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Judges : VISWANATHA IYER
Kassim - Appellant
Versus
South Indian Bank Ltd. - Respondent
Case No : C.R.P. No. 2 or 1989
Decided On : 03/13/1990
Advocates Appeared :
M.V.S. Nampoothiry For Petitioners S. Narayanan Poti For Respondents
Workers - Impleadment in Civil Suit - Order I Rule 10 of the Code of Civil Procedure, 1908 - [Order I Rule 10 of the Code of Civil Procedure, 1908] - The court discussed the distinction between necessary parties and proper parties, emphasizing that a proper party is one with a defined subsisting direct and substantive interest in the issues arising in the litigation, an interest which will be cognizable in a court of law. The court also highlighted that a civil court is circumscribed by the provisions of Order I Rule 10(2) and cannot pass orders beyond these provisions.
Fact of the Case:
The petitioners sought to be impleaded as parties to a civil suit filed by a bank for recovery of dues. The court rejected their application, stating that their presence was unnecessary for a complete and final adjudication of the dispute between the bank and its debtors.
Finding of the Court:
The court found that the petitioners were not necessary parties to the suit and their application for impleadment was rightly rejected by the lower court.
Issues: The main issue was whether the petitioners should be impleaded as parties to the civil suit filed by the bank.
Ratio Decidendi: The court emphasized the distinction between necessary parties and proper parties, highlighting that a proper party is one with a defined subsisting direct and substantive interest in the issues arising in the litigation, an interest which will be cognizable in a court of law. The court also emphasized that a civil court is circumscribed by the provisions of Order I Rule 10(2) and cannot pass orders beyond these provisions.
Final Decision: The revision petition seeking impleadment of the petitioners was dismissed, and the court upheld the rejection of their application for impleadment.
Certainly. Based on the provided legal document, here are the key points:
The main legal principle established is that a civil court's authority is limited by the provisions of Order I Rule 10(2) of the Civil Procedure Code. The court cannot pass orders beyond the scope defined by this rule (!) .
There is a clear distinction between necessary parties and proper parties. A necessary party is one without whom the court cannot effectively adjudicate the matter, whereas a proper party has a defined, subsisting, direct, and substantive interest in the issues of the case (!) (!) .
The application for impleadment by the petitioners was rejected because their presence was deemed unnecessary for a complete and final adjudication of the dispute between the bank and its debtors. The court emphasized that the petitioners did not have a claim as necessary or proper parties, as their interests were not directly related to the core issues of the suit (!) (!) .
The petitioners, who are workers at the establishment involved in the dispute, sought to be impleaded due to their concern that the sale of mortgaged properties might affect their employment rights. However, the court found that they had no liability towards the bank nor any direct interest in the debt recovery proceedings (!) (!) .
The court reaffirmed that a person must have a defined, subsisting, and legal interest in the subject matter of the litigation to be properly impleaded as a party. Indirect or commercial interests are insufficient to justify their inclusion (!) (!) .
The court clarified that civil courts are limited to exercising powers conferred by law and cannot pass orders based on notions or philosophies outside the scope of legal provisions. They cannot entertain schemes or proposals for revival or rehabilitation of the establishment outside the framework of the suit (!) (!) .
The jurisdiction of civil courts is distinct from specialized tribunals, such as industrial tribunals, which may have broader powers to create rights and liabilities beyond ordinary law. Civil courts are bound by the principles and procedures of the Civil Procedure Code and cannot venture outside their prescribed limits (!) (!) .
The court expressed disagreement with the view that labour unions or workers should be added as parties to a suit for the purpose of proposing schemes or revival plans. It emphasized that their presence is unnecessary for the adjudication of the dispute and could complicate proceedings with extraneous matters (!) (!) .
Ultimately, the court concluded that the petitioners' application for impleadment was misconceived and rightly rejected. The revision petition was dismissed, reaffirming that the petitioners were not necessary or proper parties to the suit (!) (!) .
The decision underscores that civil courts must adhere strictly to procedural provisions and cannot extend their powers beyond what is legally permitted, especially in matters involving complex industrial or financial disputes.
Counsel for the first respondent-plaintiff submits that the suit O.S. No. 193 of 1989 on the file of the Subordinate Judge of Kottayam in which the petitioners sought to get themselves impleaded, has been decreed on December 12,1989. This is not disputed by counsel for the petitioners. The question whether the lower court was right in rejecting the application to implead does not therefore, survive for consideration at this stage. The revision petition is liable to be dismissed on this preliminary ground itself.
2. But there is no merit either, in the revision petition. The suit is one for recovery of an amount of over rupees thirty one lakhs from respondents 2 and 3 by sale of the mortgaged properties, which include the establishment where the petitioners are stated to be working. This establishment is a factory "manufacturing" coffee powder. The petitioners are not parties to the mortgage transaction, nor are they liable for the whole or arty portion of the amount claimed in the suit. But they sought to get themselves impleaded as parties on the allegation that they are workers in the establishment, their right to work therein was likely to be affected by the sale of the mortgaged properties, including the industrial establishment and therefore, they are proper parties to the suit. Reliance was placed on the decision of the High Court of Bombay reported in State Bank of India v. Podar Mills Ltd., AIR 1989 Bombay 215, as also on the decision t>f the Supreme Court in Workers v. Rohtas Industries Ltd., 1987 (2) SCC 588. It must be noted however that the petitioners have discreetly avoided taking any responsibility for discharge of the debt due to the plain tiff. Nor have they put forward any scheme for operation of the establishment or for discharge of the plaintiffs dues.
3. Order I Rule 10 of the Code of Civil Procedure, 1908 provides that the court may at any stage of the proceedings, either upon, or without the application of either party, and on such terms as may appear to the court to be just, order that the name of any person, who ought to have been joined, whether as plaintiff or defendant, or whose presence before the court may be necessary in order to enable the court effectually and completely to adjudicate upon, and settle, all the questions involved in the suit, be added as party to the suit.
4. The rule categorizes parties to the suit into two, necessary parties and proper parties. The distinction between the two was drawn by the Supreme Court in Udit Narain Singh Malpaharia v. Board of Revenue, AIR 1963 S.C. 786. It was stated that a necessary party was one without whom no decree can be made effectively. A proper party was one in whose absence, an effective order can be made, but whose presence is necessary for a complete and final decision on the question involved in the proceeding.
5. The petitioners have no claim that they are necessary parties to the suit. They seek to come on record only as proper parties.
6. A person may be impleaded as a defendant in a suit, though no relief may be claimed against him, if his presence is necessary for a complete and final adjudication of the questions involved in the suit. It is well established that questions involved in' the suit are those which arise between the parties to the suit. (See Vaithilinga v Sadasiva, AIR 1926 Mad. 836, Somiah v. Amina Begum, AIR 1976 A.P. 182, among others). Only a person, who has a direct interest in the subject matter of the litigation, whether it raises questions relating to moveable or immovable property, can however be impleaded as a party. (Razia Begum v. Anwar Begum, AIR 1958 S.C. 886). What is this "direct interest". Lindley L.J. has explained it in Moser v. Marsden (1892) Ch. 487 as a direct interest in the issues between the plaintiff and the defendant. Only a person who is so interested can be impleaded as a defendant. Lord Greene M.R. has further explained the nature of this interest in re I.G. Farbenindustrie ag. Agreement
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