The suit is liable to be dismissed if a necessary party is not impleaded: Supreme court

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

These appeals challenge the judgment dated 3rd July 2008 passed by the learned Single Judge of the High Court of Judicature at Bombay. The plaintiff was a doctor in government practice to start his private practice and took part in the defendant’s house the defendant was in financial need 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 favor of the plaintiff.

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 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 money and, on such request, the plaintiff paid him an amount of Rs.6,000/-. It is also the case of the plaintiff that under the aforesaid payment, he was put in possession of the suit property on 31st July 1984.

The plaintiff 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. 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. The plaintiff applied for a suit for specific performance before the trial court. The trial court directed the defendant to execute the sale deed by accepting the balance sale consideration as per the terms of the agreement to sell. 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. 

It was 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. The defendant thereafter preferred a second appeal before the High Court which came to be partly allowed vide the impugned judgment. 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. Thus, the present appeal is at the instance of the plaintiff. 

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The trial court framed the issue as to whether the suit was bad in law for non-joinder of necessary parties, that 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. It has been established that the lawsuit itself may be dismissed if a "necessary party" is not impleaded. 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. 

It is clear from the preceding that this Court has held that to qualify as a necessary party, two requirements must be met: 

(1) There must be a right to relief against the necessary party concerning the controversies involved in the proceedings; and

 (2) No effective decree can be passed in the absence of the necessary party. Accordingly, the High Court's decision cannot be questioned. 

The appeals are therefore likely to be rejected. In any case, the High Court partially decreed the suit to balance the interests and ordered the defendant to reimburse Rs. 30,000. With an interest at the rate of 9% per annum from the date of institution of the suit till its realization of the appeals is dismissed.