Bombay High Court
Sumita Pradipkumar Dixit vs Pushpadevi G. Makharia And Ors. on 16 January, 2002
Equivalent citations: 2002(4)BOMCR249, 2002 A I H C 2214, 2002 BOM LR 2 618 (2002) 4 BOM CR 249, (2002) 4 BOM CR 249
Author: D.Y. Chandrachud
Bench: D.Y. Chandrachud
JUDGMENT D.Y. Chandrachud, J.
1. The learned Civil Judge, Junior Division, Wai, has rejected by the impugned order dated 1st November, 2001, the application made by the petitioner for being impleaded as party defendant to a suit which is pending trial before the trial Court. The petitioner challenges that order.
2. A suit has been instituted by the first to fourth respondents in their capacities as trustees of a registered Public Charitable Trust against the fifth to seventh respondents. In the suit, the relief that is prayed for is that the defendants be ordered to hand over vacant and peaceful possession of the suit premises to the plaintiff-trust. The premises which form the subject matter of the suit, consist of Survey No. 41, situated at Mahabaleshwar in the District of Satara. On the said property which admeasures 162 sq.mts., a structure known as "Shantiniketan" admeasuring about 162 sq.mtrs. consisting of 19 rooms is situated. According to the plaintiffs, by an agreement dated 21st October, 1970, the property was given on a licence to the first defendant for running a hotel. Thereafter, on 6th February, 1976, it is alleged that the premises were given on licence to the second defendant for conducting a hotel on a licence fee of Rs. 5000/- p.a. The first and second defendants are stated to have been running a hotel on the suit property by the name and style of Hotel Satkar. In the suit which has been filed before the trial Court, a decree for the handing over of possession of the property has been sought on the ground that (i) the defendants have carried out unauthorised permanent alterations in the suit property; (ii) since 1998, the first and second defendants stopped running the hotel business and inducted the third defendant in the suit property "as a sub-licence tenant". Consequently, it is alleged that the first and second defendants have committed a breach of the terms and conditions of the licence agreement and of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947; (iii) the Public Charitable Trust of which the plaintiffs are trustees requires the premises bona fide for its use and occupation. The trust addressed a notice dated 21st March, 1996 to all the three defendants terminating the licence/tenancy and calling for the handing over of vacant possession. In these circumstances, a decree for possession has been sought.
3. The first defendant initially filed a written statement opposing the grant of relief as prayed. The written statement of the first defendant records the fact that the first plaintiff Smt. Pushpadevi Makharia is the sister of the first and second defendants and that the property had been granted respectively to the first and second defendants by two licence agreements dated 21st October, 1970 and 6th February, 1976. Since the property was residential in nature, alterations were carried out therein to make it suitable for conducting a hotel with the permission of and in the presence of the aforesaid plaintiffs. According to the first and second defendant, the third defendant used to get bookings for the hotel from Bombay and is not in any manner concerned with the hotel business.
4. Subsequently, on 7th April, 2001, an affidavit has been filed by the first defendant in which it has been stated that permission had been granted to the third defendant to run the business of a hotel on the suit property with the object of enhancing the earnings therefrom and that the third defendant is carrying on business independently. The first defendant then states that the third defendant was permitted by the first and second defendants without the permission of the plaintiffs to carry on business. Having said this, the first defendant then states that the first and second defendants have no objection if the suit is decreed as prayed for by the plaintiffs.
5. A purshis has been filed by the plaintiffs, in view of the affidavit of the first defendant, in which it has been recorded that the plaintiffs have no objection if the third defendant is deleted from the array of parties.
6. The third defendant on its part filed a written statement on 30th April, 2001 in which it has been stated that the plaintiffs have impleaded the third defendant though they are aware of the fact that it is not the third defendant, but one Mrs. Sumita Pradipkumar Dixit who has been inducted as a tenant in the suit property by the plaintiffs. The said Mrs. Dixit is stated to be a director of the third defendant and for the record, it must be noted that she is the petitioner before this Court in the civil revision application. According to the third defendant, the first and second defendants have colluded with the plaintiffs with a view to evict the said Mrs. Dixit, the petitioner before this Court and that she is a necessary and proper party to the suit. According to the third defendant, it is the petitioner herein who has invested a huge amount in the suit property and has carried out additions and alterations in the said property with the consent of the plaintiffs.
