its wisdom not deemed
it fit to impose, even when both these provisions of "lis pendens" and
"temporary injunction" co-exist together for years and even when in its
157th Report devoted specifically to the "Doctrine of Lis Pendens", the Law
Commission has made certain suggestions for amendment to Section 52
of TP Act, but not on this score. It is pertinent to note that in its Report, the
Law Commission has also considered the provisions of temporary
injunction in the light of the Doctrine of Lis Pendens, but did not find it
necessary to consider the provisions of temporary injunction as redundant
in view of Doctrine of Lis Pendense, nor put any additional fetter on grant
of temporary injunction, as suggested by the learned Single Judge.
135. The learned Single Judge, in this case as well, dealt with the
question, as to whether the order of interim injunction would be akin to
Mareva injunction, which operates in rem. Learned Single Judge then
referred to the decision of the learned Single Judge in the Court of Appeal
in (Z Ltd. Vs. A)18, (1982) 1 All England Reporter 556, and came to the
conclusion that, observations of Lord Denning in respect of Mareva
injunction are made in exercise of admiralty jurisdiction, which is in rem,
unlike the jurisdiction in personam in suits inter-parties. According to
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learned Single Judge, the order of interim injunction can, at the most, bind
the defendant, but cannot bind the transfaree pendent lite.
136. However, in our considered opinion, once it is held that the
alienations made in breach of order of injunction are illegal as they are no
transactions at all in the eyes of the law and for their validity or legality,
they are not depending on the fate of the suit, as happens in case of lis
pendens under Section 52 of the TP Act, then the effect of such injunction
is to render even those subsequent transactions and transfers also illegal.
The transaction which is illegal in itself cannot create any right in the
subsequent transferee and, therefore, it is also having the effect of binding
subsequent transferees. In that view of the matter, it cannot be accepted
that the order of injunction will act only in personam and not in rem, as
though technically it may be so, but, in effect, it may bind the other and
subsequent transferees also, in rendering such alienations illegal and void
ab initio.
137. As a result of the above entire discussion, we have no hesitation in
concurring with the view expressed in the Judgment of Prakash Jawale's
case, as it is in tune with the legal position expounded above. Accordingly,
we answer the first four questions formulated for our consideration.
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Discussion on Question No.(V)
138. However, this will not complete the Judgment and the Reference, in
view of the fifth question of law framed for our consideration, which
pertains to the binding effect of the precedents in the event of there being
conflicting decisions of co-ordinate Benches. According to learned Single
Judge, as he could not find any reason to alter the view taken by him in
Kachhi Properties (supra), ordinarily, the appeal could have been dismissed
as untenable and as resulting in heaping upon the judicial system an
unwarranted burden. However, in his opinion, "since conflicting judgments of
the Courts of record tend to create confusion in the trial Courts and result in
uncertainty in law, and, since on this question, there are at least three
Hon'ble Judges, who seem to have accepted that Section 52 of the TP Act
affords adequate protection, which view has not found favour with the
Hon'ble Judge deciding Pralhad, it may be appropriate to have the matter
referred to a larger Bench rather than committing judicial indiscipline of
taking a different view".
139. Learned Single Judge also felt it necessary since a Division Bench of
this Court in Vasant Tatoba Hargude and Others v. Dikkaya Muttaya Pujari
(AIR 1980 Bombay 341), holds that judgment later in point of time would be
binding in case there is a conflict in the judgments of Courts of equal
strength.
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140. As the question No.5 is formulated in the context of the observations
made in paragraph No.13 of Vasant Hargude's Judgment (supra) and which
are quoted by learned Single Judge, they may be reproduced as follows :-
"13. The contention of Mr. Rane as to the competency of the
later Bench of three Judges to overrule the ratio of the
earlier Bench of equal number of Judges need not detain
us. In the event of there being clear conflict, the decision
of such later Bench would be binding on us. Secondly, the
decision in Anand Nivas case (AIR 1965 SC 414) is based
not so much on the incidence of statutory tenancy as on
the interpretation of Sections 12 to 15 of the Rent Act. All
the Judges were unanimous on statutory tenant having no
estate or property in the tenancy. Even while expressing
dissent as to the extent and nature of any statutory tenan-
t's "interest" in the tenancy. Sarkar, J. proceeded on the
hypothesis that the power of transfer of even such "inter-
est" required authority of law. The determination of true
scope and import of Section 13(1)(e) and consequently of
Sections 12, 14 and 15 appear to have been assumed to
be the main point in controversy in that case and the deci-
sion on the first point indicating conflict on a narrow mar-
gin appears to have been treated as mere observations.
