In Civil Appeal Nos.5755-5756 OF 2011-SC-No effective decree could be passed in absence of necessary party; Suit is liable to be dismissed, if such party is not impleaded, reiterates Top Court
Justices B.R. Gavai & C.T. Ravikumar [27-09-2022]

Read Judgment:MORESHAR YADAORAO MAHAJAN Vs VYANKATESH SITARAM BHEDI (D) THR. LRS. AND OTHERS 

Mansimran Kaur

New Delhi, September 28, 2022:  While dealing with the appeals challenging the order of the Trial Court through  which the suit for specific performance had been decreed, the Supreme Court has held that as the suit property was jointly owned by the defendant along with his wife and three sons, an effective decree could not have been passed affecting the rights of the defendants wife and three sons without impleading them

Referring to the judgment in Kasturi v. Iyyamperumal and Others, the Division bench of Justice B.R. Gavai and C.T. Ravikumar said, “It can thus be seen that what has been held by this Court is that for being a necessary party, the twin test has to be satisfied. The first one is that there must be a right to some relief against such party in respect of the controversies involved in the proceedings. The second one is that no effective decree can be passed in the absence of such a party.”

In this matter, the plaintiff, a doctor, took on rent a part of the house of the defendant for starting his private practice. It is the case of the plaintiff that subsequently, the defendant was in financial need and therefore, he suggested to the plaintiff that he should purchase the said part of the house which the plaintiff was occupying, together with an added portion.

 The plaintiff accepted the said suggestion and an agreement to sell was entered into  and the defendant agreed to sell and the plaintiff agreed to purchase the suit property for Rs.50,000.

The plaintiff paid an amount of Rs.24,000 on the date of the agreement and the defendant executed an earnest note in favour of the plaintiff. As per the terms of the agreement to sell, the sale deed was to be executed before March 31, 1985 It was  the case of the plaintiff that on  July 31,  1984, the defendant again requested for money and on such request, the plaintiff paid him an amount of Rs.6,000. It was also the case of the plaintiff that pursuant to the aforesaid payment, he was put in possession of the suit property on  July 31,  1984.

It was also the plaintiff’s case that he was always ready and willing to perform his part of the agreement and therefore, he informed the defendant by registered letter that he was willing to complete his part of the transaction before 31, March 1985. The Trial court, decreed the suit and directed the defendant to execute the sale deed by accepting the balance sale consideration as per the terms of the agreement to sell. 

Being aggrieved thereby, the defendant preferred an appeal before the Appellate Court which was also dismissed. The defendant thereafter preferred a second appeal which came to be partly allowed through the impugned judgment.

Relying on the judgment in Mumbai International Airport Private Limited v. Regency Convention Centre and Hotels Private Limited and Others (2010) 7 SCC 41, the Court noted, “It could thus be seen that 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. It has been held that if a necessary party is not impleaded, the suit itself is liable to be dismissed.”

In view of the plaintiff’s own admission that the suit property was jointly owned by the defendant, his wife and three sons, no effective decree could have been passed in their absence, the Court further remarked.  In that view of the matter, the Court stated that it failed to find any  error in the judgment of the High Court. The appeals were therefore liable to be dismissed.

The Bench, in order to balance the equities, partly decreed the suit and directed the defendant to refund an amount of Rs.30,000 with interest.  As a result, the appeals were dismissed.