7. The petitioner before this Court in these proceedings, filed an application under Order 1, Rule 10 of the Code of Civil Procedure, 1908, before the trial Court on 30th April, 2001. She has stated therein that the first and second defendants are closely related to the plaintiffs. The petitioner was desirous of obtaining suitable premises for conducting a hotel on lease and in 1986, she learnt that the plaintiffs are the owners of several properties in Mahabaleshwar. According to the petitioner, the plaintiffs and the first and second defendants represented to her that the first defendant is a Constituted Attorney of the Trust and was looking after the management of the suit property for and on behalf of the trust. Negotiations took place between the parties thereafter, and it was agreed between the plaintiffs and the petitioner that the property would be given to the petitioner on a 'long rental basis' with permission to carry out necessary additions and alterations. The case of the petitioner is that the first plaintiff, Pushpadevi Makaria, executed a lease agreement through the first defendant who is her brother and acted as the holder of her Power of Attorney. Though the agreement was styled as a conducting agreement, the real intention of the parties was to execute a lease agreement. It is stated that the petitioner paid Rs. 35,000/- by way of deposit and the first defendant as a Constituted Attorney accepted the said amount with the consent of and for and on behalf of the plaintiffs. According to the petitioner, an agreement was entered into in December 1986 after which she is in exclusive possession of the property as a tenant of the plaintiffs. The initial agreement being for a period of 10 years, it has been stated that a fresh agreement was entered into with the petitioner on similar terms and conditions for a further period of 10 years. It has been stated that the plaintiffs and the first and second defendants have received full advance rent until the end of the year 2008. The petitioner claims to have invested a large amount of money on carrying out alterations to the suit premises and it was the plaintiffs themselves who had applied to the Municipal Council for necessary permission. In paragraph 8 of the application under Order 1, Rule 10, it has also been stated that the plaintiffs insisted that the petitioner to pay a compensation of Rs. 1,25,000/- per year and that she agreed to pay the enhanced amount of rent. A lease agreement for the period 15th June, 1996 until 14th June, 2006 is stated to have been entered into between the parties.
8. The trial Court by its order dated 1st November, 2001 rejected the application of the petitioner for being impleaded as a party defendant. The trial Court held that it would be difficult to accept the claim of the petitioner individually in the absence of a lease deed executed between the petitioner and the first and second defendants. The trial Court held that there is no documentary evidence in the hands of the petitioner except some receipts as regards payment of taxes and the petitioner cannot be termed as a sub-tenant "on behalf of" the first defendant or through the second defendant, of the plaintiff. The Court has, however, recorded that the first defendant had "received some amount without regard to the claim of the present plaintiff" and the suit was instituted on the ground of arrears of rent and the requirement of the suit property for personal use and occupation. The trial Court held that although the petitioner claims to be in possession of the property, the plaintiffs have assumed that the first and second defendants are the tenants and, therefore, any person holding the property on behalf of the tenant cannot be said to have acquired any legal right to the detriment of the rights of the tenant. Finally the Court was of the view that the petitioner can institute a separate suit for her own claim against the plaintiffs or defendants in respect of the suit property, but that claim cannot be agitated in the pending suit.
9. I have heard the learned Counsel appearing on behalf of the parties.
10. Under Order 1, Rule 10(2) of the Code of Civil Procedure, 1908, 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 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.