This may have prompted the later Bench to dispense with
any need to refer the point to a larger Bench."
[Emphasis Supplied]
141. According to learned Single Judge, "as another learned Single
Judge of this Court deciding Rafique Barkatulla Khan Vs. Shahenshah
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Hussain Iqbal Munshi & Ors., reported in 2011 (3) Mah.L.R 732, has
arrived at the same decision followed in Kachhi Properties (supra), which
decision was subsequent to the decision in Pralhad Jawale's case, it may
lead to piquant situations in view of the above-said observations laid down
in Vasant Tatoba Hargude's case."
142. The learned Single Judge further observed that, this observation in
Vasant Tatoba Hargude's case does not appear to be preceded by any
argument or discussion on the question on which this one-line
pronouncement has come from the Division Bench. According to learned
Single Judge, "what the Division Bench sought to convey was that earlier
Judgment, as explained by later Judgment, would bind. Reading the
observation to universally mean that later Judgment would bind would hit
at the very root of the Doctrine of Precedent, which is based on the
principle that the Judgment rendered earlier in point of time would bind
successive Courts". Therefore, according to learned Single Judge, there is
no question of a Judgment later in point of time having a greater binding
force over a Judgment given earlier and, therefore, this stray sentence,
which has also resulted in a considerable turbulence for the Courts below,
would require appropriate judicial consideration. Hence, learned Single
Judge formulated the question No.5 to the effect, "whether the
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observation in para (13) of the Judgment in Vasant Tatoba Hargude and
Others Vs. Dikkaya Muttaya Pujari (AIR 1980 Bombay 341), that in the
event of there being conflict, the decision of later Bench would bind only
lays down that judgment later in point of time as explaining the earlier
judgment would bind?"
143. In our considered opinion, so far as the Law of Precedent is
concerned, it is undisputable that it's very premise lies in judicial discipline
and in certainty of legal position. The judicial discipline requires that the
Judgment rendered by higher Courts be binding on subordinate Courts,
whereas certainty of legal position requires that the Judgment rendered
earlier in point of time would bind successive Courts.
144. As to what is binding of the earlier decision, it is well-settled that it is
only the ratio decidendi that has a precedent value. As observed by the
Supreme Court in S.P. Gupta & Ors. Vs. President of India & Ors. 22, "It is
elementary that what is binding on the court in a subsequent case is not
the conclusion arrived at in a previous decision, but the ratio of that
decision, for it is the ratio which binds as a precedent and not the
conclusion."
22 AIR 1982 SC 149
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145. A case is thus only an authority for what it actually decides and not
what may come to follow logically from it. Hence, it is stated that the
Judgments of courts are not to be construed as Statues.
146. The following observations in The Mumbai Kamgar Sabha, Bombay
Vs. Abdulbhai Faizullabhai & Ors.23 may be useful in this respect :
"It is trite, going by Anglophonic principles, that a
ruling of a superior court is binding law. It is not of
scriptural sanctity but is of ratio-wise luminosity within
the edifice of facts where the judicial lamp plays the
legal flame. Beyond those walls and de hors the
milieu, we cannot impart eternal vernal value to the
decision, exalting the doctrine of precedents into a
prison-house of bigotry, regardless of varying
circumstances and myriad developments. Realism
dictates that a judgment has to be read, subject to the
facts directly presented for consideration and not
affecting those matters which may lurk in the record.
Whatever be the position of a subordinate court's
casual observations, generalisations and subsilentio
determinations must be judiciously read by courts of
co-ordinate jurisdiction."
147. This position has been made further clear by the Hon'ble Supreme
23 (1976) 3 SCC 832
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Court in a decision in CIT Vs. Sun Engineering Works P. Ltd.24, at page
320, where it was observed :
"It is neither desirable nor permissible to pick out a word
or a sentence from the judgment of this court, divorced
from the context of the question under consideration
and treat it to be the complete 'law' declared by this
court. The judgment must be read as a whole and the
observations from the judgment have to be considered
in the light of the questions which were before this court.
