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2017 Supreme(Bom) 1950
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
R.M. SAVANT, SARANG V. KOTWAL, JJ.
Behram Nowrosji Gamadia and Ors. - Appellants
Versus
Smt. Babli Samrathmal Seth and Ors. - Respondents
APPEAL NO. 368 OF 2017 WITH APPEAL (L) NO. 285, 289, 292 OF 2017 IN CHAMBER SUMMONS NO.55 OF 2015 IN SUIT NO.783 OF 1987
Decided On : 21-12-2017
Mr. Darius Khambata, Senior Advocate, a/w Mr. Snehal Shah, a/w Mr. S.V. Doijode, a/w Ms. Falguni Thakkar, a/w Mr. Saurish Shetye, i/b. Doijode Associates, for Appellant in Appeal No. 368/2017 and for R.No.3 & 4 in Appeal (L) No. 285/2017.
An assignee pendente lite can be added as a proper party if his interest in the subject matter of the suit is substantial and not just peripheral.
Headnote:
IMPLEADMENT - ORDER XXII RULE 10 CPC - ASSIGNMENT OF INTEREST - SUBSTITUTION OF HEIRS - DELAY - TRANSFER PENDENTE LITE - RIGHT OF ASSIGNEE - PROPER PARTY - NECESSARY PARTY - DISCRETION OF COURT - LIS PENDENS - SUBSTANTIAL INTEREST - COLLUSION - MULTIPLICITY OF PROCEEDINGS - PRIMA FACIE SATISFACTION - VALIDITY OF ASSIGNMENT - DETAILED INQUIRY - APPELLATE COURT'S POWER TO INTERFERE - INTERPRETATION OF STATUTES - RULES 1 TO 9 OF ORDER XXII CPC - APPLICABILITY OF RULE 10 - TIMING OF APPLICATION - ASSIGNMENT DURING LIFETIME OF ASSIGNOR - JURISDICTION OF COURT - SCOPE OF INQUIRY - EXTENSION OF TIME FOR AMENDMENT.
Fact of the Case:
The original Plaintiffs filed a Suit for a declaration that the partnership constituted between the original Plaintiff and the original Defendant has been abandoned and is of no legal effect and that the Suit property is not a partnership property of the firm but absolute property of the Plaintiff, and neither the original Defendant nor any person claiming through him has any right or interest in the same. In the alternative, the Plaintiff prayed for dissolution of the suit partnership and accounts. During the pendency of the Suit, the original Defendant assigned the actionable claim and/or chose in action including the right to contest the present Suit and all incidental benefits and claims arising out of the subject matter of the Suit (including his share in the suit partnership) in favor of one Housing Development and Infrastructure Ltd. (HDIL) for valuable consideration and upon the terms and conditions recorded in the Sub-Partnership Deed. The original Defendant also executed an irrevocable Power of Attorney in favor of the HDIL. The said Power of Attorney has also been duly registered. On 5-4-2010 the said HDIL further assigned the actionable claim and/or chose in action including the rights forming part of the Deed of Assignment dated 21-6-2008, referred to above in favor of one D.B. Properties Pvt. Ltd. and Vision Finstock Ltd. The latter assignors also executed an irrevocable Power of Attorney in favor of the two assignee in respect of the subject matter of the Deed of Assignment. By Share Sale Agreement dated 7-6-2011, shareholders of D.B. Properties Pvt. Ltd. sold and transferred their entire shareholding in D.B. Properties Pvt. Ltd. whereupon the name of the Company was changed to MahHill Properties Pvt. Ltd., which is the Applicant No.1 in the above Chamber Summons. Hence by the above Chamber Summons the Applicants have sought their impleadment consequent upon the assignment of the beneficial interest of the original Defendant in the suit firm including the right to contest the above Suit on behalf of the deceased original Defendant Samarthmal Seth during the pendency of the Suit.
