JUDGMENT
L. Mohapatra, J.
1. This writ application is directed against the order dated 8.7.2002 passed by the learned Civil Judge (Senior Division), Bonai in Title Suit No. 10 of 2001 allowing the application filed by the opposite party No. 1 under Order 1, Rule 10 read with Section 151 of the C.P.C. for being impleaded as party to the suit, as well as the judgment and order dated 11.2.2003 of the learned District Judge, Sundargarh in Civil Revision Petition No. 1 of 2002 confirming the order passed by the learned Civil Judge.
2. This Court by order dated 10.4.2003 had issued notice of admission. Though the matter was listed for admission, on consent of learned counsel for the parties, the same was taken up for hearing.
3. The plaintiff-petitioner filed the suit praying for a declaration that the order dated 10.6.1998 passed by the defendant No. 1 is null and void and for permanently restraining the defendants from taking any action without following the due process of law. From the record it further appears that the plaintiff is a Union which represents employees of the defendant No.2-company. It further appears that the said company was doing well till 31.3.1996 but suddenly reported loss in the year 1997-98 and the said loss increased from year to year subsequently, as a result of which the industry became sick. According to the plaintiff purposefully the management changed the depreciation method from straight loss to run down in the year 1997-98 with retrospective effect in order to allow the industry to become sick. After the industry became sick a reference was made to the Board for Industrial & Financial Reconstruction (Defendant No. 1) and the said Board declaring the company to be sick company in terms of the provisions of Sick Industries Companies (Special Provision) Act, 1958 (SICA) appointed one Arun Sinha as its special Director to safeguard the financial and other interest of the company and also appointed the Intervener opposite party No. 1 as the operating agency under Section 17(3) of the SICA to examine the viability and to submit its report for revival of the unit by order dated 10.6.1998. This decision of the Board for Industrial and Financial Reconstruction is sought to be declared null and void in the suit. When the matter stood thus the intervener-opposite party No. 1 filed an application under Order 1, Rule 10 of the C.P.C. to be impleaded as a party to the suit. Said petition was resisted by the plaintiff-petitioner. Learned CivilJudge on consideration of the materials placed before him held that the opposite-party No. 1 is a necessary party to the suit and accordingly allowed the application. Challenging the said order the plaintiff-petitioner filed Civil Revision Petition No. 1 of 2002 before the learned District Judge, Sundargarh and the said revision petition having been dismissed by order dated 11.2.2003, the present writ application has been filed.
4. Shri Sanjit Mohanty, learned Senior Advocate appearing for the petitioner submitted that the intervener-opposite party No. 1 is neither a necessary party nor a proper party to the suit. This submission was made with reference to certain documents annexed to the writ application which also form part of the record. Learned counsel Sri B. Mohanty appearing for the intervener-opposite party No. 1 supported the order passed by both the Courts below on the ground that the intervener-opposite party No. 1 is not only an Investor but also participated in the proceeding before the defendant No. 1 and therefore in absence of the said intervener no effective decree can be passed. Shri Govind Das, learned senior counsel appearing for the opposite party No.2 submitted that if the intervention is allowed only on the ground that the intervener-opposite party No. 1 had invested in the company then it will be open a flood-gate for all the creditors/ investors/Sundry creditors to approach the Court to be impleaded as parties.
5. In order to find out as to whether intervener-opposite party No. 1 is a necessary or proper party to the suit, I feel it necessary to refer decisions of this Court as well as the Apex Court. In the case of Gopal Krushna Badu Mohapatra and Ors. v. Girish Chandra Nayak and Ors., reported in 1999 (I) OLR 582 : Vol.87 (1999) CLT 628, the Division Bench of this Court held as follows :
“At this juncture, it is necessary to delineate the scope and ambit of Order 1, Rule 10 of the Code and true purport of the provision. The objection of Order 1, Rule 10 is not to change the scope and character of the suit by adding new parties or to enable them to litigate their own independent claims, but simply to help them to avoid litigation which might otherwise become necessary. There may arise cases where the Court feels that in spite of the opposition of the plaintiff, it is necessary to add a person as defendant since in the absence of that person it finds itself helpless and unable to effectively and completely settle the matter in controversy and that its failure to do so well lead to multiplicity of proceedings. The balance has, therefore, to be struck by the Court in each case by making a sound judicial approach and where it fails to do so, there is scope for interference. It is to be noted that the law is well settled that the plaintiff is the dominus litis and as a result, therefore, no person should be impleaded as a party to the suit whom the plaintiff opposes. But at the same time it cannot be lost sight of that Order 1, Rule 10, Sub-rule (2) is meant to give every person an opportunity of being heard whose rights might be affected by the ultimate decree. A bare reading of Order 1, Rule 10(2) of the Code shows that the Court has power to direct a person to be made a party to the suit if such a person is a necessary party or that the Court feels the necessity of impleading him with