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REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 10940-10941 OF 2014 (ARISING OUT OF SLP (C) NOS.996-997 of 2013)

BALURAM                                         … APPELLANT

VERSUS

P. CHELLATHANGAM & ORS.                                    ..RESPONDENTS

J U D G M E N T

ADARSH KUMAR GOEL, J.

1. Leave granted.

2. These appeals have been preferred against Orders dated

24th November, 2011 and 18th September, 2012 passed by the  

High Court of Madras, Bench at Madurai in C.R.P. No.2610 of  

2010 and in Review Application No.1 of 2012 in C.R.P. No.2610  

of 2010 respectively.

3. The question raised for our consideration is whether the  

High Court  was  justified  in  reversing  the Order  of  the  trial  

Court allowing the prayer of the appellant to be added as a  

party in a suit for specific performance filed by Respondent  

No.1-plaintiff.

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4. Case of  the plaintiff  in  O.S.  No.3  of  2007 filed  in  the  

Court of District Judge, Kanyakumari, is that K. Jagathees and  

R.  Subbaram Babu  @ Subbaram,  Respondent  Nos.2  and  3  

respectively  (original  defendants  in  the  suit)  acting  as  

trustees of “Subbaiah Paniker Family Welfare Trust” (for short  

“the Trust”) entered into the agreement dated 9th December,  

2003 to sell the suit property in favour of the plaintiff.  The  

price of the property was settled at Rs.22,000/- per cent.  A  

sum of Rs.1 lakh was received as advance.  The plaintiff was  

ready and willing to perform his part of the contract but the  

defendants failed to execute the sale deed even in extended  

time.  When called upon to do so, they took the stand that the  

sale deed could be executed only if the beneficiaries of the  

Trust agreed to the sale which was not a valid ground.   

5. During  pendency  of  the  suit,  the  appellant  filed   I.A.  

No.584 of 2008 in O.S. No.3 of 2007 in the Court of District  

Judge,  Kanyakumari  at  Nagercoil,  for  being  impleaded  as  

defendant,  pleading  that  he  will  suffer  prejudice  being  

beneficiary of the Trust if the sale is effected at a throw away  

price.  According to him, the value of the property was more  

than  Rs.50,000/-  per  cent  while  the  proposed  sale  was  for  

Rs.22,000/-   

per cent.

6. The application was opposed by the plaintiff submitting  

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that the beneficiary was a stranger to the agreement and was  

not a necessary or proper party.   

7. The trial Court accepted the application.  It held that the  

plaintiff was not a stranger to the subject matter of dispute  

and was entitled to be impleaded as a party.  Reliance was  

placed on the  Judgment  of  the  Madras  High Court  in  S.D.  

Joseph and Other vs. E. Ebinesan and others  1   holding as  

follows :

“Every member who is having interest and  right  should  be  given  an  opportunity  of   being  heard  and  the  court  must  see  whether subject matter could be factually   adjudicated  upon  in  the  absence  of   proposed  parties  in  a  case  where  the   property  belonged  to  YMCA,  a  public   Trust.”

8. Aggrieved  by  the  Order  of  the  trial  Court,  the  

respondent-plaintiff preferred a revision petition under Article  

227 of the Constitution before the High Court with the plea  

that the appellant was not a necessary or proper party and  

thus the order of the trial Court impleading him as a party  

defendant  was  erroneous.   Reliance  was  placed  on  the  

Judgment of this Court in  Bharat Karasondas Thakkar vs.  

Kiran  Construction  Co.  and  others  2  .    The  High  Court  

upheld the plea of the plaintiff and dismissed the I.A. No.584  

of  2008  filed  by  the  appellant  in  the  suit  filed  by  the  

1  2009(5) CTC p.193 2  (2008) 13 SCC 658

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respondent-plaintiff.   It  was further observed that since suit  

property is a Trust property, the trial Court can look into the  

relevant provisions of law and examine whether permission of  

the  Court  was  required  before  entering  into  the  sale  

agreement.

