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2013 DIGILAW 205 (CAL)

Kalpana Majumder v. Packard Exports Pvt. Ltd.

2013-04-19

SOUMEN SEN

body2013
JUDGMENT : SOUMEN SEN, J. This revisional application is arising out of an order passed by the learned Trial Judge refusing to add the petitioners as parties in a suit instituted by the opposite party Nos. 1 & 2 against the opposite parties Nos. 3 to 8. 2. In order to decide the present revisional application and find out whether the learned Trial Judge exercised his discretion properly in refusing to add the petitioners in the suit instituted by the opposite party Nos. 1 & 2 against the rest of the opposite parties, the scope of the suits that are presently pending before the Trial Judge is required to be examined. 3. In or about April, 2005 the petitioners instituted a suit being Title Suit No. 50 of 2005 against the opposite parties praying for a declaration that the compromise decree obtained in Title Suit No. 90 of 2004 by the opposite parties is void and not binding on the plaintiffs, and the sale deed by defendants'/owners in favour of M/s. Packard Exports Pvt. Ltd. and M/s. Ritman Commercial Pvt. Ltd. is fraudulent and not binding on the plaintiff. In the said plaint, it is alleged by the said petitioners that the opposite party Nos. 1 and 2 with ulterior motive had purchased the suit property from the opposite party Nos. 3 to 8 in spite of having prior notice and knowledge about a registered agreement of sale executed by the said opposite party Nos. 3 to 8 in favour of the plaintiffs on 15th November, 2002 inasmuch as the said conveyance in favour of the respondent Nos. 1 & 2 was executed in violation of an order of injunction passed in an earlier proceeding, the said deed of sale in favour of the respondent Nos. 1 & 2 is void and not binding on the plaintiffs. 4. Subsequent thereto, in or about November, 2007, the opposite party Nos. 1 & 2 instituted the suit against the opposite party Nos. 3 to 8 for a declaration that the said opposite party Nos. 3 to 8 do not have any right, title or interest over and in respect of the suit property and a further declaration that the plaintiffs are the absolute owners in respect of the suit property by way of purchase from the defendants by a registered deed of conveyance dated Ist March, 2005. 5. 3 to 8 do not have any right, title or interest over and in respect of the suit property and a further declaration that the plaintiffs are the absolute owners in respect of the suit property by way of purchase from the defendants by a registered deed of conveyance dated Ist March, 2005. 5. In this subsequent suit the plaintiffs pray for addition of party. The basis of the claim of the plaintiffs for addition of party seems to be that the plaintiffs are the prior agreement holder in respect of the suit property and in the suit instituted by the plaintiffs in 2005, namely, Title Suit No. 50 of 2005, the plaintiffs have categorically prayed for a declaration that the deed of conveyance executed by the said opposite party Nos. 3 to 8 in favour of the opposite party Nos. 1& 2 are fraudulent and not binding on the plaintiffs which, in fact, the defendant Nos. 1 and 2 suppressed in the suit instituted by them in 2007. In the said suit apparently a very innocuous prayer was made, namely, declarations that the said opposite parties are the absolute owners in respect of the suit property under the deed of conveyance alleged to have been executed on 1st March, 2005 ostensibly with a view to obtain a collusive decree in order to frustrate the suit filed by the plaintiffs where the issue relating to the execution of such conveyance by the opposite party Nos. 3 to 8 in favour of opposite party Nos. 1 & 2 is an issue and required to be considered and decided at the trial seems to be the apprehension of the plaintiffs resulting in filing the said application for addition of party. 6. In the application for addition of party, the petitioners tried to demonstrate the conduct of the opposite party Nos. 3 to 8 preceding the execution of the registered agreement for sale on 15th November, 2002 and it was alleged that the petitioners have a genuine claim over arid in respect of the suit property by reason of execution of the registered agreement for sale on 15th November, 2002 inasmuch as the deed of conveyance that was executed by the opposite party Nos. 3 to 8 in favour of the opposite party Nos. 3 to 8 in favour of the opposite party Nos. 1 & 2 if given effect to would and, in fact, substantially affect and prejudice the valuable right of the plaintiffs in relation to the suit property. It was further contended that the subject matter of the suit is directly and substantially connected with the suit property against which the plaintiffs had already made a claim on the basis of the registered agreement for sale. It was finally contended that the opposite party No. 1 although aware of the said prior suit in which the plaintiff had claimed a declaration that the said agreement is fraudulent and not binding upon the plaintiffs, filed the subsequent suit with an ulterior motive without making the petitioners as parties so as to obtain an order which would vitally affect the rights that had accrued in favour of the plaintiff by reason of a prior agreement for sale. 7. It was, thus, contended that on such facts, it became necessary to add the petitioners as parties' defendants in the suit and the suit should not be heard and decided in the absence of the petitioners. 8. Mr, Tilak Kumar Bose, the learned Senior Counsel appearing on behalf of the petitioners submits that one of the tests to be applied in such a situation is whether there would be a privity of estate between the parties. It was argued that in view of sections 34 and 35 of the Specific Relief Act, 1963 (Sections 42 and 43 of the Old Act) any declaration obtained by the opposite party Nos. 1 and 2 in their suit would be binding on the plaintiffs since the plaintiffs and the opposite party Nos. 1 & 2 are claiming their interest through the original opposite party Nos. 3 to 8. 