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2017 DIGILAW 1944 (RAJ)

Ol of M/S Jaipur Spinning And Weaving v. Podar Mills Ltd.

2017-08-31

SANJEEV PRAKASH SHARMA

body2017
ORDER : 1. The matter comes up on application Nos. 7971/2017 and 8107/2017 in S.B. Company Application No.21/1988. Both the applications have been preferred by one M/s. Girijikripa Developers Private Limited and M/s. Swarn Bhumi Township Private Limited respectively for impleadment as party. 2. Learned Sr. Counsel appearing for the applicants Mr. P. Samdhani while arguing the applications took this Court to the facts of the case and the background by which the present application has been filed. Suffice it to state that essentially the application for impleadment has been moved as the applicants submit that they entered into two separate conveyance deeds on 19.07.2007 with the respondent Poddar Mills Limited as coined by learned Sr. Counsel as assignment deeds of part of the land in possession with Poddar Mills Limited. It is stated that the said conveyance deeds were duly registered with the Sub-Registrar at Jaipur on 20th July, 2007 for an area admeasuing 56,629 square yards and 35,380 square yares respectively. It is further stated that on 29.03.2010 rectification deed was executed and registered on 30.03.2010 clarifying the aforementioned conveyance deeds dated 19.07.2007 making certain amendments in the clauses of the said deeds. 3. In the meanwhile, an order came to be passed on 07.12.2007 by this Court directing the OL to determine the market value of the lands of the Poddar Mills Limited and put them for open auction. On 7.8.2010 the OL gave a public notice for sale of the entire land which also included the land assigned to the applicants by way of the aforesaid conveyance deeds. Additionally an application No.75/2013 was filed by the OL for reclaiming of the leased property assigned to the applicants. In the said application No.75/2013 the applicants have already impleaded as parties. However, in the Company Application No.21/1988 which had been preferred earlier by the OL, the applicants were not impleaded as parties. The prayer in the said application is also for eviction and reclaiming of the leased property which includes the property which has been subsequently leased out in terms of the aforesaid conveyance deeds. It is stated that the application No.21/1988 has been only revived by the Court vide order dated 13.01.2017 and, therefore, it has become necessary that the applicants be impleaded as a party in the application No.21/1988. It is stated that the application No.21/1988 has been only revived by the Court vide order dated 13.01.2017 and, therefore, it has become necessary that the applicants be impleaded as a party in the application No.21/1988. It is submitted that any decision given by this Court on the Company Application No.21/1988 would necessarily affect the rights of the applicants which ensue under the said conveyance deeds of 2007 and clarified in 2010. 4. Learned Sr. Counsel for the applicants submits that at the stage for impleadment the merits of the case are not required to be examined and the Court would only examine the issue where from the facts and circumstances a party seeking impleadment is a necessary party or a proper party for the purpose of complete disposal of the case. Further, it has been argued that in terms of Rule 6 of the Company (Court) Rules, 1959 and in terms of Order 22 Rule 10 read with Order 1 Rule 10 CPC, the applicants who are the subsequent purchasers or lease holders are necessary parties and their application ought to be allowed. 5. Learned Counsel relies on the law laid down by the Apex Court in following cases : - 1. (2001) 6 SCC534: Dhurandhar Prasad Singh Vs. Jai Prakash University & Ors., 2. (2005) 11 SCC 403 : Amit Kumar Shaw & Anr. Vs. Farida Khatoon & Anr. 3. (2016) 1 SCC 730 ; Sharadamma Vs. Mohammed Pyrejan (dead) through Legal Representatives & Anr. 6. Mr. Ajeet Kumar Sharma, Sr. Counsel appearing for Poddar Mills Limited supports the applications and submits that if the assignees are impleaded as party, he has no objection moreover they are necessary parties for the purpose of true and correct disposal of the case. He relies on judgment reported in AIR 1963 SC 786 : Udit Narain Singh Vs. Additional Member, Board of Revenue, Bihar . 