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Indian CasesSupreme Court of India

Gujarat Housing Board, Ahmedabad vs Nagajibhai Laxmanbhai And Ors. on 19 September, 1985

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Gujarat High Court

Gujarat Housing Board, Ahmedabad vs Nagajibhai Laxmanbhai And Ors. on 19 September, 1985

Equivalent citations: AIR 1986 Guj 81, (1985) 2 GLR 1190

Author: Gokulakrishnan

Bench: P Gokulakrishnan, S Majmudar, I Bhatt

JUDGMENT Gokulakrishnan, C.J.

1. The Gujarat Housing Board is the petitioner in Civil Revision Application No. 1687 of 1983. This Civil Revision Application is filed against the order passed by the Civil Judge (S.D.), Bhavnagar in Order below Exh. 20 dt. 23-7-1981.

2. The 1st respondent herein filed Regular Civil Suit No. 151 of 1981 on the file of the Civil Judge (S.D.), Bhavnagar praying for setting aside S. 4 and S. 6 notifications issued under the Land Acquisition Act. In that suit, the present petitioner herein put in an application under O. 1, R. 10(2), C.P.C. praying to join him as party-defendant 3 in the main suit. According to the petitioner herein, it is a body corporate and it carries activity of constructing residential buildings for weaker section of the people. It has constructed buildings in lands situated at the outskirt of Vadhva in the City of Bhavnagar and for further construction of buildings for weaker section of people as well as for the middle class people it required further area. It submitted its representation to the State Government and the State Government, by its Notification under the Land Acquisition Act, acquired the lands bearing Survey Nos. 384, 385 and 386 situated at the outskirt of Vadhva. Thus, the lands were acquired by the State Government, who is the 1st defendant in the suit, for achieving the objects and activity of the petitioner herein. While so, the 1st respondent herein, who is the plaintiff, and his relatives and other interested persons, originally filed suits in which the petitioner was also a party-defendant. Having failed in those proceedings, the plaintiff, who is the 1st respondent herein, has come forward with the present suit without making the petitioner as the party-defendant. It is the case of the petitioner herein in the application filed by him that he is a necessary and proper party, that if the suit is proceeded without the petitioner being a party, irreparable loss and hardship would be caused to him and that the petitioner being the acquiring body of the disputed lands, he should be joined as a party third defendant to the suit. With the above said prayer the petitioner herein wanted the Civil Judge (S.D.), before whom the Regular Civil Suit No. 151 of 1981 was pending, to join him as party-third defendant to the suit. The 1st respondent herein opposed the application filed by the petitioner herein before the Civil Judge (S.D.) stating that the petitioner is neither a necessary nor a proper party and that the plaintiff in the suit cannot be compelled to litigate against a person from whom he does not seek any relief.

3. The Civil Judge (S.D.), Bhavnagar, after referring to Mahuva Municipality v. Mehra Kiritkumar Umedchand, (AIR 1973 Guj 97 wherein the Gujarat High court has held that the acquiring body is not a party interested in the subject matter of the suit nor said to be a proper party to the suit rejected the application filed by the petitioner herein under O.1, R. 10, C.P.C.

4. It is as against this order the present Civil Revision Application has been filed by the proposed party. Mr. Justice R. A. Mehta, the learned single Judge of our High Court, after referring to various decisions of our High Court and that of Supreme Court, found that Mahuva Municipality v. Mehta Kiritkumar Umedchand, AIR 1973 Guj 97 and Municipal Corporation of the City of Ahmedabad v. Chandulal Shamaldas Patel, (1971) 3 SCC 82 1. are taking a view that the body for the benefit of which the acquisition is made is not a necessary party while Himalaya Tiles and Marble (P) Ltd. v. Francis Victor Coutinho, AIR 1980 SC 1118 is observing that the said body is a necessary party and referred the matter to the larger Bench for decision. It is thus the matter is before us.

5. It is clear from the facts of the case that the land in question is being acquired by the Special Land Acquisition Officer, Bhavnagar to benefit the petitioner herein. The plaintiffs in the suit referred above are questioning the validity of such acquisition. In that suit, the petitioner has o1m’e forward with the present application under O. 1, R. 10(2), C.P.C. to add themselves as the party-respondent in the suit stating that they are vitally interested and as such they are necessary and proper party to the suit.

6. Order 1 Rule 10(2), C.P.C. reads as follows :

“The Court day 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.”

