Full Judgment
GA No.3124 of 2009 In C.S. No.244 of 2008 IN THE HIGH COURT AT CALCUTTA Ordinary Original Civil Jurisdiction ORIGINAL SIDE KAMALES MALLIK Versus OCTAVIUS TEA & IND. LTD. & Ors. BEFORE: The Hon'ble JUSTICE SUDIP AHLUWALIA Date:
29. h April, 2016 The Court: This is an application under Order I Rule 10 of the Code of Civil Procedure filed on behalf of the applicant ‘Sethia Oils Limited’ for being added as a party defendant in the original suit.
2. The petitioner’s claim is that it was inducted as a sublessee by the original defendant in a designated portion of the demised premises by virtue of a registered indenture of sub-lease executed on the 22nd day of May, 2003. The background of the matter is that the original indenture dated 5th March, 1965 was entered into between one of the co-owners, namely, Maniklal Mullick and the present defendant no.1 in respect of the concerned premises and certain specific conditions concerning the lease were narrated in that indenture.
3. For the purpose of this application the relevant conditions are those contained in Clause 2(x) as well as Clause 4(b) which are set out is under “2(x) Not to transfer and assign this Lease or the demised premises or any buildings erected thereon in any way without the previous consent in writing of the Lessor. 4(b) The Lessee shall be at liberty to sublet the demised premises or any portion thereof or any buildings or structures to be erected by the Lessee or any part thereof without the consent of the Lessor but notwithstanding creation of such subletting the Lessee shall not cease to be subject to any of its liabilities under these presents.”
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4. The claim of the petitioner is that if a suit is decreed as against the original defendant and/or the other sublessees joined in the plaint, the decree would become binding upon it as well, who would, therefore, stand to suffer without getting an opportunity of being heard, in spite of being a proper party to the proceeding since it is in occupation of a designated portion on the strength of a visibly legitimate deed of indenture.
5. To support of the above contentions, certain decisions have been cited on behalf of the petitioner. In ‘South Asia Industries Private Ltd. versus S. Sarup Singh and Others (AIR 1966 SC346, it was held by the Supreme Court “(9) I am not unmindful of the fact that where an order for recovery of possession of any premises is made under S.14 against a tenant assigning or subletting without the landlord’s consent, that order would under S.25 of the Act be binding on all persons in occupation of the premises except those who have independent title to them. This section does not however say that an order for recovery of possession against an assignee of a lessee cannot be made. It would not, therefore, support an argument that it was not intended that an order for recovery of possession could be made under S.14 against an assignee or a sub-tenant. On the other hand, it seems to me that to an application under Cl.(b) of the proviso to sub-S.(1) of S.14 an assignee or subtenant, as the case may be, should be a proper party. Under this provision an ejectment order can be made only when the assignment or subletting was without the consent of the landlord. If it was with such consent, the assignee or the sub-tenant would be protected by the Act. An assignee or a sub-tenant is, therefore, interested in showing that there was the requisite consent. They should hence be entitled to be made parties to the proceedings. Otherwise, if under S. 25 an eviction order obtained against the direct tenant is binding on them, they would be liable to be condemned without a hearing. It is no argument against this view that the direct tenant would protect them, for they cannot be made to depend on him for the protection of their rights. The direct tenant may be negligent or incompetent in his defence; he may even collude with the landlord or he may just not brother. If the assignee or the subtenant is thus entitled to be heard to oppose the order for eviction, that would be another reason for saying that an order for eviction could be made against them also; if they could oppose the making of the order, it would be unnatural to say that the order could not be made against them., In what I have said in this paragraph, I do not wish to be understood as holding that in view of S.25 an order for eviction against a tenant is in fact binding on his assignee or subtenant. Such a decision is not necessary for this case. I wish, however, to point out that if S.25 does not make the ejectment order so binding, the appellant cannot resort to it for any assistance.”
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6. The aforesaid decision of the Supreme Court was followed by a Division Bench of this Court in “Benimadhab Mahrotra versus Howrah Flour Mills Ltd. & Another”. (AIR1985 Calcutta 172). In that case also the petitioner(s) who claimed to be lawful sub-lessee in the demise premises, sought to be impleaded as parties in the eviction suit filed against the principle tenant under the West Bengal Premises Tenancy Act. The prayers were rejected by the Trial Court but ultimately allowed by this Court with the observations -
“8. …Therefore, in our view in the two suits it was necessary for the learned Assistant District Judge to consider whether the petitioner is a necessary party or is a proper party who should be brought on record for the court to adjudicate effectually and completely the questions involved in the suit. It cannot be disputed that under the provision of S.13(2)of the West Bengal Premises Tenancy Act, a sub-lessee who had otherwise complied with the requirements of the said Act, and as such, is a lawful sub-lessee is a necessary party to a suit for eviction against the lessee….”
