ASIAN HOTELS (NORTH) LTD.versusALOK KUMAR LODHA & ORS

124                      [2022]REPORTS
               SUPREME COURT   12 S.C.R. 124                 [2022] 12 S.C.R.


A                       ASIAN HOTELS (NORTH) LTD.
                                          v.
                        ALOK KUMAR LODHA & ORS.
                      (Civil Appeal Nos. 3703-3750 of 2022)
B                                  JULY 12, 2022
               [M. R. SHAH AND B. V. NAGARATHNA, JJ.]
             Civil Procedure Code, 1908 – Or.I, r.10 & Or.VI, r. 17 –
      Amendment of Plaint – Joinder of Necessary and Proper Party –
      The appellant granted licenses for individual shops to various
C
      shopkeepers including respondent – Notice of revocation of license
      was served by the appellant to the respondents – A suit for
      declaration was instituted by the respondents for declaration that
      the license granted in respect of shop/ premises is irrevocable and
      perpetual – During the pendency of the aforesaid suit, the respondent
D     filed application for amendment of the plaint for challenging various
      mortgages created by the appellant, in favour of certain banks –
      Another application was also filed seeking to implead the Banks
      and the Financial Institutions as defendant – Both the applications
      were allowed by the High Court – On appeal, held: By the purported
      amendment, the original plaintiffs have now prayed to declare that
E
      all the mortgages/charges created on the premises as void ab-initio –
      Even such a prayer can be said to be too vague – How the
      respondents can now can be permitted to challenge various
      mortgages/ charges created from time to time – Now after a number
      of years, respondents cannot be permitted to challenge the
F     mortgages/charges created on the entire premises including shops –
      The High Court while allowing the amendment application has not
      properly appreciated the fact and/or considered the fact that as
      such, by granting such an amendment the nature of the suits will be
      changed – It would also result in misjoinder of causes of action –
      The principle that the plaintiffs is the dominus litus shall be applicable
G
      only in a case where parties sought to be added as defendants are
      necessary and/or proper parties – Plaintiffs cannot be permitted to
      join any party as a defendant who may not be necessary and/or
      proper parties – Therefore, in a suit challenging revocation of the
      respective licenses, the plaintiffs cannot be permitted to challenge
H
                                         124
 ASIAN HOTELS (NORTH) LTD. v. ALOK KUMAR LODHA &                         125
                       ORS.

the respective mortgages/charges created on the entire premises as       A
void ab-initio.
      Allowing the appeals, the Court
      HELD: 1. At the outset, it is required to be noted that
mortgages have been created in favour of different mortgage
banks/financial institutions since 1982 onwards which have been          B
extended and/or rolled over, refinanced and replaced from time
to time. The mortgages are created not only with respect to the
shops/premises occupied by the original plaintiffs, but with respect
to the entire premises/Hyatt Residency Hotel. The respective
original plaintiffs are granted licenses for individual shops which      C
are part of entire premises. According to the appellant, first
mortgage was created in the year 1982. At that time, none of the
original plaintiffs were license holders. They have been granted
license for individual shops at the premises from 1983 onwards
to various shopkeepers including respondents-original plaintiffs.
The appellant, being owner – licensor, has terminated the                D
respective licenses granted in favour of respective license holders
– original plaintiffs. The revocation of the license is subject matter
of respective suits. Therefore, the only controversy/issue in the
respective suits is with respect to revocation of the respective
licenses. By way of an amendment of the plaint the plaintiffs now        E
want to challenge the mortgages/charges on the entire premises
created by the appellant. As such, the original plaintiffs are not at
all concerned with the mortgages created by the appellant which
is required for the continuous development of the hotel. By the
purported amendment, the original plaintiffs have now prayed to
declare that all the mortgages/charges created on the premises           F
as void ab-initio. Even such a prayer can be said to be too vague.
How the original plaintiffs can now can be permitted to challenge
various mortgages/charges created from time to time. At this
stage, it is required to be noted that even under the License
Agreement (clause 13) the Licensor shall have the right to create        G
charges/mortgages as and by way of first charge on its land,
premises and the buildings (including shops) constructed and to
be constructed, in favour of financial institutions and banks as
security for their terms loan advanced/to be advanced to the
licensor for the completion of its hotel project. Therefore, in fact
                                                                         H
126            SUPREME COURT REPORTS                      [2022] 12 S.C.R.


