Bombay High Court
Darius Rutton Kavasmaneck vs Gharda Chemicals Limited on 12 March, 2014
Author: R.D. Dhanuka
Bench: R.D. Dhanuka
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CHS669.12
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
CHAMBER SUMMONS NO. 669 OF 2012
IN
SUIT NO. 2932 OF 2011
Darius Rutton Kavasmaneck )
residing at 626, Parsi Colony, Dadar, )
Mumbai - 400 014 ) ..... Plaintiff
VERSUS
1. Gharda Chemicals Limited
ig )
a Company Incorporated under the )
Companies Act, 1956 and having its )
registered office at Gharda House, 48, )
Hill Road, Bandra (West), Mumbai )
400 050 )
2. Keki Hormusji Gharda of Mumbai, )
Indian Inhabitant, having address at )
Gharda House, 48, Hill Road, Bandra )
(West), Mumbai 400 050 )
3. Aban Keki Gharda of Mumbai, )
Indian Inhabitant, having address at )
Gharda House, 48, Hill Road, Bandra )
(West), Mumbai 400 050 )
4. Almitra H. Patel of Mumbai, )
Indian Inhabitant, having address at )
Gharda House, 48, Hill Road, Bandra )
(West), Mumbai 400 050 )
5. D T Desai of Mumbai,Indian Inhabitant,)
having address at Gharda House, 48, )
Hill Road, Bandra (West), Mumbai )
400 050 ) ..... Defendants
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CHS669.12
AND
1. Percy Rutton Kavasmaneck, )
USA Inhabitant, having his address at )
134, Olivera Way, Palm Beach Garden, )
Florida 33418 USA. )
2. Aban Percy Kavasmaneck, )
USA Inhabitant, having her address at )
134, Olivera Way, Palm Beach Garden, )
Florida 33418 USA. ) ..... Interveners/Applicants
Mr.Sharan Jagtiani, a/w. Ms.Ankita Singhania, i/b. D.H.Law Associates for the
Applicants in CHS/Interveners.
Dr.V.V.Tulzapurkar, Senior Advocate, a/w. Mr.Rahul Chitnis, Mr.Shriraj Dhru,
Ms.Khyati Ghevaria, i/b. Dhru & CO. for the Plaintiff.
Mr.Nishad Nadkarni, i/b. Legasis Partners for Defendant nos. 1, 3 to 5.
Mr.Mustafa Safiyuddin, a/w. Mr.Sumit Rane, i/b. Legasis Partners for Defendant
no.2.
CORAM : R.D. DHANUKA, J.
DATED : 12th MARCH, 2014
JUDGMENT
By this Chamber Summons, the applicants seek impleadment as party defendants in the above suit. Some of the relevant facts for the purpose of deciding this chamber summons are as under :-
2. The applicants hold approximately 6.3 % of the shares of the defendant no.1.
The original plaintiff no.1 and D.R.Kawasmaneck who is now plaintiff jointly held 17% of shares of defendant no.1 company. It is case of the plaintiff that the defendant no.2 and two other parties controlled by defendant no.2 and ::: Downloaded on - 29/03/2014 18:56:31 ::: Kvm 3/19 CHS669.12 Mrs.K.S.Gharda holds 60% shares of defendant no.1 company.
3. The plaintiff has filed this suit for a declaration that the patents enumerated in Ex.J to the plaint and that to be disclosed belongs to the 1 st defendant and that the 2nd defendant has no right or interest in respect thereof or any of them and seeks order and decree directing the 2nd defendant to assign and transfer the patent enumerated in Ex.J and to be disclosed to the 1 st defendant without any consideration or compensation. It is case of the plaintiff in the plaint that a patent for manufacturing Phosphaorous Trichloride Phosphaorous Pentachloride and cement came to be registered in the name of the 2 nd defendant and instead of securing the patent rights in the name of the 1st defendant, the 2nd defendant wrongfully secured several patents and have applied for several patents in his individual name. It is case of the plaintiff that the 2 nd defendant owes and controls the majority of the equity shares in the 1 st defendant and any resolution moved by the plaintiff that the 1st defendant should initiate action against 2nd defendant will be obviously defeated and therefore the plaintiff has filed the suit as a derivative action. There are several litigations filed and pending between the plaintiff and defendant nos. 1 and 2 in various courts.
