JUDGMENT : Devendra Kumar Arora, Ravindra Nath Mishra-II, JJ. Heard, Shri Nirankar Singh, learned counsel for the petitioner, Shri Somesh Tripathi, learned counsel for opposite party no. 3. 2. The petitioner has approached this court, challenging the action of the Additional Director (Law) Co-operative Societies, U.P., Lucknow/Arbitrator, in rejecting the application of the petitioner for being arrayed as respondent No. 2 in Arbitration Case No. 83 of 2007-08 vide order dated 2.6.2008. In the said order, it has been mentioned that only the applicant and none else has a right to make amendment in the case and add a respondent no. 2. If the petitioner is aggrieved in any manner he can file fresh arbitration. 3. Submission of learned counsel for the petitioner is that the petitioner being a member of the Jeevan Beema Rashtriya Sahkari Awas Samiti Lt, GH 7, Sector 6, Vasundhara, Ghaziabad, U.P. (hereinafter referred as "the Society") was allotted flat No. 403-B by the Society vide order dated 14.06.2002 and accordingly, he contributed an amount of Rs. 1199710/- between 14.6.2002 to 28.1.2005 towards the cost of the said flat and the society gave possession of the said flat vide possession letter dated 11.2.2005. The Society also came into an agreement with the petitioner to the same effect on 11.2.2005. The petitioner after taking possession of the flat in question, spent about Rs. 2 Lakhs on its renovation as well as for furnishing and thereafter started living in the said flat as an owner being a bona fide purchaser. 4. According to the petitioner, when he came to know about pendency of arbitration case being filed by one Mr. Vinay Kumar (respondent No. 2 herein) alleging ownership on Flat No. 403-B, he moved an application for impleadment as respondent to protect his interest as any decision in the said case, would have adverse impact upon the petitioner. Therefore, rejection of application for impleadment was wholly unjustified. In support of the aforesaid submission, learned counsel for the petitioner has placed reliance upon the judgment of the Apex Court in A. Jithendernath v. Jubilee Hills Cooperative House Building Society and another reported in 2006(10) SCC 96 , wherein it was observed that the allottee has not been made party in the proceedings and in the absence of the allottee, the award being in violation of the principles of natural justice would be a nullity. 5. Mr. 5. Mr. Somesh Tripathi, learned counsel for opposite party no. 3, on the basis of instructions, has submitted that opposite party no. 2, being a member of the society was allotted the house in question and initially deposited some amount but on account of default in payment, her allotment was cancelled. It is also submitted that opposite party no. 2, after taking refund from the society and lapse of two long years, initiated the arbitration proceedings. In the meantime, the petitioner was allotted the house in question and after payment of the cost of the house in question, possession of the same was delivered to the petitioner and an agreement had also been executed with the petitioner on 11.2.2005. Now the petitioner is living in the said house as a bona fide owner, therefore, he has every right to contest the arbitration proceedings. 6. Having examined the submissions of learned counsel for the parties and gone through the record, the issue involved in the writ petition is whether the petitioner is necessary/aggrieved party in the arbitration proceedings or not. 7. The Hon'ble Apex Court in the case of Prabodh Verma v. State of U.P. 1984 (4) SCC 251 has held that all the parties whose rights are going to be affected by the judgment of the court should be heard and an opportunity of hearing should be allowed to such parties. 8. A necessary party is one without whom no effective order can be made; a proper party 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 proceedings. (Vide Udit Narain Singh Malpaharia v. Additional Member, Board of Revenue, Bihar & Anr.), AIR 1963 SC 786 . 9. A person who may be adversely affected directly by the decision of a Court is a necessary party, for the reason that any order passed behind his back may not be binding upon him being passed in violation of the principles of natural justice. (Vide Prabodh Verma & Ors v. State of U.P. & Ors, AIR 1985, SC 167; Ishwar Singh & Ors v. Kuldeep Singh & Ors, 1995 (Supp) 1, SCC 179; Bhagwanti & Ors. (Vide Prabodh Verma & Ors v. State of U.P. & Ors, AIR 1985, SC 167; Ishwar Singh & Ors v. Kuldeep Singh & Ors, 1995 (Supp) 1, SCC 179; Bhagwanti & Ors. v. Subordinate Services Selection Board, Haryana & Anr., 1995 (Supp) 2 SCC 663; Central Bank of India v. S. Satyam & Ors., (1996) 5 SCC 419 ; J. Jose Dhanapaul v. S. Thomas & Ors., (1996) 3 SCC 587 ; Arun Tewari & Ors. v. Zila Mansavi Shikshak Sangh & Ors., AIR 1998 SC 331; Azar Hasan & Ors. v. District Judge, Saharanpur & Ors, (1998) 3 SCC 246 ; Ram Swarup & Ors. v. S.N. Maira & Ors., AIR 1999 SC 941 ; L. Chandrakishore Singh v. State of Manipur & Ors., (1999) 8 SCC 287 ; Mohd. Riazul Usman Gani & Ors. v. District & Sessions Judge, Nagpur & Ors., AIR 2000 SC 919 ; Nirmala Anand v. Advent Corporation (P) Ltd. & Ors., AIR 2002 SC 2290 ; M.P. Rajya Sahkari Bank Maryadit v. Indian Coffee Workers' Cooperative Society Ltd. & Ors., AIR 2002 SC 3055 ; and Ramrao & Ors. v. All India Backward Class Bank Employees Welfare Association & Ors., AIR 2004 SC 1459 ; K.H. Siraj v. High Court of Kerala & Ors., AIR 2006 SC 2339 ; and Avtar Singh Hit v. Delhi Sikh Gurudwara Management Committee & Ors., (2006) 8 SCC 487 ). 