Bombay High Court Quashes Pre-Suit Assignee’s Impleadment as Co-Plaintiff; Holds Prior Assignment Falls Outside Order XXII Rule 10 and Cannot Defeat Defendants’ Maintainability Defence
Bombay High Court Allows Owners’ Writ Against Assignee’s Impleadment; Holds Pre-Suit Transfer Falls Outside Order XXII Rule 10 and Fails Order I Rule 10 Test
Facts
The petitioners, who were the original defendants, challenged an order dated 15 March 2014 allowing a third party to be added as co-plaintiff No. 2 in a specific performance suit. Respondent No. 1 was the original plaintiff, while Respondent No. 2 was the assignee seeking impleadment.
The original plaintiff had filed a suit for specific performance of a Development Agreement dated 15 December 2006 and a Supplementary Agreement dated 22 August 2007, and had also challenged a termination notice dated 17 April 2009.
The defendants later discovered that the original plaintiff had already executed a registered Deed of Assignment dated 27 July 2007 in favour of the third party, i.e. before the suit itself was filed. They accordingly amended their written statement to plead that the original plaintiff had already divested itself of rights and therefore lacked entitlement to maintain the suit.
The original plaintiff then sought amendment of the plaint to add the assignee and seek specific performance also in its favour. That amendment application was rejected. However, the third party’s independent application under Order I Rule 10 CPC was allowed, resulting in its addition as co-plaintiff.
The defendants challenged only the order allowing the third party’s impleadment.
Issues
The principal issues were:
- Whether a person who became an assignee before institution of the suit could be added as co-plaintiff under Order I Rule 10 CPC.
- Whether Order XXII Rule 10 CPC, which deals with assignment, creation or devolution of interest during pendency of proceedings, could apply to a transfer completed before suit.
- Whether impleading the assignee would prejudice the defendants’ substantive defence that the original plaintiff had already divested itself of all rights before filing suit.
- Whether the assignee was a necessary or proper party for complete adjudication of the specific performance dispute.
- Whether the proper remedy for such assignee was to institute an independent suit, subject to limitation and other objections.
Petitioners’ Arguments
The defendants argued that the assignment was executed on 27 July 2007, whereas the suit was filed only after termination of the agreements in 2009.
Accordingly, the transfer was not pendente lite and could not attract Order XXII Rule 10 CPC, which applies only when assignment or devolution occurs during pendency of litigation.
They further argued that the impleadment application under Order I Rule 10 was founded entirely upon the prior assignment and therefore could not be used as an indirect route to cure the original plaintiff’s prior loss of rights.
A central defence in the suit was that the original plaintiff had already divested itself before filing and therefore lacked subsisting rights to seek specific performance. Adding the assignee as co-plaintiff would effectively neutralise that defence and cause serious prejudice.
The petitioners also alleged that the assignee was a sister concern of the original plaintiff and was being brought into the suit only to avoid limitation and prolong the litigation.
Respondents’ Arguments
The respondents supported the impleadment order.
They argued that the limitation objection had been expressly kept open by the Trial Court and that merely adding the assignee as co-plaintiff caused no prejudice to the defendants.
They relied upon decisions including Robin Ramjibhai Patel, Life Insurance Corporation of India v. Sanjeev Builders Pvt. Ltd., Mumbai International Airport Pvt. Ltd. v. Regency Convention Centre, and a Bombay High Court decision in State Trading Corporation of India Ltd. to contend that an assignee claiming through the plaintiff may be added where its presence assists complete adjudication.
They also emphasised that the original plaintiff had no objection to the assignee being added.
Analysis of the Law
Order XXII Rule 10 Applies to Pendente Lite Assignment
The Court drew a clear distinction between:
- assignment during pendency of a suit, governed by Order XXII Rule 10; and
- assignment before institution of the suit, which does not fall within that provision.
Since the assignment here admittedly pre-dated the suit, Order XXII Rule 10 had no application.
Order I Rule 10 Requires Its Own Conditions to Be Satisfied
The Court then examined whether impleadment could independently be sustained under Order I Rule 10.
Sub-rule (1) permits addition or substitution of a plaintiff where the suit was instituted in the name of the wrong person through a bona fide mistake, and substitution is necessary to determine the real controversy.