11. In Razia Begum v. Anwar Begum, , the Supreme Court held that in order that a person may be added as a party to the suit, he ought to have a direct interest in the litigation. B.P. Sinha, J., (as the learned Chief Justice then was) speaking for the majority held that the Courts in India have not treated the matter of the addition of parties as raising any question of the initial jurisdiction of the Court, but of a judicial discretion which has to be exercised in view of all the facts and circumstances of the particular case. The Supreme Court held that in some cases, it may, however, raise a controversy as to the power of the Court in contradistinction to its inherent jurisdiction or in other words of jurisdiction in the limited sense in which it is used in section 115 of the Code of Civil Procedure, 1908. Each case, ruled the Supreme Court, has to be determined on its own facts. In the course of the dissenting judgment, however, S. Jafer Imam, J., held that the Court ought not, under Order 1, Rule 10, to compel a plaintiff to add a party to a suit where on the face of the plaint the plaintiff has no cause of action against him. The learned Judge in his dissenting judgment was of the view that the plaintiff is entitled to choose as defendants persons against whom he has a cause of action and he should not be burdened with the task of meeting a party against whom he has no cause of action. If a party is added by the Court without whose presence all questions involved in the suit could be effectually and completely adjudicated upon, the exercise of the power is improper and even if it be a matter of discretion such an order should not be allowed to stand when the order is questioned in a Superior Court.
12. 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 provisions relating to the addition of parties, it is well settled, involve a question not of the initial jurisdiction of the Court, but of a judicial discretion which has to be exercised in view of the facts and circumstances of a particular case.
13. In Ramesh H. Kundanmal v. Municipal Corporation of Greater Bombay, , these principles were affirmed by a Bench of two learned Judges of the Supreme Court. In that case, the appellant had a dealership agreement with the Hindustan Petroleum Corporation (H.P.C.L.) which held the land as a lessee. The Municipal Corporation had issued a notice under section 351 of the Bombay Municipal Corporation Act, 1888 to the appellant for the demolition of two unauthorised structures. In the suit instituted by the appellant challenging the validity of the notice issued by the Municipal Corporation, the Supreme Court held that the lessee of the premises, H.P.C.L. was not a necessary or proper party. The principle that has been formulated by the Supreme Court is as follows :
"The Court is empowered to join a person whose presence is necessary for the prescribed purpose and cannot under the rule direct the addition of a person whose presence is not necessary for that purpose. If the intervener has a cause of action against the plaintiff relating to the subject matter of the existing action, the Court has power to join the intervener so as to give effect to the primary object of the order which is to avoid multiplicity of actions."
The Supreme Court adverted to the fact, in para 9 of the judgment that it was not the case of HPCL which sought to be impleaded as a party that there was any collusion between the appellant and the Municipal Corporation. The Court held that what makes a person a necessary party is not merely that he has some relevant evidence to give on some of the questions involved or that he has an interest in the correct solution of some question involved. The only reason, the Court held, "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 Court then held thus :
"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."
14. In Importers and Manufacturers Ltd. v. Phiroze Framrose Taraporewalla, 1952(L.V.) Bom.L.R. 271, a Bench of three learned Judges of the Supreme Court, dealt with a case under the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 in which after the landlord had given a notice to the tenant to vacate the premises, the tenant had sublet the premises to the second defendant. In the suit for eviction under the Rent Act which was filed against both the tenants and the sub-tenant it was contended that the subletting was unlawful because it was in breach of the terms of tenancy and also because the statutory tenant after a determination of the contractual tenancy was not entitled to create a sub-tenancy. On behalf of the defendants it was sought to be contended that the Court of Small Causes had no jurisdiction to entertain the suit since the suit against the second defendant who was alleged to be a trespasser by the plaintiff was not a suit between a landlord and tenant. The Supreme Court rejected that argument with reference to the provisions of section 28 of the Rent Act. Mr. Justice S.R. Das speaking for the Bench held thus :
"Apart from that section under the ordinary law a decree for possession passed against a tenant in a suit for ejectment is binding on a person claiming title under or through that tenant and is executable against such person whether or not he was or was not a party to the suit. The non-joinder of such a person does not render the decree any the less binding on him. It is in this sense, therefore, that he is not a necessary party to an enactment suit against the tenant. It is, however, recognised that such a person is, nevertheless, a proper party to the suit in order that the question whether the lease has been properly determined and the landlord plaintiff is entitled to recover possession of the premises may be decided in his presence so that he may have the opportunity to see that there is no collusion between the landlord and the tenant under or through whom he claims and to seek protection under the Act, if he is entitled to any. Such a person may be joined as a party to the suit from the beginning of the suit or at any later stage of the suit if the Court thinks fit to do so. The joinder of such a proper party cannot alter the character of the suit and does not make the suit any the less a suit between the landlord and the tenant or take it out of section 28 of the Act. To hold otherwise will be to encourage multiplicity of suits which will result in no end of inconvenience and confusion. In our view the decision and the reasoning of Chagla, C.J., are substantially correct and this appeal must fail."
