Calcutta High Court
M/S. Ashutosh Roy Prafulla Kumar Roy And ... vs Md. Iqbal Khan And on 25 November, 2025
IN THE HIGH COURT OF JUDICATURE AT CALCUTTA
ORDINARY ORIGINAL CIVIL JURISDICTION
ORIGINAL SIDE
LAST HEARD ON: 17.09.2025
DELIVERED ON:25.11.2025
PRESENT:
THE HON'BLE MR. JUSTICE BISWAROOP CHOWDHURY
I.A. No. GA 11 of 2025
IN
C.S. No. 348 OF 2013
M/S. ASHUTOSH ROY PRAFULLA KUMAR ROY AND ORS Vs MD. IQBAL KHAN AND
ORS
Appearance:
Mr. Rupak Ghosh, Adv.
Ms. Tiana Bhattacharya, Adv.
Mr. Anirudhya Dutta, Adv.
..... for the plaintiff (Except plaintiff no. 10)
Mr. Swarnendu Ghosh, Sr. Adv.
Mr. Sourav Kr. Mukherjee, Adv.
Ms. Falguni Jana, Adv.
Ms. Sahana Pal, Adv.
Mr. Souhardya Mitra, Adv. ... for plaintiff no. 10.
Mr. Soumabho Ghosh, Adv.
Mr. A. Mukherjee, Adv. ... for defendants.
Biswaroop Chowdhury, J.: This is an application filed by the plaintiff no-
10/petitioner praying for the following reliefs;
a) An Order be passed recalling and/or modify and/or set aside the
order dated 02.05.2025 passed by His Lordship The Hon'ble
Justice Biswaroop Chowdhury in C.S. No. 348 of 2013 (M/S.
Ashutosh Ray Prafulla Kumar Ray and Ors VS Md. Iqbal Khan and
Ors).
b) Restore C.S. 348 of 2013 (M/S. Ashutosh Ray Prafulla Kumar Ray
and Ors VS Md. Iqbal Khan and ors.) to its original file and number
and direct that the same be adjudicated on its merits and in
accordance with law.
c) Stay of operation of the said order dated 02.05.2025 (passed in
C.S. No. 348 of 2013) till disposal of the instant proceeding:
d) Pass such other or further order or orders and/or direction or
directions as this Hon'ble Court may deem fit and proper.
The contention of the plaintiff in the application may be summed
up thus;
1.
In the year 2013 all the partners of the partnership Firm namely
M/S. Ashutosh Ray Prafulla Kumar Ray (hereinafter referred to
as the said partnership firm) instituted a suit being C.S. No. 348
of 2013 before this Hon'ble Court against the defendants
seeking their eviction from the suit property.
2. The defendants filed their written statement and were
contesting the suit. During pendency of the said suit more than
one partners passed away, and plaint has been amended. The
defendants filed their written statement and were contesting the
suit.
3. At the time of commencement of the C.S. 348 of 2013 all the
plaintiffs jointly engaged Mr. Raghunath Chatterjee Learned
Advocate of M/S. Chatterjee Sil and Co. Solicitors and
Advocates as the advocate on record. At all material times Mr.
Raghunath Chatterjee Learned Advocate of M/S. Chatterjee Sil
Solicitors and Advocates was the advocate on record of all the
plaintiffs. It is a matter of record that since all the plaintiffs
were 14 in numbers (including the partnership firm), for logistic
convenience Mr. Som Shankar Mukherjee, the plaintiff no. 9,
was given authority to carry on the proceeding for and on behalf
of all the plaintiffs. It was decided and agreed by and amongst
all the plaintiffs that the said Mr. Mukherjee the plaintiff no.9
would take necessary steps and would carry on the proceedings
for the benefit and on behalf of all the plaintiffs so that the
claims made in the plaint be decreed conveniently.
4. Recently on or about second week of March 2025, the petitioner
herein became shocked and surprised to learn from the said
Learned Advocate of the plaintiff that the plaintiff no. 9
communicated to him that claiming albeit incorrect, that the
plaintiffs do not wish to proceed with the present suit and
thereby the plaintiff no. 9 instructed him to take necessary
steps to withdraw the suit. The said Learned Advocate handed
over a copy of letter dated 13.03.2025 issued by the plaintiff no.
9 in his favour.
5. Upon necessary enquiry the petitioner came to learn that the
plaintiff no-8, 9 and 11 with aid and assistance of a few other
plaintiffs were purporting to withdraw the suit. They were
purporting to withdraw the suit behind the back of the
petitioner and other dissenting partners.
6. Immediately thereafter the petitioner herein by a letter dated 20-
03-2025, communicated the said Learned Advocate, that he had
not authorized the plaintiff no. 9 to withdraw the said suit and
thereby instructed as a lawful existing partner of the Firm not to
take any action for withdrawal of the subject suit. He also
requested to issue 'no objection Vakalatnama' in his favour in
the subject suit. With reference to the said letter dated 20-03-
2025, the Learned Advocate made a communication to the
partnership firm narrating the above and purportedly sought for
instructions by letter signed by all the partners for further steps
to be taken by him. Thereby it was also communicated that the
said Learned Advocate was unable to take any step in the
subject suit without proper instruction.
7. The petitioner understood that the situation was getting
complicated and he decided to file Vakalatnama for himself
through another Learned Advocate on 25-04-2025. The present
Learned Advocate of the petitioner filed a Vakalatnama in the
present suit upon obtaining leave of this Hon'ble Court.
8. Immediately on the same day the present Learned Advocate of
the petitioner herein being so instructed sent an e-mail to the
said Learned Advocate of the plaintiffs, who had been engaged
since inception of the suit, thereby inter alia, communicating
that she had filed Vakalatnama on behalf of the petitioner as
her client in the subject action. Thereby she also requested the
said Learned Advocate not to take any step in the subject suit
for withdrawal thereof, in as much as the petitioner herein is
not inclined to withdraw the action but to proceed with the
same. The said communication was made to all other plaintiffs,
defendants and the Learned Advocate of the plaintiffs excluding
the petitioner herein.
9. On 05.05.2025 while checking the case status of some other
cases in the official site of the Hon'ble High Court, Calcutta the
present Learned Advocate of the petitioner became shocked and
surprised upon ascertaining that the suit being C.S. No. 348 of
2013 had been dismissed as withdrawn.' Ms. Jana could
ascertain that on 02.05.2025 the suit appeared in the list and
all the plaintiffs were purportedly represented by Mr. Anirudhya
Dutta Learned Advocate. While the suit was taken up the said
Mr. Anirudhya Dutta, Learned Advocate despite not having due
authority represented all the plaintiffs including the petitioner
herein and acting contrary to the instruction of the petitioner
herein has withdrawn the suit. Immediately on 06.05.2025 M.S.
Jana mentioned the suit before this Hon'ble Court whereupon
his Lordship was pleased to direct the matter to be listed under
the heading 'To be Mentioned' on 08.05.2025. On 06.05.2025,
Ms. Jana served a letter/e-mail of even date to the said Learned
Advocate M/S Chatterjee Sil and co, Mr. Anirudhya Dutta
Advocate, Mr. Asim Kumar Mukherjee Advocate, inter alia,
communicating that the said suit would be listed on
08.05.2025.
10. On 06.05.2025, in the afternoon the said order dated
02.05.2025 was found to be uploaded in the server wherefrom it
appeared that the Learned Advocates claiming to be
representing the plaintiffs purportedly submitted that the
parties had settled their disputes and the suit may be disposed
of. The Learned Advocates of the defendants also submitted the
same. It appears that a Terms of settlement allegedly executed
by Mr. Som Shankar Mukherjee claiming himself to be
constituted attorney of all the parties had been filed in Court.
