Bombay High Court
Phoenix Construction Company vs Shri.Kamlakar Jiwan Patil on 19 November, 2013
Bench: R.D. Dhanuka
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
CHAMBER SUMMONS NO. 2013 OF 2011
IN
SUIT NO. 2823 OF 2006
1. Phoenix Tower Cooperative Housing Society Limited,
being a cooperative housing society registered with
the Registrar of Cooperative Societies under Certificate
bearing Registration No. MUM/WGS/HSG/(ITC)8035-
99-2000 Dated June 28, 1999, formed by the members
of Phoenix Tower "A" having its address at Phoenix Tower
"A", 141, Senapati Bapat Marg, Lower Parel,
Mumbai 400 013 through its Chairman Mr. Ashok
S. Maheshwari.
2. Phoenix Tower "B" Cooperative Housing Society Limited,
being a cooperative housing society registered with
the Registrar of Cooperative Societies under Certificate
bearing Registration No. MUM/WGN/HSG/TC/8521/2005
dated May 2, 2005, formed by the members
of Phoenix Tower "B" having its address at Phoenix Tower
"B", 141, Senapati Bapat Marg, Lower Parel,
Mumbai 400 013 through its Chairman Mr. Girish Dave.
3. Amit Agarwal of Mumbai, Indian Inhabitant,
residing at Flat No. 1203, Phoenix Tower "A", 141,
Senapati Bapat Marg, Lower Parel, Mumbai 400 013.
4. Amit S. Dharnidharka of Mumbai, Indian Inhabitant,
residing at Flat No. 1903, Phoenix Tower "A", 141,
Senapati Bapat Marg, Lower Parel, Mumbai 400 013.
5. Abdul Karim of Mumbai, Indian Inhabitant,
residing at Flat No. 2504, Phoenix Tower "A", Senapati
Bapat Marg, Lower Parel, Mumbai 400 013.
6. Deepak Jain of Mumbai, Indian Inhabitant,
residing at Flat No. 901, Phoenix Tower "B",
141, Senapati Bapat Marg, Lower Parel,
Mumbai 400 013.
Versus
1. Phoenix Construction Company
being partnership firm registered under the
provisions of Indian Partnership Act, 1932,
carrying on business at Mittal Tower, 16th Floor,
"B" Wing, 210, Nariman Point, Mumbai 400 021
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2. Phoenix Mills Limited,
a public company, incorporated under the
provisions of the Companies Act, 1956, having its
office at 1st Floor, State Bank of India Annexe,
Bank Street, Mumbai 400 001 and being one of
the partners of the abovenamed Phoenix Construction
Company.
3. R.R. Hosiery, being the owner of Flat Nos. 3101,
3102, 3201 and 3202 in Phoenix Tower "B", having
its office at 462, Senapati Bapat Marg, Lower Parel,
Mumbai 400 013.
4. B.R. International, being the owner of flat
Nos.3103, 3104, 3203 and 3204, Phoenix
Tower "B", having its office at 462,
Senapati Bapat Marg, Lower Parel,
Mumbai 400 013.
5. Sai Service Agency, being an
automobile service centre carrying on its business
inter alia from the basement of Phoenix Tower "A"
and "B", Lower Parel, Mumbai 400 013.
6. The Municipal corporation of Greater Bombay,
a body corporate constituted under the Bombay
Municipal Corporation Act, 1888, having its office
Mahapalika Bhavan, Mahapalika Marg,
Opp. C.S.T., Fort, Bombay 400 001. ... Defendants
And
Mugwort Land Holdings Pvt. Ltd.
A Company registered under the Companies
Act, 1956 and having its Office at R.R. Hosiery
Building, Shree Laxmi Woolen Mills Estate,
Mahalaxmi, Mumbai 400 011 ... Applicants
Mr. Shailesh Shah, Sr. Advocate along with Ms.Jyoti Sinha i/by Negandhi Shah &
Himaytullah for applicant in chamber summons.
Mr. Pravin Samdani, Sr. Advocate along with Pranaya Goyal along with Bindi Dave i/by
Wadia Ghandy & Co. for plaintiff.
Mr. S.U. Kamdar, Sr. Advocate along with Mr. Chirag Balsara, D.V. Deokar, P.K. Shroff,
Subodh Joshi, Kavita Shetty i/by Parimal K. Shroff for defendant nos. 1 and 2.
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CORAM : R.D. DHANUKA,J.
RESERVED ON : 23.10.2013
PRONOUNCED ON : 19.11.2013
ORAL JUDGMENT :
By this chamber summons, the applicants seek impleadment as party defendants to
the suit and also to pending Notice of Motion No. 3446 of 2006, Notice of Motion No.
3376 of 2006 and Notice of Motion No. 1004 of 2011.
2. Defendant No. 2 is one of the partners of defendant No. 1. Defendant no. 2 was
original owner of the immovable property admesuring 15,812.95 sq. mtrs situate and
being at Senapati Bapat Marg, Lower Parel, Mumbai 400 013. Defendant No. 2 who is
partner of defendant no. 1 got the suit property into the partnership firm i.e. defendant no.
1. Defendant no.1 sold various flats in the building known as Phoenix Tower
Cooperative Housing Society Limited "A" and "B" Wing. Plaintiff Nos. 3 and 4 are the
owners of two flats in Tower "A". Plaintiff Nos. 5 and 6 are the owners of the two flats in
Tower "B". The Flat purchasers in the said two buildings formed Plaintiff No. 1 and 2
society. It is the case of the plaintiff that various agreements entered into between the flat
purchasers and defendant no. 1 and 2, defendant Nos. 1 and 2 are liable to convey the suit
property in favour of Plaintiff Nos. 1 and 2 jointly. Though the plaintiffs called upon the
defendant Nos. 1 and 2 to convey the suit property jointly in favour of plaintiff no. 1 and
2, defendant nos. 1 and 2 refused to comply with the same. It is the case of the plaintiff that
various illegal constructions/structural changes are carried out by defendant nos. 1 and 2. It
is the case of the plaintiffs that defendant nos. 1 and 2 are liable and are by contract
bound to execute conveyance in respect of the suit property under the provisions of the
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MOFA. The basement of the said buildings had been sanctioned only for the purpose of
being used for car parking of residents of plaintiff no.1 and 2 and no
commercial/industrial use whatsoever is permitted in the said basement. On 25 th
September, 2006, Plaintiffs filed this suit against defendant nos. 1 and 2 for execution of
the deed of conveyance of the suit property in favour of plaintiff no. 1 and 2 and has
prayed for order and decree to hand over quiet, vacant and peaceful possession of the suit
property including the portion of the suit property shown outlined in colour yellow and
earmarked as "CMP" in the plan utilized by defendant nos. 1 and/or defendant no. 2 for
installing operation of the "cement mixture plant".
