PETITIONER: <NAME> Vs. RESPONDENT: <NAME> & OTHERS DATE OF JUDGMENT: 23/05/1958 BENCH: <NAME>, BHUVNESHWAR P. BENCH: <NAME>, BHUVNESHWAR P. IMAM, SYED JAFFER KAPUR, J.L. CITATION: 1958 AIR 886 1959 SCR 1111 ACT: Civil Procedure-Addition of parties-Declaratory suit-Claim of status as married wife Admission by husband-Right of wife and son denying plaintiff's claim, to be added as Parties- Mohammedan law-Code of Civil Procedure (Act V of 1908), O. I, r 10(2)- Specific Relief Act , ss. 42 , 43 . HEADNOTE: The appellant instituted a suit against the third respondent, inter alia, for a declaration that she was his lawfully married wife, alleging that though the fact of her marriage was known to all who knew him, he was trying to suppress the facts in such a way that the members of his family should conclude that she was not his <NAME> wife, that he refused to openly acknowledge her as his legally wedded wife and that this conduct on his part had cast a cloud on her status as such wife and was affecting the rights of the issue of the marriage, her three daughters. The third respondent filed his written statement admitting the claim, but on the same date respondents i and 2 made an application under 0. i, r. 10(2), of the Code of Civil Procedure for being impleaded in the suit as defendants on the grounds that they were respectively the wife and son of the third respondent, that they were interested in denying the appellant's status as wife and the status of her children is the legitimate children of the third respondent, that the suit was the result of a collusion between the appellant and the third respondent and that if the appellant was declared to be lawfully wedded to the third respondent, the rights and interests of respondents i and 2 in the estate of the third respondent would be affected. The application was contested by both the appellant and the third respondent. The trial court allowed the application and the order was confirmed by <ORG> in its revisional jurisdiction. The question was whether the lower courts did not exceed their powers in directing the addition of respondents i and 2 as parties-defendants in the action : <NAME> (per <NAME> and <NAME>, disscenting), that in view of the averments in the plaint which showed that not only the third respondent but the other members of his family, including respondents i and 2, were interested in denying the appellant's status as a legally wedded wife, respondents i and 2 were proper parties to the suit. The question of addition of parties under O. I, r. 10, of the Code of Civil Procedure is generally not one of initial Jurisdiction of the court, but of a judicial discretion ; in a suit for a declaration as regards status or a legal character under S. 42 Of 1112 the Specific Relief Act , the rule that in order that a person may be added as a party he must have a present or direct interest in the subject-matter of the suit, is not wholly applicable, and the rule may be relaxed in a suitable case where the court is of the opinion that by adding that party it would be in a better position effectually and completely to adjudicate upon the controversy. In such suits the court is not bound to grant the declaration prayed for, on a mere admission of the claim by the defendant, if the court has reasons to insist upon clear proof, apart from the admission. A declaratory judgment in respect of a disputed status will be binding not only upon the parties actually before the court but also upon persons claiming through them respectively, within the meaning of s. 43 Of the Specific Relief Act. The word " respectively " in the section has been used with a view to showing that the parties arrayed on either side, are really claiming adversely to one another, so far as the declaration is concerned. Per <NAME> facts of the present case do not justify the addition of respondents i and 2 as defendants under the provisions of 0. i, r. 1O(2), of the Code of Civil Procedure, because..:- (1)There is nothing in the pleadings to suggest that respondents 1and 2 were denying the appellant's status as wife of the third respondent, and the court ought not to compel the plaintiff to add parties to the suit where on the face of the pleadings plaintiff has no cause of action against them. (2)Under the Mohammedan law a man is entitled to have four wives at one and the same time and, consequently, as the third respondent has admitted that the appellant was married to him, respondents i and 2 have no locus standi to make any representation in the suit that there was collusion between the appellant and the third respondent. (3)During the lifetime of the third respondent neither the appellant nor her children on the one hand nor respondents i and 2 on the other have any rights in his estate, under the Mohammedan law. (4)Assuming that a declaration in the suit would be binding upon respondents i and 2, which is doubtful having regard to the terms of S. 43 of the Specific Relief Act, that would be no justification for their being impleaded in the suit where the issue is not one of inheritance but one of marriage between the appellant and the third respondent. JUDGMENT:

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 695 of 1957. Appeal by special leave from the judgment and order dated September 17, 1957, of <ORG> in Civil Revision Petition No. 1112 of 1957 arising out of the order dated July 6, 1957, of <ORG>, <ORG>, Hyderabad (<ORG>), made on the application under 0. 1, r. 10, (C. P. C. in Original Suit No. 43/1 of 1957. <NAME>, Attorney-General for India, <NAME>, Solicitor-General of India, <NAME>, Additional Solicitor-General of India, <NAME>, <NAME>, <NAME>, <NAME>, <NAME>, <NAME>, <NAME>, <NAME> and <NAME>, for the appellant.

<NAME>, <NAME> and <NAME>, for respondent No. 1.

Sir <NAME>, <NAME>, <NAME> and <NAME>, for respondent No. 2. <NAME>, <NAME>, <NAME>, <NAME>, <NAME>, <NAME> and <NAME>, for respondent No. 3. 1958. May 23. The judgment of <NAME> and <NAME> was delivered by <NAME> J. <NAME> delivered a separate judgment.

<NAME> appeal by special leave is directed against the concurring judgments and orders of the courts below, allowing the intervention of respondents I and 2 and adding them as defendants 2 and 3 in the suit instituted by the appellant against her alleged husband, now respondent 3, who was the sole defendant in the suit as originally framed. The main question in controversy in this appeal is the true construction of sub-r. (2) of r. 10 of 0. 1 of the Code of Civil Procedure, and its application to the facts of this case which are given below:-

On April 12, 1957, the plaintiff-appellant in this Court- instituted the suit out of which this appeal arises against the third respondent who is the second son of His Exalted Highness the Nizam of Hyderabad, and who will, hereinafter, be referred to as the Prince.

<NAME>

In the plaint she alleged that she is the lawfully married wife of the Prince, the marriage ceremony (Nikah) having been solemnized in accordance with the Shia Law by a Shia Mujtahid on October 19, 1948. The plaintiff also averred that the issue of the marriage were three daughters aged 8, 7 and 5 years; that the fact of the marriage was known to all persons acquainted with the Prince; that there was a prenuptial agreement, whereby the Prince agreed to pay Rs. 2,000 per month to the plaintiff as <NAME>; that the Prince stopped the payment of the allowance aforesaid of Rs. 2,000 per month, since January, 1953, without any reasons and in contravention of the said agreement. On these allegations, she asked for the following two declarations:-

(1)That the plaintiff be declared to be the legally-wedded wife (Mankuha) of the defendant, (2)That a decree be passed in favour of this plaintiff against the defendant declaring her to be entitled to receive from the defendant 1. G. Its. 2,000 per month as Kharch-e-pandan."

It may be noted that she did not make any claim for arrears of the allowance aforesaid since the date the Prince is alleged to have stopped payment of the same. Only ten days later, on April 22, 1957, the Prince filed his written statement, admitting the entire claim of the plaintiff for the two declarations aforesaid. On that very date, an application under 0. 1, r. 10, of the Code of Civil Procedure, on behalf of (1) <NAME>, and (2) Prince <NAME>, minor, under the Guardianship of his mother, the said <NAME>, was made. They are respondents I and 2 respectively in this Court. The <NAME>, respondent 1, claimed to be the " lawful and legally wedded wife" of the Prince, and respondent 2, the son of the Prince by the first respondent. In their petition they stated inter alia: " The plaintiff herself has stated in the plaint that the defendant is trying to suppress the facts of his marriage with the plaintiff so that the members of his family should conclude that the plaintiff is not his Nikah wife, and the defendant is interested in denying the rights and status of the plaintiff.

The petitioners on being joined as parties to the suit will be equally interested in denying the marriage of the plaintiff and her rights and status.......... The peti- tioners have reasons to believe that the above suit is a result of collusion. The object and motive of the plaintiff in instituting the above suit is to adversely affect the relationship of the petitioners and the defendant and also to deprive the rights and interests of the petitioners in the defendant's estate." On June 15, 1957, the plaintiff made an answer to the petition for intervention, filed by respondents I and 2 aforesaid. She denied the right of the interveners to be impleaded in that suit, and asserted that the " possibility of the rights of the petitioners being infringed are very remote, contingent upon their or plaintiff surviving the defendant or other circumstances which may or may not arise." She also founded her objection on the ground that, having regard to the admission of the defendant in his written statement, " there is no serious controversy in the suit." She also added a number of legal objections which need not be specifically noticed as they have not been pressed in this Court. She further asserted that the petitioners (meaning thereby, respondents I and 2) are neither necessary nor proper parties to the suit. She anticipated the ground most hotly contested in this Court, by asserting that the " judgment of <ORG> in this suit will not be conclusive as against petitioners as they allege collusion and they will not be prejudiced by not being made parties." She ends her statement by making the following significant allegation:-

" The alleged collusion and motive attributed to the plaintiff for instituting this suit are denied. On the other hand, the application to be added as defendants is mala fide and malicious and is evidently inspired by some strong force behind them interested in harassing the plaintiff and exposing her to the risk of a vexatious and protracted litigation."

