The Supreme Court has ruled that a person who acquires a disputed property from an existing defendant while a civil suit is pending can be a necessary party to proceedings seeking a declaration of tenancy rights over that property.
A bench comprising Justice Ujjal Bhuyan and Justice Atul S Chandurkar reached the conclusion while overturning decisions of the trial court and the Gujarat High Court, which had declined to implead the purchasers as defendants in a suit concerning tenancy rights.
The dispute arose from a suit filed by the plaintiff seeking a declaration that he was occupying part of the property as a tenant. He had also sought a permanent injunction.
One of the co-owners had been made a defendant in the suit. While the litigation was pending, the appellants purchased the property from the previous owners, including the co-owner who was already a party to the proceedings.
An application for impleadment was initially moved by the husband of one of the purchasers. However, the application remained pending and was eventually dismissed for non-prosecution after his death.
The purchasers subsequently filed a fresh application seeking to be added as defendants. They relied on their registered sale deed and asserted that ownership of the property had passed to them during the pendency of the litigation.
The trial court rejected their request, holding that they were neither necessary nor proper parties. The Gujarat High Court subsequently upheld that decision.
The matter then reached the Supreme Court.
The purchasers argued that because they had acquired the property from an owner who was already a defendant, they had effectively stepped into the transferor’s position. Their ownership interest, they submitted, gave them a direct stake in defending the tenancy claim.
The Court agreed.
It observed that the former owner was already before the court as a defendant when the property was transferred to the appellants through a registered sale deed. As successors to the owner’s interest, the purchasers had a legal interest in the outcome of the proceedings.
The nature of the relief sought by the plaintiff was also significant.
The suit was principally seeking a declaration regarding tenancy status over the property. According to the Supreme Court, such a declaration could not properly be made without the participation of the property’s owner.
“the presence of the appellants as owners of the suit property was necessary in the suit and they were thus necessary parties,” the bench held.
The Supreme Court also rejected the reasoning that the dispute was essentially between the plaintiff and government authorities and that no specific relief had been sought against the property owner. The bench said this approach failed to take into account the primary relief claimed in the suit—a declaration of tenancy rights.
The Court further clarified that the earlier impleadment application had been rejected because it was not prosecuted, rather than after an adjudication on its merits. Consequently, that order did not operate as res judicata and did not prevent the purchasers from making a subsequent application.
The bench also found that the lower courts’ refusal to implead the purchasers had caused legal prejudice to parties who had acquired ownership during the pendency of the litigation.
The Supreme Court therefore set aside the orders of both the trial court and the Gujarat High Court and directed that the appellants be added as defendants.
At the same time, the Court made it clear that the suit must be decided independently on its merits and that none of the observations made while deciding the impleadment issue should influence the final adjudication.
The appeal was accordingly allowed, with the parties directed to bear their own costs.