4. Mr.Jagtiani, learned counsel appearing for the applicants invited my attention to paragraphs (3), (6) (xiv), paragraph (9) and would submit that admittedly the suit filed by the plaintiff is a derivative action. Learned counsel invited my attention to a letter addressed by the plaintiff to defendant no.2 on 7 th November, 2011 alleging that the action on the part of defendant no.2 registering the valuable intellectual property of the defendant no.1 company in his individual name was neither legal nor fair to the company or to its minority shareholders and would be in breach of his fiduciary duties. Learned counsel invited my attention to ::: Downloaded on - 29/03/2014 18:56:31 ::: Kvm 4/19 CHS669.12 letter dated 8th May, 2011 from the plaintiff to the defendant no.1 company requesting to furnish certified copies of the minutes of the board meetings and to assure the minority shareholders that no decision had been or shall be taken nor there was and nor will the company entertain the proposal to sale the assets and/or any such assets of the company described in the said letter. The plaintiff requested the company to respond to the said letter and not to give the minority shareholders a chance to complain. Placing reliance on these averments and the correspondence referred to aforesaid, it is submitted by the learned counsel that the suit filed by the plaintiff is not arising out of any personal cause or interest but is a derivative action with a view to protect the interest of the defendant no.1 company and is for the benefit of all the minority shareholders including the applicants. It is submitted that applicants being minority shareholders of defendant no.1 company and forming part of the group of minority shareholders, their views also have to be considered by this court after impleading the applicants as party defendants.
5. Learned counsel for the applicants submits that the present suit has been filed as a representative suit under Order 1 Rule 8 of Code of Civil Procedure or principles of Order 1 Rule 8 would apply to the suit considering the action being derivative action and thus court will have to hear not only the plaintiff but all parties for whose benefit action is brought by the plaintiff. It is submitted that the applicants belong to the same class of shareholders as the plaintiff. It is submitted that test whether applicants are necessary or proper parties or not as prescribed under Order 1 Rule 10 of the Code of Civil Procedure cannot be extended in case of a derivative action.
6. Learned counsel for the applicants placed reliance on the judgment of this court in case of BBN(UK) Ltd. and others vs. Janardan Mohandas Rajan Pillai ::: Downloaded on - 29/03/2014 18:56:31 ::: Kvm 5/19 CHS669.12 and others 1993 (3) Bom.C.R. 228 and in particular paragraphs 13 and 14 which reads thus :-
13. A member as defined under section 41 of the said Act can maintain an action against the company, -
(i) to enforce a personal right, e.g., the right to vote at or to attend a meeting;
(ii) a representative action under Order 1, rule 8 of the Civil Procedure Code, on behalf of himself and other shareholders. Such action can be maintained if the same is a derivative action. In such a derivative action a shareholder can seek reliefs in favour of the company.
Such action, therefore, is not to enforce a personal right of the shareholder.