Mr. Sil Learned Advocate (described as the erstwhile Learned
Advocate on record for the plaintiffs) appears to remain present
during the hearing however he also did not assert the aforesaid
facts.
11. The petitioner through his present Learned Advocate had
taken inspection of the record when the contents of the said
Terms of Settlement allegedly executed for, and on behalf of the
plaintiffs could be perused.
12. The petitioner was never aware of execution of the said
Terms of settlement and the same has been preferred behind his
back and that too contrary to his interest. The said Terms of
settlement purportedly records that in a meeting allegedly held
amongst the partners they decided to withdraw the suit whereas
the petitioner never attended any such meeting and was never
called upon to attend any such meeting and is not aware of any
such decision.
13. The order dated 02.05.2025 had been obtained by
perpetrating fraud upon this Hon'ble Court as per the following
particulars:
a) Neither the said Learned Advocate (described as erstwhile
advocate on record) nor any other Learned Advocate nor any
party to the suit informed this Hon'ble Court that the
petitioner herein had filed Vakalatnama through his present
Learned Advocate and he never consented for withdrawal of
the suit but to continue to proceed with the same.
b) The suit had been withdrawn without proper representation
of the fact and upon suppression of the material fact from
this Hon'ble Court.
c) The plaintiff no. 9 acting as the constituted attorney of the
petitioner herein as well withdrew the subject suit inspite of
specific instruction of the petitioner that he was not willing
to withdraw the suit but to proceed with the same.
d) Withdrawal of the suit is totally against the interest of the
firm and prejudicial inasmuch as;
i) The Firm or the plaintiffs would thereby accept their
wrongful dispossession from the subject properties.
ii) The Firm and their partners would accept the
possession of the defendants in the subject properties,
albeit the same is wrongful.
iii) The Firm and the partners would lose all their interest
in the money deposited by the defendants with this
Hon'ble Court which could be received by the plaintiffs
in the event of successful adjudication.
iv) The plaintiffs would gain nothing out of its decision to
withdraw the suit.
e) Other partners have acted in collusion to - each other and
are glaringly acting hand in gloves with the defendants
causing wrongful loss to the Firm and the petitioner as well.
f) The instruction given by the petitioner that he was interested
to proceed with the suit has not been brought to the notice of
this Hon'ble Court.
g) Misrepresentation had been made to this Hon'ble Court that
all the parties were willing to settle whereas the petitioner
herein (being the plaintiff no. 10) was not at all willing to
withdraw the suit but he instructed just the opposite.
h) The other partners of the partnership firm despite knowing
well that the petitioner was not a consenting party had
incorrectly, represented before this Hon'ble Court as if he
also had given his consent and thereby obtained the said
order by misrepresentation and fraud.
The Petitioner prayed that order Passed on 02.05.2025 in
C.S. 348 of 2013 be recalled.
Affidavit in opposition was filed by plaintiff no-1 to 9 and 11,
to 14 and the Defendants.
It is contended by the plaintiffs no. 1 to 9 and 11 to14 that
the application filed by the petitioner is not maintainable on the following
grounds.
a) The plaintiff no. 1 is a partnership firm. It was seized and
possessed of two godowns situated at 15/1 Portuguese
Church Street Kolkata-700001 which was handed over to
the defendants in the year 2010 by approval of majority
partners and affirmed by the Joint Receivers appointed by
the Hon'ble Court.
b) The fact of handing over of possession of the said
godowns in favour of the Defendants would be evident
from the contents of an application being G.A. No. 3142 of
2010 in AP. No. 392 of 2007 for discharge of Joint
Receivers by the partners of the erstwhile firm constituted
under the Deed of Partnership dated 8th July 1986. From
the averments and documents in support of the said
application it would appear that in a Minutes of Meeting
of the Joint Receiver on 25th August 2010 when it was
considered as Agenda No. 1 that the possession of the
said godown were with the Defendant and it was held that
the parties shall take appropriate steps before the
arbitration proceedings.
c) One of the partners of the erstwhile partnership firm and
the predecessor in interest of the plaintiff no. 11 to 14 had
raised objections against the Defendants being in
possession but such protest and objection was rejected by
this Hon'ble Court on account of such decision being
taken mutually by majority of the partners and for the
benefit of the said firm.
d) The said partner since deceased was also absent from
such meeting despite notice of such meeting. Such fact
would be evident from order dated 29th July 2011, passed
by the Hon'ble High Court in G.A. No. 3142 of 2010 with
AP No. 392 of 2007.
e) In respect of another property owned by the said erstwhile
partnership firm situated at 170, Mahatma Gandhi Road,
Kolkata-700001 an application under Section 9 of the
Arbitration and conciliation Act 1996 was filed before this
Hon'ble Court being A.P. No. 581 of 2012. It would appear
from the documents disclosed in the said proceedings,
that the plaintiff No. 10 had remained absent from the
meetings and said principal property of the erstwhile
partnership firm was sought to be sold in his absence.
Therefore there is no embargo on any such decision being
taken in respect of any business of the partnership firm
when taken by mutual consent of majority of the
partners.
f) Subsequently some of the Defendants filed a complaint
against the plaintiff no. 10 on 14th December 2011 in
respect of offences under Section 406, 420 read with
Section 506 of the Indian Penal Code 1860 committed on
2nd August 2010. The plaintiff No. 1 was arrested on 26th
June, 2012. The said plaintiff was remanded to Judicial
Custody pending trial. Charge sheet was filed on 18th
June 2013. Such facts were suppressed from the partners
of the present partnership firm constituted on 13th July
2013.
g) The partnership firm over the years incurred substantial
legal expenses on account of legal cost and counsel fees,
no part of which was borne by the plaintiff no.10. The
plaintiffs gained knowledge of the criminal proceedings
against plaintiff no. 10, around the time when an order of
conviction was passed by the Learned Metropolitan
Magistrate 14th Court at Calcutta on 27th February 2024.
The order of conviction specifically states that the
sentence may be set off against the time spent by the
plaintiff No. 10 in detention during pendency of trial.
h) News of conviction of the plaintiff No.10 was published in
local newspaper and was in wide circulation amongst the
tenants and neighbouring areas of the principal place of
business of the partnership firm causing immense
prejudice and disreputation to the other partners.
i) It is evident that the plaintiff No-10 has been using the
suit as a counter to the criminal proceeding.
j) The plaintiff no-10 has raised disputes inter se the
partners and such disputes and differences were referred
to arbitration before the Learned Sole Arbitration Mr.
Debdut Mukherjee, Advocate. The partners had entered
into a terms of settlement on 23rd June 2021 and
supplementary terms of settlement dated 20th July 2021,
whereby the proceedings had stood terminated.
k) However, the plaintiff no-10 filed another application for
the said terms of settlement and supplementary terms of
settlement that was rejected by an order dated 20th June
2023 passed by the Learned Sole Arbitrator.
l) On account of the persistent actions of the plaintiff No. 10
against the partnership firm, the partners held a meeting
on 30th June 2023 for which notice was admittedly served
on the plaintiff No. 10 on 30th June 2023. Insteadof
seeking information regarding the resolution taken in the
meeting he proceeded to raise issue regarding the locus
standi of the plaintiff No-9, the constituted attorney of the
plaintiffs. Therefore it would be evident that the plaintiff
no-10 had notice of the meeting held between the
partners and elected not to participate in such meetings.
m) Another notice was issued by the plaintiff No-11 dated
30th November 2023 against the plaintiff no-10 for
mismanagement of the partnership firm and it contains
details of the illegal activities of plaintiff No. 10. The
plaintiff no.10 received the notice and replied on 4th
December 2023 and disputed the authority of some of
partners from signing the rent receipts. The action of
plaintiff No. 10. has been causing impediment in
Collection of rent. Further plaintiff No. 10 in collusion and
connivance with one Kamalesh Singh has been
misappropriating sums and collecting rent from the
tenants in the said building without authorization from
the partners.
n) In the aforesaid facts and circumstances the plaintiff No.
