9911796707
TMI Blog2012 (11) TMI 572X X X X Extracts X X X X X X X X Extracts X X X X ..... rding to the Plaintiffs, a Partnership Deed was executed on 11th August 1986, between the Plaintiffs and Defendant Nos. 1 to 3. By the said Partnership Deed, the Partnership Firm was constituted under the name and style of "Laxmi Developers" for conducting the business of investment in properties, development of the same and also for sale of shops, flats, commercial premises and to acquire open spaces for development. 3. According to the Plaintiffs, after the constitution of the said Partnership Firm, an application for registration in the prescribed Form A was filed on 16th September 1986, before the Registrar of Firms. The said application was signed by all the Partners including Defendant Nos. 1 to 3. The said application was numbered as AR/26115/D/2/86 by the Registrar of Partnership Firms. In the said application form, the name of Plaintiff No.7, who was a minor at that time, was mentioned in Column "D" instead of Column "G". Therefore, the Registrar of Partnership Firms issued a notice dated 1st January 1986 addressed to Arvind Raman & Company, Chartered Accountants of the said Laxmi Developers to the effect that in the application form dated 16th September 1986, there is an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat he is the owner of the suit property executed a Joint Venture Agreement dated 1st July 2005 in favour of Defendant No.4 which later stood terminated and a fresh Joint Venture Agreement dated 29th November 2011 was executed by Defendant No.1 in favour of Defendant No.5. 7. According to the Plaintiffs, the Partnership Deed between the Plaintiffs and Defendant Nos. 1 to 3 is duly notarized but not registered. At no point of time was the Partnership Firm dissolved nor was the Partnership Deed cancelled either by the Plaintiffs or by Defendant Nos. 1 to 3. As such, the Partnership Firm continues to be the owner of the suit property. 8. Upon coming to know of the aforesaid facts, the Plaintiffs through their Advocate issued a notice dated 19th April 2012 to the Defendants inter alia recording that the Joint Venture Agreements dated 1st July 2005 and 29th November 2011 executed by Defendant No.1 in favour of Defendant Nos. 4 and 5 on the basis of false statements and representations are not legal and valid documents and not binding upon the Plaintiffs and their Partnership Firm Laxmi Developers. Shri R.R. Nagda, Advocate for the Defendants, vide his letter dated 9th May 2012 replied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Defendant Nos. 4 and 5, is illegal and not binding upon the Plaintiffs. According to the Plaintiffs, the stand taken by the Defendants is patently false and contrary to the record. The Plaintiffs have submitted that the aforesaid application form for registration of the Partnership Firm was forwarded to the Registrar of Partnership Firms and the notice issued to the Firm by the Registrar belies the claim of Defendant Nos. 1 to 3 that the Partnership Firm never existed. The Plaintiffs have also pointed out that the stand taken by the Advocate for Defendant Nos. 1 to 3 in response to the notice dated 19th April 2012 viz. that the said Partnership Firm is not registered under the Income Tax Act and has not filed any returns is also false. It is submitted that Defendant No.1 has admitted his signature on Form-A and the declaration filed before the Income-Tax Authorities under Section 184 (7) of the Income-Tax Act, but has wrongly alleged that the signatures of Defendant Nos. 2 and 3 are fabricated. 10. The Plaintiffs have thereafter filed the above suit and moved for urgent reliefs. 11. Clauses (1) and (2) of Section 69 of the Act are relevant for deciding the preliminary iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Plaintiffs has submitted that the provisions of Section 69 of the Act are not attracted and do not apply to this suit at all. 14. Prayer clause (a) of the plaint reads thus: "(a) That this Hon'ble Court may be pleased to declare that the Partnership Deed dated 11th August 1986 executed between the Plaintiffs and the Defendants Nos. 1 to 3 is legal, valid and subsisting and binding upon the Partners of the said Partnership Deed; The Learned Senior Advocate appearing for the Plaintiff has submitted that the relief in terms of prayer clause (a) of the Plaint is not a relief for enforcement of any contract. Relying on the decision of the Hon'ble Supreme Court in Mukund Balkrishna Kulkarni vs. Kulkarni Powder Metallurgical Industries and another (2004) 13 SCC 750 it is submitted that prayer clause (a) of the Plaint is maintainable and not hit by the bar of Section 69 of the Act. 15. Prayer clause (a) of the Plaint is set out hereinabove, and it can be seen therefrom that by the said prayer the Plaintiffs have sought a declaration that the Partnership Firm of Laxmi Developers has come into existence and does exist and that the Plaintiffs and Defendant Nos. 1 to 3 are Partners thereof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aration of the existence of a contract between the parties. That could not be said to be a suit to enforce a right arising from a contract. The second prayer of the appellant was not to continue as a partner of the firm but to dissolve the firm. To that extent the appellant was suing "as a partner". This he was entitled to do under Section 69 (3) (a) which