M/S. Gangotri Developers, Pune ... vs Shri. Ajit Anantrao Butte Patil ...
2023 Latest Caselaw 2421 Bom

                                                                  902.ia.1375.2023.doc


 Chaitali Ekke


                 IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                         CIVIL APPELLATE JURISDICTION

                         FIRST APPEAL NO. 143 OF 2023
                                    WITH
                     INTERIM APPLICATION NO. 1375 OF 2023

 M/s. Gangotri Developers,
 A registered partnership firm
 Having its head office at/Po.
 Barmecha Tyre, House No.40,
 Market Yard, Shiru, Dist. Pune.

 Shri Gulab Dina Dhavde,
 (deceased thr. Lr.)
 Sou. Sangita Hanumant Nazirkar
 Age : 42 yrs., Occ.: Agriculture &
 Business, R/at: H-26, Swapna Shilp,
 Kothrud, Pune 411 038.                           Appellants/Applicants
                                                 ...(Org. Plaintiffs)
                  Versus

 Shri Ajit Anantrao Butte Patil,
 Age: 47 yrs., Occ.: Agriculture &
 Business, R/At: Raj Palace, 862,
 Bhandarkar Road, Pune 411 004.

 Shri Abhaykumar Kisandas,
 Barmecha, Age: 43 years,
 Occ.: Agriculture & Business,
 At Post: Barmecha Tyre, House No. 40,
 Market Yard, Shirur, Dist. Pune.

 Sou. Savita Rajaram Ghavte,
 Age: 35 yrs, Occ.: Agriculture & Business,
 R/at : Ghodnadi, Taluka Shirur,
 Dist. Pune.

 Shri Rahul Baburao Pacharne,
 Age: 28 yrs., Occ.: Agriculture & Business,
 R/at 10, Mangaldas Road,
 Harmes Crystal Society, Shivdarshan,
 Pune 411 001.




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                                                                    902.ia.1375.2023.doc


 Shri Madhukar Vithoba Bharne                      Respondents
 Age:50 yrs, Occ.: Agriculture & Business          (Respondent Nos. 1 to 4
 R/at Anthurne, Taluka Indapur                     are the Org. Defendants
 Dist. Pune.                                       whereas the Respondent
                                                   No.5 is the original
                                                  ...Plaintiff No.2)
                                    ....
 Ms. Madhavi Ayyappa i/b Talekar & Associates, Advocate for
 Applicants / Appellants.
 Mr. Anil Sakhare, Senior Advocate i/b Mr. Vivek V. Salunke, Mr.
 Shubham Budhvant, Advocates for Respondent No.1.
 Mr. Chetan Patil, Advocate for Respondent Nos.2 to 4.
                                    ....

                                  CORAM      : K. R. SHRIRAM &
                                               RAJESH S. PATIL, JJ.

                                  DATED      : 14th March 2023


 Oral Judgment (Per K.R. Shriram, J.)

 1                Appellant is impugning an order dated 16.01.2021 passed

by the Additional Judge, Small Cause Court, Pune, rejecting the plaint

under Order VII Rule 11(d) of the Code of Civil Procedure (CPC). The

Trial Court came to a conclusion that Plaintiffs' firm M/s. Gangotri

Developers was not existing in the records of Registrar of partnership

firms and Plaintiffs did not produce any document to show that Plaintiff

No.1 and Plaintiff No.2 were mentioned as partners in the Register of

Firms on the date the suit was filed, and hence the suit was barred

under the provisions of Section 69 of the Indian Partnership Act, 1932.

2 Appeal was listed for admission today. Since the issue was

short, i.e., could trial court summarily reject the plaint under Order VII

902.ia.1375.2023.doc

Rule 11(d) of CPC on the ground of barred by law in force, with the

consent of the counsel we decided to take up the Appeal for final

hearing, at admission stage.

