H. Anjanappa v. A. Prabhakar: An ‘Aggrieved’ Stranger or a ‘Prejudicially Affected’ Third-Party (also) Can File Appeal with the ‘Leave of the Court’.

Jojy George Koduvath.

Abstract

Supreme Court of India on January 29, 2025, in H. Anjanappa v. A. Prabhakar (J.B. Pardiwala,  R. Mahadevan, JJ.) held  –

  • “Where a judgment and decree prejudicially affects a person who is not a party to the proceedings, he can prefer an appeal with the leave of the court”.

It is also pointed out that the injury complained of must not be “remote or indirect”.

The Apex Court pointed out two interesting propositions in this regard:

  • 1. The Applicant must be “bound by the decree or judgment in that proceeding and who would be precluded from attacking its correctness in other proceedings”.
  • 2. The applicant must be “a person who might properly have been a party”.

Part I

Facts in a Nutshell

The Plaintiffs had entered into an agreement for sale of the suit property owned by the defendants.

  • The Plaintiffs filed the suit for specific performance.
  • One of the Defendants sold a portion of property to Respondents 1 & 2.
  • The sale was in contravention of the injunction order, in that case.
  • IA filed by Respondents 1 & 2 to implead themselves as Defendants was rejected.
  • (No appeal therefrom; and “thereby, the said issue has attained finality”.)
  • The suit was decreed allowing Specific Performance.
  • The High Court dismissed the appeal (filed by the defendants).
  • After about 2 years of the Judgment and 11 years from filing the Impleadment Application, the subsequent purchasers, Respondents 1 & 2, filed Applications before the High Court, challenging the Decree and praying to condone the delay of 586 days, seeking leave of the Court to file the appeal .
  • This prayer was allowed.
  • Hence the Plaintiffs filed SLP before the Apex Court.
  • The Apex Court allowed the appeal.

Law Governing The Grant Of Leave To Appeal

  • Sections 96 and 100 respectively of the Code of Civil Procedure, 1908 provide for preferring an appeal from any original decree or from decree in appeal respectively.

The Apex Court pointed out that the aforesaid provisions do not enumerate the categories of persons who can file an appeal. The Court proceeded into the issue analysing the following two well-founded legal propositions –

  • A stranger cannot be permitted to file an appeal in any proceedings unless he satisfies the court that he falls within the category of aggrieved persons.
  • It is only where a judgment and decree prejudicially affects a person who is not a party to the proceedings, he can prefer an appeal with the leave of the appellate court.

Part II

Earlier decisions and authorities referred to:

  1. Sri V.N. Krishna Murthy v. Sri Ravikumar (Civil Appeal Nos.2701-2704 of 2020, decided on 21st August 2020)].
  2. Nagendra Nath Dey v. Suresh Chandra Dey, AIR 1932 PC 165.
  3. Adi Pherozshah Gandhi v. H.M.Seervai, AIR 1971 SC 385
  4. Smt. Sukhrani  v. Hari Shanker, AIR 1979 SC 1436
  5. Smt. Jatan Kumar Golcha v. Golcha Properties Pvt Ltd, (1970) 3 SCC 573
  6. Shanti Kumar R. Canji v. Home Insurance Co. of New York, (1974) 2 SCC 387
  7. State of Rajasthan v. Union of India, (1977) 3 SCC 592
  8. In re Markham Markham vs. Markham, (1881) 16 Ch D 1;
  9. In re Padstow Total Loss and Collision Assurance Association, (1882) 20 Ch. D 137
  10. Attorney General vs. Marquis of Ailesbury, (1885) 16 QBD 408
  11. In re Ex Tsar of Bulgaria, (1921) 1 Ch D 107
  12. Annual Practice for 1951 at page 1244
  13. Halsbury’s Laws of England, Vol. 26, page 115.
  14. Seton on Judgments and Orders, 7th Edn., Vol. 1, at p. 824.

No Definition Of ‘Appeal‘

The  five-Judge Bench of the Privy Council in Nagendra Nath Dey v. Suresh Chandra Dey, AIR 1932 PC 165, speaking through Sir Dinshaw Mulla observed that there is no definition of appeal in the CPC, but there is no doubt that any application by a party to an appellate Court, asking it to set aside or revise a decision of a subordinate Court, is an appeal within the ordinary acceptation of the term, and that it is no less an appeal because it is irregular or incompetent.

Applicant must have been aggrieved by an order or causes him some prejudice

A person who is not a party to a litigation has no right to appeal merely because the judgment or order contains some adverse remarks against him

In Adi Pherozshah Gandhi v. H.M. Seervai, AIR 1971 SC 385, the Constitution Bench of the Apex Court held as under:

  • “46. Generally speaking, a person can be said to be aggrieved by an order which is to his detriment, pecuniary or otherwise or causes him some prejudice in some form or other. A person who is not a party to a litigation has no right to appeal merely because the judgment or order contains some adverse remarks against him. But it has been held in a number of cases that a person who is not a party to suit may prefer an appeal with the leave of the appellate court and such leave would not be refused where the judgment would be binding on him under Explanation 6 to section 11 of the Code of Civil Procedure.”