The Supreme Court thus laid down that a decree passed in a suit for eviction binds a person who claims title under or through a tenant whether or not he was a party. Though he is not a necessary party to the ejectment suit, the law nevertheless recognises him as a property party. The Supreme Court emphasised that as a proper party, the sub-tenant has the opportunity to ensure that there is no collusion between the landlord and the tenant through whom he claims. This aspect assumes significance in this case, as will be shortly noticed hereafter.
15. In the present case, the suit which has been filed by the original plaintiff proceeds on the basis that the first and second defendants have unauthorisedly parted with the possession of the suit property in favour of the third defendant who is described in the suit as a "sub-licence tenant". The plaintiffs, in the facts and circumstances of the present case, considered it fit to implead the third defendant as a party to the suit on the ground that it was the third defendant who had been inducted, according to the plaintiffs wrongfully, in the premises by the first and second defendants. The Third defendant has filed a written statement pointing out the fact that it is not the third defendant, but the petitioner before the Court in these proceedings who was inducted and who has invested her capital for the purposes of conducting the hotel business in her personal capacity with the consent of the plaintiffs. The petitioner in her application for being impleaded as a party to the suit has pointed out circumstances on the basis of which she claims an interest in the premises in pursuance of the agreement which was entered into with her. The first and second defendants are, it is common ground, closely related to the first plaintiff who is their sister. Initially, the first defendant filed a written statement opposing the claim for relief in the suit. As it now transpires the first defendant has subsequently filed an affidavit stating that both he and second defendant have no objection if the suit is decreed. The plaintiffs have then filed a purshis to the effect that the name of the third defendant should be deleted from the array of parties. The submission of the petitioner is that the first and second defendant who are closely related to the first plaintiff are acting in collusion with the plaintiffs. Consequently, any collusive decree which is passed in the suit upon the deletion of the third defendant will seriously affect the rights which the petitioner seeks to assert. Having regard to the aforesaid circumstances, there can be no doubt about the fact that the petitioner herein is, within the meaning of Order 1, Rule 10 of the Code of Civil Procedure, 1908, a person whose presence before the Court is necessary in order to enable the Court to effectually and completely adjudicate upon and settle all the questions involved in the suit. Having regard to the nature of the controversy, the third defendant has, as held by the Supreme Court, "a cause of action against the plaintiff relating to the subject matter of the existing action". The Court has the power to join the petitioner as a party so as to subserve the object of avoiding a multiplicity of actions. The petitioner has a direct interest in the subject matter of the litigation. The petitioner would be bound by the result of the action and the question to be settled is one which can be effectually and completely settled only if the petitioner is a party.
16. A reference at this stage may also be made to the judgment of a learned Single Judge of this Court, Vimadalal, J., in Jivanlal Damodardas Wani v. Narayan Ukha Sali, . While formulating the propositions underlying the exercise of jurisdiction under Order 1, Rule 10, the learned Single Judge, inter alia, held thus:
"3. In exercising its discretion under Order 1, Rule 10, Civil P.C. the Court would not "ordinarily" and a party without the concurrence of the plaintiff. (41 Bom.L.R. 249 at p. 256 : A.I.R. 1939 Bom. 188)5. I am bound by that decision of a Division Bench of this Court, and I respectfully agree with the same because the plaintiff is a dominus litus as far as the litigation in question is concerned. From this it would follow that it is only in exceptional cases that a party would be added as a party-defendant to the suit without the concurrence of the plaintiff Banarasidas v. Pannalal, .