A decision of this court takes its colour from the question
involved in the case in which it is rendered and, while
applying the decision to a later case, the courts must
carefully try to ascertain the true principle laid down by
the decision of this court and not to pick out words or
sentences from the judgment, divorced from the context
of the questions under consideration by this court, to
support their reasoning."
148. In the above decision, the Supreme Court, also quoted with
approval, the following note of caution given by it earlier in Madhav Rao
Jivaji Rao Scindia Bahadur Vs. Union of India25, that,
"It is not proper to regard a word, a clause or a
sentence occurring in a judgment of the Supreme
Court, divorced from its context, as containing a full
24 [1992] 198 ITR 297
25 (1971) 1 SCC 85
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exposition of the law on a question when the question
did not even fall to be answered in that judgment."
149. It is thus clear that it is only the ratio decidendi of a case which can
be binding and not the obiter dictum. Obiter, at best, may have some
persuasive efficacy, though, as far as pronouncements of Supreme Court
are concerned, as per settled position of law, even its obiter dicta is also
binding on High Courts and subordinate Courts.
150. The question as to whose decisions are binding, Article 141 of the
Constitution, provides that, "the law declared by the Supreme Court shall
be binding on all courts within the territory of India."
151. It is also well-settled that though there is no specific provision, like,
Article 141 of Constitution making the law declared by the High Court
binding on subordinate courts, it is implicit in the power of supervision
conferred on a superior Court that the Courts subject to its supervision
would confirm to the law laid down by it. It is in that view of the matter that
the Supreme Court in East India Commercial Co. Ltd. Vs. Collector of
Customs26, held that, "the law declared by the highest court in the State is
binding on the Courts, authorities or Tribunals under its superintendence,
26 AIR 1962 SC 1893
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and they cannot ignore it......" There is essentially also no dispute about
the legal position that the decision of larger Bench, whether of Supreme
Court or of High Court binds the smaller Bench of the Supreme Court or
that particular High Court.
152. This position has been very aptly summed up by the Supreme Court
in Mahadeolal Kanodia Vs. Administrator General of West Bengal27 :
"Judicial decorum no less than legal propriety forms
the basis of judicial procedure. If one thing is more
necessary in law than any other thing, it is the quality
of certainty. That quality would totally disappear if
judges of co-ordinate jurisdiction in a High Court start
overruling one another's decisions. If one Division
Bench of a High Court is unable to distinguish a
previous decision of another Division Bench, and
holding the view that the earlier decision is wrong,
itself gives effect to that view, the result would be utter
confusion. The position would be equally bad where a
judge sitting singly in the High Court is of opinion that
the previous decision of another single judge on a
question of law is wrong and gives effect to that view
instead of referring the matter to a larger Bench."
153. As held by the Apex Court in the case of Commissioner of Income-
27 AIR 1960 SC 936
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Tax Vs. Thana Electricity Supply Ltd.28, it is also a well accepted legal
position that a single judge of a High Court is ordinarily bound to accept
as correct judgments of courts of co-ordinate jurisdiction and of the
Division Benches and of the Full Benches of his court and of the Supreme
Court. Equally well settled is the position that when a Division Bench of
the High Court gives a decision on a question of law, it should generally
be followed by a co-ordinate Bench in the subsequent case. If it wants the
earlier decision to be reconsidered, it should refer the question at issue to
a larger Bench.
154. As to the binding nature of the Judgment given by the Coordinate
Benches, again the law is settled, as laid down by the Apex Court, in the
case of State of U.P. & Ors. Vs. Jeet S. Bisht & Anr. 29. In this reported
Judgment, in paragraph No.100, while regretting to express his inability to
agree with Brother Katju, J., in regard to the criticism of various orders
passed in this case itself by other Benches, Justice S.B. Sinha, J.
observed that;
"I am of the opinion that it is wholly inappropriate to do
so. One Bench of this Court, it is trite, does not sit in
appeal over the other Bench particularly when it is a
coordinate Bench. It is equally inappropriate for us to
express total disagreement in the same matter as also in
28 (1994) 206 ITR 727 Bom.