7. Per contra, the learned Counsel representing the OL Mr. Gaurav Sharma vehemently opposes the application and submits that in terms of Section 536 and 537(b) of the Act of 1956, the deed on the basis of which the respondents are claiming their rights to be affected is ab initio void and they are not necessary parties nor are they proper parties. Gaurav Sharma vehemently opposes the application and submits that in terms of Section 536 and 537(b) of the Act of 1956, the deed on the basis of which the respondents are claiming their rights to be affected is ab initio void and they are not necessary parties nor are they proper parties. It is submitted that the provisions of Order 22 Rule 10 would not be attracted in the circumstances as the basis of their contention is a void deed. It is stated further that the application dated 21/1998 relates to the situation which was arising in the year 1988 and subsequent actions would not be examined thereto as it is a settled principle that the facts required for disposal of the application would be looked as they existed in the year 1988. It is submitted that provisions of Section 537 read with Section 536(2) of the Act of 1956 clearly barred any such transfer of land and was void. That apart the execution of the assignment deeds was in violation of Section 52 and Section 53 of the Transfer of Properties Act, 1882. He relies on law laid down by the Apex Court in the case of Hukum Chand Vs. Om Chand & Ors. (2001) 10 SCC 715 and on (2005) 11 SCC 403 Amit Kr. Shaw Vs. Faida Khatoon. 8. On examining the facts of the case, this Court finds that the application has been moved in the Company Application No.21/1988 which has been revived by order dated January, 2017. In Udit Narain Singh’s case (supra) it has been held by the Apex Court in para 11, 12 and 13 as under :- “11. …… In "The law of Extraordinary Legal Remedies" by Ferris, the procedure in the matter of impleading parties is clearly described at p.201 thus: “Those parties whose action is to be reviewed and who are interested therein and affected thereby, and in whose possession the record of Such action remains, are not only proper, but necessary parties. It is to such parties that notice to show cause against the issuance of the writ must be given, and they are the only parties who may make return, or who may demur. The omission to make parties those officers whose proceedings it is sought to direct and control, goes to the very right of the relief sought. It is to such parties that notice to show cause against the issuance of the writ must be given, and they are the only parties who may make return, or who may demur. The omission to make parties those officers whose proceedings it is sought to direct and control, goes to the very right of the relief sought. But in order that the court may do ample and complete justice, and render judgment which will be binding on all persons concerned, all persons who are parties to the record, or who are interested in maintaining the regularity of the proceedings of which a review is sought, should be made parties respondent." This passage indicates that both the authority whose order is sought to be quashed and the persons who ,are interested in maintaining the regularity of the proceeding of which a review is sought should be added as parties in a writ proceeding. ……….. 12. To summarize: in a writ of certiorari not only the tribunal or authority whose order is sought to be quashed but also parties in whose favour the said order is issued are necessary parties. But it is in the discretion of the court to add or implead proper parties for completely settling all the questions that may be involved in the controversy either suo motu or on the application of a party to the writ or an application filed at the instance of such proper party. 13. In the present case Phudan Manjhi and Bhagwan Rajak were parties before the Commissioner as well as before the Board of Revenue. They succeeded in the said proceedings and the orders of the said tribunal were in their favour. It would be against all principles of natural justice to make an order adverse to them behind their back; and any order so made could not be an effective one. They were, therefore, necessary parties before the High Court. The record discloses that the appellant first impleaded them in his petition but struck them out at the time of the presentation of the petition. He did not file any application before the High Court for impleading them as respondents. In the circumstances, the petition filed by him was incompetent and was rightly rejected.” 9. The record discloses that the appellant first impleaded them in his petition but struck them out at the time of the presentation of the petition. He did not file any application before the High Court for impleading them as respondents. In the circumstances, the petition filed by him was incompetent and was rightly rejected.” 9. The Apex Court in the case reported as (2001) 6 SCC 534 : Dhurandhar Prasad Singh V. Jai Prakash University has held in para 6, 7 and 26 as under :- “6. In order to appreciate the points involved, it would be necessary to refer to the provisions of Order 22 of the Code, Rules 3 and 4 whereof prescribe procedure in case of devolution of interest on the death of a party to a suit. Under these Rules, if a party dies and right to sue survives, the court on an application made in that behalf is required to substitute legal representatives of the deceased party for proceeding with a suit but if such an application is not filed within the time prescribed by law, the suit shall abate so far as the deceased party is concerned. Rule 7 deals with the case of creation of an interest in a husband on marriage and Rule 8 deals with the case of assignment on the insolvency of a plaintiff. Rule 10 provides for cases of assignment, creation