A Higher Court is Not Precluded from Considering Order in IA again at a Later Stage

In Smt. Sukhrani  v. Hari Shanker, AIR 1979 SC 1436, an interlocutory order was not challenged.  The same was challenged after the final order was passed by the court. It was held as under:

  • “5. It is true that at an earlier stage of the suit, in the proceeding to set aside the award, the High Court recorded a finding that the plaintiff was not entitled to seek reopening of the partition on the ground of unfairness when there was neither fraud nor misrepresentation. It is true that the plaintiff did not further pursue the matter at that stage by taking it in appeal to the Supreme Court but preferred to proceed to the trial of his suit. It is also true that a decision given at an earlier stage of a suit will bind the parties at later stages of the same suit. But it is equally well settled that because a matter has been decided at an earlier stage by an interlocutory order and no appeal has been taken therefrom or no appeal did lie, a higher Court is not precluded from considering the matter again at a later stage of the same litigation.”

Leave Should Be Granted If Applicant Would Be Prejudicially Affected

In Smt. Jatan Kumar Golcha vs. Golcha Properties Private Limited, (1970) 3 SCC 573 it was held as under:

  • “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.”

Applicant must Be bound by the order or is aggrieved or is prejudicially affected

In State of Punjab v. Amar Singh, (1974) 2 SCC 70, while dealing with the maintainability of appeal by a person who is not party to a suit, has observed thus:

  • “Firstly, there is a catena of authorities which, following the dictum 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 party to 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.”

Person Aggrieved Must Be One Whose Right Is Affected By The Judgment

In Baldev Singh v. Surinder Mohan Sharma, (2003) 1 SCC 34, it is held that an appeal under Section 96 of the CPC would be maintainable only at the instance of a person aggrieved by and dissatisfied with the judgment and decree. While dealing with the concept of person aggrieved, it was observed in paragraph 15 as under:

  • “A person aggrieved to file an appeal must be one whose right is affected by reason of the judgment and decree sought to be impugned.”

Consider Nature And Extent Of Injuries Suffered

In A. Subash Babu v. State of A.P., (2011) 7 SCC 616, it is held as under:

  • “The expression ‘aggrieved person’ denotes an elastic and an elusive concept. It cannot be confined that the bounds of a rigid, exact and comprehensive definition. Its scope and meaning depends on diverse, variable factors such as the content and intent of the statute of which contravention is alleged, the specific circumstances of the case, the nature and extent of the complainant’s interest and the nature and extent of the prejudice or injuries suffered by him.”

Person aggrieved must have jeopardized; Not an imaginary injury

Referring Shanti Kumar R. Canji v. Home Insurance Co. of New York, (1974) 2 SCC 387 and State of Rajasthan v. Union of India, (1977) 3 SCC 592, it is observed that the expression ‘person aggrieved’ does not include a person who suffers from a psychological or an imaginary injury; but, it must, therefore, necessarily be one, whose right or interest has been adversely affected or jeopardized.

Test Whether Precluded From Attacking in Other Proceedings

Division Bench of the Madras High Court, in Srimathi K. Ponnalagu Ammani v. The State of Madras,  AIR 1953 Mad 485, laid down the test to find out whether it would be proper to grant leave to appeal as under:

  • “Now, what is the test to find out when it would be proper to grant leave to appeal to a person not a party to a proceeding against the decree or judgment in such proceedings? We think it would be improper to grant leave to appeal to every person who may in some remote or indirect way be prejudicially affected by a decree or judgment. We think that ordinarily leave to appeal should be granted to persons who, though not parties to the proceedings, would be bound by the decree or judgment in that proceeding and who would be precluded from attacking its correctness in other proceedings.”

Court Of Appeal In Its Discretion Allows Third Party Appeal

In Province of Bombay v. W.I. Automobile Association, AIR 1949 Bom 141 (Chagla C.J. and Bhagwati J.), held as under:

  • “The Civil Procedure Code does not in terms lay down as to who can be a party to an appeal. But it is clear and this fact arises from the very basis of appeals, that only a party against whom a decision is given has a right to prefer an appeal. Even in England the position is the same. But it is recognised that a person who is not a party to the suit may prefer an appeal if he is affected by the order of the trial Court, provided he obtains leave from the Court of appeal; therefore whereas in the case of a party to a suit he has a right of appeal, in the case of a person not a party to the suit who is affected by the order he has no right but the court of appeal may in its discretion allow him to prefer an appeal.”  (referred to: Indian Bank Limited, Madras v. Seth Bansiram Jashamal Firm through its Managing Partner, AIR 1934 Mad 360, In re Securities Insurance Company, (1894) 2 Ch D 410.)

