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PETITIONER: RAMESH HIRANAND KUNDANMAL

       Vs.

RESPONDENT: MUNICIPAL CORPORATION OF GREATER BOMBAY AND ORS.

DATE OF JUDGMENT04/03/1992

BENCH: FATHIMA BEEVI, M. (J) BENCH: FATHIMA BEEVI, M. (J) AGRAWAL, S.C. (J)

CITATION:  1992 SCR  (2)   1        1992 SCC  (2) 524  JT 1992 (2)   116        1992 SCALE  (1)530

ACT:      Civil Procedure Code, 1908 :      Order I, Rule 10-Impleadment of party by Court to a suit as   necessary  party-Necessary  to  proper  party-Who   is- Distinction between necessary and proper party-Suit filed by a  plaintiff,  in  possession of service  station  under  an agreement,  with  lessee  thereof  challenging  validity  of notice  issued by Municipal Corporation, for demolition   of structures   raised  by  plaintiff  as   unauthorised-Lessee seeking  impleadment  as additional defendant  as  necessary party- Whether Court could direct plaintiff to add lessee as defendant  in suit-Whether Court has discretion to direct  a plaintiff,  though dominus litis, to implead a person  as  a necessary party.      Words  and Phrases : Necessary or proper  party-Meaning of.

HEADNOTE:      Under  a  Dealership Agreement, the  appellant  was  in possession of a service station erected on the land held  by the  second respondent- the Hindustan petroleum  Corporation limited,  as  lessee.  The service station  consisted  of  a petrol pump in the ground floor and a structure with an open terrace  for  parking of vehicles.   The  first  respondent, Municipal Corporation issued notice under section 351 of the Municipal Corporation Act to the appellant for demolition of two  chattels on  the terrace on the ground that these  were unauthorised constructions.      The  appellant instituted a suit before the City  Civil Court,  challenging  the  validity of  the  notice  and  for injunction  restraining  the  Municipal   Corporation   from demolishing  the structures.  The Court granted  an  interim injunction.      Thereafter,  on  an  application filed  by  the  second respondent  for being impleaded as additional  defendant  in the  suit on the ground that it had materials to  show  that the constructions were unauthorised, and it was a  necessary party to the litigation, the court directed the appellant to                                                     2 add the second respondent as defendant and amend the  plaint suitably   rejecting  the appellant’s  contention  that  the second respondent was neither a necessary nor a proper party

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to be impleaded in the suit.  The appellant’s writ  petition challenging  the aforesaid order was dismissed by  the  High Court.      In the appeal, by special leave, before this Court,  on behalf of the appellant-plaintiff it was contended that  the appellant-plaintiff was dominus litis and, therefore,  could not  be forced to join the second respondent Corporation  as defendant, that second respondent was neither a necessary no a  proper  party  to the suit and had  no  interest  in  the subject-matter  of the litigation and its presence  was  not required to adjudicate upon the issue involved in  the  suit or  for  the purpose of deciding the real matter and on  the contrary, its addition would enlarge the issue in the  suit, and  that  the Court could not direct  addition  of  parties against  the  wishes  of the plaintiff,  who  could  not  be compelled  to proceed against a person against whom  he  did not  claim any relief.      On  behalf of the respondent it was contended that  the second  respondent  had  a right to be  heard  in  the  suit inasmuch  as  the respondent  was the lessee,  who  was  not answerable for the illegal actions of the appellant.      Allowing the appeal, this Court,      HELD  : 1.1 Plaintiff is no doubt dominus litis and  is not  bound  to sue every possible  adverse claimant  in  the same  suit.  He may choose to implead only those persons  as defendants  against whom he wishes to proceed.   However,the Court  may  at  any stage of the  suit  direct  addition  of parties.  A party can be joined as defendant even though the plaintiff  does  not think that he has any cause  of  action against him.  The question of impleadment of a party has  to be decided on the touch stone of Order 1 Rule 10 of the Code of   Civil  Procedure,1908,  which  provides  that  only   a necessary  or a proper party may be added.  In the light  of the  clear  language of the Rule, it cannot be said  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. [6E-F, 7A-D]      1.2 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                                                        3 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. [7A-B]      1.3  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. [7E-F]      1.4  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. [9E]      1.5 It cannot be said that the main object of the  rule is  to  prevent  multiplicity  of  actions  though  it   may