Finding of the Court:
The Court held that the Applicants are entitled to be impleaded as party Defendants in the Suit in question. The Court further held that the apprehension of the Plaintiffs that the focus of the Suit would change to that of one of resolving the dispute between the Applicants and the heirs of the Defendant is mis-founded. The Suit being one filed for a declaration and in the alternative for dissolution would continue to remain so notwithstanding the inter se dispute between the heirs of the original Defendant and the Applicants. The contention urged on behalf of the Plaintiffs that they would have to face two sets of Defendants who might be taking contrary stands is only a bogey to stall the impleadment of the Applicants as Defendants in the Suit. The Court also held that an ostensible dispute between the heirs of the original Defendant and the Applicants is sought to be propounded by the Plaintiffs though the heirs of the original Defendant have not questioned the intermediate transaction of the Sub-Partnership between the original Defendant and eight others in respect of his 75% share in the partnership firm M/s S.P. Building Corporation and therefore the challenge to the Assignment made in favor of the Applicants is hollow. The Court further held that grave prejudice would be caused to the Applicants if they are not impleaded, as in the event the heirs of the original Defendant act in a manner detrimental to the interest of the Applicants the same would lead to complications and multiplicity of proceedings.
Issues: 1. Whether the Applicants are entitled to be impleaded as party Defendants in the Suit in question? 2. Whether the apprehension of the Plaintiffs that the focus of the Suit would change to that of one of resolving the dispute between the Applicants and the heirs of the Defendant is well-founded? 3. Whether the contention urged on behalf of the Plaintiffs that they would have to face two sets of Defendants who might be taking contrary stands is a valid ground to stall the impleadment of the Applicants as Defendants in the Suit? 4. Whether an ostensible dispute between the heirs of the original Defendant and the Applicants is sought to be propounded by the Plaintiffs though the heirs of the original Defendant have not questioned the intermediate transaction of the Sub-Partnership between the original Defendant and eight others in respect of his 75% share in the partnership firm M/s S.P. Building Corporation? 5. Whether grave prejudice would be caused to the Applicants if they are not impleaded?
Ratio Decidendi: 1. The Court held that the Applicants are entitled to be impleaded as party Defendants in the Suit in question. The Court further held that the apprehension of the Plaintiffs that the focus of the Suit would change to that of one of resolving the dispute between the Applicants and the heirs of the Defendant is mis-founded. The Suit being one filed for a declaration and in the alternative for dissolution would continue to remain so notwithstanding the inter se dispute between the heirs of the original Defendant and the Applicants. The contention urged on behalf of the Plaintiffs that they would have to face two sets of Defendants who might be taking contrary stands is only a bogey to stall the impleadment of the Applicants as Defendants in the Suit. The Court also held that an ostensible dispute between the heirs of the original Defendant and the Applicants is sought to be propounded by the Plaintiffs though the heirs of the original Defendant have not questioned the intermediate transaction of the Sub-Partnership between the original Defendant and eight others in respect of his 75% share in the partnership firm M/s S.P. Building Corporation and therefore the challenge to the Assignment made in favor of the Applicants is hollow. The Court further held that grave prejudice would be caused to the Applicants if they are not impleaded, as in the event the heirs of the original Defendant act in a manner detrimental to the interest of the Applicants the same would lead to complications and multiplicity of proceedings. 2. The Court held that the apprehension of the Plaintiffs that the focus of the Suit would change to that of one of resolving the dispute between the Applicants and the heirs of the Defendant is mis-founded. The Suit being one filed for a declaration and in the alternative for dissolution would continue to remain so notwithstanding the inter se dispute between the heirs of the original Defendant and the Applicants. The contention urged on behalf of the Plaintiffs that they would have to face two sets of Defendants who might be taking contrary stands is only a bogey to stall the impleadment of the Applicants as Defendants in the Suit. 3. The Court held that the contention urged on behalf of the Plaintiffs that they would have to face two sets of Defendants who might be taking contrary stands is only a bogey to stall the impleadment of the Applicants as Defendants in the Suit. 4. The Court held that an ostensible dispute between the heirs of the original Defendant and the Applicants is sought to be propounded by the Plaintiffs though the heirs of the original Defendant have not questioned the intermediate transaction of the Sub-Partnership between the original Defendant and eight others in respect of his 75% share in the partnership firm M/s S.P. Building Corporation and therefore the challenge to the Assignment made in favor of the Applicants is hollow. 5. The Court held that grave prejudice would be caused to the Applicants if they are not impleaded, as in the event the heirs of the original Defendant act in a manner detrimental to the interest of the Applicants the same would lead to complications and multiplicity of proceedings.
