Full Text
CIVIL APPELLATE JURISDICTION
WRIT PETITION 9970 OF 2019
Kalpana Vijaysinh Savant & anr. .Petitioners
Vs.
Barkha Amir Haldive @ Barkha .Respondents
Govind Valanju & ors.
Mr. Sandesh Patil i/b. Mr. Kiran Bhagat & Ms Divya Pawar, Advocate, for the Petitioners
Mr. Chetan Patil, Advocate, for the Respondents
JUDGMENT
2. Rule.
3. With consent, the Petition is fnally heard at the admission stage.
4. The Petitioners are the Plaintiffs in Special Civil Suit 17 of 2018 which is instituted seeking specifc performance of Agreement dated 16.02.2015, whereunder 1 of 19 Defendants 1 & 2 – Respondents 1 & 2 herein, agreed to sell the suit property to the Plaintiffs, on terms and conditions stipulated therein. The suit property is described in the plaint, as land assigned Gat 49/1 admeasuring 5-22 R situated in Sawantwadi, District – Sindhudurg.
5. Respondent 1 is the Third Party, who preferred an application under O. I, Rule 10 of the Code of Civil Procedure, 1908 ( for short ‘CPC’ ) seeking impleadment.
6. The learned trial Judge was pleased to allow the application preferred under O. I, Rule 10 of the CPC vide Order dated 25.03.2019, which is impugned herein.
7. The short question involved in the Petition is whether the Third Party is necessary or proper party to the suit for specifc performance of the Agreement. The learned trial Judge reasons that the Third Party is a consenting party and has right and interest in the suit property.
8. I have heard Mr. Sandesh Patil, learned counsel 2 of 19 for the Plaintiffs and Mr. Chetan Patil, learned counsel for the Third Party and with their able assistance, the relevant material inter alia recitals in the suit Agreement have been scrutinized.
9. Mr. Sandesh Patil would submit that the learned trial Judge has committed a serious error in holding that the Third Party has right and interest in the suit property. The extension of the submission is that the suit Agreement neither creates any right in favour of the Third Party nor saddles the Third Party with any obligation or liability, and the Plaintiffs as Dominus litis cannot be compelled to wage a legal battle against the Third Party against their wish.
10. In rebuttal, Mr. Chetan Patil, who represents the Third Party would submit, relying on the decision of the Apex Court in Kasturi Vs. Iyyamperumal And Ors., reported in (2005) 6 Supreme Court Cases 733, that the fact that the Third Party is a consenting party to the suit Agreement is suffcient to clothe the Third Party with the status of proper party, if not necessary party. 3 of 19
11. Both the learned counsel have invited my attention to certain decisions, which shall be considered at a later stage, to the extent that the decisions are relevant.
12. Before I consider the rival submissions, it would be opposite to note that substratum of the pleadings and the recitals the suit Agreement.
13. The Plaintiffs aver that Defendants 1 & 2 entered into Agreement dated 16.02.2015, where under the suit property was agreed to be transferred and conveyed in favour of the Plaintiffs by sale for consideration of Rs. 28,80,000/- ( Rs. Twenty Eight Lacs And Eighty Thousand). The Plaintiffs further aver that various amounts were paid to the Defendants from time to time, and the balance sale consideration which is payable is Rs. 4,80,000/- (Rs.Four Lacs Eighty Thousand) which the Plaintiffs were, and are, ready and willing to pay. The rest of the averments in the suit plaint seek to demonstrate that while the Plaintiffs were and are ready and willing to perform their 4 of 19 part of the contract by making the balance payment of the consideration, Defendants 1 & 2 are resiling from the terms and conditions of the contract. Such is broadly, the case of the Plaintiffs.