9. Mr. Tilak Kumar Bose, the learned Senior Counsel appearing on behalf of the plaintiff submitted that the Title Suit No. 50 of 2005 is a comprehensive suit where both the owners and the alleged purchasers, namely, Packard & Ritman are parties. With a view to circumvent any adverse order that might be passed in the said suit against the owners or the alleged purchasers another title suit was instituted in the year 2007 and the same is numbered as Title Suit No. 1841 of 2007 in which the petitioners were not made parties. With a view to circumvent any adverse order that might be passed in the said suit against the owners or the alleged purchasers another title suit was instituted in the year 2007 and the same is numbered as Title Suit No. 1841 of 2007 in which the petitioners were not made parties. The said suit is a collusive suit instituted by the alleged purchasers Packard & Ritman against the owners in which there was no mention of the prior Title Suit No. 50 of 2005. The said alleged purchasers and/or owners did not take any step in the subsequent suit, namely, Title Suit No. 1841 of 2007 until recently. It was only after the order of dismissal dated 29th September, 2011 passed in Title Suit No. 50 of 2005 (in respect of which status quo order has been passed by the Hon'ble High Court at Calcutta on 16th December, 2011) that the owners and the alleged purchasers have decided to make the subsequent collusive suit ready for hearing and there is every possibility that during the pendency of the appeal before the Hon'ble High Court at Calcutta, a collusive decree may be obtained in Title Suit No. 1841 of 2007. 10. Mr. Bose argued that the sole question which arises for consideration would be whether the Court would allow two parties to steal a march over a third party by filing a subsequent collusive suit without impleading the third party, when a prior suit/appeal involving same issues between all three parties is pending. In this regard, Mr. Bose has relied upon the following decisions:— (i) AIR 1958 SC 866 (Razia Begum v. Sahebzadi Anwar Begum); (ii) AIR 1968 Mad 142 (G.M.V. Krishnamachari v. M.D. Dhanalakshmi Animal); (iii) (2008) 1 CLJ 681 (Cal) (Sri Bikash Sharma v. Shri Sudama Majhi); (iv) 2011 (5) CHN 451 (Cal) (Dara Singh v. Chanda Kaur Singh); 11. In drawing sustenance from Razia Begum (supra), it was argued that in a suit for declaration any person having privity of contract/privity of estate/privity of blood can seek to get added. When a declaratory judgment has been given by virtue of section 35 of Specific Relief Act (old sections 43) it is binding not only on persons actually parties to the judgment but also their privies. When a declaratory judgment has been given by virtue of section 35 of Specific Relief Act (old sections 43) it is binding not only on persons actually parties to the judgment but also their privies. A declaratory judgment in Title Suit No. 1841 of 2007 would certainly have an adverse effect on prayer (a) in the prior suit being Title Suit No. 50 of 2005 instituted by the appellants. 12. G.M.V. Krishnamachari (supra) was cited for the proposition that a person having legal and equitable interest also has a right to be added as a party. It was, thus, argued that obviously a person who has instituted a prior suit against two defendants would have a right to be added as a party in the subsequent suit since the issue is more or less similar. 13. In Sri Bikash Sharma (supra) reliance was placed upon Paragraph 5 in order to show that in the said suit, a claim was made for declaration of title. The defendant wanted to file a separate suit and obtain a compromise decree. In that context, the learned Single Judge of this Court held that when another suit for specific performance for agreement to sell at the instance of the opposite party No. 1 was pending, there is every scope to the learned Trial Judge to hear that suit with the present suit filed by the petitioner against the opposite party Nos. 2 and 3 and the opposite party Nos. 4 to 12 as proforma defendants for declaration of title, perpetual injunction and other consequential reliefs analogously and to pass a common judgment and thereby have a scope of adjudication and settle all the questions involved in respect of the disputed property effectually and completely. It was on such consideration, the order passed by the learned Court below in allowing an application of the opposite party No. 1 being added as a defendant in the title suit instituted by the petitioner, namely, Sri Bikash Sharma was not interfered with. 14. In Dara Singh (supra) a suit for declaration of title was filed by the plaintiff. The plaintiff denied the title of predecessor-in-interest as a karta of joint Hindu family business. 14. In Dara Singh (supra) a suit for declaration of title was filed by the plaintiff. The plaintiff denied the title of predecessor-in-interest as a karta of joint Hindu family business. The learned Single Judge after noticing that several proceedings took place between the parties and the heirs and legal representatives of the original defendant No. 2 are likely to be affected by any decree that may be passed in the suit set aside the order of the learned Trial Court and allowed the application for addition of party. The relevant observations of the learned Single Judge are reproduced hereinbelow:— “11. Considering the submissions made at the bar there is no dispute that the suit is pending since 1967 and the parties have successfully dragged the litigation for more than 33 years. In order to consider an application for addition under Order 1 Rule 10(2) of the Code, the party applying has to demonstrate before the Court that he is either necessary or a proper party meaning thereby the Court cannot effectively adjudicate the dispute involved in the suit or in absence of such party no effective decree can be passed. It appears that the parties are litigating and asserting their right, title and interest in respect of the suit property. It is really an assertion of their title in respect of the property in question. The dispute involved in the suit is the claim of tenancy which if granted shall have a vital impact on the right and title of the petitioners. In case where dispute as to the title is involved the person who shall be prejudicially affected by any adjudication made in the said suit are necessary parties. I find support of the contention for the judgment of the Apex Court in case of Razia Begum v. Sahebzadi Anwar Begum reported in AIR 1958 SC 886 . The Apex Court while dealing with an application for addition of a party in respect of a suit relating to a property was pleased to hold that the party applying for addition should have a direct interest as distinguished from, a commercial interest in the subject matter of the litigation. Such is also the proposition laid down in case of Kasturi v. Iyyamperumal, reported in (2005) 6 SCC 733 . 13. Such is also the proposition laid down in case of Kasturi v. Iyyamperumal, reported in (2005) 6 SCC 733 . 