1. Rule.
Mr. D.J. Bhatt, learned advocate waives service of notice of Rule on behalf of respondent No.1 (Original Petitioner). Mr. P.K. Shukla, learned advocate for Mr. Pranav Shah, learned advocate, waives service of notice of Rule on behalf of respondent Nos.2 and 3. Ms. Trusha Mehta, learned Assistant Government Pleader, waives service of notice of Rule on behalf of respondent No.5.
2. As respondent No.4 has not chosen to appear pursuant to the issuance of notice, there is no requirement for issuance of notice of Rule to respondent No.4.
3. The present application has been preferred by the applicant- Metaflux Company Private Limited to be joined as party in Special Civil Application No.18409 of 2011. It is stated that the applicant is the fifth purchaser of the plot at 3250, Phase III, GIDC Chhatral, Kalol, that was originally owned by respondent No.4 Shree Mahalaxmi Textile. The applicant has purchased the plot from one Shri Naranbhai Somdas Patel who had, in turn, purchased the property from Shri Paresh Ramanlal Patel, owner of M/s. Harekrishna Industries.
4. The brief factual background emerging from a perusal of the material on record is that respondent No.1 (Original Petitioner of Special Civil Application 18409 of 2011) was working with Shree Mahalaxmi Textile. It is the case of respondent No.1 that his services were terminated without following due procedure of law. He raised an industrial dispute that was referred for adjudication to the Labour Court, Kalol, being Reference LCK No.540 of 1998. The Labour Court granted reinstatement on the original post in favour of respondent No.1, with full back wages. Respondent No.1 preferred Recovery Application No.43 of 2005 before the Labour Court which was allowed and Shree Mahalaxmi Textile (Respondent No.4- employer) was ordered to pay an amount of Rs.3,02,651/-, by an order dated 12.01.2010. On the basis of the order passed in the Recovery Application, the Labour Court issued a Recovery Certificate, directing the District Development Officer, Gandhinagar, to recover the amount. According to respondent No.1, no action was taken by the concerned Authorities to recover the amount, therefore, the Union addressed a letter to the Taluka Development Officer, Kalol. As no recovery was made pursuant to the Recovery Certificate, respondent No.1 filed the above-mentioned petition, praying for directions to the District Development Officer and Taluka Development Officer to initiate Recovery Proceedings against Shree Mahalaxmi Textile, deposit the amount in the Labour Court and permit the petitioner to withdraw the amount.
5. In the present application, the applicant has stated that it is a bonafide purchaser of the property that has changed hands five times. It is only when it received notice dated 13.01.2012 from the Taluka Development Officer, that it came to know that an amount of Rs.3,32,916/- including 10% service charges and penalty on Rs.3,02,652/- (the amount as per the Recovery Certificate) is sought to be recovered from it. The case of the applicant further is that this notice was replied by it on 23.01.2012, explaining that the applicant had purchased the property in the year 2008, and requesting that until the Directors of the Company are permitted to make arrangements to bring the case before the High Court, the working of the Company may not be stopped by applying a seal on its premises.
6. The applicant received communication dated 01.06.2012 from the Taluka Development Officer informing it that its reply was unsatisfactory. The applicant was directed to make payment of the amount in seven days, failing which seals would be applied to its Unit.
7. In this background the applicant has approached this Court by filing the present application for joining as party to Special Civil Application No.18409 of 2011, preferred by respondent No.1 (workman).
8. Mr.
Murali N. Devnani, learned advocate for the applicant has submitted that respondent No.1 was never the employee of the applicant. The employer of respondent No.1 was Shree Mahalaxmi Textile Industries that had obtained a loan from Gujarat State Financial Corporation ("GSFC" for short) and had failed to repay it. The factory of Shree Mahalaxmi Textile Industries was sealed and taken over by GSFC and was ultimately advertised and sold to Mr. Paresh Ramanlal Patel, owner of M/s. Harekrishna Industries.
9. It is submitted that pursuant to receipt of notice sent by the Taluka Development Officer, the applicant tried to contact Shree Mahalaxmi Textile Industries but the concerned Officers could not be found. That the applicant was never aware of the proceedings of recovery and had, therefore, requested the concerned Authorities to grant time. Not only that, in the reply to the first notice dated 23.01.2012, the applicant had undertaken to remain present before the Taluka Development Officer along with documents and Registered Sale Deed, as and when called. It is contended that the applicant is directly affected by the notices issued to it, and would be prejudicially affected, if its Unit is sealed, therefore, it ought to be joined as party respondent to the Writ Petition, to enable it to put up its defence.