3 The law on the provisions of Order VII Rule 11 of CPC is

quite settled. An application for rejection of plaint under Order VII Rule

11 of CPC can be entertained only if the plaint on the face of it discloses

that the suit is barred by any law in force, and not by referring to

materials which are sought to be placed on record by defendant in

answer to the plaint. In case, defendant requires to refer to any material

other than the plaint, like in this case has happened, certainly such an

exercise is permissible by way of leading evidence after framing issues

and satisfying the court about non-maintainability of the suit. But the

same exercise cannot be done under Order VII Rule 11(d) of CPC. The

courts have held on account of any material being available with

defendant to prove that the suit being not maintainable, the same

cannot be a ground to non-suit Plaintiff by exercise of power under

Order VII Rule 11(d) of CPC. In order to get the necessary relief on the

basis of such materials defendant will have to lead necessary evidence

by producing such materials on record in accordance with the

provisions of law and only thereupon the court can take appropriate

decision as regards the objection sought to be raised by Respondents

regarding non- maintainability of the suit.

902.ia.1375.2023.doc

4 Plaintiff had filed the suit on the basis that Plaintiff No.1

and Plaintiff No.2 are partners of Gangotri Developers a registered

partnership firm. In paragraph 4 of the plaint, there are averments to

the effect how Plaintiffs' claim to be admitted as partners, and there are

positive averments that Registrar of Firms has been informed about the

same and presently, i.e., when the suit was filed, Plaintiff No. 1 and

Plaintiff No. 2 were the existing partners of the firm. There is also an

averment in the plaint that from 31.12.2009 Plaintiff firm was

continuing with two partners, namely, Plaintiff No.1 and Plaintiff No.2,

and after Plaintiff No.2 died, Plaintiff No.2A came to be added as

partner. The dispute relates to accounts and declaration.

It is Plaintiffs' case that the erstwhile partner of the firm,

Defendant No.1 in collusion with Defendant No.2 to Defendant No.4

had filed a suit behind Plaintiffs' back and though the firm was shown

as Defendant No.1 in the suit, the summons was never served upon the

firm and a consent decree was obtained by which Defendants herein

grabbed properties of the firm.

5 Hence, the Special Civil Suit No. 607 of 2014 was filed for

declaration and cancellation or setting aside the fraudulent decree and

suit is also for permanent injunction against defendants.

6 While considering the application taken out under Order

VII Rule 11 of CPC, the Trial Court has not just considered the plaint,

902.ia.1375.2023.doc

but also has gone into various material that defendants produced. The

Trial Court has also, while hearing the application under Order VII Rule

11 of CPC, called upon Plaintiffs to prove that Plaintiff No.1 and 2A are

partners of Gangotri Developers. The Trial Court has proceeded on the

basis that Plaintiffs have not produced any documents to show that they

are partners of the registered partnership firm and their name appears

in the Registrar of Firms. The Apex Court in Pawan Kumar vs. Babulal

since deceased to legal representatives and others 1, relied upon by

Ms. Ayyappa has held that unless it appears on the face of the plaint

that it was barred by any Act, no court should reject the plaint applying

provisions of Order VII Rule 11 of CPC. The Apex Court held that the

approach of courts must be to proceed on a demurrer and see whether

accepting the averments in the plaint the suit is barred by any law or

not. Disputed questions cannot be decided at the time of considering an

application under Order VII Rule 11 of CPC, and it would apply only in

those cases where the statement made by Plaintiffs in the plaint without

any doubt or dispute shows that the suit is barred by any law in force.

In Ujwalaben Mahindra Shah and another vs. M/s Kesharchand

Gulabchand and Others2, relied upon by Ms. Ayyappa, a learned single

judge of this court while considering a matter similar to the case at

hand, held that the controversy as to whether a firm is registered

1 (2019) 4 SCC 367 2 2002 (1) Mh.L.J. 378

902.ia.1375.2023.doc

partnership firm with the Registrar of Firms or not, is not a pure

question of law but is a mixed question of law and fact. Whether a firm

is registered or not is to be established by adducing necessary evidence

in that regard. It is not a question of jurisdiction but maintainability of

the suit.

7 The Apex Court in Hajinder Pal Singh vs. Narendra Kumar

Nangia3, relied upon by Ms. Ayyappa, has held that where issue is a

mixed question of law and fact would require evidence, and in such

situations no Order VII Rule 11 of CPC application would lie.

