ASHOKA INDUSTRIES LTD Vs. ORISSA STATE FINANCIAL

JUDGEMENT

(1.) THIS revision is directed against the order of the Subordinate Judge, Bhubaneswar passed under Order 1, Rule 10, read with Order 34, Rule 1. CPC directing impletion of Allahabad Bank as one of the defendants in the suit. In the suit where the aforesaid application for impletion of party was filed by Allahabad Bank the following prayers were made : (i) A preliminary decree to be passed for accounts directing the defendant (Orissa State Financial Corporation) to render true accounts of the entire transaction of the plaintiff ; (ii) A decree for compensation to be passed against the defendant -Corporation for the damages caused to the plaintiff which is to be determined in course of trial; (iii) A decree to be passed holding inter alia that the plaintiff is entitled to redeem the entire mortgage entered into with the defendant -Corporation on payment of such amount as would be determined on account of adjustment of the amount of compensation found to be payable by the defendant -Corporation to the plaintiff ; (iv) A decree for permanent injunction to be passed restraining the defendant -Corporation from selling away the property in question and/or from creating any other encumbrance and/or leasing out transfering management of the hotel in question to any other agency in any manner whatsoever ; and (v) A decree to be passed directing the defendant -Corporation to -redeliver possession of the hotel in question to the plaintiff within a time to be fixed by the Court failing which possession to be restored through the process of Court. The plaintiff evidently impleaded the Orissa State Financial Corporation (in short 'OSFC') as the sole defendant in the suit. After describing facts regarding further developments in matters of Loans and investments and decisions thereon. His Lordship found :

(2.) THE present suit out of which this revision arises has been filed for the reliefs mentioned earlier in the aforesaid background. During the pendency of the suit Allahabad Bank made an application to be impleaded as a party in the suit. In the said application it was stated that the Allahabad Bank has advanced a term loan/secured loan of Rs. 4o lakhs to the petitioner and the petitioner has made himself liable to pay back the said Joan with interest. The premises situated at 86/A/1, Goutam Nagar ih New Capital, Bhubaneswar together with all buildings, structures, erections etc. have been given as martgage to Allahabad Bank as a matter of security for the loan advanced. Besides, they have hypothecated the present and future plants, machineries, equipments, appliances, fixtures and implements to be stored in the premises at 86/A1l Goutam Nagar. Reference has also been made to a pan' passu agreement by which the rights of all the lending banks and the financial institutions including Allahabad Bank for division of the sale proceeds in the event of enforcement of securities have been assured. On the basis of these facts Allahabad Bank claims to be one of the necessary parties in the suit and prayed for an order in their behalf. 7. The said application was objected to by the present petitioners. It was contended on behalf of the petitioner that Allahabad Bank is neither a necessary nor proper party and, therefore, its impletion cannot be ordered. It was stated in the said objection that none of the questions which arises for consideration in the suit would affect the interest of Allahabad Bank who has already filed a separate suit in the High Court of Calcutta to safeguard its own interest. The learned trial Court allowed the application of Allahabad Bank holding that Allahabad Bank is a necessary party in view of the provisions of Order 34, Rule 1, CPC. 8. The only question which arises for consideration in this revision is as to whether the intervenor -Allahabad Bank is a necessary or proper party entitled to be impleaded in the suit under Order 1, Rule 10 read with Order 34, Rule 1, CPC. The provision permitting the Court to strike out or add parties is in Order 1, Rule 10, Sub -rule (2), CPC which provides that only a necessary or proper party may be added. The object of the rule is not to change the scope or character of the suit by adding new parties or to enable the new party so added to litigate their own independent claims, but the rule is meant to avoid unnecessary litigations which may otherwise become necessary. The distinction between the necessary party and proper party rs well known which can be succinctly put in the following words : 'A person is a necessary party if in his absence no effective decree can be passed. He is a proper party if his presence is necessary for effectual and complete adjudication.'

(3.) EXPLANATION -A puisne mortgagee may sue for foreclosure o for sale without making the prior mortgagee a party to the sui and a prior mortgagee need not be joined in a suit to redeem subsequent mortgage.' The object of this rovision is to avoid multiplicity of suits which is the same as in Order 1, Rule 10, Sub -rule (2). The peculiarity of this rule is that it applies only to suits relating to mortgages. The opening words or the rule suggest that it is subject to other provisions of the Code. It has been decided in a decision reported in AIR 1942 Patna 213 (Shyam Behari Prasad and Anr. v. Rameswar Prasad Sahu and Ors.), and followed in various other decisions that Order 34, Rule 1, CPC is subject to Order 1, Rule 9, CPC which provides that no suit shall be defeated by reason of misjoinder or non -joinder of parties and the Court in every suit can deal with the matter in controversy as regards the rights and interest of the parties actually before it, provided nothing in this rule shall apply for non -joinder of necessary party. A already stated, necessary party being one in whose absence no decree at all be passed, the intervenor -bank cannot be called a necessary party. Therefore, imple - tion of the intervenor -bank under Order 34, Rule I,''. PC if at all, has to be considered keeping the provisions of Order 1., Rule 9, CPC in view. It is, therefore, clear that though the object in enacting Rule 1, Order 34, is to prevent multiplicity of suits by bringing all the parties before the Court in a suit based on mortgage either as plaintiffs or defendants, the intention of the legislature is not to visit the non -inclusion of certain defendants by the plaintiff with dismissal of the suit. Order 34, Rule 1, CPC does not profess to impose any such penalty nor can the rule of procedure be construed to have such an effect. The test is to determine in each case if the relief cannot be granted to the plaintiff without imp - leading other persons who have not been joined as defendants in the suit.