10. On the other hand, Mr. D.J. Bhatt, learned advocate for respondent No.1 (Original Petitioner) has submitted that the services of respondent No.1 were terminated in the year 1998. The Reference was allowed by the Labour Court in the year 2003 and the Recovery Application was allowed in the year 2005. The Recovery Certificate was issued on 28.08.2010. Thereafter, no steps were taken by the concerned authorities, in spite of the Union writing a letter on 28.05.2011. It is contended that it ought to be considered that the services of respondent No.1 were terminated in the year 1998. All orders have remained only on paper, as no effective implementation has been made by the concerned authorities. In these circumstances, respondent No.1 was constrained to file the petition in order to obtain the fruits of the Award and the order passed on the Recovery Application. It is further submitted that in the petition, the only prayers that have been made are for directions to the concerned authorities for initiation of Recovery Proceedings against the original employer of the respondent No.1. There is no provision for attachment under the Industrial Disputes Act, 1947. However, as per the provisions of Section 33C, a Certificate for the amount due can be issued, that has already been done in the case of the petitioner. This amount is to be recovered as arrears of land revenue. It is contended that for the working of the statutory machinery and for implementation of the statutory mandate, it is only the authorities that are the concerned and necessary parties for making recovery of the amount. It is further contended that the applicant is a third party which has purchased the property after it has changed hands several times, and cannot have a better title than the original owner. If arrears of land revenue are recoverable from the property in question, then the same can be recovered from the property irrespective of the fact that it has changed hands in the meanwhile. It is, therefore submitted that the applicant is not required to be joined as party- respondent to the petition, and the application be dismissed.
11. It is further submitted that the applicant has no locus standi to file a petition contesting the recovery sought to be made against it, and by filing the present application for joining, it is trying to achieve indirectly, what it cannot do directly.
12. Reliance has been placed by the learned advocate for respondent No.1 upon the following judgments.
1. Manager, V.J. Auto Engineering Works & Ors.
Vs.
Sherkhan Ahmedkhan Khokhar & Anr.
(1) GLR 300
2. Mumbai International Airport Pvt. Ltd. Vs. Regency Convention Centre & Hotels Pvt. Ltd. & Ors.
AIR 2010 SUPREME COURT 3109
13. Mr.
P.K. Shukla, learned advocate for Mr. Pravan Shah, learned advocate on behalf of respondents Nos.2 and 3 has made no submissions either for, or against, prayers made in the application.
14. Ms.
Trusha Mehta, learned Assistant Government Pleader for respondent No.5 has also not taken any clear stand in respect of the prayer for joining made by the applicant.
15. In rejoinder, Mr. Murali N. Devnani, learned advocate for the applicant has tried to distinguish the judgment in Manager, V.J. Auto Engineering Works & Ors. Vs. Sherkhan Ahmedkhan Khokhar & Anr. (Supra) by submitting that in that case it was the employer who had been issued notices whereas in the present case, the applicant is not the employer, therefore, the said judgment would not be applicable to the applicant.
16. Having heard the learned counsel for the respective parties it emerges that the question that arises for consideration is whether the applicant which is a third party and a purchaser of the property from which the amount, as per the Recovery Certificate, is sought to be recovered, ought to be joined as party respondent in the petition, or not, on the ground that it is affected by the notices of the recovery.
17. To determine this question, the provisions of Order I, Rule 10 (2) of the Code of Civil Procedure, 1908 may be noticed.
17. Order I, Rule 10 (2) reads as under:-
"(2) Court may strike out or add parties.- The Court may at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appear to the Court to be just, order that the name of any party improperly joined, whether as plaintiff or defendant, be struck out, and that the name of any person who ought to have been joined, whether as plaintiff or defendant, or whose presence before the Court may be necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the suit, be added."
18. A perusal of the above provision of law makes it clear that the Court is vested with discretion to join any party or to strike out any party to a proceeding at any stage. What has essentially to be kept in mind by the Court while adding a party is, whether the presence of that party would be necessary in order to enable it "effectually and completely" to adjudicate upon and settle all issues raised in the proceedings.
19. Sub Rule (2) of Rule 10 has been explained by the Supreme Court in Ramesh H.Kundanmal V. Municipal Corporation of Greater Bombay and others, (1992) 2 SCC 524, in the following terms.
"6. Sub-rule (2) of Rule 10 gives a wide discretion to the Court to meet every case of defect of parties and is not affected by the inaction of the plaintiff to bring the necessary parties on record. The question of impleadment of a party has to be decided on the touchstone of Order 1 Rule 10 which provides that only a necessary or a proper party may be added. A necessary party is one without whom no order can be made effectively. A proper party is one in whose absence an effective order can be made but whose presence is necessary for a complete and final decision on the question involved in the proceeding. The addition of parties is generally not a question 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.
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8. The case really turns on the true construction of the rule in particular the meaning of the words "whose presence before the Court may be necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the suit". The Court is empowered to join a person whose presence is necessary for the prescribed purpose and cannot under the rule direct the addition of a person whose presence is not necessary for that purpose. If the intervener has a cause of action against the plaintiff relating to the subject matter of the existing action, the Court has power to join the intervener so as to give effect to the primary object of the order which is to avoid multiplicity of actions.
