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Judgment
The challenge in this Appeal is to the Order dated 04.05.2026 (hereinafter referred to as the “Impugned Order”) passed by the learned Joint Registrar whereby the Appellant’s Application under Order I Rule 10(2) of the Civil Procedure Code, 1908 (“CPC”) seeking impleadment as Defendant No.3 in the present Suit was dismissed.
Shorn of unnecessary details, some basic facts which are necessary for adjudication of the present Appeal are as follows:
The Plaintiff has instituted the present Suit seeking damages, declaration and permanent injunction restraining the Defendants, their agents, servants, employees, officers, associates, representatives, attorneys and all acting and on its behalf from writing, publishing, circulating, speaking or making any demeaning material against the Plaintiff, including the Show Cause Notice 10.07.2023 and Email dated 25.07.2023 (hereinafter referred to as the “defamatory communications”) or any other communications allegedly intended to tarnish the image and reputation of the Plaintiff.
It is the Plaintiff’s case that he was the former CEO and Executive Director of M/s Liberty Shoes Limited (hereinafter referred to as the “company”), while Defendant No.1 is the current President and Defendant No.2 is the current Executive Director of the company.
According to the Plaintiff, the Defendants, acting for their personal and ulterior motives have circulated the defamatory communications amongst the management, employees and other stakeholders of the company with the sole objective of maligning his reputation.
The Plaintiff further asserts that no meeting of the Board of Directors was convened authorizing the issuance of the defamatory communications. It is also alleged that neither any board resolution nor any resolution passed at the General Meeting of the shareholders, or any other corporate authorization, empowered the Defendants to issue the said communications. Consequently the Plaintiff contends that the defamatory communications cannot be treated as the acts of the company but are attributable solely to the Defendants in their individual capacity.
It is further the Plaintiff’s case that the Defendants conspired to remove him from the company by first tarnishing his reputation through the defamatory communication. According to the Plaintiff, the Defendants neither constitute the entire board nor exclusively manage the affairs of the company and therefore, could not have unilaterally sought his removal at their own whims and fancies.
The Plaintiff also pleads that no Management Committee was ever constituted by the company and no authority was delegated by the board to the Defendants for issuing the defamatory communications. The communications are, therefore, alleged to be an outcome of the Defendant’s personal vendetta. It is stated that as the Defendants continue to circulate the defamatory communication and damage his reputation, the Plaintiff was constrained to institute the accompanying Suit.
Summons were issued in the Suit on 06.12.2023. While issuing summons, the Court also recorded the statements of the Defendants that they would not further circulate the defamatory communications. Thereafter, the Written Statement filed by the Defendants, along with an Application seeking condonation of delay in filing the same was not taken on record and the Application for condonation of delay came to be dismissed by the learned Joint Registrar vide Order dated 23.07.2024. Subsequently, the Defendant filed an application under Order VII Rule 11 of the CPC, notice whereof was issued vide Order dated 30.07.2024. One of the grounds taken in the Application filed under Order VII Rule 11 CPC was that the Appellant herein was not made a party and, therefore, the Suit should be dismissed for non-joinder of parties. Thereafter, the Chamber Appeal being O.A. No.127/2024 challenging the Order dated 23.07.2024 and the Application under Order VII Rule 11 of the CPC were dismissed by this Court vide Order dated 15.01.2026.
During the pendency of the Suit, the Appellant company filed I.A. No.6231/2026 under Order I Rule 10(2) of the CPC seeking its impleadment as Defendant No.3. By the Impugned Order dated 05.04.2026, the learned Joint Registrar dismissed the said Application, observing that the same was not maintainable as the Plaintiff had categorically averred in the plaint that no allegation was being made against the company and that no relief had been claimed against it. The learned Joint Registrar further observed that the question whether the defamatory communications had been issued by the Defendants in their individual capacities or on behalf of the company was a matter requiring trial, and the suit could be effectively adjudicated without impleading the Appellant company. It was, accordingly, held that the Appellant was neither a necessary nor a proper party to the suit, and the impleadment Application was dismissed.
Learned Counsel for the Appellant submitted that the defamatory communications are official documents issued in the course of the company’s internal affairs. He further submitted that the Show Cause Notice was issued on the basis of the decision of the Management Committee of the Appellant and not in the individual capacity of the Defendants, as the same was approved by the Committee of the Appellant company.
