Param Pure Edible Oil Pvt. Ltd. vs M/S. Ratendon Investments & ...
2009 Latest Caselaw 3449 Del

*          HIGH COURT OF DELHI : NEW DELHI


+          I.A. No.4396/2007 in C.S. [OS] No.92/2007


                                 Reserved on:    22nd July, 2009

%                                Decided on:     31st August, 2009

Param Pure Edible Oil Pvt. Ltd.                      ...Plaintiff
                     Through : Mr. Sunil K. Mittal, Adv. &
                                Mr. Gaurav Duggal & Mr. Kshitij
                                Mittal, Advs.

                      Versus

M/s. Ratendon Investments & Holdings
Ltd. & Ors.                                         ....Defendants
                    Through : Mr. V.P. Singh, Sr. Adv. with
                              Ms. Meenakshi Singh, Adv. for
                              Defendant No.1
                              Mr. J. Lal, Adv. with Ms. Yasmin
                              Tarapore, Adv. for Defendants No.2 & 3
                              Mr. B.B. Gupta, Adv. for proposed Def. No.4

Coram:

HON'BLE MR. JUSTICE MANMOHAN SINGH

1. Whether the Reporters of local papers may
   be allowed to see the judgment?                                 No

2. To be referred to Reporter or not?                              No

3. Whether the judgment should be reported                         No
   in the Digest?

MANMOHAN SINGH, J.

1. This order shall dispose of the application filed by the

plaintiff being IA No.4396/2007 under Order I Rule 10 (2) read with

Section 151 CPC for impleadment of Mr. S.K. Singhal as co-defendant

arraigned as defendant No.4.

2. The plaintiff filed the present suit for specific performance

of an agreement to sell dated 18th January, 1986 against defendant Nos.

1, 2 and 3 in respect of the agricultural land bearing Khasra Nos.615(1-

18), 624(4-16), 642(3-12), 627(5-0), 628(4-16) and 629(4-16) situated

in the revenue estate of Village Satbari, Tehsil Hauz Khas (Mehrauli),

New Delhi (hereinafter referred to as 'suit property'). In the application

for impleadment, it is pleaded that Mr. S.K. Singhal acted as an agent

and as a person duly authorized by defendant nos.2 and 3 to negotiate

and finalize all the terms and conditions of the agreement for sale. It is

further pleaded by the plaintiff that defendant Nos.2 and 3 were well

aware that Mr. S.K. Singhal was acting on their behalf as their agent and

had also consented to and/or accepted the terms and conditions of the

agreement for sell. The plaintiff has paid substantial part of the sale

consideration to the defendant through Mr. S.K. Singhal. It is thus

alleged that Mr. S.K. Singhal should be made a party to effectually and

completely adjudicate upon and settle the present suit.

3. It is case of the plaintiff that Mr. S.K. Singhal, Executive

Director of defendant No.1 company agreed on behalf of defendant No.1

and as the representative of defendant Nos.2 and 3 to act as an agent and

to negotiate and finalise all the terms and conditions of the agreement

for sale of the suit property.

4. The learned counsel for the plaintiff contended that vide

agreement to sell dated 18th January, 1986 the defendants agreed to sell

the suit property to the plaintiff @ Rs.2,60,00,000/- per acre for a total

sale consideration of Rs.13,46,80,000/-. The plaintiff paid a sum of

Rs.1,30,00,000/- to the defendants through Mr. S.K. Singhal, Executive

Director of defendant No.1. An amount of Rs.1 crore was paid in cash

while Rs.30 lac was paid through three cheques for the sum of Rs.10 lac

each in the name of defendant Nos.1, 2 and 3. These cheques were

however not encashed by the defendants.

5. To support his contention, the plaintiff relied upon the

statement made in the hand written receipt dated 18 th January, 2006 by

Mr. S.K. Singhal which also contains his statement;-

'this is also accepted by other co-owners'.

6. Reply to this application has been filed by the proposed

defendant Mr. S.K. Singhal who has alleged that he is not involved in

the subject matter in his personal capacity nor can any relief be granted

against him, therefore, he is not a necessary and proper party to the suit

as no relief is being sought against him.

