J.D. Kapoor, J.

1. This is an application moved by defendant No. 2 for deletion of its name as it is not a necessary or proper party. Admittedly, suit has been filed on the basis of agreement dated 1.12.1998 between the plaintiff and defendant No. 1 for the breach of said agreement.

2. The impleadment of defendant No. 2 is based upon following facts :

The defendant No. 2 is also an advertising agency engaged in activities which are in competition with plaintiff company, and would have extremely profitable and beneficial use of the confidential and sensitive information of its competitors (such as plaintiff company) wrongly received, unlawfully and in an inappropriate manner through defendant No. 1. Defendant No. 2 in gross violation of all business ethics and industry practice entered into collusion with defendant No. 1, and being aware of the position that defendant No. 1 was fully aware and privy to various confidential and highly sensitive information in respect of the business, operations, profit plans etc. of plaintiff company, enticed defendant No. 1 to join defendant No. 2. The defendant No. 1 did join defendant No. 2 company in pursuance to the collusion as aforesaid. Defendant No. 2, is, therefore, jointly and severally liable along with defendant No. 1 to pay plaintiff the losses and damages set out in para 13.

3. As is apparent defendant No. 2 was not a party to the agreement nor has there been any allegation of commission of any breach of contract on the part of defendant No. 2. What has been pleaded is accusation of violating business ethics and industry practice by entering into collusion with defendant No. 1 as defendant No. 2 was fully aware of confidential and sensitive information in respect of business operation of the plaintiff.

4. Mere allegation of having violated business ethics as being aware of various confidential and sensitive information of the business activities of the plaintiff does not at least make it a necessary and proper party. Unless and until there are allegations of commission of breach of contract on the part of defendant No. 2 it cannot form basis for impleding a party in a suit for damages. Damages have been claimed on account of breach of agreement. Thus, agreement is a genesis of the suit and since defendant No. 2 is not a party nor has any role to play in adhering to or committing breach of terms of the agreement it is neither necessary nor proper party.

5. However, learned Counsel for the plaintiff has referred to Clause 8.1 that provides as under :

..... in the ordinary course of his employment under this agreement he will be exposed to information about the business of the company or any Associated Company and that of their suppliers, customers and clients which amounts to a trade secret is confidential or is commercially sensitive and which may not be readily available to others engaged in a similar business to that of the company or any Associated Company or to the general public and/or which if disclosed would be liable to cause significant harm to the company or any Associated Company.

6. To contend that since defendant No. 2 is enticing defendant No. 1, it is indulging in violation of business ethics, and therefore, is a necessary party is highly untenable. By no stretch of imagination, this can be a ground for impleading defendant No. 2 though it may give rise to another remedy but not by way of impleading in a suit for recovery of damages.

7. However, reliance on Anil Kr. Singh v. Shivnath Mishra @ Gadasa Gur, JT 1995 (1) SC 273 [LQ/SC/1994/1012] , that in the absence of defendant No. 2, suit cannot be effectually adjudicated upon is misplaced as damages have been claimed against defendant No. 1 for breach of agreement entered by him with the plaintiff whereas there are only allegations of clandestine activities or breach of business ethics and collusion against defendant No. 2.

8. As observed above, such allegations cannot render a party a necessary party to enable the Court to adjudicate all questions involved in the suit. In the instant case, the question which is to be decided and determined is whether defendant No. 1 is liable to pay damages to the plaintiff on account of having committed breach of contract. A party cannot be held a necessary party in a suit for damages if it is not a party to the agreement. Party to the agreement alone is liable and not an outsider. Defendant No. 2 is an outsider and stranger to the agreement.

9. In view of the foregoing reasons, this application being I.A. 6693/2000 is allowed and the name of defendant No. 2 is deleted from the array of parties. With this I.A. 69/2000 under Section 20, CPC filed by the plaintiff also stands dismissed.