Learned Counsel for the Appellant further submitted that the Show Cause Notice was issued on the letterhead of the Appellant company. Although it is signed by the Defendant No.1, however, the same has been done on behalf of the Appellant company. He further contended that Email dated 25.07.2023 sent by the Defendant No.2 to other officials of the Appellant company, was to only inform about the Plaintiff’s suspension and to advise that no confidential information be shared with the Plaintiff. He also submitted that this communication was circulated through the company’s internal email system and therefore, formed part of its official internal affairs. He also contended that the reliefs sought in the Suit, including injunctions, and declarations against the Defendants along with their associates, agents and representatives are wide in scope and would in effect operate against and bind the Appellant company itself.
Counsel for the Plaintiff vehemently opposes the present Chamber Appeal and submits that the Appellant is neither a necessary, not a proper party in the present proceedings. Learned counsel for the Plaintiff submits that one of the grounds raised by the contesting Defendants in their application under Order VII Rule 11 CPC was the non-joinder of necessary parties. However, the said contention did not find favour with this Court, and the said application was rejected by order dated 15.01.2026. Learned Counsel for the Plaintiff, therefore, contends that the plea raised by the Appellant Company herein is barred by the doctrine of constructive res judicata. Learned counsel further submits that the Plaintiff, being the dominus litis, cannot be compelled to implead any person whom he does not wish to implead. He further submits that, if the suit is otherwise maintainable, the Court ought not to add parties, particularly when this Court has, by its earlier order, taken a contrary view.
Heard the learned Counsel for the parties and perused the material on record.
The short question before this Court is whether the Appellant must be impleaded as a party to the Suit in question or not.
The Apex Court in Mumbai International Airport Private Limited v. Regency Convention Centre and Hotels Private Limited & Ors., 2010 (7) SCC 417, has explained the scope and ambit of Order 1 Rule 10(2) of the CPC, and has observed as under:
“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 this 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 proper 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. The fact that a person is likely to secure a right/interest in a suit property, 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.
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22.Let us consider the scope and ambit of Order 1 Rule 10(2) CPC regarding striking out or adding parties. The said sub-rule is not about the right of a non-party to be impleaded as a party, but about the judicial discretion of the court to strike out or add parties at any stage of a proceeding. The discretion under the sub-rule can be exercised either suo motu or on the application of the plaintiff or the defendant, or on an application of a person who is not a party to the suit. The court can strike out any party who is improperly joined. The court can add anyone as a plaintiff or as a defendant if it finds that he is a necessary party or proper party. Such deletion or addition can be without any conditions or subject to such terms as the court deems fit to impose. In exercising its judicial discretion under Order 1 Rule 10(2) of the Code, the court will of course act according to reason and fair play and not according to whims and caprice.” (emphasis supplied)
Undoubtedly, it is the Plaintiff's case that the Defendants acted in their personal capacity and not on behalf of the Company. The Appellant Company has appeared before this Court and stated that the actions were taken in the name of the Company. It is also the categorical stand of the Appellant herein that the decisions were taken on behalf of the Company. The contention of the learned counsel for the Plaintiff that the issue raised by the Appellant is barred by the principle of constructive res judicata does not merit acceptance. The Appellant was neither a party to the application under Order VII Rule 11 CPC nor was it heard in the said application. Further, the Company is not claiming through its employees and, therefore, the doctrine of constructive res judicata, which in any event does not apply to orders passed in interlocutory applications, cannot be invoked against the Company. The Company in its own right is asserting that the actions were taken in its name and, therefore, it is a proper party to the present Suit. Undoubtedly, by taking such a stand, the Company has exposed itself to any legal consequences that may flow from the judgment.
In view of the specific stand taken by the Company that the decisions were taken on its instructions and in its name, the Company being a separate and independent legal entity distinct from its employees, this Court finds no reason to decline its impleadment.
In view of the aforesaid, the Appellant is impleaded as a party to the suit, since it is the Company's own stand that the actions in question were taken in its name.
The Chamber Appeal is disposed of.
The Plaintiff is directed to file an amended Memo of Parties within two weeks.
List before the learned Joint Registrar for further proceedings on 10.08.2026.