Virtus Dordrecht B.V. And Anr. vs Mr. Vikram Bhargav And Ors.
2003 Latest Caselaw 409 Del

JUDGMENT

R.C. Jain, J.

1. The plaintiffs have moved this application under Order I Rule 10(4) read with Order 39 Rules 1 & 2 read with Section 151 Civil Procedure Code seeking permission to implead Smt. Angoori Devi wife of Shri Jai Prakash, resident of C-32, AFFCC, Neb Sarai, New Delhi as a defendant (defendant No.6) in the present suit and for an injunction restraining her (Smt. Angoori Devi) from dealing with, selling, transferring, mortgaging, disposing off, alienating, creating third party interests in any manner or parting with possession of the portion of land transferred in her name by defendant No.1 i.e. Khasra No.562/462/83 (100.9 Bighas) and a part of Khasra No.565/462/83 (88 Bighas) of the suit property.

2. The germane facts which need to be noticed for the disposal of the present application are the plaintiffs had filed a suit for recovery of US Dollars 5,64,895 (Rs.2,14,66,030/-), declaration and injunction against defendants No.1 to 5. The allegations made in the suit being that around July - August 1996 defendant No.1 approached plaintiff No.1 with a project for export of certain agricultural commodities. A contract was executed between the plaintiffs and defendant No.1. After that defendant No.1 alleged to have represented to the plaintiffs that he had a better proposal for investment in real estate business and that the money sent by the plaintiffs for the performance of export project would be remitted to his account with the bank. Defendant No.1 also introduced defendant No.2 as his personal friend and consultant in Trade Promotion, having held certain prestigious posts in Government Organisations. Acting on the representation of defendants No.1 and 2, the plaintiffs remitted a sum of US Dollars 3500,000 to the defendants to secure the purchase of land and thereafter certain more amounts were remitted by transfer from the bank account for the purchase of land. However, contrary to the assurance and promise, defendants No.1 and 2 purchased several pieces of agricultural land in all measuring 753.09 bighas in the names of defendants No.1 to 4 in the revenue statate of village Mitasar, Tehsil Sardarshahar, District Churu, Bikaner, Rajsthan. The said act of the defendants was not only contrary to the terms and conditions of the agreement and the contemplated project but was also fraudulent act on the part of the defendants committed with a view to dupe the plaintiffs of huge sum which they had entrusted to defendants No.1 and 2 under good faith. The suit is being contested by defendants No.1 to 5 on a variety of grounds.

3. Along with the suit, the plaintiffs had also filed an application under Order 39 Rules 1 and 2 Civil Procedure Code praying for an ad interim injunction. On 2nd April, 1998, this Court while issuing notice on the said application, restrained the defendants from dealing with, selling, transferring, mortgaging, disposing off, alienating, creating third party interests in any manner or parting with the possessions of the suit property as described in para 21 at page 17 and 18 of the plaint. The said injunction order is still in operation.

4. The present application dated 16th October, 2000 was moved on 19th October, 2000 by the plaintiffs with the allegations that in the month of July 2000, the plaintiffs learnt that defendant No.1 Shri Vikram Bhargava had transferred a part of the suit property i.e. Khasra No.562/462/83 (measuring 1000.0 Bighas) and a part of Khasra No. 565/462/83 (88 Bighas) to one Smt. Angoori Devi wife of Shri Jaiprakash, resident of C-32, AFFCC, Neb Sarai, New Delhi sometime in February 1998 before the filing of the present suit in April 1998. Accordingly it was stated that the said portion of the suit property is now under the legal ownership and possession of the said Smt. Angoori Devi who is alleged to be the wife of Shri Jai Prakash an employee of Defendants No.1 and 2. It is also alleged that Smt. Angoori Devi and her husband Shri Jai Prakash are hand in glove with defendants No.1 and 2 in defrauding the plaintiffs of their monies. It is also alleged that the property as mentioned above was purchased by the defendants out of the monies of the plaintiffs, illegally misappropriated by defendants No.1 and 2 who in turn passed over the said property in favor of Smt. Angoori Devi who cannot in law or equity be permitted to enrich herself at the cost of the plaintiffs. The plaintiffs. It is claimed that the plaintiffs entitled to restitution of their monies.

5. Notice of this application was issued to the defendants and Smt. Angoori Devi. Smt. Angoori Devi has contested the application by filing a reply raising preliminary objection about the maintainability of the application under the said provision of law and also holding out that she is neither a necessary nor a proper party to the present suit; she being the legal owner of the immovable property consisting of Khasra No.562/462/83 (100.9 Bighas) and Khasra No.565/462/83 (88 Bighas) in the revenue estate of vilage Mitasar, Tehsil Sardarshahar, District Churu, Bikaner, Rajasthan and is in possession thereof ever since the execution of the sale deed in her favor in December 1997. It is also stated that the applicant has made bald and unsubstantiated remark in para 4 of the application Smt. Angoori Devi being in hand in glove with defendants in allegedly defrauding the plaintiffs in the aforementioned suit. This remark is without any material particulars is not only vague and false but is scurrilous and defamatory and the proposed defendant reserves the right to take appropriate legal action against the present applicant. On merits it is not disputed that Smt. Angoori Devi is a transferee of the aforesaid land vide a reigstered sale deed and the land stands mutated in her name but allegations about she and her husband being or having been the employees of defendants No.1 and 2 are denied. It is allege that they came to know of the disputes between the plaintiffs and the existing defendants after receipt of the notice of the present application. It is stated that the answering defendant Smt. Angoori Devi is the legal owner of the land in question in her own right even before the filing of the present suit. The plaintiffs have no cause of action against her and she is neither a necessary nor a paroper party to the present suit.

