2010 (7) TMI 1159 - SC - Indian Laws

Necessary party nor a proper party - lease of the airport - powers of AAI necessary for performance of the functions - appellant claims to have undertaken several developmental activities to make it a world class airport - Whether the appellant is a necessary or proper party to the suit for specific performance filed by the first respondent - According to the appellant, the Mumbai airport is surrounded by developed (constructed) areas with very limited opportunities to acquire any land and the site constraints limit the possibilities for development and therefore it was necessary to make optimum use of the existing land in the airport for the purpose of modernisation and upgradation; and therefore, the disputed land which was lying idle, was required for modernisation. It therefore filed an application seeking impleadment as an additional defendant in the pending suit filed by the first respondent against AAI, contending that its interest was likely to be directly affected if any relief is granted to the first respondent-plaintiff in the suit. The appellant alleged that the Information Memorandum proposing to privatise the management did not exclude the area which was the subject-matter of the suit; and that the suit plot could not however be leased to the appellant in view of the interim order in the pending suit of the first respondent. HELD THAT - The general rule in regard to impleadment of parties is that the plaintiff in a suit, being dominus litis, may choose the persons against whom he wishes to litigate and cannot be compelled to sue a person against whom he does not seek any relief. Consequently, a person who is not a party has no right to be impleaded against the wishes of the plaintiff. But this general rule is subject to the provisions of Order I Rule 10(2) of Code of Civil Procedure ( Code'), which provides for impleadment of proper or necessary parties. A necessary party' is a person who ought to have been joined as a party and in whose absence no effective decree could be passed at all by the Court. If a necessary party' is not impleaded, the suit itself is liable to be dismissed. A proper party' is a party who, though not a necessary party, is a person whose presence would enable the court to completely, effectively and adequately adjudicate upon all matters in disputes in the suit, though he need not be a person in favour of or against whom the decree is to be made. If a person is not found to be a proper or necessary party, the court has no jurisdiction to implead him, against the wishes of the plaintiff. The fact that a person is likely to secure a right/interest in a suit property, after the suit is decided against the plaintiff, will not make such person a necessary party or a proper party to the suit for specific performance. On a careful examination of the facts of this case, we find that the appellant is neither a necessary party nor a proper party. As noticed above, the appellant is neither a purchaser nor the lessee of the suit property and has no right, title or interest therein. First respondent - plaintiff in the suit has not sought any relief against the appellant. The presence of the appellant is not necessary for passing an effective decree in the suit for specific performance. Nor is its presence necessary for complete and effective adjudication of the matters in issue in the suit for specific performance filed by the first respondent-plaintiff against AAI. A person who expects to get a lease from the defendant in a suit for specific performance in the event of the suit being dismissed, cannot be said to be a person having some semblance of title, in the property in dispute. The appellant as lessee may certainly have the powers of AAI necessary for performance of the functions that have been assigned to them. What has been assigned is the function of operation, management and development agreement with reference to the area that been demised. Obviously the appellant as lessee of the Airport cannot step into the shoes of AAI for performance of any functions with reference to an area which has not been demised or leased to it. Appellant contended that Mumbai airport being one of the premier airports in India with a very high and ever increasing passenger traffic, needs to modernise and develop every inch of the airport land; that the suit land was a part of the airport land and that for the pendency of first respondent's suit within an interim order, AAI would have included the suit land also in the lease in its favour - This does not in any way help the appellant to claim a right to be impleaded. If the interim order in the suit filed by the first respondent came in the way of granting the lease of the suit land, it is clear that the suit land was not leased to appellant. The fact that if AAI succeeded in the suit, the suit land may also be leased to the appellant is not sufficient to hold that the appellant has any right, interest or a semblance of right or interest in the suit property. When appellant is neither claiming any right or remedy against the first respondent and when first respondent is not claiming any right or remedy against the appellant, in a suit for specific performance by the first respondent against AAI, the appellant cannot be a party. The allegation that the land is crucial for a premier airport or in public interest, are not relevant to the issue. Appeal dismissed.

Summary

Issues Involved:
1. Whether the appellant is a necessary or proper party to the suit for specific performance filed by the first respondent.
2. Interpretation and application of Order I Rule 10(2) of the Code of Civil Procedure regarding the impleadment of parties.
3. The implications of section 12A of the Airports Authority of India Act, 1994 on the appellant's rights and powers as a lessee.

Detailed Analysis:

1. Necessary or Proper Party:
The primary issue was whether the appellant should be impleaded as a necessary or proper party in the suit for specific performance filed by the first respondent. The appellant contended that it had an interest in the disputed land, which was crucial for the development and modernization of the Mumbai airport. The appellant argued that it was expecting to acquire the land pending the outcome of the litigation.

The court reiterated that a necessary party is one without whom no effective decree can be passed, and a proper party is one whose presence is necessary for a complete and effective adjudication of the matters in dispute. The appellant, being neither a purchaser nor a lessee of the suit property, had no right, title, or interest in the property. The first respondent did not seek any relief against the appellant, and the presence of the appellant was not necessary for passing an effective decree in the suit. Therefore, the appellant was neither a necessary nor a proper party to the suit.

2. Order I Rule 10(2) CPC:
The court examined the provisions of Order I Rule 10(2) of the Code of Civil Procedure, which allows the court to add or strike out parties at any stage of the proceedings. The court has the discretion to add any person as a party if they are necessary for the effective adjudication of the suit. However, the court emphasized that this discretion should be exercised judiciously and not arbitrarily.

The appellant relied on the case of Sumtibai v. Paras Finance Co. to argue that even a person likely to acquire an interest in the future could be impleaded. However, the court clarified that Sumtibai did not establish a general rule that anyone claiming a future interest could be impleaded. Instead, it reaffirmed the principle that only those with a semblance of title or interest could be considered proper parties. The court found no conflict between Sumtibai and the earlier decision in Kasturi v. Iyyamperumal, which held that only parties to the contract or their legal representatives/transferees could be necessary parties in a suit for specific performance.

3. Section 12A of the Airports Authority of India Act, 1994:
The appellant argued that under section 12A of the Airports Authority of India Act, 1994, it should be deemed to have the powers of AAI for the performance of functions related to the airport premises. The court rejected this contention, stating that the appellant, as a lessee, could only exercise powers related to the demised area and not any area not leased to it. The disputed land was not included in the lease due to the pending litigation, and thus, the appellant had no right or interest in the suit property.

In conclusion, the court dismissed the appeal, holding that the appellant was neither a necessary nor a proper party to the suit for specific performance filed by the first respondent against the Airports Authority of India. The appellant's expectations of acquiring the disputed land in the future did not confer any present right or interest warranting its impleadment in the suit.