14. Defendants 1 & 2 fled their Written Statement and their version is briefy and broadly thus. Defendants 1 & 2 contend that the suit Agreement does not refect the agreed consideration. Defendants 1 & 2 further contend that they agreed to sell the total land admeasuring 10 H 6 R to the Third Party, including the suit property, for total consideration of Rs. 1,12,50,000/- ( Rs. One Crore Twelve Lacs And Fifty Thousand ). The Third Party in turn agreed to sell the said land including the suit property to the Plaintiffs for total consideration of Rs. 2,35,25,000/- ( Rs. Two Crore Thirty Five Lacs And Twenty Five Thousand ) out of which the Defendants 1 & 2 were to receive Rs. 1,12,50,000/- ( Rs. One Crore Twelve Lacs And Fifty Thousand ). The balance consideration of Rs. 1,19,00,000/- ( Rs. One Crore Nineteen Lacs ) was payable to the Third Party. In short, the case of the Defendants 1 & 2 is that while 5 of 19 the Plaintiffs did pay them the agreed amount of Rs. 1,12,50,000/- ( Rs. One Crore Twelve Lacs And Fifty Thousand ), the amount which is payable by the Plaintiffs to the Third Party is not paid as agreed.
15. The Application preferred by the Third Party echoes the narrative of the Defendants 1 & 2. The Third Party asserts that inasmuch as the Plaintiffs have not paid the Third Party its share of the agreed sale consideration, interest of the Third Party are involved in the suit. Para 8 of the Application under O. I, Rule 10 of the CPC sums up the justifcation pleaded by the Third Party in support of its Application seeking impleadment. The justifcation is, since the Plaintiffs are avoiding to make agreed payment to the Third Party, it would be necessary for the Court to give consideration to the version of the Third Party in the interest of just decision in the suit for specifc performance. It would be appropriate to reproduce ad verbatim para 8 of the Application under O. I, Rule 10 of the CPC, which reads thus:- 6 of 19 “8½ oknh gs tk.kquw cqtwu FkMZikVhZ vtZnkj;kaph jDde n;koh ykxw u;s Eg.kwu o rh VkG.;klkBh;k dkeh FkMZikVhZ vtZnkj;kauk i{kdkj Eg.kwu lkehy dsysys ukghr- FkMZikVhZ vtZnkj gs nkosr vko';d i{kdkj vkgsr- R;kaP;k xSjgtsjhr nkospk fudky gksow 'kd.kkj ukghnkosrhy oknkrhr eqn~ns o nkosP;k djkji=kcn~ny fu.kZ;klkBh FkMZikVhZ vtZnkj;kaps er ?ks.ks vko';d vkgs-**
16. The learned trial Judge notes that back to back agreements are executed between the parties and that the Third Party is the consenting party. Paragraph 24 of the order impugned sums up the conclusions drawn by the learned trial Judge, and the said paragraph reads thus:- “24. Considering the documents alongwith contentions of defendant Nos. 1 and 2 it is seen that the third party has right and interest in the suit property. It is seen that the defendants have agreed to sell their entire property including the suit property to the third party. It is seen that thereafter agreement is executed between third party and the plaintiffs. Further as per said agreement the lands in piecemeal are agreed to be sold to the plaintiffs. Present suit is for Survey No. 47/3. There is another suit regarding Survey No. 49/1. Third party is added as consent giver to these agreements. Thus, the third party is a necessary party in present suit. Hence, I have answered the point in the 7 of 19 ‘affrmative’ and proceed to pass following order. O R D E R
1. application is allowed.
2. The third party be admitted as defendant No. 2 in the suit.
3. Plaintiffs to make necessary amendment.”
17. In the context of the pleadings and the fndings recorded by the learned trial Judge, if the suit Agreement is perused, it is crystal clear that the suit Agreement neither creates any right, much less share and interest, in the suit property, in favour of the Third Party nor is any obligation or liability imposed on the Third Party. I have not come across a single word in the suit Agreement which can be construed as a reference to any right or obligation or liability of the Third Party qua the suit Agreement.