a view to adjudicate upon all the questions involved in the suit. The question involved in the suit would mean the questions concerning the parties to the suit and not with the questions concerning third party. In short the Court has to determine if such a person ought to have been joined as party. In other words, Court has to determine whether such a person is a necessary party without whose presence no relief can be granted to the plaintiff or the defendant. In the alternative the Court has to determine whether the presence of any such person was necessary to decide the dispute between the parties to the suit. In other words, it would mean that if a person was a necessary party the Court must order for the addition of that person as party to the suit. In case such a party was only a proper party then that party can be added if the Court holds that to decide dispute between the parties, his presence was necessary. The object of the rule is to enable the Court to try and determine, once for all, material questions common to the parties and to third parties and not merely the questions between the parties to the suit. The tests for determining the question who is a necessary party to a proceeding are firstly, there must be a right to some relief against such party in respect of the matter involved in the proceedings in question and secondly, it should not be possible to pass an effective decree in the absence of such a party. Sub-rule (2) covers two types of cases : (a) of a party who ought to have been joined but not joined and is a necessary party, and (b) of a party without whose presence the question involved in the case cannot be completely decided. The former is called a necessary party and the latter a proper party. Sub-rule (2) of Order 1, Rule 10, therefore, is attracted when the question is covered by one of the above. (See Kanhu Gouda v. D. Kodandi Dora : 60 (1985) CLT 453). The Supreme Court in Udit Narayan Singh Malpaharia v. Additional Member, Board of Revenue, Bihar, observed as follows :
To answer the question raised it would be convenient at the outset to ascertain who are necessary or proper parties in a proceeding. The law on the subject is well settled, it is enough if we state the principle. 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.’
A party seeking such a joinder as proper party will have to prima facie establish that such a party has interest in the subject-matter of the litigation and as such should be before the Court. The simple test in such controversy would be as to whether the presence of such a party is appropriate in view of the subject-matter in adjudication. If the answer be in the affirmative, joinder can be permitted. By reason of direct interest in the subject-matter or even by reason of eventual reliefs sought, such a test would be answered. Power being there, it is all a matter of appreciation of the controversy in issue and its possible ramifications. The last limb of Sub-rule (2) of Rule 10 of Order 1 of the Code relates to the party whose “presence before the Court may be necessary” in order to enable the Court effectually and completely adjudicate upon and settle all the questions involved in the suit. Where the interest in the property is or would be in issue, the contender claiming such an interest in property would be entitled to join as proper parties. It is not compulsive under the rule to show always that the presence of the party applying to be joined is necessary for the determination of the questions as between the parties already on the records. The Court is required simply to see, whether the addition is necessary and should not as a general rule apply the principle of dominus litis in favour of the plaintiff as a rule of universal application. The Court must examine the propriety or otherwise of the merits of the case as reflected and demonstrated in the petition of and it must arrive at a conclusion whether the addition is redundant or legal for effective and final adjudication of the litigation between the parties. The discretion of the Court in directing impletion of a party should be exercised in a reasonable manner so as not to cause inconvenience or embarrassment. Before direct a party to be impleaded, a Court has to be prima facie satisfied about the bona fides of the applicant, the plausibility of his claim and the genuineneness of his interest in the litigation.”
As is evident from the aforesaid decision the test for determining the question who is a necessary party to a proceeding, the Court has to see first that there is a right to some relief against such party in respect of the matter involved in the proceedings in question and secondly, it is not possible to pass an effective decree in absence of such a party. Sub-rule (2) of Order 1, Rule 10 C.P.C. covers two types of cases, i.e. (a), of a party who ought to have been joined but not joined and is a necessary party, and (b) of a party without whose presence the question involved in the case cannot be completely decided. Former is called a necessary party and latter a proper party.
In the case of Udit Narayan Singh Malpaharia v. Additional Member, Board of Revenue, Bihar and Anr., , the distinction between necessary and proper party was discussed. The Apex Court held that a necessary party is one without whom no order can be made positively and proper party is one in whose absence an effective order can be made but whose presence is necessary for complete and final decision on the question involved in the proceeding. The aforesaid decision of the Apex Court has also been taken note of and relief upon by the Division Bench of this Court in the case of Gopal Krushna Badu Mohapatra and Ors. v. Girish Chandra Nayak and Ors. (supra).
In the light of the aforesaid two decisions respective cases of the parties are required to be examined.
