Dismissed

Adarsh Water Parks and Resorts Pvt. Ltd. v. Abdul Rashid Abdul Rehman Yusuf and Anr. and Space Developer

Bombay HC20 Sept 2013CHS/169/2013

Case brief

AI extract

What is this about?

Applicants seeking impleadment as defendants in a suit for specific performance claimed rights under a development agreement executed after the suit filing. The court distinguished precedents holding that subsequent purchasers claiming independent rights are not necessary or proper parties in such suits.

What did the court decide?

Chamber summons filed by applicants for impleadment as party defendant is dismissed.

Adarsh Water Parks and Resorts Pvt. Ltd. Vs Abdul Rashid… — Specific Performance | Bombay HC (2013)

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22-CHS-169-13

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY . ORDINARY ORIGINAL CIVIL JURISDICTION

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CHAMBER SUMMONS NO.169 OF 2013 IN

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SUIT NO.396 OF 2006

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M/s Space Developer	)
A registered partnership firm	)
Having its registered address	)
At 575/11, 1^stfloor, Dugad Market,	)
Station Road, Kurla (West),	)
Mumbai-70.	)
And having its Administrative Office	)
at Royal Palms, Mainframe-1	)
Suite No.621, 6^thfloor, Aarey	)
Milk Colony, Goregaon (East),	)
Mumbai – 400 065	)	… Applicants

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In the matter between :

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Adarsh Water Parks & Resorts Pvt. Ltd.	)
A company incorporated under the	)
companies Act 1956, having its	)
Office at 21 Rolex House, S.V. Road,	)
Malad (West), Mumbai-400 064	)	… Plaintiffs
Vs.
1. Abdul Rashid Abdul Rehman Yusuf	)
2. Farooq Abdul Rashid Yusuf	)
Both of Bombay, Indian Inhabitants, residing at Nhava House,	) )
65, Maharshi Karve Marg,	)
(formerly known as Queens Road),	)
Bombay-400 002.	)
Both the defendants No.1 and 2 in	)
their capacity as the Executor & Trustee	)

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Asmita

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Under the Will of late ) Sir Mohammed Yusuf Knot. ) … Defendants .

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Mr Z. Behramkamdin a/w Soma Singh, Vidya Nair i/b M/s Vimal & Co. for Applicant/Defendant.

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Mr R. K. Agarwal for the plaintiff.

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Mr Chirag Shah i/b J. J. Shah for defendant No.2.

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CORAM : R.D.DHANUKA J. DATED : SEPTEMBER 20, 2013.

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JUDGMENT :

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By this chamber summons, applicants seek their impleadment as party defendant in a suit.

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Plaintiffs have filed a suit (396/06) in this Court inter alia praying for specific performance of agreement entered into between the plaintiffs and the defendants on 16^th August 2005 in respect of the properties described in the plaint. It is the case of the applicants that in respect of part of the property which is subject matter of the suit i.e. C.T.S. No.354, 354/1 to 56, 355, 355/1 to 17 of village Kanjur, Taluka Kurla, Bhandup (W), Mumbai 400 078, applicants have acquired right, title and interest in respect of the said part of land admeasuring about 4934.10 sq. meters from Eric Nocholas D'mello and others by a registered development agreement dated 22 April 2008. Applicants came to be in possession of the said part of the property under the said development agreement dated 22 April 2008. It is the case of

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Asmita

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the applicants that part of the suit property was encroached upon by the slumdwellers. Applicants formed a scheme with the help of slum-dwellers and has formed a society by name Shriram co-operative Housing Society (proposed) and got No Objection Certificate for re-development of the said property under DC Regulation 33(10) from the Slum Rehabilitation Authority. On 23^rd December 2011, applicants received a letter from the Slum Rehabilitation Authority stating that in view of status-quo order passed by this Court in the suit, applicant cannot proceed with redevelopment of the said property till the said status-quo order was vacated. The applicants thereafter took inspection of the suit papers and revenue records and came to know that property purchased by the applicants is part of the suit property which is subject matter of this suit. Applicants therefore filed this chamber summons for their impleadment as party defendant in this suit.

