http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 3  

PETITIONER: M/S. ALIJI MOMONJI & CO.

       Vs.

RESPONDENT: LALJI MAVJI & ORS.

DATE OF JUDGMENT:       12/07/1996

BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. G.B. PATTANAIK (J)

CITATION:  JT 1996 (7)    53        1996 SCALE  (5)485

ACT:

HEADNOTE:

JUDGMENT:                          O R D E R      Leave granted.      We have heard learned counsel on both sides.      The facts  are very  simple. The  appellant-lessee laid the Suit  No. 9460/90  for perpetual  injunction against the Municipal  Corporation   af  Bombay  restraining  them  from demolishing  a   portion  of  the  building.  The  Municipal Corporation had  issued notice  under  Section  351  of  the Municipal  Corporation  Act  for  demolition  of  the  above building  on   the  ground   that  the  appellant  had  made unauthorised structures.  The contesting  respondents 2 to 6 sought to  come  on  record  under  Order  1  Rule  10,  CPC contending that  they have  direct interest  in the property and the  motion taken  out by  the respondent was ordered by the trial  Court and  the High  Court by  the impugned order dated February  17, 1993 was upheld the same in W.P. No.2418 dated July 5, 1993. Thus, this appeal by special leave.      Shri R.F.  Nariman,  learned  senior  counsel  for  the appellants, contended  that the  contesting respondents have only commercial  interest  in  the  property  but  the  real question is:  whether the appellant had made construction of the building  sought  to  be  demolished  by  the  Municipal Corporation   and,   therefore,   whether   the   landlords- respondents are  necessary or  proper party.  The High Court has not  correctly appreciated the ratio of Ramesh Hirachand Kundanmal vs. Municipal Corporation of Greater Bombay & Ors. [(1992) 2  SCC 524].  The question  therein was: whether the contesting respondents  were necessary or proper party under Order 1,  Rule 10, CPC? It was held that the party was not a necessary or  property party. It would apply to the facts of the case. We find no force.      The controversy is no longer res integra. It is settled law by  catena of  decisions of  this Court  that where  the presence of  the respondent  is necessary  for complete  and effectual adjudication  of the disputes, though no relief is sought, he is a proper party. Necessary party is one without

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 3  

whose presence no effective and complete adjudication of the dispute could  be made  and no  relief granted. The question is: whether  the landlord  is a necessary or proper party to the suit  for perpetual  injunction  against  the  Municipal Corporation for demolition of demised building? The landlord has  a  direct  and  substantial  interest  in  the  demised building before the demolition of which notice under Section 351 was  issued. In  the event of its demolition, his rights would materially  be affected. His right, title and interest in the  property demised  to the tenant or licences would be in jeopardy. It may be that the construction which is sought to be  demolished by the Municipal Corporation was made with or without  the consent  off the landlord or the lessor. But the  demolition  would  undoubtedly  materially  affect  the right, title  and interest  in the property of the landlord. Under those  circumstances, the  landlord necessarily  is  a proper party,  though the  relief is  sought for against the Municipal Corporation  for perpetual  injunction restraining the Municipal  Corporation from  demolition of the building. Under those  circumstances, the  question of  the commercial interest would  not arise.  In Ramesh  Hirachand Kundanmal’s case [supra],  this Court  had pointed out in para 18 of the judgment that the notice did not relate to the structure but to two  chattels. Original  lessee from  the landlord had no direct interest in that property. Under these circumstances, it was  held  that  the  second  respondent  has  no  direct interest in  the subject  matter of  the litigation  and the addition thereof  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 was required to  be adjudicated  and settled,  It  is  true,  as pointed out  by Shri  Nariman that in para 14, this Court in that case  had pointed  out  that  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 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. It  is not  necessary for the purpose of this case to go  into the  wider question  whether witness  can  be  a proper and necessary party when the witness has a commercial interest. This  Court in  New Redbank  Tea Co. Pvt. Ltd. vs. Kumkum Mittal & Ors. [(1994) 1 SCC 402] has pointed out that respondent 11  who filed  a suit for specific performance in the High  Court was  sought to come on record in the suit in which he had no direct interest in the pending matter. Under those circumstances,  this Court had held that respondent 11 was neither  necessary nor  proper party  in the  lease-hold interest involved  in the suit. In Union of India & Anr. vs. District Judge, Udhampur & Ors. [(1994) 4 SCC 737] the Union of India who ultimately had to bear the burden of payment of the compensation  was held  to be  a necessary  party  under Order 1  Rule 10,  CPC for determination of the compensation in respect  of the acquired land. In Bihar State Electricity Board vs.  State of  Bihar &  Ors. [(199) 4 Supp. 3 SCC 743] the same  question was  also reiterated and it was held that the Electricity  Board was  a person  interested and  also a necessary party.  In Anil  Kr.  Singh  vs.  Shivnath  Mishra

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 3  

[(1995) 3  SCC 147]  similar question  was answered  holding that the respondent was a necessary party.      In view  of the  finding  that  the  in  the  event  of building being  demolished, right, title and interest of the landlord would directly be affected, the landlord would be a proper party,  though no  relief has been sought for against the landlord.  The  High  Court,  therefore,  was  right  in refusing to  interfere with  the order  passed by  the trial Court impleading the landlords.      The appeal is accordingly dismissed. No costs.