Bombay High Court
Beharam Nawrosji Gamadia And Anr vs Babli Samartathmal Seth And 3 Ors. ... on 22 June, 2017
Bench: S.C. Gupte
Chittewan 1/10 907. CHS 55-15.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
CHAMBER SUMMONS NO.55 OF 2015
IN
SUIT NO.783 OF 1987
Mah-Hill Properties Pvt. Ltd.
And Another ... Applicants
In the matter between :
1(a) Behram Nawrosji Gamadia
And Another ... Plaintiffs
Versus
Smt. Babli Samarthmal Seth
Others ... Defendants
WITH
NOTICE OF MOTION NO.2699 OF 2010
WITH
NOTICE OF MOTION NO.189 OF 2012
IN
SUIT NO.783 OF 1987
Behram N. Gamadia And Another ... Applicants/Plaintiffs
Versus
Samratmal P. Seth And Mohd.
Zakir Oomer ... Respondents/Defendants
.....
Mr. Darius Khambatta, Senior Advocate a/w Mr. Snehal Shah, Mr. Shrikant
Doijode, Ms. Falguni Thakkar and Ms. Priyanka Ravindran i/b M/s Doijode
Associates for the Plaintiffs.
Mr. Vikram Nankani, Senior Advocate a/w Mr. Anoshak Daver, Ms. Rutuja
Patil and Ms. Niyathi Kalra i/b M/s. Negandhi Shah and Himayatullah for
the Applicants in Chamber Summons No.55 of 2015.
Mr. K.S. Dubey i/b Mr. J.P. Singh for the Applicants in Notice of Motion
No.2699 of 2010 and Notice of Motion No.189 of 2012.
Mr. A.A. Pandey for Defendant No.1(a).
Mr. Prasad Dani, Senior Advocate i/b Mr. Amit Sheth for Respondent
No.2/Original Defendant No.1(b).
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Chittewan 2/10 907. CHS 55-15.doc
Ms. K.C. Nichani i/b Mr. Yogesh Deshpande for Respondent No.4/Original
Defendant No.1(d).
Ms. Kavita Ambekar, 1st Assistant to Court Receiver present.
.....
CORAM : S.C.GUPTE, J.
DATE : 22 JUNE 2017
(ORAL JUDGMENT)
. This Chamber Summons is taken out by third party applicants for
impleadment as party defendants to the suit and consequential
amendments in the plaint and pending proceedings.
2 In short, the Applicants' case can be stated as follows :
The present suit concerns a partnership constituted between the
original Plaintiff (since deceased and now represented by Plaintiff Nos.1(a)
and 1(b)) and the original Defendant (since deceased and now represented
by Defendant Nos.1(a) to 1(d)). The Plaintiffs pray for a declaration that
the partnership originally entered into between the parties, namely,
original Plaintiff, original Defendant and one Oomer Ahmed, in the name
and style of M/s S.P. Building Corporation and modified by a deed of
retirement executed between Oomer Ahmed (retiring partner) on one
hand, and the original Plaintiff and the original Defendant (continuing
partners) on the other hand, has been abandoned or is of no legal effect
and that the suit property is not as a partnership property of the firm but
the absolute property of the original Plaintiff, and neither the original
Defendant or any person claiming through him has any right or interest in
the same. In the alternative, the Plaintiffs pray for dissolution of the suit
Chittewan 3/10 907. CHS 55-15.doc
partnership and accounts. There is also a deed of sub-partnership between
the original Defendant and eight others concerning 75% share of the
original Defendant in the suit partnership. During the pendency of the suit,
by a deed of assignment dated 21 June 2008, the original Defendant
assigned the actionable claim and/or chose in action including the right to
contest the present suit and all incidental benefits and claims arising out of
the subject matter of the suit (including his share in the suit partnership) in
favour of Housing Development and Infrastructure Ltd ("HDIL"), for a
valuable consideration and upon terms and conditions recorded in the
deed. The deed of assignment has been duly registered with the Sub-
Registrar of Assurances. The original Defendant also executed an
irrevocable power of attorney in favour of HDIL. This power of attorney
has also been duly registered. On 5 April 2010, HDIL further assigned the
actionable claim and/or chose-in-action including the rights forming part of
the deed of assignment dated 21 June 2008, referred to above, in favour of
one D.B. Properties Pvt. Ltd and Vision Finstock Ltd. Similarly, by a deed of
assignment executed on 28 July 2010, the sub-partners referred to in the
deed of sub-partnership referred to above, assigned, sold and transferred
unto the aforesaid two entities, namely, D.B. Properties Pvt. Ltd and Vision
Finstock Ltd, their respective right, title and interest under the deed of sub-
partnership for valuable consideration and on terms and conditions set out
therein. These latter assignors also executed an irrevocable power of
attorney in favour the two assignee entities in respect of the subject matter
of the deed of assignment. By Share Sale Agreement dated 7 June 2011,
shareholders of D.B. Properties Pvt. Ltd. sold and transferred their entire
shareholding in D.B. Properties Pvt. Ltd., whereupon, the name of the
company was changed to Mah-Hill Properties Pvt. Ltd., Applicant No.1 in
Chittewan 4/10 907. CHS 55-15.doc
the present Chamber Summons.
