Nitya Associates and Others vs Hasmukhbhai Ramjibhai Shah and Others

Honourable Mr. Justice Mohinder Pal

The petitioner Nitya Associates through its partner Harsukhbhai Patel has filed the present petition under Article 227 of the Constitution of India with a prayer of quashing the judgment and order dated 17.1.2007 passed by learned 7th Additional Senior Civil Judge, Vadodara on an application in Special Civil Suit No.402 of 1998. It has been submitted that learned Judge, in his order on the application, has specifically held that the matter of temporary injunction has become infructuous by the conduct of the parties as during the pendency of the suit and when interim injunction regarding sale of the property was in operation, despite that registered sale deed has been executed in favour of the new purchaser i.e. present petitioner. Learned Judge has also held that the question does not arise for discharging, variation or setting aside the order of temporary injunction when existence of that order is already infructuous. It is the grievance of the petitioner that despite the matter having rendered infructuous, learned Judge directed that subject to paragraphs 37 and 48, the original plaintiffs (respondent Nos.1 to 3 in this writ petition) have been directed to join the present petitioner i.e. Nitya Associates as defendant No.4 in the suit.

As per the facts of this case, Hasmukhbhai Ramjibhai Shah - respondent No.1, Naresh P.Patel - respondent No.2 and Mr.Sharadchandra Sudhakar Patel - respondent No.3 filed Special Civil Suit No.402 of 1998 against Jayantibhai Chunibhai Patel - respondent No.4, Toshak Manubhai Patel - respondent No.5 and Manadakini Manubhai Patel - respondent No.6 before learned Civil Judge (Senior Division), Vadodara for specific performance of the agreement to sell executed by respondent Nos.4 to 6 in favour of respondent Nos.1 to 3 wherein the prayer for interim injunction against disposal of the property in question was also made. During the pendency of the proceedings, Nitya Associates i.e. petitioner herein entered into the agreement with the original plaintiffs and defendants i.e. all the respondents in the present petition for purchase of the suit property and it was also agreed by way of one time settlement, a sum of Rs.85 lacs will be paid to respondent Nos.1 to 3 and vacant possession of the suit property shall be handed over to the petitioner by way of registered sale deed to be executed by respondent Nos.4 to 6 i.e. original defendants.

After execution of the sale deed and the petitioner having been put into possession of the property in question, original defendant No.1 filed the application under Order XXXIX Rule 4 read with Sections 154 and 94 of the Code of Civil Procedure, 1908 (hereinafter referred as "the CPC") with a prayer that ad-interim ex parte order of injunction as granted by the court below which was being extended from time to time may be vacated or set aside in view of changed circumstances. In that application, it was further averred that the parties have arrived at one time settlement and the petitioner has also paid Rs.85 lacs and, therefore, the suit has become infructuous due to the circumstances and as such, the suit be disposed of and ad-interim injunction operating regarding further sale of the property be vacated.

Learned trial Court vide order dated 17.1.2007 observed that in view of the change in circumstances, the order of temporary injunction has become infructuous in view of the conduct of the parties. It was further held that the question does not arise for discharging, variation or setting aside the order of temporary injunction when the existence of that order is already got infructuous. However, learned Judge also held that in view of the observations made in paragraphs 37 and 48, the plaintiff is directed to join M/s Nitya Associates as party defendant No.4 in the suit and necessary amendment be carried out accordingly. Aggrieved from this order passed by learned trial Court, M/s Nitya Associates - the petitioner herein has filed the present writ petition.

Learned counsel Mr.S.M.Shah for the petitioner has submitted that once learned trial Court has come to the conclusion that the suit has become infructuous in view of changed circumstances, there was no need to join the present petitioner as defendant No.4 in the suit proceedings and ordered to drag him in unnecessary litigation which has become infructuous in view of the agreement and payment of Rs.85 lacs which has been paid to the original plaintiff by way of Pay Order and with their consent. It is further submitted that if the petitioner is allowed to be joined as necessary party being subsequent purchaser, they will not be able to prove their case being bona fide purchaser and the circumstances under which the huge payment of Rs.85 lacs has been made to respondent Nos.1 to 3. It has been submitted that all these things cannot be decided in a suit which is pending between the original plaintiffs and the defendants as the dispute regarding specific performance of the contract was between the vendor and the plaintiffs and directed subsequent transferee to join in the conveyance so as to pass on the title which resides in him to the plaintiffs; all is required to do is to pass on his title to the plaintiffs which will not entitle him to explain the circumstances and prove the agreement reached between the parties at the time of making the payment to respondent Nos.1 to 3.