A     original plaintiffs being the licensee are aware that there shall be
      charges/mortgages on the entire premises and the buildings
      including the shops. In that view of the matter, now after a number
      of years, plaintiffs cannot be permitted to challenge the
      mortgages/charges created on the entire premises including
      shops. [Para 7][136-E-H; 137-A-D]
B
             2. The High Court while allowing the amendment
      application in exercise of powers under Order 6 Rule 17 of the
      Code of Civil Procedure has not properly appreciated the fact
      and/or considered the fact that as such, by granting such an
      amendment and permitting plaintiffs to amend the plaints
C     incorporating the prayer clause to declare the respective charges/
      mortgages void ab-initio, the nature of the suits will be changed.
      As per the settled proposition of law, if, by permitting plaintiffs
      to amend the plaint including a prayer clause nature of the suit is
      likely to be changed, in that case, the Court would not be justified
D     in allowing the amendment. It would also result in misjoinder of
      causes of action. From the impugned order passed by the High
      Court, it appears that what has weighed with the High Court is
      that plaintiffs, is the dominus litus and heavy reliance is placed in
      the case of Kasturi. However, the principle that the plaintiffs is
      the dominus litus shall be applicable only in a case where parties
E     sought to be added as defendants are necessary and/or proper
      parties. Plaintiffs cannot be permitted to join any party as a
      defendant who may not be necessary and/or proper parties at all
      on the ground that the plaintiffs is the dominus litus. In view of
      the above and for the reasons stated above, High Court has
F     committed serious error in allowing the application under Order
      6 Rule 17 and under Order 1 Rule 10 of the Code of Civil
      Procedure by permitting original plaintiffs to amend the plaint
      including prayer clause by which, the plaintiffs have now prayed
      to declare the charges/mortgages on the entire premises as void-
      ab initio and permitting the original plaintiffs to join / implead the
G     respective banks/financial institutions as party defendant. The
      alleged rights of the plaintiffs as perpetual license holders are
      yet to be adjudicated upon. The licenses of the original plaintiffs
      have been revoked. Therefore, in a suit challenging revocation
      of the respective licenses, the plaintiffs cannot be permitted to
H     challenge the respective mortgages/charges created on the entire
 ASIAN HOTELS (NORTH) LTD. v. ALOK KUMAR LODHA &                        127
                       ORS.

premises as void ab-initio. It is the case on behalf of the appellant   A
that apart from the fact that first charge was created in the year
1982, thereafter said mortgages have been rolled over, refinanced
and replaced from time to time for ensuring the continuous
development of the Hotel Project/premises which requires
consistent upkeep, renovation and upgradation from time to time.
                                                                        B
Under the circumstances, the impugned orders passed by the
High Court allowing the application under Order 6 Rule 17 and
under Order 1 Rule 10 of the Code of Civil Procedure are
unsustainable, both on facts as well as on law. [Para 8-10][137-
E-H; 138-A-F]
      Kasturi v. Iyyamperumal & Ors. (2005) 6 SCC 733 :                 C
      [2005] 3 SCR 864 - held inapplicable.
      Revajeetu Builders and Developers v. Narayanaswamy
      and Sons & Ors. (2009) 10 SCC 84 : [2009] 15 SCR
      103; Ashutosh Chaturvedi v. Prano Devi (2008) 15 SCC
      610 : [2008] 6 SCR 801; T. N. Alloy Foundry Co. Ltd v.            D
      T. N. Electricity Board and Ors. (2004) 3 SCC 392 :
      [2004] 2 SCR 352; L. J. Leach & Co Ltd v. M/s. Jardine
      Skinner & Co. AIR 1957 SC 357 : [1957] SCR 438;
      Rajesh Kumar Aggarwal & Ors v. K. K.Modi & Ors.
      AIR 2006 SC 1647 : [2006] 3 SCR 175 - referred to.                E
                       Case Law Reference
[2005] 3 SCR 864               held inapplicable     Para 3.6
[2009] 15 SCR 103              referred to           Para 3.6
[2008] 6 SCR 801               referred to           Para 5.11          F
[2004] 2 SCR 352               referred to           Para 5.11
[1957] SCR 438                 referred to           Para 5.11
[2006] 3 SCR 175               referred to           Para 6.3
      CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 3703-             G
3750 of 2022.
      From the Judgment and Order dated 15.09.2021 of the High Court
of Delhi at New Delhi in I.A. No. 5173-5174 of 2021 in C.S. (Comm.)
No.189 of 2020.
                                                                        H
128             SUPREME COURT REPORTS                          [2022] 12 S.C.R.