13. A meaningful reading of the amended plaint containing the paragraphs as quoted above, the plaintiffs/opposite parties sought to deny the title of the predecessor-in-interest of the petitioners contending that the said predecessor was asserting his right as the karta of the joint Hindu family business and it is further contended that the said assertion is wrong, false and is not tenable. The very existence of such assertion in an amended plaint manifest the denial of the right, title and interest of the petitioners and in case there is a dispute as to the title the person asserting the title is a necessary party as he shall be vitally affected by any decision taken in the said suit. The petitioners have a direct and substantial interest in the subject-matter of the suit and not a mere commercial interest. An assistance can be taken form a judgment of the Kerala High Court in case of Sfcaria Joseph v. Eliayamma Joseph, reported in 1996 AIHC 5035. The Appex Court while dealing with the case of an addition as in this case, observed that the controversy raised in the suit between the parties to the litigation should be the controversy based on which the relief is claimed and not the controversy which may arise between the parties to the suit, (see (2005) 6 SCC 733 ). It is further held that if the subject-matter is “a declaration as regards to the title are legal character then in such case it would be better to add a party for factual and complete adjudication of the controversy. 14. Since the petitioners have a claim in respect of the property in question, it cannot be said that they have no direct interest in respect of the subject-matter involved in the said suit. If the plaintiffs/opposite parties are declared as the only heirs and legal representatives to have inherited the said property in question, the petitioners shall be effected thereby.” 15. Mr. Biswanath Chatterjee, the learned Counsel appearing on behalf of the opposite party Nos. 1 & 2 submitted that the petitioners are neither necessary nor proper parties in the suit filed by the plaintiffs seeking declaratory reliefs. It was submitted that considering the frame of the suit, the presence of the said petitioners are wholly unnecessary. Mr. Biswanath Chatterjee, the learned Counsel appearing on behalf of the opposite party Nos. 1 & 2 submitted that the petitioners are neither necessary nor proper parties in the suit filed by the plaintiffs seeking declaratory reliefs. It was submitted that considering the frame of the suit, the presence of the said petitioners are wholly unnecessary. It was argued that the object of the petitioner is to prosecute his own cause of action and the presence of the said petitioners are not necessary for effectual and complete adjudication of the matter in dispute. In this regard he has relied upon the following decisions:— (I) AIR 1960 J & K 67 (State v. Ghani Banar) (II) AIR 1969 P & H 57 (Banarasi Dass Durga Prashad v. Panna Lal Ram Richhpal Oswal) (III) AIR 1977 Orissa 183 (Pravat Kumar Misra v. Prafulla Chandra Misra) (IV) AIR 1984 Pat 218 (Ram Bilash Pandey v. Jai Narayan Gupta); (V) AIR 1996 Mad 173 (Krishnan v. Dharmar); (VI) (1995) 3 SCC 147 (Anil Kumar Singh v. Shivnath Mishra); (VII) (1996) 10 SCC 53 : AIR 1996 SC 2755 (Vijay Pratap v. Sambhu Saran Sinha) 16. The aforesaid decisions were relied upon in order to demonstrate that in deciding the suit instituted by the opposite party Nos. 1 and 2 against the opposite party Nos. 3 to 8, the presence of the petitioner is not required at all. The said suit was for a declaration that the opposite party Nos. 3 to 8 do not have any right, title and interest over and in respect of the said property and a further declaration that the plaintiffs are the absolute owners in respect of the suit property by way of purchase from the said opposite parties by a registered deed of conveyance dated 1st March, 2005. Since the petitioner is not a party to the said deed of conveyance dated 1st March, 2005 and is seeking to set up a title on the basis of a prior agreement which is the subject-matter of dispute in Title Suit No. 50 of 2005, the addition of the plaintiff in the said suit concerning the registered deed of conveyance dated 1st March, 2005 would not only complicate the issues, in fact, it would enlarge the issues in which case the defendants would be required to meet two conflicting claims. Moreover, the suit filed by the plaintiff has been dismissed and the plaintiff cannot by making the said application for addition of party re-agitate the issues covered by the suit which has since been dismissed. It was further argued that the petition for addition of party does not disclose any reason nor there is any averment which would justify that the plaintiff is either a necessary or a proper party in the suit instituted by the opposite party Nos. 1 and 2 against the opposite party Nos. 3 to 8. 17. It was argued by Mr. Chatterjee that the decisions cited on behalf of the petitioner would even show addition of party if it is established that the said party has a direct interest as distinguished from commercial interest, the Court may permit addition. It was argued that in Sri Bikash Sharma(supra), the Hon'ble Court had noticed the fact that the intervener filed another suit and the said suit was pending, so, accordingly, the learned Single Judge directed the Trial Court to try both the suits together. 18. The learned Counsel distinguished Dara Singh (supra) by submitting that it would appear from the facts of the said case that the intervener, in fact, had a direct interest over the property in question. 19. The learned Counsel distinguished the Madras decision (G.M.V. Krishnamachari v. M.D. Dhanalakshmi Ammal) by submitting that it would be that the petitioner as intervener did not institute any other proceeding and had statutory charge over and in respect of the property in question. 20. Mr. S.S. Bose, the learned Counsel appearing on behalf of the opposite party Nos. 3 to 8 submitted that the presence of the petitioners would not be necessary in deciding the said suit filed by the opposite party Nos. 1 & 2 against the opposite party No. 3 to 8. It was submitted, in the event, that the said petitioners are allowed to be impleaded as parties in the said declaratory suit then the opposite party Nos. 3 to 8 would be required to deal with two rival claims. The presence of the defendants would not be necessary or proper in deciding the issue involved in the suit instituted by the defendant Nos. 1 and 2 in which the said opposite parties had claimed that the opposite party Nos. 3 to 8 would be required to deal with two rival claims. The presence of the defendants would not be necessary or proper in deciding the issue involved in the suit instituted by the defendant Nos. 1 and 2 in which the said opposite parties had claimed that the opposite party Nos. 3 to 8 do not have any right, title or interest over and in respect of the suit property in view of execution of a registered deed of conveyance on 1st