Calcutta High Court

Ayussh Rathhi vs Ashok Kumar Rathi & Ors on 4 April, 2024

                 IN THE HIGH COURT AT CALCUTTA
                (Ordinary Original Civil Jurisdiction)
                             ORIGINAL SIDE


Present:

The Hon'ble Justice Krishna Rao



                        IA No. GA 03 of 2022

                                     In

                               CS 28 of 2019



                               Ayussh Rathhi

                                  Versus

                      Ashok Kumar Rathi & Ors.



           Mr. Mainak Bose
           Ms. Manju Agarwal
           Mr. Rishi Agarwal
           Ms. Anju Manot
                                               ... For the plaintiff.
           Mr. Reetobrata Mitra
           Mr. Ayan Dutta
           Mr. Rudrajit Sarkar
           Ms. Aruna Ghosh
           Mr. Abhishek Sikder
                                               ... For the defendants.



Hearing Concluded On : 14.03.2024

Judgment on           : 04.04.2024
                                       2


Krishna Rao, J.:

1. Defendant no. 6 has filed the present application being G.A. No. 3 of

2022 in C.S. No. 28 of 2019 praying for deletion of its name from the

case being C.S. No. 28 of 2019. Defendant no. 6 says that the plaint

does not disclose any cause of action against the defendant no. 6 and

the defendant no.6 being the Company, an independent and separate

juristic entity, is not bound by any partition and is squarely covered

by the Companies Act, 2013.

2. Mr. Reetobrata Mitra representing the defendant no. 6 submitted that

the defendant no. 6 is an independent juristic entity in which the

plaintiff never held any shares, nor is there any pleading in the plaint

that the plaintiff held any shares in the defendant no.6 at any point of

time. He submits that there is nothing on record in so far as the

defendant no.6 is concern being the part of the family company,

assets, properties etc.

3. Mr. Mitra submitted that the defendant no.6 cannot under any

circumstance be treated to be assets of the family or the shareholders

of such company. He says that if it is construed that the shares of the

defendant no. 6 is held closely by all family members, belonging to

Rathhi family, the assets and properties of the defendant no.6

continues to be vested in the company itself i.e the defendant no.6 and

not with the shareholders and shareholders cannot by mutual

consent, understanding, representation seek to alter, amend, modify

or usurp the assets and properties of the defendant no. 6.

4. Mr. Mitra submitted that as per the claim made by the plaintiff, the

same is entertainable by the National Company Law Tribunal under

Sections 58 and 59 of the Companies Act, 2013 and cannot be

presumed to be a family company or the assets held by it to be family

assets.

5. Mr. Mitra submitted that as per Section 430 of the Companies Act,

2013, this Court has no jurisdiction to entertain the claim made by

the plaintiff. In support of his argument, the Mr. Mitra relied upon the

following judgments:

                 i.      (1954) 2 SCC 563 (Bacha F. Guzdar vs.
                         Commissioner of Income Tax, Bombay).

                 ii.     (2003) 10 SCC 310 (D.S. Lakshmaiah and
                         Another vs. L. Balasubramanyam and
                         Another).

                 iii.    (2012) 5 SCC 370 (Maria Margarida Sequeira
                         Fernandes and Others vs. Erasmo Jack De
                         Sequeira (Dead) Through LRS).




6.   Mr.   Mainak       Bose, Learned   Advocate   representing   the plaintiff

submitted that the defendant no. 6 had applied for extension of time

to file written statement which expired on 14th August, 2019 but

despite of substantial delay has no written statement was filed and to

come out of the rigor of the same, the defendant no.6 has filed the

present application. He submits that in paragraph 5 of the affidavit in

reply of the instant application, the defendant no. 6 has stated that

the petitioner had given a go by thereby meaning that the defendant

no. 6 has accepted the case of the plaintiff and has no defence to the

claim of the plaintiff.

