Romi Garg vs Lalit Modi

Jayant Nath, J

OA 42/2019

This appeal is filed seeking to impugn the order dated 26.3.2019 of the learned Joint Registrar dismissing the application of the appellant M/s.BDR

Builders and Developers Pvt. Ltd. under Order 1 Rule 10 CPC.

The case of the appellant(applicant) is that the plaintiff herein has filed a suit for Specific Performance against the defendant seeking specific

performance of Agreement dated 14.7.2016 regarding Plot No. 32, Paschimi Marg, Vasant Vihar, New Delhi. It is stated that prior to this agreement

there was an earlier Agreement to Sell dated 9.7.2012 which has been modified on 14.7.2016.

The applicant also had entered into an Agreement to Sell dated 24.6.2014 with the defendant regarding the same property and had paid a sum of

Rs.34 crores to the defendant for purchase of the said property. Pursuant to the said agreement with the defendant on payments received by the

defendant, the said defendant on 10.2.2016 had executed registered GPA and Will in favour of the applicant. An Agreement to Sell was also

executed. Apart from the Agreement to Sell a public notice was also issued.

As disputes arose between the applicant and the defendant an Arbitrator was appointed. The learned Arbitrator has given an Award on 21.11.2016.

Defendants have filed objections to the Award which are pending adjudication in this court being OMP 7/2017. Plaintiff has also filed objections.

It is in this background that the present application being IA No.14533/2018 was filed by the applicant under Order 1 Rule 10 CPC for being

impleaded as a party. The learned Joint Registrar by the impugned order dismissed the aforenoted application. The impugned order relies upon the

judgment of the Supreme Court in Bharat Karsondas Thakkar vs. Kiran Construction Company & Ors., (2008) 13 SCC 65 8to hold that a person who

has independent right in the suit property by way of a separate decree who was not a party to the Agreement is neither a necessary nor a proper

party to a suit for specific performance.

I have heard learned counsel for the parties.

Learned counsel for the appellant has strongly contended that the suit between the parties is a collusive suit for the purpose of trying to avoid the

transaction which the appellant had with the defendant. He also relied upon judgments of the Supreme Court in the case of Sumtibai vs. Paras Finance

Co. Regd. Partnership Firm Beawer (Raj.), 2007 AIR (SC) 3166 and Baluram vs. P.Chellathangam & Ors., 2015 AIR (SC) 1264 to support his case.

Learned senior counsel appearing for the respondents has relied upon judgments of the Division Bench of this Court in Mehar Chand Sharma vs.

Manjeet Singh Kohli & Ors., 2015(223) DLT 449 and Bharat Karsondas Thakkar vs. Kirsan Construction Company & Ors.(supra).

I may first look at the judgments relied upon by learned counsel for the appellant. In the case of Sumtibai vs. Paras Finance Co. Regd. Partnership

Firm Beawer (Raj.)(supra) the Court was dealing with a case of legal representatives of the owner of the property against whom a suit for specific

performance for a contract of sale has been filed. The legal heirs on being impleaded sought to file additional written statement. In those facts the

Court held as follows:-

“14. In view of the aforesaid decisions we are of the opinion that Kasturi case [(2005) 6 SCC 733] is clearly distinguishable. In our opinion it

cannot be laid down as an absolute proposition that whenever a suit for specific performance is filed by A against B, a third party C can never be

impleaded in that suit. In our opinion, if C can show a fair semblance of title or interest he can certainly file an application for impleadment. To take a

contrary view would lead to multiplicity of proceedings because then C will have to wait until a decree is passed against B, and then file a suit for

cancellation of the decree on the ground that A had no title in the property in dispute. Clearly, such a view cannot be countenanced.â€​

In the above case the Supreme Court was dealing with a case where there was a dispute regarding the title of one of the parties to the Agreement to

Sell. The applicant here does not challenge the title of the party who has entered into the Agreement to Sell.

In Baluram vs. P.Chellathangam & Ors.(supra) the Supreme Court was dealing with a case in which the plaintiff had filed a suit for specific

performance of a agreement to Sell against the family welfare trust. The applicant therein filed an application for being impleaded as a defendant

pleading that he is a beneficiary of the Trust and that he will suffer prejudice being a beneficiary of a Trust in case sale is effected at a throw away

price. It was in those facts that the Supreme Court held as follows:-

“13. After due consideration of the rival submissions, we are of the view that the High Court erred in interfering with the order of the trial court

impleading the appellant as a party defendant. Admittedly, the appellant is a beneficiary of the Trust and under the provisions of the Trusts Act, the

trustee has to act reasonably in exercise of his right of alienation under the terms of the trust deed. The appellant cannot thus be treated as a stranger.

