Dismissed

Sri.Kona Nagamani Babu v. Smt.Chalasani Mythili Jyothsna

Andhra Pradesh HC8 Sept 2023CRP/466/2023

Case brief

AI extract

What is this about?

In this civil revision petition, the High Court upheld the trial court's dismissal of an application to implead purchasers as defendants. The court held that despite their interest in the suit property, the petitioners were neither necessary nor proper parties because their rights were contingent on the outcome of their separate suit and the plaintiff's objection warranted a cautious exercise of d

What did the court decide?

The civil revision petition was dismissed; no order as to costs.

Sri.Kona Nagamani Babu Vs Smt.Chalasani Mythili… — Property and Title | Andhra Pradesh HC (2023)

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THE HON’BLE MS JUSTICE B.S.BHANUMATHI CIVIL REVISION PETITION No.466 of 2023

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ORDER :

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The Civil Revision Petition is filed under Article 227 of Constitution of India, challenging the order dated 19.01.2023 dismissing I.A.No.329 of 2017 in O.S.No.168 of 2015 on the file of the Court of VII Additional District Judge, Vijayawada filed under Order I Rule 10 (2) and Section 151 of CPC r/w 28 of Civil Rules of Practice to implead the revisionpetitioners/petitioners as defendant Nos.8 and 9 in the suit and to direct the following consequential amendments to be made:

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To add petitioner Nos.1 & 2 whose address particulars are given below as defendant Nos.8 & 9 in the long and short cause title.

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Address particulars of proposed parties:

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Kona Nagamani Babu, S/o. Late Seetaramaiah, Hindu, aged about 56 years, Properties and Agriculture, Residing in H.No.2-167/2, Vikas Vidhyavanam Road, Poranki, Penamaluru Mandal, Krishna District.

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Kona Gowri Kumari, W/o. Nagamani Babu, Hindu, aged about 50 years, Properties, Residing in H.No.2-167/2, Vikas Vidhyavanam Road, Poranki, Penamaluru Mandal, Krishna District.

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The 1^st respondent is the plaintiff. Respondent Nos.2 to 8 are the defendants.

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The plaintiff filed the suit for declaration that the sale certificate dated 29.03.2012 executed by the 2^nd defendant in favour of the 1^st defendant registered as document No.2131/2012 in the office of the District Registrar, Vijayawada East in respect of the plaint schedule property is illegal and void as it is contrary to the provisions of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. The other relief claimed in the suit is for consequential permanent injunction restraining the defendant No.1 from alienating the plaint schedule property, by executing a sale deed or sale certificate or interfering with the plaintiff’s peaceful possession and enjoyment of the plaint schedule property in any manner.

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4. The plaintiff filed the suit alleging briefly as follows:

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The plaint schedule property is the subject matter of a registered development agreement dated 22.02.2006 entered between the defendant No.5 and 6. While so, the defendant No.4, claimed himself to be authorized by the defendants No.5 and 6 to look after the construction and sales of plots in the proposed construction. The plaintiff was informed that the defendant No.3 accepted to grant the required loan to the defendant No.4, on execution of a bond by a guarantor. The defendant No.4 made the plaintiff to believe that he is the

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developer of the proposed construction and requested the plaintiff to furnish collateral security for securing the financial assistance to be granted by the defendant No.3, believing her that he would be in a position to complete the construction and would convey a plot to the plaintiff on certain terms. However, by initiating the proceedings under the provisions of the SARFAESI Act, the defendant No.2 executed a sale certificate in favour of the defendant No.1 by selling the suit schedule property. As such, the plaintiff filed the suit for the above said reliefs basing on other pleadings as well, mentioned in the plaint which are not necessary to be mentioned here for the purpose of this petition.

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Pending the suit, I.A.No.329 of 2017 was filed by the proposed defendants, seeking themselves to implead in the suit. The contention of the petitioners is briefly as follows:

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The petitioners are wife and husband. The 2^nd petitioner purchased the plaint schedule property and Non-possessory Agreement of Sale, dated 09.06.2016 executed by and in between the petitioner Nos.1 and 2, on one part and the defendant No.3 representing DHFL Vysya Housing Finance Limited as its authorized representative on the other part. The sale consideration is Rs.1,60,00,000/- (Rupees one crore sixty lakhs only). The purchasers paid advance amount of