insofar as it is relevant, reads as follows: "69 (3) The provisions of subsections (1)... shall not affect ( a) the enforcement of any right to sue for the dissolution of a firm or for accounts of a dissolved firm, or any right or power to realise the property of a dissolved firm." The question of Section 69 (3) of the Act is not relevant to the case at hand because that provision deals with a right to sue for dissolution of a firm which question does not arise for consideration in the present case. 16. I am therefore of the view that in the instant suit prayer (a) of the Plaint is maintainable and not hit by the bar of Section 69 of the Act. 17. Prayer clause (b) of the Plaint reads thus: (b) That this Hon'ble Court may be pleased to declare that the said Agreement dated 31st August 1986 in respect of the suit property is l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment held that the suit in question there, claiming that the shares of defendant no.4 company was the property of the partnership firm (which is similar to prayer (b) of the suit at hand) was not based on any contract, and the suit was maintainable and not hit by Section 69 of the Act. In paragraph 24, the Division Bench has held that in any event a part of the cause of action and reliefs claimed in the plaint were in any case beyond the scope of Section 69 of the Act. The Learned Senior Advocate appearing for the Plaintiff further submitted that the judgment of the Supreme Court in M/s. Raptakos Brett & Co. Ltd. (supra) categorically holds that where a suit is based upon two causes of action or a composite cause of action, even if one cause of action may be barred by Section 69, but the other cause of action is not barred, the suit is still maintainable. It is therefore submitted that assuming whilst denying that prayer clause (b) is hit by Section 69 of the Act, the suit would still be maintainable so far as prayer clauses (a) and ( c) and all other reliefs consequential to those prayers are concerned. 19. I have considered the submissions advanced on behalf of the Plaintiffs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 23 of the said decision read thus: "21. The above Report and provisions of the English Acts, in our view, make it clear that the purpose behind Section 69 (2) was to impose a disability on the unregistered firm or its partners to enforce rights arising out of contracts entered into by the plaintiff firm with third party defendant in the course of the firm's business transactions. 22. In Raptokos Brett and Co., (1998 (7) SCC 184) it was clarified that the contractual rights which are sought to be enforced by the plaintiff firm and which are barred under Section 69 (2) are "rights arising out of the contract" and that it must be a contract entered into by the firm with the third party defendants. Majumdar, J. stated (at p. 191) as follows: " A mere look at the aforesaid provision shows that the suit filed by an unregistered firm against a third party for enforcement of any right arising from a contract with such a party would be barred." From the above passage it is firstly clear that contract must be a contract by the plaintiff firm and not with anybody else but with the third party defendant. 23. The further and additional but equally important aspect which has to be made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is submitted that even prayer clause (c) is not hit by Section 69 of the Act. 22. As can be seen from prayer clause (c) of the Plaint, the Plaintiffs seek a declaration that the Joint Venture Agreements at Exhibits-C and D to the Plaint are null and void and not binding upon the Plaintiffs. These Agreements have been entered into by Defendant No.1 in his purported capacity as the sole owner of the suit property. The Agreement at Exhibit-D has been entered into by Defendant No.1 with Defendant No.5. The Partnership Firm or any of the Partners are not parties thereto. By the said prayer clause (c), the Plaintiffs do not seek to enforce any rights arising out of the contract of Joint Venture Agreements. There is no question of the Plaintiffs enforcing any right under the Joint Venture Agreements because the Plaintiffs are not parties thereto and are in fact disputing the Joint Venture Agreements and seeking to have them declared null and void and not binding on the Plaintiffs. The relief in prayer clause (c) of the Plaint is therefore also based upon the subsisting and already vested title to the suit property in the Partnership Firm and this relief arises out of a common law right ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lopment of the suit property and related matters during the past about 17 years, and has continuously incurred various expenses for acquiring 5 adjoining properties and for evicting hutments etc. on all the six properties. It is submitted that after going through Exhibit-A of the Plaint, Defendant No. 1 recollected that at the material time in the year 1986, the Plaintiff Nos. 1 and 4 and Defendant No.1, " had initially, just tentatively, desired to form a partnership of M/s. Laxmi Developers, I had in good faith put my signatures at the very first instant on several papers which now appear on page Nos. 39, 123 and 124 of the plaint, when no one else had put their signatures thereon.....". It is submitted on behalf of Defendant No. 1 that without admitting that the document at Exhibit-A was indeed signed by all the persons named therein, the said document has not been acted upon for the last about 25 years. It is further submitted that Plaintiff No. 4 had, sometime in 199394 borrowed a personal loan from one Jayantilal D. Shah to the extent of Rs. 17 lakhs but he could not repay the same and therefore he signed a purported allotment letter for an area of 1156 sq.ft. in favour of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Plaintiffs have no right in respect of the suit property and as such the Notice of Motion be dismissed. 