A          Mukul Rohatgi, Sr. Adv., Karan Bharihoke, Siddhant Kumar,
      Ms. Misha Rohatgi, Siddhant Sharma, Ms. Akansha Kaul, Ms. Manya
      Chandok, Advs. for the Appellant.
             Avishkar Singhvi, Nipun Katyal, Naved Ahmed, Abhikalp Pratap
      Singh, Rahul Gupta, Arav Kapoor, Shekhar Gupta, Nitin Saluja, Advs.
B     for the Respondents.
            The Judgment of the Court was delivered by
            M. R. SHAH, J.
             1.0. As common question of law and facts arise in this group of
C     appeals and as such arise out of the impugned common judgment and
      order passed by the High Court, all these appeals are decided and disposed
      of together by this common judgment and order.
              2.0. Feeling aggrieved and dissatisfied with the impugned common
      judgment and order dated 15.09.2021 passed by the High Court of Delhi
D     in respective applications in respective Commercial Suits under Order 1
      Rule 10 and Order 6 Rule 17 of the Code of Civil Procedure, by which,
      all the aforesaid applications submitted on behalf of the original plaintiff,
      the High Court has allowed the said applications and has permitted the
      original plaintiff to amend the respective suits and has also ordered
      impleadment of mortgagees (Banks), original defendant no.1 - Asian
E     Hotels (North) Limited has preferred the present appeals.
            3.0. For the sake of convenience, the impugned order passed by
      the High Court in IA No.5173-5174 of 2021 in Civil Suit (Commercial)
      No.189 of 2020 shall be treated as the lead matter. Therefore, for the
      sake of convenience and to avoid any repetition, facts arising out of Civil
F     Suit (Commercial) No.189 of 2020 leading to the present appeals are
      narrated, which are as under:
              3.1. That the appellant herein granted licenses for individual shops
      at the premises from 1983 onwards to various shopkeepers including the
      respondent herein – original plaintiff. On 29.5.2020 the original plaintiff
G     as a licensor served a revocation of license notice. Similar notices were
      also served on other licensees. Therefore, the respective licensees had
      instituted the respective suits before the Delhi High Court against the
      appellant – licensor – Asian Hotels (North) Limited seeking a decree of
      declaration that the license in favour of the plaintiff in respect of shop/
      premises is irrevocable and perpetual and the purported revocation of
H
 ASIAN HOTELS (NORTH) LTD. v. ALOK KUMAR LODHA &                               129
                ORS. [M. R. SHAH, J.]

the License by the defendant is illegal, void and bad in the eyes of law. A    A
decree is also sought for a declaration declaring that the plaintiff has
unfettered right to occupy and use the said premises/shop under the
irrevocable license till the documents of transfer/conveyance are executed
by the defendant.
       3.2. That the appellant – defendant appeared before the High            B
Court. The defendant raised verbal objection that the suit is not
maintainable in view of Section 8 of the Arbitration and Conciliation
Act, 1996. The High Court vide order dated 21.07.2020 dismissed the
suits with liberty to the parties to avail remedy of arbitration in view of
the arbitration clause in the license agreement on the verbal plea. The
order passed by the High Court dismissing the suits with the above liberty     C
was a subject matter of appeal before the Division Bench. The Division
Bench allowed the said appeal and remanded the matter. Liberty was
granted to the defendant to prefer an application under Section 8 of the
Arbitration and Conciliation Act, 1996. It is reported that such an
application is filed by the defendant and is pending adjudication.             D
        3.3. During the pendency of the aforesaid suit, the plaintiff filed
present IA No. 5174 of 2021 under Order 6 Rule 17 of the Code of Civil
Procedure seeking amendment of the plaint, by which, the plaintiff
proposed to amend the suit challenging various mortgages created by
the defendant hotel, in favour of certain banks. In the said application, it   E
is the case on behalf of the plaintiff that the mortgages created by the
defendant in favour of the Financial Institutions/Banks are illegal and
void ab-initio to the extent it encumbers the interest held by the plaintiff
in the said premises from 2.9.1991. Therefore, consequential amendments
were sought to be made pertaining to the rights of the plaintiff. By the
said application, prayer clause is also sought to be amended seeking a         F
decree of declaration against the defendant that the mortgages including
the mortgage deeds which have been executed in favour of the Banks is
void and illegal to the extent it encumbers any right, title and interest of
the plaintiff in the subject premises.
       3.4. Another application, being IA No.5173 of 2021 was also filed       G
by the plaintiff under Order 1 Rule 10 of the Code of Civil Procedure
seeking to implead the Banks and the Financial Institutions as defendant
nos. 2 to 7.
       3.5. Both the aforesaid applications were opposed by the defendant
on the ground that (i) the mortgage in question was in 1980’s; there is no     H
130             SUPREME COURT REPORTS                              [2022] 12 S.C.R.


