Mumbai International Airport Pvt.
Ltd vs Regency Convention Centra & Hotels & Ors on 6 July, 2010
Mumbai International Airport Pvt. Ltd vs Regency Convention
Centra & Hotels & Ors on 6 July, 2010
Equivalent citations: AIR 2010 SUPREME COURT 3109, 2010 AIR SCW 4222,
(2010) 93 ALLINDCAS 173 (SC), 2010 (5) AIR BOM R 63, 2010 (3) AIR KANT
HCR 698, (2013) 3 CPR 647, (2010) 4 RECCIVR 551, (2010) 6 SCALE 273,
(2010) 2 WLC(SC)CVL 207, (2010) 3 ALL RENTCAS 686, (2010) 3 CURCC 335,
(2010) 7 MAD LJ 153, (2010) 5 MAD LW 116, 2010 (7) SCC 417, (2010) 5
ANDHLD 24, (2010) 4 ICC 611, (2011) 1 UC 735, (2010) 2 CLR 294 (SC), (2010)
82 ALL LR 229, (2010) 4 CIVILCOURTC 295, (2010) 3 GUJ LH 281, (2010) 111
REVDEC 189, (2010) 4 BOM CR 638
Author: R.V.Raveendran
Bench: K S Radhakrishnan, R V Raveendran
Reportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.4900 OF 2010
[Arising out of SLP [C] No.2085 of 2009]
Mumbai International Airport Pvt. Ltd. ... Appellant
Vs.
Regency Convention Centre & Hotels
Pvt. Ltd. & Ors. ... Respondents
JUDGMENT
R.V.RAVEENDRAN, J.
Leave granted. Heard the learned counsel.
2. The Airport Authority of India (second respondent herein, AAI for short) established under the
Airports Authority of India Act, 1994 (`Act' for short) to be responsible for the development,
operation and maintenance of airports in India. The Government of India took a policy decision to
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Mumbai International Airport Pvt. Ltd vs Regency Convention Centra & Hotels & Ors on 6 July, 2010
amend the Act by Amendment Act 43 of 2003 enabling the AAI to lease the airport premises, to
private operators with prior approval of the Central Government and assign its functions to its
lessees except air traffic services and watch and ward. In pursuance of the policy of the government
in this behalf, the AAI decided to entrust the work of modernisation and upgradation of the Mumbai
Airport to a private operator, to serve the sharply increasing volume of passengers and for better
utilisation of the Airport. AAI initiated a competitive bidding process in that behalf. In the
information memorandum that was issued to the prospective bidders it was represented that the
entire airport premises will be included in the transaction including all encroached land but
excluding only the following areas : (i) New ATC tower; (ii) AAI staff colony; (iii) Hotel Leela
Venture, and (iv) All retail fuel outlets outside the airport operational boundary.
3. Pursuant to the competitive bidding process, the Chhtrapati Shivaji International Airport,
Mumbai was handed over to the appellant for operation, maintenance, development and expansion
into a world class airport under an agreement dated 4.4.2006. In pursuance of it, AAI entered into a
lease deed dated 26.4.2006 leasing the Mumbai airport to the appellant on "as is where is" basis for
a period of 30 years. The subject matter of the lease was described as "all the land (along with any
buildings, constructions or immovable assets, if any, thereon) which is described, delineated and
shown in Schedule I hereto, other than (i) any lands (along with any buildings, constructions or
immovable assets, if any, thereon) granted to any third party under any existing lease(s),
constituting the Airport on the date hereof; and (ii) any and all of the carved out assets". Schedule I
to the lease deed, instead of giving a detailed description of the demised property, referred to the
map demarcating the demised premises annexed to the lease deed by way of description of the
demised premises. The map annexed as Schedule I was the "plan showing the demised premises,
indicating carved out assets and lands vested with IAF and Navy". The carved out assets were : (1)
new ATC tower; (2) & (2A) the NAD staff colony of AAI; (3) land leased to Hotel Leela Venture; (4)
all retail fuel outlets which were outside the airport operational boundary; and (5) convention
centre. The map also contains a note below the list of carved out assets, reading as under: "A :
The parcel of land measuring 31,000 sq.mts. is currently not made a part of the lease
deed but may become part of the demised premises subject to the court verdict".
