2010 (10) TMI 1172 - HC - Indian Laws

Summary

Issues Involved:
1. Impleadment of appellants as parties to the civil suit.
2. Validity and enforceability of agreements.
3. Privity of contract between appellants and respondents.
4. Necessity of appellants as parties to the suit.
5. Maintainability of the appeal.

Summary:

1. Impleadment of Appellants as Parties to the Civil Suit:
The appellants were impleaded as parties to the civil suit by the order dated 23 March 2010 in A. No. 6722/2009 in C.S. No. 257/2005. Respondents 1 and 2 contended that the appellants, by developing the property originally constructed by the third respondent, acted contrary to the vested rights under the Technical Services Agreement dated 26 October 1988 and subsequent agreements. The learned single Judge found that impleading the appellants would enable the Court to decide the matter effectively.

2. Validity and Enforceability of Agreements:
Respondents 1 and 2 sought a declaration that the Technical Services Agreement, Project Consultancy Agreement, and Royalty Agreement dated 26 October 1988, along with subsequent agreements, are valid, legal, and subsisting, and binding on respondents 3 to 7 and their assigns. The agreements included provisions for maintaining full ownership of the hotel and disclosing the agreements to any financial institutions involved.

3. Privity of Contract Between Appellants and Respondents:
The appellants contended that they were not bound by the agreements executed between respondents 1 and 2 and respondents 3 and 4, and thus no relief could be claimed against them. They argued that the agreements did not contain provisions binding subsequent purchasers of the hotel unit. The appellants maintained that they purchased the property from a secured creditor free of all encumbrances.

4. Necessity of Appellants as Parties to the Suit:
The Court found that the appellants, having purchased the property from respondents 5 and 6 under the SARFAESI Act, 2002, stepped into the shoes of respondents 3 to 9. The appellants were deemed necessary parties to the suit as their presence was essential for a final adjudication of the lis. The Court emphasized that the appellants were aware of the agreements and the injunction order, and their participation would enable the Court to adjudicate the issue comprehensively.

5. Maintainability of the Appeal:
The learned senior counsel for respondents 1 and 2 argued that the appeal against the order in O.A. No. 6722/2009 was not maintainable as the order was not a judgment within the meaning of Clause 15 of the Letters Patent. However, since the appeal was admitted earlier, the Court did not consider this issue and left the question of law open for future proceedings.

Conclusion:
The Letters Patent Appeal was dismissed, and the appellants were deemed necessary parties to the suit. The Court found no error or illegality in the order warranting interference under Clause 15 of the Letters Patent. Consequently, M.P. No. 1/2010 was also dismissed.