The position is thus stated in the Annual Practice for 1951, at page 1244, as under:

  • “Persons not parties on the record may, by leave obtained on an ‘ex parte’ application to the Court of appeal, appeal from a judgment or order affecting their interests, as under the old practice.”

“A person who might properly have been a party”

Halsbury’s Laws of England, Vol. 26, page 115, says as under:

  • “A person who is not a party and who has not been served with such notice (notice of the judgment or order) cannot appeal without leave, but a person who might properly have been a party may obtain leave to appeal.”

In ‘more or less similar terms, the rule and its limits are stated’ in Seton on Judgments and Orders, 7th Edn., Vol. 1, at p. 824:

  • “Where the appellant is not a party to the record he can only appeal by leave to be obtained on motion ‘ex parte’ from the Court of Appeal….. Leave to appeal will not be given to a person not a party unless his interest is such that he might have been made a party.” (Emphasis supplied)

The Apex Court Concluded this part of the decision in para 43 as under:

  • “43. The principles governing the grant of leave to appeal may be summarised as under:
  • i. Sections 96 and 100 of the CPC respectively provide for preferring an appeal from an original decree or decree in appeal respectively;
  •  ii. The said provisions do not enumerate the categories of persons who can file an appeal;
  • iii. However, it a settled legal proposition that a stranger cannot be permitted to file an appeal in any proceedings unless he satisfies the court that he falls within the category of an aggrieved person;
  • iv. It is only where a judgment and decree prejudicially affects a person who is not a party to the proceedings, he can prefer an appeal with the leave of the court;
  • v. A person aggrieved, to file an appeal, must be one whose right is affected by reason of the judgment and decree sought to be impugned;
  • vi. The expression “person aggrieved” does not include a person who suffers from a psychological or an imaginary injury;
  • vii. It would be improper to grant leave to appeal to every person who may in some remote or indirect way be prejudicially affected by a decree or judgment; and viii. Ordinarily leave to appeal should be granted to persons who, though not parties to the proceedings, would be bound by the decree or judgment in that proceeding and who would be precluded from attacking its correctness in other proceedings.

Part III

Lis Pendens’ and Order I rule 10 CPC.

The Apex Court analysed the matter “from a different angle” – on ‘lis pendens’ (Section 52 of the Transfer of Property Act) and Order I rule 10 CPC, also.

Decisions Referred in this regard

  • Nagubai Ammal & Ors. vs. B. Shama Rao & Ors., AIR 1956 SC 593
  • Vinod Seth v. Devinder Bajaj, (2010) 8 SCC 1
  • Thomson Press (India) Ltd. v. Nanak Builders & Investors P. Ltd., [2013] 2 SCR 74
  • Smt. Saila Bala Dassi vs. Sm. Nirmala Sundari Dassi and Anr., [1958] SCR 1287
  • Dhurandhar Prasad Singh vs. Jai Prakash University, (2001) 6 SCC 534
  • Amit Kumar Shaw v. Farida Khatoon, AIR 2005 SC 2209.

The Apex Court Concluded this part of its decision in para 58 as under:

“58. From a conspectus of all the aforesaid judgments, touching upon the present aspect, broadly, the following would emerge:

  • .i. First, for the purpose of impleading a transferee pendente lite, the facts and circumstances should be gone into and basing on the necessary facts, the Court can permit such a party to come on record, either under Order I Rule 10 CPC or under Order XXII Rule 10 CPC, as a general principle;
  • ii. Secondly, a transferee pendente lite is not entitled to come on record as a matter of right;
  • iii. Thirdly, there is no absolute rule that such a transferee pendente lite, with the leave of the Court should, in all cases, be allowed to come on record as a party;
  • iv. Fourthly, the impleadment of a transferee pendente lite would depend upon the nature of the suit and appreciation of the material available on record;
  • v. Fifthly, where a transferee pendente lite does not ask for leave to come on record, that would obviously be at his peril, and the suit may be improperly conducted by the plaintiff on record;
  • vi. Sixthly, merely because such transferee pendente lite does not come on record, the concept of him (transferee pendente lite) not being bound by the judgment does not arise and consequently he would be bound by the result of the litigation, though he remains unrepresented;
  • vii. Seventhly, the sale transaction pendente lite is hit by the provisions of Section 52 of the Transfer of Property Act; and, viii. Eighthly, a transferee pendente lite, being an assignee of interest in the property, as envisaged under Order XXII Rule 10 CPC, can seek leave of the Court to come record on his own or at the instance of either party to the suit.”

Result of the Decision of the Court

The Appeal is allowed.

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