4. According to the appellant the said parcel measuring 31,000 sq.m. was also part of the airport
that was to be handed over by AAI to appellant but it could not be included in view of a pending case
(Suit No.6846 of 1999 on the file of the Bombay High Court) filed by the first respondent wherein
the High Court had made an interim order dated 2.5.2001, relevant portion of which is extracted
below :
"The Defendant Airport Authority should also separately demarcate an area of 31000
sq. meters for which the plaintiff is making a claim in this suit. After the land is so
demarcated, a copy of the plan would be handed over to the Plaintiff through their
advocate. The learned Counsel further states that the land admeasuring 31000 sq.
meters, which would be separately demarcated will not be alienated, sold and
transferred and no third party interest in that land would be created by the
Defendants Airport Authority without seeking leave of this Court. He further states
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Mumbai International Airport Pvt. Ltd vs Regency Convention Centra & Hotels & Ors on 6 July, 2010
that the Defendant No.1 would use the 31,000 sq. meters of land only for its own
purpose as far as possible without raising any permanent construction on that land,
and if it becomes necessary for the Defendant No.1 to raise any permanent
construction on that land, the work of construction would not be started without
giving two weeks notice to the Plaintiff, after the building plan is finally sanction by
the Planning Authority."
(emphasis supplied)
5. In pursuance of the lease of the airport in its favour, the appellant claims to have undertaken
several developmental activities to make it a world class airport. The appellant alleges that it was
expecting that the litigation initiated by the first respondent would end and it would be able to get
the said 31,000 sq.m. land also as it was in dire need of land for developing the airport. According to
the appellant, the Mumbai airport is surrounded by developed (constructed) areas with very limited
opportunities to acquire any land and the site constraints limit the possibilities for development and
therefore it was necessary to make optimum use of the existing land in the airport for the purpose of
modernisation and upgradation; and therefore, the disputed land which was lying idle, was required
for modernisation. It therefore filed an application seeking impleadment as an additional defendant
in the pending suit filed by the first respondent against AAI, contending that its interest was likely to
be directly affected if any relief is granted to the first respondent-plaintiff in the suit. The appellant
alleged that the Information Memorandum proposing to privatise the management did not exclude
the area which was the subject-matter of the suit; and that the suit plot could not however be leased
to the appellant in view of the interim order in the pending suit of the first respondent. The
appellant therefore claimed that it had, or would have, an interest in the suit land; and at all events,
it was interested in acquiring it by lease depending upon the decision in the suit and therefore it was
a necessary party and in any event a proper party.
6. The said application was resisted by the first respondent inter alia on the ground that the
appellant did not have any interest in the suit property and therefore the appellant was neither a
necessary party nor a proper party to the suit. It was also contended that AAI itself being a
substantial shareholder, having 26% share in the appellant company, would protect the interest of
the appellant by contesting the suit and therefore appellant was not a necessary party. AAI has also
filed a response to appellant's application for impleadment raising two contentions : (i) any
impleadment at that stage of the suit would delay the recording of evidence and final hearing
thereby seriously affecting the interests of AAI; and (ii) the suit plot measuring 31000 sq.m. was not
leased to the appellant.
7. A learned Single Judge dismissed the appellant's application by order dated 1.4.2008. The learned
Single Judge was of the view that as the appellant was yet to acquire any interest in the suit land and
as the pending suit by the first respondent was for specific performance of an agreement which was
a distinct earlier transaction between the first respondent and AAI to which the appellant was not a
party, and as the first respondent was not a party to the arrangement between AAI and the
appellant, the court cannot permit impleadment of appellant with reference to some future right
which may accrue in future, after the decision in the suit. The appeal filed by the appellant was also
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Mumbai International Airport Pvt. Ltd vs Regency Convention Centra & Hotels & Ors on 6 July, 2010
dismissed by a Division Bench by order dated 25.8.2008. The Division Bench held that the appellant
did not make out that he was a necessary party and the application merely disclosed that he was
only claiming to be a proper party; that the appellant's claim was not based on a present demise but
a future expectation based on spes successionis; and that therefore, the impleadment of appellant
either as a necessary party or proper party or formal party was not warranted. The said order is
challenged in this appeal by special leave. The question for consideration is whether the appellant is
a necessary or proper party to the suit for specific performance filed by the first respondent.
