1968 Supreme(Cal) 162

HIGH COURT OF CALCUTTA
P. B. Mukharji
TURNER MORRISON AND CO. LTD. - Appellant
Versus
HUNGERFORD INVESTMENT TRUST LTD. - Respondent
Suit 2005  Of  1965
Decided On : JULY 24, 1968

The presence of a party is necessary in a suit only if it is necessary in order to enable the court to effectually and completely adjudicate upon and settle all the questions involved in the suit.

Headnote:

CIVIL PROCEDURE CODE, 1908 - ORDER 1, RULE 10(2) - COMPANIES ACT, 1956 - SECTIONS 4, 255, 425(2), 484-497, 491, 492, 512, 515 - APPLICATION TO BE ADDED AS A PARTY DEFENDANT - NECESSARY PARTY - PROPER PARTY - HOLDING COMPANY AND SUBSIDIARY COMPANY - CORPORATE VEIL - DELAY IN MAKING APPLICATION - MALA FIDES - ABUSE OF PROCESS OF COURT.

Fact of the Case:

The applicant, Brahmaputra Tea Co. Ltd., filed an application to be added as a party defendant in a suit between Turner Morrison and Co. Ltd. (plaintiff) and Hungerford Investment Trust Ltd. (in voluntary liquidation) (defendant). The applicant claimed to be a necessary party to the suit by virtue of two agreements, one dated 16-1-68 between Nirmaljit Singh Hoon and Sukhdev Varma and the other dated 27-1-68 between Sukhdev Varma and the applicant. The first agreement provided for the sale of Mr. Hoon's entire interest in certain companies, including the plaintiff and the defendant, to Mr. Varma for a sum of 225,000 payable in instalments. The second agreement provided for the assignment of Mr. Varma's right, title and interest in the said companies to the applicant for a sum of 325,000 payable in instalments. The applicant also relied on a Statement of Claim in an action in the Q. B. D., London, which was brought by the applicant against Nirmaljit Singh Hoon, Sukhdev Varma and Star International Ship Owners Ltd. for specific performance of the agreements dated 16-1-68 and 27-1-68.

Finding of the Court:

The court held that the applicant was neither a necessary nor a proper party to the suit. The court found that the applicant's rights under the agreements dated 16-1-68 and 27-1-68 were contingent and had not matured. The court also found that the applicant's presence in the suit would be improper, embarrassing, irrelevant and prejudicial to the trial of the suit. The court further found that the applicant had not explained the delay in making the application and that the application was mala fide and an abuse of the process of the court.

Issues: 1. Whether the applicant was a necessary party to the suit? 2. Whether the applicant was a proper party to the suit? 3. Whether the applicant's rights under the agreements dated 16-1-68 and 27-1-68 were contingent and had not matured? 4. Whether the applicant's presence in the suit would be improper, embarrassing, irrelevant and prejudicial to the trial of the suit? 5. Whether the applicant had explained the delay in making the application? 6. Whether the application was mala fide and an abuse of the process of the court?

Ratio Decidendi: 1. The court held that the applicant was not a necessary party to the suit because its presence was not necessary in order to enable the court to effectually and completely adjudicate upon and settle all the questions involved in the suit. 2. The court held that the applicant was not a proper party to the suit because its presence would be improper, embarrassing, irrelevant and prejudicial to the trial of the suit. 3. The court held that the applicant's rights under the agreements dated 16-1-68 and 27-1-68 were contingent and had not matured because the agreements provided that any default in payment of any instalment would result in the forfeiture of the rights under the agreements. 4. The court held that the applicant's presence in the suit would be improper, embarrassing, irrelevant and prejudicial to the trial of the suit because the applicant was not a party to the agreements between the plaintiff and the defendant and because the applicant's rights under the agreements dated 16-1-68 and 27-1-68 were contingent and had not matured. 5. The court held that the applicant had not explained the delay in making the application because the applicant had not provided any reason or explanation for the delay of six months between the dates of the agreements and the date of the application. 6. The court held that the application was mala fide and an abuse of the process of the court because the applicant had filed a suit in the Q. B. D., London, for specific performance of the agreements dated 16-1-68 and 27-1-68 and because the applicant had waited until the suit between the plaintiff and the defendant was on the daily list for disposal to make the application.

Final Decision: The court dismissed the application with costs.