7. Mr. Bose submitted that the defendant no. 6 has categorically

admitted that it was incorporated by Ashok Kumar Rathi, the son of

Mulchand Rathi and grandson of Ganga Bishan Rathi and Narayan

Das Rathi being the son of Ganga Bishan Rathi as would appear from

the genealogical table. He submits that the plaintiff has categorically

stated that as to how Mulchand Rathi HUF evolved which acquired

control over the several joint family properties and businesses.

8. Mr. Bose submitted that plaintiff has shown that the joint Hindu

Undivided Family which consists of Ganga Bishan Rathi, great

grandfather of the plaintiff and his six sons. He submits that the

original business of the Rathi Family started from 201B, Mahatma

Gandhi Road, Kolkata-700007. The income generated from the said

business constituted the nucleus of the joint family and from the said

nucleus further income was generated and several businesses were

established and properties were acquired either in the name of the

individual members or in the name of companies which were formed

out of the joint family nucleus. He submits that the promoters of the

said companies were members of the Rathi family and all the

shareholders were also members thereof.

9. Mr. Bose submitted that all six sons of Rathi family resided together

and carried business together, subsequently with the passage of time,

sons of Ganga Bishan Rathi started severing from joint family. The

defendant no. 6, the defendant no. 7 and 8 who are holding controlling

shares in the defendant no. 6, the other sons of Ganga Bishan Rathi

transferred their shares in favour of the plaintiff and other members of

the family of Mulchand Rathi family which consisted of Mulchand

Rathi, his two sons, Ashok Kumar Rathi, Indra Kumar Rathi and their

other family members. He submits that since inception, the registered

office of the defendant no. 6 is situated at 201B, Mahatma Gandhi

Road, Kolkata-700007 which is also the address of defendant nos. 7 to

12 and the defendant no.18 which are joint family companies.

10. Mr. Bose submitted that as per Master data of the defendant no.6,

since inception the defendant no.6 was run by the joint family

members of Ganga Bishan Rathi and was owned by its family

members. He submits that the defendant no.1 has not stated that the

defendant no.6 was constituted and/or promoted from the separate

earning of the defendant no.1 de hors the joint family. He submits that

the defendant no.6 has not produced any document in support of the

contention that the funds to acquire assets had come from the income

generated by the defendant no.6. He submits that apart from holding

the land at Mandarmoni, West Bengal, no other business so as to

generate funds to acquire the assets.

11. Mr. Bose in support of his submissions relied upon the following

judgments:

i. (2004) 9 SCC 512 (Liverpool & London S.P.& I Association Ltd. vs. M. V. Sea Success I and Another).

ii. (2017) 9 SCC 586 (Adiveppa and Others vs. Bhimappa and Another).

12. The plaintiff has filed the suit against the defendants praying for the

following reliefs:

"(a) Declaration that all the properties and assets including those described in annexures "B", "C"

and "D" hereto and the defendant Nos.6 to 18 are Joint family properties, assets and business and the plaintiff has ½ share therein;

(b) Decree for partition of all the properties and assets belonging to the family of the plaintiff and the defendant Nos. 1 to 5 including the properties and assets described in annexures "B", "C" and "D" hereto and also of the family business being the defendant Nos. 6 to 18 above named by meres and bounds and separate allotment to the plaintiff of his ½ share therein;

(c) A decree for enquiry into the properties, assets and businesses of the family of the plaintiff and the defendant Nos.1 to 5 and a decree for partition thereof and for separate allotment of ½ share therein respectively to the plaintiff;

(d) Receiver;

(e) Attachment

(f) Injunction;

(g) Costs;

(h) Such further and/or other relief."

13. Statement made in paragraph 22 of the plaint reads as follows :

"In course of such Joint family business, lands were purchased in the name of the companies and firms being defendant Nos. 6 to 18 which were owned and controlled by the Hindu Undivided Family and lands were purchased and divided in the said companies randomly. Share holding in the said companies being defendant Nos. 6 to 15 are held in the name of the parties herein. The number of allotment of shares in the individual name was made as per instruction of the defendant No.1, however, at all material times, it was represented by the defendant No.1, both the defendant No.1 and the plaintiff will have equal right in the said companies, firms & LLP being defendant Nos. 6 to 18 and the said companies, firms & LLP being defendant Nos. 6 to 18 are family companies and number of shares held by a person cannot affect such right of the parties."

