Subsequent Purchaser, Though Not 'Necessary Party' In Specific Performance Suit, Can Be Impleaded As 'Proper Party' : Supreme Court

The Supreme Court recently ruled that in a suit for specific performance of an agreement to sell, a subsequent purchaser may not be a 'necessary party' but can be a 'proper party' if their rights are affected by the adjudication of the dispute.

The bench comprising Justices JB Pardiwala and R Mahadevan was hearing the case where the Appellant (who was stranger to the suit) sought impleadment to the specific performance suit stating that his claim on the suit property based on the registered sale deed warranted his inclusion in the trial as it may affect his title over the property.

The plaintiff didn't resist the Appellant's inclusion as a party to the suit; however, the High Court, while exercising powers under Article 227 of the Constitution, overturned the trial court's decision to implead the Appellant.

Aggrieved by the High Court's decision, the Appellant approached the Supreme Court.

Setting aside the High Court's decision, the order pronounced by Justice Pardiwala observed that since the genuineness of the transaction was in dispute and required determination at trial, it would not prejudice the case if the Appellant was impleaded as a proper party to the suit, as this would allow the court to effectively and comprehensively adjudicate all issues in dispute.

“We may only say that insofar as the transaction between (Late) Mr. Sameer Ghosh and the original defendant no. 8 (appellant herein) is concerned, the same shall be a subject matter of trial. We do not express any opinion in this regard at this point of time. We may only say that the presence of the appellant in the suit is required for proper and effective adjudication of the dispute in the suit. We say so while giving additional regard to the fact that the original plaintiff has not opposed the impleadment of the original defendant no. 8 in his suit.”, the court observed.

Explaining the distinction between the necessary part and proper party, the Court said that “a necessary party is a person in whose absence no effective decree could be passed at all by the court. Whereas a proper party is one who though not a necessary party is a person whose presence would enable the court to effectively and adequately adjudicate upon all matters in dispute in the suit.”

Placing reliance on Sumtibai v. Paras Finance Co. Regd. Partnership Firm Beawer (Raj.), reported in (2007) 10 SCC 82, the Court noted that if the third party shows a fair semblance of title or interest, he can file an application for impleadment in the suit for specific performance, and it would be sole discretion of the court to add or strike out parties under Order 1 Rule 10(2) of CPC.

In terms of the aforesaid, the Court allowed the appeal, and restored the trial court's ruling allowing impleadment of the Appellant.

Case Title: M/S J N REAL ESTATE VERSUS SHAILENDRA PRADHAN & ORS.

Citation : 2025 LiveLaw (SC) 519

Click here to read/download the judgment

Appearance:

For Petitioner(s) : Mr. C.U. Singh, Sr. Adv. Mr. Gaurav Agarwal, Sr.Adv. Mr. S.Sukumar, Adv. Mr. Sreegesh M.K., Adv. Mr. Anand Sukumar, AOR Mr. Bhupesh Kumar Pathak, Adv. Mrs. Ruche Anand, Adv.

For Respondent(s) :Mr. Navin Pahwa, Sr. Adv. Mr. Vivek Singh, AOR Mr. Ritik Dwivedi, Adv. Ms. Tanvi Anand, Adv. Ms. Rida Shafique, Adv. Ms. Prerna Priyadarshini, AOR Mr. Syed Faraz Alam, Adv. Mr. Atharva Gaur, Adv. Mr. Aayushman Aggarwal, Adv.