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2022 Supreme(SC) 562

SUPREME COURT OF INDIA
M.R. SHAH, B.V. NAGARATHNA, JJ.
Asian Hotels (North) Ltd. – Appellant
Versus
Alok Kumar Lodha and Others – Respondents
Civil Appeal Nos. 3703-3750 of 2022
Decided On : 12-07-2022

Advocates appeared:
For the Appellant(s) :Mukul Rohtagi, Aakanksha Kaul, Siddhant Kumar, Aman Sahani, Manek Singh, Manya Chandok, Karan Bharihoke, Advocates
For the Respondent(s):Abhikalp Pratap Singh, Nitin Saluja, Advocates

IMPORTANT POINTS
(1) Amendment of plaint – If, by permitting plaintiffs to amend plaint including a prayer clause nature of suit is likely to be changed, Court would not be justified in allowing amendment – It would also result in misjoinder of causes of action.
(2) In a suit challenging revocation of respective licenses, plaintiffs cannot be permitted to challenge respective mortgages / charges created on entire premises as void ab initio.
(3) Plaintiffs cannot be permitted to join any party as a defendant who may not be necessary and / or proper parties at all on the ground that plaintiffs is dominus litus.


Headnote:

Civil Procedure Code, 1908 – Order 6 Rule 17 and under Order 1 Rule 10 – Amendment of plaint and impleadment of necessary party in suit – Suit claiming ownership interest in property – If, by permitting plaintiffs to amend plaint including a prayer clause nature of suit is likely to be changed, Court would not be justified in allowing amendment – It would also result in misjoinder of causes of action – Principle that plaintiffs is dominus litus shall be applicable only in a case where parties sought to be added as defendants are necessary and / or proper parties – Plaintiffs cannot be permitted to join any party as a defendant who may not be necessary and / or proper parties at all on the ground that plaintiffs is dominus litus – Mortgages have been created in favour of different mortgage banks/financial institutions since 1982 onwards – By purported amendment, original plaintiffs have now prayed to declare that all mortgages / charges created on the premises as void ab initio – Original plaintiffs being licensee are aware that there shall be charges / mortgages on entire premises and buildings including shops – Now after a number of years, plaintiffs cannot be permitted to challenge mortgages / charges created on entire premises including shops – In a suit challenging revocation of respective licenses, plaintiffs cannot be permitted to challenge respective mortgages / charges created on entire premises as void ab initio – Impugned orders passed by High Court allowing application under Order 6 Rule 17 and Order 1 Rule 10 of CPC quashed and set aside. (Paras 7.2, 8, 9, 10 and 11)

Facts of the case:

Feeling aggrieved and dissatisfied with the impugned common judgment and order dated 15.09.2021 passed by the High Court of Delhi in respective applications in respective Commercial Suits under Order 1 Rule 10 and Order 6 Rule 17 of the Code of Civil Procedure, by which, all the applications submitted on behalf of the original plaintiff, the High Court has allowed the said applications and has permitted the original plaintiff to amend the respective suits and has also ordered impleadment of mortgagees (Banks), original defendant no.1 Asian Hotels (North) Limited has preferred present appeals.

Findings of Court:

It is the case on behalf of the appellant that apart from the fact that first charge was created in the year 1982, thereafter said mortgages have been rolled over, refinanced and replaced from time to time for ensuring the continuous development of the Hotel Project / premises which requires consistent upkeep, renovation and upgradation from time to time. Under the circumstances, the impugned orders passed by the High Court allowing the application under Order 6 Rule 17 and under Order 1 Rule 10 of Code of Civil Procedure are unsustainable, both on facts as well as on law.

Result : Appeals allowed.

Judgement Key Points

Key Points: - (!) - (!) - (!) - (!) - (!) - (!) - (!) - (!) - (!)

What is the proper scope of amendment of plaint under Order 6 Rule 17 and Order 1 Rule 10 CPC when it would change the nature of the suit or involve misjoinder of causes of action?

What are the rights and locus of licensees to challenge preexisting mortgages/charges on the premises in a suit seeking revocation of licenses, and whether such challenges are permissible when the mortgages were created prior to the licensees’ interests?

What is the effect of an arbitration clause on maintainability of suits and the sequencing of reliefs sought, including amendment and impleadment, in cases involving licenses and mortgagees?


JUDGMENT :

M.R. SHAH, J.

1. As common question of law and facts arise in this group of appeals and as such arise out of the impugned common judgment and order passed by the High Court, all these appeals are decided and disposed of together by this common judgment and order.

2. Feeling aggrieved and dissatisfied with the impugned common judgment and order dated 15.09.2021 passed by the High Court of Delhi in respective applications in respective Commercial Suits under Order 1 Rule 10 and Order 6 Rule 17 of the Code of Civil Procedure, by which, all the aforesaid applications submitted on behalf of the original plaintiff, the High Court has allowed the said applications and has permitted the original plaintiff to amend the respective suits and has also ordered impleadment of mortgagees (Banks), original defendant no. 1 Asian Hotels (North) Limited has preferred the present appeals.

3. For the sake of convenience, the impugned order passed by the High Court in IA No. 5173-5174 of 2021 in Civil Suit (Commercial) No. 189 of 2020 shall be treated as the lead matter. Therefore, for the sake of convenience and to avoid any repetition, facts arising out of Civil Suit (Commercial) No. 189 of 2020 leading to the present appeals are narrated, which are as under:

    3.1. That the appellant herein granted licenses for individual shops at the premises from 1983 onwards to various shopkeepers including the respondent herein-original plaintiff. On 29.5.2020 the original plaintiff as a licensor served a revocation of license notice. Similar notices were also served on other licensees. Therefore, the respective licensees had instituted the respective suits before the Delhi High Court against the appellant-licensor- Asian Hotels (North) Limited seeking a decree of declaration that the license in favour of the plaintiff in respect of shop/premises is irrevocable and perpetual and the purported revocation of the License by the defendant is illegal, void and bad in the eyes of law. A decree is also sought for a declaration declaring that the plaintiff has unfettered right to occupy and use the said premises/shop under the irrevocable license till the documents of transfer/conveyance are executed by the defendant.

    3.2. That the appellant-defendant appeared before the High Court. The defendant raised verbal objection that the suit is not maintainable in view of Section 8 of the Arbitration and Conciliation Act, 1996. The High Court vide order dated 21.07.2020 dismissed the suits with liberty to the parties to avail remedy of arbitration in view of the arbitration clause in the license agreement on the verbal plea. The order passed by the High Court dismissing the suits with the above liberty was a subject matter of appeal before the Division Bench. The Division Bench allowed the said appeal and remanded the matter. Liberty was granted to the defendant to prefer an application under Section 8 of the Arbitration and Conciliation Act, 1996. It is reported that such an application is filed by the defendant and is pending adjudication.

    3.3. During the pendency of the aforesaid suit, the plaintiff filed present IA No. 5174 of 2021 under Order 6 Rule 17 of the Code of Civil Procedure seeking amendment of the plaint, by which, the plaintiff proposed to amend the suit challenging various mortgages created by the defendant hotel, in favour of certain banks. In the said application, it is the case on behalf of the plaintiff that the mortgages created by the defendant in favour of the Financial Institutions/Banks are illegal and void ab-initio to the extent it encumbers the interest held by the plaintiff in the said premises from 2.9.1991. Therefore, consequential amendments were sought to be made pertaining to the rights of the plaintiff. By the said application, prayer clause is also sought to be amended seeking a decree of declaration against the defendant that the mortgages including the mortgage deeds which have been executed in favour of the Banks is void and illeg


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