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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-and 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 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  effectully  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.   It is,  therefore,  necessary that 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. it is difficult to say that the rule contemplates joining as a  defendant a person whose only object is to prosecute  his own cause of action. [9F-H, 10A-B]                                                     4      Razia Begum v. Anwar Begum, [1959] SCR 1111, relied on.      Amon  v. Raphael Tuck & Sons Ltd., (1956) 1   All  E.R. 273  and Dollfus Mieg et Compagnie S.A. v. Bank of  England, (1950) 2 All E.R. 611, referred to.      2.1 In the instant case, the courts below  have assumed that  the subject-matter of the litigation is the  structure erected  by the respondent or, in other words,  the  service station  which has been allowed to be operated upon  by  the appellant-plaintiff  under  the  terms  of  the   dealership agreement.  The notice does not relate to that structure but is  in  relation  to the two chattels stated  to  have  been erected   by  the  appellant  unauthorisedly.   The   second respondent  has  no  interest  in  these  chattels,and   the demolition  of the same in pursuance to the notice is not  a matter  which  affects the legal rights of  the  respondent. [11G-H, 12A]      National   Textile   Workers’  Union,  etc.   v.   P.R. Ramakrishnan and Ors., [1983] 1 SCR 922, distinguished.      2.2  It  is  true that being lessee  of  the  premises, second  respondent Corporation has an answer for the  action proposed  by  the  first  respondent-Municipal   Corporation against  the appellant but for the purpose of  granting  the relief  sought  for  by  the  appellant  by  examining   the justification   of  the  notice  issued  by  the   Municipal Corporation,  it is not necessary for the Court to  consider that answer. Hence the presence of the respondent cannot  be considered  as  necessary for the purpose  of  enabling  the Court  to  effectually and completely  adjudicate  upon  and settle  all  the  question  involved  in  the  suit.     The appellant  is  proceeded against by the   first  respondent- Corporation  for  the  alleged action in  violation  of  the municipal  laws.   The grievance of  the  second  respondent against the appellant,if any, could only be for violation of the  agreement  and that is based on a  different  cause  of action.   The consolidation of these two in the same suit in neither contemplated nor permissible. [10F-H, 11A]      2.3  The  courts below failed to note that  the  second respondent  has no direct interest in the subject-matter  of the  litigation  and the addition of  the  respondent  would result in causing serious prejudice to the appellant and the substitution or the addition of a new cause of action  would

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only widen the issue which is required to be adjudicated and settled.   By the joining of the party would  embarrass  the appellant-plaintiff and issues                                                 5 not germane to the suit would be required to be raised.  The mere  fact  that  a fresh litigation can be  avoided  is  no ground  to  invoke the power under the Rule in  such  cases. [12B-C]      National    Textile    Worker’s    Union,    etc.v.P.R. Ramakrishnan and Ors., [1983] 1 SCR 922, distinguished.      2.4   Therefore,  the  courts  below  were   wrong   in concluding  that the second respondent was a necessary or  a proper  party  to  be  added as  a  defendant  in  the  suit instituted by the appellant.

JUDGMENT:      CIVIL APPELLATE JURISDICTION : Civil Appeal No. 3570 of 1991.      From  the  Order dated 13.10.1989 of  the  Bombay  High Court in Writ Petition No. 4229 of 1989.      K.  Parasaran, Joquium Reis and Kailash Vasdev for  the Appellants.      D.N. Mishra (for J.B.D. & CO.) and M.S. Ganesh for  the Respondents.      The Judgement of the Court was delivered by      FATHIMA  BEEVI, J. We have to consider in  this  appeal the question whether the second respondent is a necessary or proper party to be joined as defendant under Order 1 Rule 10 of  the Code of Civil Procedure, in the  suit instituted  by the appellant against the first respondent.      Under  the dealership Agreement of 1974, the  appellant is in possession of the service station erected on the  land held   by  the  second  respondent  herein,  the   Hindustan Petroleum  Corporation  Limited  as  lessee.   The   service station consists of a petrol pump in the ground floor and  a structure with an open terrace for parking of vehicles.  The first  respondent,  the  Municipal  Corporation  of  Greater Bombay issued notice dated 5.8.1988 under section 351 of the Municipal Corporation Act to the appellant for demolition of two  chattles on the terrace on the ground that  these  were unauthorised  constructions.  The appellant  instituted  the suit  No. 6181 of 1988 before the City Civil Court,  Bombay, challenging  the validity of the notice and  for  injunction restraining  the Municipal Corporation from demolishing  the structures, Interim injunction was granted by the court.                                                   6      On  9.9.1988, the second respondent applied  for  being impleaded as additional defendant in the suit on the  ground that they have  materials to show that the constructions are unauthorised,   and  they  are  necessary  parties  to   the litigation. The Court by order dated 22.8.1989 directed  the appellant  to  add the second respondent  as  defendant  and amend  the plaint suitably rejecting the contentions of  the appellant that the second respondent was neither a necessary nor  a  proper  party  to be  impleaded  in  the  suit.  The appellant filed writ petition No. 4229 of 1989 under Article 227 of the Constitution of India in the High Court of Bombay challenging the correctness of the order. The High Court  by the  impugned  judgment dismissed the  writ  petition.  This appeal by special leave is directed against the judgement of the High Court dated 13.10.1989.      Three  grounds have been urged by the  learned  counsel for  the appellant against the sustainability of the  order.

