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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

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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

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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]

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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

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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.

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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

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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

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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

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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

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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

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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.

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