14. The question then is, what is a derivative action and who can maintain it. In Foss v. Harbottle , it has been held that it is the company which has a right to maintain an action in its corporate name. It has further been held that the court will not interfere in the internal management of the company. This principal rule is subject only to limited exceptions as laid down therein. None of the exceptions apply to the facts of the instant case. In Mozley v. Alston , it was shown that a suit in which injury was alleged to be suffered by a corporation could not be sustained by individual members unless at least it was shown that the company could not or would not institute proceedings in their corporate character. Further held that a shareholder could not ask the court to injunct directors from acting as such. In Pender v. Lushington , it was held that "members" means "member for the time being of the company... and it means prima facie a registered shareholder or stock holder... so that a member is a man who is on the register... The result appears to me to be manifest, that the company has no right whatever to enter into the question of the beneficial ownership of shares". In the said case, it was held that a meeting of the company should be called to decide whether or not the company's name should be used as the plaintiffs. In MacDougall v. Gardiner , it was held that "if the thing complained of is a thing which in substance the majority ::: Downloaded on - 29/03/2014 18:56:31 ::: Kvm 6/19 CHS669.12 of the company are entitled to do or if something has been done irregularly which the majority of the company are entitled to do legally... there can be no use in having a litigation about it, the ultimate end of which is only that a meeting has to be called and then ultimately the majority gets its wishes". It was further held that "nothing connected with internal disputes between the shareholders is to be made the subject of a bill by some one shareholder on behalf of himself and others unless there be something illegal, oppressive, or fraudulent - unless there is something ultra vires on the part of the company qua the company or on the part of the majority of the company so that they are not fit persons to determine; but that every litigation must be in the name of the company, if the company really desire it... and it is the company, as a company, which has to determine whether it will make anything that is wrong to the company a subject-matter of litigation, or whether it will take steps to prevent the wrong from being done". Further held that "there may be a great many wrongs committed in a company - there may be claims against directors... there may be a variety of things which a company may well be entitled to complain of but which as a matter of good sense they do not think it right to make the subject of litigation; and it is the company as a company which has to determine whether it will make anything that is wrong to the company a subject-matter of litigation, or whether it will take steps itself to prevent the wrong from being done." In Prudential Assurance Co. Ltd. v. Newman Industries Ltd. , it was held that the trial judge "ought to have determined as a preliminary issue whether the plaintiffs were entitled to sue on behalf of Newman by bringing a derivative action. It cannot have been right to have subjected the company to a 30-day action... in order to enable him to decide whether the plaintiffs were entitled in law to subject the company to a 30-day action. Such an approach defeats the whole purpose of the rule in Foss v. Harbottle : and sanctions the very mischief that the rule is designed to prevent. By the time a derivative action is concluded, the rule in Foss v. Harbottle : can have little, if any, role to play".
7. Reliance is placed on the said judgment in support of his submission that a ::: Downloaded on - 29/03/2014 18:56:31 ::: Kvm 7/19 CHS669.12 representative action under order 1 rule 8 can be maintained if the same is derivative action.
8. Mr.Jagtiani also placed reliance on the treatise by Palmer's on company Law 24th Edition, Volume 1 which has dealt with what the derivative actions are. The relevant portion of the said treatise relied upon by the learned counsel is extracted as under :-
Derivative actions Alternatively, the individual shareholder may seek to enforce the company's rights by suing in representative form on behalf of himself and all the other shareholders in the company (except the wrongdoers) against the wrongdoers. This procedure is founded on R.S.C. 1965, Ord.15, r.12, but it is not a true representative action. The plaintiff is seeking to enforce, not his own right of action, but a right of action vested in or derived from company. Hence in modern discussions the action is referred to as a derivative action. The alleged wrongdoers are made the defendants in the action, but the company itself is joined as a nominal defendant in order that it can be bound by the judgment. If the action succeeds, any property or damages recovered go, not to the plaintiff, but to the company. The plaintiff shareholder can complain in a derivative action of wrongs committed before he became a member.
9. Mr.Jagtiani, learned counsel then placed reliance on the judgment of Punjab and Haryana High court in case of Ram Mehar vs. Surat Singh and others AIR 1989 Punjab and Haryana 307. Reliance is placed on paragraph 9 of the said judgment which reads thus :-
9. In representative, suits, precisely for this reason Sub-rule (4) was added so that the persons representing the whole body could go on with the suit on merits after all were served with notice of the suit under Sub-rule (2) but the moment any of the things mentioned in Sub-rule (4) was sought to be done, notice ::: Downloaded on - 29/03/2014 18:56:31 ::: Kvm 8/19 CHS669.12 to all the interested persons, in this case the other co-sharers, had again to be issued. In this caserne principle of natural justice enshrined in Sub-rule (4) was not followed and the Court on the day suggestion was made for appointing the referee accepted the suggestion and appointed the referee without issuing notice to all the interested persons as required by Sub-rule (4) The failure to do so would vitiate the order of appointment of referee and all proceedings thereafter.
