CHERLO SUBBA REDDI Vs. AMPARAYANI VENKATASESHIAH

JUDGEMENT

(1.) This case raises the question whether an alienee of immoveable property pendente lite from the defendantin the suit is entitled to object to a decree being passed in terms of a compromise arrived at between the plaintiff and the defendant after the date of the alienation in question and before the date when the alienee was made a party to the suit. It was held by a Full Bench of this Court in Annamalai Chettiar v. Malayandi Appaya Naik 29 M. 426 : 1 M.L.T. 145 : 16 M.L.J. 372 (F.B.) that an alienation made pendente lite was subject to the decree subsequently made in the suit, even though the decree was based on a compromise. In that case the alienee was not made a party, whereas here he has been made a party after the compromise and objects to the passing of the decree.

(2.) As I understand the cases, the rule pendente lite nihil innovetur which is embodied in Section 52 of the Transfer of Property Act was introduced for the protection of the other party to the suit, and that the latter is entitled to disregard alienations made by his opponent during the pendency of the suit and to treat them as non-existent. Therefore, as held in Annamalai Chettiar v. Malayandi Appaya Naik 29 M. 426 : 1 M.L.T. 145 : 16 M.L.J. 372 (F.B.), a decree passed on a compromise between the original parties to the suit was held binding in the absence of fraud or collusion upon an alienee from one of the parties to the suit, even though the alienation preceded the compromise. The English and American cases have carried this even further. In Landon v. Morris (1832) 5 Sim. 247 : 2 L.J. Ch. 35 : 58 E.R. 329, where the defendant failed to put in any answer and left the country and judgment was entered against her pro confesso, the decree so passed was held binding upon alienees from her pendente lite. I find the same view was taken in two recent American decisions for which I am indebted to my learned brother. In Mellen v. Moline Malleable Iron Works (1888) 131-4 U. St. Sup. Court Rep. 352 : 33 Law. Ed. 178 the Supreme Court of the United States held that an alienee from a defendant pendente lite was bound by a decree passed, even though the defendant failed to appear and judgment was given against him pro confesso, and the judgment of the Court cited with approval the words of Sir William Grant, M.R., in Winchester (Bishop of) v. Paine 11Ves. (Jun.) 194 at p. 197 : 8 R.R. 131 : 32 E.R. 1062: ?The litigating parties are exempted from the necessity of taking any notice of a title so acquired. As to them it is as if no such title existed." The decision of the Supreme Court of Illinois at Chicago in Harding v. American Glucose Co. (1899) 64 L.R.A. 737 : 182 Ill. 551 : 55 N.E. 577 is even more in point. That was a suit to restrain the defendant, the American Glucose Company, from alienating its property and business to an alleged illegal trust, and pendente lite the defendant, company conveyed its property, and business to a nominee who reconveyed to the Glucose Sugar Refining Company, which was then made a party to the suit. Some time after the alienee company had been made a party, the alienor company withdrew its answers and allowed judgment to be given against it pro confesso. That judgment was held binding on the alienee company even though it was a party on the record at the time when the alienor company confessed judgment. It is not necessary to go so far in the present case. Here at the time the compromise was entered into the alienee was not a party to the suit and under the decision of Annamalai Chettiar v. Malayandi Appaya Naih 29 M. 426 : 1 M.L.T. 145 : 16 M.L.J. 372 (F.B.) the alienor defendant had clearly power to compromise it in the absence of fraud or collusion. If this be So, I can see no sufficient reason why the Court should refuse to give effect to the compromise by decree in the usual way merely because the alienee was made a party after compromise and before the decree. The decision of the Full Bench that the party alienating pendente lite has power to enter into a compromise with the other side after the alienation and that the decree embodying such compromise is binding on the alienee seems to me to involve that a compromise so arrived at should be embodied in the decree notwithstanding that the alienee has been made a party before the passing of the decree, if the Court cannot say the compromises was bad at the time it was made, and on the diffusions I think it cannot, I fail to see on what ground the Court can disregard it and proceed with the trial of the suit as if no such compromise had ever been made. The decision of their Lordships of the Judicial Committee in Tarakant Banneriee v. Puddomoney Dossee 10 M.I.A. 476 : 5 W.R. (P.C.) 63 : 2 Sar. P.C.J. 184 : 1 Suth. P.C.J. 631 : 19 E.R. 1052 undoubtedly presents some difficulty, as in that case their Lordships held that a decree between the original parties to the suit made after contest was not binding on the alienee pendente lite. This was before the passing of the Transfer of Property Act. and the alienee who had acquired the whole interest of one of the parties pendente lite had applied not to be added but to be substituted on the record for his alienors (see now Order XXII, Rule 10) and his application had been refused. In the present case, as I have already said, the compromise was arrived at before the alienee had applied to be made a party, and though I am not anxious to extend the rule against alienations pendente lite I am unable, consistently with the authorities by which we are bound, to see any sufficient reason for refusing to give effect to the compromise entered into between the original parties before the alience had been made a party. My learned brother differs as to the compromise being binding on the 4th respondent, the alienee, as well as on the 1st respondent as to which we are agreed. As to the 4th respondent we think my opinion prevails under Clause 86 of the Letters Patent, and there will accordingly be a decree in terms of the compromise petition, Exhibit W , on the plaintiff pacing Rs. 1,000 into Court within fourteen days and that otherwise the petition will be dismissed. There will be no order as to costs of this petition. The appeal will proceed against the remaining respondents. Srinivasa Aiyangar, J.

(3.) This is an application by the plaintiff-appellant for a decree in terms of a compromise alleged to have been entered into between him and the 1st defendant, by which the 1st defendant confesses judgment for the whole of the amount sued for together with the costs of the plaintiff in the first Court and in the appeal, though the suit had been dismissed with costs in the first Court.