29 (2007) 6 SCC 586
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similar matters with the directions and observations made
by the larger Bench. Doctrine of Judicial Restraint, in my
opinion, applies even in this realm. We should not forget
other doctrines which are equally developed viz. judicial
discipline and respect for the Brother Judges."
155. Learned counsel for the appellant has also relied, in this context, on
the decision of this Court in Panjumal Hassomal Advani Vs. Harpal Singh
Abnashi Singh30, wherein Division Bench of this Court was pleased to
observe that, "now, it is well-settled that normally one Division Bench of a
High Court cannot take a view contrary to the decision given by another
Bench of that Court. It is equally well settled that an interpretation (and
equally a misinterpretation) of a binding decision of the Supreme Court
will itself be binding subsequently on co-ordinate courts and must be got
corrected by a higher Court and no co-ordinate Court on that ground may
refuse to follow an earlier decision, opining that in its view the said earlier
decision had wrongly understood or improperly applied a decision of a
higher Court."
156. In V.R.G. & G.O.M.C. Co. Vs. State of A.P. 31, it has been observed
that, "the later Bench before whom a question arises is bound by the
earlier decision."
30 AIR 1975 BOMBAY 120
31 (1972) AIR SC 51
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157. In this respect, the reliance was also placed on the observations in
the case of Young Vs. Bristol Aeroplane Co. Ltd. 32, wherein the following
propositions have been set out in the head-note :
"The Court of Appeal is bound to follow its own decisions and
those of courts of co-ordinate jurisdiction, and the 'full' court is in
the same position in this respect as a division of the court
consisting of three members. The only exceptions to this rule
are:- (1) The court is entitled and bound to decide which of two
conflicting decisions of its own it will follow; (2) the court is bound
to refuse to follow a decision of its own which, though not
expressly overruled, cannot, in its opinion, stand with a decision
of the House of Lords; (3) the court is not bound to follow a
decision of its own if it is satisfied that the decision was given per
incuriam, e.g., where a statute or a rule having statutory effect
which would have affected the decision was not brought to the
attention of the earlier court."
158. In the case of State of Gujarat and Anr. Vs. Mr. Justice R.A. Mehta
(Retd.) and Ors.33, also while considering the binding effect of the
Judgment, the Hon'ble Supreme Court was pleased to observe as
follows :-
"35. There can be no dispute with respect to the settled legal
proposition that a judgment of this Court is binding,
32 (1944) IKB 718
33 AIR 2013 SC 693
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particularly, when the same is that of a co-ordinate
Bench, or of a larger Bench. It is also correct to state
that, even if a particular issue has not been agitated
earlier, or a particular argument was advanced, but was
not considered, the said judgment does not lose its
binding effect, provided that the point with reference to
which an argument is subsequently advanced, has
actually been decided. The decision therefore, would
not lose its authority, "merely because it was badly
argued, inadequately considered or fallaciously
reasoned". The case must be considered, taking note of
the ratio decidendi of the same i.e., the general reasons
or the general grounds upon which, the decision of the
court is based, or on the test or abstract, of the specific
peculiarities of the particular case, which finally gives
rise to the decision."
159. This being the legal position of judicial discipline and hierarchy,
there can be no dispute that a larger bench decision will prevail over a
smaller bench decision and one Bench of the High Court or Supreme
Court cannot and does not sit in appeal over the other Bench, particularly
when it is a Co-ordinate Bench. However, despite that, the fact remains
that there are, at times, conflicting decisions of Co-ordinate Benches of
the same Court. The reasons being myriad, like, the decision of earlier
Bench not brought to the notice of the later Bench and so on. Hence, the
real difficulty arises in case of the conflicting Judgments on a particular
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point by co-equal Benches. This difficulty arises, especially, to the Trial
and Appellate Court Judges, who are bound by the ratio of the law
enunciated by the superior Courts. In the absence of Constitutional or
Statutory guidance in this regard, the precedents and practice as such
have not been uniform and consistent. There have been three mutually
repugnant streams of Judgments / precedents on this very important and
often recurring question of law. One view is that in case of conflict
between two Judgments of Co-ordinate Benches, later decision should be
followed; another view says that, decision earlier in point of time should be
followed; the third view is that, the Court should follow the decision, which
is more accurate and better in point of law; whether it be earlier or later.
