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2016 (1) TMI 815 - DELHI HIGH COURT

2016 (1) TMI 815 - DELHI HIGH COURT - TMI - Recovery proceedings - why writ petitioner was a necessary or a proper party - validity of orders of Debts Recovery Tribunal - The borrower and the co-borrower are in default and the bank has proceeded to recover the same. Proceedings are pending before the Debts Recovery Tribunal. Subsequently an application was filed to implead the writ petitioner as a respondent and by a cryptic non-reasoned order without bringing out as to why writ petitioner was a .....

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ember 15, 2014 passed by the Debts Recovery Tribunal nor the order dated March 20, 2015 passed by the Debts Recovery Appellate Tribunal has dealt with the issue arising concerning writ petitionerís impleadment as prayed by the respondent No.1 bank in its application seeking impleadment. The two orders do not bring out the reasons why presence of the writ petitioner is necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the .....

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ita Dhall, Advocate, Mr.P.R.Chopra, Advocate PRADEEP NANDRAJOG, J. (Oral) 1. Having heard learned counsel for the parties, we find inchoate pleadings by the respondent bank in its application under Order 1 Rule 10 of the Code of Civil Procedure seeking impleadment of the writ petitioner. 2. Concededly the transaction was between ICICI Bank and Link Engineers Private Ltd. with co-borrower being Siddharth Sikka. Loan was sanctioned to purchase a PILOTE FIAT DUCATO/MOTORHOME P 730 LACA (a motor veh .....

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in default and the bank has proceeded to recover the same. Proceedings are pending before the Debts Recovery Tribunal. Subsequently an application was filed to implead the writ petitioner as a respondent and by a cryptic non-reasoned order without bringing out as to why writ petitioner was a necessary or a proper party, vide order dated September 15, 2014 the Debts Recovery Tribunal impleaded writ petitioner as a respondent which order has been upheld by the Debts Recovery Appellate Tribunal on .....

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able the Court effectually and completely to adjudicate upon and 'settle all the questions involved in the suit, be added'. 6. A plain reading of the provision would show that a person would be a proper party whose presence before the Court is necessary in order to enable the Court to effectually and completely adjudicate and settle all the questions involved in the suit. 7. In the decision reported as AIR 1958 SC 886 Razia Begum v Anwar Begum the Supreme Court had laid down the followin .....

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some cases, it may raise controversies as to the power of the court, in contradistinction to its inherent jurisdiction, or, in other words, of jurisdiction in the limited sense in which it is used in section 115 of the Code; (2) That in a suit relating to property in order that a person may be added as a party, he should have a direct interest as distinguished from a commercial interest in the subject-matter of the litigation; (3) Where the subject-matter of a litigation is a declaration as rega .....

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upreme Court reported as 1992 (2) SCC 224 Ramesh Hirachand Kundanmal v Municipal Corporation of Greater Bombay. In the said case, the plaintiff was a dealer on the land held by the Hindustan Petroleum Corporation and was in possession of a service station. The Municipal Corporation issued a notice to the plaintiff for demolition of a certain construction alleging that it was unauthorized. The plaintiff filed a suit for permanent injunction against the Municipal Corporation. Hindustan Petroleum a .....

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is presence is necessary for the correct solution of the dispute before the Court but whether the order would affect him or his interest would be prejudiced. Relevant discussion is being noted herein below:- 6. Sub-rule(2) of Rule 10 gives a wide discretion to the Court to meet every case of defect of parties and is not affected by the inaction of the plaintiff to bring the necessary parties on record. The question of impleadment of a party has to be decided on the touch stone of Order I Rule 10 .....

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mstances of a particular case xxx xxx 8. The case really turns on the true construction of the Rule in particular the meaning of the words "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." The Court is empowered to join a person whose presence is necessary for the prescribed purpose and cannot under the Rule direct the addition of a person whose presence is not .....

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its main objectives. The person to be joined must be one whose presence is necessary as a party. What makes a person a necessary party is not merely that he has relevant evidence to give on some of the questions involved; that would only make him a necessary witness. It is not merely that he has an interest in the correct solution of some questions involved and has thought of relevant arguments to advance. The only reason which makes it necessary to make a person a party to an action is that he .....

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which will affect him legally that is by curtailing his legal rights. It is difficult to say that the rule contemplates joining as a defendant a person whose only object is to prosecute his own cause of action. Similar provision was considered in Amon v. Raphael Tuck & Sons Ltd. (1956) 1 All E.R. 273, wherein after quoting the observations of Wynn- Parry, J. in Dollfus Mieg et Compagnie S.A. v. Bank of England (1950) 2 All E.R. 611, that the true test lies not so much in an analysis of what .....

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n the decision of the Madhya Pradesh High Court reported as AIR 1960 MP 84 Sampatbai v Madhusingh Gambhirji as under:- The test is not whether the joinder of the person proposed to be added as a defendant would be according to or against the wishes of the plaintiff or whether the joinder would involve an investigation into a question not arising on the cause of action averred by the plaintiff. It is whether the relief claimed by the plaintiff will directly affect the intervener in the enjoyment .....