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The  plaintiff was dominus  litis and, therefore, cannot  be forced  to  join  the second respondent  as  defendant.  The second respondent is neither a necessary nor a proper  party to  the suit. The addition of the respondent  would  enlarge the  issue in the suit. Reliance was placed on the  decision of  this  Court in Razia Begum v. Anwar  Begum,  [1959]  SCR 1111.      It was argued that the Court cannot direct addition  of parties  against the wishes of the plaintiff who  cannot  be compelled  to proceed against a person against whom he  does not  claim any relief. Plaintiff is no doubt  dominus  litis and  is not bound to sue every possible adverse claimant  in the  same suit. He may choose to implead only those  persons as defendants against whom he wishes to proceed though under Order  I Rule 3, to avoid multiplicity of suit and  needless expenses,  all persons against whom the right to  relief  is alleged to exist may be joined as defendants.  However,  the Court  may  at  any stage of the  suit  direct  addition  of parties. A party can  be joined as defendent even though the plaintiff   does not think that he has any cause  of  action against  him. Rule 10 specifically provides that it is  open to  the  Court to add at any stage of the suit  a  necessary party  or  a person whose presence before the Court  may  be necessary  in order to enable the Court to  effectually  and completely  adjudicate  upon and settle  all  the  questions involved in the suit.      Sub-rule(2)  of Rule 10 gives a wide discretion to  the Court  to  meet every case of defect of parties and  is  not affected by the inaction of the                                                        7 plaintiff  to  bring the necessary parties  on  record.  The question of impleadment of a party has to be decided on  the touch  stone of Order I Rule 10 which provides that  only  a necessary or a proper party may be added. 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  respondents do not seriously dispute the  position that  the second respondent is not a necessary party to  the suit  in the sense that without their presence an  effective order cannot be passed. However, they support the view  that respondent  No.  2  is  a proper  party  whose  presence  is necessary for a complete adjudication on the controversy. 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.      The  case really turns on the true construction of  the Rule in particular  the meaning of the words "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." 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 intervener  so as  to give effect to the primary object of the order  which is to avoid multiplicity of actions.

