S.S. Tools and Another vs Naresh Gupta and Others

Alok Singh, J.—Plaintiffs - petitioners have invoked jurisdiction of this Court under Article 227 of the Constitution of India, assailing order dated 6.4.2010 passed by the Additional Civil Judge, Senior division, Patiala, whereby the application moved by third-party -respondent No. 1 herein seeking impleadment under Order 1 Rule 10 (2) CPC, was allowed and the third-party - respondent No. 1 was directed to be impleaded as one of the defendants in a suit for specific performance of the contract, filed by the plaintiffs - petitioners herein against defendants - respondents No. 2 to 7 herein.

Brief facts of the present case are that plaintiffs have filed suit for specific performance of the contract on the basis of agreement to sell dated 5.8.2004. In the suit filed by the plaintiffs - petitioners, defendants have filed their written statement and it has been pleaded by the defendants that defendants - company has already decided to sell the suit land vide resolution dated 15.1.2005 to Naresh Gupta and an agreement to sell was executed with Naresh Gupta on 20.1.2005. It has further been pleaded by the defendants that Naresh Gupta was put in possession over the property in question pursuant to the agreement to sell dated 20.1.2005, hence Naresh Gupta is necessary party in the suit and the suit is bad for want of necessary party.

In the suit filed by the plaintiffs, an application was moved by Naresh Gupta - respondent No. 1 seeking impleadment in the suit. The trial Court vide impugned order has allowed the application on the ground that defendants have taken the pleading in the written statement that Naresh Gupta is also a necessary party and since Naresh Gupta is in possession of the suit property, hence he seems to be necessary and proper party.

I have heard Learned Counsel for the parties and perused the record.

Mr. Arun Jain, learned Senior Advocate assisted by Mr. Avinash Mittal, Advocate, while placing reliance on the Judgment of the Apex Court in the matter of Bharat Karsondas Thakkar v. Kiran Construction Co. and Ors. 2008(2) CCC 561 (SC) and in the matter of Ramesh Chandra Pattnaik v. Pushpendra Kumari and Ors., reported in 2009 (2) CCC 054 (SC), has argued that in a suit for specific performance of the contract, third-party and a stranger to an agreement to sale, cannot be impleaded as a party to the suit in view of Section 15 of the Specific Relief Act. Mr. Jain further argued that present suit for specific performance was filed by the plaintiffs - petitioners pursuant to the agreement to sell dated 5.8.2004. As per Mr. Jain, if agreement dated 5.8.2004 in favour of the plaintiffs is proved to be genuine and valid, then suit for specific performance shall be decreed in favour of the plaintiffs ignoring the subsequent alleged agreement to sell dated 20.1.2005 in favour of Naresh Gupta. He further argued that alleged possession of Naresh Gupta over the property in dispute is not independent possession, rather at the most, it could be permissive possession pursuant to the agreement to sell dated 20.1.2005. Mr. Jain also argued that once defendants have agreed to sell the property in favour of the plaintiffs vide agreement to sell dated 5.8.2004, it was not open to the defendants to execute subsequent agreement to sell dated 20.1.2005.

Mr. Ashok Aggarwal, learned Senior Advocate assisted by Mr. Vinish Singla, Advocate appearing on behalf of respondent No. 1 - third-party argued that once possession of Naresh Gupta is admitted over the property in dispute pursuant to the agreement to sell dated 20.1.2005, he is the necessity party. Mr. Aggarwal further stated that if suit is decreed for possession and specific performance of the contract in the absence of Naresh Gupta, he shall be at liberty to resist the decree for possession and specific performance in view of Order 21 Rule 97 CPC, hence to avoid multiplicity of the suits, he should be impleaded in the present suit. He has placed reliance on the Judgment of the Kerala High Court in the matter of C.P. Mujeeb v. Royal Hospital Pvt. Ltd. and Anr., reported in 2008 (4) CCC 539 and the Judgment of the Rajasthan High Court in the matter of Moolchand Bothra v. Addl. District Judge and Ors., reported in 2009(3) CCC 262 (Rajasthan DB). Mr. Aggarwal states that even if the subsequent purchaser with consideration is necessary party in a suit for specific performance of the contract in view of the Judgment of this Court in the matter of Baldev Singh and Ors. v. Rajinder Kumar and Ors., reported in 2007(1) CCC 162 (P&H) and in the matter of Gurcharan Singh v. Amarjit Singh and Anr., reported in 2005(2) PLR 603 (P&H).

Mr. V.K. Jain, learned Senior Advocate assisted by Mr. Parshant, Advocate appearing for respondent No. 2 has supported the arguments advanced by Mr. Aggarwal.