In R.K. Roja vs. U.S. Rayudu4 relied upon by Ms. Ayyappa,

the Apex Court in paragraph 4 has held as under :

"We are afraid that the stand taken by the High Court in the impugned order cannot be appreciated. An application under Order 7 Rule 11 CPC can be filed at any stage, as held by this Court in Sopan Sukhdeo Sable v. Charity Commr. : (SCC p.146, para 10)

10..... The trail court can exercise the power at any stage of the suit

-before registering the plaint or after issuing summons to the defendant at any time before the conclusion of the trial.

The only restriction is that the consideration of the application for rejection should not be on the basis of the allegations made by the defendant in his written statement or on the basis of the allegations in the application for rejection of the plaint. The court has to consider only the plaint as a whole, and in case, the entire plaint comes under the situations covered by Order 7 Rules 11(a) to (f) CPC, the same has to be rejected.

(Emphasis supplied)"

3 2018 SCC Online SC 1537 4 (2016) 14 SCC 275

902.ia.1375.2023.doc

8 In Shivrudra Shivling Pailwan vs. Prakash Maharudhra

Pailwan5 relied upon by Ms. Ayyappa, a learned single judge of this

court has held that in order to enable the court to arrive at the

conclusion that the suit is barred, the pleadings in the plaint should

apparently disclose the facts prevailing the bar to the suit instituted by

Plaintiff. The conclusion regarding bar to the suit cannot be arrived at

on the basis of materials extraneous to the pleadings in the plaint. The

court went on to hold that the jurisdiction of the court to take action

under Order VII Rule 11 (d) of the CPC can arise only in case where the

pleadings in the plaint are sufficient to disclose the bar to the suit and

not otherwise.

9 Mr. Sakhare for Respondents, relying upon Shreeram

Finance Corporation vs. Yasin Khan and Others 6, submitted that suit was

not maintainable in view of provisions of Section 69 (2) of the

Partnership Act. We are afraid this judgment is not applicable to the

facts of this case for two reasons, namely, a) the Trial Court has applied

the provisions of Section 69 (1) of the Partnership Act because it is a

dispute inter-se partners / erstwhile partners, and b) that was not a

case where an application under Order VII Rule 11 of CPC was

considered.

5 (2003) 1 Mh.L.J. 299 6 1989 Mh.L.J. 849

902.ia.1375.2023.doc

10 In Altaf Fakir Baig and Ors. vs. Goel Ganga Deve. (Ind) Pvt.

Ltd.7, we should note, the court, in paragraph Nos. 12 and 13, has held

that Order VII Rule 11 of CPC is a drastic power confirmed on the court,

the conditions precedent on exercise of powers are stringent, especially

when rejection of plaint is also on the ground of barred by law.

Therefore, when Plaintiff claims that it is a registered partnership firm,

the same has to be accepted at this stage considering the application

under Order VII Rule 11 of CPC.

11 In the case at hand the Trial Court has not proceeded on a

demurrer but concluded the suit was barred on the basis of materials

extraneous to the pleadings in the plaint. The issue as to whether the

firm was registered or not is a mixed question of law and fact to be

established by adducing necessary evidence in that regard. In the

circumstances, we set aside the impugned order passed by the Trial

Court rejecting the plaint. Appeal allowed and disposed.

12 The suit is restored to file of the Trial Court. The suit has

been pending since 2014. Hence, we direct the Trial Court to expedite

the matter and dispose the pending suit, as early as possible and in any

case within six months.

13 The Trial Court would go into the merits of the matter

independently and dispose the suit.

7 Dated 10.01.2023 in First Appeal (St.) No. 18751 of 2021

902.ia.1375.2023.doc

14 Ms. Ayyappa is pressing for costs. She is justified.

Respondents to pay a sum of Rs. 1,00,000/- as costs of this Appeal.

Costs shall be paid to Appellants' Advocate within four weeks from

today. If the amount is not paid, the Trial Court to strike off the defence

of Respondents.

15 Consequently, Interim Application also stands disposed.

 (RAJESH S. PATIL, J.)                           (K. R. SHRIRAM, J.)