8 had issued a notice dated 12th December 2023 calling
for meeting of the partners to be held on 16th December
2023 with intention to resolve the expenses incurred and
amicable resolution of all litigations against the plaintiff
No. 1. On receipt of such notice the plaintiff no-10 replied
by a letter dated 14th December 2023 and elected to
remain absent and/or abstain from attending the meeting
held between the partners on 16th December 2023.
o) Next meeting was held on 28th December 2023 for arriving
at an amicable settlement between the parties but
plaintiff no-10 did not attend. The partners had
unanimously agreed to take steps for legal actions against
the plaintiff No. 10.
p) Another meeting was held on 1st February wherein the
partners had unanimously agreed to withdraw the instant
suit being C.S. No. 348 of 2013 through the plaintiff No. 9
the constituted attorney.
q) Upon proper notice to plaintiff no-10 the majority of the
partners had decided to withdraw the suit being C.S. No.
348 of 2013 and the constituted attorney made several
requests with the erstwhile Advocate on Record of the
plaintiffs to take steps for withdrawal and/or issue no
objection to proceed with the decision of the partners but
the said Advocate on record decided to issue notices to all
the parties and more particularly the plaintiff No. 10.
r) The plaintiff no. 10 is not the owner of the said godown
and/or does not have any independent right title or
interest to maintain the present suit, as the plaintiff No. 1
is the lessee of the said godowns, which is a compendium
of partners without whose consent or decision of majority
of the partners of the plaintiff No. 1 the present suit is not
maintainable or can be proceeded by the plaintiff No. 10.
11. The plaintiff No. 10 is a convicted felon on account of offences
perpetrated against the Defendants. It is in the interest of the said plaintiff
No-10 to keep the present suit pending as he would use the same to his
benefit in the alleged appeal where he has allegedly obtained stay of order of
his conviction.
12. The plaintiff No. 9 was given authority to carry on proceedings and
depose in the suit on behalf of the plaintiffs, and such authorization is not
revoked till date.
The plaintiffs no. 1 to 9 and 11 to 14 have also denied the contentions
made in the application by the plaintiff no-10. The plaintiff have denied that
the plaintiff no. 9 did not have authority to represent all the plaintiffs or that
the said Advocate for the plaintiffs have acted contrary to the instruction in
withdrawing the present suit as alleged or at all. The Advocate for the
plaintiff no. 10 mentioned the matter only on 6th May 2025 without notice to
the Advocate of the plaintiffs. It is denied that the Advocate for the plaintiff
No. 10 had informed all the stakeholders of his intention not to withdraw
the suit or proceed with the suit by the purported notice or that any
information was suppressed by the plaintiffs as alleged or at all. The
submissions of the plaintiff no. 10 that the Advocate gained knowledge of
the order dated 2nd May 2025 on 6th May, 2025 afternoon is false and
incorrect as the matter was mentioned before the Hon'ble Court on 6th May
2025, as would appear from the notice dated 6th May 2025 in the morning
issued by the Advocate for the plaintiff No. 10. The plaintiffs have denied
that they have acted in collusion with the defendants or that the withdrawal
of the suit is not for the benefit of the firm.
The defendants have also contested this application by filing affidavit
in opposition. The contention of the defendants may be summed up thus;
A. The majority decision of the partnership firm is binding on the firm
and all the partners, therein as per Section 12(c) of the Indian
Partnership Act 1932.
B. The plaintiff No. 10's objection is an afterthought and is actuated
by notice with sole intent to derail the settlement and coerce the
Defendant into succumbing to his illegal demands. Plaintiff No. 10
has no legal or equitable justification to override the collective
decision of the majority of the partners.
C. The plaintiff no. 10 was convicted by a competent criminal Court
for the offence of forgery under Sections 406, 420 read with Section
506 of the Indian Penal Code 1860, committed on 2nd August 2011.
The plaintiff no. 1 was arrested on 26th June 2012 and charge
sheet was filed on 18th June 2013.
D. The plaintiff no-10 was thereafter convicted of the said offences
and was directed to suffer imprisonment for one year and 6 months
for each of the offences committed under Section 406 and 420 of
the Indian Penal Code respectively by a judgment dated 27-02-
2024. Moreover the said plaintiff was directed to pay a sum of Rs.
35,00,000/- to the defendants towards compensation within three
months from the date of passing of the judgment in default of
which would further entail imprisonment of 6 months.
E. The plaintiff however has filed an appeal from the said order and
refused to pay the compensation awarded to the defendants.
Accordingly the, plaintiff No. 10 is using this present proceeding as
a bait and a bargaining mechanism to wriggle out of the
compensation awarded to the defendants.
F. The continuation of the suit at the behest of plaintiff no-10 in the
light of the overwhelming majority having settled the matter is
nothing but an abuse of process and deserves to be deprecated and
absolutely contrary to partnership principles.
The defendants have also denied the other contentions made by the
plaintiff no-10/petitioner. The defendants have further denied that the
petitioner is not aware of any settlement as alleged and have denied that the
defendants have acted in collusion and connivance with plaintiffs no. 1 to 9,
and 11 to 14. The defendants have also denied that order dated 2nd May
2025 should be recalled.
With regard to the statements made in Affidavit in opposition by the
Defendants and plaintiffs no-1 to 9 and 11 to 14 the petitioner/plaintiff no-
10 has denied the contentions made therein and have repeated and
reiterated the statements made in the petition. The petitioner has contended
that the purported settlement is absolutely prejudicial onerous and
detrimental to the interest of the partnership firm. The same cannot be given
effect to. It is further contended that the suit was withdrawn behind his
back. It is also contended that the plaintiff no. 8 and 9 had maliciously
avoided receiving notice dated 28-04-2025 sought to be served by the postal
Department.
Heard Learned Advocate for the Petitioner/plaintiff no-10 and Learned
Advocate for the plaintiffs no. 1 to 9 and 11 to 14 and Learned Advocate for
the defendants. Perused the petition filed and materials on record. Learned
Advocate for the petitioner submits that it is not in dispute rather it has
been categorically admitted in both the Affidavits in opposition that all the
plaintiffs did not agree to the decision of the withdrawal of the subject suit
but the decision was purportedly taken by the alleged majority of partners.
Learned Advocate further submits that the partners had been informed by
their erstwhile Learned Advocate about the categorical instruction of the
petitioner that he was not inclined to withdraw the suit but to proceed with
the same. Thereby the petitioner had revoked the authority of the plaintiff
no. 9 if any, to withdraw the subject suit. As such, the plaintiff no. 9 was no
more authorized or competent to withdraw the subject suit in any manner
whatsoever.
Learned Advocate also submits that prior to withdrawal of the suit it
was known to other partners that the petitioner had filed Vakalatnama
through his present Learned Advocate.
Learned Advocate submits that under Section 12(c) of the said Act
1932 the conduct of the business subject to contract between the partners
any difference arising as to ordinary matters connected with the business
may be decided by a majority of the partners and every partner shall have
the right to express his opinion before the matter is decided, but no change
may be made in the nature of the business without the consent of all the
partners.'
Thus it appears that the majority of the partners may take a decision
however subject to the following 2 conditions:
i) Ordinary matters connected with the business.
ii) In the usual course of business.