A     challenge to the said mortgage in the present suit and therefore, the
      same cannot be permitted now; (ii) the plaintiff has no right against the
      banks and financial institutions and therefore, amendment application
      does not lie; (iii) that the prayer of the plaintiff for the relief of declaration
      and rights in the suit property have to first be adjudicated before any
      relief can be claimed against the proposed defendants no.2 to 7 and it is
B
      only after the plaintiff is successful in claiming any right in the property
      that the issue of adjudication of the rights of the third parties would arise;
      (iv) that in view of the arbitration clause in the agreement between the
      parties, the suit is liable to be stayed for which an appropriate application
      has been filed by the defendant, which is pending adjudication.
C           3.6. By the impugned common judgment and order and mainly
      relying upon the decision of this Court in the case of Kasturi v.
      Iyyamperumal & Ors reported in (2005) 6 SCC 733 and in the
      case of Revajeetu Builders and Developers vs. Narayanaswamy
      and Sons & Ors reported in (2009) 10 SCC 85, the High Court has
D     allowed both the applications i.e. application under Order 6 Rule 17 of
      the Code of Civil Procedure and application under Order 1 Rule 10 of
      the Code of Civil Procedure.
             3.7. Feeling aggrieved and dissatisfied with the impugned common
      order passed by the High Court allowing applications under Order 6 Rule
E     17 of the Code of Civil Procedure and under Order 1 Rule 10 of the
      Code of Civil Procedure, original defendant no.1- licensor has preferred
      present appeals.
            4.0. Shri Mukul Rohatgi, learned Senior Advocate has appeared
      on behalf of the appellant- original defendant and Shri Avishkar Singhvi,
F     learned counsel and Shri Rahul Gupta, learned counsel have appeared
      on behalf of the respective respondents.
             5.0. Shri Rohatgi, learned Senior Advocate appearing on behalf of
      the appellant – original defendant has vehemently submitted that in the
      facts and circumstances of the case High Court has committed a serious
G     error in allowing the applications under Order 6 Rule 17 of Code of
      Civil Procedure and Order 1 Rule 10 of the Code of Civil Procedure
      permitting the respondents to amend their respective plaints to declare
      void ab initio all mortgages/charges on the entire premises and implead
      the mortgagee banks/financial institutions.

H
 ASIAN HOTELS (NORTH) LTD. v. ALOK KUMAR LODHA &                                 131
                ORS. [M. R. SHAH, J.]

