Subhash Sethi vs Shanti Lal Bhatia

S. Ravindra Bhat, J.

I.A. 9442/2007 and 9443/2007

The applicant M/s. SLBS Ispat Udyog Pvt. Ltd. seeks impleadment by application under Order 1 Rule 10 CPC (I.A. 9442/2007) in the above suit for specific performance, filed against the first defendant. The other application I.A. 9443/2007 is for ad interim injunction.

The brief facts necessary to decide these applications are that in the suit a decree for specific performance in respect of property being 11/5, Shakti Nagar, Delhi measuring 220 sq. yds. has been sought. The plaintiff relies upon an agreement to sell said to have been entered into on 08.09.2004. The suit averments are that the total consideration agreed upon was Rs. 70,00,000/- of which the plaintiff avers to having paid Rs. 15,00,000/- to the first defendant. The plaintiff further avers that the State Bank of India which was originally impleaded as the second defendant was mortgagee in respect of the suit property and the first defendant vendor was liable to it to the extent of Rs. 79,21,000/-.

The suit was contested by both defendants. During the pendency of proceedings, the plaintiff entered into settlement with the second defendant. Accordingly, the second defendant moved I.A. 1104/2006 which was considered and disposed off. The Court on that date took on record the settlement, recording the compromise between the plaintiff and the second defendant and proceeded to delete the later from the array of parties.

The first defendant (vendor in the suit for specific performance) carried the order of this Court dated 24.8.2007 in appeal, i.e. FAO(OS) 409/2007. The appeal was dismissed on 21.07.2008. The Division Bench upheld the learned single Judge''s view that the settlement between the plaintiff and the defendant No. 2 would not, in any manner, affect the rights of the appellant i.e. first defendant.

The present applicant submits that the first defendant was a guarantor for the loan which was ultimately settled and so recorded by the Court. It is submitted that the money received by the State Bank of India would have to be appropriately accounted in other proceedings pending before the Debt Recovery Tribunal and also to the Income Tax Authorities. In the circumstances, the applicant submits that it is a necessary party and should be impleaded in the proceedings. Learned Counsel urges that besides, valuable rights of the company would be affected if the suit is proceeded without impleading it as a necessary party.

Undeniably, the present action is in the context of a suit claiming decree of specific performance. It has been repeatedly held that by several judgments of the Supreme Court including Kasturi Vs. Iyyamperumal and Others, that the vendor and the vendee, are necessary parties in such proceedings. It has also been held that normally the plaintiff being dominus litis is entitled to implead the parties who he deems are necessary for the action. The Court held that impleading other parties who are inessential who would introduce an element of controversy which is alien and irrelevant to the dispute before the Court would alter its character. That logic applies with equal force in this case. It is not the applicant''s case that it was a party to the agreement, which is the subject matter of the suit. It is also not its case that it owns the property. In the circumstances, the events which occurred after the suit was instituted i.e. payment of amount to the vendors/creditors and its appropriation, lawful or otherwise, cannot by any stretch of imagination constitute facts and issues which would arise in this case and have to be examined by the Court. Entertaining such application in fact would dilute the proceedings. Further, the Court is of the opinion that the application, moved on behalf of the son of the first defendant is a thinly disguised attempts to prolong the proceedings and somehow postpone the trial in this case. Therefore, it is an abuse of a judicial process.

For the above reasons, the applications are not maintainable; they are accordingly dismissed. In the circumstances of this case, the applicant shall bear the costs quantified at Rs. 30,000/- to be paid to the plaintiff within two weeks. The applicant shall also file a compliance affidavit within three weeks with regard to the payment of costs.

I.A. 3352/2005

This is an application for ad interim injunction. This Court by order dated 29th April, 2005 by an ad interim ex-parte order restrained the defendants from selling, transferring or alienating the property. That order subsists and binds the parties till date.

During the interregnum, the order dated 24th August, 2007 would show that defendant No. 2 was paid certain amounts; as a consequence, it was deleted from the array of the parties. That order was carried in appeal; the Division Bench rejected the same.

In view of the averments in the plaint and the application as well as the subsequent proceedings, the Court is of the opinion that the order made on 29th April, 2005 should be confirmed. The parties shall bound by the same till disposal of the suit.

I.A. 3352/2005 is disposed of in the above terms.

I.A. 5324/2007

This application seeks an order that plaintiff should not dispose off the property. Learned Counsel for the plaintiff submits, upon instructions, that the status quo with regard to the title would not be varied without leave of the Court.

The application is disposed off in terms of the statement. The plaintiff shall file an undertaking to such effect within one week.

CS(OS) 572/2005

List before the Joint Registrar for recording evidence of the parties on 29th September, 2008.

List before the Court on 10th December, 2008.