The Prince, in his own answer to the application for intervention, stated that he admitted that the first  respondent is his wife and that the second respondent is his son, and repeated his admission by saying that lie married the plaintiff in October, 1948, and the first respondent in December 1952. He added further that when he married the first respondent, he had already three daughters by the plaintiff, which fact was known to the first respondent at the time of her marriage with him. He supported the plaintiff in her objection to the intervention by asserting that the rights of respondents 1 and 2 will not be affected in any way, and by insisting upon his Muslim right of having four wives living at the same time. He also supported the plaintiff in her denial of the allegation of collusion and " that the suit is intended to adversely affect the relationship of the petitioners and the defendant respondent and to deprive the rights and interests of the petitioners in the defendant-respondent's estate. " He, in his turn, added the following equally significant penultmate para:- " That the petitioners' application has been filed in order to prolong the litigation and that the defen. dant- responaent's father <NAME> appears to be more interested than petitioner No. 1 herself, in creating unnecessary complications in the suit. " On these allegations and counter allegations, after hearing the parties, the trial court, by its judgment and order dated July 6, 1957, allowed the application for intervention, and directed respondents 1 and 2 to be added as defendants. The court, after discussing all the contentions raised on behalf of the parties, observed that there were indications in the record of a possible collusion between the plaintiff and the defendant; that the relief claimed under s. 42 of the Specific Relief Act , being discretionary, could not be granted as of right ; that the presence of the interveners would help the court in unravelling the mysteries of the litigation, and that there was force in the contention put forward on behalf of the interveners that under s. 43 of the Specific Relief Act, any declaration given in favour of the plaintiff will be binding upon the interveners. It also held that in order effectually and completely to adjudicate upon and settle the present controversy, the presence of the interveners was necessary. The plaintiff moved <ORG>, at Hyderabad, under s. 115 of the Code of Civil Procedure, to revise the aforesaid order of the learned trial judge. <ORG>, in a wellconsidered judgment, after discussing the points raised for and against the addition of the parties, and noticing almost all the authorities quoted before us, refused to interfere with the discretion exercised by the trial court, and dismissed the revisional application. It came to the conclusion that the first respondent, the admitted wife of the defendant, and the second respondent, the admitted son by her, are interested in denying the status claimed by the plaintiff, and " have some rights against the estate of the 3rd respondent. The learned Judge of <ORG> further observed When so much sanctity is attached to the status of marriage, it would indeed be strange that persons who are so intimately related to the 3rd respondent as wife and son, should be denied the opportunity of contesting the status of the petitioner as his lawfully married wife............ It cannot be that the petitioner is seeking any empty relief carrying with it the stamp of futility and it is difficult to assume that she is fighting a vain or purposeless litigation. If what she is seeking is a relief which will carry with it certain legal incidents, are not persons interested in denying her status proper parties to the litigation ? " The Court also observed that it was with a view to avoiding multiplicity of suits that r. 10(2) of 0. 1, had made provision foradding parties. The Court noticed the argument under s. 43 of the Specific Relief Act, but did not express any final opinion, because, in its view, it had already reached the " conclusion that the proposed parties are persons whose presence before the court is necessary within the meaning of 0. 1, r. 10 (2), so as to ensure that the dispute should be finally determined once for all in the presence of all the parties interested."

Against the judgment of <ORG>, refusing to set aside the order passed by the learned trial judge, the plaintiff moved this Court and obtained special leave to appeal.

In the forefront of his arguments in support of the appeal, the learned Attorney-General submitted that the court had no jurisdiction to add the first two respondents as defendants in the suit. He relied upon the words of the relevant portion of sub-rule (2) of r. 10 of O. I of the Code, which are as follows:

" (2)............... and that the name of any person who ought to have been joined, whether as plaintiff or defendant, or whose presence before the <ORG> may be necessary in order to-enable the <ORG> effectually and completely to adjudicate upon and settle all the questions involved in the suit, be added.

He rightly pointed out, and there was no controversy between the parties before us, that the added defendants do not come within the purview of the words " who ought to have been joined ", which apparently have reference to necessary parties in the sense that the suit cannot be effectively disposed of without their presence on the record. The learned Attorney-General strenuously argued that it cannot be asserted in this case that the presence of the added defendantsrespondents 1 and 2-before the court was necessary in order to enable the court effectually and completely to adjudicate upon and settle all the questions involved in the suit. He founded this argument on the legal position that the wife and the son of the Princerespondents I and 2-have no present interest in his estate. Their expectancy of succession to the estate of the Prince does not clothe them with any right vested or contingent to intervene in this action. In this connection, he pointed out that r. 10 of 0. 1 of the Code of Civil Procedure, which corresponds to portions of 0. 16, r. 11, of the Rules of the Supreme <ORG> in England, has been the subject-matter of judicial interpretation in many cases. Both, in this country and in England, there have been two currents of judicial opinion, one taking what may be called the narrower view, and the other, the wider view. As illustrations of the former, that is to say, the narrower view, may be cited the cases of <NAME> v. <NAME> (1) and <NAME> v. <NAME> (No. 2) (2). In India, this view is represented by the decision in the case of <CITATION> for Hindu Religious Endowments, Madras (3). On the other side of the line, representing the wider view, may be cited the case of <ORG> v. <ORG> (4). In India, the decisions of <ORG>, in the cases of <CITATION> (5) and <CITATION> (6), were cited as illustrations. But it was contended on behalf of the appellants that whether the narrower or the wider view of the interpretation of sub-r. (2) of r. 10 of 0. I of the Code of Civil Procedure is taken, the result, so far as the present controversy is concerned, would be the same. In the leading case of <NAME> v. <NAME> (1), <ORG> has held that a party who is not directly interested in the issues between the plaintiff and the defendant, but is only indirectly or commercially affected, cannot be added as a defendant because the court has no jurisdiction, under the relevant rule, to bring him on the record even as a " proper party ". That was a suit to restrain the alleged infringement of the plaintiff"s patent by the defendant, <NAME>. The <ORG> held, reversing the order of the trial judge, that the party sought to be added had no direct interest in. the subject-matter of the litigation, and all that could have been said on behalf of the party intervening was that the judgment against the defendant would affect his interest commercially. The <ORG> distinguished the previous decisions in <NAME> v. Krupp(7) and <ORG> v. <NAME> (8), on the ground that in those cases the litigation would have affected the property of the persons not before the court. This leading case of <NAME> v. <NAME> (1) is clearly an authority for the proposition that the court has jurisdiction to add as a party defendant only a person (1)  1 Ch. 487.

(2) [1902] 1 Ch. 911.

(3) (1926) I. L. R. 50 Mad. 34.

(4) [195O] 2 All E. R. 605.

(5) (1881) I. L. R. 5 Mad. 5.2.

(6) A. I. R. 1929 Mad. 443.

(7) (1878) 9 Ch. D. 351 .

(8) (1886) 31 Ch. D. 632.

who is directly interested in the subject-matter of the litigation and not a person who will be only indirectly or commercially affected. <NAME> who agreed with <ORG> in that case, observed that the relevant rule of <ORG>, on its proper construction, authorized the court to add only such persons as would be bound by the judgment to be given in the action, but did not authorize the court to add any persons who would not be so bound and whose interest may only indirectly be affected in a commer- cial sense. To the same effect is the decision in Re I. G. Farbeninadusrie A. G. Agreement (1). The <ORG> held that in order that a party may be added as a defendant in the suit, he should have a legal interest in the subject-matter of the litigation-legal interest not as distinguished from an equitable interest, but an interest which the law recognizes. Lord Greene M. -R. giving the judgment of the <ORG>, also observed that the court had. no jurisdiction to add a person as a party to the litigation if he had no legal interest in the issue involved in the case. In the case of <CITATION> (2), in which the wider view of the interpretation of the relevant rule was taken, <NAME> delivering the judgment of the <ORG>, observed that the wider interpretation which enabled the court to avoid conflicting decisions on the same question and which would finally and effectually put an end to the litigation respecting it, should be adopted. But in that case also the party added as defendant was interested in the subject- matter of the litigation, though there was no impediment to the court determining the issues between the parties originally before the court. The learned Judge, on a discussion of the English and Indian cases on the subject, came to the conclusion that a material question common to all the parties to the suit and to third parties should be tried once for all. He held that to secure this result the court bad a discretion to add parties-a discretion which has to be judicially exercised, that is, that by adding the new parties the court should not inflict injustice upon the parties already on the record, in the sense (1)  2 All E. R. 525.