10. Dr.Tulzapurkar learned senior counsel appearing on behalf of the plaintiff on the other hand submits that though some of the patents belong to the company are claimed by defendant no.2 who controls and in management of the 1st defendant and is a wrong doer. Defendant no.2 is managing director of defendant no.1. It is submitted that any patent acquired by defendant no.2 in the course of his employment would be the patent of the defendant no.1 company. Defendant no.2 wrongly alleges that those patents belongs to him individually. It is submitted that since defendant no.1 company is under control and management of defendant no.2, defendant no.1 is not in a position to make a claim against defendant no.2 who is a wrong doer and thus plaintiff as a shareholders have approached this court for a declaration that such patents belong to the defendant no.1. It is submitted that derivative action is against the wrong doer. It is submitted by the learned senior counsel that the applicants are opposing the action of the plaintiff and not supporting the plaintiff. It is submitted that since the interest of the plaintiff and the applicants is not same, provisions under Order 1 Rule 8 of Code of Civil Procedure are not applicable to the suit filed by the plaintiff. It is submitted that according to the plaintiff, patent belongs to the defendant no.1 company whereas according to the applicants, the patent belongs to defendant no.2 and not defendant no.1. It is submitted that suit filed by the plaintiff is not filed on behalf of the other shareholders including the applicants. Defendant no.2 has not been impleaded and does not represent other shareholders of defendant no.1. Defendants no.2 has been ::: Downloaded on - 29/03/2014 18:56:31 ::: Kvm 9/19 CHS669.12 impleaded being a wrong doer. It is submitted that the applicant is not in the management of the defendant no.1 company. The suit has been filed by the plaintiff in their own right as a minority shareholders and not for the benefit of other shareholders or as a representative action and thus Order 1 Rule 10 will apply to the Chamber Summons filed by the applicant.
11. Learned senior counsel submits that thus the chamber summons for impleadment filed by the applicant can be considered by this court only if the applicants satisfy that they are necessary or proper parties to the suit.
Dr.Tulzapurkar, learned senior counsel placed reliance on the following judgments of Supreme Court in support of his plea that the applicant is neither a necessary party nor a proper party :-
1. Ramesh Hirachand Kundanmal vs. Municipal Corporation of Greater Bombay and others (1992) 2 SCC 524 paragraphs 4 to 6.
2. Kasturi vs. Iyyamerumal and others AIR 2005 SC 2813 paragraph (12).
3. Mumbai International Airport Pvt. Ltd. vs. Regency Convention Centre & Hotels Pvt. Ltd. and others AIR 2010 SC 3109 paragraphs 12 and 14.
4. Vidur Impex and Traders Pvt. Ltd. and others vs. Tosh Apartments Pvt. Ltd. and others, AIR 2012 SC 2925 paragraph (36).
12. Since all the authorities cited by the learned senior counsel are on the same proposition and taking the same view, I will refer to paragraph (36) of the last judgment i.e. in case of Vidur Impex and Traders Pvt. Ltd. and others (supra) in which the Supreme Court has summarised the broad principles which would govern the disposal of an application for impleadment which reads thus :-::: Downloaded on - 29/03/2014 18:56:31 :::
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36. 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:
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.
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.
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.
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.
5. In a suit for specific performance, the Court can order impleadment of a purchaser whose conduct is above board, and who files application for being joined as party within reasonable time of his acquiring knowledge about the pending litigation.
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.
13. Dr.Tulzapurkar, learned senior counsel submits that the plaintiff has not ::: Downloaded on - 29/03/2014 18:56:31 ::: Kvm 11/19 CHS669.12 claimed any right in the suit against the applicants. Presence of the applicants is not required for the purpose of effective and complete adjudication of the issues involved in the suit and in his absence an effective decree can be passed by this court.
