ASIAN HOTELS (NORTH) LTD. versus ALOK KUMAR LODHA & ORS on 12 July 2022

SUPREME COURT REPORTS

[2022] 12 S.C.R.

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ASIAN HOTELS (NORTH) LTD.

v.

ALOK KUMAR LODHA & ORS.

(Civil Appeal Nos. 3703-3750 of 2022)

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JULY 12, 2022

[M. R. SHAH AND B. V. NAGARATHNA, JJ.]

Civil Procedure Code, 1908 – Or.I, r.10 & Or.VI, r. 17 –Amendment of Plaint – Joinder of Necessary and Proper Party –The appellant granted licenses for individual shops to variousCshopkeepers including respondent – Notice of revocation of licensewas served by the appellant to the respondents – A suit fordeclaration was instituted by the respondents for declaration thatthe license granted in respect of shop/ premises is irrevocable andperpetual – During the pendency of the aforesaid suit, the respondentDfiled application for amendment of the plaint for challenging variousmortgages created by the appellant, in favour of certain banks –Another application was also filed seeking to implead the Banksand the Financial Institutions as defendant – Both the applicationswere allowed by the High Court – On appeal, held: By the purportedamendment, the original plaintiffs have now prayed to declare thatEall the mortgages/charges created on the premises as void ab-initio –Even such a prayer can be said to be too vague – How therespondents can now can be permitted to challenge variousmortgages/ charges created from time to time – Now after a numberof years, respondents cannot be permitted to challenge theFmortgages/charges created on the entire premises including shops –The High Court while allowing the amendment application has notproperly appreciated the fact and/or considered the fact that assuch, by granting such an amendment the nature of the suits will bechanged – It would also result in misjoinder of causes of action –The principle that the plaintiffs is the dominus litus shall be applicableGonly in a case where parties sought to be added as defendants arenecessary and/or proper parties – Plaintiffs cannot be permitted tojoin any party as a defendant who may not be necessary and/orproper parties – Therefore, in a suit challenging revocation of therespective licenses, the plaintiffs cannot be permitted to challengeH

the respective mortgages/charges created on the entire premises asvoid ab-initio.

Allowing the appeals, the Court

Conclusion

HELD: 1. At the outset, it is required to be noted thatmortgages have been created in favour of different mortgagebanks/financial institutions since 1982 onwards which have beenextended and/or rolled over, refinanced and replaced from timeto time. The mortgages are created not only with respect to theshops/premises occupied by the original plaintiffs, but with respectto the entire premises/Hyatt Residency Hotel. The respectiveoriginal plaintiffs are granted licenses for individual shops whichare part of entire premises. According to the appellant, firstmortgage was created in the year 1982. At that time, none of theoriginal plaintiffs were license holders. They have been grantedlicense for individual shops at the premises from 1983 onwardsto various shopkeepers including respondents-original plaintiffs.The appellant, being owner – licensor, has terminated therespective licenses granted in favour of respective license holders– original plaintiffs. The revocation of the license is subject matterof respective suits. Therefore, the only controversy/issue in therespective suits is with respect to revocation of the respectivelicenses. By way of an amendment of the plaint the plaintiffs nowwant to challenge the mortgages/charges on the entire premisescreated by the appellant. As such, the original plaintiffs are not atall concerned with the mortgages created by the appellant whichis required for the continuous development of the hotel. By thepurported amendment, the original plaintiffs have now prayed todeclare that all the mortgages/charges created on the premisesas void ab-initio. Even such a prayer can be said to be too vague.How the original plaintiffs can now can be permitted to challengevarious mortgages/charges created from time to time. At thisstage, it is required to be noted that even under the LicenseAgreement (clause 13) the Licensor shall have the right to createcharges/mortgages as and by way of first charge on its land,premises and the buildings (including shops) constructed and tobe constructed, in favour of financial institutions and banks assecurity for their terms loan advanced/to be advanced to thelicensor for the completion of its hotel project. Therefore, in fact A