(2) (1881) I.L.R. 5 Mad. 52.

that they would be prejudiced in the fair trial of the questions in controversy.

The two Madras decisions in <CITATION> for Hindu Religious Enclowmentg, Madras (1) and <CITATION> (2) appear to have taken conflicting views on the question whether <ORG> could be added as a party to the litigation not because it was directly interested in the subjectmatter of the litigation, but because the law enacted by the legislature of that State had been questioned. this controversy appears to have been raised in <ORG> in the case of <ORG> Mst. <NAME> (3). In that case the provincial legislature of the United Provinces, as it then was, had enacted the United Provinces Regularization of Remissions Act (XIV of 1938) precluding the courts from entertaining any question as to the validity of certain orders of remission of rents. The validity of that Act was questioned in a litigation between a landlord and his tenants. At the <ORG> stage <ORG> was added as a party to the litigation at the instance of the Advocate-General, with a view to enabling the <ORG> to come up in appeal to <ORG> in order to obtain a more authoritative pronouncement on the vales of the Act. In <ORG> the power of the <ORG> to add <ORG> as a party was specifically questioned. <NAME> noticed the two Madras decisions referred to above but assumed that there was jurisdiction in the <ORG> in a proper case to do so, and, therefore, did not express his considered opinion in view of the fact that his two colleagues, <NAME> and <NAME> had agreed, though for different reasons, in the view that the <ORG> had jurisdiction to implead the <ORG> though it was only indirectly interested in the litigation. <NAME> J. was inclined to take the view that there was a discretion in the <ORG> to add the <ORG> as a party. On the other hand, <NAME> (1) (1926) I.L.R. 50 Mad. 34. (2) A.I.R. 1929 Mad 443. (3)  F.C.R. 110.

was inclined to take the view that the <ORG> did not stand on the same footing as a private third party for all purposes. He took the view that the <ORG> as the guardian of the public interest should not be called upon to show some pecuniary or proprietary interest or interest in public revenue in the questions involved, to be added as a party. He also observed that in a case where the <ORG> intervention was concerned, " it must be decided on broad grounds of justice and convenience and not merely as turning on the interpretation of a particular rule in the Civil Procedure Code." Discussing the question whether it was a matter of discretion or of Jurisdiction in the court to make an order adding a party, the learned Judge made the following observations :-

" In my opinion, there is no case here of defect of jurisdiction in the sense in which it is said that consent cannot cure a defect of jurisdiction. It is true that in <NAME> v. <NAME> (1), <ORG> observed that the question was not one of " discretion but of jurisdiction ". But as the antithesis shows, the learned L. J. apparently had in mind the difference between the decision of the question of joinder on the interpretation of a rule of law and a direction given by the lower court in the exercise of its discretion, because in the latter case the court of appeal would generally be reluctant to interfere. It may even be regarded as a case of excess of jurisdiction within the meaning of s. 115 of the Civil Procedure Code, but that will not make the order void in the sense that it may be ignored or treated as if it had never been passed." It would thus appear that the courts in India have not treated the matter of addition of parties as raising any question of the initial jurisdiction of the court. It may sometimes involve a question of jurisdiction in the limited sense in which it is used in s. 115 of the Code of Civil Procedure. It is no use multiplying references bearing on the construction of the relevant rule of the Code relating to addition of parties. Each case has to be determined on its own facts, and it has to be recognized that no decided cases have been brought to our notice which (1) [1892] 1 Ch. 487.

can be said to be on all fours with the facts and circumstances of the present case. There. ,cannot be the least doubt that it is firmly established as a result of judicial decisions that in order that a person may be added as a party to a suit he should have a direct interest in the subject-matter of the litigation whether it raises questions relating to moveable or immoveable property. In the instant case, we are not concerned with any controversy as regards property or estate. Hence, all the cases cited at the bar, laying down that a person who has no present interest in the subjectmatter cannot be added, are cases which were con- cerned with property rights. In this case, we are concerned primarily with a declaration as regards status which directly comes under the provisions of s. 42 of the Specific Relief Act. We are concerned, in this case, with the following provisions of s. 42 :-

" 42. Any person entitled to any legal character, or to any right as to any property, may institute a suit against any person denying. or interested to deny, his title to such character or right, and the <ORG> may in its discretion make therein a declaration that he is so entitled, and, the plaintiff need not in such suit ask for any further relief." This section recognizes the right in any person to have a declaration made in respect of his legal character or any right to property. To such a suit for a mere declaration, any person denying or interested to deny the existence of any legal character or the alleged right to any property, would be a necessary party. The plaintiff appellant chose to implead only her alleged husband, the <NAME>. There is no clear averment in the plaint that the defendant had ever denied the legal character in question, namely, the status of the plaintiff as his wife. The substance of the plaintiff's cause of action is stated in para. 3 of the plaint. From the words used in the said para. of the plaint, it is clear that the persons who are alleged to have known the existence of the relationship of husband and wife between the parties would include the respondents 1 and 2, and that the <NAME> had been trying to suppress the fact of  the marriage with the plaintiff so as to lead the members of his family to conclude that the plaintiff is not his wife,. The gravamenofthechargeagaiiistthe<NAME> is that " he refuses to openly acknowledge the plaintiff as his legally wedded wife, ", and that this conduct has cast a cloud oil the plaintiff's status as such wife. Such a conduct on the part of the <NAME>, it is further alleged, is not only injurious and detrimental to the rights of the plaintiff, but is adversely affecting the rights of the issue of the marriage, meaning thereby, the three daughters by the plaintiff. It is thus clear, as was contended on behalf of respondents I and 2, that reading between the lines of the averments aforesaid, it is suggested that not only the defendantrespondent 3-but the other inembers of his family, including respondents I and 2, were interested ill deying the plaintiff's alleged status, and that this suit-,",as being instituted to clear the cloud cast not, only upon the plaintiffs status as a legally wedded wife, but upon the status of the three daughters by her. It is clear, therefore, that if the plaintiff had been less disingenuous and had impleaded the first and the second respondents also, as defendants in the suit, the latter could not have been discharged from the action on the ground that they had been unnecessarily impleaded and that no cause of action bad been disclosed against them. They would certainly have been proper parties to the suit. This is a very important aspect of the case which has to be kept ill view in order to determine the question whether respondonts, 1 and 2 had been rightly added as defendants on their own intervention. It is also clear on the words of the statute, quoted above, that the grant of a declaration such as is contemplated by s. 42, is entirely in the discretion of the court. At this stage it is convenient to deal with the other contention raised on behalf of the appellant namely, that in view of the unequivocal admission of the plaintiffs claim by the <NAME> in his written statement and repeated as aforesaid in his counter to the application for intervention by respondents I and 2, no serious controversy now survives. It is suggested that the declarations sought in this case would be granted as a matter of course. In this connection, our attention was called to the provisions of r. 6 of 0. 12 of the Code of Civil Procedure, which lays down that upon such admissions as have been made by the <NAME> in this case the court would give judgment for the plaintiff. These provisions have got to be read along with r. 5 of 0. 8 of the (,ode with particular reference to the proviso which is in these terms:-

" Provided that the <ORG> may in its discrettion require any fact so admitted to be proved otherwise than by such admission."

The proviso quoted above is identical with the proviso to s. 58 of the Indian Evidence Act, which lays down that facts admitted need not be proved. Reading all these provisions together, it is manifest that the court is not bound to grant the declarations prayed for even though the facts alleged in the plaint may have been admitted. In this connection, the following passage in <NAME>'s " Actions for Declaratory Judgments ", Vol. 1, p. 340, under art. 177 , is relevant:-

" A claim of legal or equitable rights and denial thereof on behalf of an adverse interest or party constitutes a ripe cause for a proceeding, seeking declaratory relief. A declaration of rights is not proper where the defendant seeks to uphold the plaintiff-, in such an action. The required element of adverse parties is absent." " In others words the controversy must be between the plaintiff and the respondent who asserts an interest adverse to the plaintiff. In the absence of such a situation there is no justiciable controversy and the case must be characterized as one asking for an advisory opinion, and as being academic rather than justiciable..............." " i.e., there must be an actual controversy of justiciable character between parties having adverse interest." Hence, if the court, in all the circumstances of a parti- cular case, takes the view that it would insist upon the burden of the issue being fully discharged, and if the, court, in pursuance of the terms of s. 42 of the Specific Relief Act, decides, in a given case, to insist upon clear proof of even admitted facts, the court could not be said to have exceeded its judicial powers. That the plaintiff herself or her legal advisers did not take the view contended for on her behalf, is shown by the fact that a few days after the filing of the written statement of the Prince, on April 27, <NAME>, the Mujtahid, who is alleged to have solemnized the marriage, was examined in court, and he gave his statement on oath in support of the plaintiff's claim. He also proved certain documents in corroboration of the plaintiff's case and his own evidence. This witness was not cross-examined on behalf of the defendant. It was stated before us, on behalf of respondents 1 and 2, that there were pieces of documentary evidence apart from certain alleged admissions made by or on behalf of the plaintiff, which seriously militate against the plaintiff's case and the statement of the witness referred to above. We need not go into all that con- troversy, because we are not, at this stage, concerned with the truth or otherwise of the plaintiffs case. At this stage we are only concerned with the question whether in adding respondents I and 2 as defendants in the action, the courts below have exceeded their powers. It is enough to point out at this stage that the plaintiff did not invite the court to exercise its powers under r. 6 of 0. 12 of the Code of Civil Procedure, and, therefore, we are not called upon to decide whether the trial court was right in not pronouncing judgment on mere admission. The court, when it is called upon to make a solemn declaration of the plain- tiff's alleged status as the defendant's wife, has, naturally, to be vigilant and not to treat it as a matter of course, as it would do in a mere money claim which is admitted by the defendant. The adjudication of status, the declaration of which is claimed by the plaintiff, is a more serious matter, because by its intendment and in its ultimate result it affects not only the persons actually before,the court in the suit as originally framed, but also the plaintiff's progeny who are not parties to the action, and the respondents 1 and 2.

