Vinod Trivedi vs Prem Grover and Another

S. Muralidhar, J.

C.M. No. 7275 of 2008

Exemption allowed subject to all just exceptions.

The application is disposed of.

FAO (OS) No. 231 Of 2008 & C.M. No. 7274 of 2008 (stay)

This appeal is directed against the impugned order dated 14th March 2008 passed by the learned Single Judge dismissing an application being IA No. 12291 of 2006 filed by the Appellant seeking impleadment in CS (OS) No. 1875 of 2006.

The brief facts leading to the filing of this appeal are that the appellant Vinod Trivedi and the defendant in CS (OS) No. 1875 of 2006, Mukul Trivedi (Respondent No. 2 herein), are brothers. Their father late U.S. Trivedi died on 11th February 1973 and bequeathed a dwelling house at 91, Jor Bagh, New Delhi (''the property'') in their favour in equal shares. According to the appellant the property stood mutated in both their names as conveyed by a letter dated 28th December 1987. The appellant states he is in exclusive possession of the ground floor and a servant''s quarter at first floor and in joint possession of the barsati floor. The appellant claims to be emotionally attached to the property and does not propose to part with it.

In 1999 Mukul Trivedi filed a suit for partition against the appellant Vinod Trivedi in this Court. A status quo order was passed in the said suit by this Court in the year 2000. The suit is stated to be pending.

It is not in dispute that Respondent No. 2 Mukul Trivedi entered into an agreement with Prem Grover (Respondent No. 1 herein) agreeing to sell to the latter his share in the property for a consideration of Rs. 5.5 crores. Seeking specific performance of the said agreement, Prem Grover filed a suit CS (OS) No. 1875 of 2006 in this Court. By an order dated 30th October 2006, while directing notice to issue in the suit, a learned Single Judge of this Court passed the following order in the application filed by the plaintiff seeking an ad interim injunction:

CS (OS) 1875/2006

Issue summons to the defendant on filing of PF and RC and also through one of the approved courier returnable on 27/11/2006.

I.A. No. 11055/200

Notice to the defendant for the date fixed on filing of process fee and registered cover also through one of the approved courier.

It is stated in the application that the defendant entered in to an agreement to sell with the plaintiff in respect of the property No. 91 Jor Bagh New Delhi for a total consideration of Rs. 5.5 crores out of which the plaintiff has already has paid to the defendant a sum of Rs. 2.05 on various dates and the balance was supposed to be filed at the time of handing over of the possession of the suit property originally on or before 30th June 2006 which was later on charged to 31 July 2006, then 31/8/2006 and lastly on 25th September 2006. According to the plaintiff he has all along been ready and willing to pay balance consideration of Rs. 3.45 Crores on or before 25th September 2006 but the defendant is refusing to hand over vacant physical possession of the suit property and resiling from the agreement.

In view of the above averment made in the suit and application I am of the view that plaintiff has made out a prima facie for an exparte ad interim injunction. I therefore restrain the defendant from parting with possession or in any way creating any third party interest in the suit property....

On coming to know of the above developments, the appellant on 1 November 2006 filed IA No. 12291 of 2006 in the said Suit under Order 1 Rule 10 CPC seeking impleadment. It was contended that the property was yet to be divided and if the specific performance of the agreement between the Respondents 1 and 2 herein was ordered, severe prejudice would be caused to the appellant. It was submitted that the appellant was a necessary and proper party and the said suit was accordingly bad for non-joinder of the necessary parties. It was claimed that the appellant was a co-lessee/co-owner of "each and every part of the dwelling house along with the defendant Mukul Trivedi and therefore the agreement entered into between the plaintiff Prem Grover and the defendant Mukul Trivedi was void and could not be acted upon."

The said application was resisted by Prem Grover on the ground that there was a collusion between the two brothers in order to defeat the agreement. It was contended that the appellant herein was neither a necessary nor a proper party since the agreement in question was entered into only between the plaintiff Prem Grover and defendant Mukul Trivedi. The defendant Mukul Trivedi had thereby agreed to transfer all his right, title and interest in the suit property to the plaintiff. The appellant was not a party to the agreement. Since what was sought to be sold was only the one-half of the undivided share of Mukul Trivedi in the property, the appellant had no locus standi to be impleaded in the suit.

The learned Single Judge passed the following impugned order dated 14th March 2008 dismissing the application:

IA No. 12291/06

This is an application for impleadment in the suit. The applicant claims to be the co-owner of the joint family and states that the suit should not be proceeded in his absence. Counsel relied upon the judgment of the Supreme Court in Shanmughasundaram and Others Vs. Diravia Nadar (Dead) by Lrs. and Another, for the proposition that in the absence of necessary parties the sale of such undivided shares cannot and specifically enforced in a suit.

A plain reading of para 29 of the said judgment shows that the court was of the opinion that sale of entire property in the absence of co-owners could not have been proceeded with. However, the court significantly noticed that the co-owners who had executed the agreement were competent to execute only to the extent of their undivided share.

In the present case, the plaintiff is seeking a decree for specific performance of the contract with the defendant No. 1 whereby the latter''s one half undivided share is sought to be conveyed. On a proper application of the ratio in the above judgment and Section 44 of the Transfer of Property Act this Court is of the opinion that the applicant is not a necessary party. In the event of any relief being granted to the plaintiff, he would necessarily have to seek recourse to another partition suit to seek possession of a specific share in the property. The application is accordingly dismissed.