28. The Learned Senior Advocate appearing for the Plaintiffs has denied and disputed the aforestated allegations made by the Defendants. He has submitted that the MoU pertains to a different property. He has submitted that Plaintiff No.4 has not even signed the said MoU. He has submitted that the Plaintiffs have not given up any of their rights in the Partnership Firm and/or the property of the Partnership Firm. He has submitted that the Partnership Firm has ten partners and by no stretch of imagination the Defendant No.1 can contend that he has become the sole Proprietor of the Partnership Firm. He has submitted that all the contentions on behalf of the Plaintiffs and Defendant No. 5 fall in view of the title certificate issued by Advocate R.R. Nagda dated 6th August, 2009 wherein he has categorically certified that M/s. Laxmi Developers, a Partnership Firm, has furnished to him various records such as agreement, Power of Attorney, property card etc. in relation to the suit property and has certified that in view of the documents referred to by him in the Certificate and the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvind Raman and Company, Chartered Accountants of the Partnership Firm Laxmi Developers, pointing out the said objection. A certificate is also issued by Mr. V.M. Dhanak, Chartered Accountant, certifying that the Partnership Deed dated 11th August 1986 of M/s. Laxmi Developers was signed by all the Partners i.e. 7 Plaintiffs (including the minor), and Defendant Nos. 1 to 3 in his presence. The Plaintiffs have also produced the Income-Tax Returns of the Partnership Firm for the Accounting Years 1987-88 and 1988-89, which were filed on 11th August, 1986 and also declaration dated 31st August, 1989, under Section 184 (7) filed with the Income Tax Department for continuation of its registration. The said declaration is also signed by Defendant Nos. 1 to 3. In the Income-Tax Returns, the balance-sheet of the Partnership Firm is also filed for the years 1987-88 and 19881-989. The suit property is purchased by the Partnership Firm-Laxmi Developers under an agreement for sale dated 31st August, 1986. The Agreement for Sale is signed by the Plaintiff No.4 on behalf of the Firm. 31. From the aforesaid it is clear that the Defendant No.1 has made incorrect statements in his reply dated 9th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e given up their right in the said property, firstly I find that in the reply letter of the Advocate for Defendant Nos. 1 to 3 dated 9th May 2012 he has not made any such allegation but has only stated that, 'your clients have also suppressed from you a further true fact to the effect that they have executed an agreement long back inter alia recording the aforementioned facts disentitling them from the alleged claims, as falsely narrated in your letter under reply". It is clarified in paragraph 1 of the said letter that "your clients" includes all the seven plaintiffs. However, it is pertinent to note that the alleged agreement allegedly signed by all the Plaintiffs regarding the alleged facts, disentitling them from their alleged claims, is even at this stage not produced before this Court. Instead, a MoU is sought to be produced before the Court which is only signed by Plaintiff No.1 and where the description of the property is different. Some other documents which did not find any mention in the reply letter dated 9th May 2012, by the Defendants Advocate, are relied upon to show that certain amounts were paid by Defendant No.1 to Defendant No.4, for which Defendant No.4 signed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 3 before this Court. However, neither Mr. Nagda nor the learned Senior Counsel appearing for Defendant Nos. 1 to 3 is in a position to explain as to why the title certificate issued on 6th August 2009 certifies that the suit property belongs to the Partnership Firm of M/s. Laxmi Developers. Therefore in any event, the said title certificate dated 6th August, 2009 admittedly issued by Shri Nagda representing Defendant Nos. 1 to 3, belies the entire case advanced by Defendant Nos. 1 to 3 viz. that the suit property has ceased to be the property of the Partnership Firm since 1995 and that Defendant No.1 is the sole owner of the suit property since 1995, and is therefore entitled to deal with the same. In view thereof, the question of the Plaintiffs being disentitled to any relief on the ground of delay and laches and/or suppression also does not arise. 33. I also do not agree with the submission advanced on behalf of Defendant No.5 that Defendant No.5 has entered into a Joint Venture Agreement dated 29th November, 2011 without notice. The document dated 29th November, 2011 entered into between Defendant No.1 and Defendant No.5 itself mentions that the suit property belonged to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
