Bombay High Court
M/S Columbia Hospital And ... vs M/S Maharashtra Industries, ... on 6 June, 2022
Bench: Manish Pitale
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH AT NAGPUR
WRIT PETITION NO. 7531 OF 2019
M/s Columbia Hospital & Research Centre Pvt.
Ltd., HYATT Medicare, N.B. Marg, Near Get
Well Hospital, Nagpur through its Director Dr.
Praveen Madhukar Gantewar, age - 46 years, Petitioner
R/o 503, Fortune, Residency, Plot No. 96, 96-
A, Farmland Ramdaspeth, Nagpur.
Versus
1. M/s Maharashtra Industries
A Registered Partnership Firm Bearing No.
907 of 1978-79, Through its Partners
(i) Shri. Kailashchandra Jankilal Bundiwal,
Aged about 62 years, and
(ii) Shri. Mohanlal Balmukund Bundiwal,
Resident of 1st Floor, Gupta Building, Near
Kasturba Library, Sadar, Nagpur
2. Ashok Jagdishchandra Bundiwal,
Aged 55 years, Occ : Business,
R/o Swastik Metals, Plot No. 4/B, Sector - C,
Respondents
Manideep, Raisen, Madhya Pradesh - 462040
3. Sanjay Jagdishchandra Bundiwal,
Aged about 52 years, Occ : Business,
R/o Swastik Engineering, Pandit Malviya Road,
Near Shani Mandir, Sitabuldi, Nagpur -
440012
4. Madhubala D/o Jagdishchandra Bundiwal @
Madhubala Soni,
Aged 62 years, Occ : Household,
R/o Flat No. 301, S.P. Apartment, Near Jagat
Public School, Wathoda, Nagpur
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5. Ajay Jagdishchandra Bundiwal
Aged 54 years, Occ : Business
6. Vijay Jagdischandra Bundiwal, Respondents
Aged 55 years, Occ : Business,
Both Resp. No.5 & 6 are R/o 303, Shiv Gaurav
Apartment, Bhagwaghar Layout, Dharampeth,
Nagpur - 440010
Mr. J.T. Gilda, Senior Advocate & Mr. A.B. Patil, Advocate for
petitioner
Mr. R.M. Sharma, Advocate for respondent No.1
CORAM : MANISH PITALE, J.
RESERVED ON: 04/05/2022
PRONOUNCED ON: 06 /06/2022
JUDGMENT
The original defendant No.9 is the petitioner before this
Court, challenging concurrent orders passed by the two Courts
below. The respondent No.1 is the original plaintiff while
respondent Nos. 2 to 6 are the original defendant Nos. 2 to 6
before the Courts below.
2. The respondent No.1 filed a suit for declaration, perpetual
and mandatory injunction under Section 33 of the Maharashtra
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Rent Control Act, 1999, before the Small Causes Court at
Nagpur, against the original defendant Nos.1 to 8. Thereafter,
the defendant No.9 i.e. the present petitioner was added as a
party to the aforesaid suit. The said suit was filed on
21/05/2009, wherein it was stated that the respondent No.1 i.e.
M/s Maharashtra Industries was a registered partnership firm in
which Kailashchandra Jankilal Bundiwal and Mohanlal
Balmukund Bundiwal, were partners. The plaintiff firm was
stated to be a registered partnership firm bearing registration
No. 907 of 1978-79. The plaintiff firm claimed that the suit
property in its possession was wrongly and illegally taken over
by the original defendant Nos.1 and 2 in the intervening night
of 14/05/2009 and 15/05/2009. It was submitted that the said
act was carried out by the said defendants with the help of anti-
social elements, which necessitated filing of the aforesaid suit.
3. On the basis of such claims, the plaintiff firm sought a
declaration that the aforesaid act of taking forcible possession by
original defendant Nos.1 and 2 was illegal, with a further
declaration that the plaintiff firm was entitled to enter into the
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suit premises to carry on its business, requiring a direction to the
defendants to restore possession of the suit property i.e. tenanted
plot admeasuring 2178 sq.ft. to the plaintiff firm. A further
declaration was sought to the effect that the defendants ought
not to disturb the possession of the plaintiff over the suit
property, without following due process of law.
4. As the suit property was purchased by the petitioner i.e.
the original defendant No.9 on 23/06/2015, the petitioner was
added as a party to the suit and the plaint was amended to claim
that the petitioner had illegally demolished an RCC structure
admeasuring 809 sq.ft. existing on the suit property. A prayer
was also made for restoring the said structure.
