Jairajsingh S/O Harpalsingh ... vs Harpalsingh S/O Jaimalsingh ...
2021 Latest Caselaw 8403 Bom

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                IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                          NAGPUR BENCH AT NAGPUR

                                Writ Petition No. 3049 of 2020

  Jairajsingh S/o Harpalsingh Lamba Vs. Harpalsingh S/o Jaimalsingh Lamba
                                 and others
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Office Notes, Office Memoranda of Coram,                                 Court's or Judge's orders
appearances, Court's orders of directions
and Registrar's orders
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                               Mr. N.H. Samundre, Advocate for the petitioner
                               Mr. Sahil Dewani, Advocate for the respondents No. 1 and 2


                               CORAM :                     MANISH PITALE, J.

                               RESERVED ON             :   16.06.2021

                               PRONOUNCED ON:              24.06.2021

                                            Hearing was conducted through video

conferencing and the learned counsel agreed that the audio and visual quality was proper.

2. The petitioner is aggrieved by order 07/11/2020, passed by the Court of Joint Civil Judge (Senior Division), Nagpur, whereby an application (Exh.23), filed by the applicant under Order 1 Rule 10 of the Code of Civil Procedure, for being impleaded as a defendant in Special Civil Suit No. 670 of 2020, has been rejected.

3. According to the petitioner, he is a necessary as well as proper party in the suit filed by respondents No.1 and 2 against the respondents No.3

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and 4 and that, therefore, the impugned order deserves interference.

4. The respondents No.1 and 2 (original plaintiffs) have filed the aforesaid suit before the Court below for declaration and injunction against respondents No.3 and 4. It is the contention of the respondents No.1 and 2 that the cause of action for filing the said suit against the respondents No.3 and 4 has arisen as the said respondents (original defendants) have failed to enter into a fresh licencing agreement with the said original plaintiffs, pertaining to supply of petrol and such products in respect of a petrol pump being run by the said original plaintiffs as partners of reconstituted partnership firm "M/s Sunrise Travels". It is the case of the respondents No.1 and 2 that initially the partnership firm constituted on 06/08/2005, had four partners i.e. the said respondents, the petitioner herein and the wife of deceased original respondent No.1. The said partnership deed specified that the share of profit and loss of the four partners would be 25% each. There was an arbitration clause in the said agreement.

5. According to the respondents No.1 and 2 on 01/04/2011, there was a reconstitution of the said partnership firm, which was signed and executed by the said four existing partners. As per the reconstitution deed, the respondents No.1 and 2

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remained partners of the said firm while the petitioner and the wife of deceased original respondent No.1 retired from the partnership firm w.e.f. 31/03/2011. As per the relevant clause of the reconstituted partnership firm, the share of profit and loss amongst the two remaining partners i.e. respondents No.1 and 2 was 50% each. There was an arbitration clause in the reconstituted deed of the firm and all parties, including the petitioner had signed the same. According to the respondents No.1 and 2, the said reconstitution of the partnership firm was on the basis of a family arrangement executed between the parties, whereby the petitioner had agreed to resign from the said partnership firm while the deceased original respondent No.1 and his wife had resigned from another family entity i.e. "M/s Lamba Travel House", so that the petitioner becomes exclusive owner of the said "M/s Lamba Travel House". The said family arrangement was signed by the petitioner as well as respondents No.1 and 2.

6. The grievance sought to be agitated by the respondents No.1 and 2 in the aforesaid suit is that the respondents No.3 and 4 were not properly recognizing the right of the said reconstituted firm for renewal of dealership agreement concerning the petrol pump and that they were wrongly insisting upon a no objection certificate to be obtained from the petitioner. Since the very supply of petrol and other products was likely to

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be hampered, the respondents No.1 and 2 were constrained to file the aforesaid suit.

7. The respondents No.3 and 4 appeared in the said suit and stated that in good faith they have not stopped supply of petrol and other products to the petrol pump. It is also undisputed that the Court below has passed an order dated 12/11/2020, partly allowing the application for temporary injunction filed by the respondents No.1 and 2, as a result of which respondents No.3 and 4 have been directed to continue supply of petrol and other products to the petrol pump so that the respondents No.1 and 2 can place sales orders.

8. It is in the aforesaid suit that the petitioner filed the application for being impleaded as a defendant under Order 1 Rule 10 of the Code of Civil Procedure. According to the petitioner, he is a necessary and proper party to the said suit. The said application was opposed by the respondents No.1 and 2 before the Court below. After hearing parties, the Court below rejected the application, taking note of the fact that the petitioner himself had signed the document showing reconstitution of the firm and about the said document having been submitted to the concerned authority. The Court below has taken note of the fact that the reconstitution took place in the year 2011 and that the present suit did not concern

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settlement of accounts between the partners and that, therefore, the question arising in the present suit could be effectively and adequately decided in the absence of the petitioner. The present Writ Petition has been filed challenging the said order.

