GOVERNMENT OF ORISSA versus M/S. ASHOK TRANSPORT AGENCY AND ORS.

Citation: [2002] 3 S.C.R. 632 · Decided: 30-04-2002 · Supreme Court of India · Bench: M.B. SHAH · Disposal: Matter referred to larger bench

Judgment (excerpt)

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GOVERNMENT OF ORISSA 
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v. 
MIS. ASHOK TRANSPORT AGENCY AND ORS. 
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APRIL 30, 2002 
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[M.B. SHAH AND B.N. AGRAWAL, JJ.] 
Code of Civil Procedure, 1908/0rissa Mining Corporation (Acquisition 
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and Transfer of Charge Chrome Division) Ordinance, 1991--0rder XXll Rule 
c 1 O/Clause 1 (5)-Continuation of suit on devolution of interest during pendency 
of suit-Whether an ex-parte decree against a company taken over by State 
Government can be executed against the government even though the same 
was not brought on record before passing of the decree-Difference of opinion 
among the Judges on the question-Hence, case referred to larger Bench. 
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The question for consideration in the present appeal was whether an 
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ex-parte decree against a company taken over by State Government can 
be executed against the Government even though the same was not brought 
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on record before passing of the decree. 
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Appellant-State contended that the decree passed against the 
defendant-company a division of Orissa Mining Corporation was not 
binding on the State, as it was not brought on record as party-defendant; 
it was duty of the plaintiff-respondent to bring the appellant-State on record 
in view of its taking over the company and on failure to do so, the decree 
against the original defendant would not be binding and cannot be executed 
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against a person in whom the interest has devolved. 
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Respondent contended that decree was binding on the State a·s it is a 
successor-in-interest of the original defendant as the State had not moved 
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any application to set aside the ex-parte decree or filed appeal against the 
G same or applied for declaration that the decree was binding.on it; and that 
successor.s are bound by the result of the litigation even if such successors 
are not brought 00 record. 
Referring the matter to the larger Bench, the Court 
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632 
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GOVERNMENT OF ORI SSA v. ASHOK TRANSPORT AGENCY 
633 
HELD : (Per Shah, J.) 
I.I. Though it is true that whatever steps have already taken place 
in pending suit will continue to operate against and be binding on the 
transferee and in the present case on the State of Orissa. But as ex-parte 
decree was not passed prior to taking over by the State Government, 
therefore, such decree would not be binding on the State Government as 
it was not impleaded in the suit and the plaintiff has not taken steps for 
continuing the suit against it. (643-D-El 
1.2. For continuance of the suit, the person who is affected has to file 
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an application and normally such application is to be filed by the plaintiff. C 
In the present case, plaintiff has not discharged such duty to apply for leave 
for bringing the State of Orissa on record as party defendant. 
(643-H; 644-A; 644-B( 
1.3. The party who wants to continue the suit or other proceeding 
has to apply to the Court to grant leave to continue suit or proceedings in D 
such cases. To expect the party in whose favour an assignment, creation 
or devolution of interest has taken place during the pendency of the suit, 
to file application for continuing the suit against him, would be totally 
unreasonable. Such party may not be knowing about such proceedings. May 
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be that, in cases where principle of /is pendente is applicable, such party 
may apply to the court for grant of leave to continue the proceeding. 
Similarly, if the decree is passed against the defendant, before assignment, 
creation or devolution of interest, such party with the leave of court can 
continue the appeal or file such appeal .. ·Iris also true that Rule to of Order 
XXll CPC nowhere provides that.suit would abate in cases of assignment, 
creation or devolution of any interest. The apparent reason may be that F 
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suit would not abate against the original defendant and Court may pass a 
decree against such defendant. (639-D-F( 
1.4. Clause 1(5) of Orissa Mining Corporation (Acquisition and 
. Transfer of Charge Chrome Division) Ordinance, 1991 is in consonance G 
with the provisions of Order XXll Rule to and other provisions of the CPC. 
For continuing the suit against the State Government the State Government 
is ;-equired to be brought on record. Not that, automatically the State 
Government is deemed to be party to the suit or proceedings. For 
continuing the suit the plaintiff has to file application as contemplated under 
Order XXll Rule 10 for bringing the State Government on record as a H 
634 
SUPRE

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