IN THE HIGH COURT OF DELHI AT NEW DELHI SUBJECT : SUIT FOR DISSOLUTION OF PARTNERSHIP. Judgment delivered on:

Transcription

1 IN THE HIGH COURT OF DELHI AT NEW DELHI SUBJECT : SUIT FOR DISSOLUTION OF PARTNERSHIP Judgment delivered on: I.A. No.7642/2011 in CS(OS) 2002/2010 MANJEET SINGH... Plaintiff Through Mr. Vikram Nandrajog, Adv. with Mr. Sushil Jaswal, Adv. Versus HARBANS SINGH & ORS Through Mr. Vijay Kishan Jetly, Adv. with Mr. Vikram Jetly, Adv. for D-1 & 2. Defendants CORAM:- HON BLE MR. JUSTICE MANMOHAN SINGH MANMOHAN SINGH, J. 1. The plaintiff filed the suit for dissolution of partnership of defendant No.3, rendition of accounts, partition and mesne profits and damages. Written statement was filed by the defendant Nos.1 and 2. No replication thereto was filed by the plaintiff. Admission/denial of documents is complete. Framing of issues and statement of plaintiff under Order X Rule 1 of the Code of Civil Procedure, 1908 was recorded on The plaintiff has filed the present application Under Order VI Rule 17 read with Section 151 of the CPC seeking amendment of plaint. Mainly the plaintiff wants to add two additional prayers in the proposed plaint on the basis of additional facts stated in the amendment application.

2 3. Brief facts are that vide perpetual lease deed dated an industrial plot of land admeasuring about sq yards at plot no. 18/1 Block A, Naraina Industrial Area, Phase II, New Delhi, was obtained from President of India in the name of M/s Commercial Glazing Works. Plaintiff and defendant Nos. 1 & 2 alongwith their father Late Shri Basant Singh signed the lease deed dated Shri Basant Singh expired on After his death, the partnership between Late Shri Basant Singh, the plaintiff and defendant No. 1came to an end by operation of law. 4. The assets of the business like machinery remained at property No. 18/1,Block No. A, Naraina Industrial Area Phase II, New Delhi. Thereafter on Smt Madan Kaur wife of Late Sh. Basant Singh and mother of the plaintiff and defendants passed away. They both died intestate. But, as stated, Late Shri Basant Singh was partner to the extent of 40% share in the partnership. The following are their legal heirs :- a. Shri Manjeet Singh (Plaintiff) b. Shri Harbans Singh (Defendant No.1) c. Shri Harvinder Singh (Defendant No.2) d. Shri Jaspal Singh e. Shri Rachpal Singh f. Shri Kuljeet Singh The above legal heirs became entitled to the 40% share of Late Shri Basant Singh. 5. As per the case of the plaintiff, after discussions in March 2005 it was decided that plaintiff, defendant No. 1, defendant No. 2 would become partners of the firm and other legal heirs of Late Shri Basant Singh will execute a relinquishment deed in favour of plaintiff, defendant No.1 & 2. It was also agreed that shares of the plaintiff, defendant No.1 & 2 would be 30%, 30% and 40% respectively. 6. It is alleged by the plaintiff in his plaint that in March 2005, the said firm was reconstituted with plaintiff,

3 defendant Nos.1 & 2 as partners having 30%, 30% and 40% shares respectively. Defendant Nos. 1 & 2 further expressed their desire to convert the property from leasehold to freehold and that further business of the firm be freshly constituted of defendant No. 3 firm thereafter. 7. Procedural steps were initiated in May 2005 to get property No. 18/1, Block A, Naraina Industrial Area mutated. On vide letter from the DDA the property got mutated/transferred from leasehold to freehold in the name of defendant No. 3 firm. Hence, the property vests with the plaintiff and defendant Nos. 1 & 2 they being the partners of defendant No.3. Vide relinquishment deed dated the plaintiff, defendant No.1, Sh. Jaspal Singh and Mr. Rachpal Singh relinquished their respective 1/6th share out of 40% share of Lt. Sh. Basant Singh in favour of defendant No.2. Thus, plaintiff, defendant No.1 and defendant No.2 became owners to the extent of 30%, 30% and 40%. 8. It is stated in the plaint that the Conveyance Deed dated was executed and it was agreed that since plaintiff stays in Ludhiana, the daily affairs of the business would be looked after by defendant Nos.1 & 2. For the purpose of tax assessment and income tax return the head office was shifted to Ludhiana. 9. Plaintiff submits that defendants deny that plaintiff was ever a partner of the firm and the firm was never reconstituted. But, the same can be assessed from the affidavit which was sworn during mutation of the property and the name of plaintiff, defendant Nos.1 & 2 are mentioned in that affidavit as partners. 10. In the written statement, defendant Nos. 1 & 2 pleaded that free hold conversion was sought in the name of M/s Commercial Glazing Works to avoid clause 5 (a) of the Lease Deed dated Whereas, in the lease deed it was

