In a significant ruling, the Supreme Court of India has laid down comprehensive principles governing the grant of leave to appeal under Sections 96 and 100 of the Code of Civil Procedure, 1908 (CPC). The judgment was delivered by a bench comprising Justice J.B. Pardiwala and Justice R. Mahadevan in H. Anjanappa & Ors. v. A. Prabhakar & Ors. (Civil Appeal Nos. 1180-1181 of 2025 and 1182-1183 of 2025), arising out of Special Leave Petitions (Civil) Nos. 5785-5786 and 6724-6725 of 2023.
Background of the Case
The appeals were filed against an order of the Karnataka High Court, which had condoned a delay of 586 days and granted leave to appeal to the subsequent purchasers of the disputed property. The High Court’s order allowed respondents A. Prabhakar and Beena Anthony to challenge a decree of specific performance passed by the Senior Civil Judge and JMFC, Devanahalli, in O.S. No. 458 of 2006.
The dispute arose from an agreement of sale dated September 5, 1995, executed by the original owner, Late Smt. Daisy Shanthappa, in favor of the plaintiffs (appellants before the Supreme Court). Despite a supplementary agreement extending the time for execution of the sale deed, the property was transferred to a third party in violation of a subsisting order of injunction. The subsequent purchasers, respondents in the case, sought impleadment in the original suit, which was rejected by the trial court in 2014. This rejection was never challenged, leading to the finality of the issue. However, after the trial court decreed specific performance in favor of the plaintiffs, the subsequent purchasers approached the High Court, seeking leave to appeal, which was granted along with the condonation of delay.
Legal Issues Involved
The case raised critical questions regarding:
– The right of subsequent purchasers pendente lite to appeal against a decree of specific performance.
– The application of the doctrine of lis pendens under Section 52 of the Transfer of Property Act, 1882.
– The applicability of Order I Rule 10 CPC regarding impleadment and its implications on the right to appeal.
– The interpretation of “person aggrieved” under Sections 96 and 100 CPC.
– The interplay between Section 146 CPC (proceedings by or against representatives) and Order XXII Rule 10 CPC (continuance of suit by transferee).
Supreme Court’s Observations and Ruling
The Supreme Court, in its ruling, set aside the High Court’s order, holding that the respondents had no right to seek leave to appeal after their impleadment application had been rejected and had attained finality. The Court observed:
“A transferee pendente lite, though not brought on record under Order XXII Rule 10 CPC, is entitled to seek leave to appeal against the final decree passed against his transferor. However, whether to grant such leave or not is within the discretion of the court, and such discretion should be exercised judiciously.”
The Court further emphasized that a party seeking leave to appeal must demonstrate a substantial and direct impact on their legal rights. It held that:
“The expression ‘person aggrieved’ does not include a person who suffers from a psychological or an imaginary injury; a person aggrieved must necessarily be one whose right or interest has been adversely affected or jeopardized.”
Principles Governing Leave to Appeal
The Court summarized the principles governing the grant of leave to appeal under Sections 96 and 100 CPC as follows:
1. A stranger cannot be permitted to file an appeal unless he falls within the category of an “aggrieved person.”
2. A person is aggrieved only when their legal rights or interests are directly prejudiced by the decree.
3. Leave to appeal should not be granted to those who are only remotely or indirectly affected by the decree.
4. A lis pendens transferee is bound by the outcome of the suit and may be granted leave to appeal only if their rights are substantially affected.
5. A rejection of an impleadment application in the trial court does not automatically disqualify a party from seeking leave to appeal, but it may operate as res judicata.
6. The appellate court must exercise its discretion judiciously and not condone inordinate delays without sufficient cause.
Setting aside the High Court’s order, the Supreme Court ruled that the respondents had no right to challenge the decree as they were bound by the trial court’s findings and the doctrine of lis pendens. It reiterated that the respondents’ remedy, if any, lay in seeking compensation from their vendor rather than challenging the decree of specific performance.