6. So far as the existing defendants are concerned they have not filed any reply to the application but the application is opposed on their behalf.

7. I have heard Mr. Ashwani Kumar, Sr. Advocate representing the plaintiffs/applicants and Mr. Ashok Sethi, learned counsel representing the    non-applicant/proposed defendant Smt.  Angoori Devi and Mr. S.K. Luthra, learned counsel for the existing defendants and have given my thoughtful consideration to their respective submissions.
 

 As noticed above, the facts and circumstances on the face of which the plaintiffs seek the impleadment of Smt.  Angoori Devi are by and large admitted.  However, the important question is as to whether on the face of these facts and circumstances, Smt.  Angoori Devi can be said to be either a necessary or proper party.  Mr. Ashwani Kumar, learned senior counsel for the     plaintiffs-applicants has vehemently urged that the plaintiffs are entitled to seek the impleadment of Smt.  Angoori Devi because in her absence, the suit cannot effectively and properly be adjudicated upon and controversy raised cannot be answered finally.  On the other hand, the submission of the learned counsel for the non-applicant is that the proposed-defendant Smt.  Angoori Devi is a bona fide purchaser of the suit property with consideration and without any prior knowledge of the existence of any contract between the plaintiffs and defendant No.1 or any dispute in regard to the transferred land prior to the filing of the present suit and, therefore, she is neither necessary nor a proper party in the present suit.  It is also strongly contented that the present application is misconceived under the provisions of Order I Rule 10(4) CPC because that provision of law provides only for a consequential course about the amendment of the plaint when a new defendant is added in the suit.
 

8. Order I Rule 10 deals with two different situations as contained in sub-rules (1) & (2) of the said Rule.  Sub-rule (1) provides for substitution of the plaintiff with other plaintiff in case the suit has been instituted in the name of a different or incorrect person through bona fide mistake.  Sub-rule (2) is rather important as it authorises the Court to strike out or add parties.  Said sub-rule reads as under:-
  "10(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."  
 

 Under the above sub-rule, a person may be added as a party to the suit in the following two situations:-
   

i. when he ought to have been joined as plaintiff or defendant and is not joined so, or
 

ii. without his presence, the question in the suit cannot be completely decided. 
 

9. It is well settled legal proposition that the plaintiff is the dominus litus.  The theory of dominus litus, however, cannot be over-stretched in the matter of impleadment of parties, because it is the duty of the Court to ensure that if for deciding the real matter in dispute, a person is a necessary party.  A person who is neither a necessary nor proper party, cannot be allowed to be imp leaded as a party.  Such a finding cannot be given without ascertaining the issues arising in the suit.
 

10.  In support of his contention that the proposed-defendant is neither a necessary nor proper party in the present suit, learned counsel for the            non-applicant/proposed defendant has placed reliance upon a Supreme Court decision in the case of Ramesh Hirachand Kundanmal vs. Municipal Corporation of Greater Bombay & Others, .  In that case, the Supreme Court has enunciated/reiterated the principles on which the Court should exercise its jurisdictional discretion in allowing or refusing a plaintiff to add a new party to the suit by holding as under:-
  

"Though the plaintiff-appellant is dominus lIT is and is not bound to sue every possible adverse claimant in the same suit and he may choose to implead only those persons as defendants against whom he wishes to proceed, but the Court may at any stage of the suit direct addition of parties. A party can be joined as defendant even though the plaintiff odes not think that he has any cause of action against him. The question of impleadment of a party has to be decided on the touchstone of Order I Rule 10 which provides that only a necessary or a proper party may be added. In the light of the clear language of the rule, it is not open to the appellant to contend that a person cannot be added as defendant even in a case where his presence is necessary to enable the Court to decide the matter effectively.

Rule 10(2) gives a wide discretion to the Court to meet every case of defect of parties and is not affected by the inaction of the plaintiff to bring the necessary parties on record. A necessary party is one without whom no order can be made effectively. A proper party is one in whose absence an effective order can be made but whose presence is necessary for a complete and final decision on the question involved in the proceeding. The addition of parties is generally not a question of initial jurisdiction of the Court but of a judicial discretion which has to be exercised in view of all the facts and circumstances of a particular case. The Court is empowered to join a person whose presence is necessary for the prescribed purpose and cannot under the rule direct the addition of a person whose presence is not necessary for that purpose. If the intervener has a cause of action against the plaintiff relating to the subject matter of the existing action, the Court has power to join the intervener so as to give effect to the primary object of the order which is to avoid multiplicity of actions.