160. For example, in the case of Sundeep Kumar Bafna Vs. State of
Maharashtra and Anr.34, while dealing with the conflicting decisions in the
case of Niranjan Singh Vs. Prabhakar Rajaram Kharote35, and that of
Directorate of Enforcement Vs. Deepak Mahajan36, the Hon'ble Supreme
Court was pleased to observe as follows :-
"It is often encountered in High Courts that two or
more mutually irreconcilable decisions of the Supreme
Court are cited at the Bar. We think that the inviolable
34 AIR 2014 SC 1745
35 1980 (2) SCC 559
36 AIR 1994 SC 1775
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recourse is to apply the earliest view as the
succeeding ones would fall in the category of per
incuriam."
161. Whereas, in the case of State of U.P. Vs. Synthetics & Chemicals
Ltd.37, it was observed that;
"The later decision must prevail over the earlier
decision in a situation where an apparent conflict
between an earlier and a later decision of the Apex
Court by Benches consisting of equal number of
judges is pointed out."
162. Similar is the view expressed in the above-said decision of Division
Bench in Vasant Tatoba Hargude Vs. Dikkaya Muttaya Pujari 38, by holding
that, "in case of a clear conflict between two decisions of the Apex Court
of equal number of Judges, the later decision would be binding on the
High Court".
163. As against it, since the mechanical adherence to later decision may
hinder the cause of justice in many cases, the Supreme Court has in the
case of Municipal Corporation of the City of Ahmedabad Vs. Chandulal
Shamaldas Patel39, held as below :-
37 1991 (4) SCC 139
38 AIR 1980 Bombay 341
39 (1970) 1 SCWR 183
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"Now the contention that the latest Judgment of a Co-
ordinate Bench is to be mechanically followed and must
have pre-eminence irrespective of any other
consideration does not commend itself to me. When
judgments of the superior court are of co-equal
benches and therefore of matching authority, then their
weight inevitably must be considered by the rationale
and the logic thereof and not by the mere fortuitous
circumstances of the time and date on which they were
rendered. It is manifest that when two directly
conflicting judgments of the superior Court and of equal
authority are extent, then both of them cannot be
binding on the courts below. Inevitably a choice though
a difficult one has to be made in such a situation. On
principles, it appears to me that the High Court must
follow the judgment which appears to it to lay down the
law more elaborately and accurately. The mere
incidence of time whether the judgments of co-equal
Benches of the Superior Court are earlier or later is a
consideration which appears to me as hardly relevant."
[Emphasis Supplied]
164. In coming to the above-said conclusion, the Apex Court placed
reliance on few decisions of Courts in England, like, Hampton Vs.
Holman40, (Jessel M.R.), Miles Vs. Jarvis 41, (Kay J) and Young Vs. Bristol
40 (1877) 5 Ch D 183
41 (1883) 24 Ch D 633
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Aeroplane Co. Ltd.42 and thereafter quoted with high regard and approval
the view of the great constitutional visionary Sri. H.M. Seervai, as under :
"Even though it is perhaps unconventional to quote a
living authority, it deserves recalling that Mr. Seervai in
his latest edition of his authoritative work in the
Constitutional Law of India has opined as follows :-
"*** But Judgments of the Supreme Court, which
cannot stand together, present a serious problem
to the High Courts and to subordinate Courts. It is
submitted that in such circumstances, the correct
thing is to follow that Judgment which appears to
the Court to state the law accurately or more
accurately than the other conflicting Judgments."
165. It was also observed that,
"I am keenly aware of the great difficulty of making a
choice between the decisions of a Superior Court
when they are in direct conflict with each other.
However, when such divergence arises and the
litigants' fortune depends thereon the issue cannot
possibly be evaded. Obviously in such a situation, it
is not the province of the High Courts or the
subordinate Courts to comment on the judgments of
a Superior Court which are patently entitled to
respect. Its plain duty in the interest of justice is to
respectfully follow that which appears to it to state the
42 (1994) KB 718
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law accurately or in any case more accurately than
the other conflicting judgments."
166. The Full Bench of the Nagpur High Court in D.D. Bilimoria Vs.
Central Bank of India43, also held that, "in such case of conflicting
authorities, the result is not that the later authority is substituted for the
earlier, but that the two stand side by side conflicting with each other,
thereby indicating that the subordinate courts would have to prefer one to
the other and, therefore, would be at liberty to follow the one or the other."
