Pre-Suit Assignment Cannot Ground Impleadment as Co-Plaintiff Under Order I Rule 10, Rules Bombay High Court

Bombay High Court sets aside a trial court order adding an assignee as co-plaintiff, holding that a deed of assignment executed before the suit was filed cannot justify impleadment under Order I Rule 10 CPC.

The Bombay High Court has quashed a trial court order that allowed a third-party company to be impleaded as co-plaintiff in a specific performance suit, after finding that the company's only claim to party status rested on a deed of assignment executed before the original suit was filed. Justice Gauri Godse, sitting singly, held that Order I Rule 10 of the Code of Civil Procedure, 1908 does not permit such impleadment and that the appropriate remedy for the assignee is a separate suit. The judgment, pronounced on 20 August 2026, arose from Writ Petition No. 1227 of 2015 filed by the original defendants — four residents of Manjari Farm, Tal. Haveli, Dist. Pune — who had challenged the trial court's order dated 15 March 2014.

The Dispute in the Trial Court

The underlying litigation is Special Civil Suit No. 1463 of 2009, filed by Manjari Projects Private Limited (respondent no. 1) seeking specific performance of a registered development agreement dated 15 December 2006 and a supplementary agreement dated 22 August 2007, both executed by the petitioners in favour of Manjari Projects. The suit also challenged a termination notice dated 17 April 2009 by which the defendants cancelled both agreements and the related power of attorney.

What the suit did not disclose at the outset was that Manjari Projects had already assigned all its rights under the development agreement and power of attorney to a second company, Maland Projects (I) Pvt. Ltd. (respondent no. 2), by a registered deed of assignment dated 27 July 2007 — well before the suit was instituted in 2009. The defendants say this assignment was made without any intimation to them. Unaware of it, they went on to execute the supplementary agreement with Manjari Projects in August 2007.

After learning of the assignment, the defendants filed an application (Exhibit 130, dated 19 November 2013) to amend their written statement to bring the fact on record. Manjari Projects then filed its own amendment application (Exhibit 133, dated 29 November 2013) seeking to add Maland Projects as a co-plaintiff and to amend the plaint to claim specific performance in Maland's favour as well. On 15 January 2014, Maland Projects filed a separate impleadment application (Exhibit 137) under Order I Rule 10 CPC, seeking to join the suit as co-plaintiff.

All three applications were heard together. The trial court allowed the defendants' amendment application (Exhibit 130) and rejected the plaintiff's amendment application (Exhibit 133), explicitly finding that Manjari Projects had concealed the fact of assignment. However, on the same day, 15 March 2014, the trial court allowed Maland Projects' application (Exhibit 137) and directed that it be added as co-plaintiff no. 2. It was this last order that the defendants challenged by filing the present writ petition.

The Legal Question

The central question was whether a party holding a deed of assignment that pre-dates the filing of the suit can be added as a co-plaintiff under Order I Rule 10 CPC, or whether the only applicable provision for such situations is Order XXII Rule 10 CPC, which deals with assignment, creation, or devolution of interest pendente lite.

Counsel for the petitioners argued that Order I Rule 10 is triggered by a bona fide mistake in suing in the wrong plaintiff's name, or by the need to add a party whose presence is necessary for complete adjudication. Neither condition was met here. The deed of assignment in favour of Maland Projects preceded the suit, so no assignment during the pendency of the suit had occurred. Order XXII Rule 10, which covers assignments pendente lite, was simply inapplicable on the facts.

Counsel for the petitioners also relied on the Supreme Court's decision in Life Insurance Corporation of India v. Sanjeev Builders Private Limited and Anr., (2022) 16 SCC 1, where the Court held that in a suit for specific performance, impleadment can be permitted for proper adjudication when rights are assigned during the pendency of the suit. The argument was that this very reasoning confirmed the opposite outcome here: there was no assignment during the pendency.

Counsel for the respondents relied on Robin Ramjibhai Patel v. Anandibai Rama alias Rajaram Pawar and Ors., (2018) 15 SCC 614, Life Insurance Corporation of India, and Mumbai International Airport Private Limited v. Regency Convention Centre and Hotels Private Limited and Ors., (2010) 7 SCC 417, contending that a subsequent transferee can be added as a party when the plaintiff, as dominus litis, has no objection. Since Manjari Projects had not opposed Maland's impleadment, no prejudice arose to the defendants. Counsel also pointed out that the trial court had expressly kept the limitation question open, so the defendants were not foreclosed from raising that defence.

