MORESHAR S/O YADAORAO MAHAJANversusVYANKATESH SITARAM BHEDI (D) THR. LRS. AND OTHERS

                         [2022] 7 S.C.R. 259                              259


           MORESHAR S/O YADAORAO MAHAJAN                                  A
                                  v.
              VYANKATESH SITARAM BHEDI (D)
                  THR. LRS. AND OTHERS
                (Civil Appeal Nos. 5755-5756 of 2011)
                                                                          B
                       SEPTEMBER 27, 2022
          [B. R. GAVAI AND C. T. RAVIKUMAR, JJ.]
       Suit – Necessary party – Non-joinder of – Suit, if maintainable
– Plaintiff filed suit for specific performance admitting that the
suit property was jointly owned by defendant, his wife and three
                                                                          C
sons – However, trial court held that the defendant was the absolute
owner of the suit property and thus, there was no question of joinder
of his wife and three sons – Suit decreed, defendant was directed to
execute the sale deed by accepting the balance sale consideration
as per the terms of the agreement to sell – Appeal filed by defendant,
dismissed – Second appeal – Partly allowed by High Court, specific        D
performance denied – On appeal, held : 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 – In spite of the defendant taking an
objection in that regard, the plaintiff chose not to implead the
defendant’s wife and three sons as party defendants – A “necessary        E
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 – If a “necessary party” is not impleaded, the suit itself is
liable to be dismissed – No error in the judgment of High Court – In
any case, to balance the equities, High Court partly decreed the          F
suit and directed the defendant to refund Rs.30,000/- with interest,
this direction is affirmed.
       Suit – Necessary party – Twin test for – Held: For being a
necessary party, the twin test has to be satisfied, (i) there must be a
right to some relief against such party in respect of the controversies
involved in the proceedings, (ii) no effective decree can be passed       G
in the absence of such a party.
      Mumbai International Airport Private Limited v. Regency
      Convention Centre and Hotels Private Limited and
      Others (2010) 7 SCC 417 : [2010] 7 SCR 790 – relied
      on.                                                                 H
                               259
260             SUPREME COURT REPORTS                            [2022] 7 S.C.R.


A           Kasturi v. Iyyamperumal and Others (2005) 6 SCC 733
            : [2005] 3 SCR 864; Poonam v. State of Uttar Pradesh
            and Others (2016) 2 SCC 779 : [2015] 14 SCR 565 –
            referred to.
                               Case Law Reference
B     [2005] 3 SCR 864                     referred to         Para 8
      [2010] 7 SCR 790                     relied on           Para 10
      [2015] 14 SCR 565                    referred to         Para 10
            CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 5755-
C     5756 of 2011.
            From the Judgment and Order dated 03.07.2008 of the High Court
      of Judicature at Bombay, Nagpur Bench, Nagpur in Second Appeal No.
      264 of 1996 and Order dated 26.03.2009 in Misc. Civil Application
      (Review Application) No. 336 of 2009 in Second Appeal No. 264 of
D     1996.
             Rahul Chitnis, Ms. Shwetal Shepal, Chander Shekhar Ashri, Advs.
      for the Appellant.
           Harin P. Raval, Sr. Adv., Satyajit A. Desai, Amit Kr. Pathak, Satya
      Kam Sharma, Raghav S. Desai, Advs. for the Respondents.
E
            The Judgment of the Court was delivered by
            B. R. GAVAI, J.
             1. These appeals challenge the judgment dated 3rd July 2008 passed
      by the learned Single Judge of the High Court of Judicature at Bombay
F     in Second Appeal No. 264 of 1996, thereby allowing the appeal filed by
      the respondents challenging the judgment dated 13th June 1996 passed
      by the 2nd Additional District Judge, Yavatmal (hereinafter referred to as
      the “Appellate Court”) in Regular Civil Appeal No. 61 of 1990 vide
      which the Appellate Court confirmed the judgment dated 28th March
G     1990 passed by the Civil Judge (Senior Division), Yavatmal (hereinafter
      referred to as the “trial court”) in Special Civil Suit No. 21 of 1985 filed
      by the appellant vide which the trial court had decreed the suit for specific
      performance filed by the present appellant.
             2. The parties hereto are referred to in accordance with their
      status as before the trial court.
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      MORESHAR S/O YADAORAO MAHAJAN v.                                           261
 VYANKATESH SITARAM BHEDI (D) THR. [B. R. GAVAI, J.]