In the instant case it would appear from cl. 3 of the partnership Deed
that the business of the plaintiff partnership Firm is to generate rental
income from the properties wherein it has right title and/or interest. It is
submitted that there is no dispute that the plaintiff partnership firm is a
Lessee in respect of the said 2 two godowns. It has been enjoying the
leasehold right since 1934. By reason of withdrawal of the subject suit the
plaintiff Firm will lose its possession in the suit property and thereby it
would not be in a position to generate rental income which is the business,
of the firm by exploiting the suit property anymore in future. Learned
Advocate submits that Section 9 of the said Act of 1932 provides that the
partners are bound to carry on the business of the firm to the greatest
common advantage and are to be just and faithful to each other and
additionally terms of Section 19(2) (d) of the said Act of 1932 categorically
provides that the implied authority of a partner does not empower him to
withdraw a suit filed on behalf of the firm.
Learned Advocate further submits that any settlement is essentially a
contract and accordingly there should be some consideration to both the
parties but here it would appear that the defendants got both the property
and the money without making over anything to the plaintiffs or the plaintiff
partnership Firm. Thus the Terms of settlement is void ab initio.
Learned Advocate also submits that in 2020, the plaintiff no. 9 had
already alienated his shareholding in the firm in favour of plaintiff no. 11
and thereby he lost his right to remain and/or to act as partner. In 2016 the
plaintiff no.8 had already alienated his shareholding in the firm in favour of
the plaintiff no. 11 and thereby he lost his right to remain and/or to act as
partner.
Learned Advocate draws attention to the notice dated 28-06-2023 and
notice dated 12.12.2023 and his letter dated 05-07-2023 and 12-12-2023
challenging the authority of plaintiff no-9 and plaintiff no-8 to call a meeting
and submits that his letters were not taken into consideration and replied
to.
Learned Advocate submits that no notice was served on the petitioner
which would appear from the recording of the minutes of the Meeting dated
28-12-2023, and Meeting dated 01-02-2024. The petitioner/plaintiff no-10
was neither notified nor was aware of the meeting allegedly held. Learned
Advocate further submits that any decision including any decision allegedly
taken on 01.02.2024 for withdrawal of the suit is not binding on the
petitioner. Learned Advocate also submits that the plaintiff no. 9 with aid
and assistance of a few other plaintiffs and acting in collusion with the
defendants had surreptitiously and wrongfully withdrawn the subject suit.
The decision is prejudicial and onerous to the interest of the partnership
firm, thus the application of the plaintiff no-1/petitioner should be allowed.
Learned Advocate for the plaintiff no-1 to 9 and 11 to 14 submits that
the plaintiff no. 10 was not only aware of the steps being taken towards a
settlement in the present suit but also chose either deliberately or
negligently not to participate meaningfully in the proceedings, despite
having sufficient knowledge of the plaintiff's intention to compromise the
suit and the changes in legal representation.
Learned Advocate draws attention to the following events in
connection with the dispute.
a. March 13, 2025; The plaintiffs by a letter dated March 13, 2025
addressed to their erstwhile Advocates-on-Record, Chatterjee and
Sil, requested them not to act on their behalf any further. The
plaintiffs subsequently engaged Mr. Anirudya Dutta, Learned
Advocate to represent them in the present proceedings.
b. March 20, 2025; plaintiff No. 10 appears to have allegedly issued a
letter dated March 20, 2025.
c. April 25, 2025: plaintiff No. 10 also relies on an e-mail dated April
25, 2025, sent by Bharadwaj Law Chambers (the advocates
presently engaged by plaintiff No. 10) asserting that they have
entered appearance in the suit and requesting M/S. Chatterjee and
Sil to cease acting. The communication was shared with or
communicated to the other plaintiffs.
d. April 28, 2025: plaintiff No. 10 further relies on a purported letter
dated April 28, 2025 [Pg. 209-210] allegedly addressed to all
plaintiffs and defendants, stating that he would henceforth be
represented separately. Plaintiff No. 10 intentionally caused this
notice to be issued to incorrect addresses of partners despite
having knowledge of the current addresses. This was done with
mala fide and ulterior motives.
1) The Constituted attorney of the plaintiffs, i.e, plaintiff No. 9. did
not receive the said notice [Pg. 237 of the application]
2) Plaintiff No. 8 also did not receive the said letter [Pg. 234 of the
application]
3) The others plaintiffs [partners] received the said notice only on
May 1, 2025 after 5 P.M. [Pgs. 236, 238, 239, 240 of the
application].
4) Plaintiff No. 10 further caused the notice to be served on Pinaki
Ray plaintiff no-5 [Pg. 212 of the application] who is allegedly
deceased.
April 30, 2025: Due to the refusal of the erstwhile advocates to
issue a no-objection in favour of the newly appointed counsel, the
plaintiffs, approached this Hon'ble Court on April 30, 2025 seeking
leave to file a Vakalatnama without such no-objection. This was done
under instructions from plaintiff No. 9, the constituted attorney duly
authorized by all partners. Accordingly the Vakalatnama was filed on
April 30, 2025.
May 2, 2025: The matter was listed on May 2 2025, as reflected in
the cause list. All parties, including the erstwhile advocates were
present before the Hon'ble Court and stated their respective
positions. Plaintiff No. 10 and his newly appointed counsel however
deliberately chose not to appear. The terms of Settlement were filed
by the constituted attorney, plaintiff No. 9 who was and continues
to be authorized by all partners including plaintiff No. 10.
e. May 2, 2025: The suit was accordingly disposed of on May 2, 2025
in terms of the settlement.
f. Plaintiff No. 10 was therefore well aware that steps were being
taken to settle and compromise the present suit.
g. All plaintiffs including plaintiff No. 10 had authorized plaintiff No. 9
(Shomshankar Mukherjee) through a power of attorney to
represent them and take all necessary steps on their behalf This
power of attorney is still in vogue.
h. On the date of compromise ie. May 2, 2025 the advocates engaged
by plaintiff No. 10 chose not to appear despite allegedly being
aware of the firms intent to compromise the suit. The erstwhile
Advocate-on-Record though present did not clarify the position of
plaintiff No. 10 before the Hon'ble Court.
i. Plaintiff No. 10 with an apparent intent to frustrate the settlement
has deliberately sent communications to incorrect addresses of
plaintiff No. 9 (Shomshankar Mukherjee) despite knowing his
correct address.
1. May 6, 2025: Plaintiff No. 10 only took action after the suit had
already been disposed of as evident from the documents at Pg-
241-244 of the application.
Learned Advocate further submits that plaintiff No. 10 was fully
aware that a settlement was being negotiated between the plaintiffs
and the defendants and plaintiff No. 10 chose not to participate in any
of these meetings and deliberately refrained from asserting any
objections at the relevant time.
Learned Advocate draws attention to Letters dated 28.06.2023
issued by Shomshankar Plaintiff no-9 to all partners calling for a
meeting of the partners, dated 30.06.2023, a letter of reply by plaintiff
no-10 to letter dated 28.06.2023, further letter dated 05.08.2023
addressed by plaintiff no. 10 to plaintiff no-9 letter dated 30-11-2023
addressed by Sonali Ray (on behalf of the partnership firm) to all
partners that plaintiff no-10 is reluctant for making payment towards
salaries and other expenses, and Minutes of Meeting dated
16.12.2023, 28-12-2023 and 01.02.2024 and submits that the
plaintiff no-10 was well aware about settlement and steps for
withdrawal of suit but deliberately refrained from asserting any
objections at the relevant time.
Learned Advocate also submits that plaintiff No-10 was not
present or represented in Court on May 2, 2025, when a fresh
Vakalatnama was filed on the date the suit was withdrawn.