March, 2005. In this regard, he had relied upon the following decisions:— (i) (2005) 6 SCC 733 (Kasturi v. Iyyamperumal); (ii) (2002) 3 SCC 98 : AIR 2002 SC 1061 (J.J. Lal Put. Ltd. v. M.R. Murali); (iii) AIR 1960 Kerala 284 (Chamiar Kunchelan v. Kandan Damodaran); (iv) (2012) 8 SCC 384 (Vidur Impex & Traders Pvt. Ltd. v. Tosh Apartments Pvt. Ltd.) 21. The primary object of Order 1 Rule 10(2) of the Code of Civil Procedure is to bring before the Court at one and the same time of the persons interested in the dispute so that all the controversies in the suit may be finally determined once and for all in the presence of the parties without delay, inconvenience and expenses of several actions, trials and inconclusive adjudication. Notwithstanding the fact that the said provision confers wide discretion but such discretion has to be exercised judicially and on sound legal principle. In Anil Kumar v. Shivnath (supra) while considering the provisions of Order 1 Rule 10(2), the Hon'ble Supreme Court observed that: “though the Court may have power to strike out the name of a party improperly joined or add a party either on application or without application of either party, but the condition precedent is that the Court must be satisfied that the presence of the party to be added, would be necessary in order to enable the Court to effectually and completely adjudicate upon and settle all questions involved in the suit. To bring a person as party-defendant is not a substantive right but one of procedure and the Court has discretion in its proper exercise. To bring a person as party-defendant is not a substantive right but one of procedure and the Court has discretion in its proper exercise. The object of the rule is to bring on record all the persons who are parties to the dispute relating to the subject-matter so that the dispute may be determined in their presence at the same time without any protraction, inconvenience and to avoid multiplicity of proceedings.” 22. The said power can be exercised on either of the two grounds:— (a) Such person ought to have been joined, either as a plaintiff or as a defendant, but is not so joined; or (b) Without his presence, the question involved in the suit cannot be decided finally and effectively. 23. In Razia Begum v. Anwar Begum, ( AIR 1958 SC 886 ), the Supreme Court noted “two currents of judicial opinion”, one taking what may be called the narrower view, and the other, the wider view. Then referring to several English and Indian decisions on the point, the majority observed:— “It is no use multiplying references bearing on the construction of the relevant rule of the Code relating to addition of parties. Each case has to be determined on its own facts, and it has to be recognized that no decided cases have been brought to our notice, which can be said to be on all fours with the facts and circumstances of the present case. There cannot be the least doubt that it is firmly established as a result of judicial decisions that in order that a person may be added as a party to a suit, he should have a direct interest in the subject-matter of the litigation whether it raises questions relating to movable or immovable property.” 24. Under sub-rule (2) of Rule 10, only two classes of persons may be added as parties to a suit: (i) necessary party, i.e. a person who ought to have been joined as a party and in whose absence no decree or order can be passed; or (ii) proper party, i.e. a person, whose presence is necessary for complete and effectual adjudication of the questions involved in the suit. If a person is neither a necessary nor a proper party, he cannot be impleaded in a suit. 25. If a person is neither a necessary nor a proper party, he cannot be impleaded in a suit. 25. A person cannot be impleaded merely because he would be incidentally affected by the judgment, or is interested in the fruits of the litigation, or his presence may enable the Court to come to a correct solution of the dispute before the Court. What is to be seen in allowing, or disallowing an application for addition of a party is whether such addition would be consistent with the scope of the inquiry necessitated in the pending suit and in the absence if such: a party it would not be possible to completely and effectively adjudicate the controversy raised before the Court. The main object of the rule is not to prevent multiplicity of actions or avoid fresh litigation, but to consider whether the person is directly or legally in the action. 26. In the case of Razia Begum, it appears that one Sahebzadi claiming herself to be the “lawfully and legally wedded wife” of the son of Nizam of Hyderabad (hereinafter referred to as “Prince”) filed a petition under Order 1 Rule 10(2) of the Code of Civil Procedure, claiming addition of party in the suit instituted by Razia Begum in which Razia Begum alleged that she is the lawfully married wife of the Prince. 27. The suit was instituted by Razia Begum against the second son of the Nizam of Hyderabad (hereinafter referred to as Prince) alleging that she is lawfully married wife of the Prince and the marriage ceremony was duly solemnized in accordance with the Shia Law. It was averred that three daughters were born of the wedlock and the fact of the said marriage was known to all persons acquainted with the Prince, There was a pre-nuptial agreement where the Prince agreed to pay Rs. 2,000 per month to the plaintiff as kharch-e-pandan which allowance the Prince stopped since January, 1953. The suit was for declaration of the status of Razia as wife of the Prince and her entitlement to receive the said allowance of Rs. 2,000 per month. The suit was filed on 22nd April, 1957. 2,000 per month to the plaintiff as kharch-e-pandan which allowance the Prince stopped since January, 1953. The suit was for declaration of the status of Razia as wife of the Prince and her entitlement to receive the said allowance of Rs. 2,000 per month. The suit was filed on 22nd April, 1957. On that very date, Sahebzadi filed an application under Order 1 Rule 10 of the Code of Civil Procedure along with her minor son, praying for addition of party on the ground that the said Sahebzadi is the lawfully and legally wedded wife of the Prince and the son born of the said wedlock is the son of the said Prince. In the said application it was averred that Razia asserted her right as the wife of the Prince which status the Prince is denying or interested to deny and the petitioners, namely, Sahebzadi are being joined as parties to the suit would be equally interested in denying the marriage of the plaintiff and her rights and status. In fact, by the said application Sahebzadi wants to establish her status as wife of the Prince and denying the marriage of the plaintiff with Razia. 