5. The original defendant Nos.1 and 2 filed their written
statement to the aforesaid suit, denying the claims made in the
plaint. It was specifically stated that the plaintiff firm stood
dissolved by death of one of the partners, as the firm consisted
of only two partners. It was stated that even in the records of the
Registrar of Firms, the death of one of the partners of the firm
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had been recorded and it was also recorded that, as a
consequence, the firm stood dissolved on 17/12/2007. On this
basis, it was stated that in the plaint it was wrongly claimed that
the firm was continued and that it was re-registered on
14/05/2009. A question was raised as regards the
maintainability of the suit in view of the said facts.
6. It was further contended that the possession of the suit
property was willingly handed over by the surviving partner of
the original firm in April, 2009 and that certain amount had
also been paid in cash in that regard, thereby indicating that the
theory of illegal dispossession in the intervening night of
14/05/2009 and 15/05/2009, was false and misleading. The
said defendants denied the reliefs claimed on behalf of the
plaintiff.
7. The petitioner also filed written statement in the aforesaid
suit, upon being added as a party. In this written statement also,
a specific ground was taken that the plaintiff firm stood
dissolved and that it did not exist, thereby indicating that the
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suit itself ought to fail on that ground. The petitioner also
denied the reliefs claimed on behalf of the plaintiff and it was
stated that the suit itself was vexatious and that it deserved to be
dismissed.
8. The parties led evidence in support of their respective
pleadings. The Small Causes Court took into consideration the
pleadings, evidence and the material on record. By judgment
and order dated 06/02/2018, the Small Causes Court partly
decreed the suit. It was declared that the original defendant
Nos.1 and 2 had illegally put their lock on the suit premises and
that the plaintiff was entitled to open the lock and to enter the
suit premises to carry on its business. The defendants were
directed to restore the possession of the tenanted suit property to
the plaintiff admeasuring 2178 sq.ft. The defendants were
further directed not to disturb the possession of the plaintiff
over the suit premises, without following due process of law.
9. Aggrieved by the aforesaid judgment and decree passed by
the Small Causes Court, the petitioner filed appeal before the
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District Court. The petitioner specifically raised grounds
pertaining to maintainability of the suit and contended that the
findings rendered by the Small Causes Court on the aforesaid
issue were unsustainable. Grounds were also raised on the
merits of the matter.
10. By judgment and order dated 13/08/2019, the Court of
District Judge-10, Nagpur (Appellate Court) dismissed the
appeal and confirmed the decree passed by the Small Causes
Court. The original defendant Nos.1, 2 and 9 (petitioner
herein) were directed to restore possession in favour of the
plaintiff within eight weeks and the original defendants were
further restrained from disturbing possession of the plaintiff
over the suit property upon restoration, without following due
process of law.
11. Aggrieved by the said judgments and orders passed by the
two Courts below, the petitioner filed the present writ petition.
On 26/11/2019, a statement was made on behalf of respondent
No.1 that the Execution Petition would not be pressed. The said
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statement was continued during pendency of the Writ Petition.
On 22/01/2020, this Court granted Rule in the petition, calling
for the record and proceedings. In the meanwhile, interim stay
was granted in favour of the petitioner. The parties were given
opportunity to mention the petition for final hearing upon the
record being received. Thereafter, the petition was taken up for
final hearing.
12. Mr. J.T. Gilda, learned Senior Counsel appearing for the
petitioner submitted that both the Courts below erred in
rendering findings on the question of maintainability of the suit.
It was submitted that the suit was filed on behalf of a dissolved
firm, which was impermissible under Section 69 of the
Partnership Act, 1932. It was submitted that the objection
regarding maintainability of the suit was raised at the outset in
the written statements filed on behalf of the original defendants
and yet, the proceedings continued with the plaintiff being the
dissolved firm. It was submitted that the aforesaid substantial
defect in the suit was brought out by placing on record
documents from the office of the Registrar of Firms and the
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witness for respondent No.1 i.e. original plaintiff being cross-
examined on the basis of the same. Despite such material
available on record, the Courts below wrongly held that the suit
was maintainable.
13. Attention of this Court was invited to pleadings in the
plaint, the written statements and the documents on record, as
also statements made by the witness for the respondent No.1 in
cross-examination. The learned Senior Counsel submitted that
when the suit itself was fundamentally defective, it could not
have been entertained by the Small Causes Court under the
provisions of the Maharashtra Rent Control Act, 1999. On this
basis, it was submitted that the decree passed in favour of
respondent No.1 deserved to be set aside.