Furthermore, plaintiff no-10 has not revoked the power of attorney
previously granted in favour of plaintiff No. 9. As a result, the action
taken by plaintiff No. 9 under the instruction and on behalf of the
partnership firm and the other partners including the withdrawal of
the suit remain binding on plaintiff No. 10 who is deemed to have
acquiesced by failing to revoke the authority or raise any objection
before the court.
Learned Advocate relies upon the following Judicial Decision.
House Limited Agency VS Paints and Lecquers. Ltd.
Reported in AIR 1954 Cal 409.
Learned Advocate for the Defendants submits that pursuant to
proposal received on behalf of the partnership firm through the plaintiff No.
9, the Defendants proceeded with bona fide intention to resolve dispute with
all partners and continuation of amiable relation with the parties. Learned
Advocate further submits that the Defendants are not aware of the internal
management of the plaintiffs. In any event the partners are bound as per
Section 12 (c) of the Indian Partnership Act 1932 based on the majority
decision of the partners of the firm.
Learned Advocate also submits that the plaintiff no-10 is trying to
sabotage the settlement from the personal Vendetta against Defendant no-3
as the plaintiff No-10 has been convicted by the Learned Metropolitan
Magistrate 14th Court Calcutta in case No-2974/2011 on the complaint of
the Defendant no-3.
Learned Advocate draws attention to letter dated 13th March 2025 at
Pg. 185 of the application and submits that the plaintiffs had decided not to
proceed with the suit but no notice was issued to the Defendants by plaintiff
No-10 that he has some objection.
Learned Advocate further submits that the matter was listed on May
2, 2025 but the Learned Advocate for the plaintiff no-10 did not appear to
submit the objection. Learned Advocate also submits that the plaintiff No.
10 on the face of the application has failed to establish any grounds
rendering Terms of Settlement dated 2nd May 2025 as inoperative and not
binding.
Before proceeding to decide the material in issue it is necessary to
consider the provisions contained in Order XXIII Rule 1 Sub Rule 5 of the
Code of Civil Procedure, and Rule 3 Order XXIII of the Code of Civil
Procedure and relevant provisions of the Partnership Act 1932.
Sub-Rule 5 of Rule 1 Order XXIII of the Code of Civil Procedure
provides that nothing in this rule shall be deemed to authorise the Court or
permit one of several plaintiffs to abandon a suit or part of a claim under
Sub-rule (1) or to withdraw under sub-rule (3) any suit or part of a claim
without the consent of the other plaintiffs.
Rule 3 of Order XXIII CPC provides as follows:
Rule-3 Compromise of suit - Where it is proved to the
satisfaction of the court that a suit has been adjusted wholly or
in part by any lawful agreement or compromise [in writing and
signed by the parties] or where the defendant satisfied the
plaintiff in respect of the whole or any part of the subject matter
of the suit the Court shall order such agreement, compromise or
satisfaction to be recorded, and shall pass a decree in
accordance therewith [so far as it relates to the parties to the
suit whether or not the subject matter of the suit] agreement
compromise or satisfaction is the same as the subject matter of
the suit.
Provided that where it is alleged by one party and denied by
the other that an adjustment or satisfaction has been arrived at, the
Court shall decide the question but no adjournment shall be granted
for the purpose of deciding the question, unless the Court for reasons
to be recorded thinks fit to grant such adjournment.
Explanation - An agreement or compromise which is void or
voidable under the Indian Contract Act 1872 (9 of 1872) shall not be deemed
to be lawful within the meaning of this rule].
Section 12 of the Indian Partnership Act 1932 provides as follows:
12. The conduct of the business-Subject to contract between the
partners-
a) every partner has a right to take part in the conduct of the
business;
b) every partner is bound to attend diligently to his duties in the
conduct of the business;
c) any difference arising as to ordinary matters connected with the
business may be decided by a majority of the partners and every partner
shall have the right to express his opinion before the matter is decided, but
no change may be made in the nature of the business without the consent of
all the partners and
d) every partner has a right to have access to and to inspect and
copy any of the books of the firm.
Section 19 of the Indian Partnership Act 1932 provides as follows:
Section 19 Implied authority of partner as agent of the firm-1)
subject to provisions of Section 22, the act of a partner which is done to
carry on, in the usual way, business of the kind carried on by the firm binds
the firm.
The authority of a partner to bind the firm conferred by this
Section is called his 'implied authority.'
2) In the absence of any usage or custom of trade to the contrary,
the implied authority of a partner does not empower him to:-
a) submit a dispute relating to the business of the firm to
arbitration,
b) open a banking account on behalf of the firm in his own name.
c) compromise or relinquish any claim or portion of a claim by the
firm.
d) Withdraw a suit or proceeding filed on behalf of the firm.
e) Admit any liability in a suit or proceeding against the firm,
f) acquire immovable property on behalf of the firm,
g) transfer immovable property belonging to the firm or,
h) enter into partnership on behalf of the firm.
Upon bare reading of the provision contained in Rule 1(5) of
Order XXIII of the Code of Civil Procedure it will appear that a plaintiff, may
withdraw the suit against any or all the defendants or abandon a part of the
claim, but when there are more than one plaintiffs it is not absolute right of
a plaintiff to withdraw a suit without consent of the other plaintiffs. Thus it
cannot be said that Court is authorized to permit one of the plaintiffs to
withdraw a suit without the consent of the other plaintiffs.
Now in the case of suit by partners of a firm whether sub-
Rule-5 of Rule 1 of Order XXIII of Code of Civil Procedure is applicable is to
be considered from certain Judicial decisions.
Learned Advocate for the plaintiffs no. 1 to 9, and 11 to 14 has
relied upon the case of House Ltd. Agency VS Paints and Lecquers Ltd.
reported in 1953 SCC Online Cal-27.
In the said case this Hon'ble Court observed as follows:
24. In the present case before me there is no allegation of any fraud
or collusion as between the majority of the partners and the defendant
company. So far as sub-cls. (c) and (d) of Section 19(2) of the Partnership
Act are concerned, it is clear in this country that there is no implied
authority any more after this Statute, for one partner to compromise or
relinquish any claim by the firm or to withdraw a suit or proceeding filed on
behalf of the firm. To that extent the observations just quoted from Lindley
are not applicable in India. But then as I have said before that sub-cls. (c)
and (d) of Section 19(2) of the Partnership Act cannot be interpreted to mean
a prohibition on the majority of partners to act under Section 12(c) of the
Partnership Act and under an express contract of partnership providing that
in case of any difference their opinion shall prevail, and so to discontinue
the suit initiated by one partner in the name of the firm without the consent
and against the wishes of all other partners.
This Hon'ble Court further observed as follows:
'28. It must be emphasised that by Section 18 of the Partnership
Act it is distinctly laid down that the partner is an agent of the firm for the
purposes of the business of the firm subject to the provisions of the Act. It is
in my view a part of business of the firm to decide whether certain dues to
the firm have become recoverable from third parties and whether such dues
should be recovered by litigation. If therefore the suing partner's agency is
denounced by the majority of the partners to sue on behalf of the firm then
the action should not be allowed to proceed. Subject to contract between the
parties, Section 12 of the Partnership Act provides in sub-Cl. (c) that any
difference arising as to the ordinary matters connected with the business
may be decided by the majority of the partners. In my view whether an
action should be brought to recover dues owing to the firm is ordinarily
connected with the business of a firm. This majority principle is ingrained in
the very nature of partnership apart from the specific agreement in the
Articles of Partnership in this case.'