If the declaration of status claimed by the plaintiff is granted by the court, naturally the three daughters by the plaintiff would get the status of legitimate children of the <NAME>. If the decision is the other way, they become branded as illegitimate. The suit clearly is not only in the interest of the plaintiff herself but of her children also. It is equally clear that not only the <NAME> is directly affected by the declaration sought, but his whole family, including respondents I and 2 and their descendants, are also affected thereby. This, naturally leads us to a discussion of the effect of s. 43 of the Specific Relief Act, which goes with and is an integral part of the scheme of declaratory decrees which form the subject-matter of Ch. VI of the Act. That section is in these terms:- " 43. A declaration made under this Chapter is binding only oil the parties to the suit, persons claiming through them respectively, and where any of the parties are trustees, on the persons for whom, if in existence at the date of the declaration, such parties would be trustees." On behalf of the appellant it was contended by the learned Attorney-General that the declaration of status sought in this suit by the plaintiff will be binding only upon her and the <NAME>, and being a rule of' res judicata will bind only the parties to the suit and their privies. It was further contended that respondents I and 2 are in no sense such privies. The argument proceeds thus: Section 43 lays down a rule of res judicata in a modified form, and it was so framed as to make it clear beyond all doubt by the use of the word " only " that a declaration under s. 42 is binding on the parties to the suit and on persons claiming through them respectively. If any question arises in the future after the inheritance to the estate of the, <NAME> opens out, it could not be said that the plaintiff and respondents 1 and 2 were claiming through different persons under a conflicting title which was the core of the rule of res judicata. In this connection, reliance was placed upon the decision of <ORG> 'in the case of <NAME> v. <NAME> (1). That case lays down that a decision in a former suit that the common ancestor of all the parties to the subsequent suit was entitled to the whole of the profit of a market in dispute in the two litigations, as against his co- sharers in the zamindari in which the market was situate, does not operate as res judicata in a subsequent dispute between those who claim under him. In this connection, reliance was also placed upon a decision of <ORG> in the case of <CITATION> (2), to the same effect. Mr. <NAME>, appearing on behalf of the .<NAME>, the third respondent, supported the appellant by raising a further point that the words " claiming through " mean the same thing as " claiming under in s. 11 of the Code of Civil Procedure, laying down the rule of res judicata, and that those words are not apt to refer to a declaration. of a more personal status, and that they mean the same thing as pi-ivy in estate ,is understood under the common law. He called our attention to the following passage in ' Bigelow on Estoppel', 6th Edn., at pp. 158 and 159:-

" In the law of estoppel one person becomes privy to another (1) by succeeding to the position of that other as regards the Subject of the estoppel, (2) by holding in subordination to that other...................... But it should be noticed that the ground of privity is property and not personal relations To make a man a privy to an action he must have acquired an interest in the subject-matter of the, action either by inheritance, succession, or purchase from a party subsequently to the action, or he must hold property sub- ordinately."

He also drew our attention to similar observations in " Casperz on Estoppel". On the other hand, Mr. <NAME> and Sir <NAME>, appearing on behalf of respondents I and 2, respectively, contended that " claiming through " and " claiming under " have not exactly the same significance in law, and that the rule laid down in s. 43 of the Specific Relief Act does not stand on the same footing as a rule of res judicata contained in s. II of the Code of (1) (1903) L.R. 30 I.A. 71.

(2) (1882) I.L. R. 6 ivlad. 43.

Civil Procedure, or estoppel by judgment, as discussed in the works of <NAME> and (<NAME>, relied upon on behalf of the other side. On behalf of respondents I and 2 it was further contended that the suit was really intended not to bind the Prince who has shown no hostility to the claim, but to bind respondents 1 and 2. It was also contended that if the court were to grant the declaration that the plaintiff is the lawfully wedded wife of the Prince, if a controversy arises hereafter between the plaintiff and her children on the one side and respondents I and 2 on the other, this judgment will not only be admissible in evidence in that litigation, but will be binding upon thereon the plaintiff', because she is privy to the judgment, and oil her children, because they will be claiming the benefit of the declaration through her, and on respondents I and 2 because they are admittedly the wife and son of the Prince and will be manifestly claiming through him.

In this connection, it has to be remarked that the discretion vested in a court to grant a merely declaratory relief as distinguished from a judgment which is capable of being enforced by execution, derives its utility and importance from the objects it has in view, namely to " prevent future litigation by removing existing causes of controversy to quiet title" and "to perpetuate testimony ", as also to avoid multiplicity of proceedings. This practice of granting declaratory reliefs, which originated in England in the Equity courts, has been very much extended in America by statutory provisions. In India, the law has been codified in the Specific Relief Act , in Ch. VI, and has, in a sense, extended the scope of the rule by providing for declarations not only in respect of claims to property but also in respect of disputes as regards status. From the terms of s. 42 of the Act, it would appear that the Indian courts have not been empowered to grant every form of declaration which may be available in America. In its very entire, a declaratory decree does not confer any new right, but only clears Lip mists which may have gathered round the title to property or to status or a legal character. When a court makes a declaration in respect of a disputed status, important rights flow from such a judicial declaration. Hence, a declaration granted in respect of a legal character or status in favour of a person is meant to bind not only persons actually parties to the litigation, but also persons claiming through them as laid down in s. 43 of the Act. It is, thus, a rule of substantive law, and is distinct and separate from the rule of res judicata or estoppel by judgment. The doctrine of res judicata, as it has been enunciated in a number of rules laid down in s. 11 of the Code of Civil Procedure, covers a much wider field than the rule laid down in s. 43 of the Specific Relief Act. For example, the doctrine of res judicata lays particular stress upon the competence of the court. On the other hand, s. 43 emphasizes the legal position that it is a judgment in personam as distinguished from a judgment in rem. A judgment may be res judicata in a subsequent litigation only if the former court was competent to deal with the later controversy. No such considerations find a place in s. 43 of the Specific Relief Act. Again, a previous judgment may be res judicata in a subsequent litigation between parties even though they may not have been eo nomine parties to the previous litigation or even claiming through -them. For example, judgment in a representative suit, or a judgment obtained by a presumptive reversioner will bind the actual reversioner even though he may not have been a party to it, or may not have been claiming through the parties in the previous litigation.

When a declaratory judgment has been given, by virtue of s. 43 , it is binding not only on the persons actually parties to the judgment but their privies also, using the term 'privy' not in its restricted sense of privy in estate, but also privy in blood. Privity may arise (1) by operation of law, for example, privity of contract; (2) by creation of subordinate interest in property, for example, privity in estate as between a landlord and a tenant, or a mortgagor and a mortgagee; and (3) by blood, for example, privity in blood in the case of ancestor and heir. Otherwise, in some conceivable cases, the provisions of s. 43 , quoted above, would become otiose. The contention raised on behalf of the appellant, which was strongly supported by the third respondent through Mr. <NAME>, as stated above, is that a declaratory judgment would not bind anyone other than the party to the suit unless it affects some property, in other words, unless the parties were privy in estate. But such a contention would render the provisions of s. 43 aforesaid, applicable only to declarations in respect of property and not declarations in respect of status. That could not have been the intendment of the statutory rule laid down in s.

