__________________________________________________________ vs Sh. Ranjeet Singh And Others ...
2023 Latest Caselaw 15362 HP

IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA

OMP No. 67 of 2022 IN C.S. No. 128 of 2021.

Reserved on: 18.09.2023

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Decided on: 05.10.2023.

__________________________________________________________ M/s Sanya Enterprises ...Non-applicant/Plaintiff.

Versus

Sh. Ranjeet Singh and others ...Non-applicants/Defendants.

Sh. Raksha Pal Kaundal ...Applicant/Defendant No.6.

Sh. Kishori Lal ..Non-applicant/Proforma Defendant. _________________________________________________________

Coram

The Hon'ble Mr. Justice Satyen Vaidya, Judge 1Whether approved for reporting? Yes

______________________________________________________ For Non-applicant/Plaintiff : Mr. Ajay Sharma, Sr.

Advocate, with Mr. Atharv Sharma, Advocate.

For Non-applicants/ Defendants No. 1 to 5: Mr. Rajesh Parmar, Advocate.

For Applicant/Defendant No.6: Mr. J.L. Bhardwaj, Sr. Advocate with Mr. Sanjay Bhardwaj, Advocate.

For Non-applicant/proforma Ms. Devyani Sharma, Senior Defendant No.7. Advocate with Mr. Shivam

Sharma, Advocate.

Satyen Vaidya, Judge

The instant application has been filed on behalf of

defendant No.6 (hereinafter referred to as the "applicant"), seeking

rejection of plaint under Order VII Rule 11 of the Code of Civil

Procedure (for short "the Code").

Whether reporters of Local Papers may be allowed to see the judgment?

2. It is averred that the reliefs claimed in the plaint are

hopelessly time barred. The plaintiff is seeking a decree of specific

performance of agreement dated 20.11.2006 and a declaration to

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declare the Sale Deed No.176/2010 dated 27.02.2010 as null and

void. In alternative a prayer for refund of double the amount of

Rs.1,00,88,450/- has been made. According to the applicant, all

the reliefs are time barred as the plaint has been instituted on

19.10.2021. It is claimed that under Article 54 of the Limitation

Act, the suit for specific performance of a contract can be filed

within three years from the date fixed for the performance, or, if

no such date is fixed, when the plaintiff has noticed that

performance is refused. It is further submitted that under Article

58 of the Limitation Act, the declaration as sought by the plaintiff

could be prayed within three years when the right to sue first

accrued to the plaintiff.

3. It is further submitted that one of the partners of

plaintiff-firm namely Sh. Vivek Bhalla was a witness to execution

and registration of Sale Deed dated 27.02.2010 and in this view of

the matter, the plaintiff cannot plead ignorance about the factum

of execution of said sale deed, which was a sufficient notice to the

plaintiff of refusal of performance of agreement by the defendants.

Thus, the cause of action had arisen in favour of plaintiff to seek

all the reliefs, as sought in the present case, on 27.02.2010 and

the suit for all such reliefs could be filed within three years

commencing w.e.f. 27.02.2010.

4. The application has been contested by the plaintiff on

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the ground that in the plaint, plaintiff has specifically pleaded the

period when cause of action arose to it to file the present suit. The

stand of plaintiff is that plaintiff had paid the entire sale

consideration to defendants No. 1 to 5 at the time of execution of

agreement dated 20.11.2006 and simultaneously the plaintiff was

put in possession of the land agreed to be sold thereby. Since then,

the plaintiff has been holding the peaceful possession of the suit

land. It was only in the year 2021, as detailed in the plaint, when

the defendants sought to interfere with the possession of the

plaintiff over the suit land and plaintiff on inquiry came to know

about the execution of sale deed dated 27.2.2010 by defendants

No. 1 to 5 in favour of the applicant. As per the plaintiff, in the

given facts of the case, the limitation for it to file suit started from

the date when defendants No. 1 to 5 refused and such refusal came

to notice of plaintiff only when defendants No. 1 to 5 started

interference over the possession of plaintiff on suit land in

September, 2021. The fact that one of the partners of plaintiff-firm

was aware about the execution of Sale Deed dated 27.02.2010 has

also been denied.

5. I have heard learned counsel for the parties and have

also gone through the records of the case carefully.

6. It is settled proposition of law that for the purpose of

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adjudication of plea for rejection of plaint only the contents of

plaint are material. The Court has to form its opinion as to

existence of any of the grounds for rejection of plaint, from the

contents of plaint only.

7. Perusal of the contents of plaint reveal that the plaintiff

is a partnership firm. It is specifically disclosed in the plaint that

besides Smt. Anjali Bhalla, the plaintiff -firm has two more

partners Sh. Vivek Bhalla and Sh. Abhimanyu Raj Bhalla. As per

contents of plaint, the plaintiff firm is stated to have been

constituted and registered on 16.12.2005 with two partners

named Smt. Anjali Bhalla and Sh. Vivek Bhalla. Later, Sh.

Abhimanyu Raj Bhalla was included as a partner in the firm on

02.12.2016.