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Rs.10,00,000/- through two cheques, each for Rs.5,00,000/drawn on HDFC Bank, Enikepadu and the same were mentioned in the judgment itself. The purchasers were not aware of any dispute or suit pending in respect of schedule property. Later, they came to know about the pendency of the suit. Immediately thereafter, the 1^st petitioner approached the defendant No.3 and enquired about the matter. The defendant No.3 admitted about the pendency of the suit. The petitioners got issued a registered notice dated 10.11.2016 to the defendant No.3. On receipt of the said notice, the defendant No.3 got issued a reply disputing the terms of the agreement. Therefore, the petitioners gave a rejoinder notice dated 30.11.2016 to the defendant No.3. When there was no proper response, they filed O.S.No.46 of 2017, against the DHFL Vysya Housing Finance Limited represented by its Managing Director and the defendant No.3 seeking a declaration that the Sale Agreement dated 09.06.2016 is valid and binding on the parties to the agreement and right to seek for specific performance of the contract and for other consequential reliefs. The interest of the petitioners in the subject matter of the said suit is direct, legal and equitable, since the Sale Certificate impugned in the suit is the basis for the claim of the petitioners herein in their suit in O.S.No.46

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of 2017. Therefore, the petitioners stated that they are proper parties to the present suit in the sense that their presence is necessary for complete and effectual adjudication of all the disputes in question and also to avoid any possible unholy compromise between the plaintiff and the defendant No.3 & that the petitioners may be in a position to safeguard their interest and take the suit to its logical end.

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The petition was opposed by filing the counter of the respondent/plaintiff stating briefly as follows:

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From the version of the petitioners, it is seen that they are aware that the property covered by the agreement dated 09.06.2016 is the plaint schedule property and the defendants No.1 to 3 appeared in the suit on 17.06.2015 and that their written statement was filed on 29.06.2016. The petitioners filed their suit to enforce their rights arising out of the agreement with the defendants No.1 to 3. Their rights, if any, are to be adjudicated in the suit in O.S.No.46 of 2017 and not in the said suit. The criteria for determining whether the petitioners are to be impleaded or not cannot depend on the question whether the petitioners have got interest in the property. The question to be considered is whether without their presence, the questions in the suit cannot be completely decided or not. In the present suit, the acts of the defendants

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No.1 to 3 prior to the institution of the suit are in question. The petitioners alleged that their agreement was obtained during pendency of the suit. Therefore, it is clear that the defendants No.1 to 3 suppressed the pendency of this suit and executed the agreement in favour of the petitioners. The petitioners do not have any direct lis with the plaintiff. As such, the petitioners need not be impleaded as parties to this suit. The third party/purchaser pending a suit is neither a necessary nor a proper party. Therefore, the petition is liable to be dismissed.

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After hearing both the parties, the trial Court dismissed the petition holding that there must be a semblance of right to the proposed party to get impleaded in a suit and that the petitioners entered into agreement of sale with the defendants No.1 to 3, knowing fully about the dispute between their vendor and the plaintiff, in view of Clause (8) of the agreement of sale and therefore the petitioners are neither necessary nor proper parties to the suit.

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Having been aggrieved by the order, this revision petition is filed by the proposed parties mainly contending that the trial Court failed to appreciate the law enunciated in Order I Rule 10 C.P.C and that the pleadings in the suit are clear that the petitioners are not aware of the pendency of the

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suit, yet the trial Court misread the contentions of Non Possessory Agreement of the Sale and dismissed the petition, and thereby exercised its jurisdiction with material irregularity and failed to exercise its jurisdiction vested by law, though the revision petitioners demonstrated a clear interest in the suit property and their participation in the lis to enables this Court to adjudicate the issues effectively, finally and meaningfully. It is further contended that the trial Court arrived at a pre-determined conclusion and failed to appreciate that the petitioners are the proper parties to the lis , if not necessary parties, because their presence in the suit would enable them to prevent unholy compromise or a remiss manner of prosecuting the lis detrimental to the interest of the proposed parties.

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The learned counsel for the revision petitioners elaborated the grounds raised in the revision, besides the grounds stated in their petition. He further submitted that even according to the plaintiff, the proposed parties did not have knowledge of the pendency of the suit and therefore the trial Court ought to have allowed the petition. He further submitted that not only the main relief in the suit seeking declaration of sale certificate as null and avoid, the consequential permanent injunction seeking a direction

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against the 1^st defendant not to alienate the property would come directly in conflict with the interest of the petitioners in the relief they claimed in their suit in O.S.No.46 of 2017. Therefore, he vehemently contended that the presence of the petitioners in this suit is proper, though not necessary, since the petitioners intend to purchase the property and are not merely interested in getting the refund of the amount paid as advance.