43. Sections 42 and 43 , as indicated above, go together, and are meant to be co-extensive in their operation. That being so, a declaratory judgment in respect of a disputed status, will be binding not only upon the parties actually before the court, but also upon persons claiming through them respectively. The use of the word only' in s. 43 , as rightly contended on behalf of the appellant, was meant to emphasize that a declaration in Ch. VI of the Specific Relief Act, is not a judgment in rem. But even though such a declaration operates only in personam, the section proceeds further to provide that it binds not only the parties to the suit, but also persons claiming through them, respectively. The word I respectively' has been used with a view to showing that the parties arrayed on either side, are really claiming adversely to one another, so far as the declaration is concerned. This is another indication of the sound rule that the court, in a particular case where it has reasons to believe that there is no real conflict, may, in exercise of a judicial discretion, refuse to grant the declaration asked for for oblique reasons. As a result of these considerations, we have arrived at the following conclusions:-

(1) That the question of addition of parties under r. 10 of

0. I of the Code of Civil Procedure, is generally not one of initial jurisdiction of the court, but of a judicial discretion which has to be exercised in view. of all the facts and circumstances of a particular case; but in some cases, it may raise controversies as to the power of the court, in contra distinction to its inherent  jurisdiction, or, in other words, of jurisdiction in the limited sense in which it is used in s. 115 of the Code; (2)That in a suit relating to property in order that a person may be added as a party, he should have a direct interest as distinguished from a commercial interest in the subject matter of the litigation;

(3)Where the subject-matter of a litigation is a declaration as regards status or a legal character, the rule of present or direct interest may be relaxed in a suitable case where the court is of the opinion that by adding that party it would be in a better position effectually and completely to adjudicate upon the controversy ; (4)The cases contemplated in the last proposition have to be determined in accordance with the statutory provisions of ss. 42 and 43 of the Specific Relief Act ;

(5)In cases covered by those statutory provisions the court is not bound to grant the declaration prayed for, on a mere admission of the claim by the defendant, if the court has reasons to insist upon a clear proof apart from the admission;

(6)The result of a declaratory decree on the question of status such as in controversy in the instant case affects not only the parties actually before the court but generations to come, and, in view of that consideration, the rule of I present interest' as evolved by case law relating to disputes about property does not apply with full force; and (7)The rule laid down in s. 43 of the Specific Relief Act is not exactly a rule of res judicata. It is narrower in one sense and wider in another.

Applying the propositions enunciated above to the facts of the instant case, we have come to the conclusion that the courts below did not exceed their power in directing the addition of respondents I and 2 as parties-defendants in the action. Nor can it be said that the exercise of the discretion was not sound. Furthermore, this case comes before us by special leave and we do not consider that it is a fit case where we should interfere with the exercise of discretion by the courts below. The appeal is, accordingly, dismissed. As regards the question of costs, we direct that it will abide the ultimate result of the litigation and will be disposed of by the trial court.

<NAME> regret I cannot agree with the opinion of my learned brethren expressed in the judgment just delivered. The appellant in her plaint had asked for a declaration that she was a legally wedded wife of respondent 3 and that she was also entitled to receive from him Kharch-e-Pandan at the rate of Rs. 2,000 per month. This respondent filed his written statement in which he unequivocally admitted that the appellant was married to him and that she was also entitled to the Kharch-e-Pandan as claimed in the plaint. He further admitted that the appellant bore him three issues out of the marriage. The appellant sought no relief or any declaration against respondents 1 and 2 as, indeed, she could not have, because she had no cause of action against them. There is nothing in the pleadings of the appellant and respondent 3 which discloses that respondents I and 2 have any cause of action against the appellant. Respondents 1 and 2, however, filed an application under 0. 1, r. 10(2), of the Code of Civil Procedure before the Judge of <ORG>, Hyderabad, praying that they should be added as parties to the suit filed by the appellant. The Judge of <ORG> allowed the application and his decision was affirmed by <ORG>. The question for decision in this appeal is whether the J@dge of <ORG> was justified in adding respondents I and 2 as parties to the suit and whether the decision of <ORG> upholding his order should be affirmed. The provisions of 0. 1, r. 1, state as to who may be joined as plaintiffs in a suit and 0. 1, r. 3, states who may be joined as defendants. The parties who are to be joined as plaintiffs and defendants in a suit are persons in whom and against whom any right to relief in respect of or arising out of the same act or transaction or series of acts or transactions is alleged to exist, whether jointly, severally or in the alternative, where, if such persons were parties in separate suits, any common question of law or fact would arise. Independent of this, a court has jurisdiction under 0.1, r. 10(1), to substitute or add as plaintiff any person whom it considers necessary for the determination of the real matters in dispute. Under 0. 1, r. 10(2), the court has the power to strike off a party who has been improperly joined, whether as plaintiff or defendant, and to join, as plaintiff or defendant, any person who ought to have been joined, or whose presence before the court may be necessary in order to enable it effectually and completely to adjudicate upon and settle all the questions involved in the suit. It is quite obvious from the contents of the plaint and the written statement of respondent 3 that there was no occasion for the appellant to have joined respondents I and 2 as defendants in the suit. There remains, then, to consider whether the circumstances appearing in this case justified the Judge of <ORG> to add respondents 1 and 2 as defendants under the provisions of 0. 1, r. 10(2). Respondents 1 and 2 in their application under 0. 1, r. 10(2), of the Code of Civil Procedure, in essence, relied upon the five following grounds for their plea that they should be added as defendants in the suit:

(1)That respondent I was the lawful and legally wedded wife of respondent 3, (2) That respondent 2 was the son of respondent 3, (3) That respondents 1 and 2 should be joined as parties to the suit because the question to be adjudicated upon would seriously affect their rights and interest in the estate of respondent 3, (4)That by adding respondents 1 and 2 as parties neither a new cause of action would be introduced nor would the nature of the suit be altered, (5)That the issue to be tried in the suit, after res- pondents I and 2 were added as parties, would still be the same as the case made by the appellant was that respondent 3 was interested in denying the appellant's marriage to respondent 3-a fact which respondents I and 2 were equally interested in denying.

The first two grounds afford no justification for respon- dents I and 2 being added as parties to the suit, where the only question to be decided is whether the appellant is married to respondent 3 and whether he had contracted to pay to the appellant Rs. 2,000 a month as <NAME>. Even if the appellant successfully proved that she was married to respondent 3, who had contracted to pay her Rs. 2,000 per month as <NAME>, the status and the rights of respondents I and 2 as wife and son of respondent 3 would remain unaffected. A Mohammedan is entitled to marry more than once and have wives to the number four at one and the same time. This is his right under his personal law and no one can question the exercise of this right by him. In the suit between the appellant and respondent 3, the question as to whether the appellant was married to respondent 3 was a matter entirely personal to the appellant and respondent 3. The appellant claimed that she was lawfully married to respondent 3. It was open to respondent 3 to either deny or admit her claim. In fact, respondent 3 had admitted the claim of the appellant that she was married to him. It is not open to anyone else in the present litigation to say that he has falsely made such an admission. It is true that respondents 1 and 2 have alleged collusion between the appellant and respondent 3. No positive facts are asserted in support of this. The suggestion is based merely on suspicion. Unless the court is justified in adding respondents 1 and 2 as defendants in the suit the suggestion made by them that there is collusion between the appellant and respondent 3 should be ignored by the court on the simple ground that respondents 1 and 2 have no locus standi to make any such representation in the present case. The 3rd, 4th and 5th grounds may be considered together as they are inter-connected. Grounds 4 and 5 suggest that there would be neither a new cause of action introduced nor would the nature of the suit be altered and the issue to be tried in the suit would still be the same even if respondents I and 2 were added as parties. The only issue in the suit filed by the appellant is whether she was married to respondent 3 and whether there was a contract by the latter to pay her Rs. 2,000 per month as <NAME>. If respondents I and 2 are added as parties, questions relating to right of inheritance in the estate of respondent 3 would arise for determination in addition to the only issue stated above in the case. The main ground, upon which respondents 1 and 2 claim that they should be added as parties to the suit, is to be found in the 3rd ground which, in substance, is that if the appellant is declared to be lawfully wedded to respondent 3, then the rights and interests of respondents I and 2 in the estate of respondent 3 would be affected. In other words, in the estate of respondent 3, on his death, in addition to respondents 1 and 2, the appellant and her three children by him would have rights of inheritance. Consequently, the extent of inheritance of respondents I and 2 in the estate of respondent 3 would be considerably diminished. It was urged that if the appellant is given the declaration, which she seeks, the judgment of the court would be in the exercise of matrimonial jurisdiction and it would be a judgment in rem as stated in s. 41 of the Indian Evidence Act. Such a declaration would also be binding on respondents 1 and 2 by virtue of the provisions of s. 43 of the Specific Relief Act. The appellant asked for a declaration under s. 42 of the Specific Relief Act. This section permitted a person who claimed to be entitled to any legal character, or to any right to property, to institute a suit against any person denying, or interested to deny, such character or right. Respondents 1 and 2 was interested in denying the appellant's status as a wife and the status of her three children as the legitimate children of respondent

3. A declaration in her favour would be binding on respondents I and 2 and they would never be in a position to disprove the appellant's marriage to respondent 3. This was an impossible situation where the declaration had been obtained from a court as the result of collusion between the appellant and respondent 3.