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 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."
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.
9. The learned counsel for the appellants relied upon the following observations of a two-Judge
Bench of this Court in Sumtibai v. Paras Finance Co. [2007 (10) SCC 82] to contend that a person
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Mumbai International Airport Pvt. Ltd vs Regency Convention Centra & Hotels & Ors on 6 July, 2010
need not have any subsisting right or interest in the suit property for being impleaded as a
defendant, and that even a person who is likely to acquire an interest therein in future, in
appropriate cases, is entitled to be impleaded as a party:
"Learned counsel for the respondent relied on a three-Judge Bench decision of this
Court in Kasturi v. Iyyamperuma [2005(6) SCC 733]. He has submitted that in this
case it has been held that in a suit for specific performance of a contract for sale of
property a stranger or a third party to the contract cannot be added as defendant in
the suit. In our opinion, the aforesaid decision is clearly distinguishable. In our
opinion, the aforesaid decision can only be understood to mean that a third party
cannot be impleaded in a suit for specific performance if he has no semblance of title
in the property in dispute. Obviously, a busybody or interloper with no semblance of
title cannot be impleaded in such a suit. That would unnecessarily protract or
obstruct the proceedings in the suit. However, the aforesaid decision will have no
application where a third party shows some semblance of title or interest in the
property in dispute.........It cannot be laid down as an absolute proposition that
whenever a suit for specific performance is filed by A against B, a third party C can
never be impleaded in that suit. If C can show a fair semblance of title or interest he
can certainly file an application for impleadment."
10. The learned counsel for the first respondent on the other hand submitted that the decision in
Sumtibai is not be good law in view of an earlier decision of a three-Judge Bench decision of this
Court in Kasturi v. Iyyamperumal [2005 (6) SCC 733]. In Kasturi, this Court reiterated the position
that necessary parties and proper parties can alone seek to be impleaded as parties to a suit for
specific performance. This Court held that necessary parties are those persons in whose absence no
decree can be passed by the court or those persons against whom there is a right to some relief in
respect of the controversy involved in the proceedings; and that proper parties are those whose
presence before the court would be necessary in order to enable the court effectually and completely
to adjudicate upon and settle all the questions involved in the suit although no relief in the suit was
claimed against such person. Referring to suits for specific performance, this Court held that the
following persons are to be considered as necessary parties: (i) the parties to the contract which is
sought to be enforced or their legal representatives; (ii) a transferee of the property which is the
subject matter of the contract. This Court also explained that a person who has a direct interest in
the subject matter of the suit for specific performance of an agreement of sale may be impleaded as a
proper party, on his application under Order 1 Rule 10 CPC. This Court concluded that a purchaser
of the suit property subsequent to the suit agreement would be a necessary party as he would be
affected if he had purchased it with or without notice of the contract, but a person who claims a title
adverse to that of the defendant-vendor will not be a necessary party. The first respondent
contended that Kasturi held that a person claiming a title adverse to the title of defendant-vendor,
could not be impleaded, but effect of Sumtibai would be that such a person could be impleaded; and
that therefore, the decision in Sumtibai is contrary to the larger bench decision in Kasturi.
11. On a careful consideration, we find that there is no conflict between the two decisions. The two
decisions were dealing with different situations requiring application of different facets of sub-rule
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Mumbai International Airport Pvt. Ltd vs Regency Convention Centra & Hotels & Ors on 6 July, 2010
(2) of Rule 10 of Order 1. This is made clear in Sumtibai itself. It was observed that every judgment
must be governed and qualified by the particular facts of the case in which such expressions are to
be found; that a little difference in facts or additional facts may make a lot of difference in the
precedential value of a decision and that even a single significant detail may alter the entire aspect;
that there is always peril in treating the words of a judgment as though they were words in a
legislative enactment, and it is to be remembered that judicial utterances are made in the setting of
the facts of a particular case. The decisions in Ramesh Hirachand Kundanmal v. Municipal
Corporation of Greater Bombay [1992 (2) SCC 524] and Anil Kumar Singh v. Shivnath Mishra [1995
(3) SCC 147] also explain in what circumstances persons may be added as parties.