14. At Annexure "B" of the plaint at serial no. 12 at page 55 name of the

defendant no. 6, namely, Karni Exports Pvt. Ltd. is appearing. At

Annexure "D", page 57 of the plaint, the address of the defendant no.

6 is mentioned as 201B, M.G. Road, 1st Floor, Room No. 55-57A,

Kolkata -700007.

15. The defendant no. 6 has filed an application for deletion of its name

from the suit and main contention raised by the defendant no. 6 is as

follows:

"5. From the cause title it appears that the plaintiff has impleaded the promoter director of this petitioner/defendant, Ashok Kumar Ratthi and certain other shareholders.

6. The plaint does not disclose any cause of action as against this defendant, the petitioner herein. In fact, the plaintiff has no cause of action against the petitioner.

7. It is not in dispute and clearly admitted that the petitioner was incorporated by Ashok Kumar Ratthi and Narayan Das Ratthi on October 29, 1987, each holding 150 shares.

8. This petitioner has never availed of any money from the family corpus or from the plaintiff nor has it been alleged in the plaint."

16. In the case of Liverpool & London S.P.&I Association Ltd. (Supra),

the Hon'ble Supreme Court held that:

"Rejection of Plaint

139. Whether a plaint discloses a cause of action or not is essentially a question of fact. But whether it does or does not must be found out from reading the plaint itself. For the said purpose the averments made in the plaint in their entirety must be held to be correct. The test is as to whether if the averments made in the plaint are taken to be correct in their entirety, a decree would be passed. Cause of action

140. A cause of action is a bundle of fact which are required to be pleaded and proved for the purpose of obtaining relief claimed in the suit. For the aforementioned purpose, the material facts are required to be stated but not the evidence except in certain cases where the pleading relies on any misrepresentation, fraud, breach of trust, willful default, or undue influence."

After going through the entire plaint particularly paragraphs 22,

36, 47 and 48, this court finds that sufficient cause of action has been

pleaded against all the defendants including the defendant no. 6 and

thus it cannot be said that that the plaintiff has no cause of action

against the defendant no. 6.

17. In the case of Adiveppa (Supra), the Hon'ble Supreme Court held

that:

"16. It is a settled principle of law that the initial burden is always on the plaintiff to prove his case by proper pleading and adequate evidence (oral and documentary) in support thereof. The plaintiffs in this case could not prove with any documentary evidence that the suit properties described in Schedules 'B' and 'C' were their self- acquired properties and that the partition did not take place in respect of Schedule D properties and it continued to remain ancestral in the hands of family members. On the other hand, the defendants were able to prove that the partition took place and was acted upon.

19. It is a settled principle of Hindu law that there lies a legal presumption that every Hindu family is joint in food, worship and estate and in the absence of any proof of division, such legal presumption continues to operate in the family. The burden, therefore, lies upon the member who after admitting the existence of jointness in the family properties asserts his claim that some properties out of entire lot of ancestral properties are his self- acquired property."

18. In the present case, the plaintiff has relied upon two documents

against the defendant no. 6 those are appearing at Annexure "B" of the

plaint at serial no. 12 at page 55 name of the defendant no. 6, namely,

Karni Exports Pvt. Ltd is appearing. At Annexure "D", page 57 of the

plaint, the address of the defendant no. 6 is mentioned as 201B, M.G.

Road, 1st Floor, Room No. 55-57A, Kolkata -700007. Though the

defendant no. 6 has raised the contention that the defendant no. 6 has

never availed any money from the family corpus or from the plaintiff

but the defendant no. 6 has not filed any document to establish that

the assets of the defendant no. 6 is self-acquired property.

19. As regard to the contention of the defendant no. 6 that the suit is not

maintainable and this Court is not having jurisdiction, the defendant