4 mentioned that Naraina property was given to M/s Commercial Glazing Works with Shri Basant Singh and defendant Nos.1 & 2 as partners. 11. In the mutation letter dated , in favour of defendant No. 3, it is mentioned that upon the death of Shri Basant Singh and on the document furnished, the request of transfer/mutation of plot had been acceded to and the property is now allotted to M/s Commercial Works, having partners and their shares in Shri Harvinder Singh- 40%; Shri Manjit Singh- 30% and Shri Harbans Singh- 30% 12. Clause 3 of the said letter dated states that in case documents furnished are found to be false or misrepresented, then, it will be deemed to be a case of concealment of facts and the mutation allowed shall automatically stand withdrawn and allotment/leasehold rights of the plots shall vest in the lessor. Clause 4 of the free hold conveyance deed dated states that if, it is discovered at any stage that this deed has been obtained by misrepresentation or misstatement or fraud, then the deed shall become void at the option of the vendor. 13. Plaintiff denies that there was any release deed dated wherein the plaintiff relinquished his 30% share in favour of defendant Nos. 1 & 2. The deed is false and fabricated. Defendant Nos.1 & 2 did not show any evidence as to how the payment of Rs. 18,99,000/- as consideration was made. The plaintiff also denies that any jewellery was given as consideration for executing the deed. 14. For the procedure, the plaintiff and defendant Nos. 1 & 2 went to Sub- Registrar VII office for execution and registration of free hold conveyance deed dated Due to rush at the office, plaintiff was asked to put thumb impression and signatures on blank papers. Hence, plaintiff conceives that a fraud and mischief has been played by the defendants and the fact about the release deed has come

5 to the knowledge after filing of the written statement by defendants No.1 and 2. As far as shifting of business from Delhi to Ludhiana is concerned, the same was only for the purpose of income tax return. 15. It is alleged by the plaintiff that the property at Naraina was never leased out as alleged by the defendants in their written statement. Hence no question of rent arises. Defendant Nos. 1 & 2 requested plaintiff for blank signed papers and the same were kept at Delhi office to facilitate business of the firm. But, the defendants mis-utilized them and fabricated a partnership deed dated and rent agreement dated for sale of machinery. 16. The changes which plaintiff seeks to make in the plaint are as follows:- a. Amend the title suit for dissolution of partnership, rendition of accounts, partition, mesne profits/damages, declaration and cancellation. b. After para 20 of the plaintiff seeks to add the following para 20A in the plaint:- 20A- that the defendant No. 1 & 2 are claiming to be the owner of 50% share each qua property No. 18/1, Block No.A, Naraina Industrial Area, Phase II, Delhi on basis of a so called release dated It is stated that release deed dated is a fabricated and fraudulent document. Same purports to be a release for consideration of Rs. 18,99,000/- The plaintiff never released/ relinquished his 30% share in the said property in favour of defendants no. 1 & 2. And never received any consideration of Rs. 18,99,000/- from defendants. The said release deed dated purportedly for consideration is void in law as no consideration was paid by defendants no. 1 & 2 to the plaintiff. Said release deed does not record the mode and manner of payment of consideration. There is no separate receipt evidencing payment of consideration. No jewellery

