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2022 DIGILAW 1372 (AP)

Shaik Shajahan v. E Jyothi

2022-11-24

B.S.BHANUMATHI

body2022
ORDER : The important point fell for consideration in this revision is whether a purchaser of immovable property is a necessary party in a suit filed for recovery of amount paid as advance under an agreement of sale executed prior to the sale. 2. This civil revision petition, under Article 227 of the Constitution of India, by the defendants is directed against the orders, dated 11.03.2020, allowing IA.No.54 of 2019 in OS.No.61 of 2017 on the file of the Court of Principal District Judge, Chittoor, filed under Order I Rule 10 CPC read with Rule 28 of the Civil Rules of Practice to implead 2nd and 3rd respondents as 2nd and 3rd defendants with joint and several liability with the 1st respondent/sole defendant and make the consequential amendments as follows: “a) In the small cause title and in the big cause title of the plaint showing the names of the proposed parties (Respondent No.2 and 3) as Defendant No.2 and 3 and their addresses respectively. b) After para No.7 of the plaint add the following as para No.7(a) of the plaint. “7(a) It is submitted that the 2nd defendant being the owner of the plaint schedule property and as Principal of his power of attorney the 1st Defendant herein, the 1st defendant also liable to pay the suit amount to the plaintiff. Further it is submitted that the 3rd Defendant knowing fully well about the suit agreement of sale, in collusion with 1st Defendant on behalf of the 2nd defendant has entered into and brought in to the existence of a sham and nominal sale deed dated 15-09-2014, the Defendant is also liable to pay the suit amount. Therefore, all the Defendants jointly and severally are liable to pay the suit amount. Hence the present suit.” c) In the relief column of the plaint delete the word “Defendant” and add the words “Defendants jointly and severally”.” 3. Heard Sri M. Venkata Ramana Reddy, learned counsel appearing for the revision petitioners/proposed defendants 2 & 3 1st and Sri P.Jagadishchandra Prasad, learned counsel for the respondent/plaintiff and Sri O. Uday Kumar, learned counsel for the 2nd respondent/defendant. 4. The case of the plaintiff, in brief, is as follows: (a) The defendant, Maddipatla Geethavani (1st respondent), being power of attorney on behalf of Shaik Shajahan S/o Md. 4. The case of the plaintiff, in brief, is as follows: (a) The defendant, Maddipatla Geethavani (1st respondent), being power of attorney on behalf of Shaik Shajahan S/o Md. Ibrahim (2nd respondent), executed the suit agreement of sale on 15.05.2014 in favour of the plaintiff agreeing to sell the plaint schedule property. In spite of notices, dated 10.07.2014, 28.07.2014, 03.04.2017, the defendant failed to perform her part of contract. Thereafter, the plaintiff, on obtaining encumbrance certificate, came to know that after execution of the suit agreement of sale in favour of the plaintiff, the 1st respondent executed a sham and nominal sale deed on 15.09.2014, in favour of the 3rd respondent collusively brought into existence in order to defeat the rights of the plaintiff under the agreement of sale, dated 15.05.2014. Since the defendant failed to perform her part of the contract, the plaintiff brought the suit for recovery of advance amount of Rs.15,00,000/-with interest. The defendant filed her written statement taking a false plea. After perusal of the written statement, owner and subsequent purchasers who are the 2nd and 3rd respondents are necessary parties to the suit and required to be impleaded as 2nd and 3rd defendants to avoid multiplicity of proceedings. (b) The original defendant/1st respondent did not file any counter. 2nd 3rd The respondent also did not file any counter. The respondent filed counter denying the case of the petitioner. It is mainly contended that the 3rd respondent is not a necessary party since the suit is filed for recovery of amount only. It is further contended that the suit filed is not maintainable as the plaint schedule property is located at Tirupathi and the 1st respondent/sole defendant is resident of Tirupathi, and as such, this Court has no jurisdiction to entertain the suit; that earlier, the petitioner filed I.A.No.11 of 2019 proposing to implead the 2nd respondent and a counter was filed, but later, the plaintiff withdrew the said petition by filing a memo and thereafter, the present application was filed; that the present petition to implead the parties is barred by limitation since period of three (3) years expired by 13.07.2017 (agreement dt.15.05.2014 and two months time for performance + three years); that the 3rd respondent is a bona fide purchaser of the plaint schedule property without notice of alleged agreement of sale; and that the petition is liable to be dismissed. (c) No oral or documentary evidence was adduced for either of the parties. 5. On contest, the trial Court allowed the petition of the plaintiff permitting impleadment of respondent Nos.2 & 3 as defendants in the suit since collusion is pleaded and all other points raised will be decided during the trial. Therefore, the aggrieved defendants 2 & 3 are before this Court. 6. The revision petitioners/defendants 2 & 3, while reiterating their pleaded case, further urged as follows: The order impugned is illegal, contrary to law and is unsustainable. The trial Court failed to see that similar application in I.A.No.11 of 2019 was filed earlier seeking the same relief and later the said application was withdrawn. The reasoning assigned by the trial Court is unsound. The relief sought is barred by law of limitation. The petition is intended to drag on the proceedings. The petition is liable to be set aside and the revision deserves to be allowed. 