       3. The plaintiff is a doctor who was working in a Government              A
Hospital. The plaintiff was also in private practice. The plaintiff, for
starting his private practice, took on rent a part of the house of the
defendant. It is the case of the plaintiff that subsequently, the defendant
was in financial need for his agricultural cultivation and household
expenses and therefore, he suggested to the plaintiff that he should
                                                                                 B
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 on 24th July 1984. As per the
terms of the said agreement to sell, 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               C
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
31st March 1985. It is the case of the plaintiff that on 31st July 1984, the
defendant again requested for money and on such request, the plaintiff
paid him an amount of Rs.6,000/-. It is also the case of the plaintiff that
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pursuant to the aforesaid payment, he was put in possession of the suit
property on 31st July 1984.
        4. It is further the case of the plaintiff 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 31st March 1985. However, the defendant           E
replied to the said notice by alleging that the transaction was of money
lending and denied the execution of the sale deed. In this background,
the plaintiff filed a suit for specific performance before the trial court.
The trial court, vide judgment and decree dated 28th March 1990, decreed
the suit and directed the defendant to execute the sale deed by accepting        F
the balance sale consideration as per the terms of the agreement to sell.
It further directed that if the defendant failed to execute the sale deed,
the same should be executed through the court. Being aggrieved thereby,
the defendant preferred an appeal before the Appellate Court which
was also dismissed vide judgment dated 13th June 1996.
                                                                                 G
       5. The defendant thereafter preferred a second appeal before the
High Court which came to be partly allowed vide the impugned judgment.
Though the High Court denied the specific performance, it directed the
defendant to refund the amount of Rs.30,000/- along with an interest at
the rate of 9% per annum from the date of the institution of the suit till its
realization. Hence, the present appeal is at the instance of the plaintiff.      H
262               SUPREME COURT REPORTS                         [2022] 7 S.C.R.


A           6. We have heard Shri Rahul Chitnis, learned counsel appearing
      on behalf of the appellant and Shri Harin P. Raval, learned Senior Counsel
      appearing on behalf of the respondents.
             7. Shri Chitnis submitted that a perusal of the agreement to sell
      would reveal that the defendant had agreed to sell the property since he
B     needed money for farming and household expenses. He submitted that
      the suit property exclusively belonged to the defendant and as such, the
      finding of the High Court that the suit property belonged to the joint
      family of the defendant i.e., his wife and three sons, is untenable. He
      submitted that, in any case, the sale deed was for meeting the legal
      necessities of the family and as such, the High Court ought not to have
C     interfered with the concurrent findings of fact.
             8. Shri Chitnis further submitted that the trial court had held that,
      after partition, the house had come to the share of the defendant. He
      submitted that both the trial court and the Appellate Court have
      concurrently held that the transaction in question was for the payment
D     of antecedent debt and as such, it was not necessary to join other
      members of the family or other co-owners or other co-parceners as
      party defendants. He submitted that the concurrent findings ought not to
      have been interfered with by the High Court in second appeal. Relying
      on the judgment of this Court in the case of Kasturi v. Iyyamperumal
E     and Others1, he submitted that it is only the parties to a contract who
      are necessary parties. He further submitted that since the contract was
      between the plaintiff and the defendant, it was not at all necessary to
      implead the defendant’s wife or sons as party defendants. He therefore
      submitted that the High Court has erred in taking this aspect into
      consideration while partly allowing the second appeal.
F
            9. Shri Raval, on the contrary, submitted that the suit property
      was a property jointly owned by the defendant, his wife and three sons.
      He therefore submitted that the suit itself was not maintainable on
      account of non-joinder of other owners of the suit property.

G            10. Shri Raval further submitted that the learned Single Judge of
      the High Court has rightly held that a mere agreement to alienate cannot
      be enforced against a son on the ground that the agreement was effected
      by the father for a consideration which was formed by his own antecedent
      debts. Shri Raval further submitted that a perusal of the plaint itself
      1
H         (2005) 6 SCC 733
         MORESHAR S/O YADAORAO MAHAJAN v.                                       263
    VYANKATESH SITARAM BHEDI (D) THR. [B. R. GAVAI, J.]

would reveal that the plaintiff himself has admitted that the suit property     A
was owned by the defendant, his wife and three sons. The learned Senior
Counsel submitted that in view of this admission, the suit filed by the
plaintiff was itself not tenable. He further submitted that the Appellate
Court, after having held that the trial court has erred in holding that the
suit property was the exclusive property of the defendant but was in
                                                                                B
fact a joint property of the defendant, his wife and his three sons, has
erred in dismissing the appeal filed by the defendant. He too relies on
the judgment of this Court in the case of Kasturi (supra) to argue that it
was not possible for the trial court to pass an effective decree in the
absence of necessary parties. Relying on the judgment of this Court in
the case of Mumbai International Airport Private Limited v. Regency             C
Convention Centre and Hotels Private Limited and Others2, he
reiterated his submission that since the wife and sons of the defendant
were necessary parties, in their absence, an effective decree could not
have been passed. He also relies on the judgment of this Court in the
case of Poonam v. State of Uttar Pradesh and Others3.
                                                                                D
       11. A perusal of the plaint would reveal that the plaintiff himself,
in paragraph (2), has stated thus:
         “2. That the defendant and his sons viz. (i) Laxman; (ii) Vivek
         and (iii) Jayant together with defendant’s wife Sou. Saralabai
         constitutes a joint Hindu family governed by Bombay School of          E
         Hindu Mitaksharia Law. (The defendant is the Karta of the family.
         The family inter-alia owns residential premises within the limits of
         at Wani……”
       12. The plaintiff has further averred in the plaint that in the month
of July 1984, the defendant got into financial difficulties and that he had     F
no money to carry on his large cultivation. The defendant also required
money for his household expenses. It is further averred that besides this,
the defendant also had to pay some debts as there was no prospect for
the defendant to borrow money from the creditor.
       13. It is the specific case of the defendant that initially, he had      G
taken an amount of Rs.24,000/- and thereafter, Rs.6,000/- from the
plaintiff by way of loan for his personal purposes. The defendant, in his
written statement, has specifically stated that each of his sons are
2
    (2010) 7 SCC 417
3
    (2016) 2 SCC 779
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264             SUPREME COURT REPORTS                           [2022] 7 S.C.R.


