Bhisham Sawhney And Anr. vs Union Of India And Ors.
1994 Latest Caselaw 366 Del

JUDGMENT

Anil Dev Singh, J.

(1) This is an appeal against the order of the learned Single Judge dated July 7,1993 whereby Ia No.4262 of 1990 under order 39 rule4CPC filed in Suit No2011 of 1986 was rejected on the ground that the appellants, who had moved the application, were not parties in the suit.

(2) The brief facts giving rise to this appeal are as under: State Bank of India, respondent No.1 /plaintiff filed a suit in respect of loans and facilities lent and advanced to respondent 2/ defendant I . Respondents 3 and 4/ defendants.2 and 3 are the guarantors in respect of loans sanctioned and advanced by respondents 1 and 2. Respondents 5 to 10, who are defendants 4 to 9, in the suit are the legal heirs of late Shri Ram Gopal who was also a guarantor in respect of the various loans advanced by the respondent No. 1 to respondent No.2. In the suit, the following reliefs,inter alia, are claimed against the respondent 2 to. 10: (a) This Hon'ble court be pleased to pass a money decree against defendant No. 1 to 9 joints and severally in the sum of Rs. 27,23,886.65 Bhisham Sawhney and another Vs. U. O. I. & Others 319 together with further interest at the rate of 17.5% p.a. with quarterly rests from 13.5.1986 or such enhanced rates as per Reserve Bank of India directives; b) A declaration that the immovable properties more particularly described in Schedules lA and Ib to the plaint are validly mortgaged/charged for the due repayment for the decree to the passed in favor of the plaintiff. e) A decree for the sale of the mortgaged properties under Order 34 Rule 4 Civil Procedure Code in Appendix D to the Civil Procedure Code and application of the sale proceeds towards satisfaction of the decree to be passed herein. In the suit, respondent 1/plaintiff filed an application, being Ia No.829 of 1987, praying, inter alia, that property bearing No.48-A, Dda Shed, Okhla Industrial Area, Phase Ii, New Delhi be attached under Order 38 rule 5 Civil Procedure Code . In this application the learned single Judge on February 10,1987 passed an ex parte interim order restraining defendants in the suit from transferring or alienating the said property. This led to the moving of an application (IA No.4262 of 1990) by the appellants under Order 39 rule 4 read with Section 151 Civil Procedure Code . with the allegations that the aforesaid property no.48A,DDA Shed Okhla Industrial Area, Phase Ii, New Delhi was in possession of Libra Electronics Pvt.Ltd. which is a company owned by the family members of the trustees of the Sawhneys Trust and/or is the sister concern of the applicant firm namely Sawhney Enterprises; that defendants 1 and 2 agreed to sell the said property by agreement to sell dated September 3,1986 for a total consideration of Rs.4,25,000.00 and substantial part of the sale consideration was paid; that in part performance of the agreement to sell defendants 1 and 2 handed over the vacant physical possession of the property to the appellants and that the appellants are in possession of the property as owners thereof and/or in their own independent right, being beneficial owner thereof. The prayer of the appellants in the application was that Ia No.829of 1987 be dismissed and the Interim order dated February 10,1987 be vacated. The learned Single Judge by the order dated July 7,1993 rejected the application on the ground that the application was signed by Mr.Rajeev K.Nanda on behalf of S/Shri Shri Bhisham Sawhney and P.S.Sethi who were not parties in the suit. It is this order which has been impugned Before us in the present appeal.

(3) We have heard the learned counsel for the parties on both sides and have gone through the record. It is not in dispute that the appellants were not parties in the suit and the present appeal has been filed by them without the leave of the court. When this was brought to the notice of the learned counsel for the appellants he submitted that since the interim order dated February 10,1987 prejudicially affects the appellants, they could file the appeal even without the leave of the court, we are afraid that learned counsel for the appellant is not right in his submission.

(4) It is well settled that a person who is not a party to a decree or order of the court may prefer an appeal from such decree or order if he is either bound by it or aggrieved by it or is prejudicially affected by it. But in such matters appeal can only be filed with the leave of the court. The party is required to follow this procedure. In an appropriate case where leave is sought the court may grant the same without notice to the other party. But in a case where there is some doubt with regard to the question as to whether the person who is not a party to a decree or order has at all been prejudicially affected by it, a notice may be necessary to be issued to the other party before deciding the question whether leave should be granted to the former for preferring the appeal from such decree or order and in that event it will be open to the latter to show that the former cannot have any genuine grievance as the determination does not prejudicially affect his interest. As a general principle no one can appeal from a decree, order or determination of the court unless he is a party to the action and his title or interest in the property is apparent on the face of the record and he seeks leave of the court to prefer an appeal.

