2005 (4) TMI 635 - SC - Indian Laws

Power under Order 1 Rule 10 of the CPC - Whether in a suit for specific performance of contract for sale of a property instituted by a purchaser against the vendor a stranger or a third party to the contract claiming to have an independent title and possession over the contracted property is entitled to be added as a party/defendant in the said suit - HELD THAT - In our opinion the respondent Nos. 1 and 4 to 11 are not necessary parties as effective decree could be passed in their absence as they had not purchased the contracted property from the vendor after the contract was entered into. They were also not necessary parties as they would not be affected by the contract entered into between the appellant and the respondent Nos. 2 and 3. It may be reiterated here that if the appellant who has filed the instant suit for specific performance of contract for sale even after receiving the notice of claim of title and possession by the respondent Nos. 1 and 4 to 11 does not want to join the respondent Nos. 1 and 4 to 11 in the pending suit it is always done at the risk of the appellant because he cannot be forced upon to join the respondent Nos 1 and 4 to 11 as party- defendants in such suit. In the case of Ramesh Hirachand Kundanmal v. Municipal Corporation of Greater Bombay and Ors. 1992 (3) TMI 356 - SUPREME COURT on the question of jurisdiction this Court clearly has laid down that it is always open to the court to interfere with an order allowing an application for addition of parties when it is found that the courts below had gone wrong in concluding that the persons sought to be added in the suit were necessary or proper parties to be added as defendants in the suit instituted by the plaintiff appellant. In that case also this Court interfered with the orders of the courts below and rejected the application for addition of parties. Such being the position it can no longer be said that this Court cannot set aside the impugned orders of the courts below on the ground that jurisdiction to invoke power under Order 1 Rule 10 of the CPC has already been exercised by the two courts below in favour of the respondent Nos. 1 and 4 to 11. Thus in our view the stranger to the contract namely the respondent Nos. 1 and 4 to 11 making claim independent and adverse to the title of respondent Nos. 2 and 3 are neither necessary nor proper parties and therefore not entitled to join as party defendants in the suit for specific performance of contract for sale. The judgments and orders of the High Court and the trial court are therefore liable to be set aside. The impugned orders are thus set aside and the application for addition of parties filed at the instance of respondent Nos. 1 and 4 to 11 stands rejected. The appeal is thus allowed. We however make it clear that we have not decided in this judgment as to the title and possession of respondent Nos. 1 and 4 to 11 of the suit property and all such questions are kept open in the event any approach is made either by the respondent Nos. 1 and 4 to 11 or by the appellant in any appropriate court. There will be no order as to costs.

Summary

Issues Involved:
1. Whether a stranger or third party to a contract can be added as a party/defendant in a suit for specific performance of a contract for sale of property.

Detailed Analysis:

Issue 1: Addition of a Stranger or Third Party in a Suit for Specific Performance

The core issue in this case is whether a stranger or third party to a contract, claiming independent title and possession over the contracted property, can be added as a party/defendant in a suit for specific performance of a contract for sale of property. The appellant filed a suit against respondent Nos. 2 and 3 for specific performance of a contract for sale. Respondent Nos. 1 and 4 to 11, who were not parties to the contract, sought to be added as defendants, claiming independent title and possession over the property. The trial court allowed this application, and the High Court confirmed the order. The Supreme Court had to decide if these respondents could be added under Order 1 Rule 10 of the CPC.

Relevant Provisions of CPC:

Order 1 Rule 10(2) of the CPC empowers the court to add a person as a party if their presence is necessary for effectively and completely adjudicating upon and settling all the questions involved in the suit. The court examined whether respondent Nos. 1 and 4 to 11 were necessary or proper parties under this provision.

Necessary Parties:

The Supreme Court held that necessary parties are those in whose absence no effective decree can be passed. In a suit for specific performance, the necessary parties are the parties to the contract or their legal representatives, and a purchaser who bought the property from the vendor. The court found that respondent Nos. 1 and 4 to 11 were not necessary parties as they did not purchase the property from the vendor after the contract was entered into and would not be affected by the contract between the appellant and respondent Nos. 2 and 3.

Proper Parties:

A proper party is one whose presence is necessary to adjudicate the controversies involved in the suit. The court held that adding respondent Nos. 1 and 4 to 11 would enlarge the scope of the suit from specific performance to a suit for title, which is not permissible. The court emphasized that the issue in a specific performance suit is the enforceability of the contract between the parties, not the title or possession of third parties.

Specific Relief Act:

Section 19 of the Specific Relief Act specifies the parties against whom a contract for specific performance may be enforced. The court found that respondent Nos. 1 and 4 to 11, claiming adverse to the vendor's title, did not fall within the categories enumerated in Section 19.

Judicial Precedents:

The court referred to previous judgments, including Anil Kumar Singh v. Shivnath Mishra, which held that a person not party to the agreement for sale is not a necessary party in a specific performance suit. The court also cited Vijay Pratap v. Sambhu Saran Sinha, which held that a suit for specific performance cannot be converted into a title suit.

Conclusion:

The Supreme Court concluded that respondent Nos. 1 and 4 to 11 were neither necessary nor proper parties in the suit for specific performance. Their addition would convert the suit into a different character, which is not permissible. The court set aside the judgments and orders of the High Court and trial court, rejecting the application for addition of parties filed by respondent Nos. 1 and 4 to 11. The appeal was allowed, and the court clarified that it did not decide on the title and possession of respondent Nos. 1 and 4 to 11, leaving such questions open for future litigation.

Costs:

There was no order as to costs.