Upon considering the decision relied by the Learned Advocate and
the provisions contained in Order XXIII Rule 1(5) of the Code of Civil
Procedure and the provisions contained in Section 12 C of the Indian
Partnership Act this Court is of the view that the facts of the case relied
upon differs from the present case. In the case of House Limited Agency
(supra) a suit was instituted by one of the partners without consulting other
partners, thus the other partners decided in a meeting to withdraw the said
suit for the interest of the firm. Moreover the partner who instituted the suit
resigned from the day to day administration of the agency business prior to
institution of the suit and another partner was entrusted in the
management of the firm. Further in the said partnership Firm there was an
agreement that in case of difference of opinion at any time during the
continuance of the partnership the opinion of the majority shall prevail. In
the instant case there is no specific provision that in case of any difference
the majority decision should prevail irrespective of the provision contained
in Section 12(c) of the Indian Partnership Act 1932, thus restriction in
Section 12(c) of the Act is applicable. This Hon'ble Court in the case of
House Ltd. Agency was pleased to hold that suit for recovery of dues owing
to the firm is ordinarily connected with the business of a firm, and in the
said matter a terms of settlement was being worked out for realising the
dues from the defendant by instalments for the interest of the Firm and the
defendant. The instant suit is not for recovery of debts and according to the
plaintiff no-10 the withdrawal of the suit by entering into a settlement with
the defendants will virtually amount to closing of part of partnership
business, thus the restriction clause in Section 12(c) of the Partnership Act
regarding change of business will apply. Above all it will appear from the
decision relied upon by the Learned Advocate that in the said case prior to
withdrawal of suit the partner who instituted the suit was given an
opportunity of being heard and the application was on a chamber summons
setting out the true picture of the facts but in the instant case true facts
were not presented before the Court, by way of application. In the instant
case no application was filed by the plaintiff no. 9 who claimed to be holding
power of attorney on behalf of other plaintiffs. It was incumbent upon the
plaintiff no. 9 to move an application and state the material facts in
connection with the withdrawal of the suit with service of copy upon the
plaintiff no. 10 who did not attend the meeting for withdrawal of the suit
and who has objected to the withdrawal of the suit and locus standi of
plaintiff no-9 as such fact was known to some of the plaintiffs including
plaintiff no. 9. Plaintiff no-9 without disclosing the necessary facts of
plaintiff no-10 challenging his locus standi to call meeting with regard to the
withdrawal of the suit, the plaintiff no. 9 filed the terms of settlement
purported to be entered into between all the plaintiffs and the defendants. It
further appears from the record that prior to execution of the terms of
settlement the plaintiff no. 5 died but the plaintiff no. 9 also represented
him by power of attorney when the power of attorney has no force when the
person who issued the same is dead. It is true that when a decision is taken
by the partnership firm with regard to ordinary course of business the
majority of the decisions of partners prevail but when a suit is sought to be
withdrawn by majority of the plaintiffs partners the Court may not pass
Order mechanically by permitting withdrawal of suit unconditionally as
courts have duty to see with discerning eyes on the bona fide of the persons
seeking to withdraw the suit and the plaintiff who did not give consent for
such withdrawal. In this regard it is necessary to rely upon some judicial
decisions although the said decisions are not relied upon by the parties.
In the case of Nunu Singh VS Muni Nath Singh and others
reported in AIR 1954 Patna page 314 the Hon'ble Court observed as follows:-
'8. According to sub-rule (1) of this rule, the plaintiff may
"withdraw his suit or abandon part of his claim" after the institution of the
suit. Sub-rule (2) says that the Court may allow the plaintiff "permission to
withdraw from such suit or abandon such part of a claim with liberty to
institute a fresh suit in respect of the subject-matter of such suit or such
part of a claim" if the Court is satisfied that the suit was bound to fail by
reason of some formal defect or for some other sufficient ground. Sub-rule
(3) refers back to sub-rule (2) and empowers the Court to award such costs
as it thinks fit against the plaintiff if he withdraws from the suit or
abandons part of the claim without the permission referred to in sub-rule
(2), and it further says that the plaintiff shall be precluded from instituting
any fresh suit in respect of such subject-matter or such part of the claim.
Sub-rule (4) says that nothing in that rule shall be deemed to authorise the
Court to permit one of several plaintiffs to withdraw without the consent of
the other plaintiffs.
9. The question is whether sub-rule (1) of Rule 1 is subject to sub-
rule (4) and whether in all cases one of several plaintiffs cannot withdraw
from the suit without the consent of the other plaintiffs. The language used
in sub-rule (1) is different from the language used in sub-rule (2). Sub-rule
(1) is absolutely unconditional and it entitles 'the' plaintiff to withdraw 'his'
suit or abandon part of 'his' claim. Sub-rule (2), on the other hand, enables
the plaintiff to withdraw from such suit or abandon such 'part of a claim.'
The important words have been underlined (here in '') by me. As sub-rule (1)
is worded, the Legislature puts no fetters upon the plaintiff to withdraw his
suit. The plaintiff if he likes can withdraw his suit or abandon part of his
claim, without any hindrance and no permission is needed if the plaintiff
withdraws his suit or abandons part of his claim." The expression 'the
plaintiff' must mean sole plaintiff or the entire body of plaintiffs. If the sole
plaintiff or the entire body of plaintiffs withdraw his or their suit or abandon
part of his or their claim, no permission of the Court is needed. If, on the
other hand, the plaintiff desires to withdraw the suit or abandon part of his
claim with liberty to institute a fresh suit in respect of the subject-matter of
the suit or such part of the claim, he is to obtain the permission of the Court
under sub-rule (2) and the permission can be given on such terms as the
Court thinks fit and proper.
Sub-rule (3) says that if the plaintiff withdraws, in circumstances
referred to in that sub-rule, without the permission of the Court, he shall be
liable for costs and shall further be precluded from instituting any fresh suit
in respect of the same subject-matter or such part of the claim. Sub-rule (4),
which immediately follows sub-r, (3), adds another obstacle in the way of the
plaintiff if there are more than one plaintiff in the suit, and there could be
no withdrawal from the suit without the consent of the other plaintiffs. If
there are more plaintiffs than one and if some of the plaintiffs want to
withdraw from the suit without the liberty to institute a fresh suit in respect
of the same subject-matter or such part of the claim, such a case is not
covered by any of these sub-rules. The present case is one such. In this
case, the petitioner wants to withdraw from the suit without liberty to
institute a fresh suit in respect of the same subject-matter. His case,
therefore, is not covered by Rule 1 of Order 23, Civil P.C. There is, therefore,
no provision in the Code to cover case like the present one and the Court
has to act under its inherent powers. If the Court has to invoke its inherent
powers, it is also entitled to impose such conditions as the circumstances of
the case require.
10. As I read these sub-rules of Rule 1, in my judgment, sub-rule
(4) does not govern sub-rule (i) which was for the first time brought into the
Statute Book in 1908; the sub-rules (2) to (4) were already there even in the
Code of 1882; and that in a case where one of the several plaintiffs desires
to withdraw from the suit without the liberty to bring a fresh suit in respect
of the subject-matter of such suit or such part of the claim, such a case is
outside the provision of Order 23, Rule 1. I am amply supported in the view
which I have taken of these sub-rules of Rule 1 by a long line of cases of
Sundar', AIR 1943 Cal 427 (A). This Calcutta case has reviewed all the
previous decisions of the different High Courts, and it is not necessary for
me to reconsider those cases. Both parties relied upon this case.