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Aoriginal plaintiffs being the licensee are aware that there shall becharges/mortgages on the entire premises and the buildingsincluding the shops. In that view of the matter, now after a numberof years, plaintiffs cannot be permitted to challenge themortgages/charges created on the entire premises includingshops. [Para 7][136-E-H; 137-A-D]B

2. The High Court while allowing the amendmentapplication in exercise of powers under Order 6 Rule 17 of theCode of Civil Procedure has not properly appreciated the factand/or considered the fact that as such, by granting such anamendment and permitting plaintiffs to amend the plaintsCincorporating the prayer clause to declare the respective charges/mortgages void ab-initio, the nature of the suits will be changed.As per the settled proposition of law, if, by permitting plaintiffsto amend the plaint including a prayer clause nature of the suit islikely to be changed, in that case, the Court would not be justifiedDin allowing the amendment. It would also result in misjoinder ofcauses of action. From the impugned order passed by the HighCourt, it appears that what has weighed with the High Court isthat plaintiffs, is the dominus litus and heavy reliance is placed inthe case of Kasturi. However, the principle that the plaintiffs isthe dominus litus shall be applicable only in a case where partiesEsought to be added as defendants are necessary and/or properparties. Plaintiffs cannot be permitted to join any party as adefendant who may not be necessary and/or proper parties at allon the ground that the plaintiffs is the dominus litus. In view ofthe above and for the reasons stated above, High Court hasFcommitted serious error in allowing the application under Order6 Rule 17 and under Order 1 Rule 10 of the Code of CivilProcedure by permitting original plaintiffs to amend the plaintincluding prayer clause by which, the plaintiffs have now prayedto declare the charges/mortgages on the entire premises as void-ab initio and permitting the original plaintiffs to join / implead theGrespective banks/financial institutions as party defendant. Thealleged rights of the plaintiffs as perpetual license holders areyet to be adjudicated upon. The licenses of the original plaintiffshave been revoked. Therefore, in a suit challenging revocationof the respective licenses, the plaintiffs cannot be permitted toHchallenge the respective mortgages/charges created on the entire A

premises as void ab-initio. It is the case on behalf of the appellantthat apart from the fact that first charge was created in the year1982, thereafter said mortgages have been rolled over, refinancedand replaced from time to time for ensuring the continuousdevelopment of the Hotel Project/premises which requiresconsistent upkeep, renovation and upgradation from time to time.Under the circumstances, the impugned orders passed by theHigh Court allowing the application under Order 6 Rule 17 andunder Order 1 Rule 10 of the Code of Civil Procedure areunsustainable, both on facts as well as on law. [Para 8-10][137- B

E-H; 138-A-F]

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Kasturi v. Iyyamperumal & Ors. (2005) 6 SCC 733 :[2005] 3 SCR 864 - held inapplicable.

Revajeetu Builders and Developers v. Narayanaswamyand Sons & Ors. (2009) 10 SCC 84 : [2009] 15 SCR103; Ashutosh Chaturvedi v. Prano Devi (2008) 15 SCC610 : [2008] 6 SCR 801; T. N. Alloy Foundry Co. Ltd v.T. N. Electricity Board and Ors. (2004) 3 SCC 392 :[2004] 2 SCR 352; L. J. Leach & Co Ltd v. M/s. JardineSkinner & Co. AIR 1957 SC 357 : [1957] SCR 438;Rajesh Kumar Aggarwal & Ors v. K. K.Modi & Ors.AIR 2006 SC 1647 : [2006] 3 SCR 175 - referred to.

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CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 3703-3750 of 2022.

From the Judgment and Order dated 15.09.2021 of the High Courtof Delhi at New Delhi in I.A. No. 5173-5174 of 2021 in C.S. (Comm.)No.189 of 2020.