14. On this aspect of the matter, the learned Senior Counsel
placed reliance on the judgments of the Hon'ble Supreme Court
in the cases of Commissioner of Income Tax M.P., Nagpur and
Bhandara, Nagpur Vs. Seth Govindram Sugar Mills, AIR 1966
SC 24; S.P. Misra and others Vs. Mohd. Laiquddin Khan and
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another (2019) 10 SCC 329 and judgments of this Court in the
cases of Bhagwanji Morarji Goculdas Vs. Alembic Chemical
Works Co. Ltd. And others AIR 1943 BOM 385; Gandhi and
Co. Vs. Krishna Glass Pvt. Ltd. 1987 Mh.L.J. 885 and M.B.
Development Corporation Vs. Manilal Patel and Co. 2001(3)
Mh.L.J. 685.
15. The learned Senior Counsel further submitted that
without prejudice to the aforesaid contention raised on behalf of
the petitioner that the suit itself was not maintainable, it was the
case of the petitioner that when possession as a tenant was
claimed on the basis of an agreement dated 01/07/1978, the
Courts below could not have granted the decree in favour of
respondent No.1 for an area beyond what was specifically given
on rent as per the aforesaid agreement. It was submitted that as
per the said agreement only two rooms and one hall were given
in tenancy, which covered an area of only about 809 sq.ft.
Hence, the Courts below clearly erred in granting decree in
respect of the entire plot admeasuring 2178 sq.ft. Attention of
this Court was invited to admissions given in cross-examination
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by the witness for respondent No.1, in support of the aforesaid
contention. On this basis, it was submitted that even if the
decree was to be confirmed, it ought to be restricted only to an
area of about 809 sq.ft., which was the subject matter of the
tenancy agreement dated 01/07/1978.
16. On the other hand, Mr. R.M. Sharma, learned counsel
appearing for the contesting respondent No.1 i.e. original
plaintiff submitted that the two Courts below had concurrently
found that the suit was maintainable. It was submitted that in
the plaint itself, candid statements were made as regards the
death of one of the partners of the firm in December, 2007 and
the manner in which the new partner was inducted, resulting in
re-registration of the firm. It was submitted that no facts were
suppressed and there was no question of the Courts below being
misled by the respondent No.1. It was further submitted that
the prohibition under Section 69(2) of the Partnership Act,
1932, was not absolute and that the case of the respondent No.1
fell in Section 69(3)(a), as the prohibition under Section 69 (1)
and (2) does not apply to a dissolved firm.
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17. It was submitted that at least one of the partners i.e.
Mohanlal Balmukund Bundiwal was a partner in the earlier
firm, which stood dissolved and the subsequent firm of the same
name registered on 14/05/2009. Much emphasis was placed on
the judgments, which state that a partnership firm is only a
compendious way of describing partners of the firm and that
when such a suit is filed, it is the partners, who are seeking relief
because occupation of property by a firm is occupation by its
partners. It was further submitted that at worst, the present case
could be said to be a case of misdescription of the plaintiff,
which was a minor defect, not going to the root of the matter.
On this basis, it was submitted that the Courts below had
correctly applied the position of law laid down by this Court and
the Hon'ble Supreme Court to hold that the suit filed by the
respondent No.1 was maintainable.
18. In support of the aforesaid contention, the learned counsel
placed reliance of the judgments of the Hon'ble Supreme Court
in the cases of Purshootam Co. Vs. Manilal & Sons, AIR 1961
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SC 325, Amar Nath Agarwalla VS. Dhillon Transport Agency
(2007) 4 SCC 306; V. Subramaniam Vs. Rajesh Raghuvendra
Rao (2009) 5 SCC 608; M/s Ganesh Trading Co. Vs. Moji
Ram, (1978) 2 SCC 91 and Bhupesh Rathod Vs. Dayashankar
Prasad Chaurasiya 2021 SCC Online SC 1031 and judgments of
this Court in the case of Bhagwanji Morarji Gokuldas Vs.
Almbic Chemical AIR 1943 Bom 385; Appaya Nijlingappa Vs.
Subrao Babaji Teli, 1938 Indian Law Reporter 102; Shiv
Developers Vs. Aksharay Developers 2022 SC Online 114;
Guruprasad and etc. Vs. Additional District Magistrate, Nagpur
and others AIR 1986 BOM 288 and judgment of Nagpur High
Court in the case of Agrawal Jorawarmal Vs. Kasam and another
AIR 1937 Nag 314.
