Harbans Lal and Others vs Central Bank of India and Others

J.S. Sekhon, J.—This revision petition is directed under the provisions of Section 115 of the Civil P.C. against the order dt. 29-1-1988 of the trial Court dismissing the application of the petitioners for allowing permission to be impleaded as parties to the suit.

Briefly stated, the facts are that Shri N. C. Kundu sole proprietor of the firm M/s Bharat Rice Mills defendant 1 took some loan from the plaintiff-Bank against a simple mortgage of the land measuring 10 Kanals along with the building/construction existing thereon. The machinery of the Rice Sheller was also hypothecated. Defendant 1 failed to repay the loan which resulted in the filing of the suit by the Bank for the recovery of Rs. 607860-15 Paise by sale of the mortgaged land and hypothecated property. During the pendency of this suit, Harbans Lal, Vipin Kumar and Sohan Lal present petitioners filed an application under the provisions of Order 1 Rule 10 of the Civil P.C. for impleading them as party, contending that Shri N. C. Kundu, sole proprietor of the defendant-firm had agreed to transfer the right, title and interest in the above-referring concern to them after they had discharged the liability existing on the said concern in favour of the Central Bank of India, i.e. the plaintiff. This application was resisted by the plaintiff-Bank as well as by defendant 1. Defendant 1 also denied the execution or existence of agreement dt. 26th Sept. 1986 executed by him in favour of the applicants. The trial Court dismissed this application of the petitioners by holding that they are neither necessary parties nor their presence is essential for properly and completely adjudicating upon the controversy in issue.

During the pendency of this petition, the petitioners have also filed Civil Misc. No. 2225/C.I1/1988 for placing Annexures P1 to P7, copies of the alleged agreement etc. on the record, besides requesting through Civil Misc. No. 2227-CII/1988 for permission to place uncertified copies of these documents on the record. Notice of these applications was given to Shri S. C. Nagpal, learned counsel for the plaintiff-Bank. He had rightly not objected to the allowing of these applications as the same simply support the case of the petitioners set up in their application moved under the provisions of Order 1 Rule 10 of the Civil P.C. Accordingly, these applications are allowed.

On merits of the petition, Mr. R. K. Joshi, learned counsel for the petitioners, contended that the petitioners having undertaken to repay the loan to the Bank taken by defendant No. 1 vide agreement Annexure P-1, dt. 26th Sept. 1986, it cannot be said that the petitioners are not necessary parties to the suit and at least their presence is required for effectively and completely adjudicating the controversy in the present suit. He has also referred to annexure P-2 and Annexure P-3 showing the payments of Rs. 80,000/- and Rs. 20,000/- respectively to the Bank by Harbans Lal petitioner in the month of October, 1986, towards the instalment of the above referred loan. Annexure P-4 was also relied upon in order to prove that Shri N. C. Kundu had undertaken to transfer the licence of the Rice Sheller as well as electric connection to the petitioners after the payment of the loan to the Bank. The balance sheets, Annexures P5 and P-6 were also filed besides a copy of the Challan of payment of Income Tax as Annexure P-7. Reliance has also been placed on the observations made in AIR 1931 229 (Privy Council) . Punjab Co-operative Bank, Ltd., Lahore v. Lyallpur Bank Ltd. AIR 1934 Lah 328 , AIR 1941 16 (Federal Court) , Banarsi Dass Durga Prashad Vs. Panna Lal Ram Richhpal Oswal and Others, , Lakshmana Chetty Vs. M.S. Askar Ahmed and Another, , and Surjit Kaur and Others Vs. Chand Singh and Another, .

The learned counsel for the respondent-Bank, on the other hand, resisted this revision petition, contending that the same land is also under simple mortgage with the Bank against a loan advanced by it to M/s Northern India Flour Mill Ltd. through Shri N. C. Kundu, defendant No. 2 in the present case. He further supported the impugned order of the trial Court, contending that the petitioners were neither necessary party nor their presence was squired for effectively and completely adjudicating the controversy.

