Research › Search › Judgment

Delhi High Court · body

2014 DIGILAW 1456 (DEL)

P. R SIVANANDAN NAIR v. SAIPEM INDIA PROJECTS

2014-05-08

G.S.SISTANI

body2014
ORDER IA.No.8772/2014 1. Counsel for the plaintiff submits that on 23.2.2013 Joint Registrar issued summons to defendant no.1; and since he considered defendants no.2 and 3 as part and parcel of defendant no.1 summons were not issued against said defendants no.2 and 3. 2. By the present application under Order V Rule 11 CPC, plaintiff prays that summons be issued to defendant nos.2 and 3, who are the part and parcel of defendant no.1 and are situated in Italy. Counsel for the plaintiff submits that necessity of filing of this application has arisen as the defendant no.1 in its written statement has stated that defendant no.1 is a separate legal entity and has complete autonomy for day-to-day governance and internal management; and further defendants no.2 and 3 are also separate legal entities. Counsel for the plaintiff submits that defendants no.2 and 3 are a proper and necessary party and in view thereof they have been arrayed as defendants. Elaborating his arguments further Mr.George submits that a letter of appreciation was issued to the plaintiff on 29.10.2010 by defendants no.2 and 3. In this letter services of the plaintiff were recognized on his completing 25 years of service with the ENI group. Counsel for the plaintiff submits that since this communication has been denied by the defendant no.1, it would be necessary to issue summons to defendant nos.2 and 3, as they alone would be able to admit or deny the aforesaid communication. 3. Counsel for the defendant no.1 has opposed the prayer made in this application on the ground that the plaintiff was given employment by the defendant no.1 and throughout his entire period of employment his interaction was only with defendant no.1 he was only reporting to the defendant no.1; and his salary and all dues were also being paid by the defendant no.1. 4. I have heard counsel for the parties and considered their rival submissions. It would be necessary to notice some of the facts as stated by the plaintiff in the plaint. As per the plaint, defendant no.1 is a fully owned company of defendant no.2. The defendant no.2 is the parent company of defendant no.1. Defendant no.3 is the shareholder of defendant no.2. Both the defendants i.e. defendant nos.2 and 3 have their registered offices at Italy. As per the plaint, defendant no.1 is a fully owned company of defendant no.2. The defendant no.2 is the parent company of defendant no.1. Defendant no.3 is the shareholder of defendant no.2. Both the defendants i.e. defendant nos.2 and 3 have their registered offices at Italy. In June, 1985, the plaintiff was recruited as stenographer-cum-telex operator at a monthly salary of Rs.770/- in addition to HRA and conveyance allowance. Although the plaintiff was performing his function with utmost diligence and devotion over the period of years, the defendant no.1 surreptitiously and in a clandestine manner obtained a resignation dated 12.6.2008; acceptance letter was issued on the same date; and subsequently he was handed over another appointment letter of 11.6.2008. Plaintiff was promoted from time to time, however, his services were illegally terminated on 22.5.2012 by defendant no.1. The plaintiff was issued an employment letter dated 11.6.1985, which shows that the plaintiff was employed by the office at India and the plaintiff was liable to be transferred to any place in India, and subsequent letter of 23.2.2001 was also issued by the office at Delhi, informing the plaintiff of his promotion. A copy of which has been filed by the plaintiff. Resignation letter signed by the plaintiff was also submitted to the Office at Delhi. Another offer letter of 10.6.2008 was issued by the defendant no.1 to the plaintiff. Letter dated 11.6.2008 and 23.2.2001 have been issued from the office of defendant no.1 in India. It is also not in dispute that the plaintiff has been paid salary during his entire period of employment by the defendant no.1. The resignation of the plaintiff was also accepted by the office at Delhi. The salary work-sheet which has also been annexed by the plaintiff is also signed by the Manager HRO and ICT at Delhi. Bonus was awarded to the plaintiff from Delhi. All of which would prima facie show that the privity of contract, if any, was between the plaintiff and the defendant no.1 and defendants no.2 and 3 are the separate entities situated at Italy. 5. Counsel for the plaintiff has urged before this court that since the defendant no.1 has disputed letter dated 29.10.2010, which was written by defendant nos.2 and 3, they would be proper and necessary parties. 6. In the case of Ramesh Hirachand Kundanmal Vs. Municipal Corporation of Greater Bombay and Ors. 5. Counsel for the plaintiff has urged before this court that since the defendant no.1 has disputed letter dated 29.10.2010, which was written by defendant nos.2 and 3, they would be proper and necessary parties. 6. In the case of Ramesh Hirachand Kundanmal Vs. Municipal Corporation of Greater Bombay and Ors. reported at JT 1992 (2) CC) 116 it has been held that it is not necessary to implead individual directors as parties; and the plaintiff can always summon a person as a witness in case the plaintiff so chooses. Paragraph 14 of the judgment reads as under: “14. It cannot be said that the main object of the rule is to prevent multiplicity of actions though it may incidentally have that effect. But that appears to be a desirable consequence of the rule rather than its main objectives. 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 questions involved and has thought of relevant arguments to advance. The only reason which makes it necessary to make a person a party to an action is 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 rights. 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. 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. Similar provision was considered in Amon v. Raphael Tuck & Sons Ltd., (1956) 1 All E.R. 273, wherein after quoting the observations of Wynn-Parry, J. in Dollfus Mieg et Compagnie S.A v. Bank of England,(1950) 2 All E.R.611, that the true test lies not so much in an analysis of what are the constituents of the applicants' rights, but rather in what would be the result on the subject-matter of the action if those rights could be established, Devlin, J. has stated:- "The test is ‘May the order for which the plaintiff is asking directly affect the intervener in the enjoyment of his legal rights.’" 7. A two-fold test was laid by the Supreme Court in the case of Ramesh Hirachand (supra) that a necessary party is one in the absence of whom no order can be made effectively. It has further been held that a proper party is one in whose absence an effective order can be made but his presence is still necessary for a complete and final decision in the issue involved. This court in the case of [CS(OS) 3453/2012] decided on 17.4.2014, has held that : “9. In my view the tests laid down do not apply to the director of the defendant no.1, who is sought to be impleaded by the plaintiff, who is neither a proper nor a necessary party, as the agreement dated 4.5.2005 has been signed by the proposed defendant in the capacity of a director of defendant no.1 and not in his personal capacity. Also, in case the plaintiff succeeds a decree can be passed in the present suit, without impleading the proposed defendant in his individual capacity. With regard to the submission of the plaintiff that it is imperative to place the proposed defendant in a witness box, in my view, as discussed in the Ramesh Hirachand (supra), at best makes him a witness but not a necessary party.” 8. Taking into consideration that the plaintiff was employed by the defendant no.1, which is a separate legal entity, all letters/ correspondence was exchanged between the plaintiff and the defendant no.1, the prayer made in the present application cannot be allowed. Taking into consideration that the plaintiff was employed by the defendant no.1, which is a separate legal entity, all letters/ correspondence was exchanged between the plaintiff and the defendant no.1, the prayer made in the present application cannot be allowed. In case the plaintiff wishes to call proposed defendants No.2 and 3 as a witness, it would be open for the plaintiff to take such remedies at the appropriate time. 9. Accordingly, the application stands dismissed. It is made clear that any observation made is only for the purpose of deciding the present application and is not a reflection on the merits of the matter. CS(OS) 262/2013 10. At joint request, list on 12.9.2014 for framing of issues. Parties will bring suggested issues to court on the next date of hearing.