Full Judgment Text
THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 07.07.2014
+ FAO(OS) 202/2013 & CM Nos.6127/2013, 13451/2013 & 1/2014
CHARANJEET SINGH REKHI ..... Appellant
versus
HARISH AHUJA & ORS. ..... Respondents
AND
+ FAO(OS) 212/2013 & CM No.6449/2013
CHARANJEET SINGH REKHI ..... Appellant
versus
HARI MOHAN SHARMA & ORS. ..... Respondents
AND
+ FAO(OS) 235/2013 & CM No.7325/2013
CHARANJEET SINGH REKHI & ORS. ..... Appellants
versus
CSR POULTRY RESEARCH & BREADING
FARM & ORS. ..... Respondents
Advocates who appeared in this case:
For the Appellants : Ms Geeta Luthra, Sr. Advocate alongwith Mr
Rajeev Kumar and Mr Harish Malik, in
FAO(OS) 202/2013 & 212/2013.
Mr M. Qayam-Ud-Din in FAO(OS) 235/2013
For the Respondents : Mr Parag P. Tripathi, Sr. Advocate alongwith
Ms Neelima Tripathi, for R-1.
Mr Anil Airi, Mr Hemant Manjani and Mr
FAO(OS) Nos.202/2013, 212/2013 & 235/2013 Page 1 of 23
Pratyush Sharma, for R-2 & 3 in FAO(OS)
202/2013
Mr Suhail Dutt, Sr. Advocate alongwith Mr
Anil Kapur, for R-1 & 3
Mr Anil Airi, Mr Hemant Manjani and Mr
Pratyush Sharma, for R-7 to 9.
Mr Parag P. Tripathi, Sr. Advocate alongwith
Ms Neelima Tripathi, for R-11 in FAO(OS)
212/2013
Mr Anil Airi, Mr Hemant Manjani and Mr
Pratyush Sharma, for R-1 to 3.
Mr Parag P. Tripathi, Sr. Advocate alongwith
Ms Neelima Tripathi, for R-5
Mr Suhail Dutt, Sr. Advocate alongwith Mr
Anil Kapur, for Mr Gajender Kumar and Mr
Hari Mohan Sharma in FAO(OS) 235/2013
CORAM:-
HON’BLE MR JUSTICE BADAR DURREZ AHMED
HON’BLE MR JUSTICE VIBHU BAKHRU
JUDGMENT
VIBHU BAKHRU, J
1. These appeals have been filed by the appellants impugning a
common order dated 05.03.2013, passed by a learned Single Judge of this
Court in CS(OS) No.1511/1991 and CS(OS) No.2278/1993, whereby the
learned Single Judge dismissed the following applications:-
a) I.A. No.3133/2011 filed in CS(OS) No.2278/1993 under Order 1
Rule 10 of CPC for impleadment by the appellant in FAO(OS)
No.202/2013.
FAO(OS) Nos.202/2013, 212/2013 & 235/2013 Page 2 of 23
b) I.A. No. 2836/2011 filed in CS(OS) No.1511/1991 under Order 1
Rule 10 of CPC for impleadment by the appellant in FAO(OS)
No.212/2013.
c) I.A. No.14464/2010 filed in CS(OS) No.1511/1991 under Order 1
Rule 10 of CPC for impleadment by the appellants in FAO(OS)
No.235/2013, and
d) I.A. No.14465/2010 filed in CS(OS) No.2278/1993, for direction not
to record the compromise, by the appellants in FAO(OS)
No.235/2013.
2. As all the appeals impugn the common order and since, the substratal
facts are similar, the same have been taken up together.
3. Briefly stated, Charanjit Singh Rekhi S/o Dr Nand Singh Rekhi
(respondent no.2 in FAO(OS) No.235/2013 ) and his wife Manjit Kaur
Rekhi (respondent no.3 in FAO(OS) No.235/2013 ) formed a partnership
firm named as ‘CSR Poultry Research & Breeding Farm’ and owned two
properties i.e., agricultural land with a poultry farm in Village Ghitorni,
Mehrauli, New Delhi and a land at Village Narsinghpur, District Gurgaon,
Haryana (hereinafter referred as the ‘suit properties’). The suit properties
were mortgaged to Punjab & Sind Bank (hereinafter referred as the ‘Bank’)
and on non-payment of dues, the Bank filed a civil suit (CS(OS)
No.463/1983) in this Court for recovery of the dues. On 05.02.1985, the
said suit was decreed in favour of the bank and pursuant thereto, an
Execution Petition No.32/1985 was filed by the bank for sale of the suit
properties in order to recover its dues.