9. Mr. N.H. Samundre, learned counsel appearing for the petitioner submitted that the pleadings in the suit and the written statement filed on behalf of the defendants, as also the questions that would arise for consideration before the Court below certainly impinged upon the rights of the petitioner and that, therefore, as per the well recognized principles concerning Order 1 Rule 10 of the Code of Civil Procedure, the application of the petitioner ought to have been allowed by the Court below. By inviting attention to the application filed on behalf of the petitioner before the Court below, it was submitted that sufficient material was brought to the notice of this Court for allowing the application and yet, the impugned order was passed. It was submitted that the petitioner disputed the basis on which respondents No.1 and 2 were seeking relief against the respondents No.3 and 4 and, therefore, any finding given by the Court below in the said suit was likely to affect the rights and interests of the petitioner. On this basis, it was submitted that the impugned order deserved to be set aside. It was fairly conceded that after the impugned order was passed, the petitioner had filed a

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suit for declaration and permanent injunction against the respondents herein for a declaration that the petitioner continued to have share of 25% in profit or loss of the said partnership firm and for an injunction, restraining the respondents No.3 and 4 from supplying petrol and other products to the said petrol pump.

10. On the other hand, Mr. Sahil Dewani, learned counsel appearing for the contesting respondents submitted that the Court below was justified in rejecting the application filed by the petitioner. It was submitted that the said order was in consonance with the law laid down by the Hon'ble Supreme Court and this Court in the context of Order 1 Rule 10 of the Code of Civil Procedure. It was submitted that the reconstitution deed was executed as far back as on 01/04/2011, which had been acted upon. This was evident from various documents, including income tax returns, wherein the petitioner was not shown as a partner after reconstitution of the partnership firm. It was submitted that the petitioner had never raised any objection regarding reconstitution of the partnership firm, obviously because it was in pursuance of family arrangement, wherein the petitioner had taken exclusive rights in another business of the family. Apart from this, it was submitted that the suit filed by the respondents No.1 and 2 before the Court below sought specific reliefs against the respondents No.3 and 4 and that the

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questions that would arise for consideration could certainly be decided effectively and adequately in the absence of the petitioner. It was further submitted that the earlier partnership deed of the year 2005 and the reconstitution deed of the year 2011, both consisted of arbitration clauses. It was further submitted that the present suit in no manner concerned any aspect of disputes between the partners, inter-se, or any dispute pertaining to accounts of the firm. On this basis, it was submitted that the questions completely foreign to the dispute raised by the respondents No.1 and 2 against the respondents No.3 and 4 was sought to be imported, which could not be permitted under Order 1 Rule 10 of the Code of Civil Procedure. The learned counsel appearing for the contesting respondents No.1 and 2 relied upon judgments of the Hon'ble Supreme Court in the cases of Ramesh Hirachand Kundanmal Vs. Municipal Corporation of Greater Bombay and Others (1992) 2 SCC 524 and Mumbai International Airport Private Limited Vs. Regency Convention Centre and Hotels Private Limited and Others (2010) 7 SCC 417 and of this Court in the case of Waman Nago Choudhari Vs. Mahadu Nago and Brothers 2010(5) Mh.L.J. 452 and Devchand Constructions Vs. Board of Trustees of the Port of Mormugao and another 2006 (5) Mh.L.J. 644.

11. Heard learned counsel for the rival parties and perused the material on record. As per the well

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settled principles concerning Order 1 Rule 10 of the Code of Civil Procedure, it is clear that the respondents No.1 and 2 as plaintiffs are dominus litis, in so far as the suit is concerned. It is also settled that if the Court finds that the party seeking impleadment is a necessary or proper party, it would be appropriate for the Court to exercise power under Order 1 Rule 10 of the Code of Civil Procedure, for allowing such impleadment. It is crucial that the judicial discretion to be exercised by the Court while considering such application has to be according to reason and fair play and that a party can be directed to be impleaded only if its presence is found to be necessary to enable the Court to effectively and completely adjudicate all the questions involved in the suit.

12. In this context, the concepts of "necessary party" and "proper party" assume significance. In the judgment of the Hon'ble Supreme Court in the Mumbai International Airport Private Limited Vs. Regency Convention Centre and Hotels Private Limited and Others (supra), it has been reiterated that necessary party is a party, which if not impleaded, no effective decree can be passed by the Court and the suit itself would be liable to be dismissed. A proper party is a party who may not be a necessary party, but, whose presence would enable the Court to completely, effectively and adequately adjudicate all matters in dispute in the suit even if the decree may not be made

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in favour or against such a person.