167. Even the Five-Judge Bench of the Supreme Court in the case of
Atma Ram Vs. State of Punjab44 has also indicated (at page No.527) that,
"such a task may fall on and may have to be performed by the High Court.
According to the Supreme Court, when confronted with two contrary
decisions of equal authority, the subordinate court is not necessarily
obliged to follow the later, but would have to perform the embarrassing
task "of preferring one view to another".
168. In the words of Supreme Court, "we are inclined to think that no
blanket proposition can be laid down either in favour of the earlier or the
later decision".
43 AIR 1943 Nag. 340 at Page 343
44 AIR 1959 SC 519
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169. The Special Bench of the Calcutta High Court in Bholanath Vs.
Madanmohan45, has also, after relying on the Judgment of the Supreme
Court in Atma Ram's case (supra), held that, "the subordinate court would
have to prefer one to the other and not necessarily obliged, as a matter of
course, to follow either the former or the later in point of time, but must
follow that one, which, according to it, is better in point of law. As old may
not always be the gold, the new is also not necessarily golden and ringing
out the old and bringing in the new cannot always be an invariable
straight-jacket formula in determining the binding nature of precedents of
co-ordinate jurisdiction."
170. This Court has also in its Full Bench decision in Kamleshkumar
Ishwardas Patel Vs. Union of India and Ors.46, expressed unqualified
concurrence with the law, as enunciated in the Special Bench decision of
Bholanath (supra).
171. To some extent, this conflict was tried to be resolved by the Apex
Court in the case of Commissioner of Income-Tax Vs. Thana Electricity
Supply Ltd.47, by formulating its propositions as follows :-
45 AIR 1988 Cal. 1
46 1995 (2) Bom.C.R. 640
47 (1994) 206 ITR 727 Bom.
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172. From the foregoing discussion, the following propositions emerge :
(a) The law declared by the Supreme Court being binding
on all courts in India, the decisions of the Supreme
Court are binding on all courts, except, however, the
Supreme Court itself which is free to review the same
and depart from its earlier opinion if the situation so
warrants. What is binding is, of course, the ratio of the
decision and not every expression found therein.
(b) The decisions of the High Court are binding on the
subordinate courts and authorities or Tribunals under
its superintendence throughout the territories in
relation to which it exercises jurisdiction. It does not
extend beyond its territorial jurisdiction.
(c) The position in regard to the binding nature of the
decisions of a High Court on different Benches of the
same court may be summed up as follows :
(i) A single judge of a High Court is bound by the
decision of another single judge or a Division
Bench of the same High Court. It would be
judicial impropriety to ignore that decision.
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Judicial comity demands that a binding decision
to which his attention had been drawn should
neither be ignored nor overlooked. If he does
not find himself in agreement with the same, the
proper procedure is to refer the binding decision
and direct the papers to be placed before the
Chief Justice to enable him to constitute a larger
Bench to examine the question (see Food
Corporation of India Vs. Yadav Engineer and
Contractor).
(ii) A Division Bench of a High Court should follow
the decision of another Division Bench of equal
strength or a Full Bench of the same High
Court. If one Division Bench differs from another
Division Bench of the same High Court, it
should refer the case to a larger Bench.
(iii) Where there are conflicting decisions of courts
of co-ordinate jurisdiction, the later decision is to
be preferred if reached after full consideration of
the earlier decisions. [Emphasis Supplied]
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173. This legal position is also found reflected in the Full Bench decision
of Madhya Pradesh High Court in the case of Jabalpur Bus Operators
Association & Ors. Vs. State of M.P. & Anr.48, wherein it was held that;
"In case of conflict between two decisions of the Apex
Court, Benches comprising of equal number of Judges,
decision of earlier Bench is binding unless explained by
the later Bench of equal strength, in which case the later
decision is binding...... No decision of Apex Court has
been brought to our notice which holds that in case of
conflict between the two decisions by equal number of
Judges, the later decision is binding in all circumstances,
or the High Courts and Subordinate Courts can follow
any decision which is found correct and accurate to the
case under consideration." [Emphasis Supplied]
174. As a matter of fact, this issue should no more detain us, as in the
recent decisions, the Apex Court has settled this controversy by laying
down in unequivocal terms that earlier decisions of co-equal Benches are
binding on later Benches of the same size. In the case of State of U.P.