Final Decision: The Court dismissed the Appeals and the companion Appeals.
R.M. SAVANT, J.
1. All the above Appeals to stand “Admitted”. By the consent of the Learned Counsel for the parties are taken up for hearing forthwith.
2. The above Appeals challenge the order dated 22-1-2017 passed by a Learned Single Judge of this Court by which order the Chamber Summons for impleadment being No.55 of 2015 filed by the Respondent Nos.5 and 6 herein came to be allowed and resultantly the said Respondent Nos.5 and 6 were directed to be impleaded as party Defendants to the Suit in question and consequential amendments were directed to be carried out in the Plaint.
3. The above Appeals involve common facts and an identical challenge. By the consent of the Learned Counsel for the parties the above Appeal No.368 of 2017 is treated as the lead matter.
The Applicants who are the executors of the Will of the original Plaintiff Nowrosji Jehangir Gamadia would be referred to as the original Plaintiffs whereas the Respondent Nos.5 and 6 would be referred to as the Applicants.
4. The facts giving rise to the filing of the above Appeal can in brief be stated thus:
The Appellants herein as indicated above are the executors of the Will of the original Plaintiff Nowrosji Jehangir Gamadia who had filed the Suit in question for a declaration that the original partnership entered into between the parties has been abandoned or is of no legal effect and that the Suit property is not a partnership property of the firm but absolute property of the Plaintiff, and neither the original Defendant i.e. Samarathmal Seth or any person claiming through him has any right or interest in the same. In the alternative the Plaintiff had prayed for dissolution of the suit partnership and accounts. In the context of the challenge raised in the above Appeal, it would be apposite to refer to the relief’s sought in the Suit in question being Suit No.783 of 1987. The gist of the same is as follows:-
By prayer clause (a) the Plaintiff was seeking a declaration that the partnership constituted between the original Plaintiff and the original Defendant by the said Deed of Partnership dated 30th January, 1974 and as modified by the said Deed of Retirement dated 2nd August, 1976, has been abandoned and is of no legal effect and further that the property in question is not partnership property but the absolute property of the Plaintiff and that the Defendant or Defendants do not have any right.
By prayer clause (b) the Plaintiff sought the dissolution of the suit firm and the consequential relief’s thereto.
By way of interim relief’s the Plaintiff sought an injunction against the Defendant from dealing with the suit property and for appointment of the Court Receiver as Receiver of the suit property under Order 40 of the CPC.
4. In so far as the partnership is concerned, the same was constituted between the original Plaintiff [since deceased and now represented by the Plaintiff Nos.1(a) and 1(b)] and the original Defendant [since deceased now represented by the Defendant Nos.1(a) to 1(d)]. The said partnership was originally between the Plaintiff and the Defendant and one Oomer Ahmed which was in the name and style of M/s S.P. Building Corporation and which came to be modified by a Deed of Retirement executed between Oomer Ahmed (retiring partner) on one hand and the original Plaintiff and the original Defendant (continuing partners) on the other hand. There is also a Deed of Sub-Partnership dated 5-4-1984 between the original Defendant and 8 others concerning the 75% share of the original Defendant in the suit partnership. During the pendency of the Suit, by a Deed of Assignment dated 21-6-2008 the original Defendant assigned the actionable claim and/or chose in action including the right to contest the present Suit and all incidental benefits and claims arising out of the subject matter of the Suit (including his share in the suit partnership) in favour of one Housing Development and Infrastructure Ltd. (HDIL) for valuable consideration and upon the terms a