3. On 17th February, 2011 plaintiffs registered lis pendens with Sub Registrar. On 29th
March, 2011 Plaintiffs filed Notice of Motion No. 1004 of 2001 in this suit inter alia
praying for injunction from selling car parking space in the "CMP" portion by the
defendants. On 22nd July, 2011 and 25th July, 2011, defendant No. 2 has alleged to have
entered into 9 agreements for sale of car parking in favour of 9 entities out of 125 car
parking held by defendant no. 2. On 26 th July, 2011, one M/s. Excelsior Hotels Private
Limited is alleged to have addressed a letter to the defendant no. 1 seeking N.O.C., for
permission of the society/company for management of car parks. On 18 th August, 2011,
defendant no. 1 is alleged to have granted NOC to Excelsior Hotels Pvt. Ltd. On 30 th
August, 2011, meeting of the representatives of the 9 car parking purchasers who had
alleged to have purchased the said car parking from defendant no. 2 is alleged to have been
held. On 30th August, 2012 the applicant is alleged to have amended the objects clause of
the memorandum of association. On 31st August, 2011, 9 car parking purchasers is alleged
to have been issued 80 shares of the applicant each. On 27 th September, 2011 name of the
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applicant was changed from Mugwort Developers Pvt. Ltd to Mugwort Land Holdings
Pvt. Ltd. On 7th December, 2011 the applicant filed this chamber summons inter alia
praying for impleadment as party defendants. On 15 th December, 2011 the learned Single
Judge of this court disposed of Notice of Motion No. 1004 of 2011 filed by the plaintiffs
inter alia praying for various reliefs including the order and direction against defendant
no.1 and 2 to remove cement mixture plant from the portion of the suit properties. At the
time of hearing of the said Notice of Motion, the applicants also intervened and contended
that the applicants were vitally affected by the controversy in the suit on the ground that
defendant no.1 had entered into agreement for sale of 125 car parking spaces in the
independent proposed construction of the car parking area for available construction. The
purchasers of the car parking space have entered into several agreements for the same in
the proposed car parking lot to be constructed. The applicant being representative body of
such purchasers should be heard before any orders were passed in the said notice of
motion. This court however, did not hear this chamber summons along with the said Notice
of motion since the pleading was in the said chamber summons were not complete. This
court in the said order dated 15th December, 2011 observed that defendant no.2 being
member of the society can deal with the spaces in terms of the resolutions of the society.
It is held that it is difficult to accept the submissions of the second defendant that they can
deal with the parking spaces under this agreement at this stage. It is also observed that the
spaces portion of the area admeasuring 2153.50 sq. mtrs cannot be said to be saleable
areas or or being capable of being independently sold or disposed of. The agreement itself
is questionable though not wholly illegal. It is also observed that the parking spaces
allottees cannot be claimed to be member of the society on the strength of any document
or authorization to utilize and use the parking space and occupy it. This court granted
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interim reliefs in favour of the plaintiff in terms of prayer clauses (a)(3) and (a)(4) of the
Notice of Motion. It was however, clarified that defendant no.1 and 2 can construct
parking lot. By the said order, defendant nos. 1 and 2 were restrained from constructing
parking lot except for car parking for members of the plaintiff society and not to sell the
car parking.
4. Respondent Nos. 1 and 2 filed an appeal (126 of 2012) impugning the said order
passed by the learned Single Judge. The applicant herein also filed an Appeal (L) No. 571
of 2012. By a common order dated 24 th June, 2013 passed by the Division Bench of this
court, this court has dealt with affidavit in reply filed by the Director of the second
defendant who was also partner of the first defendant stating that the portion admeasuring
2153.5 sq. mtrs. CMP area was for car parking and had to be developed by the first
defendant. It was also stated that the second defendant was one member of the plaintiff
society to whom the first defendant had sold some of the car parking space in the CMP
area. The Division Bench of this court dismissed the said appeals filed by defendant nos. 1
and 2 herein and also applicant. It was observed that the balance of convenience must
weigh in favour of grant of injunction since what the appellants had attempted to do was
prima facie breach of their statutory obligations contained in the MOFA and irreparable
injury was liable to be caused if the appellants were permitted to alienate the car parking
space during the pendency of the suit.
5. Defendant No. 1 and 2 filed special leave petition impugning the order passed by
the Division Bench and the learned Single Judge (Special Leave to Appeal No. 26616 of
2013). By order dated 7th October, 2013, Supreme Court dismissed the said Special Leave
Petition and expedited the suit. By order dated 25 th October,2013 Supreme Court has
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clarified its order dated 7th October, 2013 making it clear that the High Court shall while
disposing of the suit remain uninfluenced by any observations made in its order dated 15 th
December, 2011 passed by the learned Single Judge and that passed by the Division Bench
on 24th June, 2013.
6. As far as applicant in this Chamber summons are concerned, it is the case of the
applicant that the defendant no. 1 had got the building plan sanctioned for construction of
the proposed independent car parking lot being lot area No. EE/8499/A dated 18 th June,
1993. Defendant no. 1 entered into agreements for sale of 125 car parking spaces in the
proposed independent car parking lot. The purchasers of the car parking spaces in turn
entered into several agreements for sale of car parking spaces in the proposed
independent car parking lot to be constructed in the said car parking lot area by defendant
no. 1. Mr. Shah, the learned senior counsel for the applicant submits that the purchasers
of the car parking spaces had agreed that defendant no.1 do acquire shares of the applicant
which company is nominated to hold the said independent car parking lot for and on behalf
of the purchasers of the car parking spaces in the said car parking lot area. It is submitted
that the applicant being representative body of the purchasers of car parking spaces in the
independent car parking lot to be constructed by defendant no. 1, 9 of such car parking
spaces purchasers had become share holders of the applicant including defendant no. 2. It
is submitted that the applicant as representative body of the purchasers of car parking
spaces are entitled to conveyance in respect of the car parking lot area admeasuring about
2153 sq. mtrs along with common right to recreation ground area and all other common
areas. It is submitted by the learned senior counsel that in the month of July, 2011,
defendant no. 2 had sold 9 car parking spaces to 9 different entities. These 9 car parking
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purchasers space purchasers have entrusted the management of the car parking plaza to the
applicant. Learned senior counsel submits that the applicant are not claiming adversely to
the claim of defendant no. 2 and are necessary parties to this suit. It is submitted that out
of 15,000 Sq. Mtrs area, the applicant claims only about 2000 sq. meters. The outcome of
the suit would affect and bind the applicant. It is submitted that since the applicant is
claiming through defendant no. 2, the applicant is entitled to be impleaded as party
defendant. The learned senior counsel submits that separate suit is not necessary with a
view to avoid any multiplicity of proceedings. Since the parties through whom the
applicant is claiming and issue has arisen in this suit and since subject matter is the
same, consent of the plaintiff for impleadment of the applicant is not necessary. It is
submitted that in these proceedings, this court would not require to conduct any detailed
enquiry about the rights of the applicant in the suit premises. It is submitted that this court
has to only consider whether the applicant would be ultimately affected, if any order is
passed in favour of the plaintiffs in this suit.