Thus, R. 10(2) (of O.1), C.P.C. provides for addition, (1) of necessary parties, and (2) of proper parties. The necessary party is that party, without whom no decree at all can be passed. In order that a party may be considered a necessary party, there must be a right to some relief against him in respect of the matter involved in the suit and that his presence should be necessary in order to enable the court to effectually and completely adjudicate upon and settle all the questions involved in the suit. This implication is derived from the words “ought to have been joined” occurring in O.1, R. 10(2), C.P.C. In the very same rule the sentence “whose presence before the Court may be necessary” by implication refers to proper parties. A person may be added as a defendant to a suit though no relief may be claimed against him provided his presence is necessary for a complete and final decision of the question involved in the suit. Such a person is called a proper party as distinguished from a necessary party, Thus, the above sentences occurring in O. 1, R. 10(2), C.P.C. clearly establish that a party can be added if he is either a necessary party or a proper party to the suit. In Razia Begum v. Anwar Begum, AIR 1958 SC 886 the Supreme Court had occasion to consider the power of the Court to add parties under O. 1, R. 10, C.P.C. It laid down the following conclusions as guidelines :

“(1) That the question of addition of parties under R. 10 of O. 1 of the Civil P.C. 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 contradistinction 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 cage 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 rest judicator. It is narrower in one sense and wider in another.”

The above-said guidelines clearly establish that the adding of’ parties under O. 1, R. 10 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. A reading of O. 1, R. 10(2) clearly establishes that the Court’ can either upon the application or sue Mote join the party in order to enable the Court effectually and completely to adjudicate upon and settle all the questions involved in the suit.

7. In the light of the above-said decision, we have to now consider whether the petitioner is a necessary or a proper party for being added as party-defendant to the suit.

8. As far as the present, case I concerned, it is clear from the facts of the case that the petitioner herein is the acquiring body and for whose benefits the lands are acquired. Whether such an acquiring body is a necessary party or a proper party is subject matter of various decisions of the High Courts in India including that of the Supreme Court, it is unnecessary to deal with every one of those cases and, in our opinion, it will suffice to deal with Mahuva Municipality v. Mehta Kiritkumar Umedchand, AIR 1973 Guj 97; Municipal Corporation of the City of Ahmedabad v. Chandulal Shamaldas Patel, (1971) 3 SCC 821; Himalaya Tiles and Marble (P)Ltd. v. Francis, Victor Coutinho, AIR 1980 SC 1118 and Noormohamad Hajishama.v. Anand Mohan Bhardwaj, (1981) 22 Guj LR 332 : (AIR 1981 Guj 132).

9. Mr. Trivedi, the learned counsel appearing for the respondent, pressing into service Mahuv a Municipality v. Mehta Kiritkumar Umedchand, AIR 1973 Guj 97 and also submitting before this Court that the law propounded in Municipal Corporation of the City of Ahmedabad v. Chandulal Shamaldas Patel, (1971) 3 SCC 821 is more apposite, contended that the petitioner is neither necessary nor a proper party. According to the learned counsel, if the Court can grant the relief even in the absence of the petitioner who is the Housing Board, then the Board cannot be deemed as a necessary or a proper party to be added in the suit. Even without the presence of the petitioner, according to the learned counsel Mr. Trivedi, the suit can be effectually and completely decided by the Civil Court.

10. Mr. Nanavati, the learned counsel appearing for the petitioner, contended that in the light of the latest Supreme Court decision in Himalaya Tiles and Marble ) Ltd. v. Francis Victor Coutinho, AIR 1980 SC 1118, the petitioner who is interested in acquiring the land it question is a proper party and that the later decision in Himalaya Tiles and Marble (P) Ltd. v. Francis Victor Coutinho, AIR 1980 SC 1118 has to be followed in preference to the decision in Municipal Corporation of the City of Ahmedabad v. Chandulal Shamaldas Patel, (1971) 3 SCC 821. According to Mr. Nanavati if two decisions of the Supreme Court of equal Bench are contradictory to each other, the later decision has to prevail.