and devolution of interest during the pendency of a suit other than those referred to in the foregoing Rules and is based on the principle that the trial of a suit cannot be brought to an end merely because the interest of a party in the subject-matter of the suit has devolved upon another during its pendency but such a suit may be continued with the leave of the court by or against the person upon whom such interest has devolved. But, if no such step is taken, the suit may be continued with the original party and the person upon whom the interest has devolved will be bound by and can have the benefit of the decree, as the case may be, unless it is shown in a properly constituted proceeding that the original party being no longer interested in the proceeding did not vigorously prosecute or colluded with the adversary resulting in decision adverse to the party upon whom the interest had devolved. The legislature while enacting Rules 3, 4 and 10 has made a clear-cut distinction. In cases covered by Rules 3 and 4, if right to sue survives and no application for bringing the legal representatives of a deceased party is filed within the time prescribed, there is automatic abatement of the suit and procedure has been prescribed for setting aside abatement under Rule 9 on the grounds postulated therein. In cases covered by Rule 10, the legislature has not prescribed any such procedure in the event of failure to apply for leave of the court to continue the proceeding by or against the person upon whom interest has devolved during the pendency of a suit which shows that the legislature was conscious of this eventuality and yet has not prescribed that failure would entail dismissal of the suit as it was intended that the proceeding would continue by or against the original party although he ceased to have any interest in the subject of dispute in the event of failure to apply for leave to continue by or against the person upon whom the interest has devolved for bringing him on the record. 7. Under Rule 10 Order 22 of the Code, when there has been a devolution of interest during the pendency of a suit, the suit may, by leave of the court, be continued by or against persons upon whom such interest has devolved and this entitles the person who has acquired an interest in the subject-matter of the litigation by an assignment or creation or devolution of interest pendente lite or suitor or any other person interested, to apply to the court for leave to continue the suit. But it does not follow that it is obligatory upon them to do so. If a party does not ask for leave, he takes the obvious risk that the suit may not be properly conducted by the plaintiff on record, and yet, as pointed out by Their Lordships of the Judicial Committee in Moti Lal v. Karrabuldin [ILR (1898) 25 Cal. 179] he will be bound by the result of the litigation even though he is not represented at the hearing unless it is shown that the litigation was not properly conducted by the original party or he colluded with the adversary. 179] he will be bound by the result of the litigation even though he is not represented at the hearing unless it is shown that the litigation was not properly conducted by the original party or he colluded with the adversary. It is also plain that if the person who has acquired an interest by devolution, obtains leave to carry on the suit, the suit in his hands is not a new suit, for, as Lord Kingsdown of the Judicial Committee said in Prannath Roy Chowdry v. Rookea Begum [(1857-60) 7 MIA 323], a cause of action is not prolonged by mere transfer of the title. It is the old suit carried on at his instance and he is bound by all proceedings up to the stage when he obtains leave to carry on the proceedings. x x x x x 26. The plain language of Rule 10 referred to above does not suggest that leave can be sought by that person alone upon whom the interest has devolved. It simply says that the suit may be continued by the person upon whom such an interest has devolved and this applies in a case where the interest of the plaintiff has devolved. Likewise, in a case where interest of the defendant has devolved, the suit may be continued against such a person upon whom interest has devolved, but in either eventuality, for continuance of the suit against the persons upon whom the interest has devolved during the pendency of the suit, leave of the court has to be obtained. If it is laid down that leave can be obtained by that person alone upon whom interest of a party to the suit has devolved during its pendency, then there may be preposterous results as such a party might not be knowing about the litigation and consequently not feasible for him to apply for leave and if a duty is cast upon him then in such an eventuality he would be bound by the decree even in cases of failure to apply for leave. As a rule of prudence, initial duty lies upon the plaintiff to apply for leave in case the factum of devolution was within his knowledge or with due diligence could have been known by him. As a rule of prudence, initial duty lies upon the plaintiff to apply