6 was given to the plaintiff as consideration for executing the release deed dated The defendants being based at Delhi, they were coordinating the paper work qua conversion of the property No. 18/1, Block No.A, Naraina Industrial Area, Phase II, Delhi from lease hold to free hold. The plaintiff signed papers and documents for said purpose. On the parties went to the office of Sub Registrar VII for execution and registration of the free hold conveyance deed dated there, in the rush of the office, the plaintiff was asked to out his signatures and thumb impression of the plaintiff were obtained on blank papers on which the defendant no. 1&2 have fraudulently fabricated a release deed dated The plaintiff did not go to the office of the Sub registrar VII for execution and registration of the release deed dated The said release deed dated has been fabricated, obtained by fraud and illegally got registered by defendant no. 1 & 2. On the freehold conveyance deed was got registered but was not given by the office of the Sub Registrar VII and was to be collected later on. The said document was not with the parties to the suit and its registration particulars were not known. The release deed dated is on the face of it, incomplete document and insertions therein have been made illegally by/ at the beast of defendant no. 1 & 2. It is stated that even otherwise, the contention of the defendants no. 1 & 2 that defendant no3/commercial Glazing works was not reconstituted as partnership firm with the plaintiff and defendant no,1 2 as partners thereof, renders the mutation and the freehold conveyance as null and void ab intito. As a consequence, the so called release deed dated based upon the premise that the property is freehold is automatically vitiated and the said document is rendered void ab initio. No rights accrue in favour of defendant nos.1, 2 on basis of the released deed dated the release deed dated is vitiated on account of fraud played by defendant by defendant no. 1,2 and is void ab initio and is nonest.

7 c. In place of existing para 23 of plaint, the plaintiff seeks to substitute para 23 which reads as under:- Para 23 that the cause of action for filing the present suit and seeking the reliefs as prayed for arose in favour of the plaintiff in early 2010 when the defendant 1, 2 denied the rights of the plaintiffs in respect of defendant no. 3 firm, its assets and qua property no. 18/1 Block No. A Naraina Industrial Area, Phase II Delhi. The cause of action further on when the defendant no. 1 2 vide their reply to the plaintiff s notice dated denied the defendant no.3 exists and denied that the plaintiff has nay share of the property no 18/1 Block No. A Naraina Industrial Area, Phase II Delhi and stated that the property was being used by the defendants no 1 2 for their own business. The cause of action further arose on when the defendant supplied the plaintiff with a copy of the fabricated, fraudulent and illegal release deed dated d. In place of existing para 24 of plaint, the plaintiff seeks to substitute para 24, which reads as under:- Para 24 that for relief/ prayer (A) seeking dissolution of partnership firm/ defendant no.3, the suit is valued at Rs. 200/- for purpose of jurisdiction and court fee in the sum of RS. 20/- is affixed for said relief/ prayer (A). for relief/ prayer (B), as accounts have not been disclosed defendants to the plaintiff, the plaintiff is unable to estimate the money due to him on this account and for said relief/prayer (B), as on date, the suit is valued at Rs. 200/- for the purpose of jurisdiction and court fee and court fee in the sum of Rs. 20/- is affixed for said relief/ prayer (B). The market value of Property No.18/1 Block No.A, Naraina Industrial Area, Phase II Delhi and plaintiff share therein, the value of the suit for propose of jurisdiction is fixed at Rs.300,000,000/- and for the purpose of Court fee is fixed at Rs.90,00,000/- as per market value of the said property and Ad valorem Court Fee thereon in the sum of Rs. 90,184/- is fixed for

