Maryam Bee Versus Shuibham Jain and Ors

Impleadment of Third Parties in Specific Performance Suits

The case titled Maryam Bee versus Shuibham Jain and Ors., with Case Number FAO(OS) (COMM) 199/2024 : 2025:DHC:7318-DB High Court of Delhi at New Delhi on 26 August 2025 by Hon'ble Mr. Justice Anil Ksheterpal and Hon'ble Mr. Justice Harish Vaidyanathan Shankar.

Detailed Summary of the Case

Facts

The underlying dispute originates from a commercial suit for specific performance of an Agreement to Sell (ATS) dated 27 December 2022, concerning a property admeasuring 82.5 square yards, bearing Municipal No. 1806 (Mezzanine Floor to Second Floor with roof rights), Ward No. 4, Chandni Chowk, Dariba Kalan, New Delhi, 110006 (referred to as the "suit property"). The plaintiffs in the original suit (Respondent Nos. 1 to 3 herein, namely Shuibham Jain and others) filed CS (Comm) No. 590/2023 against the appellant, Maryam Bee, seeking specific performance of the ATS. According to the plaintiffs, the ATS was executed for a total sale consideration of Rs. 7,00,00,000 (Rupees Seven Crores Only), and they had made partial payments, but the appellant failed to execute the sale deed in their favor, necessitating the suit.

The appellant (Maryam Bee), however, contended that the total sale consideration was actually Rs. 9,00,00,000 (Rupees Nine Crores Only), as an additional ATS for Rs. 2,00,00,000 (Rupees Two Crores Only) was executed on the same date (27 December 2022). She claimed that the plaintiffs' failure to pay the full amount prevented her from executing the sale deed.

During the pendency of this suit, Respondent No. 4 (the brother-in-law of the appellant) filed an application under Order I Rule 10 of the Code of Civil Procedure, 1908 (CPC), being I.A. No. 23592/2023, seeking to be impleaded as a party to the suit. Respondent No. 4 claimed to be a co-owner of the suit property to the extent of 50%, along with his brother Abdul Malik (the appellant's husband). He asserted that the appellant's ownership claim was based on two Gift Deeds dated 23 August 1981 executed by Late Smt. Zubeda Khatoon and Late Sh. Sheikh Abdul Sattar Sahib (the appellant's mother-in-law and father-in-law, respectively). In contrast, Respondent No. 4 argued that the property was co-shared between him and Abdul Malik.

On 7 May 2024, the learned Single Judge of the Delhi High Court allowed this impleadment application, observing that Respondent No. 4 appeared to have some interest in the property, and excluding him could lead to multiplicity of litigation and conflicting rulings. Aggrieved by this order (specifically the portion allowing impleadment), the appellant filed the present appeal under Order XLIII Rule 1 CPC read with Section 10 of the Delhi High Court Act, 1966 (DHC Act). The appeal was reserved on 6 August 2025 and pronounced on 26 August 2025.

Notably, the plaintiffs (Respondent Nos. 1 to 3) opposed the impleadment in the original application and supported the appellant's claim of sole ownership in the appeal. They had separately challenged another portion of the impugned order (regarding a deposit direction) in FAO(OS)(COMM) 167/2024, which was dismissed on 6 August 2024, rendering the impleadment final as against them.

Dispute

The primary dispute in this appeal revolves around the maintainability and propriety of impleading Respondent No. 4 as a defendant in a suit for specific performance of the ATS. The appellant argued that:

• A third party or stranger to the contract cannot be impleaded in a specific performance suit merely to avoid multiplicity of suits, as it would impermissibly enlarge the scope of the suit from enforcing a contract to determining title and possession.
• Respondent Nos. 1 to 3, as dominus litis (masters of the suit), opposed the impleadment, and their stance should be respected.
• The impleadment converts the suit into one for title, which is not permissible.

