Supreme Court Upholds High Court's Decision to Exclude NAK Engineering from Civil Suit Appellant's Claim of Successorship Overturned; High Court's Supervisory Role Reaffirmed
In a significant judgment delivered by the Supreme Court of India on January 5, 2026, the apex court upheld the Bombay High Court's decision to exclude NAK Engineering Company Pvt. Ltd. from a civil suit concerning the recovery of service charges. The case revolved around the company's claim to be the successor of the original defendant, Kishore Engineering Company, and its subsequent impleadment in the ongoing litigation.
The bench, comprising Justices Pankaj Mithal and Prasanna B. Varale, dismissed the appeals filed by NAK Engineering, affirming the High Court's exercise of supervisory jurisdiction under Article 227 of the Constitution. The court emphasized the principle that a necessary party is one without whom no effective order can be made, while a proper party is one whose presence is essential for a complete adjudication of the case.
The case originated from a suit filed by Tarun Keshrichand Shah and others against Kishore Engineering Company for unpaid service charges amounting to Rs.75,600 for the period from November 2004 to October 2007. NAK Engineering sought to be impleaded as a defendant, claiming to be the successor of the original defendant company. However, both the trial court and the High Court rejected this claim, with the latter setting aside the trial court's earlier decision to allow the impleadment.
The Supreme Court's judgment underscored the autonomy of plaintiffs in choosing their adversaries, reiterating that they cannot be compelled to add parties against their wishes unless it is proven necessary for effective adjudication. The court noted that NAK Engineering failed to establish itself as a necessary or proper party, as it could not demonstrate a direct legal interest or a right to relief that would be affected by the court's decision.
Highlighting the delay in seeking impleadment, the court observed that NAK Engineering was aware of the suit as early as 2008 but sought impleadment only in 2018, after evidence had been closed. This delay, coupled with the absence of conclusive evidence proving its successorship, led to the court's decision to uphold the High Court's order.
The judgment also clarified that any decree passed in the suit would not affect NAK Engineering, as it was not a party to the litigation. The Supreme Court dismissed the appeals with no order as to costs, concluding that the High Court's interference was justified and that restoring the trial court's order would constitute an illegality.
Bottom Line:
Refund of expired non-judicial stamp papers - Directions issued to State of Uttar Pradesh to refund stamp value upon return of expired stamp papers.
Statutory provision(s): Article 227 of the Constitution of India, Civil Procedure Code, 1908 Order 1, Rule 10
Nak Engineering Company Pvt. Ltd. v. Tarun Keshrichand Shah, (SC) : Law Finder Doc Id # 2833324