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lied in Amon v. Raphael Tuck and Sons Ltd., 1956-1 All ER 273, in connection with R.S.C. Order 16, Rule 11 which is similar to Order 1, Rule 10, C. P. C. Again as pointed out in Dollfus Mieg et Compagnie S.A.V. Bank of England, 1950-2 All ER 605 at p. 611, in determining whether or not an applicant has a proprietary right in the subject matter of an action sufficient to entitle him to be joined as a defendant the true test lies not so much in an analysis of what are the constituents of the appli .....

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ited in the aforesaid decision of the Madhya Pradesh High Court, illuminates us a lot on the subject of impleadment of a third party in a pending legal proceedings on the subject as to what kind of precise nature of the interest of the party sought to be impleaded in the property in dispute needs to be identified. 12. The said decision was dealing with Order 16 Rule 11 RSC corresponding to Order 1 Rule 10 in India. 13. In said case 64 identifiable gold bars belonging to a French company were loo .....

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ompany instituted an action against the bank claiming delivery of the gold bars. The bank applied for an order to set aside the writ on the ground that the 2 foreign Government, USA and France had declined to submit to the jurisdiction of the English Courts. The claim of the company was upheld and leave was given to the bank to appeal to the House of Lords. At that stage the two governments, USA and France applied to be added as defendant to the action. 14. It is significant to note that in the .....

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was held that whether or not the applicants had a proprietary right in the subject matter of the action sufficient to entitle them to be joined as defendants, the true test lay not so much on an analysis of what were the constituents of the rights, but rather in what would be the result on the subject matter of the action if their rights could be established. It was held that the applicants had a direct interest in the subject matter of the action which was similar to a proprietary right and was .....

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pages 611- 612:- On the other side of the line in Vavassur vs. K.Krupp, (1878) 9 Ch D 351 to which I had already referred, which established that a proprietary right of the proposed defendant in the subject matter of the action is sufficient. The question here is; on which side of the line does this case fall? For the purposes of this application, the applicants do not assert a title to the property in question, and, therefore it cannot be asserted that they have a proprietary right as the phras .....

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other words, although the applicants do not assert title to the bars of the gold, the result of a successful intervention by them would be that as between the plaintiffs and themselves, they would for all practical purposes, be the owners. It seems to me that true test lies not so much in an analysis of what are the constituents of the applicant's rights but rather in what would be the result on the subject matter of the action if those rights could be established. That is the approach whic .....

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prietary right which was under consideration in (1878) 9 Ch D 351. There is no authority directly bearing on the point but, on the analysis which I have made of the nature of the applicant's interest in the matter, I have come to the conclusion that I ought not to say that I have no jurisdiction to entertain the application on the short ground which counsel for the plaintiff puts forward, viz. that the applicants could not show a proprietary right, and, therefore did not come within the seco .....

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rather in what would be the result on the subject matter of the action if those rights could be established. 17. In the decision reported as 1956-1 All ER 273 Amon vs. Raphael Tuck & Sons Ltd., the aforesaid view was followed. In said case the plaintiff filed an action against the defendants for damages and injunction on the ground that the plaintiff was the first inventor of a new design of adhesive dispenser in the shape of a pen, that the plaintiff disclosed to the defendant the details o .....

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rty was necessary to enable the court to adjudicate completely the subject matter in dispute as the enjoyment of the legal right of the third party would be curtailed by the relief asked for by the plaintiff in the action. 18. Delvin, J. explained the scope of the rule in these terms at page 279. It is not I think disputed that 'the cause or matter' is the action as it stands between the existing parties. If it were otherwise then anybody who showed a cause of action against either a pla .....

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present case he submits that the subject matter of the dispute between the existing parties is the ownership . If I may so put it, of an invention: the plaintiff claims that he is the owner of it and the intervener alleges that he is, and both disputes ought to be determined at the same time. This construction stresses the amplitude of the closing words of the passage which I have just cited from Order 16 Rule 11 'all the questions involved in the cause or matter.' The alternative const .....

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raised by an intervener. The criticism that at once suggests itself of this construction is that it is impossible narrow. If the adjudication is limited to something that lies between the plaintiff and the defendant what parties can be necessary to it except the plaintiff and the defendant? The court is for this purpose concerned only with action in person and in such actions either the necessary defendant is sued or the action fails. If all the parties who ought to have been joined, under the f .....

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argument in my opinion, misconceives the point. Whenever a plaintiff seeks to restrain a defendant from dealing with his property and an intervener claims that the property is his, the plaintiff can say 'If I am wrong I shall not get an injunction and the intervener's right will not be affected: if I am right the intervener has no rights to be affected anyway.' The point is that the intervener is entitled to be heard on the issue whether the plaintiff is right or wrong so that he ma .....

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hts under a contract should not be called proprietary rights just as much as rights to physical property. The phrase, however, is not used definitely. The three categories formulated in the note are not exhaustive. Indeed, I do not think that they should be treated as having been formulated independently. There is one common principle running through them all, and, for my part, I should prefer to apply a test based on that principle rather than to enquire whether the case to be determined falls .....

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