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7. From the aforesaid two decisions it is clear that a sublessee is recognised as a proper party in a proceeding for eviction of the principal tenant under the Premises Tenancy Act, and is therefore, granted the chance to contest the proceeding in order to preclude the possibility of any collusion between the landlord and the original lessee which would adversely affect him when he is in possession of the premises.
8. The petitioner has also placed certain decisions applicable in relation to sub-lessees under the Transfer of Property Act. In “D.E.D.J.
Ezra versus J.E. Gubbay”. (1920)ILR47Cal 907, 60 Ind. Cas.969, the plaintiff after having obtained the decree for possession against the lessee proceeded into execution. But it was resisted by a “Mrs. Wallace”. who, like the present applicant, claimed to be a sub-lessee inducted by the original lessee, who according to her in collusion with the landlord/decree holder. The application under Rule 97 to Order XXI then moved on the half of the Lessor/Decree Holder was dismissed by a single Judge of this Court (Rankin J.) With the observations - "… The result is that, in my view, an action for possession based upon for feature offer terms should, for practical reasons, be brought against all persons in possession including constructive possession, which seems to be covered by Rule 99 (Mancharam v. Fakirchand, 20 B. 475 : Bom. L.R. 58), at the date of the suit: not that the suit is necessarily defective otherwise, but because the decree will be difficult to enforce under the Court. Unless, therefore, Mr. Avetoom, desires to contend that the respondent’s tenancy began after the suit was instituted, I must make an order under Rule 99 dismissing the plaintiff’s application, and must leave him to his remedy by a suit against the respondent. Mr. Avetoom disclaiming this desire, I make the order under Rule 99 with costs."
9. In “Raghuram Rao And Others versus Eric P. Mathias And Others”. (2002 volume 2 SCC624, the claim was for possession based on the Forfeiture clause brought against the assignee(s) of the lessees. The Trial Court held that since there was an express condition not to alienate the whole of the leasehold property, then a portion of the same could also not be transferred by implication. The Trial Court also held that the properties being situated in the Metropolitan area to which the Karnataka Rent Control Act, and not the Transfer of Property Act was applicable, and so the plaintiff was not entitled to actual physical possession of the same, but only to ‘constructive possession of the land’. The First Appellate Court however was of the view that as there was no express condition which prohibited partial alienation of the property, so it would not give right to the plaintiffs to enforce the forfeiture clause. In addition, the Court held the original lessor was a necessary party to the proceedings while the sub-lessees were proper parties. The appeals were therefore allowed and the suit dismissed. The Appellate Court’s judgment was however reversed by the High Court. In allowing the Appeals at the instance of the sub-lessees/assignees, the Supreme Court observed inter alia"Further, Section 111(g) itself requires that for forfeiture, lessee should commit breach of ‘an express condition’ which provides that on breach thereof, the lessor may reenter. The words ‘express condition ‘itself stipulates that condition must be clear, manifest, explicit, unambiguous and there is no question of drawing any insurance. In our view, as there is no express condition restraining partial alienation of the leasehold property, it would not be open to the transferee of the lessor’s right to invoke the forfeiture clause for determining the perpetual lease and such conditions cannot be inferred by implication. On similar clause, it appears that there is an express condition restraining partial alienation, forfeiture clause would not apply. In A. Venkataramana Bhatta vs. Krishna Bhatta [AIR1925 Madras 57]., the Court held thus:- "A clause for forfeiture must always be construed strictly as against the person who is trying to take advantage of it, and effect should be given to it, only so far as it is rendered absolutely necessary to do so by the wording of the clause…."
10. In “Razia Begum Vs. Sahebzadi Anwar Begum & Others”. [AIR (1958) SC885 an application under Order I R. 10 was allowed by the majority with the observations - “This leading case of Moser v. Marsden (1) is clearly an authority for the proposition that the court has jurisdiction to add as a party defendant only a person (1) [1892]. 1 Ch.