19. As regards the contention of the petitioner that the decree
ought to be restricted to only about 809 sq.ft. and not the entire
area of 2178 sq.ft., it was submitted on behalf of respondent
No.1 that the said contention was not based on pleadings and
material on record and that it deserved to be rejected at the
outset. It was submitted that the two Courts below had
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concurrently found on merits in favour of respondent No.1 and
that, therefore, no interference was warranted in the decree
passed in favour of the said respondent.
20. Heard learned counsel for the rival parties and perused the
material on record. The first contention raised on behalf of the
petitioner goes to the very root of the matter and strikes at the
very maintainability of the suit filed by respondent No.1 before
the Small Causes Court. The said contention is based upon the
material on record indicating that the suit was filed by the
plaintiff firm, which stood dissolved by death of one of the
partners on 17/12/2007. It was submitted that once the said
suit stood dissolved by operation of Section 42(c) of the
Partnership Act, 1932, there was no question of a new partner
being inducted in the said firm. The firm of the same name
which was registered subsequently on 14/05/2009, was indeed a
new independent entity.
21. In order to appreciate the aforesaid contention raised on
behalf of the petitioner, it would be necessary to peruse the
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documents, pleadings, evidence and material available on
record. A perusal of the plaint shows that the suit was filed by
the partnership firm "M/s Maharashtra Industries", having
registration No. 907 of 1978-79. Relevant extract of the
register from the office of the Registrar of Firms at Exh.65
shows that the said firm bearing the aforesaid registration
number was entered in the register on 06/03/1979, wherein two
partners were shown as Mohanlal Balmukund Bundiwal and
Smt. Manorama Devi W/o Jagdishchandra Bundiwal. Entry
dated 18/04/1992 shows that the aforesaid Manorama Devi w/o
Jagdishchandra Bundiwal, retired from the firm on 31/03/1990
and Chandrashekhar Jankilal Bundiwal joined as a partner on
the same day. Thereafter, entry dated 29/04/2009, shows that
Chandrashekhar Jankilal Bundiwal retired due to his death on
17/12/2007 and that the firm stood dissolved on 17/12/2007.
This was obviously by operation of the statute i.e. Section 42 (c)
of the Partnership Act.
22. The learned Senior Counsel appearing for the petitioner
was justified in relying upon judgment of the Supreme Court in
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the case of Commissioner of Income Tax Vs. Seth Govindram
Sugar Mills (supra), wherein it was held that when there are only
two partners in a partnership firm, death of one of the partners
leads to dissolution of the firm and since there is no partnership
in existence, no new partner can be inducted in the same. The
same view was reiterated by the Supreme Court in the case of
S.P. Misra Vs. Mohd. Laiquddin Khan (supra), wherein after
referring to Section 42(c) of the Partnership Act, 1932, it was
held that when there are only two partners in a partnership firm,
upon the death of one of the partners, the firm stands dissolved.
Thus, the entry made in the register of firms maintained by the
Registrar of Firms about dissolution of the partnership firm i.e.
M/s Maharashtra Industries having registration No. 907 of
1978-79, upon the death of one of the partners on 17/12/2007,
was in accordance with the aforesaid position of law. The
learned counsel appearing for the respondent No.1 could not
dispute the aforesaid position.
23. In this regard, a perusal of Exh.74, which is the extract of
the register of firms maintained by the Registrar of Firms,
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Nagpur, shows that the partnership firm "Maharashtra
Industries" bearing registration No. NGP-11069/2009-10, was
registered on 14/05/2009, wherein Mohanlal Balmukund
Bundiwal and Kailashchandra Jankilal Bundiwal were partners,
with the duration of the firm being at will. This partnership
firm was indeed a new, separate and independent entity, which
came into existence as per the aforesaid entries made in the
register of firms, showing the registration number of the said
firm as NGP-11069/2009-10. The statutory scheme under the
Partnership Act, 1932 and the position of law laid down by the
Supreme Court in this regard clearly show that it was wrongly
claimed in the plaint that the plaintiff firm underwent a change
when one of the partners died on 17/12/2007 and
Kailashchandra Jankilal Bundiwal stood inducted as a partner,
with the firm being re-registered on 14/05/2009. There was no
question of said Kailashchandra Jankilal Bundiwal being
inducted as a partner in the partnership firm "M/s Maharashtra
Industries" bearing registration No. 907 of 1978-79 and the
same firm being re-registered on 14/05/2009. In fact, the
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plaintiff firm bearing registration No. 907 of 1978-79, stood
dissolved on 17/12/2007 itself.