28. In the said petition, Sahebzadi further alleged that they have reasons to believe that the above suit was a result of collusion and the object and motive of the plaintiff in instituting the suit is to adversely affect the relationship of the petitioners and the defendant and also to deprive the rights and interests of the petitioners (Sahebzadi) in the defendant's (Prince) estate. The said claim was resisted by Razia Begum on the ground that the said application for addition was mala fide and malicious and she further asserted that the “possibility of the rights of the petitioners being infringed are very remote, contingent upon their or plaintiff surviving the defendant or other circumstances which may or may not arise,” 29. The plaintiff referred to the admission of the defendant (Prince) in the written statement and asserted that the petitioners were neither necessary nor proper parties to the suit. The Prince in his answer to the application admitted that the first respondent is his wife and the second respondent is his son and also repeated his admission of marriage to the plaintiff in October, 1948, and the first respondent in December, 1952. The Prince in his answer to the application admitted that the first respondent is his wife and the second respondent is his son and also repeated his admission of marriage to the plaintiff in October, 1948, and the first respondent in December, 1952. The Prince contended that when he married the first respondent, he had already three daughters by the plaintiff; which fact was known to the first respondent at the time of her marriage with him. The Prince supported the plaintiff in her objection to the intervention by asserting that the rights of the respondents 1 and 2 would not be affected in any way, and by insisting upon his Muslim right of having four wives living at the same time. The Prince also supported the plaintiff in her denial of the allegation of collusion. On these allegations and counter-allegations, the Trial Judge allowed the application of intervention, and directed the addition of the respondents 1 and 2. The reasons for allowing such addition of parties was that the record of the proceedings suggest of a possible collusion between the plaintiff and the defendant and that the relief claimed under section 42 of the Specific Relief Act, being discretionary, could not be granted as of right. It was further held that the presence of the interveners would help the Court in unraveling the mysteries of litigation and that there was force in the contention put forward on behalf of the interveners that under section 43 of the Specific Relief Act, any declaration given in favour of the plaintiff, would be binding upon the interveners. It was further held that for the purpose of effectual and complete adjudication of the issues involved and to settle the present controversy, the presence of the interveners was necessary. 30. The Hon'ble Supreme Court in such factual background construed Order 1 Rule 10(2) of the Code of Civil Procedure and laid down the law in paragraphs 12, 13 and 14 which are reproduced hereinbelow:— “12. When a declaratory judgment has been given, by virtue of 43, it is binding not only on the persons actually parties to the judgment but their privies also, using the term ‘privy’ not in its restricted sense of privy in estate, but also privy in blood. When a declaratory judgment has been given, by virtue of 43, it is binding not only on the persons actually parties to the judgment but their privies also, using the term ‘privy’ not in its restricted sense of privy in estate, but also privy in blood. Privity may arise (1) by operation of law, for example, privity of contract; (2) by creation of subordinate interest in property, for example, privity in estate as between a landlord and a tenant, or a mortgagor and a mortgagee; and (3) by blood, for example, privity in blood in the case of ancestor and heir. Otherwise, in some conceivable cases, the provisions of S. 43, quoted above, would become otiose. The contention raised on behalf of the appellant, which was strongly supported by the third respondent through Mr. Pathafc, as stated-above, is that a declaratory judgment would not bind anyone other than the party to the suit unless it affects some property, in other words, unlees the parties were privy in estate. But such a contention would render the provisions of S., 43 aforesaid, applicable only to declarations in respect of property and not declarations in respect of status. That could not have been the intendment of the statutory rule laid down in S. 43. Sections 42 and 43, as indicated above, go together, and are meant to be co-extensive in their operation. That being so, a declaratory judgment in respect of a disputed status, will be binding not only upon the parties actually before the Court, but also upon persons claiming through them respectively. The use of the word ‘only’ in S. 43, as rightly contended on behalf of the appellant, was meant to emphasize that a declaration in Chap. VI of the Specific Relief Act, is not a judgment in rem. But even through such a declaration operates only in personam, the section proceeds further to provide that it binds not only the parties to the suit, but also persons claiming through them respectively. The word ‘respectively’ has been used with a view to showing that the parties arrayed on either side, are really claiming adversely to one another, so far as the declaration is concerned. The word ‘respectively’ has been used with a view to showing that the parties arrayed on either side, are really claiming adversely to one another, so far as the declaration is concerned. This is an other indication of the sound rule that the Court, in a particular reasons to believe that there is no real conflict may, in exercise of a judicial discretion, refuse to grant the declaration asked for oblique reasons. 