and Ors. Vs. Ajay Kumar Sharma and Anr. 49, the Hon'ble Supreme Court
was, in paragraph Nos.10 and 11, pleased to observe as under :-
"10. Time and again this Court has emphatically restated
the essentials and principles of 'Precedent' and of
48 AIR 2003 MP 81
49 2015 SCC OnLine SC 1259
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Stare Decisis which are a cardinal feature of the
hierarchical character of all Common Law judicial
systems. The doctrine of Precedent mandates that an
exposition of law must be followed and applied even
by coordinate or co-equal Benches and certainly by all
smaller Benches and subordinate courts. That is to
say that a smaller and a later Bench has no freedom
other than to apply the law laid down by the earlier and
larger Bench; that is the law which is said to hold the
field. Apart from Article 141, it is a policy of the courts
to stand by precedent and not to disturb a settled
point. The purpose of precedents is to bestow
predictability on judicial decisions and it is beyond cavil
that certainty in law is an essential ingredient of rule of
law. A departure may only be made when a coordinate
or co-equal Bench finds the previous decision to be of
doubtful logic or efficacy and consequentially, its
judicial conscience is so perturbed and aroused that it
finds it impossible to follow the existing ratio. The
Bench must then comply with the discipline of
requesting the Hon'ble Chief Justice to constitute a
larger Bench.
11. If binding precedents even of co-ordinate strength are
not followed, the roots of continuity and certainty of
law which should be nurtured, strengthened
perpetuated and proliferated will instead be
deracinated. Although spoken in a totally different
context, we are reminded of the opening stanza of the
poem 'The Second Coming' authored by William Butler
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Yeats. The lines obviously do not advert to the
principle of precedent but they are apposite in bringing
out the wisdom of this ancient and venerable principle.
"Turning and turning in the widening gyre
The falcon cannot hear the falconer; Things
fall apart; the centre cannot hold; Mere
anarchy is loosed upon the world."
175. In the decision of New India Assurance Co. Ltd. Vs. Hilli
Multipurpose Cold Storage Private Ltd.50, the three-Judge Bench of the
Hon'ble Supreme Court was once again pleased to quote with approval
the law laid down by its five-Judge Bench in the case of Central Board of
Dawoodi Bohra Community Vs. State of Maharashtra51 and reiterated that
the decision delivered by the Bench of larger strength is binding on any
subsequent Bench of a lesser strength or co-equal strength. Thus, in this
case, it was held that, when a three-Judge Bench in 2005 ignored the
view taken by another three Judge Bench of 2002, as the 2005 Bench
was bound by the view taken by earlier three-Judge Bench, the view
expressed by 2002 Bench, being earlier in point of time, is required to be
followed.
176. In view of this principle laid down by the Hon'ble Supreme Court
50 2015 SCC OnLine SC 1280
51 (2005) 2 SCC 673
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that, Co-ordinate Bench is bound by the view taken earlier by the co-equal
or Co-ordinate Bench. Unless the view held by earlier Bench is per
incuriam, such a binding Judgment of earlier Bench cannot be ignored or
brushed aside. It has to be followed, as judicial discipline demands that
there is a certainty in the views expressed by the Courts. The principle of
finality and certainty of Judgments demands that the opinions and views
expressed therein should not be altered or changed frequently and
without any reason. Finally, in the event a situation emerges where two
Judgments rendered by the Benches of equal strength are irreconcilable
in their views, then, it is not the later, but the earlier one in point of time,
which should be followed and applied by the Subordinate Courts to the
facts and circumstances of a case before it. Considering that the view now
taken by the Hon'ble Supreme Court is that, "the later Judgment by Co-
ordinate Bench is rendered ignoring the binding precedent and hence is
per incuriam." As a result, we answer the question No.5 to the effect that,
in case of conflict between the decisions of Co-ordinate Benches, it is not
the later but the earlier one in point of time, which should be followed and
applied by the Subordinate Courts to the facts and circumstances of a
case before it, unless, of-course, earlier decision is considered and
explained in the later decision.
