Tea Co. Pvt.Ltd. Vs. Kumkum Mittal  INSC 489 (16 November 1993)
AGRAWAL, S.C. (J) AGRAWAL, S.C. (J) KULDIP SINGH (J) CITATION:
1994 SCC (1) 402 JT 1993 Supl. 589 1993 SCALE (4)480
Judgment of the Court was delivered by S.C. AGRAWAL, J.- Leave granted.
This appeal raises the question whether Terai Tea Company Pvt. Ltd., respondent
11 herein, is entitled to be impleaded as a party (defendant) in E.O. Suit No.
1 of 1985 pending in the Calcutta High Court.
subject-matter of the dispute between the parties is Dharanipur Tea Estate
situate in District Jalpaiguri in West Bengal. One Dhirendra Nath Bhowmick (deceased) had obtained the lease of the
land of the said tea estate from the Government of West Bengal. The said lease
was for a term of thirty years commencing from October 27, 1964. The New Red Bank Tea Co. Pvt. Ltd., appellant 1 owns the
Red Bank Tea Estate and Surendra Nagar Tea Co. Pvt. Ltd., appellant 2 herein,
owns the Surendra Nagar Tea Estate.
Nath Bhowmick and his wife, Smt Reba Bhowmick, respondent 3 herein, were having
controlling block of shares in both these companies.
the Judgment and Order- dated September 22, 1993 of the Division Bench, Calcutta in A.
No. Nil of 1993 403
4. On March 16, 1977, Dhirendra Nath Bhowmick granted a
sub-lease for the Dharanipur Tea Estate in favour of appellant 1. By virtue of
his control over appellants 1 and 2, Dhirendra Nath Bhowmick was the Managing
Director of the said two companies and the three tea gardens were under his
management. On May 14,
1981, Dhirendra Nath Bhowmick
and respondent 3 sold their controlling shares in appellants 1 and 2 to Robin
Paul, appellant 3, and his group for valuable consideration and the charge of
the three tea estates was handed over to appellant 3 and his group. In May
1984, Dhirendra Nath Bhowmick and respondent No. 3 filed a suit (Title Suit No.
8 of 1984) against the appellants as well as respondents 4 to 10 and 12 in the
court of Assistant District Judge, Jalpaiguri seeking for a declaration that
the transfer of controlling interest of shares in appellants 1 and 2 are not
valid and prayed for a declaration that Dhirendra Nath Bhowmick had all the
legal and equitable rights, title and interest in respect of the Dharanipur Tea
Estate and for restoration of possession. The said suit was subsequently
transferred to the High Court on November 27, 1984 under Clause 13 of the Letters
Patent and it was renumbered as Extraordinary Suit No. 1 of 1985.
While the said suit was pending, respondent 11 filed a suit (Suit No. 240 of
1990) in the High Court for specific performance of an agreement dated January
15, 1990 said to be executed by Dhirendra Nath Bhowmick and M/s Dharanipur Tea
Industries Pvt. Ltd., respondent 7 herein, in favour of respondent 11 for the
sale of the Dharanipur Tea Estate. In the said suit respondent 11 filed
applications for injunction as well as for appointment of receiver which were
dismissed by the learned Single Judge of the High Court by order dated April 1, 1991. Respondent 11 filed appeals
against the said order of the learned Single Judge and the said appeals were
disposed of by a Division Bench of the High Court by a consent order dated
August 2, 1991 wherein it was recorded that the respondents (defendants in Suit
No. 240 of 1990) had agreed to execute the Deed of Conveyance in favour of
plaintiff appellants (respondent 11 herein). By the said order a receiver was
appointed over the Dharanipur Tea Estate who was empowered to take possession
of Dharanipur Tea Estate and allow respondent 11 to run the said tea estate
until the Deed of Conveyance was executed and the Registering Authority was
directed to register the Deed of Conveyance without insisting upon production
of "no objection certificate" under Section 269-UC and a certificate
under Section 230-A(1) of the Income Tax Act, 1961 and the police authorities
and other appropriate administrative authorities were directed to afford all
facilities, cooperation and help for the purpose of carrying out of the said
order. On the basis of the said order the Receiver on August 3, 1991 obtained
symbolic possession of the Dharanipur Tea Estate and posted Mr Rungta as the authorised
representative for respondent 11 to run, manage and look after the affairs of
the said tea estate and the appellants were dispossessed from the said tea
gardens The said order of the High Court dated August 2, 1991 was set aside by
this Court by order dated September 9, 1991 in C.A.
3569 of 1991, New Red Bank Pvt. Ltd. v. Tarai Tea 404 Company Pvt. Ltd. on the
view that Extraordinary Suit No. 1 of 1985 as well as Suit No. 240 of 1990
ought to have been tried together and the suit for specific performance filed
by respondent 11 could not have been decreed by consent without determining the
legal title to and factum of possession of the suit property and that the title
and possession could not have been decided without impleading appellant 1 as a
party to the suit. This Court, while setting aside the decree for specific performance
as well as the order appointing the Receiver, directed the Receiver to deliver
back the possession of the property to appellant 1.
the setting aside the decree for specific performance, the sale deed that had
been executed and registered stood automatically cancelled. Thereafter
appellant 1 was impleaded as a defendant in Suit No. 240 of 1990 by order dated
November 18, 1992.