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AMukul Rohatgi, Sr. Adv., Karan Bharihoke, Siddhant Kumar,Ms. Misha Rohatgi, Siddhant Sharma, Ms. Akansha Kaul, Ms. ManyaChandok, Advs. for the Appellant.

Issues

Avishkar Singhvi, Nipun Katyal, Naved Ahmed, Abhikalp PratapSingh, Rahul Gupta, Arav Kapoor, Shekhar Gupta, Nitin Saluja, Advs.Bfor the Respondents.

The Judgment of the Court was delivered by

M. R. SHAH, J.

1.0. As common question of law and facts arise in this group ofCappeals and as such arise out of the impugned common judgment andorder passed by the High Court, all these appeals are decided and disposedof together by this common judgment and order.

2.0. Feeling aggrieved and dissatisfied with the impugned commonjudgment and order dated 15.09.2021 passed by the High Court of DelhiDin respective applications in respective Commercial Suits under Order 1Rule 10 and Order 6 Rule 17 of the Code of Civil Procedure, by which,all the aforesaid applications submitted on behalf of the original plaintiff,the High Court has allowed the said applications and has permitted theoriginal plaintiff to amend the respective suits and has also orderedimpleadment of mortgagees (Banks), original defendant no.1 - AsianEHotels (North) Limited has preferred the present appeals.

3.0. For the sake of convenience, the impugned order passed bythe High Court in IA No.5173-5174 of 2021 in Civil Suit (Commercial)No.189 of 2020 shall be treated as the lead matter. Therefore, for thesake of convenience and to avoid any repetition, facts arising out of CivilFSuit (Commercial) No.189 of 2020 leading to the present appeals arenarrated, which are as under:

3.1. That the appellant herein granted licenses for individual shopsat the premises from 1983 onwards to various shopkeepers including therespondent herein – original plaintiff. On 29.5.2020 the original plaintiffGas a licensor served a revocation of license notice. Similar notices werealso served on other licensees. Therefore, the respective licensees hadinstituted the respective suits before the Delhi High Court against theappellant – licensor – Asian Hotels (North) Limited seeking a decree ofdeclaration that the license in favour of the plaintiff in respect of shop/premises is irrevocable and perpetual and the purported revocation ofH

the License by the defendant is illegal, void and bad in the eyes of law. Adecree is also sought for a declaration declaring that the plaintiff hasunfettered right to occupy and use the said premises/shop under theirrevocable license till the documents of transfer/conveyance are executedby the defendant.

3.2. That the appellant – defendant appeared before the HighCourt. The defendant raised verbal objection that the suit is notmaintainable in view of Section 8 of the Arbitration and ConciliationAct, 1996. The High Court vide order dated 21.07.2020 dismissed thesuits with liberty to the parties to avail remedy of arbitration in view ofthe arbitration clause in the license agreement on the verbal plea. Theorder passed by the High Court dismissing the suits with the above libertywas a subject matter of appeal before the Division Bench. The DivisionBench allowed the said appeal and remanded the matter. Liberty wasgranted to the defendant to prefer an application under Section 8 of theArbitration and Conciliation Act, 1996. It is reported that such anapplication is filed by the defendant and is pending adjudication.

3.3. During the pendency of the aforesaid suit, the plaintiff filedpresent IA No. 5174 of 2021 under Order 6 Rule 17 of the Code of CivilProcedure seeking amendment of the plaint, by which, the plaintiffproposed to amend the suit challenging various mortgages created bythe defendant hotel, in favour of certain banks. In the said application, itis the case on behalf of the plaintiff that the mortgages created by thedefendant in favour of the Financial Institutions/Banks are illegal andvoid ab-initio to the extent it encumbers the interest held by the plaintiffin the said premises from 2.9.1991. Therefore, consequential amendmentswere sought to be made pertaining to the rights of the plaintiff. By thesaid application, prayer clause is also sought to be amended seeking adecree of declaration against the defendant that the mortgages includingthe mortgage deeds which have been executed in favour of the Banks isvoid and illegal to the extent it encumbers any right, title and interest ofthe plaintiff in the subject premises.