7. Mr. Shah, the learned senior counsel placed reliance on the object clause
incorporated in the memorandum of association of the applicant and more particularly
clause 1 and 3 and would submit that the applicant company has been set up for the
purpose to organize, cooperate, manage, administer and maintain any such land, building
or other properties that may be acquired or purchased by it or by its members from time to
time, which includes parking lots. It is submitted that it is also one of the object of the
applicant company to obtain conveyance or an assignment of title in the land and building
or any other structure that may be purchased by it and/or by its members from any
promoter/builder/developer/owner of land from time to time and to receive all documents
of title relating to the property which may be in its possession or power as required. The
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learned senior counsel submits that thus the applicants being necessary and/or proper
parties and are entitled to be impleaded as party defendants to the suit.
8. Mr. Shah, the learned senior counsel placed reliance on the judgment of the
Division Bench of this court delivered on on 9 th April, 2013 in Appeal No. 330 of 2012
in the case of M/s. Shree Kamal Constructions and Ors. Versus Shri.Kamlakar Jiwan Patil
and Ors. The Division Bench of this court has held that if the proposed party to be
impleaded does not claim independent title adverse to the vendors of the plaintiff but
claims under the vendors, such party can be impleaded as party to the suit.
9.
Mr. Shah, the learned senior counsel also placed reliance on an unreported
judgment of this court delivered by the learned Single Judge on 11 th October, 2011 in
Chamber Summons No.1051 of 2011 in the case of Bina Coatings Private Limited Versus
Madhuri Milap Joshi and Ors in support of his submission that the applicants are claiming
through defendant no. 2 and are not claiming adverse to the claim of defendant no.2 and
are thus necessary party under Order I rule 10 of the Code of Civil Procedure. Mr. Shah,
the learned senior counsel also placed reliance on the judgment delivered by the learned
Single Judge of this court in the case of Sumita Pradipkumar Dixit Versus Pushpadevi G.
Makharia and Ors. 2002 (4) Bom. C.R. 249 in support of his plea that merely because the
party can file separate proceeding is no ground for rejection of the application for being
made a party. It is submitted that since the applicant is necessary party or in any event,
proper parties in whose absence in general order can be made but his presence is necessary
for complete and final decision on the question involved in the proceedings. It is
submitted that if this court directs defendant nos. 1 and 2 to execute conveyance in respect
of the parking space which is purchased by the share holders of the applicant, the said
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order would be binding on the applicant and thus without presence of the applicant no
order can be made effectively in this proceedings. Mr. Shah also placed reliance on the
judgment in support of his submission that exercise of the judicial discretion of whether
or not the applicant should be impleaded cannot be made dependent upon outcome of the
question as to whether the applicant would ultimately succeed in their defence and it
would be sufficient to say that the applicant has vital interest in the subject matter of the
suit and would be affected by and to be bound by any decision that is arrived at the trial
of the suit.
10.
Mr. Shah placed reliance on the judgment of the Supreme Court in the case of M/s.
Jayantilal Investments Vs. Madhuvihar Cooperative Housing Society and Os. 2007 AIR
SCW 796 in support of his submission that under section 7A of the MOFA Act, the
consent of the plaintiff society was not required by defendant nos. 1 or 2 for construction
of any parking lot.
11. Mr. Kamdar, the learned senior counsel appearing for defendant nos. 1 and 2
supported the case of the applicant and would submit that it was within the rights of
defendant nos. 1 and 2 to sell parking spaces which right has been rightly exercised by
defendant nos.1 and 2 in favour of various parties who are now share holders of the
applicant company. It is submitted that said car parking spaces are independent premises.
There was no injunction against the defendant no. 2 when defendant no. 2 sold 9 car
parking spaces in favour of different entities. The learned senior counsel placed reliance
on judgment of the Supreme Court in the case of Thomson Press (India) Ltd. Vs.
Nanak Builders and Investors Pvt. Ltd. And Ors. Reported in (2013) 5 SCC 397 in
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support of his submission that the court has to actually see as to whether it is necessary to
make a person party to the action so that he should be bound by the resolution of the action
and the question to be settled must be the question in the action which cannot be
effectively and completely settled unless he is party. It is submitted that the the applicant
are necessary parties and in their absence effective decree cannot be passed by this court.
Mr. Kamdar submits that this court cannot reject the application for impleadment on the
ground that the applicant may not succeed ultimately in the proceedings in which he
seeks impleadment.
12.
Mr. Samdani, the learned senior counsel appearing on behalf of the plaintiff
opposing this chamber summons, on the other hand, submits that the applicant claim to be
representing body of 9 car parking space purchasers. It is submitted that defendant no. 1
has sold flats to members of the plaintiff Nos. 1 and 2. When flats were sold, parking
facility was not constructed. Mr. Samdani placed reliance on various paragraphs of the
order passed by S.C. Dharmadhari,J., in the Notice of Motion filed by the plaintiffs which
order has been upheld by the Division Bench and also the Supreme Court. It is submitted
by learned Senior Counsel that the applicant are put up by defendant nos. 1 and 2 with a
view to delay the outcome of the suit proceeding. The learned senior counsel submits
that the members of the applicant and defendant no. 3 is common. It is submitted that
under section 10 of MOFA, promoter has to take steps for formation of the cooperative
society or company under section 10 of the MOFA. It is submitted that garage alone can
not be construed as flat. If the garage is appurtenant to flat, then only it can form part of
flat and can be sold along with the flat as appurtenant or adjoining to the flat. It is
submitted that even stilt car parking is not saleable. Mr. Samdani submits that defendant
12 CHS-2013.2011-S-2823.06.odt
no. 2 had 125 car parking spaces. Out of those 125 car parking spaces, defendant no. 2 is
alleged to have sold 9 car parking spaces to their own entities so that 10 members could
form a society. It is submitted that even the said 10 members of the car parking space
cannot form society. The applicant company was originally controlled by the share holders
of defendant no. 2 and continued to be controlled even today by defendant no. 2. More
than 90% shares are held by promoters of the defendant no. 2. It is submitted that 9 car
parking purchasers are controlled by Ruia Group. The learned senior counsel submits that
the articles of association of the applicant are deliberately amended on 7 th September,
2011 with oblique motive. It is submitted by the learned senior counsel that the applicant
is not the entity recognized under the provisions of the MOFA. The application is mala
fide, not made in good faith and is misleading and thus required to be dismissed with
exemplary costs. It is submitted that the applicants have not filed any rejoinder to the
affidavit in reply filed by the plaintiffs. Mr. Samdani invited my attention to photo copy
of the plan annexed to the plaint and also agreement for sale entered into between
defendant no. 1 and one of the flat purchasers to demonstrate that IOD for construction of
two multi storied buildings including car parking facility was issued by the competent
authority. The property was admeasuring 15812.956 sq.mtrs. Clause 21 of the said
agreement provided that defendant no. 1 would execute conveyance in favour of the
society consisting of flat purchasers in respect of the said property which is inclusive of
car parking.