24. In this context, it becomes necessary to now have a look at
the pleadings in the plaint as well as the written statements filed
on behalf of the original defendants. A perusal of the plaint
shows that the plaintiff is stated to be a registered partnership
firm "Maharashtra Industries", bearing registration No. 907 of
1978-79. In the plaint, at various places, the plaintiff is shown
as the "plaintiff firm". In paragraph No.7 of the plaint it is
stated that one of the partners of the plaintiff firm i.e.
Chandrashekhar Jankilal Bundiwal died on 17/12/2007 and
that in his place his younger brother Kailashchandra Jankilal
Bundiwal was inducted as a partner in the plaintiff firm on or
about 10/02/2009. Thereafter, it was stated that Mohanlal
Balmukund Bundiwal and Kailashchandra Jankilal Bundiwal
were running the business of the said firm till date and that
while the original registration number was 907 of 1978-79,
subsequently it was given fresh registration No. NGP-
11069/2009-10.
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25. As noted above, there was no question of the dissolved
plaintiff firm inducting Kailashchandra Jankilal Bundiwal as a
partner and carrying on business with the original registration
being given a fresh registration number. Such a procedure is not
contemplated under the provisions of the Partnership Act, 1932
and the aforementioned position of law clarified by the Supreme
Court. It is significant that the original defendant Nos. 1 and 2
had specifically stated in their written statements that the old
partnership firm had dissolved and that a new partnership firm
had come into existence bearing registration No.NGP-
11069/2009-10. This was specifically stated in response to the
contents of the aforesaid paragraph No. 7 of the plaint. The
petitioner i.e. the original defendant No.9, on being added as a
party to the aforesaid suit, filed its written statement and
specifically stated that with the death of Chandrashekhar
Jankilal Bundiwal, the partnership firm M/s Maharashtra
Industries bearing registration No. 907 of 1978-79, stood
dissolved and ceased to exist, while a new and different firm
came into existence bearing registration No. NGP-
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11069/2009-10. Such objections were specifically raised and it
was specifically pleaded on behalf of the petitioner that on the
aforesaid ground, the plaintiff firm was not entitled to any relief
and that the litigation was vexatious because the plaintiff firm
had no right to file or continue the suit.
26. A perusal of the evidence on record shows that the witness
for the respondent No.1 i.e. the original plaintiff was specifically
cross-examined on the documents pertaining to the register of
firms maintained by the Registrar of Firms. In cross-
examination, witness for respondent No.1 specifically admitted
that the contents of the aforesaid Exh.65 i.e. the extract of the
register of firm recording that the partnership firm M/s
Maharashtra Industries bearing registration No. 907 of 1978-79
stood dissolved on 17/12/2007, were true and correct. The said
witness conceded that the written tenancy agreement dated
01/07/1978, was in his possession and that he would produce
the same. He also admitted that apart from the aforesaid
agreement, there was no other agreement in existence. The said
witness further admitted that it was not true to say that the firm
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which stood dissolved in the year 2007 and the firm which was
formed on 14/05/2009, was the same. It was even conceded
that after the death of Chandrashekhar Jankilal Bundiwal,
witness i.e. Mohanlal had not entered into an agreement for
continuing the old firm with the legal heirs of deceased
Chandrashekhar Jankilal Bundiwal. It was further conceded
that there was no bank account of the new partnership firm and
that the bank account of the earlier partnership firm was closed.
27. This Court has referred to the aforesaid portion of the
evidence and admissions given by the witness for respondent
No.1, for the reason that the said material clearly discloses that
in the pleadings as well as during the course of cross-
examination, the petitioner and the other defendants laid
emphasis on the fact that the plaintiff firm was dissolved, which
hit at the very maintainability of the suit. Yet, at no stage did
the respondent No.1 take any effort to make amends as regards
the aforesaid fundamental defect in filing of the suit. In this
regard, reliance placed on the judgment of this Court in the case
of M.B. Development Corporation Vs. Manilal Patel (supra) on
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behalf of the petitioners is appropriate. In the said judgment,
this Court found that the suit filed in the name of the firm,
which was already dissolved before institution of the suit, cannot
be said to be a formal defect and that it is unquestionably a
substantial defect. It is specifically held in the said judgment that
such a suit is not maintainable in law and it ought to be
dismissed at the threshold by the Courts. In fact, this Court
went on to hold that even liberty to file a fresh suit could not be
granted to the plaintiff because no suit could be filed and
maintained by a firm already dissolved. It is significant that in
paragraph 6 of the said judgment, this Court recorded that the
partners of the respondent therein i.e. the erstwhile firm, which
stood already dissolved, had instituted a fresh suit. It was
directed that the said suit would be decided in accordance with
law.