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14. It cannot be said that the main object of the rule is to prevent multiplicity of actions though it may incidentally have that effect. But that appears to be a desirable consequence of the rule rather than its main objective. The person to be joined must be one whose presence is necessary as a party. What makes a person a necessary party is not merely that he has relevant evidence to give on some of the questions involved; that would only make him a necessary witness. It is not merely that he has an interest in the correct solution of some question involved and has thought of relevant arguments to advance. The only reason which makes it necessary to make a person a party to an action is so that he should be bound by the result of the action and the question to be settled, therefore, must be a question in the action which cannot be effectually and completely settled unless he is a party. The line has been drawn on wider construction of the rule between the direct interest or the legal interest and commercial interest. It is, therefore, necessary that the person must be directly or legally interested in the action in the answer, i.e., he can say that the litigation may lead to a result which will affect him legally that is by curtailing his legal rights. It is difficult to say that the rule contemplates joining as a defendant a person whose only object is to prosecute his own cause of action. Similar provision was considered in Amon v. Raphael Tuck & Sons Ltd., wherein after quoting the observations of Wynn-Parry, J. in Dollfus Mieg et Compagnie S.A v. Bank of England, that their true test lies not so much in an analysis of what are the constituents of the applicants' rights, but rather in what would be the result on the subject-matter of the action if those rights could be established, Devlin, J. has stated:-
"The test is 'May the order for which the plaintiff is asking directly affect the intervener in the enjoyment of his legal rights."
(emphasis supplied)
20. In Mumbai International Airport Pvt. Ltd. V. Regency Convention Centre & Hotels Pvt. Ltd. (Supra),the Supreme Court has enunciated the following principles of law;-
"8. The general rule in regard to impleadment of parties is that the plaintiff in a suit, being dominus litis, may choose the persons against whom he wishes to litigate and cannot be compelled to sue a person against whom he does not seek any relief. Consequently, a person who is not a party has no right to be impleaded against the wishes of the plaintiff. But this general rule is subject to the provisions of Order I, Rule 10 (2) of Code of Civil Procedure ('Code' for short), which provides for impleadment of proper or necessary parties. The said sub-rule is extracted below:
"Court may strike out or add parties.
(2) The Court may at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appear to the Court to be just, order that the name of any party improperly joined, whether as plaintiff or defendant, be struck out, and that the name of any person who ought to have been joined, whether as plaintiff or defendant, or whose presence before the Court may necessary in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the suit, be added."
The said provision makes it clear that a court may at any stage of the proceedings (including suits for specific performance), either upon or even without any application, and on such terms as may appear to it to be just, direct that any of the following persons may be added as a party: (a) any person who ought to have been joined as plaintiff or defendant, but not added; or (b) any person whose presence before the Court may be necessary in order to enable the court to effectively and completely adjudicate upon and settle the question involved in the suit. In short, the court is given the discretion to add as a party, any person who is found to be a necessary party or proper party. 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 disputes 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."
21. In the present application, the case of the applicant is that he is directly affected by the notices issued by the concerned authorities who are in the process of effecting recovery as per the Recovery Certificate issued in favour of respondent No.1. The petition has been filed seeking directions to the concerned authorities to effect recovery as per the said Recovery Certificate. It has been stated by the learned advocate for the applicant that it is the fifth purchaser of the property from which recovery is directed to be effected. It may be true that the applicant is not the employer of respondent No.1. However, that aspect would now pale into insignificance as the recovery is to be effected as arrears of land revenue, that is, from the land itself, irrespective of the ownership thereof. The amount indicated in the Recovery Certificate can be stated to be in the nature of a charge or encumbrance upon the property and, as per operation of law, would have to be recovered from the property itself as per Section 33C of the Industrial Disputes Act. In this view of the matter, the ownership of the property would not be of relevance as the law would operate irrespective thereof. The applicant can only seek to be heard by the concerned authorities, which opportunity has been granted to it. There is no challenge to the Recovery Certificate issued in favour of the applicant. The ambit and scope of petition filed by respondent No.1 is to the extent of issuance of directions to the authorities to effect recovery as per the Recovery Certificate. In order to adjudicate such a prayer, the presence of a subsequent purchaser of the property would not be necessary. In the eventuality that respondent No.1 is successful in the petition, directions would be issued to the authorities only, and for this purpose the presence of the applicant would not be necessary. In this view of the matter, the applicant is neither a proper, nor a necessary party in order to decide the issues arising in the petition completely and effectually. The aspect that it may be affected by the recovery that is to be made from the property it has purchased cannot make it a proper or necessary party in the facts of the case, as the recovery is to be effected as per operation of law, as arrears of land revenue, and not because of any relationship of employer and employee between the applicant and respondent No.1.
22. It was, and is, open to the applicant to raise its grievances, if any, before the concerned Authorities. The prayers made in the application cannot be granted.
23. For the afore-stated reasons, the application is rejected. Rule is discharged.
(Smt.
Abhilasha Kumari, J.) PIYUSH Top