This submission presupposes that respondents I and 2 would survive respondent 3. During the lifetime of respondent 3 neither the appellant nor her children on the one hand nor respondents 1 and 2 on the other have any right,-, whatsoever in his estate under the Mohammedan law. During the lifetime of respondent 3 respondents I and 2 would have the right to be maintained by him and, if the appellant is also his wife, then she and her children would also have the right to be maintained by him. The appellant and respondent 1 would also have rights arising out of a contract, if any, between them and respondent 3. None of these rights, however, are rights or interests in the estate of respondent 3. The submission also presupposes that on the death of respondent 3 he would have left behind some estate to be inherited by his heirs. These submissions are entirely speculative and afford no basis for the impleading of respondents 1 and 2 as parties to the appellant's suit. It was said, however, that the right to inherit is a present right in respondents 1 and 2 and if the appellant is declared to be the wife of respondent 3, then that right to inheritance is affected. This contention is erroneous and there is no legal basis to support it. If the appellant is declared to be the wife of respondent 3 such a declaration could not affect the right to inherit on the part of respondents I and 2 in the estate of respondent 3, assuming that respondent 3 on his death left an estate to be inherited and that the appellant and her children and respondents I and 2 survived him. The extent of the inheritance of each one of these may thus become less but so far as that is concerned it cannot be predicated during the lifetime of respondent 3 as to what would be the extent of the inheritance of his heirs. Under the Mohammedan law, by which the parties are governed, respondent 3 could yet validly marry two other women and have children from them, in which case, the inheritance, if any, could not be to the same extent if respondent 3 died leaving only respondents I and 2 as his heirs. The entire question raised by res- pondents I and 2 is based on the supposition that they have rights in the estate of respondent 3. Under the Mohammedan law they have no such rights. It is only in the event of their surviving respondent 3 that their rights will vest in his estate and the extent of their inheritance will be calculated on the number of persons entitled to inherit his estate at the time of his death.

It was urged, however, that unless respondents 1 and 2 are now given an opportunity to show that there was no valid marriage between the appellant and respondent 3, a declaration that there was a marriage between these two persons would be binding on them by virtue of the provisions of s. 43 of the Specific Relief Act. If, therefore, on the death of respondent 3 a question arose as to who were entitled to inherit his estate, respondents I and 2 would not be able to question the rights of the appellant and her children and they would be adversely affected by the declaration. It is somewhat doubtful, having regard to the terms of s. 43 , that such a declaration in the present suit would be binding on respondents I and 2 as they would not be claiming their right to inheritance through the appellant and respondent 3 respectively. Assuming, however, that such a declaration would be binding on them, that would be no justification for their being impleaded in the present litigation where the issue is not one of inheritance but one of marriage between the appellant and respondent 3. If the submission has any substance it might as well be said by any one that he should be impleaded as a party to a suit and should be allowed to contest the suit, although there was no cause of action against him, because the decree in the suit would bind him on the ground of res judicata. It is true that in a suit under s. 42 of the Specific Relief Act it is discretionary with the court to make or not to make the declaration asked for. The exercise of that discretion, however, has to be judicial. In the present case there does not appear to be any legal impediment in the way of the court refusing to make the declaration asked for since respondent 3 had acknowledged the marriage and had admitted the claim for Rs. 2,000 per month as <NAME>. The appellant has not asked for any sum of money to be decreed in her favour. There is no cause of action now left to the appellant which can be the basis for the present suit. The appellant could rely upon the acknowledgement which raises a presumption under the Mohammedan law that she is married to respondent 3. There appears to be no good ground for adding respondents I and 2 as parties to the present suit. If hereafter on the happening of a certain event and the existence of certain circumstance any question arose whether the appellant was married to respondent 3, then those who were interested in disproving the marriage would be in a position to do so and rebut the presumption arising from the acknowledgement. Under O. 1, r. 10, of the Code of Civil Procedure the court has the power to pass orders regarding the adding of parties or striking off the name of a party. Whether the exercise of this power is a matter of jurisdiction or of discretion appears to have been the subject of difference of opinion in the courts of law here and in England. Whichever view may be correct it is. patent that resort to the exercise of such power could only be had if the court is satisfied that it is necessary to make an order under 0. 1, r. 10, in order to effectually and completely adjudicate upon and settle all questions involved in the suit. The court ought not to compel a plaintiff to add a party to the suit where on the face of the plaint the plaintiff has no cause of action against him. If a party is added by the court without whose

-presence all questions involved in the suit could be effectually and completely adjudicated upon, then the exercise of the power is improper and even if it be a matter of discretion such an order should not be allowed to stand when that order is questioned in a superior court. The plaintiff is entitled to choose as defendants against whom he has a cause of action and he should not be burdened with the task of meeting a party against whom he has no cause of action. It was, however, suggested that on the face of the plaint not only respondent 3 was interested in denying his marriage with the appellant but a legitimate inference could be drawn from the contents of the pleadings that respondents 1 and 2 were also interested in denying the marriage. No allegation made in the pleadings even remotely suggests that respondents I and 2 were interested to deny the alleged  marriage of the appellant to respondent 3 or were denying the same. Under s. 42 of the Specific Relief Act a suit may be instituted against any person denying or interested to deny the plaintiffs legal character or right to any property. The plaint does not suggest that respondents 1 and 2 were denying the appellant's status as wife of respondent 3. Such an issue was raised by the appellant against respondent 3 only. In law, it cannot be said that respondents 1 and 2 are interested to deny the status of the appellant as the wife of respondent 3 because the status of respondent I as wife and respondent 2 as the son of respondent 3 is not in the least affected even if the appellant is declared to be the wife of respondent 3, as under the Mohammedan law respondent 3 is entitled to have both the appellant and respondent 1 as his wives and .children through them. The true legal position in the present suit between the appellant and respondent 3 is that respondents I and 2 have no locus standi in such a suit. There is no danger of multiplicity of suits during the lifetime of respondent 3. The suggestion that the present suit would lead to multiplicity of suits is founded on an assumption which no court of law can assume. It cannot be assumed that respondent 3 would die first. It may well be that he may survive both respondents I and 2, in which case, no question of any suit coming into existence at their instance would arise. If the order allowing respondents 1 and 2 to be added as parties in a suit of the present nature is allowed to stand it will open the way to a wider exercise of powers under 0. 1, r. 10, and in a manner which was not contemplated by the Code of Civil Procedure, or s. 42 of the Specific Relief Act or permissible under the Mohammedan law. I would, accordingly, allow the appeal as both the courts below were in error in supposing that this was a case in which the provisions of 0. 1, r. 10, applied and would set aside the orders of the courts below. The appellant is entitled to her costs throughout.

BY COURT: The appeal is dismissed. Costs to abide the result of litigation in the trial court.

Appeal dismissed.


JUDGMENT <NAME>, J.

At the instance of the assessees who are four in numbers, <ORG>, Allahabad, by a consolidated order dated 24-3-1982, has referred the following two common questions of law under section 27(1) of the Wealth Tax Act, 1957 (hereinafter referred to as "the Act") for opinion to this court :

" 1. Whether, on the facts and in the circumstances of the case and on a true interpretation of the trust deeds, <ORG> was justified in law in concluding that the interest of each of the beneficiaries under these trusts on each of the valuation dates, was indeterminate and the beneficiaries were unknown and accordingly in holding that the assessments of the beneficial interests in the trust properties of the beneficiaries could be made on the trustees only under section 21(4) of the Wealth Tax Act, 1957 ?

2. Whether, on the facts and in the circumstances of the case and on a true interpretation of the provisions of section 25(2) of the Wealth Tax Act, 1957, the Commissioner had validly assumed jurisdiction and was justified in law in holding that the assessment made by the Wealth Tax Officer under section 21(2) of the Wealth Tax Act, 1957 were erroneous ?"

It may be mentioned here that in respect of the wife of <ORG>, the assessment years involved are 1974-75 to 1976-77 whereas in respect of the other three assessees, the assessment years involved are 1973-74 to 1977-78.

2. Briefly stated, the facts giving rise to the present reference are as follows:-

Each of the assessees is a private <ORG>. The following is the table of relationships :

<NAME> (deceased) <NAME> Lt. Col.