3.4. Another application, being IA No.5173 of 2021 was also filedby the plaintiff under Order 1 Rule 10 of the Code of Civil Procedureseeking to implead the Banks and the Financial Institutions as defendantnos. 2 to 7.

3.5. Both the aforesaid applications were opposed by the defendanton the ground that (i) the mortgage in question was in 1980’s; there is no A

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SUPREME COURT REPORTS

Achallenge to the said mortgage in the present suit and therefore, thesame cannot be permitted now; (ii) the plaintiff has no right against thebanks and financial institutions and therefore, amendment applicationdoes not lie; (iii) that the prayer of the plaintiff for the relief of declarationand rights in the suit property have to first be adjudicated before anyrelief can be claimed against the proposed defendants no.2 to 7 and it isBonly after the plaintiff is successful in claiming any right in the propertythat the issue of adjudication of the rights of the third parties would arise;(iv) that in view of the arbitration clause in the agreement between theparties, the suit is liable to be stayed for which an appropriate applicationhas been filed by the defendant, which is pending adjudication.

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3.6. By the impugned common judgment and order and mainlyrelying upon the decision of this Court in the case of Kasturi v.Iyyamperumal & Ors reported in (2005) 6 SCC 733 and in thecase of Revajeetu Builders and Developers vs. Narayanaswamyand Sons & Ors reported in (2009) 10 SCC 85, the High Court hasDallowed both the applications i.e. application under Order 6 Rule 17 ofthe Code of Civil Procedure and application under Order 1 Rule 10 ofthe Code of Civil Procedure.

3.7. Feeling aggrieved and dissatisfied with the impugned commonorder passed by the High Court allowing applications under Order 6 RuleE17 of the Code of Civil Procedure and under Order 1 Rule 10 of theCode of Civil Procedure, original defendant no.1- licensor has preferredpresent appeals.

4.0. Shri Mukul Rohatgi, learned Senior Advocate has appearedon behalf of the appellant- original defendant and Shri Avishkar Singhvi,Flearned counsel and Shri Rahul Gupta, learned counsel have appearedon behalf of the respective respondents.

5.0. Shri Rohatgi, learned Senior Advocate appearing on behalf ofthe appellant – original defendant has vehemently submitted that in thefacts and circumstances of the case High Court has committed a seriousGerror in allowing the applications under Order 6 Rule 17 of Code ofCivil Procedure and Order 1 Rule 10 of the Code of Civil Procedurepermitting the respondents to amend their respective plaints to declarevoid ab initio all mortgages/charges on the entire premises and impleadthe mortgagee banks/financial institutions.

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5.1. It is vehemently submitted by Shri Rohatgi, learned SeniorAdvocate that appellant granted license for individual shops at the premisesfrom 1983 onwards to various shopkeepers including the respondentsherein. That prior thereto, on 23.09.1982 appellant created mortgages infavour of financial institutions /banks. The said mortgages were rolledover, refinanced and replaced from time to time for ensuring the continuousdevelopment of the Hotel Projects / premises which requires consistentupkeep, renovations, upgradation from time to time. It is contended thatclause 13 of the License Agreement recognizes and preserves the powerof the appellant (lessor) to create and continue mortgages. It is submittedthat clause 13 has been retained in every renewal (every five years) andas such respondents who are licensees have continuously ratified allmortgages from 1982 onwards by signing the License Agreement andsubsequent renewals. It is submitted that licenses have been revoked on29.5.2020 by the appellant. It is urged that at this belated stage it is notopen for the respondents who are only licensees and whose licenseshave been revoked to challenge the mortgages created by the appellantcreated in favour of various banks/ financial institutions which have beencontinued since 1982 onwards.

