Summary
Shop licensees in a Delhi hotel sued the licensor after their licences were revoked in 2020, claiming the licences were irrevocable and perpetual. While the licensor's Section 8 Arbitration Act application was pending, they sought under Order VI Rule 17 and Order I Rule 10 CPC to amend the plaints to declare void all mortgages created over the entire hotel since 1982 and to implead the mortgagee banks. The Delhi High Court allowed both, treating the plaintiff as dominus litis. The Supreme Court allowed the licensor's appeals: the amendment would change the nature of suits confined to revocation of licences and cause misjoinder of causes of action; licensees who had accepted in clause 13 of the licence that charges would be created could not challenge the mortgages years later; and dominus litis permits joinder only of necessary or proper parties.
Issues
- Whether licensees suing over revocation of their shop licences could be permitted under Order VI Rule 17 CPC to amend the plaint to seek a declaration that all mortgages created by the licensor over the entire premises since 1982 are void ab initio.
- Whether the mortgagee banks and financial institutions could be impleaded under Order I Rule 10 CPC on the footing that the plaintiff is dominus litis.
- Whether Kasturi v. Iyyamperumal, a specific performance case involving subsequent purchasers, applied to such a suit.
Provisions considered
- Order VI Rule 17, Code of Civil Procedure, 1908An amendment that would change the nature of the suit cannot be allowed. Suits confined to the revocation of individual shop licences could not be converted into a challenge to mortgages over the entire hotel created from 1982, which would also result in misjoinder of causes of action; the prayer to declare all mortgages void was in any event too vague. (¶¶ 7.2, 8.0, 10)
- Order I Rule 10, Code of Civil Procedure, 1908The plaintiff's position as dominus litis applies only where the persons sought to be added are necessary or proper parties; a plaintiff cannot join a party who is neither on that ground alone. The mortgagee banks had no concern with the inter se dispute between licensor and licensees. (¶¶ 9.0, 10)
- Section 8, Arbitration and Conciliation Act, 1996The licensor's application to refer the dispute to arbitration under the licence agreement was pending before the High Court when the amendment and impleadment applications were allowed; this formed part of the background but the appeals were decided on the CPC questions. (¶¶ 3.2, 5.2)
Held
- The mortgages, created in favour of banks and financial institutions since 1982 and rolled over, refinanced and replaced from time to time, covered the entire hotel premises and predated the licences granted from 1983. Clause 13 of the licence agreement itself preserved the licensor's right to create first charges on the land, premises and buildings including the shops. Licensees aware of this could not, after a number of years, be permitted to challenge the mortgages, with which they were not concerned. (¶ 7.2)
- The only controversy in the suits was the revocation of the licences, and the plaintiffs' alleged rights as perpetual licence holders were yet to be adjudicated. Permitting an amendment to pray that all charges on the premises be declared void ab initio would change the nature of the suits and result in misjoinder of causes of action; a court is not justified in allowing such an amendment. (¶¶ 8.0, 10)
- The principle that the plaintiff is dominus litis applies only where the parties sought to be added are necessary or proper parties; it does not permit joining anyone the plaintiff chooses. Kasturi v. Iyyamperumal concerned a suit for specific performance in which subsequent purchasers of the very property were sought to be impleaded, and had no application on these facts. (¶¶ 9.0, 9.1)
Result
Appeals allowed; the Delhi High Court's common order of 15.09.2021 allowing the applications under Order VI Rule 17 and Order I Rule 10 CPC in the respective suits quashed and set aside. No order as to costs.