18. The suit Agreement is indeed signed by the Third Party, which is described as “consenting party”. However, such description as consenting party gives rise to no inference that the Third Party is a party to the suit 8 of 19 Agreement in the context of the claim for specifc performance; and at best is a signatory to the document, who presumably has joined in execution, as abundant caution. Judicial notice can be taken of the prevailing trade and commercial practice of requiring the holder of an earlier agreement qua the suit property, to join in the subsequent agreement as consenting party only to lend an assurance to the purchaser and vendor in the subsequent agreement that the consenting party shall not stake any claim nor shall otherwise impede the smooth implementation of the subsequent agreement, by falling back on the earlier agreement which he may have held. While such person is, more often than not, described as a consenting party, he has no stake as such in the suit agreement. Such consenting party has nothing to contribute to the effective adjudication of the issue involved in suit for specifc performance of contract, wherein the Court is primarily expected to decide whether there is a lawful agreement in existence and whether despite the readiness and willingness of the plaintiff to perform his part of the contract, the defendant is resiling from the terms and conditions of the agreement. 9 of 19
19. I have no doubt in my mind, that the only interest of the Third Party is in the recovery of the amount which is allegedly due and payable by the Plaintiffs. Indeed, para 8 of the Application under O. I, Rule 10 of the CPC which is reproduced supra, is a candid and unambiguous manifestation of the rationale underlying the insistence of the Third Party to actively participate in the suit. While the Third Party asserts that is views or version must be heard by the Court, I see no reason to permit the Third Party to hold the suit for specifc performance to ransom as a leverage for recovery of the alleged dues.
20. Mr. Chetan Patil invite my attention to certain observations in Kasturi Vs. Iyyamperumal And Ors., reported in (2005) 6 Supreme Court Cases 733, to buttress the submission that the consenting party to the suit Agreement is a necessary party in suit for specifc performance of contract for sale. Reliance is placed on the following observations in Kasturi Vs. Iyyamperumal And Ors. 10 of 19
21. It is well settled that a Judgment is not to be read as statute. In Islamic Academy of Education And Another Vs. State of Karnataka And Others, reported in (2003) 6 Supreme Court Cases 697, the Constitution Bench of the Apex Court articulates thus:- “139. A judgment, it is trite, is not to be read as a statute. The ratio decidendi of a judgment is its reasoning which can be deciphered 11 of 19 only upon reading the same in its entirety. The ratio decidendi of a case or the principles and reasons on which it is based is distinct from the relief fnally granted or the manner adopted for its disposal. (See Executive Engineer, Dhenkanal Minor Irrigation Division v. N. C. Budharaj reported in
140. In Padma Sundara Rao v. State of T. N. reported in (2002) 3 SCC 533 it is stated: (SCC p. 540, paragraph 9) “There is always peril in treating the words of a speech or judgment as though they are words in a legislative enactment, and it is to be remembered that judicial utterances are made in the setting of the facts of a particular case, said Lord Morris in Herrington v. British Railways Board reported in (1972) 2 WLR 537: 1972 AC 877: (1972) 1 ALL ER 749 (HL) (Sub nom British Railways Board v. Herrington). Circumstantial fexibility, one additional or different fact may make a world of difference between conclusions in two cases.” (See also Haryana Financial Corpn. v. Jagdamba Oil Mills reported in (2002) 3 SCC 496 )
141. In General Electric Co. v. Renusagar Power Co. reported in
157, paragraph 20) “As often enough pointed out by us, 12 of 19 words and expressions used in a judgment are not to be construed in the same manner as statutes or as words and expressions defned in statutes. We do not have any doubt that when the words ‘adjudication of the merits of the controversy in the suit’ were used by this Court in State of U. P. v. Janki Saran Kailash Chandra (1973) 2 SCC 96: AIR 1973 SC 2071: (1974) 1 SCR 31 the words were not used to take in every adjudication which brought to an end the proceeding before the court in whatever manner but were meant to cover only such adjudication as touched upon the real dispute between the parties which gave rise to the action. Objections to adjudication of the disputes between the parties, on whatever ground, are in truth not aids to the progress of the suit but hurdles to such progress. Adjudication of such objections cannot be termed as adjudication of the merits of the controversy in the suit. As we said earlier, a broad view has to be taken of the principles involved and narrow and technical interpretation which tends to defeat the object of the legislation must be avoided.” 142*. In Rajeswar Prasad Misra v. State of W. B. reported in AIR 1965 SC 1887: (1965) 2 Cri LJ 817 it was held: “No doubt, the law declared by this Court binds courts in India but it should always be remembered that this Court does not enact”. 13 of 19 (See also Amar Nath Om Prakash v. State of Punjab reported in (1985) 1 SCC 345: 1985 SCC (Tax) 92 and Hameed Joharan v. Abdul Salam reported in (2001) 7 SCC 573 )
143. It will not, therefore, be correct to contend, as has been contended by Mr. Nariman, that answers to the questions would be the ratio to a judgment. The answers to the questions are merely conclusions. They have to be interpreted, in a case of doubt or dispute with the reasons assigned in support thereof in the body of the judgment, wherefor, it would be essential to read the other paragraphs of the judgment also. It is also permissible for this purpose (albeit only in certain cases and if there exist strong and cogent reasons) to look to the pleadings of the parties.”
