PETITIONER: NEW REDBANK TEA CO. PVT.LTD. Vs. RESPONDENT: KUMKUM MITTAL (Agrawal,J.) DATE OF JUDGMENT16/11/1993 BENCH: AGRAWAL, S.C. (J) BENCH: AGRAWAL, S.C. (J) KULDIP SINGH (J) CITATION: 1994 SCC (1) 402 JT 1993 Supl. 589 1993 SCALE (4)480 ACT: HEADNOTE: JUDGMENT:
The Judgment of the Court was delivered by
S.C. AGRAWAL, J.- Leave granted.
2. This appeal raises the question whether Terai Tea
Company Pvt. Ltd., respondent 11 herein, is entitled to be
impleaded as a party (defendant) in E.O. Suit No. 1 of 1985
pending in the Calcutta High Court.
3. The subject-matter of the dispute between the parties
is Dharanipur Tea Estate situate in District Jalpaiguri in
West Bengal. One Dhirendra Nath Bhowmick (deceased) had
obtained the lease of the land of the said tea estate from
the Government of West Bengal. The said lease was for a
term of thirty years commencing from October 27, 1964. The
New Red Bank Tea Co. Pvt. Ltd., appellant 1 owns the Red
Bank Tea Estate and Surendra Nagar Tea Co. Pvt. Ltd.,
appellant 2 herein, owns the Surendra Nagar Tea Estate.
Dhirendra Nath Bhowmick and his wife, Smt Reba Bhowmick,
respondent 3 herein, were having controlling block of shares
in both these companies.
+ From the Judgment and Order- dated September 22, 1993 of
the Division Bench, Calcutta in A.
No. Nil of 1993
403
4. On March 16, 1977, Dhirendra Nath Bhowmick granted a
sub-lease for the Dharanipur Tea Estate in favour of
appellant 1. By virtue of his control over appellants 1 and
2, Dhirendra Nath Bhowmick was the Managing Director of the
said two companies and the three tea gardens were under his
management. On May 14, 1981, Dhirendra Nath Bhowmick and
respondent 3 sold their controlling shares in appellants 1
and 2 to Robin Paul, appellant 3, and his group for valuable
consideration and the charge of the three tea estates was
handed over to appellant 3 and his group. In May 1984,
Dhirendra Nath Bhowmick and respondent No. 3 filed a suit
(Title Suit No. 8 of 1984) against the appellants as well as
respondents 4 to 10 and 12 in the court of Assistant
District Judge, Jalpaiguri seeking for a declaration that
the transfer of controlling interest of shares in appellants
1 and 2 are not valid and prayed for a declaration that
Dhirendra Nath Bhowmick had all the legal and equitable
rights, title and interest in respect of the Dharanipur Tea
Estate and for restoration of possession. The said suit was
subsequently transferred to the High Court on November 27,
1984 under Clause 13 of the Letters Patent and it was
renumbered as Extraordinary Suit No. 1 of 1985.
5. While the said suit was pending, respondent 11 filed a
suit (Suit No. 240 of 1990) in the High Court for specific
performance of an agreement dated January 15, 1990 said to
be executed by Dhirendra Nath Bhowmick and M/s Dharanipur
Tea Industries Pvt. Ltd., respondent 7 herein, in favour of
respondent 11 for the sale of the Dharanipur Tea Estate. In
the said suit respondent 11 filed applications for
injunction as well as for appointment of receiver which were
dismissed by the learned Single Judge of the High Court by
order dated April 1, 1991. Respondent 11 filed appeals
against the said order of the learned Single Judge and the
said appeals were disposed of by a Division Bench of the
High Court by a consent order dated August 2, 1991 wherein
it was recorded that the respondents (defendants in Suit No.