13. In the present case, it needs to be examined whether the petitioner is justified in claiming that the issues that would arise in the suit filed by respondents No.1 and 2 necessarily required his presence for being effectively and completely decided. A perusal of the suit filed by respondents No.1 and 2 and the nature of reliefs claimed therein would show that the said respondents have essentially raised a grievance against the respondents No.3 and 4 for threatening to stop supply of petrol and other products to the petrol pump being run by the said firm and likelihood of non- renewal of distribution agreement in the absence of 'no objection certificate' from the petitioner, are unjustified and that a decree needs to be passed in favour of respondents No.1 and 2 so that the dealership agreement is renewed and supply of petrol and other products to the petrol pump remains unhindered. The respondents No.3 and 4 have taken a stand that although in good faith they have continued supply of petrol and other products to the petrol pump, the respondents No.1 and 2 could not have reconstituted partnership firm without first taking the approval of respondents No.3 and 4. Thus, it is clear that the nature of dispute raised in the said suit pertains to the likelihood of stoppage of supply of petrol and other products to the petrol pump. The respondents No.1 and 2 have placed on record all necessary documents,

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including the partnership deed of 2005, the reconstituted deed of 2011 and other documents to show that upon reconstitution of the firm, the same was acted upon.

14. A perusal of the application filed on behalf of the petitioner under Order 1 Rule 10 of the Code of Civil Procedure would show that the petitioner has harped upon the respondents No.1 and 2 not having settled accounts for more than 12 years and that the faith that he reposed in respondents No.1 and 2, who are his father and brother, was belied by their actions. He has merely stated that the firm could not have been dissolved without permission of the respondents No. 3 and 4 and thereupon, he has stated that his presence is necessary for adjudication of the issues that would arise in the suit.

15. The pleadings in the plaint, the stand taken by respondents No.3 and 4 and the statement made in the application filed under Order 1 Rule 10 of the Code of Civil Procedure on behalf of the petitioner, would show that while the respondents No.1 and 2 as plaintiffs have sought specific reliefs on the basis of reconstitution of the partnership in the year 2011 and the main concern is regarding uninterrupted supply of petrol and other products to the petrol pump, the respondents No.3 and 4 have taken a stand that their prior approval was necessary. The controversy in the

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suit is not centered around the validity or otherwise of the reconstitution of the partnership firm in the year 2011. The petitioner also in his application for being impleaded has sought to raise grievance about the failure of respondents No.1 and 2 in settling accounts for more than 12 years, which is not the subject matter of the suit filed by respondents No.1 and 2 at all. This situation indicates that although the petitioner may have some grievance against the respondents No. 1 and 2 with regard to settling of accounts and other aspects regarding the reconstitution of the firm, this is not the question that would arise for determination in the present suit filed on behalf of the respondents No.1 and 2 against the respondents No.3 and 4. In that context, the learned counsel appearing for the respondents No.1 and 2 is justified in relying upon the judgment of the Hon'ble Supreme Court in the case of Ramesh Hirachand Kundanmal Vs. Municipal Corporation of Greater Bombay and Others (supra). The Hon'ble Supreme court in the said judgment held that direct interest in the subject matter of the litigation has to be distinguished from a commercial interest. It is also laid down that under the aforesaid provisions, it would be difficult to say that a person needs to be joined as a defendant whose only object is prosecuting his own cause of action.

16. Reliance placed on judgment of this Court in the case of Waman Nago Choudhari Vs. Mahadu

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Nago and Brothers (supra), also appears to be justified, wherein it is held that even if a decree is passed in favour of plaintiffs, the same can always be subject to adjudication of dispute that may be raised by a third party applicant on the basis of a partnership agreement or any other such ground.

17. Apart from this, it is an admitted position that the petitioner has filed a suit for declaration and injunction, bearing Special Civil Suit No. 949 of 2020, against all the respondents, praying for a decree of declaration that he is a partner in the said firm and entitled for 25% share in the profit or loss. He has also prayed that all reliefs regarding right of not being ousted and an injunction, restraining respondents No.3 and 4 from supplying petrol and other products to the petrol pump. In the said suit also, the petitioner has chosen not to squarely challenge the reconstitution deed executed in the year 2011 and other documents on the basis of which the respondents No.1 and 2 claim that the same had been acted upon. Be that as it may, it is the said suit in which the petitioner would be entitled to raise appropriate claims, which could be decided on their own merits. It is relevant that in the impugned order also, while rejecting the application filed by the petitioner, the Court below has specifically recorded that the present suit is not for settlement of accounts and that the petitioner is at liberty to take necessary steps or file any proceedings before the

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appropriate authority.

18. The view adopted by the Court below in the present case, in the facts and circumstances of the case, is in consonance with the law laid down in the context of Order 1 Rule 10 of the Code of Civil Procedure and hence, it does not deserve any interference. Accordingly, the Writ Petition is dismissed.

19. It is made clear that the observations made in this order are limited to the claim of the petitioner to be added as a defendant in the suit filed by respondents No.1 and 2. The said suit as well as Special Civil Suit No. 949 of 2019, subsequently filed by the petitioner, shall be decided on merits uninfluenced by the observations made in the present order.

JUDGE MP Deshpande