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TMI Blog2021 (6) TMI 553X X X X Extracts X X X X X X X X Extracts X X X X ..... ht claimed by the plaintiff in the suit is not proper. Subsequent to the amendment of pleadings only, it would be proper. Initially, one of the partners viz., P.Sivanantham claimed that he is entitled for 22.5% shares in the Firm and therefore the said share should come to the Company. This way of laying the claim is not proper. This Court is of the considered view that a Firm/Company cannot file a suit for partition on behalf of one of the partners to claim his share and thereafter to treat it as firm/company property. Firm/Company can file suit to determine its right in the properties but not the right of partner in the firm's/company's property. The partner's right in the firm/company will accrue only in the event of dissolution of the Firm or he will get dividend for his share in the Company in the event of dissolution of the Company. No such situation that arose in the present case. Thus, the suit was originally not filed in a proper manner. Now, by virtue of amendment, the plaintiff is not going to introduce any new plea, but by ignorance, the suit was filed and same has to be corrected legally. Further, without amendment, the right of the parties cannot be adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent in I.A. No. 141 of 2014. 2. The suit was filed by the plaintiff for partition and for permanent injunction. Suit was filed under the name and style of Narasu's Coffee Company' represented by P. Sivanantham against the revisions petitioners herein. Originally, the plaintiff was registered under the provisions of Partnership Act. The partners of the said firm were (1) R.P. Sarathy, (2) B. Latha (3) B. Jayashree (4) P. Sivanantham and (5) Mahalakshmiammal Trust. Subsequently, the said Firm was reconstituted by inducting the wife of P. Sivanantham. Under these circumstances, all the partners have entered into a Memorandum of Understanding on 10.08.2006, whereby, the partners viz., R.P. Sarathy, B. Latha, B. Jayashree and Mahalakshmiammal Trust agreed to retire and P. Sivanantham would continue as a partner after inducting his wife Mrs. Lalitha as one of the partners. 3. As per Memorandum of Understanding, Mr. P. Sivanantham is liable to pay a sum of ₹ 26.5 crores towards the final settlement to the retirement of all the revision petitioners as well as Mahalakshmiammal Trust. The said amount was also paid by Mr. P. Sivanantham. After the execution of Memo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R.P. Sarathy refused to accept the Memorandum of Understanding, entered into in the year 2006. 7. The plaint in O.S. No. 106 of 2009 was rejected by the Hon'ble High Court in C.R.P. No. 2379 of 2012 and subsequently it was confirmed by the Apex Court by order dated 02.02.2015. Therefore, the Memorandum of Understanding was held good and the parties of the Memorandum of Understanding are liable to implement the same. Since the suit in O.S. No. 106 of 2009 was dismissed and the Apex Court has also upheld the Memorandum of Understanding entered into among the partners in the year 2006, the prayer for 22.5% shares in the 27 items does not arise by virtue of the order passed by the Apex Court, the entire properties belonging to the erstwhile partnership firm and it will become property of Company subsequent to conversion of the partnership Firm into Sri Narasu's Coffee Company Limited. Therefore, the amendment in the pleadings was sought for by the plaintiff in I.A. No. 141 of 2014 in O.S. No. 50 of 2012. Consequently, the prayer for declaration and permanent injunction was sought for in the amendment. The same was challenged in CRP (PD) No. 3010 of 2016. This Court by order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tself. It will change the basic nature of the suit. This aspect was not considered by the Court below. Application for amendment of the plaint was filed in the year 2014. Properties of erstwhile Firm was settled by virtue of Memorandum of Understanding dated 10.08.2006. Therefore, claiming any right over the properties as if claiming the properties of the Firm, the Company would be barred by limitation. When this point was raised before the Court below, the Court below, instead of considering the limitation on merit, it has simply rejected the plea stating that the plea of limitation would be considered at the time of trial. 11. Learned Senior Counsel contended that the said order is not proper. There is no bar for the Court to consider the plea of limitation at the time of considering the amendment of the pleading. Therefore, learned Senior Counsel contends that the decreetal order is not proper and liable to be set aside. 12. Yet another point raised by the learned Senior Counsel is with regard to amendment of prayer in the suit. Originally, prayer was sought for partition and permanent injunction. Now, the respondent/plaintiff wants to amend the prayer for declaration and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Memorandum of Understanding. Therefore, in terms of Memorandum of Understanding, the suit schedule properties are not vested with plaintiff's name but in the name of other Firm or in the name of individuals. In terms of the above clause, the plaintiff is not entitled to claim that the properties are purchased out of the funds of the Firm. 16. Learned Senior Counsel raised one more point with regard to benami transaction. The Court below held that Benami Transactions (Prohibition) Act, 1988 will not apply. In an amendment petition the Court below held that without any trial, Benami Transactions (Prohibition) Act, 1988 will not apply. The said finding is liable to be set aside and prays to allow the Civil Revision Petition. 