13. Mr. Samdani, the learned senior counsel also placed reliance on the affidavit dated
14th November, 2008 in the Notice of Motion No. 3376 of 2006 and affidavit in reply to
Notice of Motion No. 1004 of 2011 filed by defendant no.1 and 2 to demonstrate that
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defendant no. 1 and 2 had agreed to execute conveyance deed after completion of the
project. In those affidavits, it is also admitted that the project could not be completed and
therefore, conveyance could not be executed. It is also stated in the affidavit that the FSI is
already consumed by defendant no. 1 and 2 and therefore, there was no FSI for car
parking. Mr. Samdani submits that defendant no. 1 and 2 has not filed any affidavit in
reply to the chamber summons filed by the applicants which shows that the applicants are
put up by defendant nos. 1 and 2 and this application is mala fide. It is submitted by the
learned senior counsel that the conduct of the applicants is not above board. Defendant
nos. 1 and 2 have committed violation of provisions of MOFA. In view of these facts
and such conduct on the part of the applicants, the applicants cannot be impleaded as party
defendant. It is submitted that the applicants are nothing but defendant no. 2 who is
already party defendant to the suit. The learned senior counsel submits that this suit is for
enforcement of statutory obligations of defendant no. 1 and 2 under section 11 of MOFA.
It is not the case for sale of land under the provisions of Transfer of Property Act. The
learned senior counsel submits that the applicants are not claiming any title through
defendant no. 2. No right is created in favour of the applicants in the property. No interest
can be created except by a registered document. It is submitted that only flat purchasers
can exercise the right under the provisions of MOFA and not by any the entity like the
applicant.
14. Mr. Samdani, the learned senior counsel invites my attention to the agreement for
sale entered into between defendant nos. 1 and 2 to demonstrate that no rights are
conferred on defendant no. 2 in respect of the car parking space. My attention is invited
to clause 15 of one of such agreement which provides that no right is created under the
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car parking space. Defendant no. 2 cannot transfer the said car parking spaces but was
provided with only right to park car. It is submitted that since no rights were created in
favour of defendant no. 2, defendant no. 2 in turn could not create any right in favour of
any party. There is no provision for executing conveyance in favour of defendant no. 2
in respect of car parking space. It is submitted that defendant no. 2 did not acquire any
interest in car parking. It is submitted that the promoter did not agree to form separate
organization of the car parking space purchasers. Even today, there exists the plot which is
earmarked for car parking lot in favour of the plaintiffs. It is submitted that the share
holders of the applicant did not acquire any interest in the alleged agreement entered into
between defendant no. 2 and those parties. Nine car parking purchasers are not before this
court for seeking impleadment.
15. Mr. Samdani, the learned senior counsel submits that in view of the stand of
defendant nos. 1 and 2 who are members of the plaintiff society to convey entire property
admeasuring about 15000 sq. mtrs to Plaintiff nos. 1 and 2 society in view of the
admission of their such obligation before the Division Bench of this court, the stand of
the applicant is adverse to the stand of defendant nos. 1 and 2 regarding conveyance of
entire property in favour of the plaintiffs. It is submitted that those agreements between the
plaintiff and defendant no. 2 does not create any right in favour of defendant no. 2 and
thus the agreements, if any between defendant no. 2 and 9 car parking space purchasers
would also not create any right in their favour. Mr. Samdani submits that it is not the case
of the applicant that defendant no. 2 would collude with plaintiff in not contesting the
claim of the plaintiff. It is submitted that defendant no. 2 even in this proceeding is
contesting and vehemently opposing the claim of the plaintiff and is supporting the
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applicant. The applicants thus could not have any such apprehension of collusion of the
defendant no. 2 with the plaintiffs and are thus neither necessary nor proper parties to this
suit.
16. Mr. Samdani distinguished the judgments relied upon by Mr. Shah and placed
reliance on some of the paragraphs of the judgment of the Supreme Court in the case of
Thomson Press (supra).
17. Mr. Samdani submits that whether the car parking can be purchased or not is not
the subject matter of the suit. The applicant are not car parking purchasers but claims to be
manager on behalf of the 9 car parking space purchasers.
18. In rejoinder, Mr. Shah submits that the Supreme Court in the case of Thomson
Press (supra) has considered the situation where inspite of injunction, defendant who
had created third party rights, application for impleadment of such third party was
permitted by the Supreme Court. It is submitted that the conduct of the party is irrelevant
for the purpose of deciding whether he is necessary or proper party or not. He submits that
the applicant is an independent legal entity. Whether the transaction between the
applicant and defendant no. 2 is genuine or not can be gone into only at the stage of actual
hearing of the suit and not at the stage of hearing of the chamber summons. Mr. Shah,
learned senior counsel submits that in the present suit, plaintiffs have not prayed only for
enforcement of application under MOFA but also seeks execution of the conveyance and
possession. It is submitted that the vendor itself can form any association or can permit
its members to form company and/or association. He submits that the claim of the applicant
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is not adverse to the claim of the defendant no. 1 and 2. The applicants are not setting up
any independent title but are claiming through defendant no. 2. Mr. Shah made attempt to
distinguish the judgments relied upon by Mr. Samdani.
19. This court in the case of Bina Coatings Private Limited (supra) after adverting to
the judgments of the Supreme Court in the case of Kasturi Vs. Iyyamperumal and Ors.
(2005) 6 SCC 733 and Bharat Karsondas Thakkar Vs. Kiran Constructions Co. and
Ors. (2008) 13 SCC 658 has held that if the third party does not claim independently and
adversely to the vendor and if the assertion of his rights directly affects the
effectiveness of the decree in the suit, as originally framed, such third party can and
ought to be joined as a party to the suit. Paragraphs 7and 8 of the said judgment read
thus :
"7. In my view the ratio of this judgment would clearly apply to
the case on hand. Here a third party is making a claim (a)
through the vendor against whom the right for specific
performance is claimed by the Plaintiff, and (b) in respect of
the property which is the subject matter of such right of
specific performance. It is the case of the Plaintiff that the
vendor has done some act in breach of an obligation owed by
him to the Plaintiff, i.e. to specifically perform their inter se
contract, then surely the Plaintiff has a cause of action to
challenge such act and join the third party whose alleged right
arises out of such act. The right to relief arises against the
third party in respect of the same cause of action, namely, the
breach of an obligation owed by the vendor to the Plaintiff. To
put it differently, the alleged right of the third party, which is
sought to be challenged, arises out of this very breach. If such
act had taken place prior to the suit, surely the Plaintiff could
have arraigned the third party and challenged the agreement
between the vendor and the third party. This is not a case
where the third party claims independently and adversely to
the vendor as in the case of Kasturi (Supra). Here the third
party claims through the vendor. Any decree that may be
passed in the suit against the vendor necessarily binds the
third party who claims through the vendor and affects the
third party's alleged right. Similarly, the assertion of the third
17 CHS-2013.2011-S-2823.06.odt
party's alleged right directly affects the effectiveness of the
decree in a suit as originally framed. That is one more reason
why the third party can and ought to be joined as a party in
the instant case.