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    In the present case, the subject-matter of the  dispute between  the  appellant  and the  first  respondent  is  the demolition of the unauthorised construction in pursuance  to the  notice under section 351 of the Bombay  Municipal  Act. The  second  respondent, the lessee, in  possession  of  the service  station  asserts  that the appellant  has  made  an unauthorised  construction and the second respondent  is  in possession  of material evidence to that effect.  No  notice has been issued to the second respondent by the                                                        8 Municipal  Corporation and no case of any collusion  between the  appellant and the Municipal Corporation is alleged.  On the  other  hand, it is the case of the appellant  that  the second  respondent is instrumental in the initiation of  the proceedings   by  the  Municipal  Corporation  against   the appellant  and  the present application  is  for  collateral purposes.  In  the  light of such averments, it  has  to  be considered  whether the second respondent is a necessary  or proper party in the present action.      The  power  of the Court to add parties under  Order  I Rule 10, C.P.C, came up for consideration before this  Court in Razia Begum (supra). In that case it was pointed out that the Courts in India have not treated the matter of  addition of   parties  as  raising  any  question  of   the   initial jurisdiction of the Court and that it is firmly  established as  a  result  of judicial decisions that in  order  that  a person  may be added as a party to a suit, he should have  a direct  interest  in the subject-matter  of  the  litigation whether it be the questions relating to movable or immovable property.      In  that case the appellant instituted a  case  against the  third respondent inter alia for a declaration that  she was  his lawfully married wife. The third  respondent  filed his  written statement admitting the claim but on  the  same date  respondents 1 and 2 made an application under Order  I Rule  10(2)  of C.P.C., for being impleaded in the  suit  as defendants  on the grounds that they were  respectively  the wife  and  son of the third respondent and  that  they  were interested in denying the appellant’s status as wife and the status  of children as the legitimate children of the  third respondent;  that the suit was the result of  the  collusion between  the appellant and the third respondent and that  if the  appellant  was declared to be lawfully  wedded  to  the third respondent, the rights and interests of respondents  I and  2  in  the  estate of the  third  respondent  would  be affected.   The  application  was  contested  by  both   the appellant and the third respondent. The trial court  allowed the  application  and the order was confirmed  by  the  High Court  in its revisional jurisdicyion . The question in  the appeal before this Court was whether the lower court did not exceed their powers in directing the addition of respondents 1 and 2 as parties defendants in the action.      Sinha,  J.  speaking  for  the  majority  said  that  a declaratory judgment in respect of a disputed status will be binding not only upon parties actually before the Court  but also  upon persons claiming through them  respectively.  The Court laid down the law that in a  suit relating to property in order                                                        9 that  a  person may be added as a party, he  should  have  a direct interest as distinguished from a commercial  interest in the subject-matter of the litigation. Where the  subject- matter of a litigation is a declaration as regards status or a  legal character, the rule of presence of direct  interest may be relaxed in a suitable case where the Court is of  the

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opinion  that by adding that party it would be in  a  better position  effectually and completely to adjudicate upon  the controversy. In cases covered by the statutory provisions of sections 42 and 43 of the Specific Relief Act, the Court  is not  bound  to grant the declaration prayed for  on  a  mere admission  of the claim by the defendant. If the  Court  has reasons  to  insist  upon  a  clear  proof  apart  from  the admission,  the  result  of  a  declaratory  decree  on  the question  of  status such as the controversy  in  that  suit affects  not only the parties actually before the Court  but generation  to come and in view of that  consideration,  the rule of present interest as evolved by case law relating  to disputes  about  property does not apply  with  full  force. Applying  the  proposition enunciated to the  facts  of  the case, the Court came to the conclusion that the courts below did  not  exceed their power in directing  the  addition  of respondents 1 and 2 as parties defendants in the action  nor it could be said that the exercise of the discretion was not bound.      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  cannot be said that the main object of the rule  is 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 objectives.  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  questions involved  and has thought or relevant arguments to  advance. The only reason which makes it necessary to make a person  a party to an action is 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 wider construction of                                                     10 the  rule between the direct interest or the legal  interest and  commercial interest. 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. It is difficult to say  that the rule contemplates joining as a defendant a person  whose only object is to prosecute his own cause of action. Similar provision  was  considered in Amon v. Raphael  Tuck  &  Sons Ltd.,  (1956)  1  All E.R. 273, wherein  after  quoting  the observations of Wynn-Parry, J. in Dollfus Mieg et  Compagnie S.A  v. Bank of England,(1950) 2 All E.R.611, that the  true test  lies  not  so  much in an analysis  of  what  are  the constituents  of the applicants’ rights, but rather in  what would  be the result on the subject-matter of the action  if those rights could be established, Devlin, J. has stated:-          "The test is ‘May the order for which the plaintiff          is  asking  directly affect the intervener  in  the          enjoyment of his legal rights."      It  has been strenuously contended before us  that  the     second respondent has no interest  in the subject-matter

