MORESHAR YADAORAO MAHAJAN VERSUS VYANKATESH SITARAM BHEDI (D) THR. LRS. AND OTHERS

MORESHAR YADAORAO MAHAJAN VERSUS VYANKATESH SITARAM BHEDI (D) THR. LRS. AND OTHERS

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले

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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 5755-5756 OF 2011

MORESHAR YADAORAO MAHAJAN ...APPELLANT(S)

VERSUS

VYANKATESH SITARAM BHEDI (D)

THR. LRS. AND OTHERS ...RESPONDENT(S)

J U D G M E N T

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 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 1990 passed by the Civil Judge (Senior Division),

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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.

3. The plaintiff is a doctor who was working in a

Government 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

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 defendant executed an earnest note in

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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 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 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 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

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aggrieved thereby, the defendant preferred an appeal before

the Appellate Court which was also dismissed vide judgment

dated 13th June 1996.

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.

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 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

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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 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 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 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

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(2005) 6 SCC 733

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submitted that the High Court has erred in taking this aspect

into consideration while partly allowing the second appeal.

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.

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

would reveal that the plaintiff himself has admitted that the

suit property 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 fact a joint property of the defendant, his wife and his

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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 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.

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 Hindu Mitaksharia Law. (The defendant is the

Karta of the family. The family inter-alia owns

residential premises within the limits of at

Wani……”

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(2010) 7 SCC 417

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(2016) 2 SCC 779

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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 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 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 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 his

family. It is specifically averred by him that the said

transaction was of money lending and the agreement was

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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 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 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 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

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remained as joint with the defendant, his wife and three 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 coparceners.

17. This Court, in the case of Mumbai International

Airport 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” is a party who,

though not a necessary party, is a person whose

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

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

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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.

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 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 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 Court held thus:

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“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; (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 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 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.

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

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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.

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.

…..….......................J.

[B.R. GAVAI]

…….......................J.

[C.T. RAVIKUMAR]

NEW DELHI;

SEPTEMBER 27, 2022.