487. who is directly interested in the subject-matter of the litigation and not a person who is directly interested in the subject-matter of the litigation and not a person will be only indirectly or commercially affected. Kay L. J.
who agreed with Lindley L. J.
in that case, observed that the relevant rule of the Supreme Court, on its proper construction, authorized the court to add only such persons as would be bound by the judgment to be given in the action, but did not authorize the court to add any persons who would not be so bound and whose interest may only indirectly be affected in a commercial sense. To the same effect is the decision in Re I. G. Farbeninadusrie A. G. Agreement (1). The Court held that in order that a party may be added as a defendant in the suit, he should have a legal interest in the subject-matter of the litigation-legal interest not as distinguished from an equitable interest, but an interest which the law recognizes. Lord Greene M.R. giving the judgment of the Court, also observed that the court had no jurisdiction to add a person as a party to the litigation if he had no legal interest in the issue involved in the case…. As a result of these considerations, we have arrived at the following conclusions:(1) That the question of addition of parties under r. 10 of
0. I of the Code of Civil Procedure, is generally not one of initial jurisdiction of the court, but of a judicial discretion which has to be exercised in view of all the facts and circumstances of a particular case; but in some cases, it may raise controversies as to the power of the court, in contra distinction to its inherent jurisdiction, or, in other words, of jurisdiction in the limited sense in which it is used in s. 115 of the Code;
(2) That in a suit relating to property in order that a person may be added as a party, he should have a direct interest as distinguished from a commercial interest in the subject matter of the litigation;
(3) Where the subject-matter of a litigation is a declaration as regards status or a legal character, the rule of present or direct interest may be relaxed in a suitable case where the court is of the opinion that by adding that party it would be in a better position effectually and completely to adjudicate upon the controversy ;
(4) The cases contemplated in the last proposition have to be determined in accordance with the statutory provisions of ss. 42 and 43 of the Specific Relief Act ;
(5) In cases covered by those statutory provisions the court is not bound to grant the declaration prayed for, on a mere admission of the claim by the defendant, if the court has reasons to insist upon a clear proof apart from the admission;
(6) The result of a declaratory decree on the question of status such as in controversy in the instant case affects not only the parties actually before the court but generations to come, and, in view of that consideration, the rule of ‘present interest' as evolved by case law relating to disputes about property does not apply with full force; and
(7) The rule laid down in s. 43 of the Specific Relief Act is not exactly a rule of res judicata. It is narrower in one sense and wider in another. Applying the propositions enunciated above to the facts of the instant case, we have come to the conclusion that the courts below did not exceed their power in directing the addition of respondents I and 2 as parties-defendants in the action. Nor can it be said that the exercise of the discretion was not sound. Furthermore, this case comes before us by special leave and we do not consider that it is a fit case where we should interfere with the exercise of discretion by the courts below. The appeal is, accordingly, dismissed. As regards the question of costs, we direct that it will abide the ultimate result of the litigation and will be disposed of by the trial Court.”
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11. In dissenting with the decision however, His Lordship Syed Jaffar Imam J., observed - “Under O. 1, r. 10, of the Code of Civil Procedure the court has the power to pass orders regarding the adding of parties or striking off the name of a party. Whether the exercise of this power is a matter of jurisdiction or of discretion appears to have been the subject of difference of opinion in the courts of law here and in England. Whichever view may be correct it is patent that resort to the exercise of such power could only be had if the court is satisfied that it is necessary to make an order under 0. 1, r. 10, in order to effectually and completely adjudicate upon and settle all questions involved in the suit. The court ought not to compel a plaintiff to add a party to the suit where on the face of the plaint the plaintiff has no cause of action against him. If a party is added by the court without whose presence all questions involved in the suit could be effectually and completely adjudicated upon, then the exercise of the power is improper and even if it be a matter of discretion such an order should not be allowed to stand when that order is questioned in a superior court. The plaintiff is entitled to choose as defendants against whom he has a cause of action and he should not be burdened with the task of meeting a party against whom he has no cause of action.”
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12. In opposing the application, the plaintiff/respondent has categorically denied that the petitioner is actually in possession of any portion of the demised premises, and has drawn attention of this Court to the reports of the Receiver(s) and the Special Officer in the years 2005 and 2009 respectively which are on page 29 of the Affidavit-in-opposition and page 87 of the application respectively. He therefore claims that he cannot be compelled to meet the applicant who is essentially a party against whom he has no cause of action.
13. Further contention of the respondent/plaintiff in this regard is that even assuming the applicant was actually inducted as a sub-lessee by the original defendant/principal lessee, still the same would be in palpable violation of the original lease agreement since it was stipulated therein, that any sublessee could not be inducted without the lessor's "consent in writing”.. But even the indenture of sublease relied upon by the applicant does not mention anywhere that such “consent in writing”. had been obtained by the principal lessee from the lessor before inducting the applicant. Hence according to the respondent plaintiff, the express condition of the original lease agreement was violated, which therefore gives rise to the consequences of ‘Forfeiture’ under Section 111(g) of the Transfer of Property Act, 1861. The thrust of the arguments on behalf of the plaintiff/ respondent is thus on the second part of Section 115 of the Transfer of Property Act which is set out as follows “The forfeiture of such a lease annuls all such underleases, except where such forfeiture has been procured by the lessor in fraud of the under-lessees, or relief against the forfeiture is granted under section 114.”