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   of the litigation and the presence of the respondent  is     not  required to adjudicate upon the issue  involved  in     the suit or for the purpose of deciding the real  matter     involved.  It is pointed out that the subject-matter  in     the   suit  is  the  notice  issued  by  the   Municipal     Corporation to the appellant and the issue is whether it     is justified or not. The Hindustan Petroleum Corporation     Limited  is  interested  in  supporting  the   Municipal     Corporation and sustaining the action taken against  the     appellant.  But  that  does  not  amount  to  any  legal     interest  in  the subject-matter in the sense  that  the     order,  if  any, either in favour of  the  appellant  or     against   the  appellant   would  be  binding  on   this     respondent.  It  is  true  that  being  lessee  of   the     premises,  the Hindustan Petroleum  corporation  Limited     has  an answer for the action proposed by the  Municipal     Corporation  against the appellant, but for the  purpose     of  granting the relief sought for by the  appellant  by     examining  the justification of the notice issued by the     Municipal Corporation, it is not necessary for the Court     to consider that answer. If that be so, the presence  of     the respondent cannot be considered as necessary for the     purpose  of  enabling  the  Court  to  effectually   and     completely adjudicate upon and settle all the  questions     involved in the suit. The appellant is preeceded against     by  the municipal Corporation for the alleged action  in     violation of the municipal laws. The grievance of the                                                           11     respondent against the appellant, if any, could only  be     for  violation of the agreement and that is based  on  a     different  cause of action. The consolidation  of  these     two  in  the  same  suit  is  neither  contemplated  nor     permissible.      The  learned counsel for the respondent on a  reference     to  the broad principles laid down in National  Textiles     v.  P.R.Ramakrishnan, [1983] 1 SCR 922, maintained  that     the  second  respondent has a right to be heard  in  the     suit  filed  by  the  appellant  against  the  Municipal     Corporation inasmuch as the respondent is the lessee who     is  not  answerable  for  the  illegal  action  of   the     appellant. It was held in that case that the workers  of     a  company are entitled to appear at the hearing of  the     winding up petition whether to support or oppose it. The     court considered wider public interest involved and said     that  in  winding  up  of  a  company  or  changing  its     management,  the Court must take into consideration  not     only  the  interest of the shareholders,  creditors  but     also  amongst other things the interest of  the  workers     and  that the workers must have an opportunity of  being     heard  for  projecting and safeguarding  their  interest     before  a  winding up order is made by the  Court.  That     principal   has  no application in  a  civil  litigation     where  licensee  questions  the  action  of  the   legal     authority  and  the  lessee  would  not be  affected  in     whatever way the decision is rendered.      The City Civil Judge in para 32 of the order said  that     the  Hindustan  Petroleum Corporation  Limited  are  the     lessees of the plot as also the premises, the  plaintiff     is  merely  their dealer; they have a right,  title  and     interest  in  the suit premises and the  applicants  are     proper  and necessary parties as they have  interest  in     the subject-matter of the litigation and their  presence     will  be necessary and proper to effectively  adjudicate     upon and  determine the cause of action in the suit. The     High  Court also in confirming the order said  that  the

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   notice  which is challenged is in respect  of  structure     which   belongs  to  the  second  respondent   and   the     respondent’s   presence  is  necessary   for   effective     adjudication.      The  courts below have assumed that the  subject-matter     of  the  litigation  is the  structure  erected  by  the     respondent  or in other words the service station  which     has  been allowed  to be operated upon by the  plaintiff     under the terms of dealership agreement. The notice does     not  relate to that structure but is in relation to  the     two chattels stated to have been erected by the  present     appellant  unauthorisedly.  According to  the  appellant     these  chattels/structures are moveables on  wheels  and     plates where servicing                                                          12                                           page     and/or repairs are done and used for storing  implements     of the mechanics. The second respondent has no  interest     in  these  chattels and the demolition of  the  same  in     pursuance  to the notice is not a matter  which  affects     the  legal rights of the respondent.  The courts  below,     therefore, failed to note that the second respondent has     no   direct  interest  in  the  subject-matter  of   the     litigation  and  the addition of  the  respondent  would     result in causing serious prejudice to the appellant and     the  substitution  or  the addition of a  new  cause  of     action  would only widen the issue which is required  to     be  adjudicated and settled. By the joining of the party     would embarrass the plaintiff and issues not germane  to     the  suit would be required to be raised. The mere  fact     that  a fresh litigation can be avoided is no ground  to     invoke the power under the Rule in such cases.      We  are, therefore, of the view that the  courts  below     were wrong in concluding that the second respondent is a     necessary  or a proper party to be added as a  defendant     in the present suit instituted by the appellant.      We  according  allow  the  appeal  and  set  aside  the     impugned judgment. No order as to costs.       N.V.P.                                      Appeal allowed.                                                   13