FAO(OS) Nos.202/2013, 212/2013 & 235/2013 Page 3 of 23
4. Thereafter, Hari Mohan Sharma, M/s Moti Board Industries Pvt.
Ltd., Gajendra, Om Prakash Sharma, Manju Mishra, Inder Pratap Singh
Akoi (respondent nos.6 to 11 respectively in FAO(OS) No.235/2013) filed
a civil suit (CS(OS) No.1511/1991) alleging that Charanjit Singh Rekhi and
his wife Manjit Kaur Rekhi had entered into an agreement dated
14.09.1990, through their son and attorney Jasjit Singh, for sale of the suit
properties for a total consideration of 1,01,00,000/-. It was alleged that, in
`
terms of the said agreement, respondent nos.6 to 11 paid a sum of
` 98,00,000/- to the Bank thereby satisfying the entire dues of respondents
no. 2 & 3 towards the bank and the balance amount of ` 3,00,000/- was paid
to respondent nos. 2 & 3. It was also alleged that, after receiving the entire
sale consideration, respondent nos.2 & 3 terminated the agreement by a
notice dated 29.01.1991. Consequently, respondents no. 6 to 11 filed a civil
suit (CS(OS) No.1511/1991) claiming specific performance of the
agreement dated 14.09.1990 executed in their favour.
5. During the pendency of the above mentioned suit, on 05.01.1991,
Inder Pratap Singh transferred his interest in the suit properties in favor of
M/s Moti Board Industries Pvt. Ltd. On 20.02.1992, Manju Mishra
transferred her interest in the suit properties in favor of Gajendra. On
15.11.1994, Om Prakash Sharma transferred his interest in the suit
properties in favor of Hari Mohan Sharma. On 14.04.1995, M/s Moti Board
Industries Pvt. Ltd. transferred its interest in the suit properties in favor of
Gajendra. Thus, respondents nos. 7, 9, 10 and 11 were left with no interest
in the suit properties as their interests were transferred to nos.6 & 8.
FAO(OS) Nos.202/2013, 212/2013 & 235/2013 Page 4 of 23
6. Thereafter, a joint application (I.A. No.1452/1994) was filed under
Order XXIII Rules 1 and 3 of CPC by the parties to the suit, for decreeing
the suit in terms of a compromise arrived at between the parties to the suit.
In terms of the said compromise, a further sum of ` 7,00,000/- was paid to
respondent nos. 2 & 3 thereby increasing the total consideration amount for
the suit properties to ` 1,08,00,000/-.
7. In the meanwhile, Harish Ahuja (respondent no.5) also filed a civil
suit CS(OS) No.2278/1993 alleging that Charanjit Singh Rekhi and his wife
Manjit Kaur Rekhi, through their GPA holder Kanwaljit Singh, had
executed an Agreement to Sell, dated 27.04.1989, in favor of Harish Ahuja
for sale of the suit properties i.e., Mehrauli land at the rate of ` 18,00,000
per acre and Narsimpur land at rate of 3,00,000 per acre. It was alleged
`
that after receiving a sum of ` 2,10,000/- as part sale consideration,
respondents no.2 & 3 purported to terminate the said agreement by their
letter dated 26.09.1989. In consequence thereof, Harish Ahuja filed a civil
suit on 05.10.1989, seeking specific performance of the agreement dated
27.04.1989.
8. Thereafter, the compromise application (I.A. No.1452/1994) was
considered by a learned Single Judge of this court on 15.05.1998 and the
court held as under:-
“22. The application be retained on record as compromise
between Sharmas and Rekhis that is plaintiffs and the
defendants 1, 2 and 3 respectively. The effect thereof shall be
taken into consideration by the court at the time of final
judgment in the two suits.”
FAO(OS) Nos.202/2013, 212/2013 & 235/2013 Page 5 of 23
9. On 09.08.2010, a joint application (I.A. No.10905/2010) was filed in
CS(OS) No.1511/1991 under Order 23 Rule 1 & 3 of CPC by the
respondent nos. 6 & 8 (Hari Mohan Sharma and Gajendra) and respondent
no.5 (Harish Ahuja), praying for a decree in terms of the compromise
arrived at between the parties. The said application is still pending and has
not been disposed of. It is relevant to note that the learned counsel
appearing for respondent nos. 2 & 3 submitted that Charanjit Singh Rekhi
died on 10.10.2006 and as per order dated 27.03.2008, his son Jasjit Singh
was brought on record being a legal heir of Charanjit Singh Rekhi. His wife
Manjit Kaur Rekhi was already a party in the suit.
