M/S. ALIJI MONOJI AND CO.versusLALJI MAVJI AND ORS.

A                          MIS. ALIJI MONOJI AND CO.
                                        v.
                             LAU! MA V.TI AND ORS.

                                   JULY 12, l 996

B                [K. RAMASWAMY AND G.B. PATTANAIK, JJ.]

             Code of Civil Procedure J908: Order J Rule JO.

         Necessaiy or proper party-Impleadment of-Notice by Municipal Car- .
C poration to appellant for demolition of unauth01ised structures-Suit by
  appellant-Lessee seeking injunction against Municipal Corpora-
  tion-Respondent-landlords brought on record under Order J Rule JO on the
  ground that they were having direct interest in property-Order of Tlial Cowt
  upheld by High Cowt-Appeal-Held High Court was light in refusing to
D inteifere with the order of impleadment passed by T1ial Cowt-Held though
  relief was sought against the Municipal Co1poration but the landlord was
  necessalily a proper party-Jn the event of demolition his 1ight title and interest
  would be directly affected-Where presence of respondent is necessary for
  complete and effectual adjudication of dispute he is a proper party though no
  relief is sought against him.
E
          Ramesh Hirachand Kundamnal v. Municipal Corporation of Greater
    Bombay & Ors., [1992) 2 SCC 524; New Redbank Tea Co. Pvt. Ltd. v.
    Kumkum Mittal & Ors., [1994] 1 SCC 402; Bihar State Electlicity Board v.
    State of Bihar & Ors., [1994) Supp. 3 SCC 743; Anil Kr. Singh v. Shivnath
    Mishra, [1995] 3 SCC 147 and Union of India & Anr. v. Distlict Judge,
F   Udhampur & Ors., [1994) 4 sec 737, referred to.

             CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9477 of
    1996:.

G        From the Judgment and Order dated 5.7.93 of the Bombay High
    Court in W.P. No. 2418 of 1993.

             R.F. Nariman, Arvind Kr. Sharma and P.H. Parekh for the Appel-
    ]ants.

H            V.N. Ganpule and A.M. Khanwilkar for the Respondents.
                                      542
                  ALIJI MONOJI AND CO. v. LAJ.JI MAVJ!                    543

      D.N. Mishra for the Respondent Nos. 7-8.                                   A

      The following Order of the Court was delivered :

      Leave granted.

      We have heard learned counsel on both sides.                               B

      The facts are very simple. The appellant-lessee laid the Suit No.
9460/90 for perpetual injunction against the Municipal Corporation of
Bombay restraining them from demolishing a portion of the building. The
Municipal Corporation had issued notice under Section 351 of the
Municipal Corporation Act for demolition of the above building on the
                                                                                 c
ground that the appellant had made unauthorised structures. The contest-
ing respondents 2 to 6 sought to come on record under Order 1 Rule 10,
CPC contending that they have direct interest in the property and the motion
taken out by the respondent was ordered by the trial Court and the High Court
by the impugned order dated February 17, 1993 was upheld the same in W.P.        D
No. 2418 dated July 5, 1993. Thus, this appeal by special leave.

       Shri R.F. Nariman, learned senior counsel for the appellants, con-
tended that the contesting respondent have only commercial interest in the
property but the real question is : whether the appellant had made con-
struction of the building sought to be demolished by the Municipal Car-          E
poration and, therefore, whether the landlords-respondents are necessary
or proper party. The High Court has not correctly appreciated the ratio of
Ramesh Hirachand Kundamnal v. Municipal C01poratio11 of Greater Bom-
bay & Ors., [1992] 2 SCC 524. The question therein was : whether the
contesting respondents were necessary or proper party under Order 1,             F
Rule 10, CPC ? It was held that the party was not a necessary or proper
party. It would apply to the facts of the case. We.find no force.

      The controversy in no longer res integra. It is settled law by catena of
decisions of this Court that where the presence of the respondent is
necessary for complete and effectual adjudication of the dispute, though         G
no relief is sought, he is a proper party. Necessary party is one without
whose presence no effective and complete adjudication of the dispute
could be made and no relief granted. The question is : whether the landlord
is a necessary or proper party to the suit for perpetual injunction against
the Municipal Corporation for demolition of demised building ? The               H
    544                   SUPREME COURT REPORTS I1996] SUPP. 3 S.C.R.

A landlord has a direct and substantial interest in the demised building before
  the demolition of which notice under Section 351 was issued. In the event
  of its demolition, his rights would materially be affected. His right, title and
  interest in the property demised to the tenant or licences would be in
  jeopardy. It may be that the construction which is sought to be demolished
B by the Municipal Corporation was made with or without the consent of the
  landlord or the lessor. But the demolition would undoubtedly materially
  affect the right, title and interest in the property of the landlord. Under
  those circumstances, the landlord necessarily is a proper party, though the
  relief is sought for against the Municipal Corporation for perpetual injunc-
  tion restraining the Municipal Corporation from demolition of the building.
C Under those circumstances, the question of the commercial interest would
  not arise. In Ramesh Hirachand Kundanmal's case (supra), this Court had
  pointed out in para 18 of the judgment that the notice did not relate to the
  structure but to two chattels. Original lessee from the landlord had no
  direct interest in that property. Under these circumstances, it was held that
D the second respondent has no direct interest in the subject matter of the
  litigation and the addition thereof would result in causing serious
  prejudice to the appellant and the 'substitution or the addition of a new
  cause of action would only widen the issue which was required to be
  adjudicated and settled. It is true, as pointed out by shri Nariman that in
E para 14, this Court in that case had pointed out that 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
F action is 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 a wider construction of the rule between the direct
   interest or the legal interest and commercial interest. It is not necessary
G for the purpose of this case to go into the wider question whether witness
   can be a proper and necessary      parfy.
                                           wneli.!he-witness has a commercial
   interest. This Court in New Redbank Tea Co. Pvt. Ltd. v. Kumkum.J{ittal
   & Ors., [1994] 1 SCC 402 has pointed ont that respondent 11 who filed        a -.
   suit for specific performance in the High Court was sought to come on
H record in the suit in which he had no direct interest in the pending matter.
,·                    ALJJIMONOJJANDCO. v. lAIJIMAVJI                         545

     Under those circumstances, this Court had held that respondent 11 was           A
     neither necessary nor proper party in the lease-hold interest involved in
     the suit. In Union of India & Anr. v. District Judge, Udhampur & Ors., [1994]
     4 SCC 737 the Union of India who ultimately had to bear the burden of
     payment of the compensation was held to be a necessary party under Order
     1 Rule 10, CPC for determination of the compensation in respect of the          B
     acquired land. In Bihar State Electricity Board v. State of Bihar & Ors.,
     [1994] Supp. 3 SCC 743 the same question was also reiterated and it was
     held that the Electricity Board was a person interested and also a necessary
     party. In Anil Kr. Singh v. Shivnath Mishra, [1995] 3 SCC 147 similar
     question was answered holding that the respondent was a necessary party.
                                                                                     c
            In view of the finding that in the event of building being demolished,
     right, title and interest of the landlord would directly be affected, the
     landlord would be a proper party, though no relief has been sought for
     against the landlord. The High Court, therefore, was right in refusing to
     interfere with the order passed by the trial Court impleading the landlords.    D

           The appeal is accordingly dismissed. N~ costs.

     T.N.A.                                                    Appeal dismissed.