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Rights of assignor/assignee in an ongoing suit

Does the assignor/seller loose his/her interest in an ongoing suit because of the assignment/transfer ?

This issue came up in an appeal before the Hon'ble Supreme Court in Sharadamma vs Mohammed Pyrejan(D) Tr.Lrs.& Anr on 23 September, 2015.

The facts, in brief, indicate that Sharadamma, plaintiff-appellant had filed Original Suit No.6020 of 1998 on 5.8.1998 for the purposes of declaration of title and for restoration of possession on the strength of registered sale deed dated 10.11.1965. The plaintiff had also claimed a sum of Rs.3,000/- towards past damages and a further sum of Rs.20/- per day as continuing damages. The suit was dismissed by the trial court against which the plaintiff had preferred regular first appeal before the High Court. The same has been dismissed on the aforesaid ground by the impugned judgment and order.Subsequently she had released her interest in the suit property in favour of her daughter Smt. Padmavathi on 11.4.2011 and said Padmavathi, in turn, had transferred the property in favour of Mr. G.R. Ramesh vide sale deed dated 20.4.2011.  When she preferred an appeal before the Hon'ble High Court of Karnataka, the same was dismissed on the ground that she had released her interest in the suit property.

The Hon'ble Supreme Court opined that considering the provisions contained in Order 22 Rule 10 and 11 of the Code of Civil Proceduret he impugned judgment of the High Court is patently illegal. Merely due to the assignment or release of the rights during the pendency of the appeal, the appellant did not in any manner lose the right to continue the appeal. Merely by transfer of the property during the pendency of the suit or the appeal, plaintiff or appellant, as the case may be, ordinarily has a right to continue the appeal. It is at the option of the assignee to move an application for impleadment.

The Supreme Court referring to various past judgments stated thatthere cannot be dismissal of the suit or appeal, as the case may be, on account of failure of assignee to file an application to continue the proceedings. It would be open to the assignor to continue the proceedings notwithstanding the fact that he ceased to have any interest in the subject-matter of dispute. He can continue the proceedings for the benefit of assignee.

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