10. At this stage, two applications IA No.14464/2010 in CS(OS)
No.1511/1991 (for impleadment) and IA No.14465/2010 in CS(OS)
No.2278/1993 (for rejecting the compromise between the parties of two
suits) were filed by some other persons claiming to be Charanjeet Singh S/o
Nandi Singh and Manjit Kaur w/o Charanjeet Singh both resident of 41,
Mohalla Itabba Village Itabba, PS Bazpur Distt. Udhamsingh Nagar,
Uttrakhand). The said applicants are hereinafter referred to as ‘Charanjeet
Singh (CSR-1)’ and ‘Manjit Kaur (MKR-1)’. They claimed to be real
owners of the suit properties and denied entering into any agreement to sell
either with plaintiffs in CS(OS) No.1511/1991 or with plaintiff in CS(OS)
No.2278/1993. It is submitted by the learned counsel for the said applicants
that Manjeet Kaur (MKR-1) died on 11.11.2012 during the pendency of the
application and Charanjeet Singh (CSR-1) is alive and actively pursued the
said application.
FAO(OS) Nos.202/2013, 212/2013 & 235/2013 Page 6 of 23
11. Thereafter, two applications (IA No.2836/2011) for impleadment as
a party in CS(OS) No.1511/1991 and I.A. No.3133/2011 for impleadment
as a party in CS(OS) No.2278/1993 were filed by another person claiming
to be Charanjeet Singh Rekhi S/o Nand Singh Rekhi R/o S-64, GK-I, New
Delhi-18 and owner of the suit properties. The said applicant is hereinafter
referred to as ‘Charanjeet Singh (CSR-2)’ and his wife is referred to as
‘Manjit Kaur (MKR-2)’. It was submitted by the learned counsel for the
said applicant that Charanjeet Singh (CSR-2), whom he represents, is alive,
however his wife Manjeet Kaur (MKR-2) died in the year 2010 and
therefore, the application was pursued only by Charanjeet Singh (CSR-2).
12. In the given circumstances, the learned Single Judge ordered an
inquiry/investigation on 22.03.2011, to ascertain as to who was the real
owner of the suit properties and directed an investigating officer to file a
report. Pursuant to the said direction, investigation was carried out and an
FIR (No.106/2011) was registered on 04.06.2011 and, subsequently, a
charge-sheet was filed on 20.06.2012. Thereafter, Tej Pal Singh, ACP,
EOW, Crime Branch (Investigating Officer), filed a status report, as well as
a final report.
13. As per the status report dated 26.07.2012, the applicants in I.A.
No.14464/2010 & I.A. No.14465/2010 (i.e. Charanjeet Singh, CSR-1 and
Manjit Kaur, MKR-1) were found to be Charan Singh S/o Balwant Singh
and Jamuna Kaur W/o Charan Singh both R/o Village Harsan, Tehsil
Bazpur, District Udham Singh Nagar, Uttrakhand. Similarly, the applicant
in I.A. No. 2836/2011 (i.e. Charanjeet Singh, CSR-2), was found to be
Amritpal Singh S/o Kehar Singh R/o Village Ratia, District Fatehabad,
FAO(OS) Nos.202/2013, 212/2013 & 235/2013 Page 7 of 23
Haryana. The said Charan Singh and Amritpal Singh were arrested on
25.03.2012 and Jamuna Kaur is reported to be absconding. It was also
stated that the witnesses and one seller, who are the signatories of the sale
deed of the land of Village Narsinghpur, Gurgaon, Haryana, have
confirmed from the certified copies of the sale deed that Charanjeet Singh
Rekhi and Manjit Kaur Rekhi, whose photographs are available on record
of case file are the real purchasers of the land which was sold by the owners
of the property. Similarly, the legal heirs of the sellers of the land of Village
Ghitorni, Mehrauli, Delhi have also identified the signatures of their father
and uncle on the sale deeds through which the said land was sold to
Charanjeet Singh Rekhi and Manjit Kaur Rekhi and have also identified the
photographs of the purchasers, Charanjeet Singh Rekhi and Manjit Kaur
Rekhi, available on the record of the case file. The said Charanjeet Singh
Rekhi and Manjit Kaur Rekhi are those persons who are stated to have
obtained a loan from State Bank of India, R.K Puram, New Delhi and
Punjab & Sindh Bank, Green Park Extension, New Delhi against the
mortgage of the suit properties.
14. Thereafter, the learned Single Judge dismissed the various
applications for impleadment (being I.A. No.14464/2010, I.A.
No.2836/2011, IA No. 14465/2010 and IA No. 3133/2011) by the
impugned order dated 05.03.2013, whereby the Court held as under:-
“15. However all of them agree that their impleadment in the
present suit will necessarily entail adjudication in the present
suit as to which Sh. Charanjit Singh Rekhi and Smt. Manjeet
Kaur Rekhi are the genuine ones and which are not.