        5.1. It is vehemently submitted by Shri Rohatgi, learned Senior          A
Advocate that appellant granted license for individual shops at the premises
from 1983 onwards to various shopkeepers including the respondents
herein. That prior thereto, on 23.09.1982 appellant created mortgages in
favour of financial institutions /banks. The said mortgages were rolled
over, refinanced and replaced from time to time for ensuring the continuous
                                                                                 B
development of the Hotel Projects / premises which requires consistent
upkeep, renovations, upgradation from time to time. It is contended that
clause 13 of the License Agreement recognizes and preserves the power
of the appellant (lessor) to create and continue mortgages. It is submitted
that clause 13 has been retained in every renewal (every five years) and
as such respondents who are licensees have continuously ratified all             C
mortgages from 1982 onwards by signing the License Agreement and
subsequent renewals. It is submitted that licenses have been revoked on
29.5.2020 by the appellant. It is urged that at this belated stage it is not
open for the respondents who are only licensees and whose licenses
have been revoked to challenge the mortgages created by the appellant
                                                                                 D
created in favour of various banks/ financial institutions which have been
continued since 1982 onwards.
       5.2. It is further submitted by Shri Rohatgi, learned Senior Advocate
that as such in view of the arbitration clause in the license agreement,
suits are not maintainable in view of Section 8 of the Arbitration and
Conciliation Act. That application filed by the appellant – original plaintiff   E
to stay the suits are pending adjudication. Therefore, as such the said
application/s under Section 8 of the Arbitration and Conciliation Act are
to be decided first. It is further submitted that while pleadings were
completed and Section 8 application was part-heard, respondents filed
the present applications in April 2020 to implead the Banks holding              F
mortgage over the premises and amend their plaints seeking to challenge
such mortgages. It is submitted that the learned Single Judge as such,
without issuing any notice or granting an opportunity to file reply, heard
arguments and reserved the judgment which has been pronounced on
15.09.2021.
                                                                                 G
       5.3. Shri Rohatgi, learned Senior Advocate appearing for the
appellant – original defendant has assailed the impugned judgment and
order passed by the High Court mainly on the following grounds:
       I.     Impugned judgment has resulted in mis-joinder of causes
              of action and of parties;                                          H
132               SUPREME COURT REPORTS                        [2022] 12 S.C.R.


A           II.     Respondents do not have the locus or right to challenge the
                    mortgages/charges;
            III.    Challenge to mortgage/charges is barred by limitation, delay
                    and laches;
            IV.     The impleadment and amendment applications are mala
B                   fide filed only to circumvent adjudication pending Section 8
                    of the Act;
            V.      Impugned judgment has been passed in violation of principles
                    of natural justice;

C            5.4. It is vehemently submitted by Shri Rohatgi, learned Senior
      Advocate for the appellant that when the first License Agreement was
      executed in 1983, the premises were already mortgaged and the
      respondents were aware of the said fact, as is evident from Clause 13 of
      the License Agreement. It is submitted that thus, the respondent’s rights,
      even as a licensee, are subject to the pre-existing charge perfected
D     thereon with which the respondents have no concern.
             5.5. It is submitted that the respondents – original plaintiffs are
      strangers to the mortgage on the premises created by and between the
      appellant and its lenders. Respondents – original plaintiffs have no privity
      with the mortgagee banks/financial institutions. The suits themselves
E     are based on the License Agreement executed with the appellant and the
      rights contained thereunder.
             5.6. It is further submitted that the suits originally sought
      declarations that the respondents are irrevocable licenses or alternatively
      owners. Thus, the suits preferred by the plaintiffs only concern the inter-se
F     rights between the appellant and the respondent, with which the banks/
      financial institutions impleaded by the impugned judgment have no
      concern. But the impugned judgment has resulted in mis-joinder of parties
      and causes of action which is incorrect in law.
             5.7. It is further submitted by Shri Rohatgi, learned Senior Advocate
G     that the respondents have no semblance of right to sue the banks/ financial
      institutions in the present case or challenge the mortgage.
             5.8. It is further submitted that mortgage over the premises has
      been created by and between the appellant and its lenders. Respondents-
      original plaintiffs are not parties to said transaction. There is admittedly
H     no privity of contract between the respondents and original plaintiffs and
 ASIAN HOTELS (NORTH) LTD. v. ALOK KUMAR LODHA &                               133
                ORS. [M. R. SHAH, J.]