No doubt, it may be permissible for the appellant to file a separate suit, as suggested by Respondent 1, but the beneficiary could certainly be held to be

a proper party. There is no valid reason to decline his prayer to be impleaded as a party to avoid multiplicity of proceedings. Order 1 Rule 10(2) CPC

enables the court to add a necessary or proper party so as to “effectually and completely adjudicate upon and settle all the questions involved in the

suitâ€​.

The facts of the aforesaid cases are entirely different and do not help the case of the plaintiff. In the above case the beneficiary of the Trust who had

entered into an Agreement to Sell was apprehensive about the sale being effected to cause loss and damage to the Trust. The facts of the present

case are different inasmuch as the applicant claims to have entered into an Agreement to Sell prior to the Agreement to Sell allegedly in dispute in the

present suit. He also claims that the suit is a Collusive suit.

In Mehar Chand Sharma vs. Manjeet Singh Kohli & Ors (supra the Division Bench held as follows:-

“9. In a suit for specific performance of an Agreement, the Court has to adjudicate upon and settle all the questions involved between the parties to

the agreement or parties claiming any right or interest through or under the parties to the Agreement. The lis in a suit for the specific performance is a

lis arising out of a contract i.e. the subject Agreement. The questions to be settled by the Court are questions revolving around the Agreement. The

presence of a stranger to the Agreement would not, in any manner, facilitate or enable the Court in adjudicating upon and settling the questions

pertaining to the Agreement.

The parties that are neither signatory nor claiming any title through or under parties that are signatory to the Agreement would not assist the Court

in effectually and completely adjudicating upon or settling all the questions involved in the suit. On the other hand, impleadment of parties that are not

connected with the Agreement would lead to enlarging the scope of enquiry required to be conducted by the Court for the purposes of adjudicating

upon and settling the questions involved in the suit.

In this view of the matter, since the appellant is neither a signatory to the Agreement nor claiming any right, title or interest under/through any

person, who is signatory to the Agreement, the appellant is neither a necessary nor a proper party to enable with Court to effectually and completely

adjudicate upon and settle all questions in the suit.

The plaintiff is the dominus litis. It is for the plaintiff to choose against whom the plaintiff wishes to litigate. The plaintiff cannot be forced to litigate

against a party against whom he seeks no relief. If the plaintiff omits to sue or litigate against the party whose presence is necessary or in absence of

whom the decree cannot be executed, the plaintiff does so at its own risk and peril.â€​

Similarly, in Bharat Karsondas Thakkar vs. Kirsan Construction Company & Ors. (supra) the Supreme Court held as follows:-

“28. Along with that is the other question, which very often raises its head in suits for specific performance, that is, whether a stranger to an

agreement for sale can be added as a party in a suit for specific performance of an agreement for sale in view of Section 15 of the Specific Relief

Act, 1963. The relevant provision of Section 15 with which we are concerned is contained in clause (a) thereof and entitles any party to the contract

to seek specific performance of such contract. Admittedly, the appellant herein is a third party to the agreement and does not, therefore, fall within the

category of “parties to the agreementâ€. The appellant also does not come within the ambit of Section 19 of the said Act, which provides for relief

against parties and persons claiming under them by subsequent title. This aspect of the matter has been dealt with in detail in Kasturi case. While

holding that the scope of a suit for specific performance could not be enlarged to convert the same into a suit for title and possession, Their Lordships

observed that a third party or a stranger to the contract could not be added so as to convert a suit of one character into a suit of a different

character.â€​

Clearly, in the present case the appellant is not a signatory to the Agreement to Sell dated 14.7.2016 said to have been executed between the

plaintiff and the defendant. Permitting the applicant to become a party to the suit would change the nature of the suit. Presently the suit pertains to the

specific performance of the agreement to Sell executed between the parties. In case, the applicant was impleaded the nature of the suit would

completely change where the applicant would agitate his own rights.

Clearly, the applicant here is neither necessary nor proper party. To implead him here in the present suit would completely change the nature of

the suit. If for some reason the decree is passed in favour of the plaintiff and he is not able to execute the decree he does it at his own peril.

There is no merit in the present appeal. Same is dismissed.