11. In Mahuva Municipality v. Mehta Kiritkumar Umedchand AIR 1973 Guj 97 it has been clearly held that the acquiring body for whose benefit the land is proposed to be acquired cannot be said to have any interest in the subject matter of the suit. In Noormohmad Hahshama v. Anand Mohan Bhardwaj (1981) 22 Guj LR 332 : (AIR 1981 Guj 132), a learned single Judge of our High Court, considering a suit arising out of Evacuee Property Act, wherein the allotted wanted to get himself impleaded, observed that the allotted is not at all necessary to effectually and completely adjudicate upon and settle the questions regarding the legality of the declaration made by the Government. In Municipal Corporation of the City of Ahmedabad v. Chandulal Shamaldas Patel (1971) 1 SCC 821, a Division Bench of tile Supreme Court consisting of two learned judges had occasion to consider as to whether the Municipal Corporation for whose. Benefit the lands were acquired by the State Government was a party interested in the proceedings. That is a case in which the aggrieved party whose lands were acquired by the State Government filed a writ petition to quash the notification issued by the Government. In that the aggrieved party has added the Municipal Corporation as the 4th defendant. The High Court quashed the Notification. As against that the Municipal Corporation preferred appeal to the Supreme Court. The Supreme Court, holding that the Municipal Corporation cannot have any interest in such acquisition proceedings, dismissed the appeal as not maintainable. Thus reading the above-said decision cited, it is clear that the acquiring body such as the petitioner herein cannot be termed as a person interested’ in the proceedings and as such it is not a proper or a necessary party. Before referring to the decision in Himalaya Tiles and Marble (P) Ltd. v. Francis Victor Coutinho AIR 1980 SC 1118, which, in our opinion, clearly contradicts the view taken in the above said decision, it will be relevant to look into certain provisions of the Land Acquisition Act in order to appreciate the reasoning of the Supreme Court in Himalaya Tiles and Marble (P) Ltd. v. Francis Victor Coutinho AIR 1980 SC 1118. Section 3(b) of the Laud is. Acquisition Act defines the expression “person interested”. It reads as follows:

“3…..(b) the expression “person interested includes all persons claiming an interest in compensation to be made on account of the acquisition of land under this Act; and a person shall be deemed to be interested in land if he is interested in an easement affecting the land;”

Section 18 of the Land Acquisition Act deals with reference to court and procedure there. Here it is stated that any person interested car make a reference Section 50 of the Land Acquisition Act deals with acquisition of laid at cost of a local authority or company and the same reads as follows :

“50(1) Where the provisions of this Act are put in force for the purpose of acquiring land at the cast off my fund controlled or managed by a local authority or of any company, the charges of an incidental to such acquisition shall be defrayed from or by such fund or company.

(2) In any proceeding held before a Collector or Court in such cases the local authority or company concerned may appear and adduce evidence for the purpose of determining the amount of compensation;

Provided that no such local authority or company shall be entitled to demand a reference under S. 18.”

There is an amendment to this section by Land Acquisition (Gujarat Unification and Amendment) Act XX of 1965 wherein the amendment runs as follows :

“In S. 50 of the principal Act, in sub-section (2) for the words “may appear and adduce evidence”, the words “shall be called upon to appear and adduce evidence, if any”, shall be substituted.”

Section 50 which deals with acquisition of land at cost of a local authority or Company gives right to the acquiring body to appear and adduce evidence. The Gujarat Amendment referred above makes it compulsory for the authority to call in the acquiring body to appear and adduce evidence, if any. From this it is clear that the acquiring body is termed as an “interested person” in such acquisition proceedings. Thus, it is clear from a combined reading of all these provisions that the words. “person interested” given in S. 18 is an inclusive definition and must be liberally construed so as to embrace all persons who may be directly or indirectly interested either in the title to the land or in the quantum of compensation. In Himalaya Tiles and Marble (P) Ltd. v. Francis Victor Coutinho AIR 1980 SC 1118. Supreme Court had occasion to consider as to whether the body for whose benefit the land is acquired is a party interested in the proceedings challenging such acquisition. The Government in that case acquired the land for the benefit of a private party. This was questioned by the owner of the land on the ground that the Company of which the land is acquired is a private company, that such acquisition cannot be considered for public purpose under S. 4.of the Act and that such acquisition has to be quashed. This plea taken by the plaintiff from a combined reading of all these provisions in the suit found favor with a single judge who allowed the writ petition and quashed the land acquisition the words “person interested” given in proceedings along with the Notification. Against that order the appellant before the Supreme Court for 18 is are inclusive definition and must be whose benefit the land was acquired filed a Letters Patent Appeal to the Bench of the Bombay High Court liberally cloistered so as to embrace all persons The Letters Patent Bench which confirmed the view taken by the single Judge dismissed the appeal mainly who may be directly or indirectly interested on the ground that the appellant had no locus stand to file the appeal before the Bench in as much as it was either- in the title to the land or in the quantum not a “person interested” within the meaning of S. 18(l) of the Act. Dealing with this question as to whether of compensation. In Himalaya Tiles and the body for whose benefit the land is being acquired is an interested person or not, the Supreme Court (P) Ltd. v. Francis Victor Court observed :

“7. It seems to us that the definition of a person interested given, in S. 18 is an inclusive definition and occasion to consider whether the body must be liberally construed so as to embrace all persons who I may be directly or indirectly interested either for whose benefit though land is acquired is aim the title to the land or in the quantum of compensation. In the instant case, it is not disputed that the party interested in the proceedings challenging lands were actually acquired for the purpose of the company and once the land vested in the Government, such acquisition. The Government in that case after acquisition, it stood transferred to the company under the agreement entered into between the acquire the land for the benefit of a private company and the Government. Thus, it cannot be said that the Company had no claim or title to the land at party. This was questioned by the owner of all. Secondly, since under the agreement the company had to pay the compensation, it was most certainly the land on the, ground that the Company for interested in seeing that a proper quantum of compensation was fixed so that the company may not have to pay a very heavy amount of money. For this purpose, the company could undoubtedly appear and adduce evidence on the question of the quantum of compensation.”