240 of 1990) had agreed to execute the Deed of Conveyance in
favour of plaintiff appellants (respondent 11 herein). By
the said order a receiver was appointed over the Dharanipur
Tea Estate who was empowered to take possession of
Dharanipur Tea Estate and allow respondent 11 to run the
said tea estate until the Deed of Conveyance was executed
and the Registering Authority was directed to register the
Deed of Conveyance without insisting upon production of “no
objection certificate” under Section 269-UC and a
certificate under Section 230-A(1) of the Income Tax Act,
1961 and the police authorities and other appropriate
administrative authorities were directed to afford all
facilities, cooperation and help for the purpose of carrying
out of the said order. On the basis of the said order the
Receiver on August 3, 1991 obtained symbolic possession of
the Dharanipur Tea Estate and posted Mr Rungta as the
authorised representative for respondent 11 to run, manage
and look after the affairs of the said tea estate and the
appellants were dispossessed from the said tea gardens The
said order of the High Court dated August 2, 1991 was set
aside by this Court by order dated September 9, 1991 in C.A.
No. 3569 of 1991, New Red Bank Pvt. Ltd. v. Tarai Tea
404
Company Pvt. Ltd. on the view that Extraordinary Suit No. 1
of 1985 as well as Suit No. 240 of 1990 ought to have been
tried together and the suit for specific performance filed
by respondent 11 could not have been decreed by consent
without determining the legal title to and factum of
possession of the suit property and that the title and
possession could not have been decided without impleading
appellant 1 as a party to the suit. This Court, while
setting aside the decree for specific performance as well as
the order appointing the Receiver, directed the Receiver to
deliver back the possession of the property to appellant 1.
With the setting aside the decree for specific performance,
the sale deed that had been executed and registered stood
automatically cancelled. Thereafter appellant 1 was
impleaded as a defendant in Suit No. 240 of 1990 by order
dated November 18, 1992.
6. Dhirendra Nath Bhowmick died on March 15, 1992 and his
legal representatives have been brought on record in both
the suits.
7. On behalf of respondent II an oral prayer was made
before the learned Single Judge for being impleaded as a
defendant in Extraordinary Suit No. 1 of 1985. The said
oral prayer was rejected by the learned Single Judge by
order dated March 22, 1993 on the view that it would be
proper if a formal application was filed giving opportunity
to all the parties to put forward their objections in
specific terms. Thereafter respondent 11 filed a written
application on April 1, 1993 for being added as a defendant
in Extraordinary Suit No. 1 of 1985. The said application
of respondent 11 was opposed by the defendants in the said
suit but the plaintiffs had no objection to the said
application being allowed. The application was rejected by
the learned Single Judge by order dated July 5, 1993. The
learned Single Judge was of the view:
“Upon perusal of the materials on record and
on appreciation of the point of law, and the
ratio of the reported decisions cited from the
Bar, this Court finds that M/s Terai Tea Co.
Pvt. Ltd. has already filed an independent
title suit and disclosed all its claims in its
plaint. While the said suit is being heard
along with Extraordinary Suit No. 1 of 1985,
and when there is no conflict of interest
between the plaintiff in Extraordinary Suit
No. 1 of 1985 and the plaintiff in Suit No.
240 of 1990 and where Terai Tea Co. Pvt. Ltd.
stands for success only when the plaintiff in
Extraordinary Suit No. 1 of 1985 will succeed,
there is no scope for impleading Terai Tea Co.
Pvt. Ltd. as a defendant again in
Extraordinary Suit No. 1 of 1985. While both
the suits would be heard analogously and/or
together, Terai Tea Co. Pvt. Ltd. is entitled
to take effective steps so far as its own suit
is concerned and in Extraordinary Suit No. 1
of 1985 it cannot claim to be added as a party
to help and/or assist the plaintiff in any
manner whatsoever. Mr Gupta appearing for the
defendant has tried to impress upon this Court
that several complications will arise if Terai
Tea Co. Pvt. Ltd. is added as party-
defendant, and at the time of trial it can
lead evidence to the prejudice of the interest
of other defendants. Apart from any technical
difficulty, this Court is of the view that the
presence of Terai Tea Co. Pvt. Ltd. is not
405
necessary for effectual and complete
adjudication of the matter in dispute.”
8. Feeling aggrieved by the said order of the learned
Single Judge, respondent II filed an appeal which was
allowed by the Division Bench of the High Court by judgment
dated September 22, 1993 on the view that the learned Single
Judge was not right in holding that the presence of
respondent 11 was not necessary for effectual and complete
adjudication of the matter in dispute. According to the
learned Judges the addition of respondent 11 is necessary to
avoid the possibility of a multiplicity of the judicial
proceedings and that if respondent 11 is kept out of the
suit and ultimately the same is dismissed, such outcome will
not bind them and they will nonetheless have to challenge
the decree passed in such suit by way of a separate
proceeding only to continue the suit for specific
performance. The present appeal is directed against the
said judgment of the Division Bench of the High Court.