Sukhdeo Mohan Lt. Col. <NAME> <NAME> (Died) <NAME> <NAME> Vinay Mohan Hemant Mohan Lt. Col. <NAME> executed a deed dated 20-10-1973 in respect of 60,000 equity shares of <ORG> for the benefit of the wife of <NAME>. Under clause 2 of the said trust deed, in the event of her death or her otherwise becoming incapable of acquiring any interest in the property, the beneficiary was to be the second wife of <NAME> (in case he married again) and in case his wife (first) became incapable of acquiring property, then the first son of Shri <NAME> on his attaining majority. In clause 3 it was further provided that if the said Shri <NAME> did not marry and/or in any manner all possibilities of his marriage disappeared, the beneficiary of the trust was to be Shri <NAME> (upon his attaining majority) and failing him, to the other surviving heirs of Shri <NAME>. In clause 4 it was provided that the trustee shall hold the trust property absolutely in trust for and for the benefit of the beneficiary named hereinbefore and administer the same in the manner provided therein. In clause 6 of the deed it was provided that the trust shall come to an end upon the transfer and delivery of the trust property and all the accumulation thereto to the beneficiary in the manner indicated therein whereupon the trustee shall stand discharged, otherwise the trust shall remain in full force.

3. Three similar trusts were earlier created on 22-5-1973 in respect of 60,000 equity shares of <ORG> (i) by <NAME> for the benefit of the first son of <NAME> (in any circumstance), (ii) by Smt. <NAME> for the benefit of the first son of <NAME> and (iii) by Lt. Col. <NAME> for the benefit of the first son of <NAME>. In these trusts it was provided that in case the son named therein died before attaining the age of majority or otherwise became incapable of acquiring any interest in property, the beneficiary will be the next surviving male child. They also provided that if <NAME>, <NAME> or <NAME> (as the case may be) did not beget a son and in any manner all possibilities of begetting a son disappeared and/or the male children having been born, died before attaining majority, the beneficiary would be <NAME>, <NAME> or <NAME> himself (as the case may be).

Accordingly, the trustees named in each case, for the valuation dates as on 31-3-1973 to 31-3-1977 filed the return of wealth declaring the value of shares and accretions in regard thereto in the assessment years subsequent to 1973-74. The Wealth Tax Officer completed the assessments of these assessees in the status of individuals by invoking the provisions of section 21(1) / 21(2) of the Act on the basis that on each of the valuation dates the beneficiaries were known and that their shares were determinate. Subsequent to the making of these assessments and in view of the objection raised in the audit note the Wealth Tax Officer sought to rectify the assessments by issuing notices dated 27-8-1979 under section 35 of the Act on the ground that the status of the assessees had been wrongly adopted. However, the Wealth Tax Officer dropped the reassessment proceedings after considering the replies of the assessees.

4.Thereafter, the Commissioner acting under section 25(2) of the Act, issued notices to the assessees on 13-12-1979 to the effect that the assessments made by the Wealth Tax Officer under section 16(3) were erroneous insofar as they were prejudicial to the interest of the revenue inasmuch as the Wealth Tax Officer had assessed the assessees in the status of the individuals on the ground that the shares of the sole beneficiaries were determinate and had allowed exemptions under section 5(1A) . After considering the replies dated 20-10-1979 filed by each of the assessees, the Commissioner held that the beneficiaries for whom the assets were held by the trustees, were indeterminate and unknown and that the assessees should have been assessed to tax under section 21(4) of the Act. The exemption under section 5(1A) was also held to be inadmissible and, therefore, the tax was held to be leviable at the higher rate of 1.5%. He held that on the relevant valuation date <NAME> had not married, <NAME> and <NAME> were themselves minors, and that <NAME> had no son as he was married only in April, 1977.

5. The assessees being aggrieved preferred separate appeal before the <ORG>. The <ORG> after considering the submissions made by the respective parties was of the view that on each of the valuation date, there was no beneficiary named in the trust deed who could be said to have vested interest in the property of the trust and everyone named as beneficiary in the trust deed was to have a contingent interest which was incapable of getting vested on each of the valuation dates. Therefore, it was held that the assessment of beneficial interest in the trust property of the beneficiaries could be made on the trustees only under section 21(4) of the Act. The order passed by the Commissioner was upheld.

6. We have heard <NAME>, the learned senior counsel assisted by <NAME>, Advocate, on behalf of the applicants, and <NAME>, the learned Standing counsel appearing for the revenue.

The learned counsel for the applicants submitted that each of the trusts has been validly created. The beneficiaries and their interest was also known and determinate and, therefore, they were assessable under section 21(1) of the Act and not under section 21(4) of the Act. He further submitted that the Commissioner had initiated proceedings under section 25(2) of the Act on the basis of an audit objection to which the stand of the department was that the trust is assessable under section 21(1) of the Act and, therefore, the assessment order could not have been said to be either erroneous or prejudicial to the interest of the revenue. He submitted that the proceeding initiated under section 25(2) of the Act was wholly illegal and unwarranted. He relied upon the following decisions:

(i) <CITATION> . Kapil Mohan (2001) 252 ITR 830 (Del);

(ii) <CITATION> (2000) 243 ITR 83 (S C);

(iii) <CITATION> . (1983) 140 ITR 490 (P &H))

(iv) <CITATION> (19971 228 ITR 195 (MP);

(v) <CITATION> (1979) 119 ITR 996 (SC)

(vi) CWT v. Smt. Arundhati Balkrishna Trust (1975) 101 ITR 626 (Guj);

(vii) Jeewanlal (1929) <CITATION> . CIT(1977) 108 ITR 407 (Cal.);

(viii) <CITATION> (2003)259 ITR 5025 (Guj);

(ix) Padmavati Jaykrishna Trust (1966) 61 ITR 66 (Guj);

(x) <CITATION> (1984) 147 ITR 5006 (Mad.);

(xi) <CITATION> (1989) 176 ITR 442 7 (Mad.);

(xii) <ORG> v. CWT(1970) 77 ITR 6 (SC) and

(xiii) Aditanar Educational Institution v. Addl. CIT(1997) 224 ITR 310 (SC).

7. Sri <NAME>, the learned counsel for the revenue, however, submitted that from a perusal of the trust deed it is clear that beneficiaries were not in existence on the relevant valuation dates in respect of each assessment years in question and, therefore, the beneficiaries were indeterminate and the provision of section 21(4) of the Act was applicable. According to him, the Wealth Tax Officer had assessed the trust under section 21(1) of the Act which order was not only erroneous but also prejudicial to the interest of the revenue and the Commissioner was within his right to exercise his jurisdiction under section 25(2) of the Act on the basis of the audit objection. He relied upon the following decisions:

(i) <ORG> (supra); and

(ii) CWT v. Trustee of <ORG> (1977) 108 ITR 555 (SC).

8. Having heard the learned counsel for the parties, we find that the Wealth Tax Officer has assessed each of the applicants under section 21(1) of the Act. Subsequently, on the basis of the objection raised in the audit note, the Wealth Tax Officer sought to rectify the assessment by issuing notice under section 35 of the Act on the ground that the status of the assessees had been wrongly adopted which proceeding was subsequently dropped. Thereafter, the Commissioner initiated the proceeding under section 25(2) of the Act on the ground that the assessment order are erroneous and prejudicial to the interest of the revenue. The said action has been taken on the basis of the audit objection.

9. In the case of <ORG> (supra), <ORG> has held that the opinion of an internal audit party of <ORG> on a point of law cannot be regarded as information within the meaning of section 147(b) of the Income Tax Act, 1961 for the purpose of reopening an assessment. It has further held that although an audit party does not possess the power to pronounce on the law, it nevertheless may draw the attention of the <ORG> to it. Law is one thing and its communication another.

10. In the case of <ORG> (supra), <ORG> has held that only if the order is erroneous and is likely to prejudice the interest of the revenue, the provision of section 263(1) of the Income Tax Act, 1961 which is analogous to the provision of section 25(2) of the Act, shall be attracted.

11. In the case of <ORG> (supra), <ORG> has held that the prerequisite for exercise of jurisdiction by a Commissioner suo motu under section 263 of the Income Tax Act, 1961 is that the order of the <ORG> is erroneous insofar as it is prejudicial to the interest of the revenue. The Commissioner has to be satisfied of the twin conditions, namely, (i) the order of the assessing officer sought to be revised is erroneous; and (ii) it is prejudicial to the interest of the revenue. If one of them is absent, i.e., if the order of the <ORG> is erroneous but is not prejudicial to the interest of the revenue or if the order of the <ORG> is not erroneous but is prejudicial to the interest of the revenue, recourse cannot be had to section 263(1) of the Income Tax Act, 1961 and the provision cannot be invoked to correct each and every type of error committed by the assessing officer. It is only when an order is erroneous then the section will be attracted. <ORG> has further held that the incorrect assumption of fact or incorrect assumption of law will satisfy the requirement of order being erroneous. The phrase "prejudicial to the interest of the revenue" is of wide import and is not confined to loss of tax. If due to an erroneous order of the <ORG>, the revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to the interests of the revenue. <ORG> has further held that every loss of revenue as a consequence of an order of the assessing officer, cannot be treated as prejudicial to the interests of the revenue, for example, when an <ORG> adopted one of the course permissible in law and it has resulted in loss of revenue and where two views are possible and the <ORG> has one view with which the Commissioner does not agree, it cannot be treated as erroneous order prejudicial to the interests of the revenue unless the view taken by the <ORG> is unsustainable in law.