3 The Chamber Summons seeks impleadment consequent upon the
assignment of interest of the original Defendant during the pendency of the
suit. The Applicants rely on registered deeds of assignment as between (i)
original Defendant and HDIL, (ii) HDIL, and D.B. Properties Pvt Ltd. and
Vision Finstock Ltd, (together with powers of attorney, respectively,
executed consequent upon these assignments), and (iii) sub-partners in the
share of the original Defendant in the suit partnership, and D.B. Properties
Pvt. Ltd and Vision Finstock Ltd. (together with the power of attorney).
Based on these, it is submitted that the Applicants, being assignees of the
interest of the original Defendant in the subject matter of the suit, should
be joined as party defendants and allowed to defend the suit by granting
leave under Order 22 Rule 10 of the Code.
4 Mr. Khambata, learned Senior Counsel appearing for the Plaintiffs,
raises several objections to the application for impleadment. Learned
Counsel submits that the Applicants do not have any independent right to
defend the suit. It is submitted that they claim through the original
Defendant under various deeds of assignment, which are disputed by the
parties to the suit. It is submitted that the original Defendant expired on
30 October 2014 and his legal heirs have already been brought on record
as Defendant Nos.1-a to 1-d to the suit and that these Defendants alone are
entitled to represent the estate of the original Defendant. Learned Counsel
submits that if the Applicants are also impleaded as party defendants to the
suit, the Plaintiffs will have to face two different sets of defendants who
claim to represent the same estate and whose interests conflict with each
Chittewan 5/10 907. CHS 55-15.doc
other. It is submitted that an enquiry as to the succession or devolution of
the interest of the original Defendant in the subject matter of the present
suit is foreign to the Plaintiffs' cause of action. It is submitted that the
Applicants may have to file their own suit against the defendants
impleaded as legal heirs of the original Defendant for setting up a title to
the interest of the deceased original Defendant; they have no role to play
so far as the present suit is concerned. Learned Counsel also submits that
the Applicants are guilty of grave delay and laches in coming to the Court,
the deeds of assignment in their favour having been executed as far back as
on 5 April 2010 (the original Defendant himself having executed an
assignment deed on 21 June 2008) and the Applicants having approached
the Court for impleadment on 5 December 2014. Learned Counsel submits
that, at any rate, the question as to whether or not there is infact an
assignment of the interest of the original Defendant in the suit in favour of
the Applicants, as alleged by them, needs to be decided by this Court at the
outset, before they are impleaded as party defendants.
5 In the first place, Rule 10 of Order 22 of the Code is merely an
enabling provision. It gives an assignee of a party's interest during the
pendency of the suit an option to apply for a leave to continue the suit. It
does not impose any obligation on the assignee to come on record. He may
or may not choose to come on record, in the latter case leaving the conduct
of the suit to his assignor. The only consequence in that case is that he is
bound by the result of the litigation. Correspondingly, such assignee does
not, by reason of leaving the conduct of the suit to his assignor, loose his
right to continue the proceedings. At a proper juncture, he may seek leave
to prosecute or defend the suit, as the case may be, if he is of the view that
Chittewan 6/10 907. CHS 55-15.doc
his interests would be protected better by taking over the conduct of the
suit. In the present case, the assignor continued to defend the suit till his
death on 30 October 2014. After his death, when the legal heirs of the
deceased were brought on record, the Applicants, as purported assignees
of the interest of the original Defendant, have chosen to come forward and
represent the estate of the deceased Defendant in their capacity as such
assignees so as to protect their interests. As held by the Supreme Court in
the case of Amteshwar Anand Vs. Virender Mohan Singh 1, Rule 10 gives
an assignee of a party's interest during the pendency of the suit an option
to apply for leave to continue the suit and this option can be resorted to at
any stage by the assignee, "when he is of the opinion that his interest would
be better protected thereby." If the legal heirs of the assignor, who are
brought record as party defendants in place and stead of the original
Defendant, take a stand which may not be in the interest of the assignee, as
it infact turns out in the present case, going by the respective pleadings of
the parties and stands adopted by them at the Bar, nothing prevents the
assignee from approaching the Court to represent the interest of his
assignor with a view to protect his interests.
6 The only question in such a case is, whether or not, at the stage
when the application for joinder is made, the Court is expected to make
any detailed inquiry or come to any definitive finding as to the correctness
or otherwise of the assignment claim. Mr. Khambata, learned Counsel
relies on the judgment of Karnataka High Court in the case of Akka Bai Vs.