How Justice Godse Reasoned

Justice Godse began by noting a significant procedural detail: before the trial court, Maland Projects had appeared through a separate advocate, but before the High Court both respondents were represented by the same counsel. The court found this consistent with the defendants' contention that Maland Projects is a sister concern of Manjari Projects, and that the impleadment application was designed to defeat the defendants' termination defence rather than to advance any independent right of Maland.

Turning to Order I Rule 10, the court set out the provision in full and analysed its scope. Sub-rule (1) allows substitution or addition of a plaintiff only when the suit was instituted in the name of the wrong person through a bona fide mistake and such substitution is necessary to determine the real matter in dispute. No bona fide mistake had been pleaded by anyone here. Sub-rule (2) permits the court to add any party whose presence is necessary for complete and effective adjudication. But the court held that an assignment made before the suit was filed cannot constitute a ground under either sub-rule.

The reason the distinction matters, the court explained, is structural. The defendants' entire defence was that Manjari Projects had divested itself of all rights before filing the suit, and therefore the suit itself was not maintainable. Allowing the assignee in as co-plaintiff would effectively neutralise that defence without meeting its substance. If the termination notice were ultimately upheld by the trial court, a deed of assignment deriving from the terminated development agreement would confer nothing on Maland Projects anyway.

Justice Godse then distinguished the precedents cited by the respondents. In Robin Patel, there were rival claims against the same vendor — a different factual configuration entirely. In Life Insurance Corporation of India, the assignment had taken place during the pendency of the suit, so Order XXII Rule 10 was directly engaged. In Mumbai International Airport, the addition of an assignee as co-plaintiff was considered under Order XXII Rule 10. The court observed that Mumbai International Airport itself recognised that impleadment may be refused if it would alter the nature of the suit or create a new cause of action.

The respondents had also cited a Bombay High Court decision in State Trading Corporation of India Ltd. — In the matter of — Standard Chartered Bank v. ICICI Lombard General Insurance Company Ltd., 2015 SCC OnLine Bom 6272. Justice Godse distinguished it on the ground that the assignment in that case was by way of consent terms signed before the Debt Recovery Tribunal during the pendency of the suit — again a pendente lite situation.

The court also found the trial court's reasoning internally contradictory. Having already held that Manjari Projects concealed the assignment and having rejected the amendment application (Exhibit 133) on that ground, the trial court nonetheless allowed Maland's own impleadment application by reasoning that Maland had “purchased the litigation and therefore had stepped into the shoes of the plaintiff.” Justice Godse held this was erroneous: since the assignment pre-dated the filing of the suit, there was no litigation to purchase and no “stepping into shoes” in the pendente lite sense.

The Court's Conclusions

Justice Godse held that the assignment in favour of Maland Projects, being admittedly prior to the date of filing of the suit, could not be a valid ground to add Maland as a co-plaintiff under Order I Rule 10 CPC. The provision governing assignment of interest during the pendency of a suit — Order XXII Rule 10 — was not attracted because the assignment was not pendente lite.

Allowing the impleadment would cause serious prejudice to the defendants. They are entitled to oppose the prayer for specific performance and for cancellation of the termination notice on the ground that the plaintiff had already divested its rights before approaching the court. Permitting a third party in as co-plaintiff on the basis of the same assignment would undercut that defence without any valid procedural or substantive basis.

At most, Maland Projects is entitled to file a separate suit to enforce whatever rights it claims under the deed of assignment, subject to all objections that the defendants may raise in that proceeding.

Order

The Bombay High Court allowed Writ Petition No. 1227 of 2015. The order dated 15 March 2014 passed below Exhibit 137 in Special Civil Suit No. 1463 of 2009 was quashed and set aside, and the application at Exhibit 137 filed by Maland Projects (I) Pvt. Ltd. was dismissed. The court expressly clarified that the order would not preclude respondent no. 2 from filing a separate suit, subject to all just objections by the proposed defendants.