The main legal point established is the importance of impleading necessary parties in arbitration proceedings to ensure that all parties whose rights may be affected are given an opportunity to be heard and to avoid multiplicity of proceedings.

Devendra Kumar Arora, Ravindra Nath Mishra-II, JJ.

Heard, Shri Nirankar Singh, learned counsel for the petitioner, Shri Somesh Tripathi, learned counsel for opposite party no. 3.

2. The petitioner has approached this court, challenging the action of the Additional Director (Law) Co-operative Societies, U.P., Lucknow/Arbitrator, in rejecting the application of the petitioner for being arrayed as respondent No. 2 in Arbitration Case No. 83 of 2007-08 vide order dated 2.6.2008. In the said order, it has been mentioned that only the applicant and none else has a right to make amendment in the case and add a respondent no. 2. If the petitioner is aggrieved in any manner he can file fresh arbitration.

3. Submission of learned counsel for the petitioner is that the petitioner being a member of the Jeevan Beema Rashtriya Sahkari Awas Samiti Lt, GH 7, Sector 6, Vasundhara, Ghaziabad, U.P. (hereinafter referred as "the Society") was allotted flat No. 403-B by the Society vide order dated 14.06.2002 and accordingly, he contributed an amount of Rs. 1199710/- between 14.6.2002 to 28.1.2005 towards the cost of the said flat and the society gave possession of the said flat vide possession letter dated 11.2.2005. The Society also came into an agreement with the petitioner to the same effect on 11.2.2005. The petitioner after taking possession of the flat in question, spent about Rs. 2 Lakhs on its renovation as well as for furnishing and thereafter started living in the said flat as an owner being a bona fide purchaser.

4. According to the petitioner, when he came to know about pendency of arbitration case being filed by one Mr. Vinay Kumar (respondent No. 2 herein) alleging ownership on Flat No. 403-B, he moved an application for impleadment as respondent to protect his interest as any decision in the said case, would have adverse impact upon the petitioner. Therefore, rejection of application for impleadment was wholly unjustified.

In support of the aforesaid submission, learned counsel for the petitioner has placed reliance upon the judgment of the Apex Court in A. Jithendernath v. Jubilee Hills Cooperative House Building Society and another reported in 2006(10) SCC 96, wherein it was observed that the allottee has not been made party in the proceedings and in the absence of the allottee, the award being in violation of the principles of natural justice would be a nullity.

5. Mr. Somesh Tripathi, learned counsel for opposite party no. 3, on the basis of instructions, has submitted that opposite party no. 2, being a member of the society was allotted the house in question and initially deposited some amount but on account of default in payment, her allotment was cancelled. It is also submitted that opposite party no. 2, after taking refund from the society and lapse of two long years, initiated the arbitration proceedings. In the meantime, the petitioner was allotted the house in question and after payment of the cost of the house in question, possession of the same was delivered to the petitioner and an agreement had also been executed with the petitioner on 11.2.2005. Now the petitioner is living in the said house as a bona fide owner, therefore, he has every right to contest the arbitration proceedings.

6. Having examined the submissions of learned counsel for the parties and gone through the record, the issue involved in the writ petition is whether the petitioner is necessary/aggrieved party in the arbitration proceedings or not.

7. The Hon'ble Apex Court in the case of Prabodh Verma v. State of U.P. 1984 (4) SCC 251 has held that all the parties whose rights are going to be affected by the judgment of the court should be heard and an opportunity of hearing should be allowed to such parties.

8. A necessary party is one without whom no effective order can be made; a proper party 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 proceedings.