12. In the case of <ORG> (supra), <ORG> has held that the notice under section 263 of the Income Tax Act, 1961 at the instance of <ORG> without exercising his own discretion and judgment cannot be sustained.

13. In the case of <NAME> (supra), <ORG> has followed the principle laid down by <ORG> in the case of <ORG> (supra).

14. In the case of <ORG> (supra), <ORG> has held that the power of revision conferred on the Commissioner by section 25 of the Act is not administrative but is quasi-judicial and in exercise of that power the Commissioner must bring to bear an unbiased mind, consider impartially the objections raised by the aggrieved party and decide the dispute according to procedure consistent with principles of natural justice. He cannot permit his judgment to be influenced by matters not disclosed to the assessee nor by direction of another authority.

15. In the case of Brig. <NAME> (supra), <ORG> has held that the first son of <NAME> trust to be valid trust.

16. In the case of <NAME> (supra), <ORG> has held that if a trust specifies the condition laid down in section 13 of the Transfer of Property Act, 1882 a trust may be created even in favour of an unborn person.

17. In the case of <NAME> (supra), <ORG> has held that a valid trust can be created for prospective wives of minor sons.

18. In the case of <ORG> (supra), <ORG> has held that the language of section 10(22) of the Income Tax Act, 1961 is plain and clear and the availability of exemption should be evaluated each year to find out whether the institution existed during the relevant year solely for educational purposes and not for purposes of profit. The emphasis is that for considering the exemption evaluation should be made each year regarding the purpose for which the institution existed.

19. In the case of <ORG> (supra), <ORG> has held that section 21(4) of the Act would apply where the shares of the beneficiaries were indeterminate or unknown, i.e., where the settler had not determined or specified the shares.

20. In the case of <ORG> (supra), <ORG> was considering a case under section 161(1) of the Income Tax Act, 1961. In that case., a registered settlement deed on 26-11-1979 was executed by <NAME> creating a private clause 4 of the deed dealt with the distribution. It provided that the date of distribution means the day on which shall expire the period of 20 years after execution of the settlement or such earlier or later day as the trustees may in their absolute discretion at any time appoint. The shares of the beneficiaries were also specified. <ORG> had held that the beneficiaries were not required to do anything but to stand wait for something to fall to their respective shares in accordance with the settlement deed, They were merely body of individual and not an association of persons with any intention to carry on common activity to produce taxable income and, therefore, the assessment of the trust would be made under section 161(1) of the Income Tax Act, 1961.

21. In the case of <ORG> (supra), <ORG> was considering a case where under the term of the trust deed the income from the trust properly was made payable to the daughter, in law of the settler for. a life and thereafter the corpus was to be divided and distributed in equal shares amongst the male child or children of the settler's son. During the accounting year relevant to 'the assessment year 1958-59, the settler's son had two sons, namely, 31-12-1957, the number of beneficiaries was definite and their shares were equal, there was no question of their shares being indeterminate and unknown arid, consequently, the provisions of sub-section (4) of section 21 would not apply. It further held that the possibility of a variation in the constitution of the family in future was immaterial and the assessment would have to be made under section 21(1) of the Act.

22. In the case of Trustee of HEM <NAME>'s Family (Remainder Wealth) Trust (supra), <ORG> has held that the question in regard to applicability of sub-section (1) or (4) of section 21 of the Act has to be determined with reference to the relevant valuation date. The Wealth Tax Officer has to determine who are the beneficiaries in respect of the remainder on the relevant valuation date and whether their shares are indeterminate or. unknown. It is not at all relevant whether the beneficiaries may change in subsequent years before the date of distributor depending upon contingencies which may come to pass in future arid so long it is possible that the beneficiaries are known and their shares are determinate, the possibility that the beneficiaries may change by reason of subsequent events such as birth or death would not take the case out of the ambit of sub-section (1) of section 21 of the Act. It has further held that if on the relevant valuation date it is not possible to say with certainty and definiteness as to who would be the beneficiaries and whether their shares would be determinate arid specific, if the event on the happening of which the distribution is to take place occurred on that date, the case will be governed by sub-section (4) of section 21 of the Act. <ORG> has further held that when the beneficiaries are indeterminate or unknown then obviously their shares would also be indeterminate and unknown and they cannot conceive of a case where the share would be determined or named while the beneficiaries are indeterminate or unknown. According to <ORG>, the expression "where the shares of the beneficiaries are indeterminate or unknown" carries with it, by necessary implication, a situation where the beneficiaries themselves are indeterminate or unknown.

23. In the case of <ORG> v. <ORG> (1999) 240 ITR 409 (SC), <ORG> was considering the following clauses of the trust deed executed by Sri <NAME> of Kadiam in East Godavari District for the benefit of his three grandchildren and daughter:--

"18. The trustee for the time being may, at his discretion, apply the whole or any portion of the income of the trust fund for the maintenance, education or advancement in life of the beneficiary and shall accumulate all the residue by investing the same in the aforesaid manner.

20. On the beneficiary completing the age of 25 years, the trustee shall transfer and make over to the beneficiary all the trust funds and on so transferring, this trust deed shall stand cancelled and be of no effect.

21. If the object for which the trust has been created fails and cannot be fulfilled, the trustee for the lime being shall be at liberty to apply the trust property to the benefit of the other sons, daughters of my last daughter, Mrs. <NAME>, in the proportion of one share for a son and half-share for a daughter'." (p. 414) <ORG> has held that-

"On the basis of the aforesaid terms and conditions, it. is apparent that the rights of the beneficiaries to get the corpus of the trust fund conic into existence at the future date when the condition regarding the survival is fulfilled. <ORG>, therefore, rightly arrived at the conclusion that interest of beneficiary is indeterminate or unknown and is contingent and, therefore, held that section 21(4) would be applicable. In this view of the matter, there is no substance in the contention of learned counsel for the appellant that the trust should be assessed tinder section 21(1) of the Wealth Tax Act." (p. 414)

24. From a perusal of the notice issued under section 25(i) of the Act, it appears that the Commissioner had examined the assessment record of each of the assessees and had independently arrived at the conclusion that the orders passed under section 16(3) of the Act by the Wealth Tax Officer was erroneous and prejudicial to the interest of' the revenue. The audit objection was only a piece of opinion which might have been taken into consideration by the Commissioner but his decision is not solely based on (lie audit objection. He has also applied his independent mind and, therefore, in view of the principle laid down by <ORG> in the cases of Trustee of HEM <ORG> (supra) and <ORG> (supra), the view taken by the Wealth Tax Officer that the assessment should have been made tinder section 21(1) of the Act is unsustainable in law. Thus, the orders are not only erroneous but also prejudicial to the interest of the revenue. In this view of the matter, the Commissioner was justified in assuming jurisdiction under section 25(2) of the Act..

25. So far as the question as to whether the shares of the beneficiaries were determined or not, it may be mentioned here that each of the four trust deeds contained identical clauses with variations in the names. In the trust deed dated 20-10-1975, executed by Major <NAME>, on 20-10-1975, the beneficiaries of the trust had been the wife of Sri <NAME> son of late Padma Bhushan Col. <NAME>. The following clauses 2 and 3 of the said trust deed are relevant and are reproduced below:-

"2. That the beneficiary of this trust is and shall be the wife of <NAME> son of Padma Bhushan Lt. Col. <NAME> and in case she dies or otherwise becomes incapable of acquiring any interest in property the beneficiary of this trust shall be the second wife of <NAME> in case he marries again and in case his first wife becomes incapable of acquiring property, then the first male child of <NAME> on the attainment of majority of such male child.

3. If the said <NAME> does not marry and/or in any manner all possibilities of marrying shall disappear then and in that event the beneficiary of this trust shall be the first son of Sri Pankaj Mohan son of' Padma Bhushan Lt. Col. V.R. Mohan upon his attaining majority and failing him to the other surviving heirs of Sri Pankaj Mohan son of Padma Bhushan Lt. Col. V.R. Mohan."

26. It is admitted that <NAME> was not married on the valuation date of each of the assessment years in question nor <NAME>, <NAME> and <NAME> had any son on the respective valuation date. Thus, the beneficiary was unknown. Even though a trust can be created in respect of future wife or an unborn child but the position in law would be that the beneficiary is unknown. As held by <ORG> in the cases of Trustee of HEM Nizam's Family (Remainder Wealth) Trust (supra) and <ORG> (supra), where the beneficiaries are unknown, the shares would also be taken to be indeterminate. In this view of the matter, the provision of section 21(4) of the Act would be applicable and not section 21(1) of the Act. The <ORG> has rightly applied the provisions of section 21(4) of the Act.

27. In view of the foregoing discussion, we answer both the questions of law referred to us in the affirmative, i.e., in favour of the revenue and against the assessees. There shall be no order as to costs.