2022 (2) TMI 1458 - HC - Indian Laws

Application under Order 1 Rule 10 CPC filed for deletion array of parties in the suit - applicants point out that the cheques were issued under coercion and that the allegation of fraud by the plaintiff was rejected - HELD THAT - In an application to delete parties, the applicant is required to establish that the said parties are neither necessary nor proper parties to the action. A necessary party is a party in whose absence the decree prayed for cannot be granted and a proper party is a party whose presence is necessary for the effective adjudication of all issues which arise for consideration in the action. In the case at hand, the plaintiff has levelled allegations of pre-contractual misrepresentation, inter alia, by the second and third defendants. The relevant cheques are on record indicate prima facie that the cheques were issued in the name of the second defendant. Even as regards the third defendant, there are allegations that such third defendant made misrepresentations and that such misrepresentations were the basis for the plaintiff to enter into the construction agreement. Needless to say, the burden of proof is on the plaintiff to establish these allegations. However, the proof of such allegations would have to await trial. The applicants have failed to establish that they are neither necessary nor proper parties to the suit. Consequently, the present application is liable to be rejected - Application dismissed.

Summary

Issues:
Application under Order 1 Rule 10 CPC to delete parties from the suit.

Analysis:
The second and third defendants filed an application under Order 1 Rule 10 CPC seeking to be removed from the array of parties in the suit. They argued that the dispute stemmed from a construction agreement between the plaintiff and the first defendant, and the alleged liability arose solely from that agreement. The applicants contended that the plaintiff failed to establish a case to lift the corporate veil, thus making the second and third defendants unnecessary parties. They also highlighted previous legal proceedings where their application against criminal proceedings by the plaintiff was allowed. The applicants asserted that all issues could be resolved without the presence of the second and third defendants.

On the contrary, the plaintiff argued that the second and third defendants were both necessary and proper parties. Referring to specific paragraphs in the plaint, the plaintiff claimed that these defendants induced them to enter the construction agreement and undertook personal liability for the suit claim. The plaintiff also cited cheques issued by the second defendant as evidence of personal liability.

The applicants, in a rejoinder, claimed that the cheques were issued under coercion and fraud allegations against them were previously rejected. The court emphasized that in an application to delete parties, it must be established that the said parties are neither necessary nor proper parties. A necessary party is crucial for the decree to be granted, while a proper party is essential for effective adjudication of all issues in the action. The plaintiff alleged pre-contractual misrepresentation by the second and third defendants, with assertions that they undertook to repay amounts due under the agreement. The court noted that the burden of proof rested on the plaintiff to substantiate these claims, which would be determined at trial. Ultimately, the court found that the applicants failed to prove that they were not necessary or proper parties to the suit, leading to the dismissal of the application.

In conclusion, the court dismissed the application, stating that the second and third defendants were deemed necessary and proper parties based on the allegations and evidence presented, and their presence was crucial for the effective adjudication of the issues in the suit.