28. Thus, it becomes clear that the defect in the present case
was fundamental and substantial as the respondent firm already
stood dissolved on 17/12/2007, while the suit was filed on
21/05/2009. The contentions raised on behalf of the respondent
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No.1 cannot be accepted that the defect was minor and that it
was only a misdescription of the plaintiff. The pleadings,
documents, evidence and other material on record clearly show
that the suit filed by the dissolved plaintiff firm i.e. respondent
no.1 herein was fundamentally defective.
29. At this stage, it becomes necessary to refer to the
judgments relied upon by the rival parties. It is also necessary to
refer to Section 69 of the Indian Partnership Act, which reads as
follows :
"69. Effect of non-registration.-- (1) No suit to enforce
a right arising from a contract or conferred by this Act
shall be instituted in any court by or on behalf of any
person suing as a partner in a firm against the firm or
any person alleged to be or to have been a partner in the
firm unless the firm is registered and the person suing is
or has been shown in the Register of Firms as a partner
in the firm.
(2) No suit to enforce a right arising from a contract
shall be instituted in any Court by or on behalf of a firm
against any third party unless the firm is registered and
the persons suing are or have been shown in the Register
of Firms as partners in the firm.
(3)The provisions of sub-sections (1) and (2) shall apply
also to a claim of set-off or other proceeding to enforce a
right arising from a contract, but shall not affect,--
(a) the enforcement of any right to sue for the
dissolution of a firm or for accounts of a dissolved firm,
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or any right or power to realise the property of a
dissolved firm, or
(b) the powers of an official assignee, receiver or Court
under the Presidency-towns Insolvency Act, 1909 (3 of
1909) or the Provincial Insolvency Act, 1920 (5 of
1920) to realise the property of an insolvent partner.
(4) This section shall not apply,--
(a) to firms or to partners in firms which have no place
of business in 8 [the territories to which this Act
extends], or whose places of business in 9 [the said
territories], are situated in areas to which, by notification
under 10 [section 56], this Chapter does not apply, or
(b) to any suit or claim of set-off not exceeding one
hundred rupees in value which, in the Presidency-towns,
is not of a kind specified in section 19 of the Presidency
Small Cause Courts Act, 1882 (5 of 1882), or, outside
the Presidency-towns, is not of a kind specified in the
Second Schedule to the Provincial Small Cause Courts
Act, 1887 (9 of 1887), or to any proceeding in execution
or other proceeding incidental to or arising from any
such suit or claim."
30. The aforesaid provision indicates that under Section 69(2)
of the Partnership Act, no suit can be filed by a firm unless it is
registered and the names of the persons suing are shown in the
register of firms as partners of the firm. Under Section 69(3)(a)
of the Partnership Act, an exception is carved out to the said
prohibition, to the extent that the right to sue for dissolution of
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a firm or accounts of a dissolved firm, or any right or power to
realise the property of a dissolved firm, would remain intact.
The said provision has come up for consideration in the context
of dissolved firms. In the case of Bhagwanji Morarji Goculdas
Vs. Alembic Chemical Works Co. Ltd. (supra), which has been
referred to by the learned counsel appearing for the rival parties,
it has laid down that even if a right is invoked in respect of a
property of a firm which has been dissolved and which was not
even registered, a suit by partners of the dissolved firm for
realising the property of such a dissolved firm could be
maintained. It is crucial that the plaintiff in the said case was a
partner of a dissolved firm and not the dissolved firm itself.
31. In the case of Gandhi and Co. Vs. Krishna Glass Pvt. Ltd.,
a Division Bench of this Court considered the effect of Section
69(2) of the Indian Partnership Act, 1932. It was found that a
suit wherein the plaintiff was a registered firm but the name of
one of the partners was not recorded with the Registrar of Firms
as a partner on the date of filing of the suit would attract the bar
under the aforesaid provision, notwithstanding the fact that the
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name of such a partner was recorded in the register subsequent
to filing of the suit. In the present case, as found hereinabove,
the plaintiff firm was a dissolved firm and, therefore, there was
no question of the names of the partners stated in the plaint
being recorded as partners of the firm in the register of firms.
32. It is necessary to deal with the judgments on which the
learned counsel for respondent No.1 has placed much reliance.