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14. In this manner it has been contended that in a case of forfeiture on account of violation of the agreed terms of lease, the effect of the decree as against to the principal lessor is automatically binding upon the sub-lessee, who therefore need not necessarily be impleaded in the suit.
15. In "Rupchand Gupta versus Raghuvanshi (Private) Ltd. & Another”. (AIR 1964 SC1889, a suit brought by the landlord against his lessee for ejectment was decreed ex parte as the lessee did not choose to contest it. The sub-lessee thereupon brought a suit against both of them for a declaration that he was not bound by the decree which had been obtained by collusion between them in order to injure him and to elect him from the premises without it decree being passed against him. The suit was decreed in favour of the sub- lessee by the Trial Court. The landlord/defendant No.2 challenged the same in appeal. The High Court allowed the appeal and set aside the decree on the ground that he had failed to establish collusion. The Supreme Court upheld the decision of the High Court, after having also observed -
"12. Taking the last action first, viz., Raghuvanshi's omission took impleaded the appellant, it is quite clear that the law does not require that the sub-lessee need be made a party. It has been rightly pointed out by the High Court that in all cases where the landlord institutes a suit against the lessee for possession of the land on the basis of a valid notice to quit served on the lessee and does not implead the sub-lessee as a party to the suit, the object of the landlord is to eject the sub-lessee from the land in execution of the decree and such an object is quite legitimate. The decree in such a suit would bind the sub-lessee. This may act harshly on the sub-lessee, but this is a position well understood by him when he took the sublease. The law allows this and so the omission cannot be said to be an improper act."
16. From the decision in “D.E.D.J.
Ezra versus J.E. Gubbay”. (supra) it is clear that impleading of every person in possession (including a sub-lessee) when filing a suit is desirable, but that is the suit does not necessarily become defective otherwise, since the result of such omission to implead would only be the difficulty in enforcing the decree later on. It is also well settled that the plaintiff is the ‘Dominus litus’ of his suit and cannot be compelled to pursue his claim against a stranger with whom he has no privity of contract. In view of the decision in "Rupchand Gupta versus Raghuvanshi (Private) Ltd. & Another”. (supra), a sublessee has no locus standii to join the suit between the Lessor and the original Lessee. The two decisions in ‘South Asia Industries’ and “Benimadhab Mahrotra”. (supra) cited on the half of the petitioner arose out of proceedings under the relevant Tenancy/Rent Control Acts, and not under the Transfer of Property Act. There is no provision in the Tenancy laws equivalent to the forfeiture clause covered in the second part of Section 115 already referred to above, on account of which the decision in ‘Rupchand Gupta’ (supra) is directly applicable in the present case. Consequently this Court finds no justification to add the petitioner as a party defendant in the suit.
17. Again, the facts of “Razia Begum Vs. Sahebzadi Anwar Begum”. (supra) are distinguishable from the present case. In that matter the suit had been filed against the son of the Nizam of Hyderabad (Prince) by a lady claiming to have the status of his wife. The applicants claiming to be the other wife and son of the Prince sought to be impleaded as the marital status of the applicant lady and the consequential rights of herself and her son stood to be adversely affected in view of the nature of claim raised by the plaintiff wife. The applicants also claimed that they were interested in denying the status claimed by the plaintiff. In this background, the following observations of the majority Bench were therefore directly extracted in the matter - “(2) That in a suit relating to property in order that a person may be added as a party, he should have a direct interest as distinguished from a commercial interest in the subject matter of the litigation; (3) Where the subject-matter of a litigation is a declaration as regards status or a legal character, the rule of present or direct interest may be relaxed in a suitable case where the court is of the opinion that by adding that party it would be in a better position effectually and completely to adjudicate upon the controversy ; (6) The result of a declaratory decree on the question of status such as in controversy in the instant case affects not only the parties actually before the court but generations to come, and, in view of that consideration, the rule of ‘present interest' as evolved by case law relating to disputes about property does not apply with full force; 18. In the present case, however, there is absolutely no dispute about the status of the parties. The plaintiff admittedly is the Landlord/Lessor, the original defendant is the Lessee, and the applicant is undisputedly the sublessee. As already observed earlier, it is the existence of the statutory forfeiture clause In Section 115 of the Transfer of Property Act, which precludes the necessity of joining the sub-lessee as a party-defendant in view of the decision in ‘Rupchand Gupta’ (supra), and as such the decision in “Razia Begum Vs. Sahebzadi Anwar Begum”. (supra) does not help the applicant. The application is therefore dismissed. No orders as to costs. (SUDIP AHLUWALIA, J.)