The Calcutta High Court dismissed an application filed for the addition of parties as defendants in the C.S. No. 61 of 2021. The Court observed that the addition of a party may be allowed when it is found by the Court that the party sought to be added is a necessary party or proper party in whose absence the suit cannot be decided or no effective decree can be passed.
Brief Facts:
The plaintiff filed the suit against the defendant for recovery of money. The defendant being a non-banking financial company had several transactions with Mr. Raju Patni or the companies controlled by him in the past in course whereof Mr. Raju Patni had secured the confidence of the directors of the plaintiff. In March 2018, Mr. Raju Patni met the Director of the defendant, with the proposal to assist transfer of funds by the plaintiff company. Mr. Patni represented that the transfer of funds will be shown as a loan on paper and the amount of the funds to be provided by the plaintiff company will carry interest at the rate of 9% per annum. Several events occurred.
In 2020, the plaintiff made a criminal complaint on the basis of which the CID initiated a criminal case and started an investigation. During the investigation, Mr. Bubna, the Director of the defendant, Raju Patni, and K.R. Pradeep were interrogated by the CID, and on completion of the investigation, the CID submitted a report that the case was civil in nature.
Contentions of the Plaintiffs:
The learned counsel for the Plaintiffs submitted that the parties which the defendant prays for impleading in the present suit are neither the proper parties nor the necessary parties for adjudication of the present suit. He submits that as per the case made out by the defendant at best, they may be the witness of the defendant but not the necessary party for adjudication of the suit filed by the plaintiff.
Contentions of the Defendants:
The learned counsel for the Defendants submitted that the defendant filed another application G.A. No. 3 of 2023 praying for an extension of time to file a written statement along with a written statement with a counter-claim and in the counter-claim, the defendant made the above-mentioned company and persons as party-defendant, and thus, the Company and the persons are required to be added as defendants in the suit for effective adjudication of the suit along with the counter-claim.
Observations of the Court:
The Court noted that the defendant has not filed a written statement but during the hearing of the present application, the defendant filed another application for an extension of time to file a written statement along with a counter-claim and the said application is pending.
The Court observed that the addition of a party means the addition of a new cause of action and widening of a particular issue, the party should not be added in such a situation. The mere fact that a fresh litigation could be avoided is also no ground. The addition of a party may be allowed when it is found by the Court that the party sought to be added is a necessary party or proper party in whose absence the suit cannot be decided or no effective decree can be passed.
Further, the Court said that the necessary party is one without whom no order can be effectively made. The proper party is one who is necessary for the final decision of the question involved in the proceedings. Therefore, the addition of the parties would depend upon the judicial power which has to be exercised in the facts and circumstances of the particular case.
The decision of the Court:
The Calcutta High Court, dismissing the application, held that the parties namely Raju Patni, Sagittarian Credit Private Limited, Pranava Electronics Private Limited, and Mr. K.R. Pradeep are not the necessary and proper parties to the suit.
Case Title: Pranava City Complex Pvt. Ltd. vs Gyan Traders Ltd.
Coram: Hon’ble Justice Krishna Rao
Case no.: IA No: GA 2 of 2022
Advocate for the Plaintiffs: Mr. Suman Dutt
Advocate for the Defendants: Mr. K. Thakker
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