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IN THE HIGH COURT OF DELHI
Neena Bansal Krishna, J.
Subhash Arora - Appellant
Versus
Kishan Sharma - Respondent
CS(OS) 1033 of 2013
Decided On : 09-01-2023




The court ruled that an auction purchaser, lacking a connection to the original agreement, cannot be impleaded in a specific performance suit, as their presence is neither necessary nor proper for adjudicating the existing contract issues.

Headnote:(A) Code of Civil Procedure, 1908 - Order I Rule 10 - Impleadment application in specific performance suit - Auction purchaser sought impleadment after purchasing property under SARFAESI Act - The court found that the applicant's rights are independent and unrelated to the agreement of sale in question. The requisite tests for necessary parties were not met, affirming that the plaintiff, as dominus litis, cannot be compelled to add parties he does not wish to involve. (Paras 21, 34, 38)

Facts of the case:
The application for impleadment involved a property mortgaged to a bank, with the original owners defaulting, leading to an auction wherein the applicant bid successfully. Despite payment, possession was not handed over due to ongoing disputes and restraining orders related to prior litigations over the property.

Findings of Court:
The rights of the auction purchaser do not arise from the contract of sale under discussion, rendering their presence unnecessary as it would complicate existing issues rather than clarify them.

Issues: Whether the auction purchaser should be permitted to join as a party in the ongoing specific performance suit relating to a contract to sell; and whether the court has jurisdiction to enforce rights against a party not involved in the original contract.

Ratio Decidendi: The court concluded that the applicant had no rights derived from the original owners under the sales agreement, thus their addition would convert the specific performance suit into a title dispute, which is impermissible. The applicant's attempts were ruled as unnecessary and improper in the context of the current proceedings.

Result: Application dismissed.

Table of Content
1. factual background of auction and suit (Para 1 , 2 , 3 , 4 , 5 , 6 , 10 , 12 , 15 , 16 , 17 , 18 , 19 , 20 , 21)
2. plaintiff's arguments against impleadment (Para 8 , 9 , 11 , 13)
3. court's observations on necessary parties and specific performance (Para 14 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37)
4. ruling on impleadment application (Para 38 , 39)

JUDGMENT

Neena Bansal Krishna, J.

I.A.7727/2020 (For Impleadment)

1. Kalyani (India) Private Ltd. has filed an application under Order I Rule 10 Code of Civil Procedure, 1908 (hereinafter referred to as "CPC") to be impleaded as a party in the present Suit for Specific performance of an Agreement to Sell dated 26.03.2012 between the plaintiff and the defendant.

2. The facts in brief as narrated in the application are that the residential property consisting of Basement, Ground Floor and First Floor built on Plot No.38, Block-B, Masjid Moth, Panchsheel Enclave, Chirag Delhi-110017 measuring 216 Sq. Metres (hereinafter referred to as "suit property"), of which the defendant was the owner, had been mortgaged with Punjab National Bank by the original owners/ allottees. On account of their failure to pay the bank dues, the proceedings were initiated by the Bank under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (hereinafter referred to as "SARFAESI Act"). Punjab National Bank, Mayur Vihar, Phase-II, Delhi held an auction of suit property under the provisions of the SARFESI Act, 2002 on 31st December, 2018. The applicant was declared as the highest bidder in the auction. The sale in favour of the applicant was confirmed by the Bank vide letter dated 01st January, 2019 and the Sale Certificate dated 15th February, 2019 was executed in its favour on 12th June, 2019, and registered on 14th June, 2019 in the Office of Sub-Registrar, 5-A, Hauz Khas, New Delhi.

3. The applicant has asserted that the entire sale consideration of Rs. 4,90,25,000/- has already been paid by him to the Punjab National Bank and the sale transaction has been concluded, despite which the Bank has failed to hand over the possession of the property for the reasons and causes attributable to the plaintiff in the present suit.

4. On 20th March, 2020 the applicant became aware of the present Suit as well as the Order 16th July, 2013. An application was filed before the learned CMM, Saket Courts, New Delhi and a Receiver was appointed vide Order dated 20th March, 2016 with the direction to take physical possession of the suit property.

5. In the interim, Shri Mayank Sharma who is the family member of the borrower had filed a suit for Partition bearing CS (OS) 664/2018 titled Mayank Sharma vs. Santosh Sharma and obtained interim protection in his favour on 21st December, 2018 by concealing the true facts before the High Court of Delhi. The Receiver was unable to take physical possession due to the interim Order dated 21st December, 2018. The applicant on becoming aware of the Order dated 21st December, 2018 moved an application under Order I rule 10 CPC for impleadment in the said proceedings. Likewise, Punjab National Bank also filed an application under Order I Rule 10 of the CPC and also an application under Order XXXIX Rule 4 of the CPC for vacating the interim stay. This Court after hearing the parties vacated the stay dated 21st December, 2018 and disposed of the respective applications of the applicant as well as the Bank.

6. Thereafter, fresh directions were obtained by the Bank from the learned CMM vide Order dated 28th February, 2020 and the respondent issued a Notice for taking physical possession of the mortgaged property in question. In the mean while, plaintiff also filed an application for early hearing in case titled SA/NDN/243/2019 Subhash Arora vs. PNB which is pending before the DRT-I, New Delhi. After hearing arguments on the application, the directions were issued by the lear

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