5.2. It is further submitted by Shri Rohatgi, learned Senior Advocatethat as such in view of the arbitration clause in the license agreement,suits are not maintainable in view of Section 8 of the Arbitration andConciliation Act. That application filed by the appellant – original plaintiffto stay the suits are pending adjudication. Therefore, as such the saidapplication/s under Section 8 of the Arbitration and Conciliation Act areto be decided first. It is further submitted that while pleadings werecompleted and Section 8 application was part-heard, respondents filedthe present applications in April 2020 to implead the Banks holdingmortgage over the premises and amend their plaints seeking to challengesuch mortgages. It is submitted that the learned Single Judge as such,without issuing any notice or granting an opportunity to file reply, heardarguments and reserved the judgment which has been pronounced on15.09.2021.

5.3. Shri Rohatgi, learned Senior Advocate appearing for theappellant – original defendant has assailed the impugned judgment andorder passed by the High Court mainly on the following grounds:

I.Impugned judgment has resulted in mis-joinder of causesof action and of parties; A

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AII.Respondents do not have the locus or right to challenge themortgages/charges;

III.Challenge to mortgage/charges is barred by limitation, delayand laches;

IV.The impleadment and amendment applications are malaBfide filed only to circumvent adjudication pending Section 8of the Act;

V.Impugned judgment has been passed in violation of principlesof natural justice; C5.4. It is vehemently submitted by Shri Rohatgi, learned SeniorAdvocate for the appellant that when the first License Agreement wasexecuted in 1983, the premises were already mortgaged and therespondents were aware of the said fact, as is evident from Clause 13 ofthe License Agreement. It is submitted that thus, the respondent’s rights,even as a licensee, are subject to the pre-existing charge perfectedDthereon with which the respondents have no concern.

5.5. It is submitted that the respondents – original plaintiffs arestrangers to the mortgage on the premises created by and between theappellant and its lenders. Respondents – original plaintiffs have no privitywith the mortgagee banks/financial institutions. The suits themselvesEare based on the License Agreement executed with the appellant and therights contained thereunder.

5.6. It is further submitted that the suits originally soughtdeclarations that the respondents are irrevocable licenses or alternativelyowners. Thus, the suits preferred by the plaintiffs only concern the inter-seFrights between the appellant and the respondent, with which the banks/financial institutions impleaded by the impugned judgment have noconcern. But the impugned judgment has resulted in mis-joinder of partiesand causes of action which is incorrect in law.

5.7. It is further submitted by Shri Rohatgi, learned Senior AdvocateGthat the respondents have no semblance of right to sue the banks/ financialinstitutions in the present case or challenge the mortgage.

5.8. It is further submitted that mortgage over the premises hasbeen created by and between the appellant and its lenders. Respondents-original plaintiffs are not parties to said transaction. There is admittedlyHno privity of contract between the respondents and original plaintiffs and its lenders. Therefore, the plaintiffs have no right to sue the lenders ofthe appellant against whom reliefs are now sought by way of amendmentof the plaint.

5.9. It is further submitted that, even otherwise, respondents areascertaining their status as irrevocable licensees of the concerned shops.Therefore, plaintiffs have not locus or cause to challenge mortgages/charges, which have been created by the appellant from time to time forensuring continuing development of hotel project/premises.

5.10. It is further submitted by Shri Rohatgi, learned SeniorAdvocate that challenge to mortgage/charges now is barred by limitation,delay and laches. This is because the first mortgage was created on thepremises on 23.09.1982. By the amendment applications, the principalrelief sought to be added by the respondents is to assail any and allcharges/mortgages on the premises created since 1982 in favour ofany person. It is submitted that first mortgage on the premises wasregistered on 23.09.1982 with the RoC as per Section 125 of theCompanies Act, 1956. Subsequent charges/mortgages were alsoregistered with the RoC. It is submitted that as per Section 126 of theCompanies Act, 1956 and Section 80 of the 2013 Act, the respondentsare deemed to have knowledge and constructive notice of the saidmortgage/charges and there exists a presumption in law that therespondents had knowledge of the aforesaid charges.