8. As held by the Supreme Court in the case of Amit Kumar
Shaw (Supra) the question is whether the right of a person
may be effected if he is not added as a party. Alienee
Pendente Lite has always been considered a necessary party
to a suit because he is bound by the final decree that may be
passed in the suit. Here the third party's position can certainly
be compared to Alienee Pendente Lite. It is also pertinent to
note that the discussions of law as to the joinder of parties in
both Kasturi (Supra) and Amit Kumar Shaw (Supra) are in a
context of an application by the third party. In the instant case
the Plaintiff, who, in any event is the dominus litus, should
have no difficulty in impleading the third party."
20.
This court in the case of Sunita Dixit (supra) on which reliance is placed by Mr.
Shah, the learned senior counsel for the applicant, has held that necessary party is one
without whom no order can be made effectively and proper party is one in whose
absence effective order can be made but whose presence is necessary for complete and
final decision on the question involved in the matter. It is held that existence or non
existence of the consent of the plaintiff to the addition of the party to the proceedings can
not always be regarded as conclusive of the jurisdiction of the Court to add a party. It is
held that if such party 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, such party would be a necessary party. This court has held that 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 his defence. The court has to see whether such party has vital interest in the
subject mater of the suit and would be affected by and be bound by any decision that is
arrived at the trial of the suit. Paragraphs 15, 16 and 17 of the said judgment read thus :
18 CHS-2013.2011-S-2823.06.odt
"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-license 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, MANU/MH/0066/1972 :
AIR1972Bom148 . While formulating the propositions underlying
19 CHS-2013.2011-S-2823.06.odt
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. ( : ). 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,
MANU/PH/0041/1969.
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,
MANU/PH/0041/1969 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
MANU/MH/0170/1969 : (1970)72BOMLR827 .
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
20 CHS-2013.2011-S-2823.06.odt
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."
21. The Division Bench of this court in the case of M/s. Shree Kamal Constructions &
Ors. (supra) reliance on which is placed by Mr. Shah the learned senior counsel for the
plaintiff, has held that if the party does not claim independent title adverse to the vendors
of the plaintiff, but claim from the vendors, he would be necessary party. Paragraphs 12
and 13 of the said judgment read thus :
"12. Reliance was sought to be placed on behalf of the
Respondents on a judgement of the Supreme Court in
Bharat Karsondas Thakkar v. Kiran 4 2013 (3) Scale 26
21 CHS-2013.2011-S-2823.06.odt
Construction Co. A distinguishing feature of the case
before the Supreme Court was that by the proposed
amendment what was sought to be introduced was a
challenge to a consent decree which the Appellant had
obtained. Although this fact was brought to the notice of
the first Respondent in March 1984, no steps were taken
to amend the plaint at that stage and the first
Respondent waited until a consent decree was passed
before applying for amendment of the plaint. In this
view of the matter, the Supreme Court was of the view
that the proper course of action was for the first
Respondent to challenge the consent decree not in its
suit for specific performance but in a separate suit for a
declaration that the consent decree ought not to have
been passed and was not binding on the first
Respondent. Significantly however the following
observations of the Supreme Court are extremely
material to the issue in the present case:-
".............. If, as was held in Durga Prasad's case (supra),
the impleadment of the appellant was only for the
purpose of joining him in the conveyance if the
respondent No.1's suit ultimately succeeded, the ratio of
the said decision would possibly have been applicable
to the facts of this case. Unfortunately, that is not the
case here, since the respondent No.1 has by amending
the plaint prayed for a declaration that the consent
decree obtained by the appellant was not binding on
him and also for a declaration that the consent decree
was null and void and was liable to be quashed."
The judgement of the Supreme Court, therefore, clearly
recognises that if impleadment was sought for the
purpose of joining the Appellant there in the
conveyance if the suit of the first Respondent was to
ultimately succeed, the ratio of the decision in Durga
Prasad's case would have been attracted.
13. The learned Single Judge was, with respect, in
error in coming to the conclusion that the proposed
amendment would convert what was essentially a suit
for specific performance into a suit on title. The case of
the Plaintiffs is that conveyances that were executed
after the agreement between the Plaintiffs and their
vendors were entered into by subsequent purchasers
who had notice of the prior transaction. The Plaintiffs-
Appellants seek a decree to the effect that subsequent
22 CHS-2013.2011-S-2823.06.odt
purchasers must join in conveying the title to them, if
the suit were to succeed. The learned Single Judge has
as noted earlier recognised that if the Plaintiffs were to
succeed in the suit, each one of those parties who are
vendors and from whom the Plaintiffs had purchased
the property and persons who derived title from such
vendors will all be directed to join in so as to convey the
right, title and interest in the immovable property which
is the subject-matter of the agreement for sale. Once
this is the position, it is impossible to conceive as to
how the impleadment of those persons who claim title
under the vendors of the Appellants would not be
necessary parties. Again at the cost of repetition, it is
necessary to note that the proposed Respondents do
not claim an independent title adverse to the vendors of
the Appellants but claim under the vendors. In this view
of the matter, we are of the view that the learned Single
Judge was in error in rejecting the Chamber Summons
for amendment."
22. Mr. Shah, learned senior counsel for the applicant and Mr. Kamdar, learned
senior counsel for defendant Nos. 1 and 2 placed reliance on the judgment of the
Supreme Court in the case of Thomson Press (India) (supra). Mr. Samdani, learned senior
counsel also placed reliance on the some of the paragraphs of the said judgment and
distinguished the paragraphs relied upon by Mr. Shah and Mr. Kamdar, learned senior
counsel appearing for plaintiff and defendant nos. 1 and 2 respectively. Mr. Shah and Mr.