22. It is diffcult to agree with the submission of Mr. Chetan Patil that the observations in Kasturi Vs. Iyyamperumal And Ors. would apply with equal vigour to the consenting party, who neither has any right or share or interest in the suit property nor any liability or obligation to fulfll or discharge. Notably, no relief is claimed in the suit against the consenting party. The observation of the Apex Court that the parties to the contract shall be necessary 14 of 19 parties in suit for specifc performance of contract cannot be understood or construed dehors the context.
23. A necessary party is a party in whose absence the Court shall be precluded from rendering any effective Judgment or Decree. A proper party is a person in whose absence an effective decree may conceivably be passed; however, whose presence may be necessary to enable the Court to completely and effectively decide all issues arising in the suit. The Plaintiff is the dominus litis, and cannot be compelled to wage a legal battle against a person against his will, as is rightly submitted by Mr. Sandesh Patil. The exception would be if the compulsions of law demand the presence of such party in the suit as would render the unwillingness of the Plaintiff secondary.
24. A person against whom no relief is sought in the suit for specifc performance and, who has no right or interest in the subject matter of the suit Agreement, is neither a necessary party nor a proper party in suit for specifc performance. Impleadment on the ground that the 15 of 19 Third Party may have some, material which may translate into evidence, which would assist the Court to arrive at the correction determination of the lis, is impermissible in law. Such a person may be material witness; he certainly is neither a necessary nor a proper party. Similarly, impleadment in a suit for specifc performance, and for that matter in any lis, cannot be allowed on the assumption that the Third Party may assist the Court to arrive at the correct conclusion. Suffce it to note the observations of the Apex Court in the case of Ramesh Hirachand Kundanmal Vs. Municipal Corporation of Greater Bombay And Ors., reported in (1992) 2 Supreme Court Cases 524 which read thus:- “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. 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. It is not merely that he has an interest in the correct solution of some question 16 of 19 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 so 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, 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 diffcult 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. Raphel Tuck & Sons Ltd., wherein after quoting the observations of Wynn-Parry, J. in Dollfus Mieg et Compagnie S. A. v. Bank of England, that their 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:”
25. The observation of the learned trial Judge that the Third Party has share and interest in the suit property is manifestly erroneous in law. Notably, the Third Party is 17 of 19 asserting right to impleadment, not on the basis that he has share or interest in the suit property; but on the premise that he is entitled to recover some amount from the Plaintiffs in view of the back to back transactions. The learned trial Judge appears to have made out a case not even pleaded. The learned trial Court further failed to appreciate, that even a person who claims to hold an agreement for sale has no share or interest in the property on the basis of such agreement, in view of the provisions of Section 54 of the Transfer of Property Act.
26. In my considered view, the order impugned is manifestly erroneous.
27. The order impugned is set aside.
28. The Application preferred by the Third Party under the provisions of O. I, Rule 10 of the CPC is dismissed.
29. The Petition is allowed in the aforestated terms. 18 of 19
30. No order as to costs. ( ROHIT B. DEO, J. )