5.11. It is submitted that clause 13 of the License Agreementsexpressly records the knowledge of the respondents of the existingcharges on the premises and also authorizes creation of further chargesin the future. It is submitted that this understanding has been renewedand reaffirmed by the parties in the subsequent Renewal Agreements.Therefore, the respondents have knowledge of the mortgages in view ofstatutory presumption and express stipulation in Clause 13 of the LicenseAgreement since 1982, which negates the assertion that respondentsacquired knowledge by pleadings filed in the proceedings before the HighCourt. It is further submitted that considering Article 58, Schedule I ofthe Limitation Act, the prayer to challenge mortgages / charges wouldbe clearly barred by law of limitation and therefore, liable to be rejected.In support of the above submission, reliance is placed on the decision ofthis Court in the case of Ashutosh Chaturvedi v. Prano Devi (2008)15 SCC 610, T.N. Alloy Foundry Co. Ltd vs. T.N. Electricity Boardand Ors (2004) 3 SCC 392 and L.J.Leach & Co Ltd vs. M/s.

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AJardine Skinner & Co. AIR 1957 SC 357. Making abovesubmissions, it is prayed to allow the present appeals.

6.0. While opposing the present appeals and supporting the impugnedorder passed by the High Court, allowing the applications under Order 6Rule 17 of the Code of Civil Procedure and Order 1 Rule 10 of the CodeBof Civil Procedure, learned counsel for the respondents have vehementlysubmitted that in the facts and circumstances of the case. The impugnedorder is just and proper. It is contended that it is necessary to impleadbanks which are mortgagees of the suit property, while plaintiffs areclaiming ownership interest and that the trial has not yet commencedand the suit is at preliminary stage where the defendant has even notCfiled its written statement therefore, no prejudice can be said to be causedto the defendant if the application for amendment as well as impleadmentapplications are allowed. That no error has been committed by the HighCourt in the peculiar facts and circumstances of the case.

6.1. It is vehemently submitted by the learned counsel for theDrespondents that as such the plaintiff is the dominus litus in the suit.That in view of the position in law, when the applications submitted bythe original plaintiffs under Order 1 Rule 10 of the Code of Civil Procedurehave been allowed, the same may not be interfered with by this Court.Reliance is placed on the decision of this Court in the case of Kasturi v.EIyyamperumal & Ors. reported in (2005) 6 SCC 733.

6.2. It is further submitted by learned counsel for the respondents-original plaintiffs that cogent reasons have been given by the High Courtwhile allowing the applications under Order 6 Rule 17 and Order 1 Rule10 of the Code of Civil Procedure, which in a nutshell are as under:

FI.that it is necessary to implead the banks who are mortgageesof the suit property wherein the Plaintiffs are claimingownership interest;

II.the trial has not yet commenced and the suit is at thepreliminary stage where the Petitioner has not even filed itsGwritten statement;

III.no prejudice can be said to be caused to the Petitioner ifthe abovesaid applications are allowed;

IV.that the plaintiff is the dominus litus in the suit; H

ASIAN HOTELS (NORTH) LTD. v. ALOK KUMAR LODHA &ORS. [M. R. SHAH, J.]

VI.the fact that the Petitioner themselves had pleaded beforethe learned Single Judge of the Hon’ble High Court thatthe suit was bad for non-joinder of parties without the banksbeing parties;

VII.at the stage of allowing the amendment the Court shouldnot be concerned with the merits and demerits of suchamendments;

VIII. it is imperative that the Hon’ble Courts are liberal in theirview of amendment of pleadings especially when the partiesare necessary and required to be present to protect thesubject matter of the relief; 6.3. Relying upon the decisions of this Court in the case of RajeshKumar Aggarwal & Ors vs. K.K.Modi & Ors AIR 2006 SC 1647and in the case of Revajeetu Builders and Developers Vs.Narayanaswamy and Sons & Ors (2009) 10 SCC 84, it is vehementlysubmitted by the learned counsel for the respondents – original plaintiffsthat as observed and held by this Court while considering whether anapplication for amendment should or should not be allowed, Court shouldnot go into the correctness or falsity of the case in the amendment. It isfurther observed and held that likewise, it should not record a findingon the merits of the amendment and the merits thereof sought to beincorporated by way of amendment are not to be adjudged at the stageof allowing the prayer for amendment.