14. Dr.Tulzapurkar, learned senior counsel distinguished the judgment of the Bombay High Court in case of BBN(UK) Ltd. and others (supra) relied upon by Mr.Jagtiani. It is submitted that this court was considering the Chamber Summons filed by the defendants for striking the names of plaintiff nos. 1 and 2 to the suit as they were not shareholders of the company.
ig Learned senior counsel placed reliance on paragraphs 1, 3, 4, 6 and 15 of the said judgment and would submit that it is nowhere held in the said judgment that provisions of Order 1 Rule 8 applies to the derivative action.
15. Learned counsel distinguished the judgment of Punjab and Haryana High Court. It is submitted that it is not case of the applicant admittedly that the suit filed by the plaintiff is a collusive action between the plaintiff and defendant nos. 1 and 2. It is submitted that it is not the case of defendant no.2 that he has got benefit on behalf of all the shareholders of defendants no.1 company.
16. Leaned counsel appearing for defendant no1. and for defendants no.2 submits to the orders of court and neither supports the applicants nor oppose the chamber summons.
17. Mr.Jagitani, learned counsel appearing for the applicants in rejoinder submits that the correspondence exchanged between the plaintiff and the defendants would indicate that the plaintiff has demanded assurance from the ::: Downloaded on - 29/03/2014 18:56:31 ::: Kvm 12/19 CHS669.12 defendants on behalf of all minority shareholders. Reliance is placed by the learned counsel on explanation to order 1 rule 8. It is submitted that the expression 'interest' referred in order 1 rule 8 would not mean cause of action. It is submitted that the suit filed by the plaintiff is on behalf of all the minority shareholders and the interest on the date of institution of suit has to be considered. It is submitted that whether stand of the applicant is against the plaintiff or not or in favour of the company or not is irrelevant for the purpose of deciding an application filed by the applicants for the impleadment in a derivative action.
18. Provisions of Order 1 Rule 8 and Order 1 Rule 10 are extracted as under :-
8. One person may sue or defend on behalf of all in same interest.-(1) Where there are numerous persons having the same interest in one suit,--
(a) one or more of such persons may, with the permission of the Court, sue or be sued, or may defend such suit, on behalf of, or for the benefit of, all persons so interested;
(b) the Court may direct that one or more of such persons may sue or be sued, or may defend such suit, on behalf of, or for the benefit of, all persons so interested.
(2) The Court shall, in every case where a permission or direction is given under sub-rule (1), at the plaintiff's expense, give notice of the institution of the suit to all persons so interested, either by personal service, or, where, by reason of the number of persons or any other cause, such service is not reasonably practicable, by public advertisement, as the Court in each case may direct.
(3) Any person on whose behalf, or for whose benefit, a suit is instituted, or defended, under sub-rule (1), may apply to the Court to be made a party to such suit.::: Downloaded on - 29/03/2014 18:56:31 :::
Kvm 13/19 CHS669.12 (4) No part of the claim in any such suit shall be abandoned under sub-rule (1), and no such suit shall be withdrawn under sub-rule (3), of rule 1 of Order XXIII, and no agreement, compromise or satisfaction shall be recorded in any such suit under rule 3 of that Order, unless the Court has given, at the plaintiff's expense, notice to all persons so interested in the manner specified in sub-rule (2).
(5) Where any person suing or defending in any such suit does not proceed with due diligence in the suit or defence, the Court may substitute in his place any other person having the same interest in the suit.
(6) A decree passed in a suit under this rule shall be binding on all persons on whose behalf, or for whose benefit, the suit is instituted, or defended, as the case may be.
Explanation.--For the purpose of determining whether the persons who sue or are sued, or defend, have the same interest in one suit, it is not necessary to establish that such persons have the same cause of action as the persons on whose behalf, or for whose benefit, they sue or are sued, or defend the suit, as the case may be.