Kamdar placed reliance on the judgment of the Supreme Court in the case of Thomson
Press (supra) in support of the submission that under Order I rule 10, the court is
empowered to add any person as party at any stage of proceedings if the person whose
presence before the court is necessary or proper for effective adjudication of the issue
involved in the suit. Reference is also placed on the judgment in support of the submission
that the applicant did not claim any independent right or rights adverse to the rights of
defendant nos. 1 or 2 but is claiming through defendant no. 2 and in the event of this
23 CHS-2013.2011-S-2823.06.odt
court passing any decree for execution of the conveyance in respect of the entire suit
property which includes some of open parking space which is acquired by share holders
of the applicants company, it would seriously affect the applicant and would be binding
on the applicants. Mr. Shah, learned senior counsel laid emphasis on the judgment also in
support of the plea that though the applicants who had acquired rights in the property and
was claiming through the vendor having acquired such rights inspite of injunction order,
during the pendency of the suit, the Supreme Court had held that such party would be
necessary party and was required to be impleaded as party defendant under Order I rule
10 of the Code of Civil Procedure, 1908 and the conduct would be irrelevant for the
purpose of deciding the plea of impleadment. Mr. Samdani, appearing on behalf of the
plaintiff on the other hand strongly placed reliance on the statement of law laid down by
the Supreme Court in the said judgment after adverting to the principles laid down by the
Supreme Court in the case of Vidur Impex and Traders (P) Ltd. Vs. Tosh Apartments
(P) Ltd. (2012) 8 SCC 384. It is submitted by Mr. Samdani, learned senior counsel that if
the court comes to the conclusion that in the suit for specific performance, the court can
order impleadment of the purchaser only if his conduct is above board and if he files an
application for being joined as party within reasonable time of his acquiring knowledge
about the pending litigation. It is submitted that since defendant Nos. 1 and 2 themselves
had filed affidavit in this suit admitting their obligation to convey entire property to the
plaintiff, have put up applicants to file such frivolous proceedings. It can not be pleaded by
the applicants that they are not claiming rights adverse to the rights of the defendants
vendor. It is submitted that nine car parking space purchasers are nothing but group
companies of Ruia. It is submitted that even if nine car parking space could have been
sold in favour of such parties by defendant no. 2, such transactions are illegal and are
24 CHS-2013.2011-S-2823.06.odt
clandestine transactions. It is submitted that since the applicant is beneficiary of such
clandestine transaction, in view of the exceptions carved out by the Supreme Court in the
case of Vidur Impex and Traders (supra), such party cannot be impleaded as party
defendant to the suit. It is also submitted by Mr. Samdani, learned senior counsel that in
any event since nine car parking space purchasers have not claimed impleadment before
this court, such application on behalf of their so called managers of the car parking space
cannot be entertained under Order I Rule 10 of the Code of Civil Procedure, 1908.
Paragraphs 24, 25, 30, 34 to 37, 44, 47 and 56 of the said judgment read thus :
"24. In Kasturi's case (supra) a three Judges' Bench of this Court said
that in a suit for specific performance of contract for sale an
impleadment petition was filed for addition as party Defendant on the
ground that the Petitioners were claiming not under the vendor but
adverse to the title of the vendor. In other words, on the basis of
independent title in the suit property the Petitioner sought to be added as
a necessary party in the suit. Rejecting the petition this Court held as
under:
"11. As noted herein earlier, two tests are required to be satisfied to
determine the question who is a necessary party, let us now consider
who is a proper party in a suit for specific performance of contract for
sale. For deciding the question who is a proper party in the suit for
specific performance the guiding principle is that the presence of such a
party is necessary to adjudicate the controversies involved in the suit for
specific performance of the contract for sale. Thus, the question is to be
decided keeping in mind the scope of the suit. The question that is to be
decided in a suit for specific performance of the contract for sale is to the
enforceability of the contract entered into between the parties to the
contract. If the person seeking addition is added in such a suit, the scope
of the suit for specific performance would be enlarged and it would be
practically converted into a suit for title. Therefore, for effective
adjudication of the controversies involved in the suit, presence of such
parties cannot be said to be necessary at all. Lord Chancellor Cottenham
in Tasker v. Small made the following observations:
It is not disputed that, generally, to a bill for specific
performance of a contract for sale, the parties to the
contract only are the proper parties; and, when the ground
of this jurisdiction of Courts of Equity in suits of that kind
is considered it could not properly be otherwise. The Court
25 CHS-2013.2011-S-2823.06.odt
assumes jurisdiction in such case, because a Court of law,
giving damages only for the non-performance of the
contract, in many cases does not afford an adequate remedy.
But, in equity, as well as in law, the contract constitutes the
right and regulates the liabilities of the parties; and the
object of both proceedings is to place the party
complaining as nearly as possible in the same situation as
the Defendant had agreed that he should be placed in. It is
obvious that persons, strangers to the contract, and,
therefore, neither entitled to the right, nor subject to the
liabilities which arise out of it, are as much strangers to a
proceeding to enforce the execution of it as they are to a
proceeding to recover damages for the breach of it.
(Emphasis supplied)
...
14. Keeping the principles as stated above in mind, let us now, on the
admitted facts of this case, first consider whether the Respondent Nos. 1
and 4 to 11 are necessary parties or not. In our opinion, the Respondent
Nos. 1 and 4 to 11 are not necessary parties effective decree could be
passed in their absence as they had not purchased the contracted property
from the vendor after the contract was entered into. They were also not
necessary parties as they would not be affected by the contract entered
into between the Appellant and the Respondent Nos. 2 and 3. In the case
of Anil Kumar Singh v. Shivnath Mishra alias Gadasa Guru
MANU/SC/0652/1995 : 1995 (3) SCC 147, it has been held that since the
applicant who sought for his addition is not a party to the agreement for
sale, it cannot be said that in his absence, the dispute as to specific
performance cannot be decided. In this case at paragraph 9, the Supreme
Court while deciding whether a person is a necessary party or not in a suit
for specific performance of a contract for sale made the following
observation:
"9. Since the Respondent is not a party to the agreement for sale, it
cannot be said that without his presence the dispute as to specific
performance cannot be determined. Therefore, he is not a necessary
party. (Emphasis Supplied)
25. In the case of Vidhur Impex (supra), the Supreme Court again had
the opportunity to consider all the earlier judgments. The fact of the case
was that a suit for specific performance of agreement was filed. The
Appellants and Bhagwati Developers though totally strangers to the
agreement, came into picture only when all the Respondents entered into
a clandestine transaction with the Appellants for sale of the property and
executed an agreement of sale which was followed by sale deed. Taking
26 CHS-2013.2011-S-2823.06.odt
note all the earlier decisions, the Court laid down the broad principles
governing the disposal of application for impleadment. Paragraph 36 is
worth to be quoted hereinbelow:
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.
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.
30. In the light of the settled principles of law on the doctrine of lis
pendens, we have to examine the provisions of Order 1 Rule 10 of the
Code of Civil Procedure. Order 1 Rule 10 which empowers the Court to
add any person as party at any stage of the proceedings if the person
whose presence before the court is necessary or proper for effective
adjudication of the issue involved in the suit. Order 1 Rule 10 reads as
under:
10. Suit in name of wrong Plaintiff.-
27 CHS-2013.2011-S-2823.06.odt
(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 a 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.
(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 , the proceedings as against any person added as
Defendant shall be deemed to have begun only on the service of the
summons.
34. In the light of the aforesaid discussion both on facts and law, we
shall now examine some of the relevant facts in order to come to right
conclusion.
35. As noticed above, even before the institution of suit for specific
performance when the Plaintiff came to know about the activities of the
Sawhneys' to deal with the property, a public notice was published at the
instance of the Plaintiff in a newspaper "The Hindustan Times" dated
12.02.1990 (Delhi Edn.) informing the public in general about the
agreement with the Plaintiff s. In response to the said notice the sister
concern of the Appellant M/s Living Media India Limited served a legal
notice on the Defendants- Sawhneys' dated 24.06.1990 whereby he has
referred the 'agreement to sell' entered into between the Plaintiff s and
28 CHS-2013.2011-S-2823.06.odt
the Defendants- Sawhneys'.