its lenders. Therefore, the plaintiffs have no right to sue the lenders of     A
the appellant against whom reliefs are now sought by way of amendment
of the plaint.
       5.9. It is further submitted that, even otherwise, respondents are
ascertaining their status as irrevocable licensees of the concerned shops.
Therefore, plaintiffs have not locus or cause to challenge mortgages/          B
charges, which have been created by the appellant from time to time for
ensuring continuing development of hotel project/premises.
       5.10. It is further submitted by Shri Rohatgi, learned Senior
Advocate that challenge to mortgage/charges now is barred by limitation,
delay and laches. This is because the first mortgage was created on the
premises on 23.09.1982. By the amendment applications, the principal           C
relief sought to be added by the respondents is to assail any and all
charges/mortgages on the premises created since 1982 in favour of
any person. It is submitted that first mortgage on the premises was
registered on 23.09.1982 with the RoC as per Section 125 of the
Companies Act, 1956. Subsequent charges/mortgages were also                    D
registered with the RoC. It is submitted that as per Section 126 of the
Companies Act, 1956 and Section 80 of the 2013 Act, the respondents
are deemed to have knowledge and constructive notice of the said
mortgage/charges and there exists a presumption in law that the
respondents had knowledge of the aforesaid charges.
                                                                               E
       5.11. It is submitted that clause 13 of the License Agreements
expressly records the knowledge of the respondents of the existing
charges on the premises and also authorizes creation of further charges
in the future. It is submitted that this understanding has been renewed
and reaffirmed by the parties in the subsequent Renewal Agreements.
Therefore, the respondents have knowledge of the mortgages in view of          F
statutory presumption and express stipulation in Clause 13 of the License
Agreement since 1982, which negates the assertion that respondents
acquired knowledge by pleadings filed in the proceedings before the High
Court. It is further submitted that considering Article 58, Schedule I of
the Limitation Act, the prayer to challenge mortgages / charges would
                                                                               G
be clearly barred by law of limitation and therefore, liable to be rejected.
In support of the above submission, reliance is placed on the decision of
this Court in the case of Ashutosh Chaturvedi v. Prano Devi (2008)
15 SCC 610, T.N. Alloy Foundry Co. Ltd vs. T.N. Electricity Board
and Ors (2004) 3 SCC 392 and L.J.Leach & Co Ltd vs. M/s.
                                                                               H
134               SUPREME COURT REPORTS                         [2022] 12 S.C.R.


A     Jardine Skinner & Co. AIR 1957 SC 357. Making above
      submissions, it is prayed to allow the present appeals.
              6.0. While opposing the present appeals and supporting the impugned
      order passed by the High Court, allowing the applications under Order 6
      Rule 17 of the Code of Civil Procedure and Order 1 Rule 10 of the Code
B     of Civil Procedure, learned counsel for the respondents have vehemently
      submitted that in the facts and circumstances of the case. The impugned
      order is just and proper. It is contended that it is necessary to implead
      banks which are mortgagees of the suit property, while plaintiffs are
      claiming ownership interest and that the trial has not yet commenced
      and the suit is at preliminary stage where the defendant has even not
C     filed its written statement therefore, no prejudice can be said to be caused
      to the defendant if the application for amendment as well as impleadment
      applications are allowed. That no error has been committed by the High
      Court in the peculiar facts and circumstances of the case.
             6.1. It is vehemently submitted by the learned counsel for the
D     respondents that as such the plaintiff is the dominus litus in the suit.
      That in view of the position in law, when the applications submitted by
      the original plaintiffs under Order 1 Rule 10 of the Code of Civil Procedure
      have been allowed, the same may not be interfered with by this Court.
      Reliance is placed on the decision of this Court in the case of Kasturi v.
E     Iyyamperumal & Ors. reported in (2005) 6 SCC 733.
             6.2. It is further submitted by learned counsel for the respondents
      -original plaintiffs that cogent reasons have been given by the High Court
      while allowing the applications under Order 6 Rule 17 and Order 1 Rule
      10 of the Code of Civil Procedure, which in a nutshell are as under:
F           I.      that it is necessary to implead the banks who are mortgagees
                    of the suit property wherein the Plaintiffs are claiming
                    ownership interest;
            II.     the trial has not yet commenced and the suit is at the
                    preliminary stage where the Petitioner has not even filed its
G                   written statement;
            III.    no prejudice can be said to be caused to the Petitioner if
                    the abovesaid applications are allowed;
            IV.     that the plaintiff is the dominus litus in the suit;

H
 ASIAN HOTELS (NORTH) LTD. v. ALOK KUMAR LODHA &                                 135
                ORS. [M. R. SHAH, J.]