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, it 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 ::: Downloaded on - 29/03/2014 18:56:31 ::: Kvm 14/19 CHS669.12 improperly joined, whether as plaintiff or defendant, be struck out, and that the name of any person who ought to have been joinded, 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.
(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.
19. It is not in dispute that the plaintiff as well as the applicants are minority shareholders of defendant no.1 company. A perusal of the plaint indicates that it is case of the plaintiff that the patent which is claimed by the defendant no.2 of his own is patent of the 1st defendant company who is in control of the management of defendant no.1. It is the case of the plaintiff that since defendant no.1 being under control of defendant no.2 it would not file any proceedings for protecting the properties against defendant no.2. The plaintiff thus as shareholders have filed this proceedings.
20. A perusal of the affidavit in support of Chamber Summons filed by the ::: Downloaded on - 29/03/2014 18:56:31 ::: Kvm 15/19 CHS669.12 applicants indicate that it is case of the applicants that the inventions being the subject matter of patents, have been invented by defendants no.2 and he is owner of the same. It is case of the applicants that in the alternative the defendants no.2 has permitted defendants no.1 to utilise his inventions to the extent that they relate to the business of defendant no.1 without deriving any remuneration or benefit for the same. It is averred in the affidavit in support of the Chamber Summons that the nature of the allegations made in the plaint could also result in the invalidation of the patent of such inventions and would not be in the interest of defendant no.1 company. It is also averred in the affidavit in support of the Chamber Summons that the present suit filed by the plaintiff is in the garb of a derivative action for reliefs prayed in the plaint. It is averred that the suit filed in the garb of a derivative action as in fact is being filed by the plaintiff in furtherance of their personal interest and the interest of the competitors of defendants no.1. It is thus clear that the applicant though has canvassed across the bar that the proceedings filed is in the nature of derivative action by the plaintiff, such argument is contrary to the averments made in the affidavit in support of Chamber Summons. It is also clear that it is not the stand of the applicants that the suit patent in respect of which plaintiff has filed this suit claiming to be patent of defendants no.1 company belongs to defendant no.1 company. It is the case of the applicants that the said patent belongs to defendant no.2. Defendant nos. 1 and 2 through their learned counsel did not oppose this Chamber Summons or made any submissions in support of the applicant. A perusal of the record indicates that defendant nos. 1 and 2 are vehemently opposing the reliefs claimed by the plaintiff. There are no allegations of collusion made by the applicants between plaintiff and the defendants.
21. I am not inclined to accept the submission of learned counsel appearing for ::: Downloaded on - 29/03/2014 18:56:31 ::: Kvm 16/19 CHS669.12 the applicants that even if interest of the applicant is not the same and are rival claim that the applicants are necessary and/or proper parties to this suit.
22. In my view, Dr.Tulzapurkar, learned senior counsel appearing for the plaintiff is right in his submissions that Order 1 Rule 8 of Code of Civil Procedure would not apply to the suit filed by the plaintiff. It is not the case of the plaintiff that the plaintiff has filed the suit on behalf of or for the benefit of all the shareholders or that all such shareholders and the plaintiff has same interest in the suit. It is not the case of the applicants that the defendant no.2 is representing the other shareholders including the applicants who has been impleaded by the plaintiff in the suit. In my view, the learned senior counsel is right in his submission that if plaintiff seeks to withdraw the suit at any point of time in future, plaintiff would not require to issue any notice to the other shareholders of the defendants no.1 company before withdrawal of such suit and/or for abandonment of any claim. Reliance placed by the learned counsel appearing for the applicants on the explanation to Order 1 Rule 8 is of no assistance to the applicants. Under the said explanation it is provided that for the purpose of determining whether the persons who sue or are sued or defend have the same interest in one suit, it is not necessary to establish that such persons have the same cause of action as the persons on whose behalf or for whose benefit they sue or are sued or defend the suit as the case may be. In my view the said explanation does not provide in any manner whatsoever that the interest of all the parties on whose behalf a suit is filed in representative capacity under Order 1 Rule 8 of Code of Civil Procedure need not be common but may have different and contrary to interest to each other. In my view thus Order 1 Rule 8 will not apply to this suit filed by the plaintiff at all. In my view Order 1 Rule 10 will apply to the chamber summons filed by the applicants.