9. Aggrieved by the Order of the High Court, the appellant  

has approached this Court.

10. We have heard learned counsel for the parties.

11. Learned counsel for the appellant vehemently submitted  

that the view taken by the High Court is patently erroneous.  

The appellant was certainly a proper party and the trial Court  

was justified in exercising its jurisdiction under Order I Rule  

10(2) of the Code of Civil Procedure, 1908 in impleading the  

appellant  as  a  party.   Even if  the  Trustee had the  right  of  

alienation, the Court was entitled to control the exercise of  

power of a Trustee under Section 49 of the Indian Trusts Act,  

1881 (for short “the Trusts Act”).  The appellant was entitled  

to  be  impleaded  as  a  party  to  safeguard  his  right  as  

beneficiary of the Trust so that the Trustees did not exercise  

their  power  of  alienation  unreasonably.   Reliance  has  been  

placed on Judgment of this court in  Mumbai International  

Airport  (P)  Ltd. vs. Regency  Convention  Centre  &  

Hotels (P) Ltd.  3  .

3  2010(7) SCC 417

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12. Learned counsel for Respondent No.1 however, opposed  

the  above  submission  and  supported  the  impugned  order  

passed by the High Court.  It  was submitted that since the  

appellant was neither necessary nor proper party, application  

for  impleading  the  appellant  as  a  party  could  not  be  

entertained.  The appellant was stranger to the transaction  

and could not object to the sale in question.

13. After due consideration of the rival submissions, we are  

of the view that the High Court erred in interfering with the  

order of the trial Court impleading the appellant as a party  

defendant.  Admittedly, the appellant is a beneficiary of the  

Trust and under the provisions of the Trusts Act, the Trustee  

has  to  act  reasonably  in  exercise  of  his  right  of  alienation  

under the terms of the trust deed.  Appellant cannot thus be  

treated as a stranger.  No doubt, it may be permissible for the  

appellant to file a separate suit, as suggested by Respondent  

No.1,  but  the  beneficiary  could  certainly  be  held  to  be  a  

proper party.  There is no valid reason to decline his prayer to  

be impleaded as a party to avoid multiplicity of proceedings.  

Order I Rule 10(2), CPC enables, the Court to add a necessary  

or  proper  party  so  as  to  “effectually  and  completely  

adjudicate upon and settle all  the questions involved in the  

suit”.

14. In  Mumbai International Airport (supra) this Court  

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observed :

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   

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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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19. Referring  to  suits  for  specific   performance,  this  Court  in  Kasturi  [(2005) 6  SCC 733], held that the following persons are  to be considered as necessary parties: (i) the  parties to the contract which is sought to be  enforced or their legal representatives; (ii) a  transferee  of  the  property  which  is  the  subject-matter of the contract. This Court also  explained  that  a  person  who  has  a  direct   interest in the subject-matter of  the suit for   specific performance of an agreement of sale   may be impleaded as a proper party on his   application under Order 1 Rule 10 CPC. This   Court concluded that a purchaser of the suit   property  subsequent  to  the  suit  agreement   would be a necessary party as he would be  affected if he had purchased it with or without   notice  of  the  contract,  but  a  person  who   claims a title adverse to that of the defendant   vendor will not be a necessary party.

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22. Let us consider the scope and ambit  of   Order 1 Rule 10(2) CPC regarding striking out   

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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.”

15. In the present case, the appellant could not be held to  

be a stranger being beneficiary of the Trust property.  The trial  

Court was justified in impleading him as a party.  The High  

Court erred in interfering with the order of the trial Court.

16. Accordingly,  we  allow  this  appeal,  set  aside  the  

impugned order of the High Court and restore that of the trial  

Court dated 10th August, 2010, impleading the appellant as a  

party defendant in the suit.  There will be no order as to costs.

…………………………………………J. (T.S. THAKUR)

.…………………………………………J. (ADARSH KUMAR GOEL)

NEW DELHI DECEMBER 10, 2014

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