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The learned counsel for the respondent/plaintiff submitted that the presence of the petitioners, the purchasers pending the lis, is not necessary for complete adjudication of the lis in the suit and thus they are not necessary parties. He further submitted that they are not even proper parties as their interest can be secured in their suit by getting the refund of the amount in case if the sale certificate is set aside and supported the observations of the trial Court in the interim order.

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In any suit, a party can be added, if the party is necessary or a proper party and not otherwise. The test as to who is a necessary or proper party has been well said by the Apex Court in several cases which reads as follows:

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In Vidur Implex vs. Tosh Apartments¹ , the Hon’ble

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Apex Court observed as under:

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“ the discretion of the court under Order 1 Rule 10 (2) of the Code of Civil Procedure, 1908 is limited. It is only if a party is a necessary or a proper party that they can be directed by the Court to be joined in the proceeding. If a person is not found to be a necessary or property party, the Court has no jurisdiction to order impleadment against the wishes of the plaintiff .”

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Further, in CCI vs. SAIL² , the Hon’ble Apex Court

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observed as under:

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“The Court is therefore duty bound to arrive at a conclusion that a party is a necessary party or proper party before it can pass an order directing impleadment contrary to the plaintiff's wishes The discretion to either allow or reject an application for impleadment of a party is required to be exercised according to settled principles of law and according to reason and fair play.”

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12. In Kasturi vs. Iyyamperumal and Ors .³ , the Hon’ble

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Supreme Court held as follows:

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1 (2012) 8 SCC 384

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2 (2010) 10 SCC 744

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3 AIR 2005 SC 2813

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“………. it is pellucid that necessary parties are those persons in whose absence no decree can be passed by the Court or that there must be a right to some relief against some party in respect of the controversy involved in the proceedings and proper parties are those whose presence before the Court would be necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the suit although no relief in the suit was claimed against such person.”

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By applying the above test in the present case, it can be said that the presence of the petitioners in the suit is not indispensable and their presence is not necessary for complete or effectual adjudication of the lis in the suit. Even the petitioners categorically stated that though they are not necessary parties, that they are proper parties. Thus, it is clear that the petitioners are not necessary parties to the suit.

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The next question would be whether they are proper parties to the suit. According to the petitioners, since their interest in the property through their agreement of sale is directly involved in the present suit and if the suit is not effectually prosecuted or end in an unholy compromise, the interest of the petitioners is likely to be defeated and the same has direct effect on the principal relief claimed in

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O.S.No.46 of 2017. Whether the petitioners have knowledge of the pendency of the suit as on the date of entering into their agreement is not seriously in dispute as the plaintiff has not specifically contended contrary to the assertion by the petitioners that they were not aware of the pendency of the suit. Of course, it depends on the pleadings taken in case if the petitioners are allowed to come on record. The learned counsel for the plaintiff submitted that the relief claimed by the petitioners is based on contingent events and not the present situation. Except, the apprehension for the present, there is no basis for the petitioners to seek their remedy. Since the agreement of sale is pending lis in the present suit, they are bound by the decree that is going to be passed after conducting trial, whether or not the petitioners have knowledge of the pendency of the suit at the time when they entered into the agreement of sale. Therefore, on the assumed apprehension of likely damaged of their interest in their suit, the discretion of a Court under Order I Rule 10(2) need not be exercise in their favour, because the general principle is that the plaintiff is the master of the suit i.e., dominus litis, in choosing the defendant against whom the relief is to be sought. Of course, the general principle has exception and thus in spite of resistance by the plaintiff, any

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defendant would be permitted to be impleaded basing on the test whether such party is necessary or proper party. However, when a party is sought to be impleaded against the resistance offered by the plaintiff, the discretionary jurisdiction of this Court under Order I Rule 10(2) must be cautiously and sparingly used. If in every case where there is a mere element of apprehension that the result in the suit may directly affect the interest of a party in the event the defendant does not prosecute the suit properly is accepted as an incumbent ground, without any further material on record, the proceedings would become endless as any unscrupulous defendant may generate any number of transactions pending the trial, to delay the proceedings in the suit. That apart, in the present suit, the petitioners are not totally remediless in their suit or that their interest would not be absolutely affected by the result in the present suit. Considering all these facts and circumstances into consideration, this Court is of the view that there is no need to permit the petitioners to come on record. Thus, there is no ground to interfere with the order impugned in this Revision Petition.

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In the result, the civil revision petition is dismissed. There shall be no order as to costs. Pending miscellaneous applications, if any, shall stand closed.

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___________________________ JUSTICE B.S.BHANUMATHI

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Date: 08-09-2023 Pmk

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136

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THE HON’BLE MS JUSTICE B.S.BHANUMATHI

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