(5) In Smt.Jatan Kanwar Golcha Vs. M/s. Golcha Properties Ltd.( In Liquidation ), the Supreme Court while laying down the above principle held as follows: "IT would be a travesty of justice if a party is driven to file a suit which would involve long and cumbersome procedure when an order has been made directly affecting that party and redress can be had by filing an appeal which is permitted by law. It is well settled that a person who is not a party to the suit may prefer an appeal with the leave of the appellate court and such leave should be granted if he would be prejudicially affected by the judgment. ..............It is implicit that if the directions which have to be given by the court would affect any person prejudicially he must be served with a notice of the summons under the general rule of natural justice and that no order should be made affecting the rights of a party without affording a proper opportunity to it to represent its case. The High Court was thus clearly in error in not entertaining and deciding the appeal preferred by the appellant who was the owner of the land in which lease hold rights said to have been created by her in favor of the company in liquidation were sought to be sold........"

(6) Again while taking the same view the Supreme Court in State of Punjab ( new Haryana) and otheresVs. Amar Singh and another observed as follows: "Firstly there is a catena of authorities which following the doctrine of Lindley, L.J., in re Securities Insurance Co.,(1894) 2 Ch 410 have laid down the rule that a person who is not a decree or order may with the leave of the court, prefer an appeal from such decree or order if he is either bound by the order or is aggrieved by it or is prejudicially affected by it. As a rule, leave to appeal will not be refused to a person who might have been made ex nominee a party-see Province of Bombay Vs. W.I.Automobile Automobile Association, Air 1949 Bomb.141;Heera Singh Vs. Veerka, and Shivaraya Vs. Siddamma, Air 1963 Mysore 127; Executive Officer Vs.Raghawan Pillai, . In re B, Infant (1958) 1 Qb 12; Govind Menon Vs. Mathawan Nair "

(7) Same principle is being followed by other High Courts as well. ln Heersingh and others Vs. Veerka and another Rajasthan High Court held as under: "THE position appears to us to be clearly this that as a rule, it is only a party to the proceeding in the primary court or tribunal who has the right to prefer an appeal against the order of that tribunal provided of course he is aggrieved by it,and if any other person happens to feel aggrieved by that order, and his interests are affected thereby, he can file an appeal against it only by leave of the court of appeal but not otherwise. Again, whether such leave should be granted or not is a matter which lies in the discretion of the Court of Appeal. We would also add that no hard and fast rule can be laid down to crystallise the exercise of such discretion and the decision in each case is bound to depend upon its own facts and circumstances".

(8) Similarly in Shivaraya Vs. Siddamma and another Air 1963 Mysore 127 the same principle was reiterated in te following manner. ".....ITis, in my opinion, clear that leave to a person to appeal from a decree or order in a proceeding to which he was not a party should not be ordinarily granted unless he establishes that he has an interest which is affected by the order or decree from which he proposes to appeal.If he establishes that he has such interest,it seems to me that it is not necessary for him to further establish that if he does not institute an appeal with the leave of the Appellate court, the consequence will be that. the order or decree against which he proposes to appeal becomes conclusive without his being able to question such decree or order in other proceedings. In my opinion, the question as to whether leave should or should not be granted should depend upon the facts of each case and it is for the appellate court to decide whether the case before it is a fit one for the grant of such leave".

(9) Thus any person who was not a party to the suit can file an appeal with the leave of the court if his rights arc prejudicially affected by any order or decree passed in the suit. In the present case, even though the appellants have not filed an appeal with the leave of the court, we are not inclined to dismiss the appeal at this state on this ground alone, more particulary when both the parties have appeared through their respective counsel who have argued the case on merits but in future I we expect that proper procedure will be followed by the parties in such like matters.

(10) The sole ground on which the application of the appellants under0rder39 rule 4 Civil Procedure Code was dismissed by the learned Single Judge was that the appellants were not parties in the suit. The allegations of the appellants is that the land with reward to which interim order dated February 10,1987 was passed by the learned Single Judge has been in possession of the appellants and the sale consideration to a very large extent stands paid to the defendants 1 and 2 under an agreement to sell and the appellants do not owe any money to the plaintiff in the suit. Besides learned counsel for the appellants points out that the property in question is not the subject matter of mortgage and falls outside Schedules Ia and Ib to the plaint. This position is not controverter by the learned counsel for respondent No.1. This is how the appellants have explained the prejudicial effect of the order dated February 10,1987 on their interest.

(11) Having regard to the case set up by the appellants before the learned Single Judge and before us we are of the opinion that the appellants are proper parties as prima facie they have interest in the property in question. The learned single Judge should therefore, examine the aforesaid pleas raised by the appellants in Ia No.4262 of 1990 and thereafter pass a fresh order after hearing the appellants and parties to the suit. lt will be open to the appellants to file. an application under Order I rule 10 Civil Procedure Code for being imp leaded parties in the suit and if such an application is made the same will be considered by the learned single Judge.

(12) Accordingly the order dated July 7,1993 is set aside. The learned single Judge will pass a fresh order on the application of the appellants after examining the respective stands of the appellants and the parties in accordance with law and keeping in view the aforesaid observations.