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177. In view of the above-said discussion, we answer the questions
placed before us for reference as follows :
Question No.(I) : Does Section 52 of the Transfer of Property Act
provide adequate protection to the parties from
transfers pendente lite since such transferees are not
required to be, or entitled as of right to be, impleaded
as parties to the suit and cannot resist execution
proceedings in view of provisions of Order XXI Rule
100 of the Code as amended by this Court ?
Answer : Section 52 of TP Act does not provide adequate
protection to the parties from transfers pendent lite.
The question does lay down a correct proposition of
law that, transferees pendent lite are not required to
be or entitled as of right to be impleaded as parties to
the suit, and they cannot resist execution proceedings
in view of provisions of Order XXI Rule 100 of the
Code, as amended by this Court.
Question No.(II) : Would plaintiffs' registering notices of their suits under
Section 18 of the Indian Registration Act (though such
registration may not be compulsory) not secure for
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plaintiffs more than what an injunction could secure
since transferees, who purchase property, pendente
lite in spite of such registration would be deemed to
have notice of pendency of the lis and could not claim
to be transferees without notice ? And, would such
registration not be preferable to clamping an injunction
on adversary ?
Answer : Mere registration of notices of pending suit cannot
secure for plaintiffs more than or even equivalent to
what an injunction could secure, as the consequences
of alienation in breach of interim injunction render
such alienation illegal and expose the party to the
consequences provided under Order XXXIX Rule 2A
and Rule 11 CPC, in addition to the punishment for
contempt of Court. Hence, such registration of notices
of pending suit, though desirable as an additional
safeguard, cannot be preferable or substituted to
clamping an order of injunction on adversary.
Question No.(III) : Since a plaintiff seeking a temporary injunction is
required to show that he would suffer irreparably if
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temporary injunction is not issued, would it be
inappropriate to expect such plaintiff to show that the
provisions of Section 52 of the Transfer of Property
Act do not afford adequate protection before an
injunction to restrain transfer pendente lite is issued ?
Answer : Though it may not be inappropriate for the Court to
expect the plaintiff to show that the provisions of
Section 52 of TP Act do not afford adequate
protection, it cannot laid down as a blanket proposition
of law that in each and every case, plaintiff is expected
to show it as a condition precedent for grant of
injunction order.
Question No.(IV) : Would it be appropriate, in cases of claims for
temporary injunction to restrain transfers pendente
lite, to consider imposition of conditions short of
granting injunction, which should protect the plaintiff's
interest, like, seeking an undertaking that no equities
would be claimed on account of sale or development
of properties; effecting sales only after putting
transferees to notice that their rights would be subject
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to the pending suit, or requiring the party to inform the
Court promptly of creation of every such interest ?
Answer : Though depending on the facts of the case, the Court
can consider imposition of conditions, like, seeking an
undertaking that no equities would be claimed on
account of sale or development of property; effecting
sale only after putting transferees to notice that their
rights would be subject to pending suit or requiring the
parties to inform the Court promptly of creation of such
interest, those conditions can be in addition to or
independent of the order of injunction, but cannot be in
place of or short of granting injunction.
Question No.(V) : Whether the observation in para (13) of the judgment
in Vasant Tatoba Hargude and others v. Dikkaya
Muttaya Pujari (AIR 1980 Bombay 341) that in the
event of there being conflict, the decision of later
Bench would bind only lays down that judgment later
in point of time as explaining the earlier judgment
would bind ?
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Answer : In the light of the decisions of the Hon'ble Supreme
Court in the case of State of U.P. And Ors. Vs. Ajay
Kumar Sharma and Anr. (supra) and New India
Assurance Co. Ltd. Vs. Hilli Multipurpose Cold
Storage Pvt. Ltd. (supra), we answer this question to
the effect that, in case of conflict between the
decisions of Co-ordinate Benches, it is not the later
but the earlier one in point of time, which should be
followed and applied by the Subordinate Courts to the
facts and circumstances of a case before it, unless, of-
course, earlier decision is considered and explained in
the later decision.
178. Having answered all the five questions referred to us, we direct the
Registry to place this matter, as per the present assignment, before the
learned Single Judge for hearing of the Appeal.
[DR. SHALINI PHANSALKAR-JOSHI, J.] [S.C. DHARMADHIKARI, J.]
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