8 relief/prayer (C). for relief/ prayer (D), the value of the machinery/stock in trade in property which machinery/ stock in trade belongs to defendant no. 3 firm, is worth at least Rs. 15,00,000/- and plaintiff s 30% share would come to Rs. 4,50,000/-. For relief/prayer (D) relating to partition of machinery/stock in trade and grant of plaintiff s share therein the value of the suit for the purpose of jurisdiction is fixed at Rs. 15,00,000/- and for the purpose of Court fee is fixed at 4,50,000/- as per value of the machinery and Advalorem Court Fee thereon in the sum of Rs.6736/- is affixed for relief/prayer (D). The plaintiff is entitled to damages/mesne Rs.75,000/- per month from defendant no 1 & 2 for the unauthorized use by said defendants relating to the plaintiff s 30% share of the property no. 18/1 Block No.A Naraina Industrial Area, Phase II Delhi. The plaintiff claims said damages/ mesne profits w.e.f. date of filing of this suit and has affixed a Court Fee of Rs. 20/- qua relief/ prayer (E). The plaintiff undertakes to pay further Court Fee on exact determination of the value of his share in property no.18/1, Block No.A Naraina Industrial Area, Phase II Delhi, the profits and machinery/stock in trade/ assets of the defendant no.3 firm and towards mesne profits/ damages payable to the plaintiff by defendant no.1 & 2. The plaintiff undertakes to pay the requisite Court Fee on rendition of accounts/partition and grant of mesne profits/ damages being ordered y this Hon ble Court. For the relief/prayer (F) seeking declaration qua the release deed dated the suit is valued at Rs. 200/- for the purpose of jurisdiction and court fee and court fee in the sum of Rs. 20/- is affixed for said relief/prayer (F). For the relief/prayer (G) seeking cancellation of the release deed dated the suit is valued at Rs. 18,99,000/- for the purpose of court fee and court fee in the sum of Rs. 20,888/- is affixed for said relief/ prayer (G). e. In the prayer made in the plaint, the plaint besides retaining the existing para E seeks to add para F & G as follows:-

9 F) Pass a decree of declaration declaring the release deed dated registered at Registration No.5461 in Book No. 1, Vol. No on pages as null and void ab initio. G) Pass a decree of cancellation cancelling the release deed dated registered at Registration No.5461 in Book No. 1, Vol. No on pages as null and void ab initio. Hence, the plaintiff seeks that his suit be amended accordingly. 17. Reply of Defendants to the application filed by the plaintiff under Order VI Rule 17 CPC (a) Defendants submit that plaintiff was granted last opportunity to file replication to the written statement of defendant Nos. 1 & 2. Just to avoid filing of replication, the plaintiff now seeks to file an application under Order VI Rule 17 for amendment of plaint. The written statement filed by the defendants will remain admitted by the plaintiff by virtue of Order VIII Rule 5 of CPC. The plaintiff by filing the present application deprives the defendants of their rights, which have accrued to them by non filing of replication by plaintiff. (b) Defendants submit that in para 5 of the application the business assets/machinery of M/s Commercial Glazing Works remained at property No. 18/1, Block A, Naraina Industrial Area, New Delhi. Thereafter, machinery were sold vide sale letters. The business of the firm came to an end w.e.f. 1st April No machinery was left at Delhi office after the sales thereof. (c) There was no question of reconstruction of firm M/s Commercial Glazing Works. Defendants submit that when a firm has been dissolved it cannot be reconstituted. Defendants deny that the firm was reconstituted in March

10 2005 or anytime with plaintiff and defendant Nos.1 & 2 as partners. (d) What was decided that legal representatives of Shri Basant Singh was 40% only in property /assets bearing property No. 18/1, Block A, Naraina, Industrial Area, Phase II, New Delhi be released by the remaining legal representative in favour of Shri Harvinder Singh defendant No.2. The same is clear from the said relinquishment/release deed dated 17th March The relinquishment deed dated 17th March 2005 states as following And whereas 5/6th share of 40% in the said plot has to devolved upon the releasers of the lease. And whereas the releasers wish to relinquish their shares in the said plot as mentioned hereinabove in favour of their brother Shri Harvinder Singh who is also one of the legal heir of the Lessee (e) From the above, it is clear that what Shri Harvinder Singh (defendant No.2) got the share of Late Shri Basant Singh to the extent of 40% in the said immovable property, as the firm M/s Commercial Glazing works already stood dissolved and accounts settled. The defendant No.2 was already carrying on business of glazing papers, board etc. in partnership with Sh. Jasvinder Pal Singh by virtue of partnership deed dated (f) Defendants submit that the application is mischievous, incorrect and not admitted. The plaintiff had shifted its head office from Delhi to Ludhiana w.e.f By way of Release Deed dated , 20% was given in favour of Sh. Harbans Singh, defendant No.1 and remaining 10% in favour of defendant No.2. (g) After the closure of bank account of the firm on , no other bank account was opened. No fresh partnership came into effect. The defendant No.1 after dissolution of defendant No.3, joined M/s National Glazing and Offset Printers as Manager therein and since then, have been filing his income tax return in that capacity only.