11. Mr. P. R. Das, appearing on behalf of the opposite party,
supported the order moved against, but, upon the authority of this case, he
submitted that in suitable cases, as was held in the above noted case, one of
the several plaintiffs, who wants to withdraw from the suit, may be added as
a party defendant to the action as was done in several cases in this country
which were referred to in the Calcutta case. Mr. Lal Narayan Sinha,
appearing on behalf of the petitioner, welcomed the suggestion of Mr. Das
and he agreed that the petitioner should be added as a defendant to the
suit. In this view of the matter, it is not necessary to seriously consider the
argument of Mr. Das that, as there was no question of jurisdiction, this
Court should not interfere with the order passed. As I have already
indicated, the Learned Munsif has not considered the implications of the
sub-rules of Rule 1 of Order 23, and, if it was necessary to hold, I should
have found that the Court below, in exercise of its jurisdiction, has acted
with grave and material irregularity in rejecting the application of the
petitioner on the grounds mentioned by it. In the circumstances, aforesaid, I
would allow the application and direct that the petitioner Nunu Singh be
removed from the category of plaintiff and be added as a defendant to the
suit pending before the Learned Munsif at Barh.
In the case of Baidyanath Nandi VS Shaymasundari Nandi
reported in AIR-1943 Cal-427 this Hon'ble Court observed as follows:-
'All persons may be joined in one suit as plaintiffs in whom any right
to relief in respect of or arising out of the same act or transactions is alleged
to exist whether jointly, severally or in the alternative, where if such persons
brought separate suits, any common question of law or fact would arise.
The sub-rule gives a plaintiff right to withdraw only his suit or
abandon his claim. This can be done only by the entire body of the plaintiffs
when they allege that the right to the relief exists in them jointly. The suit
and the claim in such a case are the suit and the claim of these plaintiffs
collectively. But as persons may join in one suit as plaintiffs even when they
claim severally or in the alternative, their several or alternative reliefs will be
their own respective suits or claims and they will be entitled to withdraw or
abandon them under this Sub-rule (1). No leave of the Court will be needed
for this purpose. In this view, no right of withdrawal is given by this rule to
some of the plaintiffs in a case where they allege the right to the relief as
existing in them jointly without the leave of the Court. Even the Court''s
power under the rule is limited to the case of withdrawal with liberty to
bring a fresh suit. When such liberty is not sought for, the Court is not
authorized by the rule to allow withdrawal. It is only in exercise of its
inherent power that the Court can move in the matter.
When therefore such a plaintiff wants to withdraw without such
liberty his only remedy is to invoke the inherent power of the Court. The
exercise of this inherent power is not hampered by the provisions of this
rule. But certainly all considerations of justice and prejudice will be open to
it while called upon to exercise its inherent power. The consent of the other
plaintiffs in. such a case is not at all required. Sub-rule (1) has no
application here. The consent is material only so far as the consideration of
their prejudice is concerned. If they are sui juris and give their consent, the
Court need not trouble itself with the question of their prejudice. Still the
question of prejudice and harassment of the defendants remains and before
exercising the inherent power in favour of withdrawal the Court will weigh
them properly. The views I have taken may thus be summarised:
(1) That Order 23, Rule 1, Sub-rule (1) exhaustively deals with the
cases where the plaintiff can as of right withdraw his suit or abandon part of
his claim; (A) that the use of the word ''his'' with the words ''suit'' and
''claim'' is significant; the sub-rule must be read with Order 1, Rule 1, Civil
P.C. which provides for the joinder of the plaintiffs; (i) that when the persons
are joined in one suit as plaintiffs alleging that the right to relief exists in
them severally or in the alternative, then (a) any of them having the several
right to the relief according to the allegations made in the plaint will have
right to withdraw his several claim under Sub-rule (1), (b) any of them
having the right to the relief in the alternative according to the allegations
made in the plaint will have right to withdraw his claim in the alternative
under Sub-rule (1); (ii) but when and so far as the persons join as plaintiffs
alleging that the right to relief exists in them jointly all these persons
collectively will be the plaintiffs and the suit and the claim will be theirs
jointly within the meaning of the sub-rule. The sub-rule will apply only
when they withdraw or abandon collectively; (a) that no leave or permission
of the Court is required if and when the plaintiff wants to; withdraw in
exercise of the right given to him in this respect by Sub-rule (1); (i) that the
only power of the Court in such a case of withdrawal is to award costs
against the withdrawing plaintiff under Sub-rule (3), (ii) that the legal
consequences of such withdrawal will be that the withdrawing plaintiff shall
be precluded from instituting any fresh suit in respect of the same matter;
(b) that if a plaintiff''s case is not covered by Sub-rule (1) he shall have no
claim to withdraw or abandon the suit or claim as of right; but this does not
curtail the inherent power of the Court, to allow such withdrawal.
2. That Sub-rule (2) is the only provision empowering withdrawal with
liberty to institute a fresh suit : (a) such withdrawal can be made only with
the permission of the Court, (b) Court''s power to permit such withdrawal is
limited (i) by the grounds specified in Sub-rule (2), (ii) by the provision of
Sub-rule (4), (c) exercise of this power is discretionary with the Court. [N.B. :
Besides the provisions contained in Sub-rule (2), the Courts in India have no
power to non-suit a plaintiff with the consequence of entitling him to bring a
fresh suit in respect of the same matter.]
3. That Sub-rule (4) applies only to the cases under Sub-rule (2): (a)
that sub-rule applies to all the cases of several plaintiffs when any of them
wants to withdraw with liberty to bring a fresh suit; (i) Court cannot permit
without the consent of the other plaintiffs, (ii) consent being given, Court
can still refuse to permit on other consideration: Sub-rule (2) does not oblige
the'' Court to permit. It simply empowers it to grant such permission:
exercise of the power under the sub-rule is discretionary with the Court.
In the present case the petitioners wanted to withdraw from the entire
suit. According to the allegations in the plaint the right to some of the reliefs
claimed in the suit exists in the plaintiffs neither severally nor in the
alternative, but jointly. This is the position at least so far as the question of
removal of defendant 1 by the Court is concerned. In the view that I have
taken of the meaning and scope of Sub-rule (1) of Rule 1 of Order 23, Civil
P.C. the petitioners cannot, as of right, claim to withdraw from this suit. As
no liberty to bring a fresh suit was sought for, the power conferred on the
Court by Rule 1 excepting its power to award costs under Sub-rule (3) could
not be exercised. In such a case the only course left to the petitioners was to
invoke the aid of the Court in exercise of its inherent power. The Court in
exercise of that power refused to allow them to withdraw from the suit as, in
its opinion, such withdrawal might prejudice the right of the other plaintiffs
to continue the suit successfully. The materials placed before us do not
entitle us to say that in thus refusing leave to withdraw the Court has
committed any error.'
The term ordinary course of business varies from case to case thus
whether the Act of the partners is in the ordinary course of business varies
in different case. Thus the Court while considering the prayer to withdraw a
suit may also decide as to whether the act of the plaintiffs/partners is in the
ordinary course of business or otherwise. As the plaintiffs no. 1 to 9 and 11
to 14 have claimed that suit is compromised by entering into terms and
settlement it is also necessary to consider the provisions of Order 22 Rule 3
to ascertain as to whether any type of compromise entered into between
parties should be accepted by the Court without going into its legality. Rule
3 Order 22 CPC provides that where it is proved to the satisfaction of the
Court that the suit has been adjusted wholly or in part by any lawful
agreement or compromise in writing and signed by the parties or where the
defendant satisfies the plaintiff in whole of any part of the subject matter of
the suit the Court shall order such agreement compromise of satisfaction to
be recorded and shall pass a decree in accordance therewith. The
explanation to Rule 3 provides that an agreement or compromise which is
void or voidable under the Indian Contract Act 1872 shall not be deemed to
be lawful within the meaning of this Rule. In the instant matter although
there is no compromise decree passed in this suit but the Court has every
duty to see as to whether the terms of settlement entered between the
parties and filed in Court is lawful and whether on the basis of the terms of
settlement which is filed in Court the plaintiffs should be permitted to
withdraw the suit. Order dated 2nd May 2025 was passed permitting
withdrawal of the suit and treating the suit to be disposed. As contended by
the plaintiff no. 10 that the terms of settlement entered into by the plaintiff
no. 9 on behalf of all the plaintiffs with the defendants does not provide any
consideration and terms to be complied by the defendants on the basis of
which the settlement is arrived at thus this terms of settlement should not
be treated to be lawful agreement and compromise under Order 23 Rule 3 of
the Code of Civil Procedure. Upon perusal of the terms of settlement it
appears that the plaintiffs no. 9 on behalf of all the plaintiffs and by virtue of
the power of attorney has agreed to withdraw the suit unconditionally and
thus gave the right to the defendant to use the suit property without any
consideration. It further appears that in the terms of compromise there is no
mention with regard to the amount deposited by the defendant by virtue of
earlier Orders. In view of the terms of settlement which does not provide for
any condition nor any consideration nor does it mention anything with
regard to the amount deposited by the defendants the Court may look at
such terms of settlement entered into by the plaintiff no. 9 with the
defendants without express consent of the plaintiff no. 10 with suspicion
and within the restrictions of Rule 3 Order 22 of the Code of Civil Procedure.