7. Though the suit is filed for mere recovery of the amount of part of sale consideration paid as advance, now, the plaintiff proposes to implead 2nd and 3rd defendants who are (i) the owner of the property who gave GPA to the 1st defendant, as 2nd defendant, and (ii) the purchaser of the property as 3rd defendant. 8. Learned counsel for the revision petitioners vehemently contends that the trial Court did not answer the points raised and just postponed them without any reason, by observing that they can be answered at a later stage. Further, he contended that in a suit for mere recovery of such amount, purchaser of immovable property is not a necessary party and the decision relied on by the trial Court is not applicable to present case. 9. At the outset, it is necessary to refer to the provision of Order 1 Rule 10 CPC, which reads as under: “10. Further, he contended that in a suit for mere recovery of such amount, purchaser of immovable property is not a necessary party and the decision relied on by the trial Court is not applicable to present case. 9. At the outset, it is necessary to refer to the provision of Order 1 Rule 10 CPC, which reads as under: “10. Suit in name of wrong plaintiff— (1) Where a suit has been instituted in the name of the wrong person as plaintiff or where it is doubtful whether it has been instituted in the name of the right plaintiff, the Court may at any stage of the suit, if satisfied that the suit has been instituted thought a bona fide mistake, and that it is necessary for the determination of the real matter in dispute so to do, order any other person to be substituted or added as plaintiff upon such terms as the Court thinks just. (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. (3) No person shall be added as a plaintiff suing without a next friend or as the next friend of a plaintiff under any disability without his consent. (4) Where defendant added, plaint to be amended—Where a defendant is added, the plaint shall, unless the Court otherwise directs, be amended in such manner as may be necessary, and amended copes of the summons and of the plaint shall be served on the new defendant and, if the Court thinks fit, on the original defendant. (4) Where defendant added, plaint to be amended—Where a defendant is added, the plaint shall, unless the Court otherwise directs, be amended in such manner as may be necessary, and amended copes of the summons and of the plaint shall be served on the new defendant and, if the Court thinks fit, on the original defendant. (5) Subject to the provisions of the [116] Indian Limitation Act, 1877 (15 of 1877), section 22, the proceedings as against any person added as defendant shall be deemed to have begun only on the service of the summons.” A plain reading of the above provision shows that the Court has got jurisdiction and discretion to add a party at any stage of the proceeding either upon or without application of either of the parties to the suit, in case, the Court is of the opinion that the presence of such party before the Court may be necessary in order to enable the Court to effectively and completely adjudicate and settle all questions involved in the lis. 10. Before proceeding further, it is apropos to refer the settled legal position: (i) This Court, in Darji Krishna Murthy and Ors. Vs. M. Shankar Reddy and Ors., 2014 (6) ALT 447 (S.B), referred the decision of the Supreme Court in Vidhur Impex and Traders Pvt. Ltd. v. Tosh Apartments Pvt. Ltd. and Ors.[ (2012 ) 8 SCC 384], wherein at paragraph No.36, the broad principles which should govern disposal of an application for impleadment are narrated and they are excerpted herein below:- “1. The Court can, at any stage of the proceedings, either on an application made by the parties or otherwise, direct impleadment of any person as party, who ought to have been joined as plaintiff or defendant or whose presence before the Court is necessary for effective and complete adjudication of the issues involved in the suit. 2. A necessary party is the person who ought to be joined as party to the suit and in whose absence an effective decree cannot be passed by the Court. 3. A proper party is a person whose presence would enable the Court to completely, effectively and properly adjudicate upon all matters and issues, though he may not be a person in favour of or against whom a decree is to be made. 4. 3. A proper party is a person whose presence would enable the Court to completely, effectively and properly adjudicate upon all matters and issues, though he may not be a person in favour of or against whom a decree is to be made. 4. If a person is not found to be a proper or necessary party, the Court does not have the jurisdiction to order his impleadment against the wishes of the plaintiff. 