American Baptist Foreign Mission Society vs D. Jayaraju and Others

P. Sathasivam, J.—The above Original Side Appeal has been filed against the order of the learned single Judge dated 10.12.2004 made in

Original Application No. 4740 of 2004 in C.S. No. 124 of 1994. The learned Judge, after holding that the applicant therein, a third party, cannot

have any say in the matter in dispute, rejected its request to implead it as a party.

The respondents 1 to 5 in this appeal filed a suit in O.S. No. 124 of 1994 on the file of the this Court u/s 92 of the CPC for removal of the first

defendant Company, viz., The Property Association of Baptist Churches Private Ltd., from the post of Trusteeship of the properties mentioned in

Schedule I, prohibiting the second defendant/7th respondent herein from associating itself with the administration of the Trust, enquiring into the

affairs of the Trustee Company, as to its income, expenditure and outgoing for the period from 1980 onwards, enquiring into several transfers of

immovable properties belonging to the Trust after 1979, to appoint a Receiver to take charge of the properties of the Trust and to frame a Scheme

for the management of the Trust and the Trust properties.

When the said suit was ripe for trial, the third party/applicant, viz., American Baptist Foreign Mission Society filed an application in O.A.

No.4740 of 2004, praying to permit the applicant to be impleaded as a party/defendant in C.S. No. 124 of 1994. When the said application came

up for hearing, the learned single Judge, after holding that the subject matter of the suit between the plaintiff and the defendants involves the

question of alienation, etc., the applicant/third party cannot have any say, since all the properties belonged to the applicant had already been vested

more than 30 years ago with the first defendant Company, rejected the said application; hence, the present appeal.

Heard the learned counsel for the appellant as ell as the contesting respondents.

The third party applicant, in the affidavit filed in support of the application for impleadment, has stated that it is a Tax exempt Charitable

Organisation originally incorporated on June 15, 1821 in the Commonwealth of the Pennsylvania, USA and later incorporated in the states of

Massachusetts and New York in 1846 and 1894 respectively and is a single corporation chartered in the three states. The current legal name of

American Baptist Foreign Mission Society (ABFMS) was adopted on February 11, 1910 and it is recognised as one of the three separately

incorporated national programme boards created to serve member churches in the fellow ship known as ABC in the U.S.A. The object of the

Society is ""to defuse the knowledge of the religion of Jesus Christ by means of missions throughout the world"" and for the said purpose the Society

is empowered to hold, purchase and converse with Real Estate as the purpose of the Society shall require and also to receive, hold, take by

donation, deed or devise in real property, granted or devised to it by any persons whomsoever and to receive, accumulate and hold in trust of

endorsements and other funds and made investments thereof.

It is their further case that with the said object the applicant Society acquired properties throughout India, including Tamil Nadu and Andhra

Pradesh. They also established several Churches, Educational Institutions, Hospitals and other charitable programmes all over India. For the

purpose of better administration and management of the properties, the first defendant Company was incorporated in the year 1973 as a Company

u/s 25 of the Companies Act, with the object to promoting the sacred work of the applicant Society.

In order to secure and fully realise the object of the ABFMS C.P. Nos. 109 and 110 of 1973 were filed by the 6th respondent in the

application as Transferee Company and the applicant herein as Transferor Company for approval of a scheme of Amalgamation of the Indian

activities and undertakings of the applicant Society. In the said petitions filed u/s 394 of the Companies Act, the Company Court, by order dated

3.5.1974, sanctioned the scheme of amalgamation as proposed, acting on a letter from the Reserve Bank of India and directed to issue of notice of

the Official Liquidator with reference to the prayer for dissolution of the Company without being wound up in terms of second proviso to Section

394(b) of the Act. However, it is seen that by the subsequent order dated 5.7.2004 the prayer of dissolution of the transferor company was not

pressed, with the result, the two company petitions stood disposed of as clarified and explained by order dated 6.4.2004. In spite of the same, the

first and second defendants were embroiled in successive litigation involving the properties, organisational elections and posts and related issues in

various Courts in Tamil Nadu and Andhra Pradesh and elsewhere between rival groups and among their own office bearers. The applicant coming

to know about the unfortunate circumstances, addressed letters to the defendants and their group of persons.

The suit, C.S. No. 124 of 1994 had been laid u/s 92, CPC, by the realtors for removing the 1st defendant company from the Trusteeship of the

suit schedule properties and for framing a scheme for the management of the properties among other specific reliefs. It is just and necessary that

matters pertaining to the management, control and ownership of the India Trust Properties which were acquired by the ABFMS for the primary

purpose of promoting the applicant Society''s object must be adjudicated and decided upon in the presence of the applicant. Such a course will

sub-serve the ends of justice and balance of convenience is also in favour of the applicant being made a party/defendant to the suit, for a fuller

adjudication of the contentions in issue. In fact the applicant is a necessary party to the proceedings and its presence is essential for a full and

complete adjudication of the issues involved in the suit.