The provisions of Sub-rule (2) of Rule 10 of Order 1 of the Civil P.C. are clear enough to conclude that an addition of a party to a suit cannot be allowed unless such party is a necessary party or if the controversy in issue cannot be effectively and completely decided without impleading such party. It is also well settled law that the plaintiff is the dominus litis, i.e. master of the suit and he cannot be compelled to fight against a person against whom he does not wish to fight and against whom he does not claim any relief. Justice R. S. Sarkaria of this Court (as he then was) in Banarsi Dass Durga Prashad Vs. Panna Lal Ram Richhpal Oswal and Others, after elaborate discussion had supported the above referred view. In the case in hand, the plaintiff-Bank had not at all claimed any relief against the present petitioners. The petitioners cannot be said to be necessary party to the suit as they had simply entered into an agreement after the institution of the suit with the original debtor of the Bank to purchase the property in dispute which is admittedly under simple mortgage with the plaintiff-Bank. Simply because, in the agreement to sell, Annexure P-1, the petitioners had undertaken to repay the loan of the plaintiff-Bank or that the petitioners had paid Rs. 1,00,000/- vide Annexure P-2 and Annexure P-3 towards the said loan to the plaintiff-Bank or that the petitioners are running the concern of defendant 1 or that they had made improvements in the construction and installation of machinery on the premises of defendant 1, it cannot be said that the plaintiff-Bank is bound by the mutual arrangements between defendant 2 and the petitioners Thus, under these circumstances, it appears that the Bank had rightly opposed the impleading of the prospective vendees of the mortgaged property as defendants. Even it possibility of collusion between the plaintiff Bank and defendant 2 to defeat the interest of present petitioners in running the business of defendant 1 cannot be ruled out, but that in itself is not a good ground to allow the prospective vendees to be impleaded as a party to the suit. The prospective vendees are at liberty to pay the entire amount of loan to the Bank if they intend to do so as contended by their counsel at the bar as well as in the Grounds of Revision. It appears that the plaintiff-Bank had rightly opposed the application of the prospective vendees to be impleaded as a party in the suit for recovery of the above referred amount by sale of the mortgaged land as this very property is under mortgage for securing another loan taken by defendant 2 on behalf of the Northern India Flour Mills.

The observations of the Privy Council in AIR 1931 229 (Privy Council) relied upon by the learned counsel for the petitioners are of no help to their case as in that case the request for joining some necessary parties made at a late stage of the proceedings was disallowed on the ground that it would necessitate a commencement of the proceedings de novo.

The controversy before the Lahore High Court in Punjab Co-operative Bank''s case AIR 1934 Lah 328 (supra) was whether the Bank under liquidation being a proper party should be allowed to join as a defendant in a suit based on a pronote in favour of the liquidator-Bank but endorsed in favour of another. The suit was filed by the endorsee against the original debtor, Under these circumstances, it was held that the Bank in liquidation is a proper party, even though no relief could be granted against the Bank under liquidation. Thus, it has no application to the facts of the present case.

In United Province''s case (supra) before the Federal Court the controversy related to the impleading of Advocate General of the Province as a party in a suit involving the validity of a statute reflecting upon the executive competency of the Provincial Government. It was held under these circumstances that the controversy in the suit cannot be effectively and completely decided without impleading the State through Advocate General as a party. Thus, the above referred observations are of no help to the petitioners as the same are not applicable to the facts of the present case.

The view taken by the Madras High Court in Lakshmana Chetty Vs. M.S. Askar Ahmed and Another, that in a suit on the basis of the promissory note by assignee-assignor-original payee is a proper party, is of no help to the petitioners in the present case.

The findings of this Court in Surjit Kaur and Others Vs. Chand Singh and Another, relied upon by the petitioners, are also not attracted to the facts of the case in hand, as on facts it was found that the party sought to be impleaded had a direct interest as distinguished from the commercial interest, in the subject-matter of the litigation, in that case Daulat Singh had set up a case to the disputed property of Chand Singh defendant, on the ground that the latter had gifted away the property to him, besides adopting him as a son. Under these circumstances, it was held that in a suit for declaration filed by the plaintiff regarding the ownership of the disputed property belonging to Chand Singh, wherein the latter had admitted the claim of the plaintiff, the adopted son of the latter was a necessary party. Reliance in that case was placed on the findings of the Supreme Court in Razia Begum Vs. Sahebzadi Anwar Begum and Others, , wherein, in turn, it was held that in a dispute relating to the property, the party sought to be impleaded should have direct interest in the subject-matter of the litigation and not only a commercial interest. In the instant case also, the prospective vendees had a commercial interest in the subjectmatter of the litigation only and not a direct interest because there are so many hurdles to be crossed before they would be able to purchase the property and become owners thereof.

For the foregoing reasons, it cannot be said that the trial Court had wrongly dismissed the application of the petitioners for being impleaded as a party. Consequently, this petition fails and is hereby dismissed but the parties are left to bear their own costs.