Law Web: Whether the court should allow the addition of a party if the said party has a commercial interest in the suit?

In the backdrop of the aforesaid facts, pointing out the

distinction in the matter of impleadment of a party in a suit relating to property and a matter involving a declaration as regards the status or legal character, the Supreme Court observed that, 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 subjectmatter of the litigation. It was further observed what makes a person a necessary party is not merely that he has relevant evidence to give on some of the questions involved in the suit. The observations of the Supreme Court in paragraph 13 and 14 are instructive and, thus,

extracted below :“

13 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.

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 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 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 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." (Emphasis supplied)

In the case at hand, the petitioners do not claim any proprietary interest in the land on which the unauthorized constructions are allegedly erected. The petitioners, on the contrary, desire to ensure a favourable outcome of C.S. No. 94 of 2017 so as to advance their commercial interest. This pure commercial interest separates the petitioners from the class litigants who have an abiding interest in the orderly and planned development and thus approach the Court to compel the planning authority to perform its duty.

29. The learned Judge was justified in observing that the

impleadment of the petitioners would change the nature of adjudication. If the petitioners are impleaded as party defendants, inevitably, the questions as to whether the building permission was lawfully granted, whether access as per norms was available at the time of grant of building permission and whether the Corporation can now withheld the permission for want of access as per norms would be urged for consideration and adjudication. These aspects are not germane for the adjudication of the dispute between the respondent Nos. 2 to 10 and respondent No.11. There is a clear and present danger of the trial of the suit taking the turn of a distinct trial between the petitioners and Planning Authority.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

CIVIL APPELLATE JURISDICTION

WRIT PETITION NO. 6563 OF 2017

Mr.Ashok Bansidhar Agarwal Vs The State of Maharashtra

CORAM : N.J. JAMADAR, J.

Dated: 22nd July 2019

1. Rule. Rule made returnable forthwith and, with the consent of the

learned counsels for the parties, heard finally.

2. These petitions take exception to the orders dated 9th May 2017 in

Chamber Summons No. 72 of 2017 and 192 of 2017, taken out by the

petitioners in the respective petitions, to implead them as party

defendants in Suit No. 94 of 2017 instituted by the respondent Nos. 2 to

10 herein against the respondent No.11Municipal

Corporation, whereby

the learned Judge, City Civil Court rejected both the chamber summons.

3. Shorn of unnecessary details, the background facts can be stated

as under :M/

s.Rajeshwari Land Developer Private Limitedpetitionerapplicant

in Chamber Summons No.192 of 2017 in L.C. Suit No.94 of

2017 is a company. It deals in the business of development of land and

construction of buildings. The petitioners had developed a plot bearing

No.1363/1364 situated at Village : Malwani, Malad Marve Road, Malad

(W), Mumbai. The petitioners have erected a 21 storied building

thereon. Mr.Ashok Agarwal, (Petitioner in Writ Petition No. 6563 of

2017) has purchased a flat in the building constructed by the petitioner.

The respondent No.11Municipal

Corporation had sanctioned the

necessary building plan on being satisfied that there is a road having

width of 9.10 mtrs. available for access to the said building. After

completion of the construction, the respondent No.11 has withheld the

occupation certificate on the premise that there is no access to the said building. It transpired that some encroachers have erected unauthorized

construction on the road leading to the said premises. The respondent

No.11Municipal

Corporation has initiated action for removal of

unauthorized construction on the road leading to the said building.

4. The respondent Nos.2 to 10 herein have, however, challenged the

notice, issued by the respondent No.11Municipal

Corporation, under

Section 354A of the Mumbai Municipal Corporation Act, 1888

(hereinafter referred as 'the Act'), by instituting Suit No. 94 of 2017. The

petitioners alleged that the officers of the respondent No.11Municipal

Corporation are hand in glove with the plaintiffs in said suit. The

defendants therein have not passed a reasoned order on the reply

furnished by the encroachers to the notice under Section 354A.

contrast, the petitioners are in a position to produce relevant material on

record and demonstrate that the structures erected by the plaintiffs in

Suit No. 94 of 2017 are unauthorized. In the event, the Court comes to

the conclusion that the notice under Section 354A

issued by the

respondent No.11Municipal

Corporation is bad in law and thereby

quashes the action initiated by the respondent No.11, it would cause a

serious prejudice to the rights of the petitioner as occupation certificate

would be denied on the premise that there is no access to the said

building constructed by the petitioner. Thus, the petitioner took out

chamber summons bearing No.192 of 2017 to implead it as party

defendant to the said suit, being a necessary party thereto.

5. The petitioner in Writ Petition No. 6563 of 2017 has taken out

chamber summons No. 72 of 2017 to implead him as a party defendant

by making similar averments, with the change that the petitioner's'

character is that of a purchaser of a flat in the said building constructed

by the petitioner in Writ Petition No. 6564 of 2017.