It is claimed that the said judgments indicate that
notwithstanding dissolution of the firm, a suit could be
maintained by a dissolved firm, since a partnership firm is
nothing but a compendious way of describing the partners and
that the right in the property of the firm really vests in the
partners. But, a perusal of the judgments in the cases of Agrawal
Jorawarmal Vs. Kasam; Bhagwanji Morarji Goculdas Vs.
Alembic Chemical and Appaya Nijlingappa Vs. Subrao Babaji
Teli (supra), shows that these were cases where the suits were
filed by partners of a dissolved firm. It is in such factual matrix
that the Courts held that such suits were maintainable as Section
69(3)(a) of the Indian Partnership Act, 1932, would come into
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operation only when a partner of a dissolved firm files a suit.
None of these judgments come to the aid of the respondent
No.1 as the suit in the present case was filed by the respondent
No.1, which was a dissolved firm.
33. Reliance was placed on the judgment of the Supreme
Court in the case of Amar Nath Agarwalla VS. Dhillon
Transport Agency (supra) to contend that since one of the
partners i.e. Mohanlal Balmukund Bundiwal was a partner in
the dissolved firm as well as the subsequent firm, the suit was
maintainable. But, a perusal of the said judgment of the
Supreme Court would show that it considered a controversy of
subletting of premises by a partnership firm, in a situation where
one of the partners of the original firm was partner in the new
firm. In such peculiar circumstances, it was held that a case of
subletting was not made out, but, the said controversy had
nothing to do with the question about fundamental defect in the
suit filed by the respondent that arises in the facts and
circumstances of the present case. The material on record shows
that in the present case, the suit was filed by a dissolved firm and
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not by the new partnership firm that came into being and was
registered on 14/05/2009. The suit was not filed by a partner of
a dissolved firm. On this ground, the aforesaid judgments relied
upon, on behalf of the respondent No.1, are clearly
distinguishable.
34. The judgment in the case of Guruprasad Vs. Additional
District Magistrate, Nagpur (supra) is also distinguishable,
because it was rendered in the context of a proprietary concern,
wherein the proprietor was held to be a tenant in his personal
capacity. The said judgment cannot come to the aid of the
respondent No.1, to hold that a dissolved firm can file a suit.
Similarly, judgment in the case of M/s Ganesh Trading Co. Vs.
Moji Ram (supra), is distinguishable, for the reason that it
concerned the question of application for amendment moved by
the plaintiff to cure the defect of the original suit being filed by a
dissolved firm. The judgment is more on the question of the
power of amendment being exercised by Courts. As noted
above, in the present case, no such attempt was ever made on
behalf of the respondent No.1, despite the fact that the aforesaid
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objection about the plaintiff firm being a dissolved firm was
raised at the outset in the written statements filed on behalf of
the original defendants as well as the petitioner i.e. defendant
No.9. The defect in the present case was fundamental as also
substantial, going to the very root of the matter, hitting at the
very maintainability of the suit filed by respondent No.1, which
the two Courts below failed to appreciate in the correct
perspective.
35. Similarly, the judgment in the case of Purshootam Co. Vs.
Manilal & Sons (supra), rendered by the Supreme Court is
distinguishable, because the said case concerned a situation
where the plaintiff firm was doing business outside India and it
had five partners. An amendment application was moved to
strike out name of the firm as plaintiff and to state the names of
five partners. In the facts of the said case, the Supreme Court
held that there was a misdescription, which was capable of
amendment and that it was not a case where the plaint had been
filed by a non-existing person and therefore, a nullity. In the
present case, the respondent No.1 / plaintiff firm was a dissolved
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firm and hence, a non-existent entity, which the two Courts
below completely failed to appreciate.
36. Reliance placed on the judgment of the Supreme Court in
the case of Shiv Developers Vs. Aksharay Developers (supra), is
also misplaced for the reason that in the present case the plaintiff
firm / respondent No.1 i.e. a dissolved firm filed the suit on the
basis of a tenancy agreement i.e. a contract and not for
enforcement of a statutory or common law right. Therefore, bar
under Section 69(2) of the Partnership Act would certainly
come into play in the facts and circumstances of the present
case. In any event, Section 69(3)(a) of the Indian Partnership
Act, 1932, would come into operation when a suit is filed by a
partner of a dissolved firm, concerning enforcement of a right
for accounts of the dissolved firm or any right or power to
realize the property of a dissolved firm.