In this regard it would be reasonable to refer judicial decision with regard to
the terms of compromise.
In the case of Chand Kaur VS Raj Kaur Reported in AIR 1997 Punjab
and Haryana page 155 the Hon'ble Court observed as follows:-
"10. Consistent views taken by various Courts by now
have clearly spelled the conditions which normally must be satisfied
for validly invoking the provisions of Order 23. Rule 3 of the Code
and for passing of such a decree, which are as under:--
(i) There should be a lawful agreement or compromise;
(ii) This compromise has to be in writing and signed by the
parties;
(iii) The compromise must be recorded by the Court;
(iv) A decree on such compromise can be passed so far it
relates to the parties to the suit but may extend to a special matter
which is not the subject-matter of the suit.
The Court has to record its satisfaction with regard to
adjustment of the whole or part of the claim in terms of such lawful
compromise.
11. The explanation to sub-rule (3) of Rule 23 of the
Code further makes legislative intent more clear by specifying
that an agreement or compromise which is void or voidable under
the Indian Contract Act 1872 shall not be deemed to be lawful
within the meaning of the rule. The purpose of effecting a
compromise between the parties is to put an end to the various
disputes pending before the Court of competent jurisdiction fully
and finally.
12. Finality of decisions is an underlying principle of all
adjudicating forums. Thus creation of further litigation should
never be the basis of a compromise between the parties. Rule 3(a)
of Order 23 of the Code further provides that no suit shall lie to
set aside a decree on the ground that the compromise on which
the decree is based was not lawful. The scheme of Order 23, Rule
3 of the Code is to avoid multiplicity of litigation and permit
parties to amicably come to a settlement which is lawful, is in
writing and a voluntary act on the part of the parties. The Court
can be instrumental in having an agreed compromise effected
and finality attached to the same. The Court should never be
party to imposition of a compromise upon an unwilling party.
13. In the present case the Court had proceeded against some
of the defendants ex parte on the same day and immediately proceeded
to pass a decree on the alleged compromise, which definitely
prejudicially-affected the rights and contentions of the said defendants.
A compromise decree has to be between the parties to the suit and the
Court must apply its mind and use its judicial discretion if the case is
otherwise. Obviously the suit was being contested by different sets of
defendants, and compromise between some of them adversely affecting
the rights of another set of defendants, had to be looked into by the
Court with caution. Compromise between some of the parties to the suit
and prayer for passing of a decree effecting rights of all, the Court had
a discretion to accept or reject such a request. In fact in some of the
cases where partial compromise would be prejudicial to the interests of
the parties not joining such a compromise, the Court has gone to the
extent of holding that such compromise cannot be recognised. In this
regard reference can be made to Smt. Rani Bai v. Yadunandan Ram,
AIR 1969 SC 1118: (1969 All LJ 988) and Gopika Raman Roy v. Atal
Singh, AIR 1926 Calcutta 193 (DB)."
Upon considering the facts of the case and the judicial decisions
referred above this Court is of the view that first of all due procedure was
not followed by the partners of the firm being plaintiff no. 1 to 9 and 11 to
14 and specially plaintiff no. 9 by not moving the application for withdrawal
of the suit and by serving copy of the application upon plaintiff no-10 by
disclosing all material facts. This Court upon representation of the plaintiffs
that the matter has been settled permitted the plaintiffs to withdraw the suit
unconditionally when certain material fact affecting the decision of the
matter was not brought to notice of this Court. Secondly the terms of
settlement relied upon by the plaintiffs no. 1 to 9 and 11 to 14 in the
opinion of this Court cannot be relied as the said does not comply the
conditions of valid compromise under Rule 3 Order 23 of the Code of Civil
Procedure. Moreover it is also entered on behalf of plaintiff no-5 who is dead.
Thus the Order date 02/05/2025 should be recalled by allowing this
application.
Let there be an Order in terms of prayer a and b of the notice of
motion dated 14th May 2025. The suit which was dismissed for non-
prosecution by order dated 02/05/2025 is restored to file. However in order
to expedite the matter in the interest of justice the Court is of the view that
Special Officer should be appointed to resolve the disputes between the
parties with regard to terms of settlement in accordance with Law. Thus Mr.
Nara Narayan Ganguly Advocate Ph-9830620014 and Ms. Rajarshi
Mukherjee Advocate Ph-8777291292 are appointed as Special Officers.
Learned Special Officers shall upon notice to all the plaintiffs and also their
Learned Advocates hold a meeting and in the said meeting if the dispute
between the plaintiffs is resolved by discussion Learned Special Officers
shall record the same and the plaintiffs will be at liberty to take necessary
steps in accordance with Law for withdrawal or settlement of the suit. In the
event the dispute cannot be settled by Learned Special Officers the Learned
Special Officers shall upon discussion with the plaintiffs fix a date and time
of meeting to be held by the plaintiffs amongst themselves in which the
issue regarding withdrawal or settlement of the suit shall be discussed and
steps be taken in accordance with Law. The Learned Special Officers shall
also be entitled to appoint one of the partners who shall preside the said
meeting of the plaintiffs. The presiding Officer of the meeting to be appointed
may be any partner but other than the plaintiff no. 9 and 10. In the meeting
to be held by the Learned Special Officers both the plaintiffs' advocates and
the plaintiffs may be present but in the meeting to be held by the
plaintiffs/partners with regard to the issue of the withdrawal/settlement of
the suit only the plaintiffs will be present. The meeting with plaintiffs shall
be held by the Learned Special Officers within two weeks from the date of
the communication of this Order. In the event any of the plaintiffs is unable
to be present in the meeting before the Special Officer he may send his
Learned Advocate to represent him. But in the meeting to be held by the
plaintiffs with regard to the issue of withdrawal of the suit where any of the
plaintiff is unable to make himself present he has to give his views in writing
to the presiding Officer of the meeting in advance. In the said meeting other
than the plaintiffs none shall be present. Upon the meeting being held the
plaintiffs shall intimate the Learned Special Officers forthwith in writing.
The Learned Special Officers shall upon the meeting of plaintiffs being
concluded file a report before this Court on or before, 5-01-2026. The report
shall be filed before the regular bench having determination. As it appears
that one of the plaintiff is dead steps shall also be taken in accordance with
Law. Learned Special Officers are entitled to a remuneration of 700 GM
each. 50% to be paid by plaintiff no-10 and 50% by remaining plaintiffs.
Fix 05/01/2026 for filing report.
(BISWAROOP CHOWDHURY, J.)