Nath Bhowmick died on March
15, 1992 and his legal
representatives have been brought on record in both the suits.
behalf of respondent II an oral prayer was made before the learned Single Judge
for being impleaded as a defendant in Extraordinary Suit No. 1 of 1985. The
said oral prayer was rejected by the learned Single Judge by order dated March 22, 1993 on the view that it would be proper
if a formal application was filed giving opportunity to all the parties to put
forward their objections in specific terms. Thereafter respondent 11 filed a
written application on April
1, 1993 for being
added as a defendant in Extraordinary Suit No. 1 of 1985. The said application
of respondent 11 was opposed by the defendants in the said suit but the
plaintiffs had no objection to the said application being allowed. The
application was rejected by the learned Single Judge by order dated July 5, 1993. The learned Single Judge was of
perusal of the materials on record and on appreciation of the point of law, and
the ratio of the reported decisions cited from the Bar, this Court finds that
M/s Terai Tea Co.
Ltd. has already filed an independent title suit and disclosed all its claims
in its plaint. While the said suit is being heard along with Extraordinary Suit
No. 1 of 1985, and when there is no conflict of interest between the plaintiff
in Extraordinary Suit No. 1 of 1985 and the plaintiff in Suit No. 240 of 1990
and where Terai Tea Co. Pvt. Ltd.
for success only when the plaintiff in Extraordinary Suit No. 1 of 1985 will
succeed, there is no scope for impleading Terai Tea Co.
Ltd. as a defendant again in Extraordinary Suit No. 1 of 1985. While both the
suits would be heard analogously and/or together, Terai Tea Co. Pvt. Ltd. is
entitled to take effective steps so far as its own suit is concerned and in
Extraordinary Suit No. 1 of 1985 it cannot claim to be added as a party to help
and/or assist the plaintiff in any manner whatsoever. Mr Gupta appearing for
the defendant has tried to impress upon this Court that several complications
will arise if Terai Tea Co. Pvt. Ltd. is added as party- defendant, and at the
time of trial it can lead evidence to the prejudice of the interest of other
defendants. Apart from any technical difficulty, this Court is of the view that
the presence of Terai Tea Co. Pvt. Ltd. is not 405 necessary for effectual and
complete adjudication of the matter in dispute."
Feeling aggrieved by the said order of the learned Single Judge, respondent II
filed an appeal which was allowed by the Division Bench of the High Court by
judgment dated September 22, 1993 on the view that the learned Single Judge was
not right in holding that the presence of respondent 11 was not necessary for
effectual and complete adjudication of the matter in dispute. According to the
learned Judges the addition of respondent 11 is necessary to avoid the
possibility of a multiplicity of the judicial proceedings and that if
respondent 11 is kept out of the suit and ultimately the same is dismissed,
such outcome will not bind them and they will nonetheless have to challenge the
decree passed in such suit by way of a separate proceeding only to continue the
suit for specific performance. The present appeal is directed against the said
judgment of the Division Bench of the High Court.
application for being impleaded as a defendant was moved by respondent 11 under
Order 1, Rule 10(2) CPC which provides as under:
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 as 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
The said provision empowers the court to implead as a party to a suit a person
(i) who ought to have been joined, whether as plaintiff or defendant; or (ii)
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. It is not the case of respondent 11 that they ought to have
been joined as a defendant in E.O. Suit No. 1 of 1985. Their application has
been allowed by the Division Bench of the High Court on the ground that
presence of respondent 11 is necessary for effectual and complete adjudication
of the matter in dispute. We find it difficult to agree with this view of the
the leading English case of Moser v. Marsden', Lindly L.J. has held that a
party who is not directly interested in the issues between the plaintiff and
the defendant but is only indirectly or commercially affected cannot be added
as a defendant because the court has no jurisdiction under the relevant rule to
bring him on record even as a proper party. The position is no different under
the Indian law. As laid down by this Court, "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
subject-matter of the litigation". [See: Razia Begum v. Sahebzadi Anwar 1
(1892) 1 Ch 487: 66 LT 570 406 Begum2.] In Ramesh Hirachand Kundanmal v.
Municipal Corpn. of Greater Bombay3 this Court has held: (SCC p. 53 1, para
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.
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."
the instant case respondent 11, admittedly, have no legal interest in the
subject-matter of the dispute in E.O. Suit No. 1 of 1985. All that they are
claiming is specific performance of the agreement for sale of Dharanipur Tea
Estate said to have been executed by Dhirendra Nath Bhowmick and respondent 7
on January 15, 1990. The said agreement was executed
long after the institution of E.O. Suit No. 1 of 1985. Moreover, the reliefs
claimed by the plaintiffs in E.O. Suit No. 1 of 1985 relate to the validity of
the agreement dated May
14, 1981 whereby the
plaintiffs in that suit had transferred their controlling shares in appellants
1 and 2 in favour of appellant 3 and his group. In the said suit, the
possession of Dharanipur Tea Estate is claimed only on the basis of control
over appellant 1 which is a sub-lessee of the said tea estate. On the other
hand Suit No. 240 of 1990 filed by respondent 11 relates to specific
performance of the agreement relating to the sale by Dhirendra Nath Bhowmick
and respondent 7 of Dharanipur Tea Estate. Respondent 11 cannot be said to be
directly interested in the matter of validity of agreement executed by Dhirendra
Nath Bhowmick and respondent 3 on May 14, 1981.
are, therefore, unable to hold that the presence of respondent 11 is necessary
for effectual and complete adjudication of the matter in E.O. Suit No. 1 of
1985. The presence of respondent 11 in those proceedings, on the other hand,
might cause prejudice to the rights of the appellants in the said suit.
Moreover, both the suits are being tried together in accordance with the
directions given by this Court by its order dated September 9, 1991.
For the reason aforesaid, the appeal is allowed, the judgment dated September
22, 1993 passed by the Division Bench of the Calcutta High Court in Appeal
directed against the order dated July 5, 1993 in E.O. Suit No. 1 of 1985 is set
aside and the order dated July 5, 1993 passed by the learned Single Judge
dismissing the application filed by respondent 11. Is restored. There is no
order as to costs.