Gowrawwa2. Relying on observations of the Division Bench of Karnanataka
High Court in this case, learned Counsel submits that it is only when the
1 (2006) 1 SCC 148
2 AIR 1990 Karnataka 278
Chittewan 7/10 907. CHS 55-15.doc
identity of the heir, legatee, transferee or assignee, as the case may be, is
not in dispute that the question of permitting him to be impleaded as
successor or transferee pendente lite would arise. Whenever there is any
dispute, the Court must reject the application for impleadment. No doubt,
the Division Bench of Karnataka High Court has observed so, purportedly
relying on observations of the Supreme Court in the case of Khemchand
Shankar Choudhary Vs. Vishnu Hari Patil. 3 But, and I say this with great
respect to the learned Judges of Karnataka High Court, the law cited by
them is contrary to the law laid down by the Supreme Court not only in
Khemchand Shankar's case but also in various other cases. In fact
Khemchand Shankar's case says nothing of the kind. That was a case,
where there was no dispute as to the transfer and the transferees had asked
for an equitable partition post a preliminary decree of partition, relying on
the deed of transfer executed in their favour pendente lite. The argument
before the Court was that the transferees during the pendency of the suit
for partition do not have locus standi to appear before the revenue
authority in proceedings under Section 54 of the Code and ask for an
equitable partition of land, if they had not been impleaded as parties to the
suit before the Civil Court. The Supreme Court held that in case where
there was no dispute, if the Collector made an equitable partition taking
into consideration the interests of all concerned including those on whom
any interest in the subject matter had devolved during the pendency of the
suit, he would neither be violating the decree nor transgressing the law;
his action would not be ultra vires; on the other hand, it would be in
conformity with the intention of the legislature which has placed the work
of partition of lands, subject to payment of assessment to the Government,
3 AIR 1983 SC 124
Chittewan 8/10 907. CHS 55-15.doc
in his hands, to be carried out in accordance with the law (if any), for the
time being in force, relating to partition of property or separate possession
of shares. Non-existence of a dispute as to the fact of transfer is referred to
in this context and this context alone. There is no law laid down by the
Supreme Court to the effect, as suggested by the learned Judges of
Karnataka High Court, that, by implication, when there is a dispute as to
the fact of transfer, the application of the transferee pendente lite for leave
under Order 22 Rule 10 ought to be rejected, relegating the parties to have
the disputed facts decided before another forum.
7 Our Court in fact in the case of Jawaharlal Vs. Smt. Saraswatibai
Babulal Joshi4, has clearly laid down that no detailed enquiry is
contemplated at the stage of grant of leave under Order 22 Rule 10 of the
Code. The Court has only to be prima facie satisfied for exercising its
discretion in granting leave for continuing the suit by or against the person
on whom the interest has devolved by assignment or devolution and the
validity of the assignment or devolution can be considered at the trial of
the suit on merits.
8 Just to rest the controversy finally, we may note the following
observations of the Supreme Court in the case of Amit Kumar Shaw Vs.
Farida Khatoon5 :
"12. Under Order 22 Rule 10, no detailed inquiry at the stage of
granting leave is contemplated. The court has only to be prima
facie satisfied for exercising its discretion in granting leave for
continuing the suit by or against the person on whom the interest
has devolved by assignment or devolution. The question about
4 AIR 1987 Bombay 276
5 (2005) 11 Supreme Court Cases 403
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existence and validity of the assignment or devolution can be
considered at the final hearing of the proceedings."
9 But such impleadment, argues Mr. Khambata, causes clear
inconvenience to the Plaintiffs. They have to defend the suit against two
sets of defendants, who claim to represent the interest of the deceased
original Defendant and yet plead their cases differently. It is but natural
that the Plaintiffs have to do so. There is nothing unusual about such
predicament. Whenever there is any contest as to devolution of interest as
between the successors of the original party in a suit and more than one
successor claim such devolution, there would be two or more sets of
defendants, each within his or her rights to take such stand as suits them.
It is another matter, whether they are entitled to take a stand contrary to
the one urged by the original Defendant. But there is nothing in law to
suggest that they must take stands in conformity with each other.
10 Mr. Khambata contends that in a case such as this, the Plaintiffs have
no way to join issues, since there is nothing that the Plaintiffs can say once
differing written statements of these two sets of defendants are filed. Even
this is no unusual predicament. No doubt, no pleadings subsequent to the
written statement of the defendant, other than by way of defence or set off
is permitted in a trial, but, in accordance with Rule 9 of Order 8, the
defendant can always seek leave of the Court and the Court in appropriate
case, upon such terms as it thinks fit, permit the defendant to file
subsequent pleadings. Anyway, that is not a ground for not allowing the
defendants to take different stands.
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11 In view of the discussion above, concerning the right of the assignee
to come to the Court as and when he is of the opinion that his interests
would be better protected thereby, there is no need to consider in this case
the question of delay and laches. Even otherwise, the application is made
in close proximity of the death of the original Defendant and if the
Applicants are of the view that interests of the deceased are better
protected by them as assignees rather than legal heirs of the deceased, who
are already brought on record, they may very well chose to come before
the Court and apply for impleadment.
12 For all these reasons, the Chamber Summons is made absolute in
terms of prayer clause (a).
13 On the application of Mr. Khambata, the Plaintiffs are permitted to
defer carrying out of the amendment for a period of four weeks from today.
The amendments must be carried out immediately thereafter.
(S.C. GUPTE, J.)