       VI.      the fact that the Petitioner themselves had pleaded before       A
                the learned Single Judge of the Hon’ble High Court that
                the suit was bad for non-joinder of parties without the banks
                being parties;
        VII. at the stage of allowing the amendment the Court should
                not be concerned with the merits and demerits of such            B
                amendments;
        VIII. it is imperative that the Hon’ble Courts are liberal in their
                view of amendment of pleadings especially when the parties
                are necessary and required to be present to protect the
                subject matter of the relief;
                                                                                 C
        6.3. Relying upon the decisions of this Court in the case of Rajesh
Kumar Aggarwal & Ors vs. K.K.Modi & Ors AIR 2006 SC 1647
and in the case of Revajeetu Builders and Developers Vs.
Narayanaswamy and Sons & Ors (2009) 10 SCC 84, it is vehemently
submitted by the learned counsel for the respondents – original plaintiffs
that as observed and held by this Court while considering whether an             D
application for amendment should or should not be allowed, Court should
not go into the correctness or falsity of the case in the amendment. It is
further observed and held that likewise, it should not record a finding
on the merits of the amendment and the merits thereof sought to be
incorporated by way of amendment are not to be adjudged at the stage
                                                                                 E
of allowing the prayer for amendment.
        6.4. Learned counsel for the respondent no.1 has further submitted
that the amendments did not seek any direct injunctions against the banks
for creation of the mortgage but has only sought reliefs against the
defendant hotel whose property is mortgaged to the banks. That the
mortgage has not been challenged by the respondents but only the                 F
undeniable interest of the respondent is sought to be protected by having
mortgagees as a party to the suit. It is submitted that idea is to see that in
the event banks enforce the mortgage then they will step into the shoes
of the appellant.
        6.5. It is further submitted by the learned counsel for the plaintiffs   G
that in the suit original plaintiffs are seeking perpetual ownership rights in
the premises of the appellant hotel. Therefore, if the mortgages with
respect to the very property are not challenged, in that case, in future
they may affect the rights of the plaintiffs and therefore, to protect their
rights, the impleadment of the mortgagee banks/financial institutions and
                                                                                 H
136             SUPREME COURT REPORTS                         [2022] 12 S.C.R.


A     the amendments are very much necessary. That as such, Banks/Financial
      Institutions (mortgagees) can be said to be necessary and proper parties
      for giving the ultimate effective relief in favour of plaintiffs. That
      respondents – original plaintiffs after final adjudication of the suit may
      be held to be owners as they are the perpetual lessee who hold irrevocable
      licenses executed in their favour to operate their respective shops. It is
B
      submitted that the plaintiffs have paid the premium at the time of
      execution of the License Agreement and hence this is not a case of
      mere license but it is a case of irrevocable and perpetual license.
      Therefore, no error has been committed by the High Court while passing
      the impugned orders and allowing the applications under Order 6 Rule
C     17 and Order 1 Rule 10 of the Code of Civil Procedure.
             7.0. We have heard learned Senior Advocate appearing on behalf
      of the appellant and learned counsel appearing on behalf of the respective
      respondents - original plaintiffs at length.
             7.1. By the impugned orders, the High Court has allowed the
D     applications filed by the original plaintiffs under Order 6 Rule 17 and
      Order 1 Rule 10 of the Code of Civil Procedure permitting the original
      plaintiffs to amend their respective plaints so as to declare void ab-initio
      all the mortgages/charges on the entire premises in question and also
      implead mortgagee banks/financial institutions for that purpose.
             7.2. At the outset, it is required to be noted that mortgages have
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      been created in favour of different mortgage banks/financial institutions
      since 1982 onwards which have been extended and/or rolled over,
      refinanced and replaced from time to time. The mortgages are created
      not only with respect to the shops/premises occupied by the original
      plaintiffs, but with respect to the entire premises/Hyatt Residency Hotel.
F     The respective original plaintiffs are granted licenses for individual shops
      which are part of entire premises. According to the appellant, first
      mortgage was created in the year 1982. At that time, none of the original
      plaintiffs were license holders. They have been granted license for
      individual shops at the premises from 1983 onwards to various
      shopkeepers including respondents- original plaintiffs. The appellant, being
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      owner – licensor, has terminated the respective licenses granted in favour
      of respective license holders – original plaintiffs. The revocation of the
      license is subject matter of respective suits. Therefore, the only
      controversy / issue in the respective suits is with respect to revocation
      of the respective licenses. By way of an amendment of the plaint the
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 ASIAN HOTELS (NORTH) LTD. v. ALOK KUMAR LODHA &                                137
                ORS. [M. R. SHAH, J.]