36. Even after the institution of the suit, the counsel who appeared for
the Defendants-Sawhneys' gave an undertaking not to transfer and
alienate the suit property. Notwithstanding the order passed by the Court
regarding the undertaking given on behalf of the Defendants- Sawhneys',
and having full notice and knowledge of all these facts, the sister
concern of the Appellant namely Living Media India Ltd. entered into
series of transaction and finally the Appellant M/s. Thomson Press got a
sale deed executed in their favour by Sawhneys' in respect of suit
property.
37. Taking into consideration all these facts, we have no hesitation in
holding that the Appellant entered into a clandestine transaction with the
Defendants-Sawhneys' and got the property transferred in their favour.
Hence the Appellant - M/s Thomson Press cannot be held to be a
bonafide purchaser, without notice.
44. Having regard to the law discussed hereinabove and in the facts and
circumstances of the case and also for the ends of justice the Appellant is
to be added as party-Defendant in the suit. The appeal is, accordingly,
allowed and the impugned orders passed by the High Court are set aside.
45. Before parting with the order, it is clarified that the Appellant after
implement as party-Defendant shall be permitted to take all such
defences which are available to the vendor Sawhneys' as the Appellant
derived title, if any, from the vendor on the basis of purchase of the suit
property subsequent to the agreement with the Plaintiff and during the
pendency of the suit.
46. I have had the advantage of going through the order proposed by my
Esteemed Brother M.Y. Eqbal, J. While I entirely agree with the
conclusion that the Appellant ought to be added as a party-Defendant to
the suit, I wish to add a few lines of my own.
47. There are three distinct conclusions which have been drawn by
Eqbal, J. in the judgment proposed by his Lordship. The first and
foremost is that the Appellant was aware of the "agreement to sell"
between the Plaintiff and the Defendants in the suit. Publication of a
notice in the Hindustan Times, Delhi Edition, and the legal notice which
Living Media India Limited, Appellant's sister concern, sent to the
Defendants indeed left no manner of doubt that the Appellant was aware
of a pre-existing agreement to sell between the Plaintiff and the
Defendants. It is also beyond dispute that the sale of the suit property in
favour of the Appellant was in breach of a specific order of injunction
passed by the trial Court. As a matter of fact, the sale deeds executed by
the Defendants falsely claimed that there was no impediment in their
29 CHS-2013.2011-S-2823.06.odt
selling the property to the Appellant even though such an impediment in
the form of a restraint order did actually exist forbidding the Defendants
from alienating the suit property. The High Court was in that view
justified in holding that the sale in favour of the Appellant was a
clandestine transaction which finding has been rightly affirmed in the
order proposed by my Esteemed Brother, and if I may say so with great
respect for good and valid reasons.
56. To the same effect is the decision of this Court in Amit Kumar
Shaw v. Farida Khatoon MANU/SC/0284/2005 : (2005) 11 SCC 403
where this Court held that a transferor pendente lite may not even defend
the title properly as he has no interest in the same or collude with the
Plaintiff in which case the interest of the purchaser pendente lite will be
ignored. To avoid such situations the transferee pendente lite can be
added as a party Defendant to the case provided his interest is substantial
and not just peripheral. This is particularly so where the transferee
pendente lite acquires interest in the entire estate that forms the subject
matter of the dispute. This Court observed:
16... The doctrine of lis pendens applies only where the lis is pending
before a court. Further pending the suit, the transferee is not entitled as
of right to be made a party to the suit, though the court has a discretion
to make him a party. But the transferee pendente lite can be added as a
proper party if his interest in the subject-matter of the suit is substantial
and not just peripheral. A transferee pendente lite to the extent he has
acquired interest from the Defendant is vitally interested in the
litigation, where the transfer is of the entire interest of the Defendant;
the latter having no more interest in the property may not properly
defend the suit. He may collude with the Plaintiff. Hence, though the
Plaintiff is under no obligation to make a lis pendens transferee a party,
under Order 22 Rule 10 an alienee pendente lite may be joined as party.
As already noticed, the court has discretion in the matter which must be
judicially exercised and an alienee would ordinarily be joined as a party
to enable him to protect his interests. The Court has held that a
transferee pendente lite of an interest in immovable property is a
representative-in-interest of the party from whom he has acquired that
interest. He is entitled to be impleaded in the suit or other proceedings
where the transferee pendente lite is made a party to the litigation; he is
entitled to be heard in the matter on the merits of the case."
23. In support of the submission that the car parking space and or common parking
areas and spaces meant for parking of vehicles whether under stilt, enclosed or open are
incapable of being sold as independent unit and is therefore, not saleable area. Mr.
30 CHS-2013.2011-S-2823.06.odt
Samdani, placed reliance on the judgment of the Supreme Court in the case of Nahalchand
Lalchand (supra). It is submitted that since defendant no. 2 did not have any right to retain
the said car parking area, the question of transferring the same to other 9 alleged car
parking purchasers did not arise. It is submitted by the learned senior counsel that in any
event, since defendants had filed affidavits in notice of motion filed by the plaintiffs in the
same suit that defendant no. 1 and 2 could not complete the project and did not develope
the car parking area, the conveyance of the entire property could not be executed in favour
of the plaintiffs, sale of any such car parking spaces in favour of other entities is
fraudulent. It is submitted that such transaction, if carried out would be a clandestine
transaction and such parties who are involved in such clandestine transaction cannot be
impleaded as party defendants to the suit. Mr. Samdani, learned senior counsel also
invited my attention to the order dated 15 th December, 2011 passed by S.C.
Dharmadhikari,J. and also order passed by the Division Bench delivered on 24 th June,
2013 and also order passed by the Supreme Court dismissing SLP and the clarificatory
order dated 25th October, 2013.
24. On perusal of the order passed by the learned Single Judge on 15 th December, 2011,
it is clear that this court adverted to the judgment of the Supreme Court in the case of
Nahalchand Lalchand (supra) while granting interim relief in favour of the plaintiff. In
case of Nahalchand Lalchand, Supreme Court has held that the stand-alone-garage or in
other words garage as an independent unit by itself is not a flat within the meaning of
section 2(a-1). It is held that the garage is a place having roof and walls on three sides
and does not include unenclosed or uncovered sparking spaces. The Supreme Court has
held that open to the sky parking area or stilted portion utilized as parking space is not a
31 CHS-2013.2011-S-2823.06.odt
garage within the meaning of section 2(a-1) and therefore, is not saleable independently as
a flat or along with the flat. Considering this judgment of the Supreme Court the learned
Single Judge of this court in Notice of Motion filed by the plaintiff in this suit has held that
any parking facility or portion thereof cannot be said to be saleable areas or being capable
of being independently sold and disposed of.
25. The next question that arises for consideration of this court is whether the
applicants are claiming title from the vendors who had sold the entire plot including the
car parking space to the members of the plaintiff society or is claiming independently or
whether their claim is adverse to the claim of the vendor i.e. defendant no. 2 in this case.