4. The Court would add a person as a party-defendant to a suit without the concurrence of the plaintiff to that suit only where the party sought to be added is a necessary party as distinguished from a mere proper party. This is the view which a Single Judge of the Punjab High Court has taken in the case of Banarasidas v. Pannalal, cited above, after considering the various authorities on the point, and it is a view with which I am in agreement. Since a person can be joined as party-defendant to a suit without the concurrence of the plaintiff only in exceptional cases, the only line that the Court can draw to distinguish the ordinary rule from an exceptional case would be to distinguish between a "proper party" and a "necessary party". This distinction has been recognised in Order 1, Rule 10, Civil P.C. itself. It has been held by a Single Judge of this Court that a real owner is not a necessary party to a suit by the benamidar, but is only a proper party .
While I am in respectful agreement with the judgment of the learned Single Judge, at the same time, it would now be necessary for this Court to have due regard to the subsequent judgments of the Supreme Court including the judgment in Kundanmal's case (supra) which have construed the scope of the power of the Court under Order 1, Rule 10. The existence or the non-existence of the consent of the plaintiff to the addition of a party to the proceeding cannot always be regarded as conclusive of the jurisdiction of the Court to add a party. The Supreme Court has adverted to the possible case of a collusion between the plaintiff and the existing defendants to a suit, in Taraporewala's case (supra) as also in the judgment in Kundanmal's case. The facts of a given case may underline the need to add a party in order to avoid a possibility of a collusion between the plaintiff and one or more of the existing defendants. In such a case, the object of adding a party is to ensure that the existing parties, by their collusive acts do not seek orders which will have a serious bearing on the rights of persons who are not before the Court. In such a case, the fact that the plaintiff has denied his consent to the addition of a party cannot be a fetter on the power of the Court to implead a party in an appropriate case. Each case, therefore, has to be evaluated upon its own facts and that is the legal position formulated by the Supreme Court in Anwar Begum's case.
17. The learned trial Judge has commented upon the merits of the claim of the petitioner and has then held that it is open to the petitioner to agitate such right as she may claim in an independent proceeding against the plaintiffs and the defendants to the suit. With respect, that in my view is not a correct approach to the matter, nor is it consistent with the law which has been laid down by the Supreme Court. The fact that the third defendant would be at liberty even if the application for impleading her is rejected to have recourse to an independent proceeding, is no ground to exclude her from the array of parties in the suit before the trial Court if the tests laid down for impleading a party under Order 1, Rule 10 are satisfied. If the conditions which are laid down for impleading a party under Order 1, Rule 10 are satisfied, then it would be clearly contrary to the law to dismiss the application which was filed by the petitioner. The trial Court has also commented upon the nature of the documents on which the petitioner relies and some of the documents were sought to be placed before this Court in the form of a compilation. Though some of these documents were relied upon by Counsel for the respondents, this is not the appropriate stage where the weight of the evidence upon which the petitioner relies can be evaluated. The exercise of judicial discretion on whether or not the petitioner should be impleaded cannot be made dependent upon the outcome of the question as to whether the petitioner would ultimately succeed in her defence. Suffice it would to say that the petitioner has a vital interest in the subject matter of the suit and she would be affected by and be bound by any decision that is arrived at the trial of the suit.
18. In the facts and circumstances of the present case, therefore, the exercise of the jurisdiction of this Court under section 115 of the Code of Civil Procedure, 1908 is called for. The impugned order of the trial Court dated 1st November, 2001 is quashed and set aside. The application filed by the petitioner, Exh. 43, before the trial Court, shall stand allowed. The Civil Revision Application is accordingly allowed in the aforesaid terms. There shall be no order as to costs.