Thursday, 23 July 2020

Whether it is necessary to hear the proposed defendant before adding him as a party to suit?

This Court is not even remotely suggesting as to what order learned Court below should have had passed. All that this Court is observing is that had the notices been issued to the petitioners of the application filed under Order 1, Rule 10 of the Code, then they would have got an opportunity to respond to the same, take all pleas available opposing the said application and the Court would have had then passed a reasoned order whether to implead them or not after taking note of the respective pleas of the parties. Learned Court below having failed to do so has indeed caused grave prejudice to the petitioner.

26. Before parting with the case, this Court would like to observe that though it is not in dispute that Order 1, Rule 10 of the Code expressly does not provides that a proposed party has to be heard before being impleaded but then the said provision can also not be read so as to mean that under no circumstance/situation, notice need not be issued to a proposed party. In my considered view, a harmonious construction of the said provision is that whether or not before impleading a party in a lis, notice to the proposed party should be issued or not, will depend upon facts of the lis itself. In a suit like the present one, where contentious issues are involved, prudence and fair play demands that before order is passed on the application, proposed party should be given an opportunity of being heard. By doing so, while the Court shall be causing no prejudice to the applicant who seeks the impleadment of a new person as a party, justice will also be done to the proposed party as it shall have the satisfaction of having been heard before any order on such an application is passed by the Court. Not only this, because the Court will have the benefit of the view of the applicant as also the proposed party, it will be in a position to pass a speaking order containing reasons explaining its decision.

27. In view of discussion held herein-above, the impugned order impleading petitioners as party defendants to the suit without giving them an opportunity of responding to/opposing the application filed for their impleadment is not sustainable in law and is liable to be quashed and set aside. 

IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA

CMPMO No. 311 of 2018

Decided On: 16.03.2019

Ashwani Kumar  Vs.  Sanjay Kumar

Hon'ble Judges/Coram:
Ajay Mohan Goel, J.
 Citations: MANU/HP/0194/2019



1. By way of this petition filed under Article 227 of the Constitution of India, the petitioner has challenged order dated 12.09.2016, passed by the Court of learned Senior Civil Judge, Rampur Bushahr, in an application filed under Order 1, Rule 10 of the Code of Civil Procedure (hereinafter referred to as 'Code' for short), in Civil Suit No. 52-1 of 2012, titled as Sanjay Kumar and others vs. Kamlesh Kumar, vide which, learned trial Court has ordered the impleadment of the present petitioners as defendants in the said suit.

2. Brief facts necessary for adjudication of the present petition are as under:-

Respondents No. 1 to 4 (hereinafter referred to as plaintiffs) have filed a suit for declaration in the Court of learned Senior Civil Judge, Rampur Bushahr, i.e. Civil Suit No. 52-1 of 2012 on 03.09.2012 to the effect that plaintiffs and defendant were the only legal heirs entitled to inherit the properties and collect money with interest from all bank accounts left behind by late Shri Narayan Dev, son of Shri Chander Shekhar, in equal share and also for recovery of ` 4,47,932/- from the defendant being the share of the plaintiffs.
3. In the said suit, proforma respondent No. 5 namely Kamlesh Kumar was impleaded as the sole defendant. It was mentioned in para 4 of the plaint that defendant had succeeded in withdrawing more than ` 4,91,540/- from the bank accounts of the deceased in collusion with the bank officials.

4. In para 2 of the preliminary objections in the written statement, sole defendant stated that late Narayan Dev had appointed nominees and amount was withdrawn by the nominees who were competent to withdraw the same and plaintiffs had no claim with regard to the said amount.

5. During the pendency of the suit, plaintiffs filed an application under Order 1, Rule 10 of the Code for addition of the parties. Averments made in the application dated 22.11.2015 filed before the learned lower Court on 4.11.2015, are reproduced herein-below:-

"That the applicants have instituted a suit for declaration and rendition of accounts, qua the assets and liabilities of late Shri Narai Dev against the respondent/defendant and the same is listed for hearing before this Ld. Court today.

2. That the applicants did not have the knowledge of disbursement of amount by the banks and post office to the sons of the respondent but while leading evidence, it has surfaced that the sons of the respondent S/Shri Ashwani Kumar and Sandeep Kumar have received the amount from the bank and post office as nominee of deceased Narain Dev, therefore, it is necessary to array them as defendants in the present suit.