It is the grievance of the applicant that though the first defendant had not filed counter to their claim and no objection was raised by the plaintiff

and other defendants, the learned Judge has erroneously rejected their claim, mainly on the ground that if the applicant is permitted to implead, it

will take several years for the parties to carry out amendment, to file a written statement and to frame additional issues and the considerable delay

would cause prejudice to the plaintiffs. In the same order, the learned Judge has also held that all the properties of the applicant had already been

transferred to the first defendant even 30 years ago. It is brought to our notice by the learned Senior Counsel appearing for the applicant/appellant

that there is a factual error in the said conclusion. It is specifically stated in the affidavit filed in support of the impleading petition as well as before

this Court that though an order was passed in the Company Petitions approving the scheme of amalgamation, however, by subsequent order of this

Court dated 5.7.1974 the prayer of dissolution of Transferor Company was not pressed, with the result the two Company Petitions stood

disposed of as clarified and explained by order dated 6.4.2004. The materials placed also show that no further orders have been obtained after

notice to the Official Liquidator or by presenting the transfer deed as required by the Reserve Bank of India. However, according to the

applicants, the first defendant has chosen to act as though the amalgamation had become complete and has legal force, which made the parties to

resort to several litigation in various Courts in Tamil Nadu and Andhra Pradesh in respect of properties and organisational elections. It is also the

case of the applicant that the present suit is one such and if the applicant is not impleaded, the object of ABFMS will be frustrated.

In the light of the materials placed in the form of affidavit and in the absence of contra evidence by way of counter affidavit, it is clear that the

Scheme of amalgamation has not been approved; hence, the applicant has vital interest in the properties and several litigation, considering its

objects referred to in the earlier part of our order. When the applicant asserts that it is the owner of the suit schedule properties and the rights of

ownership continues to be vested in it, on account of this specific circumstance stated in the petition seeking for impleadment, we are of the view

that the learned Judge is not justified in rejecting the application at the threshold. It is also the claim of the applicant that the first defendant had been

incorporated and after incorporation, entrusted with the management of the properties of the applicant for the specific object of promoting the

sacred work of the Society. It is also the case of the applicant that the first defendant Company was incorporated as a transitory Trustee with the

object of promoting the objects of the applicant Society and C.P. Nos. 109 and 110 of 1973 were filed by the Transferor Company

(appellant/applicant) and the Transferee Company (first defendant) respectively for approval of a scheme of amalgamation u/s 394 of the

Companies Act. Though by order dated 3.5.1974, the scheme of amalgamation as proposed was sanctioned, notice to the Official Liquidator was

ordered returnable by 27.6.1974, however, it is seen that by a subsequent order dated 5.7.1974 of this Court, the prayer for dissolution of a

Transferor Company was not pressed. Therefore, it follows that the amalgamation has not become complete and does not have the legal force as

put forth by the first defendant. We are satisfied that these material aspects have not been considered by the learned Judge.

Another infirmity in the order of the learned Judge is that though several litigation between the first and second defendants were catalogued

involving the suit schedule properties, the apprehension of the applicant that the first defendant Company is defeating the purpose for which the

Trust was established was not given due weight before rejecting the application for impleadment. With the materials placed, we are satisfied that

the applicant/third party is a necessary and proper party to be impleaded in the suit. The learned Judge committed an error in arriving at a

conclusion that if the applicant is impleaded in the suit, it will take several years to carry out amendments, to file written statement, to frame

additional issues, etc. We are unable to share the above view. If the third party or any one is able to satisfy and establish that it is a proper and

necessary party for the disposal of the suit, considering the issues raised, the apprehension that suit is likely to be further delayed is immaterial.

Even otherwise, if anyone is impleaded pursuant to the order of the Court, it is the duty of the Registry to carry out amendment then and there and

the impleaded party is expected to file written statement or objection without further loss of time. It cannot be denied that the Court has ample

power to protect the interest of all the parties by issuance of proper directions.

The learned Senior Counsel appearing for the appellant has brought to our notice that at the end of the order having found that the applicant

may be allowed to address its arguments, learned Judge committed an error in rejecting the application for impleadment. It is not in dispute that in a

civil proceedings, unless any one is impleaded as party to the proceedings, no case can be put forth by mere argument. In other words, without

being a party, any argument so advanced, is liable to be rejected and the said party cannot challenge the same before the appellate Court. It is not

clear on what basis the learned Judge permitted the applicant to address its arguments having found that there is no merit in the application for

impleadment. We are unable to accept the conclusion arrived at by the learned Judge.

In the light of the materials placed, we are satisfied that by impleading the applicant it would only subserve the ends of justice and enable the Court

to arrive at a comprehensive decision on the rights of the parties. Accordingly, the order dated 10.12.2004 made in O.A. No.4740 of 2004 is set

aside and the third party/applicant is ordered to be impleaded as a party/defendant in C.S. No. 124 of 1994, considering the fact that the suit is of

the year 1994 and the application for implement was filed after the commencement of the trial, the applicant is directed to file its written statement

expeditiously without further loss of time and cooperate for early disposal of the suit.

With the above observation, the original side appeal is allowed. No costs. Consequently, connected CMPs. and VCMPs. are closed.

This Original Side Appeal having been posted on 26.4.2005 for Being Mentioned in pursuance to the order of this Court dated 5.4.2005 and

made herein and in the presence of the aforesaid Advocates, the Court made the following Order :

The above appeal is posted today before us for ""Being Mentioned"" at the instance of 6th Respondent/First defendant in the suit.

It is made clear that the conclusion of us/findings rendered relate to the disposal of the application against which the above appeal has been filed.