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23. The question then arises is whether applicants have satisfied the conditions for impleadment under Order 1 Rule 10 of Code of Civil Procedure. Though Dr.Tulzapurkar, learned senior counsel has placed reliance on several authorities on this issue, I will deal with the last authority on the issue i.e. in case of Vidur Impex and Traders Pvt. Ltds. (supra). After considering the earlier judgments of the Supreme Court in paragraph 36 of the said judgment, the Supreme Court has culled out the broad principles which should govern disposal of an application for impleadment. It is held that a necessary party is the person who ought to be joined as party to the suit and on whose absence an effective decree cannot be passed by the court. It is held that 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 or against whom a decree is to be made. It is also held that if a person is not found to be a proper and necessary party, the court does not have the jurisdiction to order his impleadment against the wishes of the plaintiff. I am respectfully bound by the judgment of Supreme Court.
I am of the view that presence of the applicants is not required before the court for effective and complete adjudication of the issues involved in the suit. Defendants are opposing the plaint seriously to protect their alleged rights. Impleadment of applicants to defend the claim of defendant no.2 or opposing the claim of the plaintiff against defendant no.2 is not required for the adjudication of the issues involved in the suit.
24. In so far as judgment of this court in case of BBN(UK) Ltd. and others (supra) relied upon by the learned counsel appearing for the applicants is concerned, the said Chamber Summons was filed by the defendants for striking the name of two of the plaintiffs. The facts of that matter are totally different. This court has not held in the said judgment that a suit and/or action if is derivative ::: Downloaded on - 29/03/2014 18:56:31 ::: Kvm 18/19 CHS669.12 action, Order 1 Rule 8 of the Code of Civil Procedure would be attracted to such suit. The points which arose for consideration in that matter were whether plaintiff nos. 1 and 2 were liable to be deleted and/or struck out from the cause title of the plaint under Order 1 Rule 10 of the Code of Civil Procedure, 1908. The reliance placed by the learned counsel on said judgment is totally misplaced.
25. In so far as judgment of Punjab and Haryana High court in case of Ram Mehar (supra) is concerned, in paragraph (6) of the said judgment it is held by the Punjab and Haryana High court that where there are numerous persons having the same interest, one or more of such persons may with the permission of the court sue or sued or may defend such suit on behalf of or for the benefit of the person so interested and where permission is granted, it is incumbent on the court to give notice of the suit to all the persons so interested in the manner so provided so that they may come to know of the institution of the suit and all or some of them feel interested may apply to the court to be made a party to the suit. Admittedly the interest of the applicants and the plaintiff which is also apparent from the pleadings filed by both parties is not the same. In my view the said judgment does not assist the applicants but assist the plaintiff. Whether a suit has been filed in a representative capacity or for the vindication of one's own personal rights can only be determined with reference to the nature of the plaint, the allegations made therein and the precise reliefs claimed. In my view, the explanation 'interest' referred in Order 1 Rule 8 of Code of Civil Procedure must be common to all the parties or they must have a common grievance which they seek to get redressed. Community of interest is an essential condition precedent for bringing a representative suit. In my view since the interest of plaintiff and applicant is not common but is apparently rival in nature, provisions of Order 1 Rule 8 of Code of Civil Procedure is not applicable to the suit filed by the plaintiff. Since applicants ::: Downloaded on - 29/03/2014 18:56:31 ::: Kvm 19/19 CHS669.12 are neither necessary nor proper parties to the suit, this court has no jurisdiction to implead the applicants against the wish of the plaintiff.
26. In my view, Chamber Summons is throughly misconceived and is accordingly dismissed. No order as to costs.
[R.D. DHANUKA, J.] ::: Downloaded on - 29/03/2014 18:56:31 :::