On the other-hand, learned Senior Counsel Mr.Mihir Thakor while arguing on behalf of respondent Nos.1 to 3 has submitted that the present petitioner being subsequent purchaser was necessary party in the suit and there was nothing wrong with the impugned order while directing the plaintiff to implead the present petitioner as party. It has been submitted that in view of section 19(b) of the Specific Relief Act, 1963, subsequent purchaser was necessary party and in view of Order I, Rule 10(2) of the CPC, the Court was within its power to direct the original plaintiff to implead subsequent purchaser as necessary party even though no application in this regard was made by any of the plaintiffs.

I have heard learned counsel for the parties and also gone through the file.

The main grievance of the petitioner is that though learned trial Court has recognized, noted and written in the impugned order that the interim order granting temporary injunction has become infructuous by conduct of the parties to the suit, but has further directed to join the present petitioner as party to the suit; thus, unnecessarily dragged the petitioner into the litigation. It has been further his case that the present petitioner will not get an opportunity to prove its case regarding compromise having been reached between the parties and the circumstances under which the payment of Rs.85 lacs has been made.

Section19(b) of the Specific Relief Act, 1963 reads as under.

19 (b) any other person claiming under him by a title arising subsequently to the contract, except a transferee for value who has paid his money in good faith and without notice of the original contract.

A bare perusal of the above section leaves no doubt that subsequent purchaser is necessary party and he can be impleaded as party.

Mr.Thakor, learned counsel has relied upon the judgment of the Apex Court in the case of Sumtibhai and Others Vs Paras Finance Co.Rg.Partnership Firm Beawer (Raj) Through Mankanwar W/o Parasmal Chordia (Dead) and Others, reported in 2007(3) GLH 644. Paragraph 9 of this judgment reads as under.

Learned counsel for the respondent relied on a three Judge Bench decision of this Court in Kasturi V.Iyyamperumal and others. He has submitted that in this case it has been held that in a suit for specific performance of a contract for sale of property a stranger or a third party to the contract cannot be added as defendant in the suit. In our opinion, the aforesaid decision is clearly distinguishable. In our opinion, the aforesaid decision can only be understood to mean that a third party cannot be impleaded in a suit for specific performance if he has no semblance of title in the property in dispute. Obviously, a busybody or interloper with no semblance of title cannot be impleaded in such a suit. That would unnecessarily protract or obstruct the proceedings in the suit. However, the aforesaid decision will have no application where a third party shows some semblance of title or interest in the property in dispute. In the present case, the registered sale deed dated 12.8.1960 by which the property was purchased shows that the shop in dispute was sold in favour of not only Kapoor Chand but also his sons. Thus prima facie it appears that the purchaser of the property in dispute was not only Kapoor Chand but also his sons. Hence, it cannot be said that the sons of Kapoor Chand have no semblance of title and are mere busybodies or interlopers.

So, even as per this judgment, in a case where the third party shows some semblance of title or interest in the property in dispute, he is necessary party. Coming to the case in hand, the subsequent purchaser is not simply the purchaser of the property, but he has entered into an agreement with all the respondents and has made payment of Rs.85 lacs through Pay Order which has been deposited in the account of the present petitioner with their bank.

Learned counsel for the petitioner raised another argument regarding the power of the Court on its own to direct the subsequent purchaser to be impleaded as party in the suit. Order I, Rule 10(2) of the CPC reads as under.

Order I, Rule 10(2): Court may strike out or add parties.- 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 added.

So, bare reading of this section leaves no doubt that the Court was within its jurisdiction to direct the original plaintiff to join subsequent purchaser as necessary party in the suit. The main contention of the petitioner that he cannot be given proper opportunity to explain the circumstances under which he has entered into the agreement and for that purpose, the original plaintiff or defendant should have filed the separate suit. During the course of arguments, it is brought to the notice of this Court that respondent Nos.1 and 2 have also filed separate suit being Special Civil Suit No.101 of 2008 in the court of learned Civil Judge (Senior Division), Vadodara. So, viewing from every angle, the present petition is devoid of any merit and is bound to fail. However, in the facts and circumstances of the case, both the suits, being Special Civil Suit No.402 of 1998 and Special Civil Suit No.101 of 2008 pending before the court of learned Civil Judge (Senior Division) Vadodara, be heard and decided together by the same Court in order to avoid any multiplicity of the proceedings and in the interest of justice. The petition is dismissed. Rule is discharged. Ad-interim relief granted earlier stands vacated forthwith. There shall be no order as to costs.