6.4. Learned counsel for the respondent no.1 has further submittedthat the amendments did not seek any direct injunctions against the banksfor creation of the mortgage but has only sought reliefs against thedefendant hotel whose property is mortgaged to the banks. That themortgage has not been challenged by the respondents but only theundeniable interest of the respondent is sought to be protected by havingmortgagees as a party to the suit. It is submitted that idea is to see that inthe event banks enforce the mortgage then they will step into the shoesof the appellant.

6.5. It is further submitted by the learned counsel for the plaintiffsthat in the suit original plaintiffs are seeking perpetual ownership rights inthe premises of the appellant hotel. Therefore, if the mortgages withrespect to the very property are not challenged, in that case, in futurethey may affect the rights of the plaintiffs and therefore, to protect theirrights, the impleadment of the mortgagee banks/financial institutions and A

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Athe amendments are very much necessary. That as such, Banks/FinancialInstitutions (mortgagees) can be said to be necessary and proper partiesfor giving the ultimate effective relief in favour of plaintiffs. Thatrespondents – original plaintiffs after final adjudication of the suit maybe held to be owners as they are the perpetual lessee who hold irrevocablelicenses executed in their favour to operate their respective shops. It isBsubmitted that the plaintiffs have paid the premium at the time ofexecution of the License Agreement and hence this is not a case ofmere license but it is a case of irrevocable and perpetual license.Therefore, no error has been committed by the High Court while passingthe impugned orders and allowing the applications under Order 6 RuleC17 and Order 1 Rule 10 of the Code of Civil Procedure.7.0. We have heard learned Senior Advocate appearing on behalfof the appellant and learned counsel appearing on behalf of the respectiverespondents - original plaintiffs at length.

7.1. By the impugned orders, the High Court has allowed theDapplications filed by the original plaintiffs under Order 6 Rule 17 andOrder 1 Rule 10 of the Code of Civil Procedure permitting the originalplaintiffs to amend their respective plaints so as to declare void ab-initioall the mortgages/charges on the entire premises in question and alsoimplead mortgagee banks/financial institutions for that purpose.

7.2. At the outset, it is required to be noted that mortgages haveEbeen created in favour of different mortgage banks/financial institutionssince 1982 onwards which have been extended and/or rolled over,refinanced and replaced from time to time. The mortgages are creatednot only with respect to the shops/premises occupied by the originalplaintiffs, but with respect to the entire premises/Hyatt Residency Hotel.FThe respective original plaintiffs are granted licenses for individual shopswhich are part of entire premises. According to the appellant, firstmortgage was created in the year 1982. At that time, none of the originalplaintiffs were license holders. They have been granted license forindividual shops at the premises from 1983 onwards to variousshopkeepers including respondents- original plaintiffs. The appellant, beingGowner – licensor, has terminated the respective licenses granted in favourof respective license holders – original plaintiffs. The revocation of thelicense is subject matter of respective suits. Therefore, the onlycontroversy / issue in the respective suits is with respect to revocationof the respective licenses. By way of an amendment of the plaint the H