13. As a result of these considerations, we have arrived at the following conclusions: (1) That the question of addition of parties under R. 10 of O. I of the Code of Civil Procedure, is generally not one of initial jurisdiction, of the Court, but of a judicial discretion which has to be exercised in view of all the facts and circumstances of a particular case; but in some cases, it may raise controversies as to the power of the Court, in contradistinction to its inherent jurisdiction, or, in other words, of jurisdiction in the limited sense in which it is used in S. 115 of the Code; (2) That in a suit relating to property, in order that a person may be added as a party, he should have a direct interest as distinguished from a commercial interest, in the subject-matter of the litigation; (3) Where the subject-matter of a litigation, is a declaration as regards status or a legal character, the rule of present or direct interest may be relaxed in a suitable case where the Court is of the opinion that by adding that party, it would be in a better position effectually and completely to adjudicate upon the controversy; (4) The cases contemplated in the last proposition, have to be determined in accordance with the statutory provisions of Ss. 42 and 43 of the Specific Relief Act; (5) In cases cohered fry those statutory provisions, the Court is not bound to grant the declaration prayed for, on a mere admission of the claim by the defendant, if the Court has reasons to insist upon a clear proof apart from the admission; (6) The result of a declaratory decree on the question of status, such as in controversy in the instant case, affects not only the parties actually before the Court, but generations to come, and in view of that consideration, the rule of ‘present interest’, as evolved by case law relating to disputes about property does not apply with full force; and (7) The rule laid down in S. 43 of the Specific Relief Act, is not exactly a rule of res judicata. It is narrower in one sense and wider in another. 14. Applying the propositions enunciated above to the facts of the instant case, we have come to the conclusion that the Courts below did not exceed their power in directing the addition of the respondents 1 and 2 as parties-defendants in the action. Nor can it be said that the exercise of the discretion was not sound. Furthermore, this case comes before us by special leave, and we do not consider that it is a fit case where we should interfere with the exercise of discretion by the Courts below. The appeal is, accordingly, dismissed. As regards the question of costs, we direct that it will abide the ultimate result of the litigation, and will be disposed of by the Trial Court.” 31. It has been stated that necessary party is one without whom no decree can be made effective and proper party was one in whose absence, an effective order can be made, but whose presence is necessary for a complete and final decision on the question involved in the proceeding. 32. Section 35 of the Specific Relief Act, 1963 makes it clear that a declaration made under section 34 does not operate as a judgment in rem. A declaratory decree does bind— (a) the parties to the suit; (b) person claiming through parties to the suit; and (c) whether any of the parties are trustees, of the person from whom, if in existence at the date of the declaration, such parties will be trustees. 33. A declaratory decree does bind— (a) the parties to the suit; (b) person claiming through parties to the suit; and (c) whether any of the parties are trustees, of the person from whom, if in existence at the date of the declaration, such parties will be trustees. 33. It is obvious that the declaration would not bind persons who are not parties to the suit, section 35 of the Specific Relief Act enacts a rule of substantive law. Such declaratory relief has great importance viewed from its objectivity that the effect of such declaration is to prevent future litigation by removing existing causes of controversy to quiet title, and to perpetuate testimony, as also to avoid multiplicity of proceedings. In a case where a Court makes a declaration in respect of a disputed status, important rights flow from such a judicial declaration, not only binds persons who are actually parties to the litigation but also persons claiming through them. It is, thus, a rule of substantive law and is distinct and separate from the rule of res judicata, it is narrower in one sense and wider in another. The doctrine of res judicata lays particular stress upon the competence of the Court, but this section emphasizes the legal position that it is a judgment in personem, as distinguished from a judgment in rem. 34. When a declaratory decree has been given, it binds not only the parties to the suit but privies also. Privity may arise— (1) by operation of law, as privity of contract, (2) by creation of subordinate interest in property, as privity in estate between a landlord and tenant, or a mortgagor and mortgagee; and (3) by blood, as in the case of an ancestor and heir. 35. Sections 34 and 35 go together and are meant to be co-extensive in their operation. The result of a declaratory decree, on the question of status, affects not only the parties actually before it, but, in some cases, generations to come. In such a case, the rule of present or direct interest may be relaxed, in a suitable case, where the Court is of opinion that, by adding a particular party, it would be in a better position effectually and completely to adjudicate upon the controversy. In such a case, the rule of present or direct interest may be relaxed, in a suitable case, where the Court is of opinion that, by adding a particular party, it would be in a better position effectually and completely to adjudicate upon the controversy. The adjudication of status, the declaration of which is claimed by a plaintiff, is a more serious matter, and, in its ultimate result, it affects not only the persons actually before the Court in the suit as originally framed, but also a plaintiffs progeny who are not parties to the action.) (Law of Specific/Relief, Tagore Law Lectures, 10thEdition, S.C. Banerjee) 36. The Hon'ble Supreme Court in Mumbai International Airport Pvt. Ltd. v. Regency Convention Centre & Hotels Pvt. Ltd. reported in (2010) 7 SCC 417 considering a plea as to whether the appellant is a necessary or proper party to a suit for specific performance held:— “13. The general rule in regard to impleadment of parties is that the plaintiff in a suit, being dominus litis, may choose the persons against whom he wishes to litigate and cannot be compelled to sue a person against whom he does not seek any relief. Consequently, a person who is not a party has no right to be impleaded against the wishes of the plaintiff. But his general rule is subject to the provisions of Order 1 Rule 10(2) of the Code of Civil Procedure (the” Code”, for short), which provides for impleadment of proper or necessary parties. The said sub-rule is extracted below: “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.” 14. The said provision makes it clear that a Court may, at any stage of the proceedings (including suits for specific performance), either upon or even without any application, and on such terms as may appear to it to be just, direct that any of the following persons may be added as a party: (a) any person who ought to have been joined as plaintiff or defendant, but not added; or (b) any person 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. In short, the Court is given the discretion to add as a party, any person who is found to be a necessary party or property party. 