Shri V.K. Misra, Learned Counsel for the appellant contends that the suit was not merely one for specific performance but also for delivery of possession of the premises. Since the appellant herein was in exclusive possession of the servant''s quarter in the first floor and in joint possession of the barsati floor, if the suit was decreed as prayed for he would be severely prejudiced. Relying on the judgments in Kasturi Vs. Iyyamperumal and Others, Anil Kumar Singh Vs. Shivnath Mishra alias Gadasa Guru, and the judgment of learned Single Judge of this Court in S.S. Bakshi through its Karta K.S. Bakshi Vs. P.M. Mathrani, , the Learned Counsel for the appellant contends that the impugned order is erroneous and ought to be set aside by this Court.

On the other hand, Mr. Sandeep Sethi, learned Senior Counsel appearing for Respondent No. 1 points out that the prayer in the suit is essentially for a decree for specific performance. There is no prayer for possession. However, a prayer has been made for mesne profits to compensate the plaintiff for not being put in possession of the suit property. Relying on the judgments in Shanmughasundaram and Others Vs. Diravia Nadar (Dead) by Lrs. and Another, Bharat Karsondas Thakkar v. Kiran Construction Company 2008 VIII AD (SC) 129 and a judgment dated 4th October 2007 of the Supreme Court in Civil Appeal No. 117 of 2001 (Sumtibai v. Paras Finance Company), he submits that the suit would not be bad for the non-joinder of the appellant herein.

We have perused a copy of the plaint in CS (OS) No. 1875 of 2006. The learned Senior Counsel for the Respondent is right in his submission that the prayer in the Suit is for specific performance of the agreement in question and there is no prayer for possession. The consequential prayer in the suit is for mesne profits and in that context a reference is made to the date from which the plaintiff ought to have been put in possession. It is plain to this Court that if the plaintiff in CS (OS) No. 1875 of 2006 has to recover possession of the portion of the property that has been agreed to be sold to him, he can do so only in accordance with law. In that event, if the Appellant herein is in possession of any portion thereof, he would be a necessary and a proper party to such proceedings.

The law as regards the impleadment of necessary and proper parties in a suit for specific performance is well settled. It has been clearly elucidated in a three-judge bench decision of the Supreme Court in Kasturi v. Iyyamperumal. The said decision explains that the two tests that have to be satisfied are (SCC, p.739):

As noted herein earlier, two tests are required to be satisfied to determine the question who is a necessary party, let us now consider who is a proper party in a suit for specific performance of a contract for sale. For deciding the question who is a proper party in a suit for specific performance the guiding principle is that the presence of such a party is necessary to adjudicate the controversies involved in the suit for specific performance of the contract for sale. Thus, the question is to be decided keeping in mind the scope of the suit. The question that is to be decided in a suit for specific performance of the contract for sale is to the enforceability of the contract entered into between the parties to the contract. If the person seeking addition is added in such a suit, the scope of the suit for specific performance would be enlarged and it would be practically converted into a suit for title. Therefore, for effective adjudication of the controversies involved in the suit, presence of such parties cannot be said to be necessary at all. Lord Chancellor Cottenham in Tasker v. Small (1834) 40 ER 164 made the following observations:

It is not disputed that, generally, to a bill for a specific performance of a contract for sale, the parties to the contract only are the proper parties; and, when the ground of the jurisdiction of Courts of Equity in suits of that kind is considered it could not properly be otherwise. The Court assumes jurisdiction in such cases, because a Court of law, giving damages only for the non- performance of the contract, in many cases does not afford an adequate remedy. But, in equity, as well as in law, the contract constitutes the right and regulates the liabilities of the parties; and the object of both proceedings is to place the party complaining as nearly as possible in the same situation as the defendant had agreed that he should be placed in. It is obvious that persons, strangers to the contract, and, therefore, neither entitled to the right, nor subject to the liabilities which arise out of it, are as much strangers to a proceeding to enforce the execution of it as they are to a proceeding to recover damages for the breach of it.

(emphasis supplied)

The aforesaid decision in Tasker was noted with approval in De Hoghton v. Money (1866) 2 Ch 164. Turner, L.J. observed at Ch p. 170:

Here again his case is met by Tasker (1834) 40 E.R. 848 in which case it was distinctly laid down that a purchaser cannot, before his contract is carried into effect, enforce against strangers to the contract equities attaching to the property, a rule which, as it seems to me, is well founded in principle, for if it were otherwise, this Court might be called upon to adjudicate upon questions which might never arise, as it might appear that the contract either ought not to be, or could not be performed.

From the aforesaid discussion, it is pellucid that necessary parties are those persons in whose absence no decree can be passed by the Court or that there must be a right to some relief against some party in respect of the controversy involved in the proceedings and proper parties are those whose presence before the Court would be necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the suit although no relief in the suit was claimed against such person.

The Supreme Court while reiterating the law in the aforementioned decision has referred to its earlier judgments in Vijay Pratap and others Vs. Sambhu Saran Sinha, . Recently in Bharat Karsondas Thakkar the law was reiterated by the Supreme Court. The decision of the learned Single Judge of this Court in S.S. Bakshi appears to have turned on its own facts and does not help the appellant. Likewise, the facts in Shanmughasundaram as set out in para 29 of the said decision clearly distinguishes it in its application to the present case.

For the aforementioned reasons, we find no infirmity in the impugned order of the learned Single Judge.

The appeal is accordingly dismissed with no order as to costs. The application is also dismissed.