Undisputedly, plaintiffs - petitioners have filed suit pursuant to the agreement to sell dated 5.8.2004. Undisputedly, Naresh Gupta is a stranger to the agreement to sell dated 5.8.2004. In the opinion of this Court, this is settled position of law that if first agreement is proved to be genuine and legal, then decree for specific performance at the behest of the Court can be passed in favour of the plaintiff ignoring the subsequent agreement to sell in favour of the third-party. This Court is further of the view that agreement to sell does not confer any title or interest in favour of the proposed vendee. Hence, Naresh Gupta cannot be said having derived any title or interest in the disputed property.

The Apex Court in the matter of Bharat Karsondas Thakkar''s case (supra) in paragraph 21 has held as under:

Admittedly, the appellant herein is a third party to the agreement and does not, therefore, fall within the category of "parties to the agreement". The appellant also does not come within the ambit of Section 19 of the said Act, which provides for relief against parties and persons claiming under them by subsequent title. This aspect of the matter has been dealt with in detail in Kasturi''s case (supra). While holding that the scope of a suit for specific performance could not be enlarged to convert the same into a suit for title and possession, Their Lordships observed that a third party or a stranger to the contract could not be added so as to convert a suit of one character into a suit of a different character.

The Apex Court in the matter of Ramesh Chandra Pattnaik''s case (supra) in paragraph 4 has held as under:

It is not in dispute that the petitioner filed suit in the year 1979 for specific performance of the alleged agreement of sale dated 10.4.1977. In that suit, the only scope of enquiry would be as to whether the said agreement was, in fact, executed between the petitioner and Respondent No. 1. Respondent No. 10 is alleged to have entered into an agreement with Respondent No. 1 on 15.11.1984 for sale of the property, which is the subject matter of the suit filed by the petitioner. In respect of such an agreement, Respondent No. 10, could have filed a suit for specific performance but, as stated by Learned Counsel appearing for the parties, no such suit has been filed. In our opinion respondent No. 10 was not at all a necessary party for determination of the genuineness or otherwise of the agreement of sale which is said to have been entered into between the petitioner and Respondent No. 1.

In view of the dictum of the Apex Court, I am of the view that since respondent No. 1 - third party is a stranger to the agreement to sell dated 5.8.2004, hence he is not a necessary/proper party and cannot be permitted to be impleaded as one of the defendants. Not only this, alleged possession of Naresh Gupta respondent No. 1 - third-party cannot be said in part performance of the contract/alleged agreement to sell dated 20.1.2005. Perusal of the agreement to sell dated 20.1.2005 does not reveal that any possession was ever delivered in favour of Naresh Gupta. Mr. Aggarwal, learned senior Counsel states that possession was delivered to Naresh Gupta after 20.1.2005.

Section 17 of the Registration Act, 1908 (hereinafter referred to as the Act) as amended by 2001 Amendment, reads as under:

Documents of which registration is compulsory.-

(1) The following documents shall be registered, if the property to which they relate is situate in a district in which, and if they have been executed on or after the date on which, Act No., XVI of 1864, or the Indian Registration Act, 1866, or the Indian Registration Act, 1871, or the Indian Registration Act, 1877, or this Act came or comes into force, namely:

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(1A) The documents containing contracts to transfer for consideration, any immovable property for the purpose of Section 53A of the Transfer of Property Act,1882 shall be registered if they have been executed on or after the commencement of the Registration and Other Related Laws (Amendment) Act, 2001 and if such documents are not registered on or after such commencement, then, they shall have no effect for the purposes of the said Section 53A).

From the perusal of Section 17 of the Act, I have absolutely no doubt in my mind that after the amendment if possession is being delivered in part performance of the contract, then document requires compulsory registration. Since document delivering possession in favour of Naresh Gupta is not registered, hence same is void document in the eye of law and cannot be enforced and read into evidence u/s 49 of the Act. Moreover, possession of Naresh Gupta at the most can be said on behalf of the defendants and if suit for possession and specific performance is decreed in favour of the plaintiffs, Naresh Gupta shall not be entitled to resist the decree for specific performance under Order 21 Rule 97 CPC as suggested by Mr. Aggarwal in view of the fact that decree for possession and specific performance can be resisted by the person who is claiming his independent right over the property. Since Naresh Gupta has no independent right in his favour, hence argument of Mr. Aggarwal that he would be resisting the decree, is misconceived.

Judgments cited by Mr. Aggarwal have no application to the facts and circumstances of the present case in view of the dictum of the Apex Court in the matters of Bharat Karsondas Thakkar (supra) and Ramesh Chandra Pattnaik (supra). Moreover, as observed hereinabove, third-party - respondent No. 1 is not able to prove any independent title or right over the property in dispute, hence, he is neither necessary party nor a proper party.

The trial Court has committed jurisdictional and legal error while directing impleadment of respondent No. 1. Impugned Order cannot be sustained in the eye of law. Petition is allowed. Impugned order is set aside.

Plaintiffs and defendants are directed to appear before the trial Court on 27.10.2010 and the trial Court is requested to expedite hearing of the suit and to decide the suit at the earliest, preferably within period of 18 months from the date certified copy of the order is produced before the trial Court.