17. Per contra, Mr. AR.L. Sundaresan, learned Senior Counsel appearing for the second respondent would submit that originally suit was filed for partition by the plaintiff due to the reason that in the year 2009, Mr. R.P. Sarathy filed a suit in O.S. No. 106 of 2009 for partition to divide six items of property, whereby, he refused to accept Memorandum of Understanding dated 10.08.2006. The Firm has filed a suit in O.S. No. 1019 of 2009 for partition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iff is not going to add any other property to claim any additional right so as to change the basic structure of the suit. 18. With regard to the amendment of cause title is concerned, amendment was sought for under Order I Rule 10 of Civil Procedure Code. As per the said Order, if any person's name has been wrongly instituted, the same can be substituted with correct name. The fact remains that at the time of filing the suit, the Firm is not in existence. Therefore, the plaintiff's name was wrongly mentioned. It should have been mentioned as M/s. Sri Narasu's Coffee Company Limited instead of Narasu's Coffee Company by P. Sivanantham. The suit cannot be filed by a non-existent person. However, learned Senior Counsel fairly admits that the Firm was converted into Narasu's Coffee Company Limited with effect from 01.04.2009 and subsequent to that, suit was filed in the name of the Company in O.S. No. 1016 of 2009. But the present suit was inadvertently filed in the name of the Firm. Learned Senior Counsel submits that at any cost, the suit cannot continue in the name of the Firm, which is non-existent one and the same should be substituted with the Company's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Coffee Company was converted into Company under the name and style of Sri Narasu's Coffee Company Limited with effect from 01.04.2009. The present suit was filed by the respondent/plaintiff in the year 2012. Once the firm is converted into Company, the partnership will automatically get dissolved as the Company would take over entire assets and liabilities of the Firm. Thus, after the conversion of the Firm into Company, the Firm will not exist. An application was filed under Order I Rule 10 of Civil Procedure Code to amend the cause title from Narasu's Coffee Company to Sri Narasu's Coffee Company Limited. It means that the suit was originally filed in the name of non-existent person. Therefore, the plaintiff sought to amend the same. The fact remains that the Firm was not in existence at the time of filing of the suit in O.S. No. 50 of 2012. At this juncture, it is relevant to extract Clause (1) of Order I Rule 10 of Civil Procedure Code which states as follows:- Where a suit has been instituted in the name of the wrong person as plaintiff or where it is doubtful whether it has been instituted in the name of the right plaintiff, the Court may at any stage of the sui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arity in the fair and decreetal order with respect to the allowing to amend the cause title. 29. In the amendment petition, the plaintiff also sought for amendment of pleadings as well as prayer. The suit was filed by the plaintiff claiming right over 27 items of the suit schedule properties. At the time of filing suit, all 27 items have been mentioned as suit schedule properties. No amendment was sought for adding or deleting the suit schedule properties. Ultimately, the Court has to decide the entitlement of the plaintiff in the suit schedule properties. 30. Initially, the plaintiff claimed 22.5% right in the suit schedule properties. Now, the claim of the plaintiff is 100% in the suit schedule property. The reason for changing the plaintiffs entitlement from 22.5% to 100% is subsequent to the validation of Memorandum of Understanding dated 10.08.2006 by this Court as well as Apex Court. According to the plaintiff, as per the Memorandum of Understanding Mr. P. Sivanantham is liable to pay a sum of ₹ 26.5 crores towards the final settlement to the retirement of all the revision petitioners as well as Mahalakshmiammal Trust. If at all there is any obligation on the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement or beyond the scope of the agreement, would be decided only after letting the parties to present evidence. The claim of the revision petitioners is that by virtue of clause no. 2(1) of Memorandum of Understanding, the plaintiff is entitled to the properties mentioned therein alone. On the other hand, the respondent contended that the agreement will apply only to the parties to the agreement. If the properties purchased in the name of any other individual and Firm etc., who are not parties to the Memorandum of Understanding would not bind the plaintiff, in which case, the plaintiff is entitled to take appropriate action to recover the possession of the property. Obviously it is an important issue which has to be decided by the Court below not at the stage of the amendment of the pleading, but it can be decided only after full fledged trial. Therefore, it is for the Court below to decide and frame appropriate issue if so desired by the parties. 34. Even this Court is of the view that the right claimed by the plaintiff in the suit is not proper. Subsequent to the amendment of pleadings only, it would be proper. Initially, one of the partners viz., P.Sivanantham claimed that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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