9. The application for being impleaded as a defendant was
moved by respondent 11 under Order 1, Rule 10(2) CPC which
provides as under:
“(2) The Court may at any stage of the
proceedings, either upon or without the
application of either party, and on such terms
as may appear to the Court to be just, order
that the name of any party improperly joined,
whether as plaintiff or defendant, be struck
out, and that the name of any person who ought
to have been joined, whether as plaintiff or
defendant, or 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, be added.”
10. The said provision empowers the court to implead as a
party to a suit a person (i) who ought to have been joined,
whether as plaintiff or defendant; or (ii) 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. It is not
the case of respondent 11 that they ought to have been
joined as a defendant in E.O. Suit No. 1 of 1985. Their
application has been allowed by the Division Bench of the
High Court on the ground that presence of respondent 11 is
necessary for effectual and complete adjudication of the
matter in dispute. We find it difficult to agree with this
view of the High Court.
11. In the leading English case of Moser v. Marsden’,
Lindly L.J. has held that a party who is not directly
interested in the issues between the plaintiff and the
defendant but is only indirectly or commercially affected
cannot be added as a defendant because the court has no
jurisdiction under the relevant rule to bring him on record
even as a proper party. The position is no different under
the Indian law. As laid down by this Court, “in a suit
relating to property in order 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”. [See: Razia Begum v. Sahebzadi Anwar
1 (1892) 1 Ch 487: 66 LT 570
406
Begum2.] In Ramesh Hirachand Kundanmal v. Municipal Corpn.
of Greater Bombay3 this Court has held: (SCC p. 53 1, para
14)
“It cannot be said that the main object of
the rule is to prevent multiplicity of actions
though it may incidentally have that effect.
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.”
12. In the instant case respondent 11, admittedly, have no
legal interest in the subject-matter of the dispute in E.O.
Suit No. 1 of 1985. All that they are claiming is specific
performance of the agreement for sale of Dharanipur Tea
Estate said to have been executed by Dhirendra Nath Bhowmick
and respondent 7 on January 15, 1990. The said agreement
was executed long after the institution of E.O. Suit No. 1
of 1985. Moreover, the reliefs claimed by the plaintiffs in
E.O. Suit No. 1 of 1985 relate to the validity of the
agreement dated May 14, 1981 whereby the plaintiffs in that
suit had transferred their controlling shares in appellants
1 and 2 in favour of appellant 3 and his group. In the said
suit, the possession of Dharanipur Tea Estate is claimed
only on the basis of control over appellant 1 which is a
sub-lessee of the said tea estate. On the other hand Suit
No. 240 of 1990 filed by respondent 11 relates to specific
performance of the agreement relating to the sale by
Dhirendra Nath Bhowmick and respondent 7 of Dharanipur Tea
Estate. Respondent 11 cannot be said to be directly
interested in the matter of validity of agreement executed
by Dhirendra Nath Bhowmick and respondent 3 on May 14, 1981.
We are, therefore, unable to hold that the presence of
respondent 11 is necessary for effectual and complete
adjudication of the matter in E.O. Suit No. 1 of 1985. The
presence of respondent 11 in those proceedings, on the other
hand, might cause prejudice to the rights of the appellants
in the said suit. Moreover, both the suits are being tried
together in accordance with the directions given by this
Court by its order dated September 9, 1991.
13. For the reason aforesaid, the appeal is allowed, the
judgment dated September 22, 1993 passed by the Division
Bench of the Calcutta High Court in Appeal directed against
the order dated July 5, 1993 in E.O. Suit No. 1 of 1985 is
set aside and the order dated July 5, 1993 passed by the
learned Single Judge dismissing the application filed by
respondent 11. Is restored. There is no order as to costs.
2 1959 SCR 11 11, 1132: AIR 1958 SC 886
3 (1992) 2 SCC 524
407