7. In the reply filed by the defendant No.1, it is alleged that the

proposed defendant Mr. S.K. Singhal has no direct interest in the

controversy and this court has no power to implead Mr. S.K. Singhal as a

co-defendant. It is also alleged that he is neither in possession of the

property nor has anything to do with property in dispute. By impleading

him, in fact the plaintiff is seeking to expand the scope of its suit. For

impleading a party in the suit, firstly there must be a right to some relief

against such a party in respect of matter involved in the proceedings in

question and secondly it should not be possible for the court to pass an

effective decree in the absence of such a party. Therefore, Mr. S.K.

Singhal is neither a necessary nor a proper party to the suit.

8. It is submitted by the learned counsel appearing on behalf of

defendant Nos. 2 and 3 that there is no agreement between the plaintiff

and the defendant Nos. 2 and 3 and no privity of contract between them.

It is further submitted that the defendant Nos.2 and 3 have not agreed to

sell the land to the plaintiff and have not received any part of the sale

consideration. (It is submitted that the plaintiff has filed the suit

under a specific enactment and is thus bound by its provisions being

Section 19 of the Specific Relief Act, 1963 which postulates who are

the necessary party to the suit.) The plaintiff wants to implead a party

against whom the plaintiff seeks no relief. Since the plaintiff has

failed to demonstrate the interest of Mr. S.K. Singhal, the application

is not maintainable.

9. Vide order dated 18th January, 2007 this Court dismissed the

application for passing injunction against the defendant Nos.2 and 3

and observed that there is no document evidencing authorization of Mr.

S.K. Singhal by defendant Nos.2 and 3. Only an assertion has been

made in this regard in the plaint. Defendants No.2 and 3 did not sign

the agreement to sell dated 18th January, 2006. Mr. S.K. Singhal signed

it without any reference as to whether he had been authorized by the

defendants to represent their interest in the suit property.

10. Mr. V.P. Singh, learned Senior counsel appearing for

defendant No.1 contended that the alleged agreement in question is a

composite agreement of three different properties, which is not signed

by the two parties i.e. defendant Nos.2 and 3 who have a share in the

said properties. Learned counsel has argued that under the provisions

of Section 19[c] of the Specific Relief Act, the part of the property

under composite agreement cannot be partitioned and cannot be

sold.

11. Mr. Sunil K. Mittal, learned counsel for the plaintiff has

made his contention that the Receipt dated 18.01.1996 is signed by Mr.

S.K. Singhal, who is admittedly the Executive Director of defendant

no.1. Learned counsel for the plaintiff has referred to two letters dated

09.05.2006 and 31.07.2006, which were written and sent to the plaintiff

on behalf of the defendant no.1 signed by Mr. S.K. Singhal as an

authorized signatory wherein an admission has been made to the effect

that three cheques of Rs.10 lac each and Rs.1 crore in cash was

received.

12. Learned counsel for the plaintiff has referred to para 3 of the

preliminary objection of the written statement filed by the defendant

No.1 wherein the defendant No.1 has denied the signatures of Mr. S.K.

Singhal and the receipt by alleging that the same are false and

fabricated document. Learned counsel has argued that in para 5, the

defendant No.1 has not denied the fact of having received the three

cheques and Rs.1 crore in cash from the plaintiff. He has argued that

defendant No.1 has also admitted having sent two communications on

9th May, 2006 and 31st July, 2006 on its behalf. Mr. Mittal has argued

that Mr. S.K. Singhal himself has signed the written statement and filed

his personal affidavit in support of written statement as an Executive

Director. He has argued that since defendant No.1 has denied

the execution of the receipt in the written statement and the authority

of Mr. Singhal, therefore, he is a proper and necessary party coupled

with the fact that the defendant on the one hand has denied the

execution of the documents and on the other hand it is alleged in the

written statement that the alleged sale agreement is not a concluded

agreement in law and the deal was never finalized between the parties.

He submits that by virtue of two letters, the defendant No.1 desires to

return back the cash amount received by Mr. S.K. Singhal and in fact the

defendant No.1 had prepared a draft for Rs. 1 crore on 18th July, 2006, a

copy of which was sent alongwith its letter dated 31 st July, 2006.

Learned counsel has made his submissions that in fact Mr. S.K. Singhal

was authorized by virtue of General resolution dated 27th July, 2005

passed in his favour, therefore, the defendants are not performing their

part and are making flimsy defences which are after thoughts and

contrary to the stand taken from time to time.