12. Let us consider the scope and ambit of Order I of Rule 10(2) CPC regarding striking out or
adding parties. The said sub-rule is not about the right of a non-party to be impleaded as a party, but
about the judicial discretion of the court to strike out or add parties at any stage of a proceeding. The
discretion under the sub-rule can be exercised either suo moto or on the application of the plaintiff
or the defendant, or on an application of a person who is not a party to the suit. The court can strike
out any party who is improperly joined. The court can add anyone as a plaintiff or as a defendant if it
finds that he is a necessary party or proper party. Such deletion or addition can be without any
conditions or subject to such terms as the court deems fit to impose. In exercising its judicial
discretion under Order 1 Rule 10(2) of the Code, the court will of course act according to reason and
fair play and not according to whims and caprice. This Court in Ramji Dayawala & Sons (P) Ltd. vs.
Invest Import
- 1981 (1) SCC 80, reiterated the classic definition of `discretion' by Lord Mansfield in R. vs. Wilkes -
1770 (98) ER 327, that `discretion' when applied to courts of justice, means sound discretion guided
by law. It must be governed by rule, not by humour; it must not be arbitrary, vague, and fanciful,
`but legal and regular'. We may now give some illustrations regarding exercise of discretion under
the said Sub-Rule. 12.1) If a plaintiff makes an application for impleading a person as a defendant on
the ground that he is a necessary party, the court may implead him having regard to the provisions
of Rules 9 and 10(2) of Order I. If the claim against such a person is barred by limitation, it may
refuse to add him as a party and even dismiss the suit for non-joinder of a necessary party.
12.2) If the owner of a tenanted property enters into an agreement for sale of such property without
physical possession, in a suit for specific performance by the purchaser, the tenant would not be a
necessary party. But if the suit for specific performance is filed with an additional prayer for delivery
of physical possession from the tenant in possession, then the tenant will be a necessary party in so
far as the prayer for actual possession.
12.3) If a person makes an application for being impleaded contending that he is a necessary party,
and if the court finds that he is a necessary party, it can implead him. If the plaintiff opposes such
impleadment, then instead of impleading such a party, who is found to be a necessary party, the
court may proceed to dismiss the suit by holding that the applicant was a necessary party and in his
absence the plaintiff was not entitled to any relief in the suit.
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Mumbai International Airport Pvt. Ltd vs Regency Convention Centra & Hotels & Ors on 6 July, 2010
12.4) If an application is made by a plaintiff for impleading someone as a proper party, subject to
limitation, bonfides etc., the court will normally implead him, if he is found to be a proper party. On
the other hand, if a non-party makes an application seeking impleadment as a proper party and
court finds him to be a proper party, the court may direct his addition as a defendant; but if the
court finds that his addition will alter the nature of the suit or introduce a new cause of action, it
may dismiss the application even if he is found to be a proper party, if it does not want to widen the
scope of the specific performance suit; or the court may direct such applicant to be impleaded as a
proper party, either unconditionally or subject to terms. For example, if `D' claiming to be a
co-owner of a suit property, enters into an agreement for sale of his share in favour of `P'
representing that he is the co-owner with half share, and `P' files a suit for specific performance of
the said agreement of sale in respect of the undivided half share, the court may permit the other
co-owner who contends that `D' has only one-fourth share, to be impleaded as an additional
defendant as a proper party, and may examine the issue whether the plaintiff is entitled to specific
performance of the agreement in respect of half a share or only one-fourth share; alternatively the
court may refuse to implead the other co-owner and leave open the question in regard to the extent
of share of the vendor-defendant to be decided in an independent proceeding by the other co-owner,
or the plaintiff; alternatively the court may implead him but subject to the term that the dispute, if
any, between the impleaded co-owner and the original defendant in regard to the extent of the share
will not be the subject matter of the suit for specific performance, and that it will decide in the suit,
only the issues relating to specific performance, that is whether the defendant executed the
agreement/contract and whether such contract should be specifically enforced. In other words, the
court has the discretion to either to allow or reject an application of a person claiming to be a proper
party, depending upon the facts and circumstances and no person has a right to insist that he should
be impleaded as a party, merely because he is a proper party.