for leave in case the factum of devolution was within his knowledge or with due diligence could have been known by him. The person upon whom the interest has devolved may also apply for such a leave so that his interest may be properly represented as the original party, if it ceased to have an interest in the subject-matter of dispute by virtue of devolution of interest upon another person, may not take interest therein, in ordinary course, which is but natural, or by colluding with the other side. If the submission of Shri Mishra is accepted, a party upon whom interest has devolved, upon his failure to apply for leave, would be deprived from challenging correctness of the decree by filing a properly constituted suit on the ground that the original party having lost interest in the subject of dispute, did not properly prosecute or defend the litigation or, in doing so, colluded with the adversary. Any other party, in our view, may also seek leave as, for example, where the plaintiff filed a suit for partition and during its pendency he gifted away his undivided interest in the Mitakshara coparcenary in favour of the contesting defendant, in that event the contesting defendant upon whom the interest of the original plaintiff has devolved has no cause of action to prosecute the suit, but if there is any other co-sharer who is supporting the plaintiff, he may have a cause of action to continue with the suit by getting himself transposed to the category of plaintiff as it is well settled that in a partition suit every defendant is a plaintiff, provided he has cause of action for seeking partition. Thus, we do not find any substance in this submission of learned counsel appearing on behalf of the appellant and hold that prayer for leave can be made not only by the person upon whom interest has devolved, but also by the plaintiff or any other party or person interested.” 10. In Amit Kumar Shaw Vs. Farida Khatoon, (2005) 11 SCC 403 it was observed in para Nos. 8, 9, 10 and 12 as under :- “8. In Amit Kumar Shaw Vs. Farida Khatoon, (2005) 11 SCC 403 it was observed in para Nos. 8, 9, 10 and 12 as under :- “8. On a combined reading of Order 1 Rule 10, Order XXII Rule 10 of the Code of Civil Procedure and Section 52 of the Transfer of Property Act, can an application for substitution by a subsequent transferee be rejected and the subsequent purchaser be non-suited altogether is the prime question for consideration in these appeals. 9. The object of Order 1 Rule 10 is to discourage contests on technical pleas, and to save honest and bona fide claimants from being non-suited. The power to strike out or add parties can be exercised by the Court at any stage of the proceedings. Under this Rule, a person may be added as a party to a suit in the following two cases: (1) When he ought to have been joined as plaintiff or defendant, and is not joined so, or (2) When, without his presence, the questions in the suit cannot be completely decided. 10. The power of a Court to add a party to a proceeding can not depend solely on the question whether he has interest in the suit property. The question is whether the right of a person may be affected if he is not added as a party. Such right, however, will include necessarily an enforceable legal right. 11. …………… 12. Under Order XXII, Rule 10, no detailed inquiry at the stage of granting leave is contemplated. The Court has only to be prima facie satisfied for exercising its discretion in granting leave for continuing the suit by or against the person on whom the interest has devolved by assignment or devolution. The question about the existence and validity of the assignment or devolution can be considered at the final hearing of the proceedings. The Court has only to be prima facie satisfied for exercising its discretion in granting leave for continuing the suit.” 11. The judgment of Dhurandhar Prasad Singh (supra) has been followed in a recent judgment passed by the Apex Court in the case reported as (2016) 1 SCC 730 : Sharadamma Vs. Mohammed Pyrejan (dead) through Legal Representatives & Anr. 12. The judgment of Dhurandhar Prasad Singh (supra) has been followed in a recent judgment passed by the Apex Court in the case reported as (2016) 1 SCC 730 : Sharadamma Vs. Mohammed Pyrejan (dead) through Legal Representatives & Anr. 12. Taking into consideration the law as quoted above and that the question regarding merits relating to the validity or legality of the assignment deeds entered between Poddar Mills Limited and the applicants would have to be examined by the Court while deciding application No.21/1998 as well as application No.75/2013 and the decision thereto shall definitely affect the applicants one way or the other, therefore, it is necessary that they may be heard and given opportunity to put up their version before the Court. Thus, I find that they are not only proper parties but are necessary parties for true and correct disposal of the applications. 13. The objections raised by the OL are therefore rejected. 14. Accordingly applications Nos. 7971/2017 and 8107/2017 are allowed. 15. No costs.