Sarita Lamba vs Satish Jassal & Ors.
2000 Latest Caselaw 944 Del

ORDER

Mukul Mudgal, J.

1. This is a petition, filed by the petitioner under Section 9 of the Arbitration & Conciliation Act, 1996. This petition seeks an order restraining the respondents or their agents from alienating, transferring or parting with possession of the premises in question said to be constructed upon plots bearing Nos. 700A & 701-A, Village Lado Sarai, New Delhi. It further seeks an appointment of a Receiver for the said property and seeks the deposit of the rent paid to the respondents for the said premises in this Court.

2. The petitioner submits as under :

Respondent No. 1, Satish Jassal and respondent No. 2, Nagender Singh were acquainted with the petitioner through her husband as being builders and consequently a partnership firm constituting the petitioner and the two respondents was formed. The partnership inter-alia provided that properties shall be purchased from the funds provided by the parties towards their capital and the properties purchased shall be developed and redeveloped and dealt with thereafter so as to accrue profits for the partnership firm and its partners. Accordingly property Nos. 700-A & 701-A measuring 242 sq. yds. was purchased in Village Lado Sarai, New Delhi and the petitioner paid the entire consideration of Rs. 5 lacs to the seller Smt. Saroj Dev for property No. 701-A. This property was purchased for the partnership firm which was to be named 'National Construction Company'. However, the part- nership at that time was yet to be formed and consequently the properties were to be purchased in individual names and thereafter were to be part of the assets of the firm. On 27th March, 1996, the petitioner executed the written Deed of Partnership under the name and style of National Construc- tion Company for sale, purchase, renting construction and development of residential, commercial and agricultural properties. The petitioner has relied upon Clause 5 of the said Partnership Deed to contend that petition- er had given financial assistance in the purchase of the property and was also to contribute towards the redevelopment. The partnership firm was subsequently registered on 18th November, 1998.

3. The petitioner's case further is that the amount of Rs.5 lacs was paid to Saroj Devi from her initial investment. This was also reflected in the income-tax returns of the petitioner. The petitioner's case is that even though the properties in question were purchased prior to the Deed of Partnership dated 27th March, 1996, the properties No.700-A & 701-A were purchased for the partnership by the petitioner and the respondents. Clause 13 of the Deed of Partnership has been relied upon by the petitioner to contend that no party shall without the written consent of the other, assign and mortgage his share and interest in the partnership or dispose of by loan, pledge, sale or otherwise any part of the partnership properties or assets. According to the petitioner the respondents developed the property and constructed basement, ground floor, first floor, second floor and the third floor in the said premises. A bank account was opened in the name of National Construction Company recording the petitioner and the respondent as partners of the firm. In April, 2000, the petitioner came to know upon a site visit that the building on the piece of land, i.e., property No. 700-A & 701-A was fully complete and under occupation of the parties including "Voltas Ltd." and "Carrier Refrigeration Ltd". The peti- tioner claims that the respondents never disclosed to the said companies that the properties were owned by the firm and the security deposit for large sums of money was taken by the respondents from the said companies. The petitioner states that when the respondents were confronted with this unauthorised alienation of the partnership assets, the respondent No.2 threatened the husband of the petitioner with life due to his muscle power in case any controversy was created. Accordingly a Notice dated 25th April, 2000 was issued by the petitioner to the respondents and even the tenant- Voltas Ltd. by its letter dated 15th May, 2000 declined to withhold rent in the absence of an order from the Court.

4. In view of these averments, the petitioner submits that arbitration according to the terms of partnership can be resorted to. Consequently interim reliefs detailed in this petition under Section 9 of the Arbitra- tion and Conciliation Act, 1996 were prayed for. By this petition the petitioner inter alia prays for an order restraining the respondents from in any manner dealing with or alienating or transferring with the posses- sion of the suit premises or any portion thereof. Appointment of a receiver and deposit of rent by the 2 tenants, namely, Voltas & Carrier with the receiver is also sought.

5. This petition was opposed by the respondent No.1. Respondent No.1 has contended that the property in question was his individual property which was developed by him and did not form part of the partnership assets. In fact the plea of the respondent No.1 is that the partnership business was dormant from its inception. The main plea of the respondent No.1 is that the receipt executed by the owner Saroj Devi for property No. 701-A clearly shows that the property belongs to respondent No.1 and the petitioner and the respondent No. 2 could have no claim to the properties in question. Insofar as the payment of Rs. 5 lacs is concerned, there is no receipt of Saroj Devi, the seller, showing in what transaction the said sum of Rs. 5 lacs was paid and the said amount was not paid from the account of partner- ship. It is for Saroj Devi to explain as to why the sum of Rs. 5 lacs was paid to her through the petitioner. He further stated that the Agreement to Sell in question does not refer to any amount being paid by bank draft which shows that the petitioner's case is unsustainable. The respondent No.1 has further contended that it is only after the properties of respond- ent No.1 started yielding profits that reliefs have been sought after a gap of three years demonstrating beyond doubt that the partnership was dormant and never fructified.

