A pre-suit assignee cannot be impleaded as co-plaintiff under Order I Rule 10 CPC.

Respondent No. 1, the original plaintiff, filed a suit for specific performance of a development agreement dated 15 December 2006 and a supplementary agreement dated 22 August 2007, and challenged the petitioners’ notice dated 17 April 2009 terminating those agreements.

Before institution of the suit, respondent No. 1 had executed a registered deed of assignment dated 27 July 2007, assigning its rights under the development agreement and power of attorney to respondent No. 2.

The assignment was not disclosed to the petitioners, who were the original landowners.

The petitioners contended in their written statement that respondent No. 1, having divested itself of its rights before filing the suit, was not entitled to maintain the action.

Respondent No. 2 independently applied under Order I Rule 10 CPC to be added as co-plaintiff. The trial court allowed that application by order dated 15 March 2014, which was challenged in the present writ petition.

Whether an assignee whose assignment was executed before institution of the suit could be added as a co-plaintiff under Order I Rule 10 CPC merely on the basis of that assignment?

Whether the assignment constituted a pendente lite transfer attracting Order XXII Rule 10 CPC?

Whether permitting the assignee to join the suit would prejudice the petitioners’ defence that the original plaintiff had already lost its rights and could not maintain the suit?

The Court applied Order I Rule 10(1) CPC, which permits substitution or addition of a plaintiff where the suit was instituted in the name of the wrong person through a bona fide mistake and such addition is necessary for determining the real dispute; and Order I Rule 10(2) CPC, which permits addition of a necessary or proper party whose presence is required for complete and effective adjudication.

Order XXII Rule 10 CPC governs the continuation of a suit where, during its pendency, an interest is assigned, created, or devolves upon another person; it does not apply to an assignment made before institution of the suit.

Relying on Life Insurance Corporation of India v. Sanjeev Builders Pvt. Ltd., (2022) 16 SCC 1, Robin Ramjibhai Patel v. Anandi Bai Rama, (2018) 15 SCC 614, Mumbai International Airport Pvt. Ltd. v. Regency Convention Centre & Hotels Pvt. Ltd., (2010) 7 SCC 417, and State Trading Corporation of India Ltd. v. ICICI Lombard General Insurance Co. Ltd., 2015 SCC OnLine Bom 6272, the Court recognised that assignees may be impleaded in appropriate cases, particularly where the assignment occurs pendente lite, but impleadment cannot alter the nature of the suit, introduce a new cause of action, or prejudice existing parties.

The Court distinguished cases involving assignments during the pendency of proceedings from the present case, where the deed of assignment was executed on 27 July 2007, before the suit was filed.

Since respondent No. 1 had transferred all its rights before instituting the suit, there was no pendente lite devolution attracting Order XXII Rule 10 CPC.

Nor was any bona fide mistake pleaded or established under Order I Rule 10(1) CPC.

Under Order I Rule 10(2), respondent No. 2 could not be added merely because it claimed through the original plaintiff. Its impleadment would effectively cure the original plaintiff’s alleged lack of entitlement and defeat the petitioners’ substantive defence that the plaintiff had no subsisting rights when the suit was instituted.

The Court also found significance in the concealment of the assignment and the fact that respondent No. 2 appeared through the same advocate as respondent No. 1 in the writ proceedings, supporting the petitioners’ contention that impleadment was sought to overcome their defence.

The writ petition was allowed; the trial court’s order dated 15 March 2014 below Exhibit 137 was quashed and set aside, and respondent No. 2’s impleadment application was dismissed.

The Court clarified that respondent No. 2 remained free to institute a separate suit, subject to all lawful objections available to the proposed defendants.