3. That S/Shri Ashwani Kumar and Sandeep Kumar both sons of Shri Kamlesh Kumar residents of village Ravin, P.O. Sarahan, Tehsil Rampur Bushahr, District Shimla, H.P. are the necessary party to the suit who can only depose about the utilization of money they received.

It is, therefore, prayed that this application may be allowed and the persons S/Shri Ashwani Kumar and Sandeep Kumar both sons of Shri Kamlesh Kumar, residents of village Ravin, P.O. Sarahan, Tehsil Rampur Bushahr, District Shimla, H.P., be arrayed as defendant No. 2 and 3 to the suit for just and proper disposal of the suit, in the interest of justice."

6. Vide impugned order, this application has been allowed by the learned lower Court. It held that plaintiffs had filed the suit for declaration of their right to inherit the property of deceased Narayan Dev including the money deposited by Narayan Dev and had sought decree for recovery of ` 4,47,932/- which fell to their share. Defendant had filed written statement wherein he disclosed that deceased Narayan Dev had appointed his nominees to collect money deposited by him in his accounts, but he did not disclose the name of nominees. The Court further held that plaintiffs claimed that they came to know about the names of nominees only during the course of evidence. The claim of sole defendant that plaintiffs' claim is time barred against the proposed defendants, could not be decided without impleadment of Ashwani Kumar and Sandeep Kumar as co-defendants. Issue of limitation can be decided at a later stage after impleading them as co-defendants. As they withdrew amount from the bank accounts of deceased Narayan Dev being his nominees, Ashwani Kumar and Sandeep Kumar were necessary parties and suit cannot be effectively adjudicated in their absence.

7. Mr. Shrawan Dogra, learned Senior Counsel appearing for the petitioner has argued that the impugned order is bad and not sustainable in law as the same stood passed by the learned trial Court without issuance of any notice of the application to the petitioners. As per learned Senior Counsel, this has caused grave prejudice to the petitioners because had they been given an opportunity to oppose the application filed for their impleadment, they would have had persuaded the learned Court below not to allow the application as they were neither necessary nor proper parties for the decision of the suit and assuming that they were so, then also the cause for which their impleadment was sought as defendants was time barred and therefore also, they could not have been impleaded as defendants in the suit. According to Mr. Dogra, as the impleadment of the petitioner as defendants was not at the behest of the Court itself, but was on an application filed by the plaintiffs, it was incumbent upon learned Court, in the peculiar facts of the case, to have had issued notice of the application to them and no order impleading them as party defendants could have been passed at their back. As per Mr. Dogra, by not doing so, great prejudice has been caused to the defendants and they have been unnecessarily dragged in the litigation. He has further argued that principles of natural justice also demanded that before an application filed for their being impleaded as defendants in the suit was allowed, the petitioners at least should have been heard on the same.

8. On the other hand, Mr. Romesh Verma, learned Counsel for respondents No. 1 to 4/plaintiffs has vehemently argued that the petition was without any merit as there was no perversity in the order passed by the learned Court below impleading the petitioners as defendants. Mr. Verma strenuously argued that the petitioners are necessary party and have been rightly impleaded as defendants by the learned Court below. He has argued that at the time when the suit was filed, plaintiffs were not aware as to who had siphoned of their share and even the sole defendant therein who happens to be the father of the present petitioners did not disclose in the written statement the fact that it were his sons who were the nominees and who had withdrawn the money wrongly. He has further argued that there was no question of the claim being time barred against the petitioners because the plaintiffs came to know about this fact only during the course of recording of the statements of PW 2 Kehar Singh and PW 3 Prakash Thakur who were bank employees and thereafter, with due diligence, application for impleadment of the petitioners as defendants in the suit was filed without delay. He has also argued that there is no necessity as per the Scheme of Order 1, Rule 10(2) of the Code that the proposed defendant has to be heard before allowing an application for impleadment. He has therefore prayed for dismissal of the case.

9. I have heard learned Counsel for the parties and also carefully gone through the impugned order as also the record of the case.