The Court found that no such bona fide mistake had been pleaded.
Sub-rule (2) permits addition of a necessary or proper party where its presence is required to enable complete and effective adjudication.
However, the Court held that the mere existence of a pre-suit assignment did not, by itself, justify adding the assignee as co-plaintiff, particularly where doing so would undermine a substantive defence already available to the defendants.
Prejudice to Defendants Was Material
The defendants’ case was that the original plaintiff had already lost its rights before instituting the suit.
The Court treated this as a legitimate maintainability defence. If the assignee were added as co-plaintiff, that defence could effectively be neutralised.
Accordingly, impleadment was not a procedural formality; it had substantive consequences for the defendants’ rights and therefore required close scrutiny.
Precedent Analysis
1. Life Insurance Corporation of India v. Sanjeev Builders Pvt. Ltd., (2022) 16 SCC 1
The petitioners relied on this decision for the principles governing necessary and proper parties in specific performance suits and for the proposition that impleadment based on assignment during pendency is governed by Order XXII Rule 10.
The Bombay High Court distinguished the present case because the assignment was prior to filing of the suit, not pendente lite.
2. Robin Ramjibhai Patel v. Anandibai Rama Alias Rajaram Pawar, (2018) 15 SCC 614
The respondents relied upon this authority concerning impleadment where rival claims existed against the same vendor.
The Court held that those principles did not apply here because the assignee claimed entirely through the original plaintiff rather than asserting an independent rival claim against the vendor.
3. Mumbai International Airport Pvt. Ltd. v. Regency Convention Centre and Hotels Pvt. Ltd., (2010) 7 SCC 417
This authority concerned impleadment of an assignee under Order XXII Rule 10.
The Court noted that an applicant may be impleaded where appropriate, but addition may be refused if it alters the nature of the suit or introduces a new cause of action. Again, the present case differed because the transfer took place before suit.
4. State Trading Corporation of India Ltd. v. ICICI Lombard General Insurance Co. Ltd., 2015 SCC OnLine Bom 6272
The respondents relied upon this Bombay High Court decision where an assignment occurred during pendency through consent terms before the DRT.
The Court held that the case was distinguishable because the assignment there was pendente lite, whereas here the Deed of Assignment pre-dated the suit itself.
Court’s Reasoning
The Court found that the Trial Court had proceeded on an incorrect premise.
It had treated the third party as though it had “purchased the litigation” and stepped into the shoes of the plaintiff. But that reasoning was factually wrong because the assignment had occurred before litigation even commenced.
The original plaintiff had already assigned its rights before filing suit and, according to the defendants, had thereby divested itself of the contractual rights forming the basis of the suit.
The defendants were entitled to rely upon that fact to oppose the reliefs for cancellation of termination and specific performance.
The Court concluded that allowing the assignee to enter as co-plaintiff would seriously prejudice that defence and that the Trial Court had not recorded legally sustainable reasons for such impleadment.
At most, the assignee could pursue its own independent cause of action through a separate suit, subject to limitation and all other legal objections.
Conclusion
The Bombay High Court allowed the writ petition.
The order dated 15 March 2014 below Exhibit 137 in Special Civil Suit No. 1463 of 2009 was quashed and set aside, and the third party’s application for impleadment was dismissed.
The Court clarified that this would not prevent Respondent No. 2 from filing a separate suit, subject to all objections available to the proposed defendants.
The key principle emerging from the judgment is that a pre-suit assignee cannot use Order XXII Rule 10, and cannot automatically invoke Order I Rule 10, to enter as co-plaintiff where such impleadment would defeat the defendants’ substantive defence that the original plaintiff had already divested itself of rights before instituting the suit.
Case Details
Case: Savita Arun Zambre & Others v. Manjari Projects Private Limited & Another
Court: High Court of Judicature at Bombay, Civil Appellate Jurisdiction
Case Number: Writ Petition No. 1227 of 2015
Judge: Justice Gauri Godse
Date: 20 August 2026; Reserved on 7 May 2026
Result: Writ petition allowed; impleadment of pre-suit assignee as co-plaintiff quashed; assignee’s application dismissed; separate suit left open subject to limitation and other objections