A     managing their own properties and the defendant was not required to
      look after their properties. The defendant has submitted that the other
      members of the family, i.e., his wife and sons had nothing to do with the
      amount borrowed by him from the plaintiff. The defendant has stated
      that the borrowed amount was spent by him for himself. The defendant
      has denied that the said transaction was binding upon other members of
B
      his family. It is specifically averred by him that the said transaction was
      of money lending and the agreement was entered into only as a security
      towards the loan. The defendant has subsequently stated thus:
            “It is submitted that the defendant’s sons and wife are necessary
            parties to this suit and their non-joinder is fettled to the suit. The
C           suit is liable to be dismissed for non-joinder of necessary parties.
            It is denied that the defendant’s sons must be deemed to have
            given their approval to the transactions. It is submitted that deeming
            is always fictions and no suit can be decreed on fictions.”
             14. It is to be noted that in spite of this specific objection, the
D     plaintiff did not implead the defendant’s wife and sons as party defendants.
             15. Though the trial court framed the issue as to whether the suit
      was bad in law for non-joinder of necessary parties, it answered the
      same against the defendant by holding that the defendant was the absolute
      owner of the suit property and therefore, there was no question of joinder
E     of his wife and three sons.
             16. The Appellate Court, vide its judgment, held that the observation
      of the trial court that the suit property was the exclusive property of the
      defendant was not correct. It held that though the property was partitioned,
      the property remained as joint with the defendant, his wife and three
F     sons. It further held that since the defendant represents the entire family
      and since the transaction in question was for payment of an antecedent
      debt, it was not necessary to join other members of the family or other
      co-owners or other co-parceners.
            17. This Court, in the case of Mumbai International Airport
G     Private Limited (supra), has observed thus:
            “15. 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. If a “necessary party” is not
            impleaded, the suit itself is liable to be dismissed. A “proper party”
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      MORESHAR S/O YADAORAO MAHAJAN v.                                            265
 VYANKATESH SITARAM BHEDI (D) THR. [B. R. GAVAI, J.]

       is a party who, though not a necessary party, is a person whose            A
       presence would enable the court to completely, effectively and
       adequately adjudicate upon all matters in dispute in the suit, though
       he need not be a person in favour of or against whom the decree
       is to be made. If a person is not found to be a proper or necessary
       party, the court has no jurisdiction to implead him, against the
                                                                                  B
       wishes of the plaintiff. The fact that a person is likely to secure a
       right/interest in a suit property, after the suit is decided against the
       plaintiff, will not make such person a necessary party or a proper
       party to the suit for specific performance.”
      18. 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            C
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.
        19. As already discussed hereinabove, the plaintiff himself has
admitted in the plaint that the suit property is jointly owned by the
defendant, his wife and three sons. A specific objection was also taken           D
by the defendant in his written statement with regard to non-joinder of
necessary parties. Since 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 defendant’s wife and
three sons without impleading them. Even in spite of the defendant taking         E
an objection in that regard, the plaintiff has chosen not to implead the
defendant’s wife and three sons as party defendants. Insofar as the
reliance placed by Shri Chitnis on the judgment of this Court in the case
of Kasturi (supra) is concerned, the question therein was as to whether
a person who claims independent title and possession adversely to the
title of a vendor could be a necessary party or not. In this context, this        F
Court held thus:
       “7. …….From the above, it is now clear that two tests are to be
       satisfied for determining the question who is a necessary party.
       Tests are — (1) there must be a right to some relief against such
       party in respect of the controversies involved in the proceedings;         G
       (2) no effective decree can be passed in the absence of such
       party.”
       20. 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
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266              SUPREME COURT REPORTS                              [2022] 7 S.C.R.


A     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.
            21. In view of the plaintiff’s own admission that the suit property
B     was jointly owned by the defendant, his wife and three sons, no effective
      decree could have been passed in their absence.
              22. In that view of the matter, we find that no error can be noticed
      in the judgment of the High Court. The appeals are therefore liable to be
      dismissed.
C            23. In any case, the High Court, in order to balance the equities,
      has partly decreed the suit and directed the defendant to refund an amount
      of Rs.30,000/- with an interest at the rate of 9% per annum from the
      date of institution of the suit till its realization. We affirm this direction of
      the High Court.
D            24. In the result, the appeals are dismissed. Pending application(s),
      if any, shall stand disposed of in the above terms. No order as to costs.

      Divya Pandey                                                    Appeals dismissed.
      (Assisted by: Roopanshi Virang, LCRA)
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