10. The moot issue for consideration before this Court is that in view of the facts of the case in hand, whether learned Court below should have had allowed the application under Order 1, Rule 10(2) of the Code for impleadment of the petitioners as defendants without issuing them any notice of the application and thus without hearing them?

11. Sub Rule 2 of Order 1, Rule of the Code inter alia provides that 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 the 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.

12. Under Sub Rule 2 of Order 1, Rule 10 of the Code, a plaintiff or defendant can either be added on an application by a party or suo motu by the Court itself if the conditions stipulated in the Sub Rule are fulfilled. In the present case, the order of impleadment of the petitioners as defendants has not been made at the behest of the Court suo motu. The order passed by the learned Court below impleading them as defendants is on an application filed by the plaintiffs.

13. In Kasturi versus Iyyamperumal and Others, MANU/SC/0319/2005 : (2005) 6 Supreme Court Cases 733, a three Judge Bench of Hon'ble Supreme Court has held that two tests which are to be satisfied for determining the question as to who is necessary party are (I) there must be a right to some relief against such party in respect of the controversies involved in the proceedings; (II) no effective decree can be passed in the absence of such party. Hon'ble Supreme Court has also held that jurisdiction of the Court to add an applicant arises only when the Court finds that such applicant is either a necessary party or a property party. It has also held that an application so filed cannot be allowed for adjudication of collateral matters.

14. In Mumbai International Airport Private Limited versus Regency Convention Centre and Hotels Private Limited and Others, (MANU/SC/0427/2010 : 2010) 7 Supreme Court Cases 417, Hon'ble Supreme Court has held that in exercising its judicial discretion under Order 1, Rule 10(2) of the Code, the Court has to act according to reason and fair play and not according to whims and caprice. While giving illustration regarding exercise of discretion under the said sub-Rule, Hon'ble Supreme Court in para 24 has held as under:-

"24. If a plaintiff makes an application for impleading a person as a defendant on the found that he is a necessary party, the court may implead him having regard to the provisions of Rules 9 and 10(2) of Order 1. If the claim against such a person is barred by limitation, it may refuse to add him as a party and even dismissed the suit for non-joinder of a necessary party."
15. In the judgments referred to herein-above, Hon'ble Supreme Court has laid down the tests which are to be followed by the Court while allowing application filed under Order 1, Rule 10(2) of the Code. In the backdrop of the tests so laid down by Hon'ble Supreme Court, this Court will now answer the moot issue as to whether in the facts of the present case, issuance of notice of the application filed under Order 1, Rule 10(2) of the Code to the proposed defendants was necessary or not.

16. This Court is purposely using the words "in the fact of present case", because this Court is of the view that it is not as if in each and every case where impleadment of a party has to be ordered by the Court, it is necessary that notice has to be issued to the proposed party.

17. Coming to the facts of this case. Here admittedly when the plaintiffs filed the suit in the year 2012, the petitioners were not impleaded as defendants by them. The Court is not going into the effect of non-impleadment of the petitioners as defendants at the time of filing of the suit because may be, as has been argued by learned Counsel for the respondents/plaintiffs, the plaintiffs were not aware as to who had actually withdrawn the amount which was being claimed by them in the suit.

18. Be that as it may, it is the case of the plaintiffs that when they came to know that the amount stood withdrawn by the present petitioners as nominees of late Narayan Dev, they immediately moved to the Court by filing an application under Order 1, Rule 10 of the Code for impleadment of the defendants.

19. The moment, said application was filed by the plaintiffs before the learned Court below, the Court became duty bound to pass an order upon the same in the light of the tests laid down by Hon'ble Supreme Court. In the absence of any notice of the application having been issued to the proposed defendants, they were not in a position to put forth their stand before the Court and oppose the application.

20. A perusal of the impugned order demonstrates that sole defendant took the objection of the claim being time barred against the proposed defendants, but learned Court rejected the said objection by holding that the issue of limitation can be decided at a later stage after impleading Ashwani and Sandeep Kumar as co-defendants.