6. The learned Judge, City Civil Court, was persuaded to reject both

the chamber summons by passing the impugned order as the learned

Judge was of the view that the petitioners were not the necessary

parties, and that their impleadment would change the nature and scope

of the proceedings in Suit No. 94 of 2017, as, in that event, the question

as to whether the respondent No.11Municipal

Corporation can withheld

the occupation certificate to the building in question would be in issue.

7. Being aggrieved by and dissatisfied with the aforesaid orders of

rejection of chamber summons Nos.72 of 2017 and 192 of 2017, the

petitioners have invoked the writ jurisdiction of this Court.

8. I have heard Shri Sushil Upadhaya, the learned counsel for the

petitioner, Shri A.B.Kadam, the learned AGP for for respondent No.1Shraddha

State, Mr. R.A.Thorat, the learned Senior Advocate for respondent Nos.

8 and 9 and Shri Santosh Parad, the learned counsel for the respondent

No.11Municipal

Corporation.

9. Shri Upadhyay, the learned counsel for the petitioners strenuously

urged that the learned Judge committed a grave error in declining to

permit the petitioners to be impleaded themselves as party defendant to

Suit No. 94 of 2017. It was urged that the fact that the petitioners have

a direct interest in the subject matter of Suit No. 94 of 2017 was

completely lost sight of by the learned Judge. The learned counsel

would further submit that the learned Judge ought to have given due

weight to the fact that at the instance of the petitioners, the action

leading to the issue of notice under Section 354A,

which has been

challenged by the respondent Nos.2 to 10, has been initiated. Moreover,

serious prejudice is caused to the petitioners on account of withholding

of the occupation certificate to the building erected by M/s. Rajeshwari

Land Developer Private Limited for the sole reason that in view of the

unauthorized construction erected by the respondent Nos. 2 to 10, there

is no access thereto as per norms.

10. The learned counsel for the petitioners urged with tenacity that

the adverse and prejudicial consequences, the determination of Suit No.

94 of 2017 would have, on the rights of the petitioners, cannot be

simply ignored. Viewed through this prism, according to the learned

counsel for the petitioners, the petitioners are the necessary parties to

the said suit and in their absence no effective decree can be passed

therein.

11. In opposition to this, Shri R.A. Thorat, the learned Senior Counsel

for respondent Nos. 8 and 9 stoutly submitted that the petitioners have

no interest in the subject matter of the dispute raised in Suit No. 94 of

2017, much less direct. The petitioners do not claim any proprietary title

over the land bearing city survey No.1491, in respect of which the

respondent No.11Municipal

Corporation has issued notice under

Section 354A

of the Act. The petitioners are total strangers to the said

dispute between the plaintiffs and the Planning Authority. An effective

decree can be passed in Suit No.94 of 2017 in the absence of the

petitioners. Nor their presence is necessary to assist the Court for an

effective adjudication. Thus, the petitioners are neither necessary nor

proper parties to the said suit.

12. Evidently, the petitioners sought their impleadment as party

defendants to Suit No. 94 of 2017 in accordance with the provisions

contained in Order I Rule 10(2) of the Code of Civil Procedure, 1908

('CPC'). It is trite that under the provisions of Order I Rule 10(2) of the CPC, the Court is empowered to direct that a person may be added as a party to the suit if presence of such person before the Court is necessary in order to enable the Court to adjudicate all the questions involved in the suit effectively and completely. The true test to determine whether a party is a necessary party to the suit is whether in the absence of the

person, sought to be impleaded as a party to the suit, the controversy

raised in the suit can be effectively and completely adjudicated.

13. The first and foremost principle which governs the power of the

Court in the matter of addition of a party is that the question of addition

of a party under Order I, Rule 10(2) is not one of the initial jurisdiction

of the Court but a judicial discretion which has to be exercised keeping

in view the facts and circumstances of a particular case. A profitable

reference in this context can be made to a judgment of the Supreme

Court in the case of Mumbai International Airport Private Limited Vs.

Regency Convention Centre and Hotels Private Limited & Ors. (2010) 7 Supreme Court Cases 417,

wherein the scope and ambit of Order I, Rule 10(2) was propounded as

under :“

22. Let us consider the scope and ambit of Order I of Rule 10(2)

CPC regarding striking out or adding parties. The said subrule

not about the right of a nonparty

to be impleaded as a party,

but about the judicial discretion of the court to strike out or add

parties at any stage of a proceeding. The discretion under the

sub rule

can be exercised either suo moto or on the application of

the plaintiff or the defendant, or on an application of a person

who is not a party to the suit. The court can strike out any party

who is improperly joined. The court can add anyone as a plaintiff

or as a defendant if it finds that he is a necessary party or proper

party. Such deletion or addition can be without any conditions or

subject to such terms as the court deems fit to impose. In

exercising its judicial discretion under Order 1 Rule 10(2) of the

Code, the court will of course act according to reason and fair

play and not according to whims and caprice.”

