[Section 96-100 CPC] Non-Parties Can File Appeal If Negatively Impacted By Trial Court's Order: Telangana High Court

The Telangana High Court, in a landmark ruling, has affirmed the right of non-parties to file appeals under Sections 96-100 of the Code of Civil Procedure (CPC) if they are negatively impacted by a trial court's decision.

This judgment was delivered by the division bench of Justice Moushumi Bhattacharya and Justice Nagesh Bheemapaka, in a plea by individuals who were not formal parties to the lawsuit but were substantially affected by its outcome.

The Bench relying on the cases of Smt. Jatan Kumar Golcha v. M/s. Golcha Properties (P) Ltd, My Palace Mutually Aided Co-operative Society v. B. Mahesh, Chenga Reddy v. Kuppala Bala Subramanya, Dimmiti Pullaya v. Abdebolu Nagabhushanam and also referring to the common law position in England has held:

“Persons like the appellants, who were not made parties to the Suit, have a right to seek leave to appeal from the judgment if such persons can show, even prima facie, that they are adversely affected by the judgment or would be bound by it by reason of the facts shown to the Appellate Court. It would indeed be a travesty of justice if persons who are not made parties to a Suit for ulterior motives or even through inadvertence, are deprived of the right to assail the judgment before the Appellate Court solely on the ground that they were not parties to the Suit. There may be several reasons why a plaintiff would choose not to bring a person/entity on board as a defendant including that of a collusive decree. The Court, in such cases, cannot sit powerless and shut the aggrieved persons out from ventilating their grievance against the order/judgment.”

Background:

The dispute originated from a specific performance suit filed by the respondent herein, seeking the execution of a sale deed for a disputed property. The trial court ruled in favour of the respondent, ordering the sellers to execute the sale deed. However, the appellants, who claimed to have purchased the same property earlier from the same sellers, were aggrieved by this decision as it directly jeopardized their ownership rights.

The appellants approached the Telangana High Court, seeking leave to appeal despite not being formal parties to the original suit. The Court embarked on a thorough analysis of legal provisions and precedents to determine whether non-parties could appeal in such circumstances. It examined Sections 96-100 of the CPC, which govern appeals from original decrees, along with Order I Rule 10(2), which allows for adding necessary parties to a suit. The Court also delved into relevant sections of the Specific Relief Act, 1963, concerning specific performance and the rights of persons affected by such contracts.

The crux of the matter was whether the appellants were "prejudicially affected" by the trial court's judgment.

The High Court concluded in the affirmative as the lower court's decision directly impacted their claim to the property. Relying on precedents from the Supreme Court and other High Courts, the Bench affirmed that the right to appeal should not be limited to formal parties but extended to any person whose rights and interests are substantially affected by a judgment. It said:

“Sections 96-100 of the CPC deal with the procedure for filing appeals from original decrees and do not restrict the categories of persons who can prefer an appeal. In essence, any person who is not a party to the Suit but is affected by a judgment can prefer an appeal with the leave of the Court. Section 96 of the CPC simply provides for appeals from original decrees and does not differentiate between parties and non-parties to the Suit in the context of preferring an appeal. This seemingly simple benchmark must however be established by the person to the Appellate Court.”

Lastly, in the facts and circumstances of the present case, the Court also noted that the appellants being subsequent purchasers would also be proper and necessary parties.

Case number: AS 1/2023

Case title: Malabai Khandarkar vs. Y. Jaihind Reddy and others

Citation: 2024 LiveLaw (Tel) 96

Counsel for appellants: M DAMODAR REDDY

Counsel for respondents: YEMIREDDY RAJASHEKAR REDDY

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