11 18. The defendants deny the statement made by the plaintiff in para 14 of the application, defendants state that it is totally false, the release deed dated is duly registered is true and genuine document duly executed by the plaintiff. 19. The plaintiff himself admitted in this Court in his statement on oath recorded on 10th May 2011, but in the application, the plaintiff had stated something totally false that his thumb impression and signatures have been obtained on blank paper. The stamp papers were issued by State Bank of India and there is a seal of State Bank of India at the back of the stamp paper. Defendants states that plaintiff deliberately made false statement and should be prosecuted under Section 340 Cr.P.C. 20. The said release deed expressly and unequivocally record, state and admit that the entire consideration amount has been received by the releaser from the Release in full and final settlement prior to the execution of this Release Deed and the releasor doth hereby acknowledge the receipt of the same before the Sub-Registrar, Delhi. Hence, defendant states that there was no need of any extra receipt. Defendant also admits that jewellery has been given to the plaintiff as consideration of the release deed dated The defendants submit that the statement made in para 15 of the application is also false that w.e.f 1st April 1992 as agreed between partners of Commercial Glazing Works on 5th June 1992, the principle place of business of firm was to be at 39B, Industrial Estate Ludiana with its branch in Delhi at 18/1, Block A, Naraina Industrial Area, Phase II, New Delhi. Therefore, the defendants state that the application filed by the plaintiff under Order VI Rule 17 CPC should be dismissed at the threshold.

12 22. I have heard the learned counsels for the parties, the main contention of Mr. Nandrajog, learned counsel appearing on behalf of the plaintiff is that the cause for filing the present application has arisen when the defendants in the month of November, 2010 filed the written statement wherein, defendants No.1 & 2 relied upon the document i.e. registered release deed dated though in earlier 2010, the plaintiff was informed by the defendants No.1 and 2 that he has no share in the suit property. The said release deed disclosed that the plaintiff has received his share in the suit property and has also acknowledged the amount therein. Mr. Nandrajog states that the plaintiff was not aware about the said document at the time of filing the suit and it has come to the notice of the plaintiff, for the first time, on filing of the written statement by defendants No.1 & 2. He submits that according to the plaintiff, the said release deed dated is a fabricated document which has been obtained by fraud and illegally got registered by defendants No.1 & 2. According to the plaintiff, on the same date i.e the freehold conveyance deed was also registered but, was not given by the office of Sub Registrar-VII and was to be collected later on. In nut-shell, the plaintiff has now decided to challenge the said deed by amending the plaint and details of the said challenge are mentioned in the application. 23. On the other hand, Mr. Vijay Kishan Jetly, learned counsel appearing on behalf of defendants No.1 & 2 has relied upon the statement made by the plaintiff in Court on According to him, the application is an abuse of process of the Court. The plaintiff is the signatory of the release deed. He has also received the consideration which is acknowledged by him in the said deed. He was aware of the said document. He was given time to file the replication. Since the time for filing the replication expired, the plaintiff by filing the present application is depriving the rights of the defendants under the provision of Order VIII Rule 5 of CPC indirectly. The learned counsel has also referred the

13 statement recorded in the court on He submits that the averments made in the application are contrary to the statement made before the Court. The learned counsel has also tried to demonstrate various circumstances in order to satisfy the suit which is totally misconceived and is not maintainable in view of the release deed executed by the plaintiff. In support of his submissions, the learned counsel has also referred the following judgments:- (a) Mandir Sita Ramji alias Sita Ram Bhandar vs. Land Acquisition Collector, reported in 2003(70) DRJ 630 (DB). (b) Ashok Kumar Aggarwal vs. Delhi Vidyut Board, reported in 2004 (76) DRJ 13. (c) Pamela Manmohan Singh vs. Major L.V. Kohli (deceased), reported in 2000 (52) DRJ 394. (d) Neera Grover and another vs. Narinder Jaggi, reported in 21 (1982) Delhi Law Times 33. (e) Pfizer Enterprises Sarl vs. Cipla Ltd., reported in (2009) 107 DRJ 735 (DB) (f) Municipal Corporation of Greater Bombay vs. Lala Pancham and Others, reported in AIR 1965 Supreme Court (g) Malabar Fisheries Co. Calicut vs. Commissioner of Income-Tax, Kerala, reported in AIR 1980 Supreme Court The case of the plaintiff is that the fact of execution of the release deed dated has come to the knowledge of the plaintiff only in the month of November, 2010 at the time of filing of the written statement by the defendants. The plaintiff within his right has challenged the said release deed and is also entitled to amendment of the pleading. The plaintiff has also denied the acknowledgement