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plaintiffs now want to challenge the mortgages/charges on the entirepremises created by the appellant. As such, the original plaintiffs are notat all concerned with the mortgages created by the appellant which isrequired for the continuous development of the hotel. By the purportedamendment, the original plaintiffs have now prayed to declare that allthe mortgages/charges created on the premises as void ab-initio. Evensuch a prayer can be said to be too vague. How the original plaintiffscan now can be permitted to challenge various mortgages/charges createdfrom time to time. At this stage, it is required to be noted that even underthe License Agreement (clause 13) the Licensor shall have the right tocreate charges/mortgages as and by way of first charge on its land,premises and the buildings (including shops) constructed and to beconstructed, in favour of financial institutions and banks as security fortheir terms loan advanced/to be advanced to the licensor for thecompletion of its hotel project. Therefore, in fact original plaintiffs beingthe licensee are aware that there shall be charges/mortgages on theentire premises and the buildings including the shops. In that view of thematter, now after a number of years, plaintiffs cannot be permitted tochallenge the mortgages /charges created on the entire premises includingshops.

8.0. The High Court while allowing the amendment applicationin exercise of powers under Order 6 Rule 17 of the Code of CivilProcedure has not properly appreciated the fact and/or considered thefact that as such, by granting such an amendment and permitting plaintiffsto amend the plaints incorporating the prayer clause to declare therespective charges/mortgages void ab-initio, the nature of the suits willbe changed. As per the settled proposition of law, if, by permittingplaintiffs to amend the plaint including a prayer clause nature of the suitis likely to be changed, in that case, the Court would not be justified inallowing the amendment. It would also result in misjoinder of causes ofaction.

9.0. From the impugned order passed by the High Court, it appearsthat what has weighed with the High Court is that plaintiffs, is the dominuslitus and heavy reliance is placed in the case of Kasturi (supra). However,the principle that the plaintiffs is the dominus litus shall be applicableonly in a case where parties sought to be added as defendants arenecessary and/or proper parties. Plaintiffs cannot be permitted to joinany party as a defendant who may not be necessary and/or proper partiesat all on the ground that the plaintiffs is the dominus litus.

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A9.1. Even otherwise, High Court has materially erred in relyingupon the decision in the case of Kasturi (supra).

In the case of Kasturi (supra) before this Court the suit was forspecific performance of the agreement to sell and the subsequentpurchasers purchased the very property for which decree for specificBperformance was sought. Therefore, on facts said decision is notapplicable to the facts of the case on hand.

10. In view of the above and for the reasons stated above, HighCourt has committed serious error in allowing the application under Order6 Rule 17 and under Order 1 Rule 10 of the Code of Civil Procedure bypermitting original plaintiffs to amend the plaint including prayer clauseCby which, the plaintiffs have now prayed to declare the charges/mortgageson the entire premises as void-ab initio and permitting the original plaintiffsto join/implead the respective banks/financial institutions as partydefendant. The alleged rights of the plaintiffs as perpetual license holdersare yet to be adjudicated upon. The licenses of the original plaintiffsDhave been revoked. Therefore, in a suit challenging revocation of therespective licenses, the plaintiffs cannot be permitted to challenge therespective mortgages/charges created on the entire premises as voidab-initio. It is the case on behalf of the appellant that apart from the factthat first charge was created in the year 1982, thereafter said mortgageshave been rolled over, refinanced and replaced from time to time forEensuring the continuous development of the Hotel Project/premises whichrequires consistent upkeep, renovation and upgradation from time to time.Under the circumstances, the impugned orders passed by the High Courtallowing the application under Order 6 Rule 17 and under Order 1 Rule10 of the Code of Civil Procedure are unsustainable, both on facts asFwell as on law.

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11. In view of above and for the reasons stated above, all theseappeals succeed. The impugned orders passed by the High Court allowingthe application under Order 6 Rule 17 and Order 1 Rule 10 of the Codeof Civil Procedure in respective suits preferred by the respondents hereinoriginal plaintiffs are hereby quashed and set aside. Present appealsGare allowed accordingly, However, there shall be no order as to costs.

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Ankit Gyan(Assisted by : Rahul Rathi, LCRA)

Appeals allowed.