The object of Rule 10(2) of Order I is not to prevent multiplicity of actions though it may incidentally have that effect. But that appears to be a desirable consequence of the rule rather than its main objective. The person to be joined must be one whose presence is necessary as a party. What makes a person a necessary party is not merely that he has relevant evidence to give on some of the questions involved; that would only make him a necessary witness. It is not merely that he has an interest in the correct solution of some question involved and has thought of relevant arguments to advance. The only reason which makes it necessary to make a person a party to an action is so that he should be bound by the result of the action and the question to be settled, therefore, must be a question in the action which cannot be effectually and completely settled unless he is a party. The line has been drawn on a wider construction of the rule between the direct interest or the legal interest and commercial interest. A clear distinction has been drawn between suits relating to property and those in which the subject matter of litigation is a declaration as regards status or legal character. In the former category, the rule of present interest as distinguished from the commercial interest is required to be shown before a person may be added as a party. It is, therefore, necessary that the person must be directly or legally interested in the action in the answer, i.e., he can say that the litigation may lead to a result which will affect him legally that is by curtailing his legal rights. The rule does not contemplate joining as a defendant a person whose only object is to prosecute his own cause of action."

11. Learned counsel for the defendant has extensively referred to averments/pleas contained in para No.21 of the plaint with a view to show that the plaintiffs had made all possible enquiries/research before filing the suit with regard to sale of land and had acquired knowledge even about certain contemplated transactions in regard to the land in question and it is stated that defendants were about to transfer the land comprising in the said two khasra numbers by defendant No.1 in favor of the proposed-defendant/Smt. Angoori Devi which had taken place in December 1997, i.e. about five months prior to the filing of the suit. It is also alleged that the application contains certain incorrect averments about the sale deed in question being of February 1998 which infact was of December 1997. He also pointed out that though the plaintiffs claim to have acquired knowledge about the transfer of the land sometimes in July 2000 but no application for impleadment was moved uptil October 2000. On the other hand, Mr. Ashwani Kumar has strongly urged that whatever knowledge the plaintiffs could acquire from the revenue records, was placed on record and since in the revenue records, the land comprised in the above two Khasra No.562/462/83 and Khasra No.565/462/83 continued to be shown in the name of defendant No.1, they could not possibly be aware of any transfer of the said land by defendant No.1 in favor of Smt. Angoori Devi. According to the learned counsel for the plaintiff, as per the copies of the revenue records filed Along with the application, it would be apparent that the mutation of the land in question was effected in favor of Smt. Angoori Devi and the mutation entered in the revenue records only on 28th June, 2000. However, there seems to be no merits in this contention because as per the copies of the revenue records filed on record, the mutation of the land in question had been effected in favor of Smt. Angoori Devi as back as on 7th January, 1998, i.e. before the filing of the present suit and only the copies of the said revenue records were prepared and issued to the plaintiffs on 28th June, 2000. However, the question is as to whether this lapse on the part of the plaintiffs about not taking note of the said transfer/mutation of the land in favor of Smt. Angoori Devi at the time of filing of the present suit is itself sufficient to decline the prayer of the plaintiffs for impleadment of Smt. Angoori Devi, if she is otherwise considered a necessary and proper party. In the opinion of this Court, the answer would be in the negative.

12. Having considered the matter in its entirity and on the face of the facts obtaining on record that the suit of the plaintiff for the recovery of certain amount against defendants 1 & 2 is primarily based on the averments and allegations that they had committed breach of trust by mis-appropriating different sums of money received by them from the plaintiffs by investing them for purchasing of lands in their own name and the name of their family members contrary to the terms of the agreement and thereafter a part of land in question was transferred in favor of a third party viz. Smt. Angoori Devi with a view to defeat the claim of the plaintiffs which they could have made on the said land, this Court is of the considered opinion that Smt. Angoori Devi is not only a proper but a necessary party for the just and proper adjudication of the suit. As regards the plea of proposed defendant that she is a bona fide purchaser for valuable consideration without knowledge of any alleged claim of the plaintiffs against the existing defendant, this Court is of the opinion that she would be entitled to raise this plea in her defense after she is imp leaded as a party.

13. The objection of the proposed-defendant that the application has been made under the incorrect provision of law, appears to be correct because the application ought to have been made under sub-rule (2) instead of sub-rule (4) of Rule 10 of Order I CPC. Since all the averments and allegations alleged in the application are fully covered by sub-rule (2) of Order I Rule 10 CPC, therefore, the application can be considered and treated to have been made under Order I Rule 10 (2) & (4) CPC.

14. In the result, the application is allowed and the plaintiffs are permitted to implead Smt. Angoori Devi w/o Sh. Jaiprakash, resident of C-32, AFFCC, Neb Sarai, New Delhi as defendant No.6 in the present suit. Let the amended memo of parties and the amended plaint may be filed within four weeks. The proposed-defendant may file her written statement within four weeks thereafter.

List before the Joint Registrar for completion of pleadings and admission/denial of documents on 21st August, 2003.