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Mr Behramkamdin, learned counsel appearing on behalf of the applicants submits that since the applicants are in possession of the property which is also the subject matter of the suit and the agreement entered into in favour of the applicants being registered, in view of the status-quo order passed by this Court in this suit in respect of the entire property, applicants are not able to develop the property acquired by the applicants. It is submitted that the interim orders obtained by the parties in notice of motion

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Asmita

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are obtained by collusion between them It is submitted that if any further orders are passed by this Court in this proceedings in respect of the suit property which includes the property acquired by the applicants, rights of the applicants would be seriously prejudiced. It is submitted that applicants are thus, necessary and proper party to this suit and their presence is required for effective adjudication of the dispute between the plaintiffs and the defendants. Learned counsel placed reliance on the Judgment of this Court in case of Shivshankareppa Mahadevappa Parakanhatti v. Shivappa Parappa Kupati & Ors. Reported in A.I.R.(30) 1943 Bombay 27 and in particular portion of paragraph at page 29 which reads thus :

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“ … Undoubtedly, the agreement, which was the foundation of the cause of action, expressly refers to a series of transactions between the vendor and defendants 2 to 20 and the common question of fact involved in the suit was whether defendant 1 had the sole title to sell the property to the plaintiff and whether the contract of sale affected the interests of defendants 2 to 21. It is indeed true that in a suit for specific performance the general rule is that a stranger to the contract cannot be sued upon it. Only the parties to the contract are, according to that rule, necessary and sufficient parties. But the general rule is subject to certain modifications (see Halsbury's Laws of England, Edn.2, Vol.31, Para.497, P.417, and the foot-notes thereunder. Se also Fry's Specific Performance of Contracts Edn.6 p.90, para, 205). For instance, strangers are made parties as an exception to the rule in cases of novatio; in cases of an interest arising under a prior contract; and in cases where it is desirable to avoid multiplicity of suits. That is exactly what O.1, R.1, Civil P.C., contemplates. According to Fry (paras 206 and 209) :

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…. a stranger to the contract may so mix himself up with it by setting up a claim to some benefit resulting from it, as to render himself liable to be made a party to proceedings for the enforcement of the contract … In some cases where a portion of the relief claimed might affect the person in actual possession of the property, that person may properly be made a party to an action for the specific performance of the contract ….

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The rule as to joinder of defendant swas thus expressed by Stuart V.C. In (1967) 5 Eq.17(1) (P.21).

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Ordinarily, a person not being a party to the contract ought not to be brought before the Court. But it is otherwise where possession is sought by the bill, and the person in possession will be affected by the decree.

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It has been held in several cases in England that persons claiming adversely might be made defendants, and the case of defendants 3 to 20 is exactly on the same footing for they had claimed adversely to the vendor. It may be noted that they are still in possession and their possession is likely to defeat the claim of the plaintiff to possession. If the plaintiff succeeds upon his title, the decision is bound to affect those defendants. In that connexion it is necessary to refer to S.27, cl.(c), Specific Relief Act, which deals with the class of persons who may be parties to a suit for specific performance. That clause is as follows :

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Any person claiming under a title which, though prior to the contract and known to the plaintiff, might have been displaced by the defendant. ”

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Learned counsel also placed reliance on the Judgment of this

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Court in case of Sumita Pradipkumar Dixit v. Pushpadevi G. Makharia &

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Ors. reported in 2002(4) Bom. C. R. 249 in support of his submission that

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even if the applicant may have right to file independent proceedings since conditions under Order 1 Rule 10 of the Code of Civil Procedure for impleadment of applicants as party defendants are satisfied, this Court cannot reject this application on the ground of recourse to independent proceedings being available to the applicants. Paragraphs 16 and 17 of the said Judgment which are relied upon by the learned counsel read thus :

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“ 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 the exercise of jurisdiction under Order 1, Rule 10, the learned Single Judge, inter alia, held thus:

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" 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.

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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 .

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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 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.

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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

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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.”

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Mr Agarwal, learned counsel appearing for the plaintiffs and Mr Chirag Shah, learned counsel appearing for defendant No.2 on the other hand oppose this chamber summons on the ground that in a suit for specific performance, applicants who claim to have acquired rights under an agreement in respect of part of the property, is neither a necessary party nor a proper party to the suit. It is submitted that in any event, an agreement alleged to have been entered into between the applicants and the third party, is alleged to have been entered into during the pendency of the suit. It is submitted that a third party claiming independent right under any other agreement in respect of the suit property can file separate proceedings and is neither necessary nor proper party. Reliance is placed on the Judgment of

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Supreme Case in case of Ramesh Chandra Pattnaik Vs. Pushpendra Kumar

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& Ors. Reported in (2008) 10 Supreme Court Cases 708 in support of thie submission that applicants being a third party claiming independent right under separate agreement, cannot be impleaded as party defendant in a suit for specific performance between two different parties. Paragraphs 2, 5 and 6 of the said Judgment read thus :

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“ 2. In a suit for specific performance of the alleged agreement of sale dated 10-4-1977 instituted by the petitioner against Respondent 1 with a further prayer for grant of a decree of permanent injunction restraining Respondents 1 to 9 herein from interfering with his possession, the trial court allowed the application filed by Respondent 10 under Order 1 rule 10 of the Code of Civil Procedure, 1908 and granted her prayer for impleadment as a defendant. The petitioner unsuccessfully challenged the order of the trial court by filing a writ petition before the Orissa High Court and then preferred a petition for special leave to appeal.