13. If the principles relating to impleadment, are kept in view, then the purported divergence in the
two decisions will be found to be non- existent. The observations in Kasturi and Sumtibai are with
reference to the facts and circumstances of the respective case. In Kasturi, this Court held that in
suits for specific performance, only the parties to the contract or any legal representative of a party
to the contract, or a transferee from a party to the contract are necessary parties. In Sumtibai, this
Court held that a person having semblance of a title can be considered as a proper party. Sumtibai
did not lay down any proposition that anyone claiming to have any semblance of title is a necessary
party. Nor did Kasturi lay down that no one, other than the parties to the contract and their legal
representatives/transferees, can be impleaded even as a proper party.
14. On a careful examination of the facts of this case, we find that the appellant is neither a necessary
party nor a proper party. As noticed above, the appellant is neither a purchaser nor the lessee of the
suit property and has no right, title or interest therein. First respondent - plaintiff in the suit has not
sought any relief against the appellant. The presence of the appellant is not necessary for passing an
effective decree in the suit for specific performance. Nor is its presence necessary for complete and
effective adjudication of the matters in issue in the suit for specific performance filed by the first
respondent-plaintiff against AAI. A person who expects to get a lease from the defendant in a suit
for specific performance in the event of the suit being dismissed, cannot be said to be a person
having some semblance of title, in the property in dispute.
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Mumbai International Airport Pvt. Ltd vs Regency Convention Centra & Hotels & Ors on 6 July, 2010
15. Learned counsel for the appellants contended that in view of section 12A of the Act when AAI
granted a lease of the premises of an airport, to carry out any of its functions enumerated in section
12 of the said Act, the lessee who has been so assigned any function of AAI, shall have the powers of
AAI, necessary for the performance of such functions in terms of the lease. Learned counsel for the
appellant submitted that in view of this provision, it should be deemed that the appellant has
stepped into the shoes of AAI so far as the Airport premises are concerned. This contention has no
merit. The appellant as lessee may certainly have the powers of AAI necessary for performance of
the functions that have been assigned to them. What has been assigned is the function of operation,
management and development agreement with reference to the area that been demised. Obviously
the appellant as lessee of the Airport cannot step into the shoes of AAI for performance of any
functions with reference to an area which has not been demised or leased to it.
16. Learned counsel for the appellant contended that Mumbai airport being one of the premier
airports in India with a very high and ever increasing passenger traffic, needs to modernise and
develop every inch of the airport land; that the suit land was a part of the airport land and that for
the pendency of first respondent's suit within an interim order, AAI would have included the suit
land also in the lease in its favour. It was submitted that therefore a note was made in the lease that
the land measuring 31000 sq.m. was not being made a part of the lease but may become part of the
demised premises subject to the court verdict. This does not in any way help the appellant to claim a
right to be impleaded. If the interim order in the suit filed by the first respondent came in the way of
granting the lease of the suit land, it is clear that the suit land was not leased to appellant. The fact
that if AAI succeeded in the suit, the suit land may also be leased to the appellant is not sufficient to
hold that the appellant has any right, interest or a semblance of right or interest in the suit property.
When appellant is neither claiming any right or remedy against the first respondent and when first
respondent is not claiming any right or remedy against the appellant, in a suit for specific
performance by the first respondent against AAI, the appellant cannot be a party. The allegation that
the land is crucial for a premier airport or in public interest, are not relevant to the issue.
17. In the result, the appeal is dismissed.
..............................J.
(R V Raveendran)
New Delhi; ..............................J.
July 6, 2010. (K S Radhakrishnan)
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