21. This finding of the learned trial Court per se is not sustainable in law in view of the decision of the Hon'ble Supreme Court in Mumbai International Airport Private Limited supra. In the said case, Hon'ble Supreme Court has categorically held that exercise of judicial discretion by the Court under Order 1, Rule 10(2) of the Code has to be according to reason and fair play and not according to whims and caprice. Hon'ble Court went on to explain that if a plaintiff makes an application for impleading a person as a defendant on the ground that he is a necessary party, the Court may implead him having regard to the provisions of Rules 9 and 10(2) of order 1 of the Code and if the claim of such a person is barred by limitation, it may refuse to add him a party and even dismiss the suit for non-joinder of a necessary party.

22. In my considered view, when the sole defendant had raised the objection of the suit being time barred against the proposed defendants, then it was the duty of the learned Court to have had returned findings on this point and learned Court could not have simply brushed aside the said objection by holding that limitation can be decided at a later stage after impleading the proposed defendants as co-defendants.

23. This, in my considered view, cannot be said to be exercise of judicial discretion under Order 1, Rule 10(2) of the Code according to reason and fair play. The discretion stands exercised by the learned Court on whims and caprice.

24. The suit in issue was filed by the plaintiffs in April 2012. In para 4 of the plaint, the factum of withdrawal of more than ` 4,91,540/- stood mentioned. Meaning thereby, that this amount stood withdrawn by someone, may be wrongly and illegally, as on the date when the suit was filed. The written statement was filed on 8.8.2012. In the preliminary objections, it stood mentioned that the amount was withdrawn by the nominees who were competent to withdraw the same. There are on record statements of PW 2 Kehar Singh and PW 3 Prakash Thakur recorded on 18.7.2014 and 2.6.2015 respectively who have disclosed in the Court names of the present petitioners who as nominees withdrew the amount in issue. In this factual matrix when the petitioners were not initially impleaded as defendants and they were sought to be impleaded as defendants on the basis of statements made by PW 2 and PW 3, in my considered view, it was incumbent upon the learned Court to have had issued notice of the application filed under Order 1, Rule 10 of the Code and any order upon the same should have been passed by the learned Court only after hearing the petitioners.

25. This Court is not even remotely suggesting as to what order learned Court below should have had passed. All that this Court is observing is that had the notices been issued to the petitioners of the application filed under Order 1, Rule 10 of the Code, then they would have got an opportunity to respond to the same, take all pleas available opposing the said application and the Court would have had then passed a reasoned order whether to implead them or not after taking note of the respective pleas of the parties. Learned Court below having failed to do so has indeed caused grave prejudice to the petitioner.

26. Before parting with the case, this Court would like to observe that though it is not in dispute that Order 1, Rule 10 of the Code expressly does not provides that a proposed party has to be heard before being impleaded but then the said provision can also not be read so as to mean that under no circumstance/situation, notice need not be issued to a proposed party. In my considered view, a harmonious construction of the said provision is that whether or not before impleading a party in a lis, notice to the proposed party should be issued or not, will depend upon facts of the lis itself. In a suit like the present one, where contentious issues are involved, prudence and fair play demands that before order is passed on the application, proposed party should be given an opportunity of being heard. By doing so, while the Court shall be causing no prejudice to the applicant who seeks the impleadment of a new person as a party, justice will also be done to the proposed party as it shall have the satisfaction of having been heard before any order on such an application is passed by the Court. Not only this, because the Court will have the benefit of the view of the applicant as also the proposed party, it will be in a position to pass a speaking order containing reasons explaining its decision.

27. In view of discussion held herein-above, the impugned order impleading petitioners as party defendants to the suit without giving them an opportunity of responding to/opposing the application filed for their impleadment is not sustainable in law and is liable to be quashed and set aside. Ordered accordingly.

28. The application filed under Order 1, Rule 10 of the Code filed by the respondents/plaintiffs shall be decided afresh by the learned Court below after providing petitioners herein an opportunity to file their reply to the same.

29. Learned Court shall pass orders upon the said application on merit after hearing all the parties and thereafter proceed with the suit. It is clarified that while deciding the application filed under Order 1, Rule 10 of the Code of Civil Procedure, learned trial Court shall not be influenced by any observation made by this Court while deciding the present petition. With the above observations and directions, present petition is disposed of. Pending miscellaneous application(s), if any, also stand disposed of accordingly. Parties through their learned Counsel are directed to appear before the learned lower Court 11th April, 2019.


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