13. At the stage of hearing of the application under Order 1

Rule 10(2), the court is not required to adjudicate the claim of the party

finally. While deciding an application for impleadment, the Court has

to record only a prima facie finding to find out whether the application

is bona fide. It cannot finally adjudicate the questions of fact which

would be decided in the suit itself.

14. The principle underlying the rule under Order 1 Rule

10 CPC is that the Court puts itself in the position of being able to

effectually and completely adjudicate upon and settle the questions

involved in the suit.

15. The object of the rule is to enable the addition of parties for

the sole purpose of completely and effectually adjudicating upon the

dispute arising between the original parties in the presence of such of

the newly impleaded parties without which there must be multiplicity

of proceedings.

16. Now, coming to the facts and circumstances of the present

case, Mr. Singhal in his bail application under Section 438 of Cr.P.C.

before the Sessions Judge, Patiala House Court has admitted having

signed the agreement, cash receipt of Rs.1 crores and three cheques as

well as the execution of the cash receipt. The defendant No.1 on the

other hand in the written statement signed by Mr. Singhal has denied

his signatures on these documents and has alleged that they are false

and fabricated. Not only that, defendant No.1 has also admitted in the

written statement having received the said payment. It is specifically

alleged by the defendant No.1 that the three cheques received from the

plaintiff have not been encashed and that defendant No.1 is ready and

willing to refund Rs.1 crore received from the plaintiff.

17. I agree with the learned counsel for the defendants

that these alleged documents have not been signed by the defendant

Nos.2 and 3 and if the plaintiff is unable to prove his case in

this regard, ultimately, the suit may be held as not maintainable

under the Specific Relief Act. However, the case of the plaintiff as per

plaint is that Mr. S.K. Singhal has also accepted the amount by other

co-owners as mentioned in the receipts on behalf of defendant Nos.2

and 3. Without going into the merits of the case, I feel that the rival

contentions of the parties in this respect are to be considered at the time

of trial. It is well settled law that the merit of the case cannot be

determined in the application of amendment of pleadings or at the

stage of impleadment. Now the question before this Court is as to

whether Mr. S.K. Singhal is a proper and necessary party in view of the

fact that no relief is sought by the plaintiff against Mr. S.K. Singhal.

18. It is not denied by either party that the presence of Mr. S.K.

Singhal in the matter is very much necessary in order to determine the

real dispute between the parties as he is the central character in the

scheme of things. The contentions of the defendants is that the plaintiff

may summon him as a witness at the time of trial.

19. After thoughtful consideration of the matter, this Court feels

that for the purpose of deciding the real controversy between the

parties, filing of written statement by Mr. S.K. Singhal is necessary,

therefore, he is to be impleaded as defendant in the case on the

following reasons :-

(a) the written statement is signed by him with

supporting affidavit as an Executive Director of defendant

No.1 who has not specifically denied his signatures on the

documents calling them forge and fabricated which was

filed on behalf of defendant No.1.

(b) he is the person who signed the two letters

dated 9th May, 2006 and 31st July, 2006 on behalf of

defendant No.1 sent to the plaintiff asking him to take

refund of the money.

(c) he has admitted in the bail application filed

before the Sessions Judge having executed the same very

documents while obtaining the bail.

(d) during the course of hearing, defendant No.1

has shown its willingness to refund back the money left

with it.

20. The facts as mentioned above are prima facie sufficient to

implead him as a party to the suit as he may not again change his

stand if he is summoned as a witness. Therefore, this court feels that

his written statement on specific facts involved in the matter is

required to be filed in the interest of justice, equity and fair play due

to peculiar facts in the present case. Further, no prejudice would be

caused to the defendants if he is impleaded as a party as this Court

feels that the truth must come before the Court.

21. Considering the overall peculiar circumstances of the

present matter, the present application is allowed and Mr. S.K.

Singhal is impleaded as defendant No.4 in the matter. The plaintiff is

permitted to file the amended plaint/memo of parties within four

weeks. The application is disposed of. No cost.

C.S. [OS] No.92/2007

List on 6th November, 2009.

AUGUST 31, 2009                         MANMOHAN SINGH, J.
nn