FAO(OS) Nos.202/2013, 212/2013 & 235/2013 Page 8 of 23
16. I am of the opinion that the aforesaid adjudication will be
totally outside the ambit of the present suit which as aforesaid is
only for specific performance of an Agreement of Sale of
immovable property.
xxxx xxxx xxxx xxxx xxxx
18. The principle, that in a suit for specific performance,
persons claiming adversely to the defendants are not a
necessary or a proper party and ought not to be impleaded is a
well settled one, reiterated by the Supreme Court recently in
Thomson Press (India) Ltd. Vs. Nanak Builders and Investors
P. Ltd. MANU/SC/0192/2013. Even though the dispute in the
present case is of the multiple identities of the defendants but I
have no hesitation in holding the same principles to apply and
the present suit cannot be converted into a suit for adjudication
of which is the real Sh. Charanjit Singh Rekhi and Smt.
Manjeet Kaur Rekhi.
19. It is always open to the applicants to, in a separate
proceeding filed against Mr. Anil Airi's client, plead that they
are not the persons who are the owners of the property subject
matter of the suit and should not proceed to act with respect
thereto and to seek appropriate orders.”
15. Aggrieved by the dismissal of the applications, the appellants
(Charanjeet Singh (CSR-2) in FAO(OS) 202/2013 & FAO(OS) 212/2013
and Charanjeet Singh (CSR-1) alongwith his son Daljeet Singh in
FAO(OS) No. 235/2013) have challenged the common order dated
05.03.2013 in these three appeals.
16. It is relevant to note that one Jangir Singh had also filed an
application (I.A. No.6487/2011) for impleadment in CS(OS) No.1511/1991
claiming that on 13.10.1983, Charanjeet Singh S/o Nandi Singh Rekhi then
R/o S-64, Greater Kailash-I, New Delhi had executed a will in favour of
FAO(OS) Nos.202/2013, 212/2013 & 235/2013 Page 9 of 23
Jangir Singh for his share in the property situated at Gurgaon. It was
alleged that the said Charanjeet Singh was presumed to be dead as he was
not traceable for the past over seven years and therefore, Jangir Singh had
initiated probate proceedings before the Gurgaon court and the same were
pending. The said application (I.A. No.6487/2011) was also dismissed by
the impugned order, however, Jangir Singh has not challenged the dismissal
of the said application.
17. The learned counsel appearing for the appellants in FAO(OS)
No.235/2013 (Charanjeet Singh, CSR-1 in I.A. No.14464/2010 and in I.A.
No.14465/2010) contended that the applicants were the real Charanjit Singh
Rekhi and Manjit Kaur Rekhi and were the genuine owners of the suit
properties and therefore, they were the necessary and proper parties in the
civil suit. It was submitted that respondent nos. 2 and 3 were imposters who
were claiming title to the suit properties which belonged to the applicants.
The applicants disputed the genuineness of the agreement and true identity
of the parties and denied having entered into any agreements with respect to
the suit properties. It was, therefore, contended that the applicants were
necessary and proper parties and ought to have been impleaded in the suit.
The learned counsel placed reliance on the decision of the Supreme Court
in the case of Sumtibai & Ors. v. Paras Finance Co. : (2007) 10 SCC 82
and in the case of Thomson Press (India) Ltd. v. Nanak Builders &
Investors Pvt. Ltd. : (2013) 5 SCC 397. With regard to the application of
Order 1 Rule 10(2) of CPC, the counsel has placed reliance on the decision
of the Supreme Court in the case of Mumbai International Airport Pvt.
Ltd. v. Regency Convention Centre & Hotels Pvt. Ltd. : (2010) 7 SCC 417.
FAO(OS) Nos.202/2013, 212/2013 & 235/2013 Page 10 of 23
18. It was contended by the learned counsel for the applicant (Charanjeet
Singh, CSR-2) in I.A. No.2836/2011 and in I.A. No.3133/2011, that the
applicant is the real Charanjit Singh Rekhi who owns the suit properties. It
was stated that his wife Manjit Kaur Rekhi had expired in the year 2010
and therefore, the applicant was a necessary and proper party to be
impleaded in the civil suits. It was also contended that the original title
deeds of one of the suit properties, namely the property at Gurgaon,
Haryana were in his possession, and the title deeds of the other immovable
property at Mehrauli were mortgaged with State Bank of India, which have
disappeared from that Bank. It was submitted that the title deeds, if any,
deposited with Punjab and Sind Bank were not the genuine title deeds.
19. The learned counsel appearing for Harish Ahuja (plaintiff in CS(OS)
No.2278/1993) contended that in a suit for specific performance of a
contract, only the parties to the contract or persons claiming under them are
necessary parties and persons claiming adversely to the vendor are not
necessary parties. It was submitted that Section 19 of the Specific Relief
Act, 1963 is exhaustive and only parties to the contract could be made
parties to a suit for specific performance. It was contended that the scope of
the suit filed by the plaintiff could not be enlarged at the behest of a
stranger to the suit. It was submitted that the expression “all the questions
involved in the suit”, as used in order 1 Rule 10 (2) covers only such
controversies as are raised between the parties to the suit. In the present
case, all the applicants have denied executing any of the agreements to sell
with the plaintiffs in the two suits and, therefore, the performance of the
contract by the applicants is not the controversy/subject matter in the suit.