15. A “necessary party” is a person who ought to have been joined as a party and in whose absence no effective decree could be passed at all by the Court. If a “necessary party” is not impleaded, the suit itself is liable to be dismissed. A “proper party” is a party who, though not a necessary party, is a person whose presence would enable the Court to completely, effectively and adequately adjudicate upon all matters in dispute in the suit, though he need not be a person in favour of or against whom the decree is to be made. If a person is not found to be a proper or necessary party, the Court has no jurisdiction to implead him, against the wishes of the plaintiff, after the suit is decided against the plaintiff, will not make such person a necessary party or a proper party to the suit for specific performance. 23. This Court in Ramji Dayawala & Sons (P) Ltd. v. Invest Import reiterated in SCC p. 96, para 20 class definition of “discretion” by Lord Mansfield in R. v. Wilkes (ER p. 334) that “discretion”, “when applied to a Court of justice, means sound discretion guided by law. It must be governed by rule, not by humour: it must not he arbitrary, vague and fanciful; but legal and regular.” 37. The decisions in Ramesh Hirachand Kundanmal v. Municipal Corporation of Greater Bombay, ( (1992) 2 SCC 524 ) and Anil Kumar v. Shivnath, ( (1995) 3 SCC 147 ) were also considered in the said judgment. 38. It must be governed by rule, not by humour: it must not he arbitrary, vague and fanciful; but legal and regular.” 37. The decisions in Ramesh Hirachand Kundanmal v. Municipal Corporation of Greater Bombay, ( (1992) 2 SCC 524 ) and Anil Kumar v. Shivnath, ( (1995) 3 SCC 147 ) were also considered in the said judgment. 38. The primary object of Order 1 Rule 10(2) of the Code of Civil Procedure is to bring before the Court at one and the same time of the persons interested in the dispute so that all the controversies in the suit may be finally determined once and for all in the presence of the parties without delay, inconvenience and expenses of several actions, trials and inconclusive adjudication. Notwithstanding the fact that the said provision confers wide discretion but such discretion has to be exercised judicially and on sound legal principle. The said power can be exercised on either of the two grounds:— (a) Such person ought to have been joined, either as a plaintiff or as a defendant, but is not so joined; or (b) Without his presence, the question involved in the suit cannot be decided finally and effectively. 39. In Ramesh v. Municipal Corpn. of Greater Bombay reported in (1992) 2 SCC 524 to be joined as a party to the suit, the person must have a direct or legal interest in the action. In other words, he must show that the litigation may lead to a result which would affect him legally by interfering or adversely affecting his legal right or legally protected interest. 40. In Ramesh (supra), the Hon'ble Supreme Court held as follows:— “It cannot be said that the main object of the rule is to prevent multiplicity of actions though it may have incidentally have that effect. But that appears to be a desirable consequence of the rule rather than its main objective. The person to be joined must be one whose presence is necessary as a party. What makes a person a necessary party is not merely that he has relevant evidence to give on some of the questions involved; that would only make him, a necessary witness. It is not merely that he has an interest in the correct solution of some question involved and has thought of arguments to advance. What makes a person a necessary party is not merely that he has relevant evidence to give on some of the questions involved; that would only make him, a necessary witness. It is not merely that he has an interest in the correct solution of some question involved and has thought of arguments to advance. The only reason which makes it necessary to make a person a party to an action is so that he should be bound by the result of the action and the question to be settled, therefore, must be a question in the action which cannot be effectually and completely settled unless he is a party. The line has been drawn on a wider construction of the rule between the direct interest or the legal interest and commercial interest. It is, therefore, necessary that the person must be directly or legally interested in the action in the answer, i.e. he can say that the litigation may lead to a result which will affect him legally, that is, by curtailing his legal right. It is difficult to say that the rule contemplates joining as a defendant a person whose only object is to prosecute his own cause of action.” 41. In Firm of Mahadeva Rice and Oil Mills v. Chennimalai Goundar reported in AIR 1968 Mad 287 the Hon'ble Court laid down the following tests required to be fallowing in considering an application filed under Order 1 Rule 10(1) of the Code of Civil Procedure:— “No amount of assertion on the part of the parties to a lis to the effect that it would avoid multiplicity of suits, that it would be convenient for purposes of trial, that it would not cause prejudice to any party, would be of any avail. If the cardinal test, namely, for a final adjudication of the “real controversy” such addition is necessary, is not satisfied, then it cannot be said with any reasonable certainty that the proposed party is a proper party. I am of the opinion that the following tests may be formulated usefully as a guidance in the case of adding of parties under O. 1, R. 10, Civil P.C.: (1) If, for the adjudication of the “real controversy” between the parties on record, the presence of a third party is necessary, then he can be impleaded. I am of the opinion that the following tests may be formulated usefully as a guidance in the case of adding of parties under O. 1, R. 10, Civil P.C.: (1) If, for the adjudication of the “real controversy” between the parties on record, the presence of a third party is necessary, then he can be impleaded. (2) It is imperative to note that by such impleading of the proposed party, all controversies arising in the suit and all issues arising thereunder may be finally determined and set at rest, thereby avoiding multiplicity of suits over a subject-matter which could still have been decided in the pending suit itself; (3) The proposed party has a defined, subsisting, direct and substantive interest in the litigation, which interest is either legal or equitable and which right is cognisable in law; (4) Meticulous