In CS(COMM) 267/2022-DEL HC-Under Order 1 Rule 10 CPC, Court has power at any stage of proceeding to implead party who ought to have been joined and in whose absence subject matter of suit cannot be decided effectively: Delhi HC Justice Jyoti Singh [15-06-2022]

Read Order: MR. DHANANJAY RATHI Vs. SHREE VASU STEELS PRIVATE LIMITED & ORS.

Mansimran Kaur

New Delhi, June 17, 2022:The Delhi High Court has allowed an application moved by the plaintiffs under Order 1 Rule 10 of the CPC seeking  impleadment of the Members/ Trustees of Rathi Research Centre as party defendants to the suit and observed that under Order 1 Rule 10 of CPC, the Court has the power at any stage of the proceeding to implead a party who ought to have been joined but has not been so joined and in whose absence the subject matter of the suit cannot be decided effectively and completely.

The Single-Judge Bench of Justice Jyoti Singh took into account the fact that the parties to the lis were  ad-idem with respect to impleadment of the ‘Centre’. 

The factual matrix of the case was such that in 1942, male members of Rathi Family started a company called Rathi Steel Rolling Mills under the trademark RATHI. Thereafter RSRM entered into the arena of manufacturing TOR Steel Bars under the registered trademark RATHI. In 1969, RSRM split into two different groups namely, M/s. G.D. Rathi Steels Limited and M/s. K.L. Rathi Steels Limited.  Later, K.L. Rathi Steels Ltd. obtained registration for the trademark RATHI in class 06 for certain items, while G.D. Rathi Steels Limited applied for registration of the same mark in class 06. The registration was granted for the mark RATHI. The Trust named Rathi Foundation was created and registered under the Indian Trusts Act, 1882 and the trademark RATHI along with the goodwill was assigned to the ‘Foundation’.

To bring on record the ‘Foundation’ as the subsequent proprietor of the trademark RATHI, an appropriate form under TM-24 was filed before the Trade Marks Registry and the same was accepted. In furtherance of MoU-2, a Trust was created by the name of Rathi Research Centre which was duly registered and the trademark RATHI was assigned to the said Trust along with the goodwill. Thereafter, suit was filed by one of the lifetime Trustees of the Foundation in pursuance to the information that the defendants were using the mark RATHI PRAGATI. Consequently, an ex-parte ad- interim injunction was granted by the Court. In pursuance of the same, the defendants instituted an application under Order 39 Rule 4 of CPC seeking vacation of the injunction order on the ground that there was no family settlement or an overarching agreement between the ‘Centre’ and the ‘Foundation’ authorizing or permitting the members of the ‘Foundation’ to regulate the use and licensing of the mark RATHI by the ‘Centre’. 

The defendants also objected to the non-impleadment of the Centre and alleged that the plaintiffs deliberately did not implead the centre as the party in the suit as they had the hidden intention to mislead the Court. In relation to the same, the plaintiffs filed the present application for impleading ‘Centre’ as the party defendant under Order 1 Rule 10 of CPC. 

After hearing the averments made in the application, the Court was of the view that as there existed a common ground and a broad consensus between the plaintiff and the defendant pertaining to the fact that the ‘Centre” should be impleaded as a necessary party, thus the present application deserved to be allowed It was further observed that the legal position for impleading a party to a suit under Order 1 Rule 10 CPC is no longer res integra, and this Court need not advert to in great details, in view of the fact that the parties to the lis are ad-idem with respect to impleadment of the ‘Centre’.

Reference was placed on the judgment in Gonsalo De Filomena Luis v. Inacio Piedade Hildeberte Fernandes, AIR 1977 GOA, Daman & Diu 4, wherein five tests/factors were formulated for the Courts to determine if a party sought to be impleaded is a necessary party. Also, referring to Order 1 Rule 10 of CPC by which the Court has the power at any stage of the proceeding to implead a party who ought to have been joined and in whose absence the subject matter of the suit cannot be decided effectively, the Court opined that the “Centre” was a necessary party in the instant case in order to adjudicate the dispute and the issues arising in the present suit.  Accordingly, the application was allowed.