FAO(OS) Nos.202/2013, 212/2013 & 235/2013 Page 11 of 23
The applicants cannot be permitted to enlarge the scope of the suits and
therefore cannot be impleaded as parties in the suit.
20. It was contended that a third party or a stranger to a suit cannot be
added so as to convert the suit of one character into a suit of different
character. In the present case, the suit was filed for the specific performance
of the contract, and the same cannot be converted into a suit for declaration
as to the real identity of the parties at the behest of a stranger to the suit.
The plaintiff in suit is dominus litis and cannot be forced to add parties
against whom he does not want to litigate. In support of these contentions,
the counsel placed reliance on the judgments; Kasturi v. Iyyamperumal
and Others : (2005) 6 SCC 733 and Ramesh Hirachand Kundanmal v.
Municipal Corporation of Greater Bombay & Others : (1992) 2 SCC 524.
21. It was also contended that the original Rekhis were litigating from
the point when they had mortgaged the suit properties with the Bank and
have gone through various litigations for the past 27 years and no challenge
was made as to the identity of parties at any stage. It was submitted that, as
per the investigation and the status report filed by the police, all the three
applicants (Charanjeet Singh, CSR-1; Manjit Kaur, MKR-1; Charanjeet
Singh, CSR-2 and Jangir Singh) were found to be impersonators and an
FIR No.106/2011 has also been registered against them. Therefore, all the
three appeals merit dismissal.
22. We have heard the learned counsel for the parties at length.
23. The appellants have contested the proposition that in a suit for
specific performance of a contract for sale of property, impleadment of a
FAO(OS) Nos.202/2013, 212/2013 & 235/2013 Page 12 of 23
person claiming a title adverse to that of the vendor is not necessary.
However, there is abundant precedent supporting the view that where a
person seeks to be impleaded as a party- defendant claiming an independent
title to the suit property, it would not be necessary to implead the said
person in a suit for specific performance of a contract for sale of the
property. The Supreme Court in the case of Kasturi (supra) held as under:-
“7. A purchaser is a necessary party as he would be affected if
he had purchased with or without notice of the contract, but a
person who claims adversely to the claim of a vendor is,
however, not a necessary party. From the above, it is now clear
that two tests are to be satisfied for determining the question
who is a necessary party. Tests are — (1) there must be a right
to some relief against such party in respect of the controversies
involved in the proceedings; (2) no effective decree can be
passed in the absence of such party.”
24. The appellants have relied upon a decision of the Supreme Court in
Sumtibai and Ors. (supra) wherein the Supreme Court had referred to
various decisions including its earlier decision in Kasturi (supra) and held
as under:
“In view of the aforesaid decisions we are of the opinion that
Kasturi case is clearly distinguishable. In our opinion it cannot
be laid down as an absolute proposition that whenever a suit for
specific performance is filed by A against B , a third party C can
never be impleaded in that suit. In our opinion, if C can show a
fair semblance of title or interest he can certainly file an
application for impleadment. To take a contrary view would
lead to multiplicity of proceedings because then C will have to
wait until a decree is passed against B , and then file a suit for
cancellation of the decree on the ground that A had no title in
the property in dispute. Clearly, such a view cannot be
countenanced.”
FAO(OS) Nos.202/2013, 212/2013 & 235/2013 Page 13 of 23
25. The facts in the case of Sumtibai and Ors. (supra) were clearly
dissimilar from those in the case of Kasturi (supra) . In the case of Sumtibai
and Ors. (supra) , the defendant expired and his legal heirs were brought on
record. The legal heirs wanted to file an additional written Statement to
plead that they also had interest in the Suit property. The application filed
by the legal heirs under Order 22 Rule 4(2) read with Order 1 Rule 10 CPC
was rejected. It is in this context that the court held that a party has a right
to take whatever plea he/she wants to take. It is thus settled that there
cannot be an absolute proposition that in no circumstances can a person
claiming title to the suit property be impleaded as a necessary or proper
party to a suit for specific performance. The question whether a person is a
necessary or a proper party to a suit would have to be decided in the given
facts and circumstances of a case. It is relevant to note that the decision in
the case of Kasturi (supra) has also been referred to by the Supreme Court
in the case of Thomson Press (India) Ltd. (supra) which is a later decision.