5. In a suit for specific performance, the Court can order impleadment of a purchaser whose conduct is above board, and who files application for being joined as party within reasonable time of his acquiring knowledge about the pending litigation. However, if the applicant is guilty of contumacious conduct or is beneficiary of a clandestine transaction made by the owner of the suit property in violation of the restraint order passed by the Court, or the application is unduly delayed then the Court will be fully justified in declining the prayer for impleadment. (ii) In Kasturi vs. Iyyamperumal and Ors., (2005) 6 Supreme Court Cases 733, the Supreme Court observed as follows: “The two tests are to be satisfied for determining the question who is a necessary party. Tests are – (1) there must be a right to some relief against such party in respect of the controversies involved in the proceedings (2) no effective decree can be passed in the absence of such party.” (iii) This Court in Namala Veera Bhadram v. Namala Dayakar and others, 2016 (6) ALT 275 (S.B), reiterated the same proposition and it was held at para 5 held as follows: “5. There cannot be any dispute that Order I Rule 10(2) CPC provides for adding of the defendant at any stage. Two conditions are required to be fulfilled for impleading of a party viz., (i) the proposed party has some semblance of right over the property, and (ii) without impleading a party, complete and effective adjudication cannot be made. There cannot be any dispute that Order I Rule 10(2) CPC provides for adding of the defendant at any stage. Two conditions are required to be fulfilled for impleading of a party viz., (i) the proposed party has some semblance of right over the property, and (ii) without impleading a party, complete and effective adjudication cannot be made. If the above two requirements are satisfied, a party can be impleaded.” (iv) In Taddi Chinnayya and others v. Tekumalla Purushottam Reddy and others, 2015 (4) ALT 476 (S.B), the High Court of Judicature at Hyderabad, observed that the Court has the discretion to either to allow or reject an application of a person claiming to be a proper party, depending upon the facts and circumstances and no person has a right to insist that he should be impleaded as a party, merely because he is a proper party. It was held in para (18) of the said decision as follows: “18. A necessary party is one whose presence is indispensable to the constitution of the suit, against whom the relief is sought and without whom no effective order can be passed. A proper party is one in whose absence an effective order can be passed, but whose presence is necessary for a complete and final decision on the question involved in the proceeding. A duty is cast on the court to curb vexatious and frivolous petitions, which were filed with an ulterior motive of protracting the litigation by certain persons under the guise of bona fide parties to the proceedings. In such circumstances, the court has to take more care in order to ascertain the hidden agenda of the proposed party by lifting the veil.” (v) In Tellagam Setty Babu v. State of Andhra Pradesh, rep. by its Principal Secretary, Revenue Department, Amaravathi, Guntur District and others, 2019 (1) ALT 781 (S.B), it was held that in a suit for specific performance, when property is transferred to third parties during the pendency of the suit, adding purchaser is necessary as suit cannot be adjudicated without him and he is a proper and necessary party. by its Principal Secretary, Revenue Department, Amaravathi, Guntur District and others, 2019 (1) ALT 781 (S.B), it was held that in a suit for specific performance, when property is transferred to third parties during the pendency of the suit, adding purchaser is necessary as suit cannot be adjudicated without him and he is a proper and necessary party. (vi) In Putturu Vishnu Kumar v. Rudraraju Satyanarayana Raju and others, 2016 (1) ALT 109 (S.B), it was held that a person who is likely to secure right, title and interest in a property which is the subject matter of a suit for specific performance of agreement of sale after the said suit decided in favour of plaintiff therein is neither a necessary party nor a proper party to get impleaded as a party to the suit. 11. Insofar as the contentions raised by the proposed parties opposing the petition filed under Order 1 Rule 10 CPC are concerned, the issue of territorial jurisdiction, limitation, cause of action and no liability as they are not signatories to the agreement which is a main document in the suit etc., were raised. 12. Insofar as territorial jurisdiction is concerned, it is submitted that the plaint schedule property is located in Tirupathi, the defendants reside in Tirupathi and the power of attorney is also executed at Tirupathi and therefore, the Court at Chittoor has no territorial jurisdiction, but the same was not answered by the trial Court. 13. Nextly, insofar as the question of limitation is concerned, the 3rd respondent contended that the agreement was executed on 15.05.2014 stipulating two months time for performance and thereby, three years time would expire by 14.07.2017 and as such, the suit ought to have been filed on or before 13.07.2017, but the present petition filed in the year 2019 to implead respondents 2 & 3 is beyond 13.07.2017 and thus, the cause of action is barred by limitation as against them. Learned counsel relied on the decision in B.Santoshamma & Another v. D.Sarala & Another, 2020 SAR (Civ) 1131, wherein, Supreme Court held that in a suit for specific performance of an agreement of sale, transferee is a necessary party and must be impleaded before the suit becomes time barred against him. Learned counsel relied on the decision in B.Santoshamma & Another v. D.Sarala & Another, 2020 SAR (Civ) 1131, wherein, Supreme Court held that in a suit for specific performance of an agreement of sale, transferee is a necessary party and must be impleaded before the suit becomes time barred against him. It was held at para No.79 as follows: “A transferee to whom the subject matter of a sale agreement or part thereof is transferred, is a necessary party to a suit for specific performance. Unfortunately, the Vendee omitted to implead ‘Pratap Reddy’. By the time she filed an application to implead ‘Pratap Reddy’, in 1989, the suit for specific performance of the agreement dated 21.3.1984 had become barred by limitation as against 'Pratap Reddy'. However, the trial Court answered this point by observing that the suit was instituted within the period of limitation and the said observation has not answered the point raised by the respondents. 