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SUPREME COURT OF INDIA
PANKAJ MITHAL, PRASANNA B. VARALE, JJ.
Nak Engineering Company Pvt. Ltd. – Appellant
Versus
Tarun Keshrichand Shah and Others – Respondents
Civil Appeal No....................of 2026 [Arising Out of SLP (C) Nos. 6024-6025 of 2022]
Decided On : 05-01-2026
Civil Procedure Code, 1908 – Order I Rule 10 – Recovery suit – Addition of necessary party in suit – Dispute concerning payment of service charges between owners of property and its user – Appellant has nowhere established its independent right to be impleaded to defend suit except for claiming to be successor of respondent – High Court proceeded to pass impugned order on the premise that no relationship of tenant and landlord existed between parties and that appellant is unauthorized occupant that need not be joined as a defendant to suit – There is no material to indicate that relief, as claimed in suit against respondent, if granted, would be implemented against appellant – Appellant is not a necessary party to suit – Respondents who have instituted suit are dominus litis and it is for them to choose their adversaries – If they do not array proper and necessary parties to suit, they do it at their own risk – However, they cannot be compelled to add a party to defend a suit against their wishes – Decree passed in suit would be binding only between parties to suit and would not infringe upon any right of a third party – Appeals dismissed with direction that decree passed in suit would not be implemented against appellant. (Paras 16, 27, 31, 37, 39, 41 and 44)
Facts of the case:
The dispute is essentially with regard to payment of service charges between owners of property and its user. Dispute is not regarding recovery of rent or arrears of rent and relationship of landlord and tenant between the parties is completely alien to controversy in question.
Findings of Court:
Impleadment application was filed almost after nine years of the knowledge of pendency of suit. Impleadment has been rightly refused to the appellant by the High Court.
Result : Appeals dismissed.
| Table of Content |
|---|
| 1. factual background of the case (Para 3 , 4 , 7 , 8 , 9 , 10) |
| 2. appellant's arguments for impleadment (Para 11 , 12 , 20 , 21 , 22) |
| 3. high court's reasoning for revoking impleadment (Para 15 , 16 , 17) |
| 4. determining necessity of parties in a suit (Para 19 , 32 , 34) |
| 5. legal definitions of necessary and proper parties (Para 33 , 35 , 38) |
| 6. court's confirmation of high court's judgement (Para 39 , 41 , 42) |
| 7. conclusion and final orders of the court (Para 44 , 45 , 46) |
JUDGMENT :
PANKAJ MITHAL, J.
1. Leave granted.
2. We have heard Shri Chander Uday Singh, senior counsel assisted by Shri Amarjit Singh Bedi, Advocate-on-Record for the appellant-NAK Engineering Company Pvt. Ltd.1 [Hereinafter referred to as ‘appellant’] and Dr. Abhinav Chandrachud, learned counsel assisted by Shri Surjendu Sankar Das, Advocate-on-Record for the respondent No. 1-Tarun Keshrichand Shah.2 [Hereinafter referred to as ‘respondent No. 1’]
3. Respondent No. 2-Priyalata Keshrichand Shah3 [Hereinafter referred to as ‘respondent No. 2’] is reported to be dead and her interest is represented by respondent No. 1.
4. Respondent No. 3-M/s Kishore Engineering Company4 [Hereinafter referred to as ‘respondent No. 3’] has not appeared. It had not even appeared in the Trial Court or the High Court. It has not even filed any written statement, despite service of notice.
5. In a Suit No. 6117 of 2007 filed by respondent No. 1 and respondent No. 2 against respondent No. 3, a Notice of Motion No. 1346 of 2018 was moved to add the appellant as the party defendant to participate and contest the aforesaid suit. Earlier, a Notice of Motion No. 1925 of 2017 was also moved by the appellant seeking to set aside the order to proceed in the said suit ex-parte. Both the said motions were allowed by the court of first instance vide a common Order dated 05.10.2018. However, the said order was set aside by the High Court by the impugned judgment and order dated 21.02.2022 in exercise of its power under Article 227 of the Constitution of India.
6. Under challenge in these appeals is thus the above judgment and order of the High Court dated 21.02.2022 setting aside the order of the court of first instance permitting impleadment of the appellant as one of the defendants to the suit meaning thereby that the motion of addition of the appellant as one of the defendants to the suit stands rejected.
7. One Keshrichand Shah was the original owner of the commercial premises admeasuring 1700 sq. feet existing on the third floor of the Churchgate House, Mumbai. He was the sole proprietor of M/s Union Commercial Corporation. The aforesaid Keshrichand Shah through its proprietorship firm M/s Union Commercial Corporation let out an area of 525 square feet of the above premises having five cabins to one M/s Modern Products Pvt. Ltd. The said M/s Modern Products Pvt. Ltd. licensed or sublet the same to the respondent no. 3. In addition to the rent of Rs. 400/- per month payable to M/s Modern Products Pvt. Ltd., the respondent No. 3 also used to pay service charges at the rate of Rs. 2,100/- per month for the use of furniture and fixtures therein to the owner, Keshrichand Shah. On the death of Kesharichand Shah, the said service charges were realized by his heirs, i.e. respondent nos. 1 and 2.
8. The respondent Nos. 1 and 2 instituted a Suit No. 3319 of 2007 on the original civil side of the Bombay High Court but on account of pecuniary jurisdiction it was later transferred to the Bombay City Civil Court and re-numbered as Suit No. 6117 of 2017.
9. The aforesaid suit was instituted by respondent Nos. 1 and 2 against respondent No. 3 for the recovery of service charges at the rate of Rs. 2,100/- per month, amounting to Rs. 75,600/- for the period November 2004 to October 2007.
10. In the aforesaid suit, notice was served upon sole defendant i.e., respondent no. 3 but no one appeared on its behalf and filed any written statement. Thus, after closing the evidence on 11.02.2014, the court vide order
Addition of necessary party in suit – Plaintiffs are dominus litis and they cannot be compelled to add a party to defend suit against their wishes.
Code of Civil Procedure under Order 22 Rule 10, deals with the assignment, creation order-volution of any interest. In those cases party can be joined. Those contingencies may occur in case of transf....
A court may exercise discretion to add necessary or proper parties in a suit for effective adjudication, distinguishing necessary parties (essential for decree) from proper parties (important for adj....
The court may compel the addition of necessary parties to a suit despite the plaintiff's choice, ensuring all interested parties can be adjudicated effectively.
An applicant seeking impleadment must demonstrate a direct legal interest and right to relief concerning the controversy in a suit; absence of such a link renders the request for impleadment invalid.
The main legal point established in the judgment is that the discretionary power to add parties under Order 1 Rule 10 of the Code of Civil Procedure should be exercised to ensure the effective adjudi....
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