26. The quintessential controversy in the present case is whether the
aforesaid principle can be applied in a case of multiple identities. The
controversy is not that the appellants are claiming an independent title
adverse to all the original defendants (Charanjeet Singh Rekhi, respondent
no. 2 & Manjit Kaur Rekhi, respondent no.3). The appellants are infact
claiming to be the said defendants and/or their successors. The question that
needs to be addressed is, whether it is necessary to determine a controversy
as to the identity of a defendant in a suit for specific performance of a
contract for sale of a property. In the present case while, it may not be in
dispute that the persons claiming to be the defendants originally, had
FAO(OS) Nos.202/2013, 212/2013 & 235/2013 Page 14 of 23
entered into a contract the specific performance of which is sought to be
enforced, however, the appellants have disputed that the contract has been
entered into by Charanjeet Singh Rekhi & Manjit Kaur Rekhi (respondent
nos. 2 & 3), as they are claiming to be those persons. And, have further
asserted that the contract in question had not been entered into by them but
by imposters.
27. The present appeals emanate from the dismissal of the applications
filed by the appellants under Order 1 Rule 10 of the Code of Civil
Procedure. Before proceeding further it would be necessary to refer to
Order 1 Rule 10 of CPC, which reads as under:-
“ 10. Suit in name of wrong plaintiff. — (1) Where a suit has
been instituted in the name of the wrong person as plaintiff or
where it is doubtful whether it has been instituted in the name
of the right plaintiff, the Court may at any stage of the suit, if
satisfied that the suit has been instituted through a bona fide
mistake, and that it is necessary for the determination of the real
matter in dispute so to do, order any other person to be
substituted or added as plaintiff upon such terms as the Court
thinks just.
(2) Court may strike out or add parties .—The Court may at
any stage of the proceedings, either upon or without the
application of either party, and on such terms as may appear to
the Court to be just, order that the name of any party improperly
joined, whether as plaintiff or defendant, be struck out, and that
the name of any person who ought to have been joined, whether
as plaintiff or defendant, or whose presence before the Court
may be necessary in order to enable the Court effectually and
completely to adjudicate upon and settle all the questions
involved in the suit, be added.
FAO(OS) Nos.202/2013, 212/2013 & 235/2013 Page 15 of 23
(3) No person shall be added as a plaintiff suing without a next
friend or as the next friend of a plaintiff under any disability
without his consent.
(4) Where defendant added, plaint to be amended .—Where
a defendant is added, the plaint shall, unless the Court
otherwise directs, be amended in such manner as may be
necessary, and amended copies of the summons and of the
plaint shall be served on the new defendant and, if the Court
thinks fit, on the original defendant.
(5) Subject to the provisions of the Indian Limitation Act, 1877
(15 of 1877), section 22, the proceedings as against any person
added as defendant shall be deemed to have begun only on the
service of the summons.”
28. A plain reading of Order 1 Rule 10(2) of CPC indicates that the
Court has wide discretion to strike out the names of the parties which have
been improperly joined and implead any person as a party whose presence
may be necessary in order to enable the Court to effectively and completely
adjudicate upon and settle all the questions involved in the suit. The
Supreme Court, in a number of decisions, has interpreted the provisions of
Order 1 Rule 10 of CPC and held that it provides the Court with the
necessary discretion to implead any person who is either a necessary or a
proper party and whose presence is essential for the effective adjudication
of the disputes involved in an action. In Thomson Press (India) Ltd.
(supra) , the Supreme Court stated this proposition as under:-
“31. From the bare reading of the aforesaid provision, it is
manifest that sub-rule (2) of Rule 10 gives a wider discretion to
the court to meet every case or defect of a party and to proceed
with a person who is either a necessary party or a proper party
whose presence in the court is essential for effective
determination of the issues involved in the suit.”
FAO(OS) Nos.202/2013, 212/2013 & 235/2013 Page 16 of 23
29. It is well settled that a necessary party is one in the absence of whom
no effective order can be passed. A proper party is one in whose absence an
effective order can be passed but its presence is necessary for adjudication
of the disputes involved in the suit. The Supreme Court in the case of
Ramesh Hirachand Kundanmal (supra) has explained this in the
following words:-
“6. Sub-rule (2) of Rule 10 gives a wide discretion to the Court
to meet every case of defect of parties and is not affected by the
inaction of the plaintiff to bring the necessary parties on record.
The question of impleadment of a party has to be decided on
the touchstone of Order 1 Rule 10 which provides that only a
necessary or a proper party may be added. A necessary party is
one without whom no order can be made effectively. A proper
party is one in whose absence an effective order can be made
but whose presence is necessary for a complete and final
decision on the question involved in the proceeding. The
addition of parties is generally not a question of initial
jurisdiction of the Court but of a judicial discretion which has to
be exercised in view of all the facts and circumstances of a
particular case.”