37. The judgment of the Supreme Court in the case of V.
Subramaniam Vs. Rajesh Raghuvendra Rao (supra) concerned
challenge to constitutional validity of Section 69(2A)
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introduced in the Indian Partnership Act, 1932, as the
Maharashtra Amendment. The Supreme Court held that the
said Section violated Articles 14, 19(1)(g) and 300-A and hence,
it was declared ultra vires. The said controversy has nothing to
do with the question that arises for consideration in the present
petition. Therefore, it becomes clear that the two Courts below
erred in holding that the suit filed by respondent No.1 i.e. a
dissolved partnership firm was maintainable.
38. In fact, a perusal of the judgment of the Small Causes
Court would show that an issue was indeed framed as regards
the maintainability of the suit, but, after discussion on the said
aspect, the Small Causes Court proceeded on the basis that
although the Registrar of firms did record that the partnership
firm bearing registration No. 907 of 1978-79, stood dissolved
on 17/12/2007, it was a partnership firm dated 10/02/2009,
named "Maharashtra Industries" that came into existence and it
was in existence at the time of filing of the suit. The relevant
findings read as follows:
"32) Considering the recital of above documents, it is
seen that the partnership was at will. It will not dissolve
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for the reason of death or retirement of partners. There
is no dissolution deed between the parties in respect of
partnership dated 1.7.1978 or 1.4.1990. Though Register
of Firm (Exh.65) shows that firm No. 907 of 1978-79 is
dissolved on 17/12/2007, as supra dictus, there was a
partnership firm dated 10.02.2009 in the name of
Maharashtra Industries. Hence, the partnership firm
was in existence at the time of filing of suit. It has come
in cross-examination of Sanjay (DW 1) that,
Jagdishchandra Bundiwal had inducted the Maharashtra
Industries as a tenant and the machineries of plaintiffs
are lying in the suit premises even till the date of
execution of sale deed in favour of defendant No.9.
Therefore, though the suit is filed in the name of
Maharashtra Industries, registered partnership firm No.
907 of 1978-79, it does not affect the status of
partnership firm Maharashtra Industries. Because of
new number is given, it cannot be said that partnership
firm Maharashtra Industries was not in existence."
39. This Court is of the opinion that the aforesaid finding is
unsustainable and not in tune with the provisions of the Indian
Partnership Act, 1932, and the law laid down by this Court and
the Supreme Court in the aforementioned judgments.
40. The Appellate Court did not even frame a point as regards
the maintainability of the suit, thereby indicating the grave error
in its approach. Yet, there is some discussion in the judgment of
the Appellate Court as regards the dissolution of the firm on
17/12/2007, but, it has been erroneously held that the same did
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not matter since Mohanlal Balmukund Bundiwal was one of the
partners in the new firm and he could be said to have continued
in possession of the suit property. Such an approach is wholly
unsustainable. Thus, it is found that the two Courts below
concurrently erred in holding that the suit filed by the
respondent No.1 i.e. the dissolved partnership firm was
maintainable.
41. On the second contention raised on behalf of the
petitioner, without prejudice to the aforesaid contention
pertaining to maintainability of the suit, it is found that the
witness for respondent No.1 i.e. Mohanlal Balmukund
Bundiwal himself in cross-examination conceded that tenancy
agreement dated 01/07/1978 at Exh.188 was the only
agreement and that there was no other agreement. Thus, the
claim to possession under the said tenancy agreement could be
only to the extent of the area of the property subject matter of
the said agreement i.e. about 809 sq.ft. Hence, it becomes
obvious that the decree could not have been passed for the
entire area of the plot i.e. 2178 sq.ft. in favour of respondent
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No.1. This was also completely missed by the two Courts below
while granting the decree in favour of respondent No.1.
42. In any case, even if findings on the second contention
raised on behalf of the petitioner would lead to a decree
restricted to the said area of only 809 sq.ft., in view of the fact
that this Court has found hereinabove that the suit filed by the
respondent No.1 i.e. a dissolved firm was not maintainable, it
must lead to setting aside of the entire decree. The two Courts
below completely erred on the aforesaid issue of maintainability
of the suit, thereby rendering the decree passed in favour of
respondent No.1 wholly unsustainable and liable to be set aside.
43. Accordingly, the Writ Petition is allowed. The impugned
judgments and orders passed by the Small Causes Court and
Appellate Court are quashed and set aside.
44. The suit filed by respondent No.1 is held to be not
maintainable and accordingly, it is dismissed.
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45. There shall be no order as to costs.
Rule is made absolute in above terms.
JUDGE
Digitally signed by:MILIND
P DESHPANDE
Signing Date:06.06.2022
17:43
MP Deshpande