6. The respondent No.1 has further contended that the dormant nature of the partnership business is also evident by the provisions of Clause 6 which specifically stated that the parties were to contribute for redevel- opment charges. The partnership became dormant because the respondent No. 2 and petitioner expressed their inability to contribute any amount towards the corpus and all the amounts had been contributed by the respondent No.1. The respondent No.1 has commented upon the failure of the petitioner to bring vouchers in support of the petitioner's submission that she had contributed approximately Rs.10 lacs. The respondent No.1 has finally contended that the documents show that the property bearing No. 700-A was purchased in October, 1995 when all the necessary documents were got exe- cuted in favour of the respondent No.1. The respondent No.1 has contended that the petitioner was nowhere in the picture at that time and even ac- cording to the petitioner's case she has got acquainted with the respondent No.1 only in February-March, 1996. He has further stated that the property No. 700-A was purchased in October 1995 from Kulbeer Singh for Rs.4 lacs which was paid only by the respondent No.1 and at that time the partnership was not even thought of . The property No. 701-A was purchased in January, 1996 and all the necessary documents were executed in favour of respondent No.1 in January-February, 1996 when petitioner was nowhere in the picture. The respondent No.1 has also stated that the amounts paid for these proper- ties by him are reflected in his income-tax returns also and he had also filed Form No.34-A on 21st April, 1998 with the concerned office of the Income-tax Department. The respondent No.1 has also pleaded that besides the house-tax he has also spent a sum of Rs. 3,44,000/- for installation of the lift in the building. Finally it has been pleaded by the respondent No.1, that registration of firm belatedly in 1998 was mala fide and done by the petitioner's chartered accountant as the answering respondent No.1 had signed the Form No. 4 on 10th May, 1996 and this form was forwarded in November, 1998 by the petitioner through her own Chartered Accountant and witnessed by her husband's office neighbours and business associates.

7. This Court had passed an Order on 25th May, 2000, directing that if alienation of the property takes place, the party coming into possession will be put on notice about the pendency of the proceedings and will be bound by the decision in the present proceedings.

8. Insofar as the Partnership Deed is concerned, the case of the respond- ent No.1 that the partnership was dormant, is supported by the fact that the partnership deed is though executed on 27th March, 1996 was registered only in November 1998. The registration has significantly been done by the plaintiff's chartered accountant and witnessed by her husband's office employees and neighbours. No credible explanation has been given by the petitioner for this delay in registration. It is but to be expected that if the partnership had come into being the registration would have been soon after the signing of the partnership deed. In so far as the payment to Saroj Devi is concerned, the petitioner has not been able to clarify for what purpose was the sum of Rs. 5 lacs was paid by her on 24.1.1996. Furthermore, it is not possible to prima facie believe the case of the peti- tioner that for three years she was not aware of the fate of the investment of a sum of Rs.5 lacs having been paid as far back as in 1996. It is not possible to believe at this stage that the petitioner would have been totally unaware of the contribution in 1996 for a period of more than years and at this stage the petitioner's case that she suddenly come to know only in April, 2000 that the respondent No.1 had let out the properties in question does not inspire confidence. In the light of the fact that the petitioner had no clue to investment of Rs. 5 lacs by her for 3 years, prima facie lends support to the plea of respondent No.1 that the partner- ship had become dormant. In any case the petitioner has not given any explanation how she could lay any claim to property No.700-A purchased from Kulbeer Singh in October 1995. Furthermore the non-production of the vouch- ers by the petitioner for the additional investment prior to the partner- ship in Rs.5 lacs except some stray receipts does prima facie show that partnership was dormant and consequently the petitioner is not entitled to the injunction prayed for. In this view of the matter, except the interim order dated 25th May, 2000 no further orders are called for. The said Order dated 25th May, 2000 in my opinion sufficiently protects the interests of the petitioner in the light of the above discussion. However, the continu- ance of the said order is naturally contingent upon arbitration proceedings commencing within twelve weeks from today as per the judgment of the Hon'ble Supreme Court in Sundaram Finance Ltd. Vs. NEPC India Ltd., . If arbitration proceedings do not commence within twelve weeks from today then the interim Order dated 25th May, 2000 shall stand vacated. The prayer made in the petition is, therefore, rejected.

9. The petition is accordingly dismissed.