10. In Ramesh Hirachand Kundanmal v. Municipal Corporation of Greater Bombay & Ors., (1992) 2 SCC 524 , the Hon'ble Supreme Court held that parties, whose presence before the Court is necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the suit, are necessary parties. What makes a person a necessary party is not merely that he has relevant evidence to come on some of the questions involved, nor it is merely that he has interest in the correct solution of some questions involved, and as relevant 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. 11. 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. 11. In Savitri Devi v. District Judge, Gorakhpur & Ors., AIR 1999 SC 976 , the Hon'ble Supreme Court held that the presence of a necessary party which is necessarily required as one of the parties is to implead as necessary party is to avoid multiplicity of the proceedings, which is also one of the main objects of the Order 1, Rule 10 CPC. If a necessary party is not impleaded or its application for impleadment is rejected and he is adversely affected, it may not be bound by the said judgment or would have a right to come up with a separate suit to enforce his alleged rights, which would amount to ultimately multiplicity of the proceedings. In Razia Begum v. Sahebzadi Anwar Begum & Ors., AIR 1958 SC 886 the Hon'ble Supreme Court held that the person claiming to be a necessary party must be a person who must have a direct interest in the action. In Director of Technical Education & Anr v. Smt K. Sitadevi, AIR 1991 SC 308 , the Hon'ble Supreme Court examined a case regarding the correction of the date of birth in the service record. The case was filed by the employee without impleading the State (employer), and the submission that the relief was sought only against the Technical Education Board; which had issued the certificate containing the date of birth on the basis of which the date of birth had been entered in her service book, and thus, employer was not a necessary party, was rejected observing as under:- "We, therefore, clarify the legal position that a decree without the State being a party is not binding on the employer (State) in the matter of determination of the date of birth." Undoubtedly, a party can be added at any stage of the proceedings as held by the Hon'ble Supreme Court in Bal Niketan Nursery School v. Kesari Prasad, AIR 1987 SC 1970 . 12. In the present case, the petitioner apparently was allotted a flat no. 12. In the present case, the petitioner apparently was allotted a flat no. 403-B, Jeevan Apartments, GH-7, Sector-6, Vasundhara, Ghaziabad, U.P. by opposite party no. 3 being its member vide allotment letter dated 20.6.2004 and on payment of the cost of the flat, while delivering the possession an agreement was entered between the petitioner and opposite party no. 3 (the society). 13. It appears that the earlier allottee raised his grievance invoking the arbitration clause under Section 70 of the U.P. Co-operative Societies Act, 1965, in respect of the house which belongs to the petitioner and the petitioner on coming to know about the said proceedings moved an application for impleadment, which was rejected by the Arbitrator vide order dated 2.6.2008 which resulted in filing the instant writ petition. 14. It may be noted that this court while entertaining the writ petition, has restrained the Arbitrator from proceedings in the matter. On examination of the facts of the present case, we come to conclusion that if petitioner is not permitted to participate in the proceedings, then, his right would definitely be affected, if any award is passed in favour of the opposite party no. 2. It was the duty of the Arbitrator to examine the application of the petitioner on merit. It appears that the application has been rejected without application of mind and taking into consideration the surrounding circumstances. 15. For the aforesaid reasons, we quash the impugned order dated 2.06.2008 and direct the Additional Registrar (Law) Co-operative Societies, U.P., Lucknow/Arbitrator to consider and decide the application of the petitioner for impleadment on merit in Arbitration No. 83 of 2007-08 and if he finds that petitioner's interest is involved in any manner in the said proceedings, then, direct the claimant to implead the petitioner as respondent to the said proceedings and due opportunity shall be given to the petitioner for presenting her case. Considering the fact that the matter is lingering since 2007-2008, the Arbitrator shall make every endeavour to decide the case expeditiously i.e. within a period of six months in accordance with law from the date of production of certified copy of this order. 16. With the aforesaid observations, the writ petition is allowed.