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5. It is not in dispute that the petitioner filed suit in the year 1979 for specific performance of the alleged agreement of sale dated 10-4-1977. In that suit, the only scope of enquiry would be as to whether the said agreement was, in fact, executed between the petitioner and Respondent No.1.

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6. Respondent 10 is alleged to have entered into an agreement with Respondent 1 on 15-11-1984 for sale of the property, which is the subject-matter of the suit filed by the petitioner. In respect of such an agreement, Respondent 10, could have filed a suit for specific performance but, as stated by the learned counsel appearing for the parties, no such suit has been filed. In our opinion Respondent 10 was not at all a necessary party for determination of the genuineness or otherwise of the agreement of sale which is said to have been entered into between the petitioner and Respondent 1.”

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6. On perusal of the pleadings in this suit, it is clear that plaintiffs

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have filed a suit for specific performance of an agreement between the plaintiffs and the defendants on 16^th August 2005. Applicants are claiming to

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have acquired rights under the agreement for development dated 22^nd April 2008 which is much after filing of this suit by the plaintiffs. On perusal of the said agreement for development relied upon by the applicants, it is clear that the applicants are claiming development rights in respect of part of the suit property through Mr Eric Nicholas D'mello and others who are not even parties to this suit but are third parties. This Court had already passed an interim orders in the notice of motion filed by the plaintiffs prior to the date of entering into agreement for development between the applicants and such third parties. In my view, if applicants claim any independent rights under any other agreement entered into between the applicants and third parties who are not parties to this suit, dispute if any, between the applicants and such third parties, cannot be adjudicated by this Court in this proceedings. This suit is already filed much prior to the date of entering such alleged agreement between the applicants and third parties.

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In so far as Judgment of Supreme Court in case of Ramesh Chandra Pattnaik (supra) is concerned, Supreme Court has held that subsequent purchaser of the immovable property is not at all a necessary party for determination of the said question in a suit for specific performance. I am respectfully bound by the Judgment of Supreme court in case of Ramesh Chandra (supra). As far as Judgment of this Court in case of

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Shivshankareppa (supra) relied upon by the learned counsel for applicants is

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concerned, it has been held that the strangers are made parties as an exception to the rule in cases of novatio; in cases of an interest arising under a prior contract; and in cases where it is desirable to avoid multiplicity of suits. However in the facts of this case, applicants claim rights if any under an agreement for development, which has been executed much after the suit agreement in respect of which suit for specific performance has been filed, has been entered into. In my view, the reliance placed by the applicants on the said Judgment is totally misplaced. The said Judgment is of no assistance to the applicants but it assists the case of the plaintiffs and the defendants. In so far as Judgment of this Court in case of Sumita Pradipkumar Dixit (supra) relied upon by the learned counsel appearing for the applicants is concerned, in the said suit, plaintiff had prayed for vacant and peaceful possession of the suit premises from the defendants. The applicant sought impleadment under a separate writing entered into between the plaintiff, defendants and applicants and claimed to be in possession under the said writing. Considering the facts of that case, this Court held that the applicant would be at liberty even if 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

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party under Order 1, Rule 10 are satisfied. It is held that if conditions which are laid down for impleadment of party under Order 1 Rule 10 are satisfied, then it would be clearly contrary to the law to dismiss the application. In my view, the facts in case of Sumita Dixit (supra) are clearly distinguishable to the facts of this case. Even in the said Judgment, it has been categorically held by this Court that if the tests laid down for impleading a party under Order 1 Rule 10 are satisfied, application for impleadment of such party has to be considered by this Court.

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In my view, in the facts of this case, alleged agreement between the applicants and third parties which are not even parties to this suit and that agreement also entered into much after the agreement which is subject matter of the suit for specific performance, presence of the applicants in this suit is not required for effective adjudication of the dispute between the plaintiffs and defendants. In my view, applicants are neither necessary nor proper party to this suit. Chamber summons filed by the applicants is thoroughly misconceived and deserves to be rejected.

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Chamber summons is accordingly dismissed. There shall be no order as to costs.

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( R.D.DHANUKA, J.)

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Asmita

Adarsh Water Parks and Resorts Pvt. Ltd. v. Abdul Rashid Abdul Rehman Yusuf and Anr. and Space Developer

Case brief

What is this about?

What did the court decide?

Adarsh Water Parks and Resorts Pvt. Ltd. v. Abdul Rashid Abdul Rehman Yusuf and Anr. and Space Developer

Case brief

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What did the court decide?

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