14. It is settled law that when a party is to be added under Order 1 Rule 10 CPC, if the cause of action against such party is barred by limitation, the same shall also be taken into consideration and if it requires a detailed enquiry, while allowing the petition, the question of limitation may be allowed to be decided in the suit or if it is already barred by limitation ex facie basing on the material available on record, the impleadment of a party may be rejected then and there. However, the point has been answered in another perspective, but not the perspective raised by the respondent. 15. First of all, to add a party in a pending suit, it must be shown that the proposed party must be either necessary party or a proper party. In a suit for specific performance of contract, even a subsequent purchaser becomes a necessary party and the contention whether such a purchaser is a bona fide purchaser or not can be adjudicated during the course of trial. But, in a suit for recovery of amount paid as advance sale consideration, how the purchaser of the property would be a necessary party without showing the liability attached to the property transferred to the purchaser. A mere agreement of sale of immovable property does not create any liability on the property for realization of the amount paid in advance under an agreement to purchase the said property. A mere agreement of sale of immovable property does not create any liability on the property for realization of the amount paid in advance under an agreement to purchase the said property. Therefore, the plaintiff ought to have shown prima facie liability of the 3rd defendant to be added as a party being necessary for adjudication of the suit claim for recovery of the advance amount. This question cannot be postponed till trial merely because a bare and vague plea of collusion is proposed to be pleaded. It must be decided in this petition. 16. It is contended by the plaintiff that since collusion between the 1st defendant and other defendants is pleaded, the presence of 3rd defendant is essential for adjudication of the suit. Order VI Rule 4 CPC requires the details of the fraud etc. and in all other cases in which particulars may be necessary to be pleaded in the plaint. Mere use of word ‘collusion’ is not sufficient. No details of collusion are mentioned even in the proposed amendment or in the affidavit annexed to the petition. Thus, vague expressions do not create cause of action even to satisfy the Court to implead the third respondent/3rd defendant as a party. Therefore, there is no need to implead the 3rd respondent/3rd defendant who is the 2nd revision petitioner. 17. Insofar as the necessity of the 2nd defendant to be impleaded as a party to the suit is concerned, though no counter has been filed by the 2nd defendant before the trial Court, the 2nd defendant has 3rd 2nd joined the defendant in filing the revision. Since the defendant is the principal who gave GPA to the 1st defendant who received the amount from the plaintiff, the proposed 2nd defendant is a necessary party. The 2nd respondent cannot oppose the impleadment in the suit. 18. In the present case, the question of limitation requires enquiry and it can be raised in the written statement in view of Section 21 of the Limitation Act which allows a suit to be deemed as instituted on an earlier date as regards the impleaded party also. 19. Section 21(1) CPC says objection as to place of suing shall be taken at the earliest possible opportunity or else it cannot be taken at a later stage unless it occasions a failure of justice. 19. Section 21(1) CPC says objection as to place of suing shall be taken at the earliest possible opportunity or else it cannot be taken at a later stage unless it occasions a failure of justice. Therefore, lack of territorial jurisdiction does not ipso facto nullify the proceedings. The defendant is already contesting the suit. If it has already been taken by the defendant, it shall be decided. If not, the 2nd defendant can raise the question of jurisdiction on his appearance in the suit. 20. Though the plaintiff has originally filed I.A.No.11 of 2019 to bring the 2nd defendant as party initially, pending the suit, the same has been withdrawn with liberty to file a fresh application and thus the present application is filed to bring both 2nd and 3rd defendants as parties to the suit. Since the said application has been withdrawn with liberty to file a fresh application, that does not bar filing of the present petition and as such, it is not so relevant to give any consideration to it for hearing of this petition. 21. Accordingly, the Civil Revision Petition is allowed in part setting aside the impugned order to the extent of allowing the 3rd respondent to be impleaded as 3rd defendant. The order impugned to the extent of permitting impleadment of the 2nd respondent as 2nd defendant holds good. There shall be no order as to costs. Miscellaneous petitions pending, if any, shall stand closed.