(Emphasis supplied)

14. In the backdrop of the aforesaid enunciation of the legal position,

it has to be seen whether, in the instant case, the learned Judge was

justified in exercising the discretion not to implead the petitioners as

party defendants to the suit. The question needs to be addressed from

two perspectives. One, the nature of the suit instituted by the

respondent Nos.2 to 10 against the respondent No.11Municipal

Corporation. Two, the nature of the interest claimed by the petitioners

in the subject matter of the suit. Thereafter, the test as to whether in the

absence of the petitioners an effective decree can be passed, needs to be

applied.

15. The respondent Nos. 2 to 10 the

plaintiffs claimed that their

respective constructions are situated at Survey No.1491, 1502 and 1503.

The respondent No.11Municipal

Corporation has issued a notice under Section 354A

of the Act on 5th May 2017 to demolish the said structure.

Though proper reply has been furnished by the plaintiffs, the officers of

the respondent No.11 have not passed a reasoned order.

16. The said notice is also stated to be vague and invalid. Thus, the

plaintiffs have sought a declaration that the said notice is illegal, bad in

law and inoperative. They have also sought injunction restraining the

Municipal Corporation from taking any action pursuant thereto.

17. In this backdrop, reverting to the case of the petitioners, it

becomes abundantly clear that the petitioners do not claim any title over

the land on which the alleged unauthorized structures stand, in respect

of which notice under Section 354A

was issued by the respondent

No.11. The petitioners, on the other hand, assert that those structures

are located on the road, which provides the access to the building

erected by M/s. Rajeshwari Land Developer Private Limited. Unless the

said unauthorized structures are removed, the requirement of 9.10 mtrs.

wide access to the said building can not be met. Resultantly, the

occupation certificate to the said building would be withheld, on the

premise that there is no access. Thus the presence of the petitioners in Suit No.94 of 2017 is warranted.

18. From the aforesaid nature of interest in the subject matter of the

dispute, in Suit No. 94 of 2017, it becomes evidently clear that the

petitioners have rested their claims for impleadment on the following

counts :

Firstly, the action in question is initiated by the respondent no.11Municipal

Corporation at the instance of the petitioners. Secondly, the

petitioners have necessary material to lend support to the action of the

Municipal Corporation; which has been challenged by the plaintiffs in

Suit No. 94 of 2017. Thirdly, the petitioners would suffer serious

prejudice in the event the proposed action of the respondent No.11Municipal

Corporation is declared as bad in law and the unauthorized

constructions are not demolished and, consequently, the occupation

certificate is not granted to the petitioners.

19. The learned counsel for the petitioners also drew attention of the

Court to the fact that the petitioners have, in fact, instituted petitions in

this Court seeking writ against the Municipal Corporation to forthwith

clear all the encroachments on the road leading to the building and,

thereafter, grant the occupation certificate to the building constructed by

M/s. Rajeshwari Land Developer Private Limited. A specific attention

was invited to an order passed by this Court on 1st July 2017 in Writ

Petition (O.S.) No.2407 of 2016, whereby the Municipal Corporation

was directed to take all possible steps to remove all the encroachments,

after following due process of law.

20. In the circumstances, according to the learned counsel for the

petitioners, the presence of the petitioners is absolutely necessary for an

effectual and complete adjudication of Suit No. 94 of 2017.

21. I find it rather difficult to accede to the aforesaid submission. The

very nature of the suit instituted by the respondent Nos. 2 to 10, against

the Planning Authority, calling in question the notice under Section 354A

of the Act, indicates that the fate of the said suit would revolve

around the legality and validity of the said notice and the actions

proposed to be taken by the Planning Authority pursuant thereto.

Indisputably, the petitioners do not claim proprietary title over the land

on which the alleged unauthorized constructions have been erected. The

petitioners, thus, have no direct interest in the property which is the

subject matter of the dispute in Suit No. 94 of 2017. What the

petitioners claim is that non removal of those unauthorized

constructions would have consequences on their entitlement to get the occupation certificate for the building in question. This circumstance is of no consequence in determining the question as to whether the petitioners are the necessary parties to the said suit.

22. A useful reference in this context can be made to a judgment of

the Supreme Court in the case of Ramesh Hirachand Kundanmal Vs.

Municipal Corporation of Greater Bombay & Ors.2. In the said case,

the Municipal Corporation had issued a notice under Section 351 of the

Bombay Municipal Corporation Act to the appellant for demolition of

two chattels on the terrace on the ground that those were unauthorized

constructions. The appellant had challenged the validity of the said

notice. The respondent No.2 therein, being the original lessee, had

applied for being impleaded as a defendant in the suit on the ground

that it had material to show that the constructions were unauthorized.

The trial Court took a view that the lessee had right, title and interest in

the suit premises and, therefore, a necessary party. Before the Supreme

Court, it was urged on behalf of the respondents that though the

respondent No.2 was not a necessary party, yet, it was a proper party,

whose presence was necessary for a complete adjudication of the

controversy.

2 (1992) 2 Supreme Court Cases 524

23. In the backdrop of the aforesaid facts, pointing out the

extracted below :“

13 A clear distinction has been drawn between suits relating

to property and those in which the subjectmatter

of litigation is