6. Shri Sanjit Mohanty, learned Senior counsel for the petitioner referring to the record of the proceeding submitted that the representative of the intervener-opposite party No. 1 was only present at the time of hearing held on 10.6.1998. The representative of I.D.B.I, present during hearing agreed that the change in depreciation method has resulted in the erosion of net worth of the company and the said representative expressed that the promoters instead of devoting their energies to fighting legal cases should concentrate on the working of the company and declaring it sick would enable it to do so by being insulated from facing cases in Courts. Said representative also expressed that any viable rehabilitation proposal would be favourably considered by the IDBI. The said view expressed by the representative of the IDBI was endorsed by the representative of the intervener-opposite party No. 1. According to Sri Mohanty, learned senior counsel appearing for the petitioner this being the role played by the opposite party No. 1 in the entire process of BIFR, it cannot be said that such intervener-opposite party No. 1 became a part of the decision-making process. Learned counsel further stated that the intervener-opposite party is one of the creditors and if it is allowed to be impleaded as a party only on the ground that it had financed the company (defendant No. 2) other creditors including Sundry creditors may approach the Civil Court for being impleaded as parties. . It was also contended that prayer of the plaintiff in the suit is for declaration that the decision taken by the BIFR on 10.6.1998 is null and void and the BIFR being the defendant No. 1 in the suit, the interest of the intervener-opposite party No. 1 can be taken care of by the defendant No. 1. He also submitted that in view of nature of participation of the intervener-opposite party No. 1 in the proceeding before the BIFR, it is neither a necessary party nor a proper party. An effective decree can be passed in absence of the said intervener-opposite party No. 1 and therefore the impugned orders are liable to be set aside.
7. Shri Biswajit Mohanty, learned counsel appearing for the intervener-opposite party No. 1, on the other hand, submitted that not only the intervener is one of the creditors but also representative of the said intervener-opposite party No. 1 participated in the proceeding before BIFR and intervener had been appointed as operating agency to examine the viability and submit a report for revival of the company. According to Sri B. Mohanty, in absence of the said intervener-opposite party No. 1, no effective decree can be passed and therefore it is a necessary party. Shri Govind Das, learned senior Advocate appearing on behalf of the opposite party No.2 supported the stand taken by the learned counsel appearing for the plaintiff-petitioner.
8. In the light of the submissions made by the learned counsel appearing for the parties as well as the decision of this Court in the case of Gopal Krushna Badu Mohapatra and Ors. v. Girish Chandra Nayak and Ors.(supra) the present case is required to be examined. The first question to be determined is as to whether the intervener-opposite party No. 1 is a necessary party or not. In the aforesaid decision, this Court referring to Order 1, Rule 10 C.P.C. held that test for determining the question as to who is a necessary party to a proceeding, the Court has to first see that there is a right to some relief against such a party in respect of the matter involved in the proceeding in question and secondly it is not possible to pass an effective decree in absence of such a party. On perusal of the complaint, it appears that no relief has been claimed against the present intervener-opposite party. The decision taken by the Board of Industrial and Financial Reconstruction is challenged in the suit. The said Board being defendant No. 1 in the suit and the company being defendant No. 2 in the suit an effective decree can be passed in absence of the intervener-opposite party. I am therefore of the view that the intervener-opposite party is not a necessary party to the proceeding.
9. The second question that requires consideration is as to whether the intervener-opposite party is a proper party or not. Law in this regard is well settled. The Apex Court in the case of Udit Narayan Singh Malpaharia v. Additional Member, Board of Revenue, Bihar and Anr. (supra) has held that proper party is one in whose absence an effective order can be made, but whose presence is necessary for complete and final decision on the question involved in the proceeding. There is no dispute that in the proceeding before BIFR representative of the intervener-opposite party was present and participated in the discussion. Apart from the above, it appears that the BIFR appointed the intervener-opposite party as the operating agency under Section 17(3) of the SICA to examine the validity and submit its report for revival of the company. The intervener-opposite party was also directed to keep in view the provisions of Section 18 of the Act and to examine viability of the company and to prepare viable study report for revival of the company. Therefore, it is clear from the said direction that for revival of the defendant No. 2-company, the intervener-opposite party was appointed as operating agency under the Act and was directed to examine viability and to submit a report for the purpose. Since in the process of revival of the company there has been active participation of the intervener-opposite party, I am of the view that though effective decree can be passed in absence of the intervener-opposite party, its presence is necessary for complete and final decision on the question involved in the proceeding. Apprehension of the learned counsel for the plaintiff-petitioner as well as the defendant No. 2 that other creditors and Sundry creditors may also approach the Court to be impleaded as parties does not appear to be based on sound reasons. The intervener-opposite party No. 1 having been appointed as an operating agency for the purpose as mentioned earlier, it not only stands on the footing of the creditors but also the operating agency for the purpose of submitting report for revival of the defendant No. 2-company. Therefore, position of the intervener-opposite party No. 1 cannot be equated with other ordinary creditors or Sundry creditors. In view of the discussions made above, I am of the view that the intervener-opposite party No. 1 is not a necessary party, but its presence is necessary for complete and final decision on the question involved in the proceeding and therefore is a proper party to the suit.
10. I accordingly do riot find any merit in the writ application and the same is dismissed.