PAPPU SINGH & OTHERS vs GAMMON INDIA AND ANR

* IN THE HIGH COURT OF DELHI AT NEW DELHI
RESERVED ON : 03.10.2023
PRONOUNCED ON : 14.12.2023
+ CS(OS) 1778/2015, I.A. 18238/2022, I.As. 19609-10/2022, I.As. 10004-06/2023

PAPPU SINGH & OTHERS ….. Plaintiffs
Through: Dr. Amnitabha Sen, Ms. Aditi Pandey, Mr. Chirag Tuteja, Advs.

versus

GAMMON INDIA AND ANR. ….. Defendants
Through: Mr. Saurabh Suman, Mr. Anuruddh Singh, Advs. for D-1.
Mr. Tarun Johri, Mr. Vishwajeet Tyagi, Advs. for D-2.

CORAM:
HON’BLE MR. JUSTICE DINESH KUMAR SHARMA

O.A. No. 54 of 2023 in CS (OS) No. 1778 of 2015

1. The present chamber appeal has been filed under Chapter 2 Rule 5 of the Delhi High Court Rules,2018 read with section 151 of the C.P.C, 1908 against the order dated21.03.2023 In CS (OS) No. 1778 of 2015, passed by the Ld. Joint Registrar (Judicial) with the following prayer:
a) Pass an order, thereby, setting aside the Order dated 21.03.2023 passed by the Ld. J.R. in I.A. no. 14023/2022 in CS OS no. 1778 of 2015; and
b) Substitute M/s. Gammon Engineers and Contractors Private Ltd., in place of Defendant no.1 i.e., M/s Gammon India Ltd., and
c) Pass such other and further orders as this Hon’ble Court deems fit in the facts and circumstances of the case.

2. Briefly stating the facts of the case, Gammon India Ltd. / defendant No. 1 was granted a tender for the construction of the elevated rail track. Gammon India Ltd. / defendant No. 1 is engaged in the business of civil engineering, design and construction of power transmission and distribution and in order to carry out works the appellant has executed various EPC (engineering procurement and construction) contracts wherein the contractor is made responsible for all the activities from design, procurement, construction, commissioning till handling-over the project.
3. The incident took place when a pre-fabricated concrete segment of the under-construction Metro viaduct collapsed along with a portion of the girder launcher resulting in unfortunate deaths and injuries to various persons. The Respondent No. 1 to respondent No.12/plaintiff had filed a suit for wrongful damages bearing CS(OS) no. 1778 of 2015 against Gammon India Ltd./appellant/defendant No. 1/and against the Delhi Metro Rail Corporation Ltd./Respondent no. 14 seeking inter alia, compensatory damages, at the rate of Rs. 50 Lakhs to the Legal Heirs of each deceased labourer/Plaintiff and Rs. 25 Lakhs to each injured Plaintiff.
4. The Gammon India Ltd./Applicant herein, filed an Interlocutory application registered as I.A. No. 14023/2022 under Order I rule 10 of CPC seeking substitution of defendant no. 1/appellant with the M/s. Gammon Engineers and Contractors Private Ltd./applicant in the suit pursuant to a scheme of arrangement allowed by the National Company Law Tribunal at Mumbai on 22.03.2017 under section 391 to 394 of the Companies Act, 1965 wherein Civil EPC Undertaking of the defendant no. 1 was transferred to the applicant/M/s. Gammon Engineers and Contractors Private Ltd.
5. The learned joint registrar vide order dated 21.03.2023 (hereinafter referred to as impugned order) has impleaded the applicant/Mrs. Gammon Engineers and Contractors Private Limited as defendant no.3. It was further inter-alia observed by the learned joint registrar that no prejudice shall be caused to any of the parties if the applicant is impleaded as defendant no. 3 in the present suit. Respondent No. 1 to respondent No. 12 submitted before the Learned Joint Registrar that their right would get prejudiced if in case applicant/ defendant no. 1 is deleted from the array of parties as the dispute is pertaining to the tortious liability.
6. Learned counsel appearing on behalf of Gammon India Ltd./appellant/defendant no. 1 has assailed the Impugned Order and submitted that the finding of ld. Joint Registrar that ‘no prejudice will be caused to any of the parties if the Applicant is impleaded as Defendant no.3’ as unnecessarily dragging a person/entity into litigation causes an unnecessary embarrassment to that person/ entity along with the burden of litigation cost upon that person.
7. Learned counsel appearing on behalf of Gammon India Ltd./appellant/defendant no. 1 has further submitted that the order passed by the Ld. Joint Registrar while disposing of I.A. No. 14023/2022 under Order I rule 10 of CPC is against the scheme of Arrangement duly approved by the National Company Law Tribunal, Mumbai.
8. Learned counsel appearing on behalf of Gammon India Ltd. has further submitted that while allowing the I.A., Ld. Registrar has exceeded its jurisdiction by granting relief that is not even sought under the I.A.
9. Learned counsel appearing on behalf of Gammon India Ltd. has further submitted that the alleged liability of the appellant/defendant no. 1 under the suit cannot be equated with tortious liability as it is already covered under the various statutes like the Workmen Compensation Act, 1923 and Fatal Accidents Acts, 1885. It has also been submitted that the said liability is already undertaken by the Contract BC-25 executed between DMRC (Respondent no. 13/Defendant no. 2) and appellant/defendant no. 1.
10. Learned counsel appearing on behalf of the plaintiff/respondent has submitted that the substitution application has been filed 14 years after the fateful incident. Defendant no. 1 violated the construction guidelines by constructing a faulty design which resulted in the incident. Therefore, the appellant is responsible and cannot shift its burden by entering into any “scheme of arrangement” and attempting to ring-fence the business and to deleverage the balance sheet of Gammon India Ltd.
11. Learned counsel appearing on behalf of the plaintiff has submitted that a tortious liability cannot be shifted by way of a scheme of arrangement. It was submitted that in the present case the company has been sued for compensation for death and such liability cannot be shifted by way of any scheme of arrangement.
12. Learned counsel appearing on behalf of the plaintiff/respondent has further submitted that the instant suit is at the stage of Defendant’s evidence and if substitution is allowed by deleting the Appellant from the array of parties, it will seriously prejudice the case of the plaintiff as M/s. Gammon Engineers and Contractors Private Limited has no knowledge about the incident.
13. Learned counsel appearing on behalf of the plaintiff has further submitted that the Applicant has rightly been impleaded to the array of parties as Defendant no. 3 and it is a matter of trial and may be decided at the time of passing of the Final decree so that the Plaintiff’s rights are not prejudiced.
14. It is a well-settled law, that a “necessary party” is a person who ought to have been joined as a party and in whose absence no effective decree could be passed at all by the court and a “proper party” is a party who, though not a necessary party, is a person whose presence would enable the court to completely, effectively and adequately adjudicate upon all matters in dispute in the suit, though he need not be a person in favour of or against whom the decree is to be made.
15. This court needs to consider the scope and ambit of Order 1 Rule 10, CPC regarding striking out, adding or substitution of parties. The aforementioned rule covers the court’s judicial authority to strike out, add, or substitute parties and not the right of a non-party to be impleaded as a party. In exercising its judicial discretion under Order 1 Rule 10of the Code, the court has to arrive at decision based on logic and reasoning instead of whims and caprice.
16. The Apex court In Kasturi vs Uyyamperumal & Ors (2005 6 SCC 733)inter-alia held as under:
“6…it is now clear that two tests are to be satisfied for determining the question who is a necessary party. Tests are – (1) there must be a right to some relief against such party in respect of the controversies involved in the proceedings (2) no effective decree can be passed in the absence of such party.”