The Supreme Court, after referring to various other decisions finally observed :

“13. Thus, the preponderance of judicial opinion, seems to favour the view that the definition of ‘person interested’ must be liberally construed so as to include a body, local authority, or a company for whose benefit the land is acquired and who, is bound under an agreement to pay, the compensation. In our opinion, this view accords with the principles of equity, justice and good conscience. How can it be said that a person for whose benefit the land is acquired and who is to pay the compensation is not a person interested even though its stake may be, extremely vital? For instance, the land acquisition proceedings may be held to be invalid and thus a person concerned is completely deprived of the benefit, which is proposed to be given to him. Similarly, if such a person is not heard by the Collector or a Court, he may have to pay a very heavy compensation which, in case he is allowed to appear before a court, he could have satisfied it that the compensation was far too heavy having regard to the nature and extent of the land. We are, therefore, unable to agree with the view taken by the Orissa High Court or even by the Calcutta High Court that a company, local authority or a person for whose benefit the land is acquired is not an interested person we are satisfied that such a person is vitally interested both in the title to the property as also in the compensation to be paid therefore because both these factors concern its future course of action and if decided against him, seriously prejudice, his rights. Moreover, in view of the decision of this Court referred to above, we hold~ that the appellant was undoubtedly a person interested. as contemplated by S. 18(l) of the Act. The High Court, therefore, committed an error in throwing out the appeal of the appellant on the ground that it had no locus to file an appeal before the. Bench.”

Thus, the Supreme Court had definitely held that the person for whose benefit the land is, acquired is a person vitality interested both in the title to the property as ‘also in the compensation to be paid therefore because both these factors concern its future course of action and if decided against hire, will seriously prejudice his rights. In view of the above-said decision of Division Bench of the Supreme Court consisting of two Judges in Himalaya Tiles and Marble (P) Ltd. v. Francis Victor Coutinho, AIR 1980 SC.1118 the petitioner herein is an interested party and the decision to be effective and complete has to be made in the presence of such an interested party. Now we have to consider as to whether the decision in Municipal Corporation of the City of Ahmedabad v. Chandulal Shamaldas Patel (19713 SCC 821 prevails or that the decision in Himalaya Tiles and Marble (p) Ltd. v. Francis Victor Coutinho, AIR 1980 SC 1118 prevails. Mr. Trivadi, the learned counsel appearing for the 1st respondent, submitted, that the decision in Municipal Corporation of the City of Ahmedabad v. Chandulal Sharnaldas Patel (1971) 3SCC 821 is more accurate and as such the said decision has to prevail. In support of his contention, he cited the decision reported in Indo, Swiss Time Limited, Dundahera v. Umrao, AIR 1981 Punj and Hary 213. In that Full Bench decision the majority view is spoken to as follows:

“23. Now the contention that the latest judgment of a co-ordinate Bench is to be rnechanically followed and must have preeminence irrespective of any other consideration does not corn mend itself to me. When judgments of the superior Court are of co-equal Benches and therefore of matching authority then their weight inevitably must be considered by, the rationale and the logic thereof and not by t1he mere fortuitous circumstances of the time and date on which they were rendered. It is manifest that when two directly conflicting judgments of the superior Court and of equal authority are extant then both of them cannot be binding on the courts below. Inevitably a choice, though a difficult one, has to be made in such a situation. On principle it appears to me that the High Court must follow the judgment, which appears to it to lay down the law more elaborately and accurately. The mere incidence of time whether the judgments of co-equal Benches of the superior Court are earlier or later is a consideration which appears to, me as hardly relevant.”