30. The learned counsel for the respondents have relied upon the
decision in the case of Ramesh Hirachand Kundanmal (supra) and have
referred to paragraph 14 of the said judgment which reads as under:-
“14. It cannot be said that the main object of the rule is to
prevent multiplicity of actions though it may incidentally have
that effect. But that appears to be a desirable consequence of the
rule rather than its main objective. The person to be joined must
be one whose presence is necessary as a party. What makes a
person a necessary party is not merely that he has relevant
evidence to give on some of the questions involved; that would
only make him a necessary witness. It is not merely that he has
an interest in the correct solution of some question involved and
FAO(OS) Nos.202/2013, 212/2013 & 235/2013 Page 17 of 23
has thought of relevant arguments to advance. The only reason
which makes it necessary to make a person a party to an action
is so that he should be bound by the result of the action and the
question to be settled, therefore, must be a question in the
action which cannot be effectually and completely settled
unless he is a party. The line has been drawn on a wider
construction of the rule between the direct interest or the legal
interest and commercial interest. It is, therefore, necessary that
the person must be directly or legally interested in the action in
the answer, i.e., he can say that the litigation may lead to a
result which will affect him legally that is by curtailing his legal
rights. It is difficult to say that the rule contemplates joining as
a defendant a person whose only object is to prosecute his own
cause of action. Similar provision was considered
in Amon v. Raphael Tuck & Sons Ltd. [(1956) 1 All ER 273 :
(1956) 1 QB 357] , wherein after quoting the observations of
Wynn-Parry, J. in Dollfus Mieg et Compagnie S.A. v. Bank of
England[(1950) 2 All ER 605, 611] , that their true test lies not
so much in an analysis of what are the constituents of the
applicants' rights, but rather in what would be the result on the
subject matter of the action if those rights could be established,
Devlin, J. has stated:
“The test is ‘May the order for which the plaintiff is
asking directly affect the intervener in the enjoyment of his
legal rights’.””
31. It is contended by the respondents that in view of the fact, that it is an
admitted position that the appellants or persons through whom they are
claiming their title had not executed the contract, the appellants cannot be
impleaded as parties. It is submitted that for a person to be made a party to
a suit, it is necessary that the person must be legally and directly interested
in the action. Since, it is an admitted position that the appellants or their
predecessors had not entered into the contract in question, they would not
be necessary parties to the suits.
FAO(OS) Nos.202/2013, 212/2013 & 235/2013 Page 18 of 23
32. We are unable to accept this contention. It is settled law that in order
to determine whether a person is a necessary party to an action, one of the
tests that is to be applied is whether he should be bound by the result of the
action. The Supreme Court in the case of Vidur Impex & Traders (P) Ltd.
v. Tosh Apartments (P) Ltd. : (2012) 8 SCC 384 has referred to various
decisions and set down the broad principles which are applied while
considering an application for impleadment. The relevant extract of the said
judgment is as under:-
“41. Though there is apparent conflict in the observations made
in some of the aforementioned judgments, the broad principles
which should govern disposal of an application for impleadment
are:
41.1. The court can, at any stage of the proceedings, either on an
application made by the parties or otherwise, direct impleadment
of any person as party, who ought to have been joined as plaintiff
or defendant or whose presence before the court is necessary for
effective and complete adjudication of the issues involved in the
suit.
41.2. A necessary party is the person who ought to be joined as
party to the suit and in whose absence an effective decree cannot
be passed by the court.
41.3. A proper party is a person whose presence would enable the
court to completely, effectively and properly adjudicate upon all
matters and issues, though he may not be a person in favour of or
against whom a decree is to be made.
41.4. If a person is not found to be a proper or necessary party,
the court does not have the jurisdiction to order his impleadment
against the wishes of the plaintiff.
41.5. In a suit for specific performance, the court can order
impleadment of a purchaser whose conduct is above board, and
FAO(OS) Nos.202/2013, 212/2013 & 235/2013 Page 19 of 23
who files application for being joined as party within reasonable
time of his acquiring knowledge about the pending litigation.
41.6. However, if the applicant is guilty of contumacious conduct
or is beneficiary of a clandestine transaction or a transaction
made by the owner of the suit property in violation of the
restraint order passed by the court or the application is unduly
delayed then the court will be fully justified in declining the
prayer for impleadment.”
33. Applying the above tests to the facts of the present case the questions
that need to be answered are, whether the presence of Charanjeet Singh
Rekhi & Manjit Kaur Rekhi and all persons claiming through them are
required for complete adjudication of the disputes and whether they would
be bound by a decree that may be passed in the suits. In our view, the
answers to these questions would have to be in the affirmative. The
appellants are not claiming themselves to be parties other than the original
defendants and in that sense the applications filed by them under Order 1
Rule 10(2) of CPC are not in substance seeking to be added as separate
persons but only as a means to represent the original defendants. This
distinction is vital and distinguishes the cases where a person seeks to be
impleaded as a party to a suit for specific performance of a contract for sale
of a property, by claiming to derive title to the suit property independent
from the vendor.