care should be taken to avoid the adding of a party if it is intended merely as a ruse to ventilate certain other grievances of one or the other of the parties on record which is neither necessary or expedient to be considered by the Court in the pending litigation: and (5) It should always be remembered that considerable prejudice would be caused to the opposite party when irrelevant matters are allowed to be considered by Courts by adding a new party whose interest has no nexus to the subject-matter of the suit. (6) In the light of the such judicial precedents and the principles laid down above, I do not see any justification for the proposed party herein being added as a regular party. I do not agree with the observation of the Subordinate Judge that the proposed party is a proper party. I have already given my reasons. If the proposed party is not a proper party, the Court has no jurisdiction to add him as a party to the suit. Therefore, there is an error apparent in the judgment of the lower Court. I, therefore, set aside the order of the Subordinate Judge who directed that the party proposed by the respondent be added as a regular party to the suit. The revision petition is allowed, but in the peculiar circumstances of this case, there will be no order as to costs.” 42. I, therefore, set aside the order of the Subordinate Judge who directed that the party proposed by the respondent be added as a regular party to the suit. The revision petition is allowed, but in the peculiar circumstances of this case, there will be no order as to costs.” 42. In Antony Devaraj v. Aralvaimozhi (Kurusadi) Devasahayam Mount Oor and Thuya Viagula, Annai Church rep by the Trustee, reported in 2004 (2) C.T.C. 183 the Madras High Court considered the right of a third party to claim addition of party. It was held as follows:— “(iii). The person to be added as one of the parties must be one whose presence is necessary as a party. What makes a person a necessary party is not merely that he has relevant evidence to given on some of the questions involved, but it should make him as necessary witness. (iv) The third party cannot be considered to be a necessary party for deciding the main issue framed in the suit. Mere ground that inclusion of the proposed third party would not alter the structure of the suit may not entitle the party to ask the Court to implead the third party as a defendant. (v). The Court may upon an application or suo motu, in a fit and proper case, implead a new party as defendant, even against the plaintiffs consent under certain circumstances. The discretion vested with the Court though wide is however circumscribed by the limitations which are built in the provisions contained in Order 1 Rule 10(2), C.P.C. Where a person is neither necessary nor proper party, the Court has no jurisdiction to add him as a party. If the question at issue between the parties can be worked out without anyone else being brought in, the stranger should not be added as a party. (vii) A person is not to be added as a defendant merely because he or she would be incidentally affected by the judgment. The main consideration is whether or not the presence of such a person is necessary to enable the Court to effectually and completely adjudicate upon and settle the questions involved in the suit. (viii) Persons whose interest would be affected by the litigation are entitled to come on record to protect their interest when those are jeopardized by the persons already on record.” 43. (viii) Persons whose interest would be affected by the litigation are entitled to come on record to protect their interest when those are jeopardized by the persons already on record.” 43. Considering the nature of the two suits and the reliefs claimed, it cannot be said that the petitioners are not necessary parties in the subsequent suit. The opposite party Nos. 1 and 2 have filed a suit subsequent to the suit filed by the petitioners. The parties to the subsequent suit are aware that in the suit instituted by the plaintiffs, a prayer was made for declaration that any deed of sale executed by the owners in favour of the opposite party Nos. 1 and 2 are fraudulent. The opposite party Nos. 1 and 2 during the pendency of the aforesaid suit, filed a suit in 2007 apparently with an innocuous prayer for a declaration that the, said opposite party Nos. 3 to 8 do not have any right, title or interest over and in respect of the suit property and the plaintiffs are the absolute owners in respect of the said property by virtue of a registered deed of conveyance dated 1st March, 2005. The subsequent suit involves the self-same property and the said suit is not ready for hearing. The opposite party Nos. 1 and 2 have kept the said suit pending since they knew that a determination in favour of the petitioners in the earlier suit would non suit the opposite party Nos. 1 and 2 in respect of the 2007 suit. In the meantime, the suit filed by the petitioner was dismissed and an appeal was preferred against the said order before a Division Bench of this Hon'ble Court in which an order of status quo was passed in respect of the suit property. The suit was not dismissed on merits and there is no adjudication and/or determination on the registered deed of conveyance dated November 15, 2002. Ideally, both the suits should have been heard together since it concerns the self-same property and the suit filed by the plaintiff is a comprehensive suit. The deed of conveyance formed the subject-matter in the 2007 suit, is also the subject-matter of the suit instituted by the petitioners. There is no reason as to why the opposite party Nos. Ideally, both the suits should have been heard together since it concerns the self-same property and the suit filed by the plaintiff is a comprehensive suit. The deed of conveyance formed the subject-matter in the 2007 suit, is also the subject-matter of the suit instituted by the petitioners. There is no reason as to why the opposite party Nos. 1 and 2 should not have impleaded the petitioners considering the fact that the title of the opposite party Nos. 1 and 2 would not be perfect without an adjudication being made in respect of the agreement dated 15th November, 2002. The conduct of the petitioners are also flawless. This Court is of the view that the application filed by the petitioners for addition of party should have been allowed by the learned Trial Judge. In view thereof, the revisional application is allowed. The application for addition of party is allowed. The impugned order is accordingly set aside. However, there shall be no order as to costs. Urgent xerox certified copy of this judgment, if applied for, be given to the parties on usual undertaking.