plaintiffs now want to challenge the mortgages/charges on the entire            A
premises created by the appellant. As such, the original plaintiffs are not
at all concerned with the mortgages created by the appellant which is
required for the continuous development of the hotel. By the purported
amendment, the original plaintiffs have now prayed to declare that all
the mortgages/charges created on the premises as void ab-initio. Even
                                                                                B
such a prayer can be said to be too vague. How the original plaintiffs
can now can be permitted to challenge various mortgages/charges created
from time to time. At this stage, it is required to be noted that even under
the License Agreement (clause 13) the Licensor shall have the right to
create charges/mortgages as and by way of first charge on its land,
premises and the buildings (including shops) constructed and to be              C
constructed, in favour of financial institutions and banks as security for
their terms loan advanced/to be advanced to the licensor for the
completion of its hotel project. Therefore, in fact original plaintiffs being
the licensee are aware that there shall be charges/mortgages on the
entire premises and the buildings including the shops. In that view of the
                                                                                D
matter, now after a number of years, plaintiffs cannot be permitted to
challenge the mortgages /charges created on the entire premises including
shops.
        8.0. The High Court while allowing the amendment application
in exercise of powers under Order 6 Rule 17 of the Code of Civil
Procedure has not properly appreciated the fact and/or considered the           E
fact that as such, by granting such an amendment and permitting plaintiffs
to amend the plaints incorporating the prayer clause to declare the
respective charges/mortgages void ab-initio, the nature of the suits will
be changed. As per the settled proposition of law, if, by permitting
plaintiffs to amend the plaint including a prayer clause nature of the suit     F
is likely to be changed, in that case, the Court would not be justified in
allowing the amendment. It would also result in misjoinder of causes of
action.
        9.0. From the impugned order passed by the High Court, it appears
that what has weighed with the High Court is that plaintiffs, is the dominus
litus and heavy reliance is placed in the case of Kasturi (supra). However,     G
the principle that the plaintiffs is the dominus litus shall be applicable
only in a case where parties sought to be added as defendants are
necessary and/or proper parties. Plaintiffs cannot be permitted to join
any party as a defendant who may not be necessary and/or proper parties
at all on the ground that the plaintiffs is the dominus litus.                  H
138              SUPREME COURT REPORTS                           [2022] 12 S.C.R.


A             9.1. Even otherwise, High Court has materially erred in relying
      upon the decision in the case of Kasturi (supra).
              In the case of Kasturi (supra) before this Court the suit was for
      specific performance of the agreement to sell and the subsequent
      purchasers purchased the very property for which decree for specific
B     performance was sought. Therefore, on facts said decision is not
      applicable to the facts of the case on hand.
              10. In view of the above and for the reasons stated above, High
      Court has committed serious error in allowing the application under Order
      6 Rule 17 and under Order 1 Rule 10 of the Code of Civil Procedure by
      permitting original plaintiffs to amend the plaint including prayer clause
C     by which, the plaintiffs have now prayed to declare the charges/mortgages
      on the entire premises as void-ab initio and permitting the original plaintiffs
      to join/implead the respective banks/financial institutions as party
      defendant. The alleged rights of the plaintiffs as perpetual license holders
      are yet to be adjudicated upon. The licenses of the original plaintiffs
D     have been revoked. Therefore, in a suit challenging revocation of the
      respective licenses, the plaintiffs cannot be permitted to challenge the
      respective mortgages/charges created on the entire premises as void
      ab-initio. It is the case on behalf of the appellant that apart from the fact
      that first charge was created in the year 1982, thereafter said mortgages
      have been rolled over, refinanced and replaced from time to time for
E     ensuring the continuous development of the Hotel Project/premises which
      requires consistent upkeep, renovation and upgradation from time to time.
      Under the circumstances, the impugned orders passed by the High Court
      allowing the application under Order 6 Rule 17 and under Order 1 Rule
      10 of the Code of Civil Procedure are unsustainable, both on facts as
F     well as on law.
              11. In view of above and for the reasons stated above, all these
      appeals succeed. The impugned orders passed by the High Court allowing
      the application under Order 6 Rule 17 and Order 1 Rule 10 of the Code
      of Civil Procedure in respective suits preferred by the respondents herein
      original plaintiffs are hereby quashed and set aside. Present appeals
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      are allowed accordingly,
              However, there shall be no order as to costs.

      Ankit Gyan                                                      Appeals allowed.
      (Assisted by : Rahul Rathi, LCRA)
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