17. Further, the ambit of Order 1 Rule 10,CPChas also been dealt with in Shri Pratap Singh vs Mr. Rahul Gupta and Ors., O.A. No. 19/2011 in CS (OS) 1098/2008 (2013 SCC Online Del 468), wherein this court widely discussed the powers of the court while deciding an application with respect to the judicial discretion of the court to strike out, addition of parties or substitution of parties and inter-alia held as under:
“13.……it can be seen that a wide discretion, has been conferred on the Court in order to decide whether to strike off any party from the suit, who has been indecorously joined either as a plaintiff or defendant or to include the name of any person, whose presence is found to be necessary by the Court to effectively and completely adjudicate upon and settle all the questions involved in the suit. This power vested in the Court can be exercised at any stage of the proceedings and the same can be exercised even suo motu without there being any application of either of the parties.
14. Once I say discretion, certainly it would mean the discretion to be exercised by the Court not quixotically but based on sound judicial principles of law after taking into consideration the facts of the case. The effectual and complete adjudication and settlement of all the questions involved in the suit is the primary test to decide as to whether the impleadment of any party to a suit is required or not”

18. This court is of the considered view that at this stage merely impleading of the party rather than substituting the party in the present suit will not consummate any liability on either of the parties to the suit. The impleadment of M/s. Gammon Engineers and Contractors Private Ltd./defendant no. 3 by Learned joint registrar vide order dated 21.03.2023 will not cause any prejudice to either of the party. Furthermore, Gammon India Ltd. is well-versed with the facts and circumstances of the case and the substitution of Gammon India Ltd. can prejudice the court proceeding. The question of liability will be determined by the court at the time of final disposal in accordance with law. This court is of firm view that M/s. Gammon Engineers and Contractors Private Ltd. is a necessary party and M/s. Gammon India Pvt. Ltd. cannot be deleted at this stage for the effective and complete adjudication of the matter in dispute.
19. The liability of Gammon India Ltd. or of M/s. Gammon Engineers and Contractors Private Ltd. can be determined only at conclusion of the trial. This court does not find any illegality in order of ld. Joint registrar. Hence, the appeal is dismissed.
20. In view of the above, the present application stands disposed of.
CS(OS) 1778/2015, I.A. 18238/2022, I.As. 19609-10/2022, I.As. 10004-06/2023
21. List before Joint Registrar (Judicial) on 05.01.2024.

DINESH KUMAR SHARMA, J

DECEMBER 14, 2023/AR

O.A. No. 54 of 2023 in CS (OS) No. 1778 of 2015 Page 7 of 7