34. The learned counsel for the respondents have referred to Section 19
of the Specific Relief Act, 1963 and have contended that in terms of the
said provision it would not be necessary to implead the appellants in the
suits filed in this Court. Section 19 of the Specific Relief Act, 1963 reads
as under:-
FAO(OS) Nos.202/2013, 212/2013 & 235/2013 Page 20 of 23
“ 19. Relief against parties and persons claiming under
them by subsequent title. - Except as otherwise provided by
this Chapter, specific performance of a contract may be
enforced against—
(a) either party thereto;
(b) any other person claiming under him by a title arising
subsequently to the contract, except a transferee for
value who has paid his money in good faith and
without notice of the original contract;
(c) any person claiming under a title which, though prior
to the contract and known to the plaintiff, might have
been displaced by the defendant;
(d) when a company has entered into a contract and
subsequently becomes amalgamated with another
company, the new company which arises out of the
amalgamation;
(e) when the promoters of a company have, before its
incorporation, entered into a contract for the purpose of
the company and such contract is warranted by the
terms of the incorporation, the company: Provided that
the company has accepted the contract and
communicated such acceptance to the other party to
the contract. ”
35. It is contended that the appellants are not parties to the contract and
therefore, are not necessary parties in a suit for specific performance of the
contract. In our view, treating the appellants as separate from Charanjeet
Singh Rekhi & Manjit Kaur Rekhi would be an erroneous assumption as
their application under Order 1 Rule 10(2) is premised on the basis that
they are Charanjeet Singh Rekhi & Manjit Kaur Rekhi or are claiming
through them. Indisputably, Charanjeet Singh Rekhi & Manjit Kaur Rekhi
FAO(OS) Nos.202/2013, 212/2013 & 235/2013 Page 21 of 23
are parties to the contract which is sought to be specifically enforced. The
appellants may not have signed the contract but are claiming to be the
persons who are named therein. In this situation, would it be open for the
respondents to contend that the appellants who claim to be Charanjeet
Singh Rekhi & Manjit Kaur Rekhi are not parties to the contract. We think
not. The very assumption that the parties to the contract are persons other
than the appellants or their predecessors is the controversy that has been
raised by the appellants. The only question that thus arises is whether this
controversy has to be decided in the present suits or whether the appellants
are to be relegated to filing separate suit(s). It is obvious that this
controversy would have to be settled in order that the controversy with
regard to any agreement entered into by the Charanjeet Singh Rekhi &
Manjit Kaur Rekhi can be decided. Thus, in our view, it would be apposite
if this controversy is decided in the present suit in order that all the disputes
in the present suit can be effectively adjudicated.
36. In view of the above discussions, we set aside the impugned order
and remand the matter to the Single Judge.
37. After the orders in the present appeals were reserved, Respondent
no.5 (Harish Ahuja) filed an application (CM No.1/2014 in FAO(OS)
No.202/2013) seeking dismissal of FAO(OS) No.202/2013 as an abuse of
process of Court. It is stated that after filing of the present appeal, a fresh
Civil Suit CS(OS) No. 2355/2013 titled Dharmendra v. Harish Ahuja and
Anr. was filed by the appellant in this Court through a Power of Attorney.
The applicant further contended that relief in respect of the same properties
which are subject matter of the present proceedings was sought. Thereafter,
FAO(OS) Nos.202/2013, 212/2013 & 235/2013 Page 22 of 23
an application was filed for withdrawal of the suit with liberty to re-file the
same in case adverse orders are passed in FAO(OS) No.202/2013. It is
further stated by the applicant that yet another suit relating to the suit
properties has been filed by the appellant being civil suit, CS(OS)
No.2357/2013, where the applicant has not been arrayed as a party. It is
contended that the said action of appellant no. 2 in FAO(OS) No.202/2013
amounts to forum shopping. We are not inclined to entertain the present
application as the same has been filed after the orders in the present appeals
had been reserved. However, it would be open for the applicant to urge all
contentions before the learned Single Judge.
38. We clarify that we have not examined any of the contentions raised
by the learned counsel for the parties with respect to the bonafides of the
appellant or the merits of their claim as the same had not been considered
by the learned Single Judge. The learned counsel for the respondents has
submitted that there has been a gross delay in filing the applications. It has
been further pointed out that the investigations have revealed that the
applicants are, in fact, imposters and in this view their applications before
the Single Judge ought to have been dismissed on merits also. All
contentions of the parties, except as considered herein, are open and the
learned Single Judge shall proceed to decide the applications after hearing
the parties.
VIBHU BAKHRU, J
BADAR DURREZ AHMED, J
JULY 07, 2014/ RK/MK
FAO(OS) Nos.202/2013, 212/2013 & 235/2013 Page 23 of 23