In opposition, Respondent No. 4 contended:

• The impugned order is not appealable under Order XLIII Rule 1 CPC, and Section 10 of the DHC Act cannot be invoked due to Section 13(2) of the Commercial Courts Act, 2015 (CCA). He relied on cases like Kandla Export Corpn. v. OCI Corpn. (2018) 14 SCC 715, M.V. Polaris Galaxy v. Banque Cantonale De Geneve (2024) 5 SCC 750, Trex India Pvt. Ltd. v. CDE Asia Limited 2023 SCC OnLine Del 2388, and Alka Traders v. Cosco India Ltd. 2020 SCC OnLine Del 3694.
• Impleadment in specific performance suits depends on facts and circumstances, and no rigid rule prohibits it. He cited Sumtibai v. Paras Finance Co. (2007) 10 SCC 82 and Rajesh Kumar Arora v. Smt. Shila 2016 SCC OnLine Del 1277.
• The impugned order had attained finality against the plaintiffs, as their separate appeal was dismissed.

A preliminary objection was raised on the appeal's maintainability under the CCA and CPC provisions.

Reasoning

The Division Bench of the Delhi High Court, comprising Justices Anil Ksheterpal and Harish Vaidyanathan Shankar, first addressed the preliminary objection on maintainability. They distinguished the relied-upon cases (Kandla Export, M.V. Polaris Galaxy, Trex India, and Alka Traders), noting that those dealt with arbitration appeals, admiralty suits, rejection of plaints, or ex parte proceedings, which were inapplicable here. Instead, relying on Gurmauj Saran Baluja v. Mrs. Joyce C. Salim 1988 SCC OnLine Del 295 and Supreme Court precedents like Shah Babulal Khimji v. Jayaben D. Kania (1981) 4 SCC 8 and Jugal Kishore Paliwal v. S. Sat Jit Singh (1984) 1 SCC 358, the Bench held that the impugned order qualifies as a "judgment" under Section 10(1) of the DHC Act. It affects substantive rights (e.g., enlarging the suit's scope and forcing a de novo trial), making the appeal maintainable even if not expressly listed under Order XLIII CPC.

On merits, the Bench analyzed Order I Rule 10(2) CPC, which allows impleadment only if a party's presence is necessary for complete adjudication of the issues involved. They emphasized that suits for specific performance are contract-centric, adjudicating enforceability between contracting parties, and result in judgments in personam (not in rem). Citing the Supreme Court's seminal ruling in Kasturi v. Iyyamperumal (2005) 6 SCC 733, the Bench reiterated that impleading a third party claiming adverse title enlarges the suit into one for title/possession, which is impermissible. The two tests from Kasturi for a "necessary party" were applied: (i) right to relief against them in the controversy, and (ii) inability to pass an effective decree without them. A "proper party" requires their presence for effective adjudication.

The Bench distinguished Sumtibai (supra), where impleadment was allowed due to prima facie semblance of title via a registered sale deed involving the defendant's legal representatives (LRs), noting it was fact-specific and not a blanket exception. Similarly, Rajesh Kumar Arora was deemed inapplicable, as it involved multiple applications, pending inter se suits among parties, and the appeal on impleadment was dismissed without merit analysis.

The Bench concluded that Respondent No. 4, as a stranger to the ATS, failed the tests under Order I Rule 10 CPC. His impleadment would introduce collateral title issues, contrary to precedents like Anil Kumar Singh v. Shivnath Mishra (1995) 3 SCC 147, Vijay Pratap v. Sambhu Saran Sinha (1996) 10 SCC 53, and Bharat Karsondas Thakkar v. Kiran Construction Company (2008) 13 SCC 658. The learned Single Judge's reasoning (potential interest and multiplicity avoidance) was flawed, as it overlooked the suit's limited scope. Even assuming Respondent No. 4's prima facie interest, it did not make him necessary or proper for adjudicating the contract's enforceability.

Decision

The appeal was allowed, and the impugned order dated 7 May 2024 (allowing I.A. No. 23592/2023) was set aside, thereby reversing the impleadment of Respondent No. 4 as Defendant No. 2 in CS (Comm) No. 590/2023. Respondent No. 4 was granted liberty to pursue his claims via an independent suit before a competent court. The appeal and pending applications were disposed of accordingly, with no other submissions noted from the parties.

Disclaimer: The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.

Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi

Suggested Title for This Article

": Delhi High Court Sets Aside Order Allowing Co-Ownership Claim in Contract Dispute"