On perusal of the affidavits filed by defendant nos. 1 and 2 in this proceedings, it is clear
that it was the case of the defendant nos. 1 and 2 that the portion admeasuring 2153.5
sq.mts in the South-West side out of the larger property was yet to be developed by
defendant no. 1 and the project was incomplete and the time for execution of conveyance
under the agreements for sale executed between the defendant no. 2 and the purchasers of
the flats in Phoenix Towers A and B have not become operative till date. It is also stated
that defendant no. 1 is ready and willing to execute conveyance after completion of the
project in accordance with the agreements executed with the purchasers of the premises.
Defendant no. 2 also filed separate affidavit in which it is deposed that the portion
admeasuring 2153.5 sq. mts., area as common car parking is yet to be developed by the
defendant no.1 . It is also deposed that there is no balance FSI in the suit premises and the
FSI available has already been consumed. Similar statements have been also made by
defendant nos. 1 and 2 before the Division Bench which are recorded by the Division
Bench in appeals arising out of the order passed by S.C. Dharmadhari,J. It is thus clear
32 CHS-2013.2011-S-2823.06.odt
that the claim made by the applicants in the chamber summons that defendant no. 2 has
created right, title and interest in nine car parking purchasers is contrary to the stand
taken by defendant no. 1 and 2 in the notice of motion filed by the plaintiff in the suit. In
my view, the claim of the applicant is not under defendant no. 2 but is independent and
adverse to the claim of defendant no. 2.
26. This court can not adjudicate the merits of the claim made by the applicants in this
chamber summons but can certainly look into the issue whether the claims made by the
applicants on the basis of which applicants seek impleadment, are independent or are
adverse to the claims made by the vendor.
27.
The Supreme court in the case of Thomson Press (supra) has adverted to the earlier
judgment of the Supreme Court in the case of Vidur Impex and Traders (P) Ltd. (supra) in
which the Supreme Court has culled out the principles governing disposal of the
application for impleadment. Considering the principles laid down by the Supreme Court,
this court has to examine whether this court would not be in a position to pass effective
decree in the absence of applicants or not or whether presence of the applicants is
necessary for effective and complete adjudication of the issues involved in the suit.
28. This court also has to examine whether the conduct of the applicants is above board
or transaction between defendant no. 2 and the alleged nine car parking space purchasers
can be construed as clandestine transaction in which applicants seek to take benefit of such
clandestine transaction and whether such party can be impleaded as party defendant.
29. In the case of Thomson Press, the Supreme Court has held that transferee
pendente lite can be added as party defendant to the proceedings provided his interest is
substantial and not just peripheral. The Supreme Court has also considered the effect of
33 CHS-2013.2011-S-2823.06.odt
section 19 of the Specific Relief Act while deciding the petition arising out of an
application under Order I Rule 10 of the Code of Civil Procedure. Section 19 of Specific
Relief Act provides as to when specific performance of the contract may be enforced and
against whom. In the matter in hand before the Supreme Court, in case of Thomson Press
the vendor had transferred the entire property in favour of third party who sought
impleadment in the suit for specific performance.
30. It is not the case of the applicants that the flats which were constructed by
defendant no. 1 in partnership with defendant no. 2 and were sold to various other
purchasers, have been sold by defendant no. 2 to the applicants. It is also not in dispute
that the plaintiffs have claimed various reliefs including mandatory order and injunction
directing defendant nos. 1 and 2 to execute conveyance of the entire suit property.
Defendant no. 2 is alleged to have sold nine car parking space out of 125 car parking space
to various entities. Mr. Shah, learned counsel could not dispute the submissions made by
Mr. Samdani, learned senior counsel for the plaintiffs that the alleged nine car parking
purchasers are entities of the Ruia Group. It is also not in dispute that these nine alleged
car parking purchasers have not made any application for their impleadment to the suit.
The applicants who have filed this application claim to have right to manage car parking
spaces alleged to have been acquired by nine of such parties who are claiming to be the
shareholders of the applicants. In my prima facie view, the transactions alleged to have
been entered into between defendant no. 2 is in the nature of clandestine transaction and
are also in violation of the principles laid by the Supreme Court in the case of Nahalchand
Lalchand. In my view the applicants would have no locus to file any such application for
impleadment on behalf of such so called car parking space purchasers on the premise that
34 CHS-2013.2011-S-2823.06.odt
such car parking purchasers have acquired shares of the applicants company and have
agreed that such car parking space be managed by the applicants. I am of the view that
such claims are not substantial but are just peripheral. In my view presence of such party
is not required for effectively and properly adjudicating upon the matters and issues in
the suit. The suit is for enforcement of statutory obligations of the developer under the
provisions of MOFA and is also for execution of the deed of conveyance in respect of
entire suit property. Whether said car parking space can be sold or not by defendant no. 2
in favour of other parties is not the issue or matter which is under adjudication in the suit.
In my view, effective decree can be passed by this court in the suit in the absence of the
applicants. Defendant no. 2 claims to be one of the member and share holder of the
applicants and who is alleged to have created some third party rights in respect of nine car
parking space is already party defendant to the suit. There are no allegations of collusion
made by the applicants against plaintiff and defendant nos. 1 and 2. On the contrary
defendant nos. 1 and 2 are contesting the suit and interlocutory proceedings and are ex-
facie supporting the case of the applicants.
31. The applicant who is part of the Ruia Group and/or is under the control and
management of Ruia Group and who wants to take advantage of such clandestine
transaction between defendant no. 2 and nine car parking space purchasers, can not be
impleaded as party defendant to the suit. Under section 19 of the Specific Relief Act,
specific performance of the contract may be enforced against the parties described. In my
view applicants are not included in such category of persons. The Management of the
applicants was all through out aware of the statements made by defendant nos. 1 and 2 in
the Notice of Motion filed by Plaintiffs regarding car parking space. Even the car parking
35 CHS-2013.2011-S-2823.06.odt
purchasers were also aware of such stand of defendant no. 2 before entering into such
alleged transaction.
32. In my view, reliance placed by Mr. Shah, learned senior counsel on the judgment
of the Supreme Court in the case of Thomson Press is of no assistance to the applicants.
Said judgment on the contrary assists the plaintiffs. The facts before the Supreme Court
in that matter are totally different. The applicants had alleged to have purchased entire
property which was forming subject matter of the suit, which is absent in this case.
33. Mr. Shah, learned senior counsel could not produce any documents to indicate that
defendant no.2 has created any right, title or interest in favour of the applicants in
respect of the properties which are subject matter of the suit or any documents by which
these nine alleged car parking purchasers have created any right, title interest in favour
of the applicant in respect of the properties which are subject matter of the suit. In my view
the application filed by the applicant for impleadmnet is thoroughly misconceived and
deserves to be dismissed.
34. Resultantly, I pass the following order :
Chamber summons is dismissed. No order as to costs.
(R.D. DHANUKA.J.)