In contradistinction to the above-said decision, we have catena of decisions, which say that in respect of the decision of the Superior Court of co-equal Benches, the later one prevails over the former. In Vasant Tatoba Hargude v. Dikkaya Muttaya Pujari, AIR 1980 Bom 341 a Bench of the Bombay High Court has held that in case of conflict between earlier and later decisions of Supreme Court where each Bench consists of equal number of Judges the later decision should prevail. In Govindanaik G. Kalaghatigi v. West Patent Press Co. Ltd AIR 1980 Kant 92 the Full Bench of the Karnataka High Court has definitely held that when there are two conflicting decisions of the Supreme Court, one given by the larger Bench should be followed and that if both 4enches of the Supreme Court consist of equal number of Judges, the later of the two decision should be followed by High Court Courts and other courts. We are in complete agreement with the principle laid down by the Bombay and Karnataka High Courts in Vasant Tatoba Hargude v. Dikkaya Muttaya Pujari, AIR, 1980 Bom 341 and Govindanaik G Kalaghatigi v. West Patent Press Co. Ltd., AIR 1980 Kant 92 (FB) respectively. In this view we hold that the decision reported in Himalaya Tiles and Marble (P) Ltd. v. Francis Victor Coutinho AIR 1980 SC 1118 holds the field and that the petitioner h herein is an interested party whose presence is necessary to effectually and completely decide the issue in question. In the present case, the petitioner wants to get itself impleaded as party-third defendant in the suit pending before the Civil Judge (S. D.), Bhavnagar. The petition to impaled was filed under the provision of O. 1 R. 10(2), CPC. If the Court in its discretion feels-that the petitioner is an interested party and his presence is necessary to effectually and completely adjudicate and settle all questions involved in the suit, it has ample power to add the petitioner as party-defendant in the suit. The Supreme Court decision reported in Himalaya Tiles and Marble (P) Ltd. v. Francis Victor Coutinho, AIR 1980 SC 1118 which we have seen is, the one that which holds the field as on date, definitely states that the person for whose benefit the land is acquired is an interested party. In Udit Narain Singh. Malpaharia v. Addl. Member Board of Revenue, Bihar AIR 1963 SC 786, the Supreme Court had occasion to consider in the writ proceedings the question as to the person who will be necessary and proper party to such proceedings. It observed :

“(7) To answer the question raised it would be convenient at the outset to ascertain who are necessary or proper parties in a proceeding. The law on the subject is well settled, it is enough if we state the principle. 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 full decision on the question involved in the proceeding.

” Continuing the Supreme Court held”

“(12) To summaries in a writ of certiorari not only the tribunal or authority whose order is sought to be quashed but also parties in whose favor the said order is issued are necessary parties. But it is in the discretion of the court to add or implead proper parties for completely settling all the questions that may be involved in the controversy either summon or on the application of a party to the writ or an application filed at the instance of such proper party.”

The above-said observation made by the Supreme Court completely answers the contention put forth by Mr. Trivedi, the learned counsel appearing for the 1st respondent to the effect that if the relief can be fully granted even in the absence of the Housing Board, then the Board is neither a necessary party nor a proper party to be added., As correctly observed by the learned referring Judge of our High Court in the present case the impugned land acquisition is for the public purpose of the Gujarat Housing Board and is being acquired at the cost of the Gujarat Housing Board. The entire amount of compensation is to come out of the funds of Gujarat Housing Board, who is the petitioner herein. Even the cost of the present litigation, irrespective of its result, is to be borne by the Gujarat Housing Board. In fact all the stake in the result of the litigation and the cost of the litigation is on the Gujarat Housing Board and as such it can be easily presumed, that the Gujarat Housing Board is an interested party in this litigation. The suit can be effectually and completely decided only in the presence of the petitioner herein. Even if it is considered that the petitioner Its not a necessary party, there cannot be any two opinion in view of the Supreme Court decision rendered in Himalaya Tiles and Marble (P) Ltd. v. Francis Victor Coutinho, AIR 1980 SC 1118 that the petitioner is a proper party to be added as the party defendant to the suit.

12. In these circumstances we answer the reference by declaring that the person for whose benefit the land is acquired is an interested party and has every right to be added as a party-defendant to the suit in order to effectually and completely decide the dispute in issue. We also declare that when there are two conflicting decisions of the Supreme Court consisting of equal number of Judges, the later of the two decisions should be followed by the High Courts and other Courts.

In view of the reference answered by us in para supra, we feel that there is nothing left to send back the case to the, file of the learned single Judge for disposal. Hence, we allow the Civil Revision Application holding that the petitioner is an interested party and the petitioner’s presence is necessary for effectually and completely deciding the issues involved in the suit pending before the Civil Judge (S. D.), Bhavnagar as Regular Civil Suit No. 151 of 1981. The order passed by the learned trial Judge is set aside. The application, Exh. 20, filed by the Gujarat Housing Board to be added as a party-defendant is granted. The Civil Revision Application is allowed with costs

13. Application allowed.

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