R. Ganesan and Others vs State Bank of India and Others

Raju, J.—The above revision has been filed against the order of the learned Principal Subordinate Judge at Pondicherry, dated 2.2.1994 in

I.A. No. 1419 of 1993 in O.S. No. 13 of 1992, whereunder the court below has ordered the impleading of the petitioners herein as party

defendants 4 to 6 to the suit by allowing an application filed by the 1st respondent-plaintiff under Order 1, Rule 10(2) read with Section 151 of the

Code of Civil Procedure. From the typed set of papers filed it is seen that the suit O.S. No. 13 of 1992 has been filed by the plaintiff-Bank on the

equitable mortgage for realisation of the amount by passing a preliminary decree and also for the sale of hypothecation in case the amount as per

the preliminary decree is not paid. The plaint averments discloses that though the loanees were accorded loan facilities on personal guarantees

initially and on letters of pledge, it is only on 16.2.1990 the plaintiff-Bank obtained from defendants 2 and 3 a mortgage by deposit of their title

deeds as security for the loan availed by the firm in terms of Section 58(F) of the Transfer of Property Act as extended to the Union Territory of

Pondicherry. As a matter of fact, in paragraph 7 of the plaint, while disclosing the details relating to the mortgage, it is clearly stated that the date of

mortgage in 16.2.1990.

While matter stood thus, the plaintiff-Bank has filed I.A. No. 1419 of 1993 for impleading the petitioners also as defendants to the suit on the

ground that they have purchased portions of encumbered properties and that they are not bonafide purchasers for value without notice of the

mortgage in favour of the Bank as the Original title deeds were with the Bank. The applications was opposed by the petitioners herein. After

enquiry, the court below by the order under challenge ordered the same by allowing the claim of the plaintiff-Bank and directed the impleading of

the petitioners as defendants in the suit. Hence the above revision.

Mr. G. Rajan, learned Counsel for the petitioners contended that the order of the court below is contrary to law, that the petitioners are neither

proper or necessary parties to the suit and that for adjudicating upon and to settle all the questions involved in the suit, the presence of the

proposed parties are not at all necessary or warranted. The petitioners have purchased portions of the property from defendants 2 and 3 in the

year 1982 under registered sale deeds long prior to the equitable mortgage created in the year 1990, in enforcement of which alone the suit came

to be filed.

The learned Counsel appearing for the plaintiff-first respondent would contend that the language of Order 1, Rule 10(2), C.P.C. is wide enough

to enable the court to implead parties of the nature to meet the requirements and ends of justice and no exception could be taken to the order

passed by the court below. The further submission of the learned Counsel for the first respondent-bank is that though the mortgage was

subsequent to the purchase by the petitioners, defendants 2 and 3, who are the debtors had credit dealings even prior to the execution of the

mortgage with the plaintiff-Bank and the alienation made in favour of the petitioners by defendants 2 and 3 would be hit by the provisions

contained in Section 53 of the Transfer of Property Act and that, therefore, they would be necessary and proper parties to the suit.

I have carefully considered the submissions of the learned Counsel appearing on either side. I am unable to persuade myself to agree with the

submission of the learned Counsel for the first respondent-Bank. In a suit for recovery of money in enforcement of an equitable mortgage it is only

those who are parties to the mortgage or any one claiming to be the representatives in interest of the mortgagor or a person, who has acquired any

interest subsequent to the creation of the mortgage can be said to be necessary, proper and relevant parties. The provisions of Sub-rule (2) of Rule

10 of Order 1, C.P.C. enable the court at any stage of the proceedings either without or with an application, order the name of any party

improperly joined to be struck out and the name of any person who ought to have been joined'''' or whose presence before the court'''' may be

necessary in order to enable the court to effectively and completely adjudicate upon and settle the questions involved in the suit'''' be added as

parties to the proceedings. It is by now well settled that the phraseology"" who ought to have been joined"" are those, who are normally called

necessary parties and that such persons must be necessary to the continuation of the suit in the absence of whose presence there cannot be an

effective decree at all. The phraseology whose presence before the court may be necessary in order to effectively and completely adjudicate upon

and settle the questions involved in the suit has relevance to what are usually known as proper parties, who may be interested in the result of the

suit and that such interest must be an interest which the law recognises. The said provisions contained in Order 1, Rule 10, C.P.C. would not

enable the court to implead any and everybody at its sweet will or at the pleasure and request of a party moving for the same irrespective of his

relevance and even though he is neither directly nor necessarily connected with the issues involved in the suit. No doubt, the ultimate object also of

the court is to ensure that needless multiplicity of suits must be avoided and the interest of the parties already on record must be sufficiently

protected.

As pointed out supra, in a suit based on a mortgage indisputably executed only on 6.2.1990 the presence of any alienees prior to the date of

such mortgage as in this case persons who have acquired interests in portions of the property which came to be mortgaged only subsequently and

long thereafter cannot be said to be either indirectly or even remotely concerned in the issues involved or relief sought for in the proceedings. The

fact that the plaintiff is entitled to avoid a sale by invoking Section 53 of the Transfer of Property Act is no ground or justification to implead such

parties, who have acquired interest in portions of the property long prior to the creation of the mortgage as parties to the mortgage suit. If the Bank

wants to avoid the sale by invoking Section 53 of the Transfer of Property Act it should be otherwise in separate and distinct proceedings and the

provisions enabling impleading of proper and necessary parties cannot be availed of to make orders, which will lead to misjoinder of causes and

likely to prejudice a fair trial and the property rights of parties, who are not concerned with the mortgage suit or claim, which is only the subject

matter of adjudication in the suit filed on a mortgage. As noticed earlier, there is no controversy over the position that the petitioners have not

acquired any interest in the property mortgaged on and after the date of the mortgage. Consequently, I am of the view that the petitioners must be

considered as total strangers to the suit on mortgage and are neither proper nor necessary parties. The court below, in my view, has committed a

grave error of jurisdiction and committed a gross and patent error of law in allowing the application for impleading the petitioners as party

defendants to the mortgage suit. The order of the court below is therefore set aside. The revision shall stand allowed as prayed for. The order

made herein shall not preclude the parties from working out their rights, if any, otherwise in accordance with law. No costs.