Asian Hotels (North) Ltd. vs Alok Kumar Lodha & Ors.

HELD: 1. At the outset, it is required to be noted that mortgages have been created in favour of different mortgage banks/financial institutions since 1982 onwards which have been extended and/or rolled over, refinanced and replaced from time to time. The mortgages are created not only with respect to the shops/premises occupied by the original plaintiffs, but with respect to the entire premises/Hyatt Residency Hotel. The respective original plaintiffs are granted licenses for individual shops which are part of entire premises. According to the appellant, first mortgage was created in the year 1982. At that time, none of the original plaintiffs were license holders. They have been granted license for individual shops at the premises from 1983 onwards to various shopkeepers including respondents-original plaintiffs. The appellant, being owner – licensor, has terminated the respective licenses granted in favour of respective license holders – original plaintiffs. The revocation of the license is subject matter of respective suits. Therefore, the only controversy/issue in the respective suits is with respect to revocation of the respective licenses. By way of an amendment of the plaint the plaintiffs now want to challenge the mortgages/charges on the entire premises created by the appellant. As such, the original plaintiffs are not at all concerned with the mortgages created by the appellant which is required for the continuous development of the hotel. By the purported amendment, the original plaintiffs have now prayed to declare that all the mortgages/charges created on the premises as void ab-initio. Even such a prayer can be said to be too vague. How the original plaintiffs can now can be permitted to challenge various mortgages/charges created from time to time. At this stage, it is required to be noted that even under the License Agreement (clause 13) the Licensor shall have the right to create charges/mortgages as and by way of first charge on its land, premises and the buildings (including shops) constructed and to be constructed, in favour of financial institutions and banks as security for their terms loan advanced/to be advanced to the licensor for the completion of its hotel project. Therefore, in fact original plaintiffs being the licensee are aware that there shall be charges/mortgages on the entire premises and the buildings including the shops. In that view of the matter, now after a number of years, plaintiffs cannot be permitted to challenge the mortgages/charges created on the entire premises including shops. [Para 7][136-E-H; 137-A-D]

2. The High Court while allowing the amendment application in exercise of powers under Order 6 Rule 17 of the Code of Civil Procedure has not properly appreciated the fact and/or considered the fact that as such, by granting such an amendment and permitting plaintiffs to amend the plaints incorporating 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 plaintiffs to amend the plaint including a prayer clause nature of the suit is likely to be changed, in that case, the Court would not be justified in allowing the amendment. It would also result in misjoinder of causes of action. From the impugned order passed by the High Court, it appears that what has weighed with the High Court is that plaintiffs, is the dominus litus and heavy reliance is placed in the case of Kasturi. However, the principle that the plaintiffs is the dominus litus shall be applicable only in a case where parties sought to be added as defendants are necessary and/or proper parties. Plaintiffs cannot be permitted to join any party as a defendant who may not be necessary and/or proper parties at all on the ground that the plaintiffs is the dominus litus. In view of the above and for the reasons stated above, High Court has committed serious error in allowing the application under Order

6 Rule 17 and under Order 1 Rule 10 of the Code of Civil Procedure by permitting original plaintiffs to amend the plaint including prayer clause by which, the plaintiffs have now prayed to declare the charges/mortgages on the entire premises as voidab initio and permitting the original plaintiffs to join / implead the respective banks/financial institutions as party defendant. The alleged rights of the plaintiffs as perpetual license holders are yet to be adjudicated upon. The licenses of the original plaintiffs have been revoked. Therefore, in a suit challenging revocation of the respective licenses, the plaintiffs cannot be permitted to challenge the respective mortgages/charges created on the entire ORS.

premises as void ab-initio. It is the case on behalf of the appellant that apart from the fact that first charge was created in the year 1982, thereafter said mortgages have been rolled over, refinanced and replaced from time to time for ensuring the continuous development of the Hotel Project/premises which requires consistent upkeep, renovation and upgradation from time to time. Under the circumstances, the impugned orders passed by the High Court allowing the application under Order 6 Rule 17 and under Order 1 Rule 10 of the Code of Civil Procedure are unsustainable, both on facts as well as on law. [Para 8-10][137E-H; 138-A-F]

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

Revajeetu Builders and Developers v. Narayanaswamy and Sons & Ors. (2009) 10 SCC 84 : [2009] 15 SCR 103; Ashutosh Chaturvedi v. Prano Devi (2008) 15 SCC

610 : [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. Jardine Skinner & 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.