14 of the amount mentioned in the release deed. I agree with the submission of Mr. Nandrajog that by filing of the replication, the plaintiff could not have sought the relief for cancellation of release deed on the grounds. It is also not in dispute that even otherwise, the plaintiff could challenge the alleged release deed by filing of the separate suit. 25. The law of amendment of plaint is that the merit of the case is immaterial and cannot be looked into while considering an application for amendment. 26. It is further trite that the correctness and falsity of the amendment cannot also be gone into at the stage of the amendment (Rajesh Kumar Aggarwal and Others vs. K.K. Modi and Others (2006) 4 SCC 385.) Further, in Usha Devi v. Rijwan Ahmad and Others AIR 2008 SC 1147 it was held as follows: As to the submissions made on behalf of the respondents that the amendment will render the suit non- maintainable because it would not only materially change the suit property but also change the cause of action it has only to be pointed out that in order to allow the prayer for amendment the merit of the amendment is hardly a relevant consideration and it will be open to the defendantsrespondents to raise their objection in regard to the amended plaint by making any corresponding amendments in their written statement. (a) In the case of Savitri Minda vs. Minda Industries, 1997 PTC 257, this Court allowed the amendment of the plaint under Order VI Rule 17 observing that the courts should be liberal in the matter of allowing amendment unless serious injustice or irreparable loss is caused to the other side. The Courts exist to decide the rights of the parties and not to punish them for the mistake they make in the conduct of their cases.

15 (b) The Supreme Court, in Revajeetu Builders and Developers v. Narayanaswamy And Sons And Others, (2009) 10 SCC 84, observed in para 63 as under: Factors to be taken into consideration while dealing with applications for amendments- 63. On critically analyzing both the English and Indian cases, some basic principles emerge which ought to be taken into consideration while allowing or rejecting the application for amendment- (1) Whether the amendment sought is imperative for proper and effective adjudication of the case? (2) Whether the application for amendment is bona fide or mala fide? (3) The amendment should not cause such prejudice to the other side which cannot be compensated adequately in terms of money; (4) Refusing amendment would in fact lead to injustice or lead to multiple litigation; (5) Whether the proposed amendment constitutionally or fundamentally changes the nature and character of the case? and, (6) As a general rule, the court should decline amendments if a fresh suit on the amended claims would be barred by limitation on the date of application. (These are some of the important factors which may be kept in mind while dealing with application filed under Order VI Rule 17. These are only illustrative and not exhaustive.) 27. In view of the facts and circumstances in the matter, if the amendment sought by the plaintiff is not allowed, no doubt, it would lead to multiple litigation and it is also imperative for proper adjudication of the case. It is not in dispute that the documents i.e. release deed dated provided by the defendants have to be legally examined by the court and fate of it would be decided after the trial in the matter. At this stage, it is not necessary to give final opinion on the documents. Therefore, the amendment sought by the plaintiff is liable to be allowed.

16 28. The application I.A. No.7642/2011 is allowed subject to cost of Rs.20,000/- to be paid by the plaintiff to the defendant within four weeks. 29. The application is disposed of. CS(OS) No.2002/2010 Let the amended plaint be filed within four weeks. The written statement be filed within four weeks thereafter. List the matter before the Joint Registrar on for admission/denial of the documents. Thereafter, the same be listed before the Court on for framing of issues and directions for trial. APRIL 10, 2012 Sd./- MANMOHAN SINGH, J.