8. It is further pleaded that defendants No. 1 to 5 had

executed an agreement to sell the suit land in favour of plaintiff on

20.11.2006 for a total sale consideration of Rs.1,00,88,450/-. The

plaintiff was put in possession of the suit land on payment of entire

sale consideration at the time of execution of agreement. The

plaintiff was enjoying the peaceful possession of the suit land till

September, 2021 when its possession was sought to be interfered

with by the defendants. On inquiries, the plaintiff came to know

that defendants No. 1 to 5 had sold the suit land to defendant No.6

(applicant) vide Sale Deed dated 27.02.2010.

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9. On the above premise, the plaintiff has alleged that

cause of action arose to it for filing the suit in September, 2021.

10. In addition, plaintiff has made specific averments in

para-8 of the plaint to the following effect:

"8. That cause of action arose in favour of plaintiff on

20.11.2006, thereafter on various dates as and when defendants were approached by the plaintiff orally by paying visits to their places and then on the dates of misdeeds of

defendants committed in the shape of sale deed and

consequent mutations, referred to supra and in the month of September, 2021 when interference in the possession of the plaintiff is sought to be made and now a week back i.e. on 5.10.2021 when finally requests were made to the defendant

to adhere to the agreement to sell dated 20.11.2006 and to cancel the above transaction, defendants having flatly

refused."

11. Alongwith the suit, the plaintiff has placed reliance on

certain documents and has filed on record copies thereof. One of

such documents is an attested copy of Sale Deed dated 27.02.2010

of the suit land executed by defendants No. 1 to 5 in favour of

defendant No.6 (applicant). A perusal of this document reveals that

one of the partners of the plaintiff-firm namely Sh. Vivek Bhalla

was a witness to the above-mentioned Sale Deed.

12. In the background of above noticed facts, the question

arises whether the plaintiff can feign ignorance about the factum

of the execution of Sale Deed dated 27.02.2010, in respect of the

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suit land by defendants No. 1 to 5 in favour of defendant No.6

(applicant)?

13. The Rules 1 and 2 of Order XXX of the Code of Civil

Procedure read as under:

"1. Suing of partners in name of firm. - (1) Any two or more persons claiming or being liable as partners and carrying on business in, India may sue or be sued in the r name of the firm (if any) of which such persons were

partners at the time of the accruing of the cause of action, and any party to a suit may in such case apply to the Court for a statement of the names and addresses of the persons

who were, at the time of the accruing of the cause of action, partners in such firm, to be furnished and verified in such manner as the Court may direct.

(2) Where persons sue or are sued as partners in the name

of their firm under sub-rule (1), it shall, in the case of any pleading or other document required by or under this Code

to be signed, verified or certified by the plaintiff or the defendant, suffice if such pleading or other document is signed, verified or certified by any one of such persons.

2. Disclosure of partners' names. - (1) Where a suit is instituted by partners in the name of their firm, the plaintiffs or their pleader shall, on demand in writing by or on behalf of any defendant, forthwith declare in writing the names

and places of residence of all the persons constituting the firm on whose behalf the suit is instituted.

(2) Where the plaintiffs or their pleader fail to comply with any demand made under sub-rule (1), all proceedings in the

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suit may, upon an application for that purpose, be stayed upon such terms as the Court may direct.

(3) Where the names of the partners are declared in the manner referred to in sub-rule (1), the suit shall proceed in the same manner, and the same consequences in all respects shall follow, as if they had been named as plaintiffs

in the plaint:

Provided that all proceedings shall nevertheless

continue in the name of the firm, but the name of the

partners disclosed in the manner specified in sub-rule (1) shall be entered in the decree.

14. In Shanker Housing Corporation vs. Mohan Devi

and others, AIR 1978 Delhi, 255, it was observed as under:

"10. Section 4 of the Partnership Act defines the term 'Partnership' as the "relation between the persons who

have agreed to share the profits of a business carried on by all or any of them acting for all". It further states that "persons who were entered into partnership with

one another are called individually 'partners' and collectively 'a firm', and the name under which their business is carried on is called the 'firm name'". Thus, a firm is not a separate legal entity, but, is only a collective or compendious name for all the partners. So, if a suit to enforce a right arising from a contract is to be instituted "by a firm" against a third party, the firm would be the plaintiff. If the suit is to be instituted "on behalf" of a firm, the partner or partners, who wants

or want to institute the suit on behalf of (i.e. for the benefit of) the firm would be the plaintiff. But, in both the cases, the suit would in effect be by or on behalf of all the partners of the firm. Section 69 (2) lays down that the suit of the nature mentioned

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above can be instituted only if (a) the firm is registered,

and (b) the persons suing are or have been shown in the Register of Firms as partners in the firm. The use of the words 'is' and "are or have been", which are in

the present tense, shows that the point of time contemplated in Section 69 (2) is at the time of the institution pf the suit. That is to say, the firm must be a registered firm by the date of the institution of the

suit and the persons suing (i.e. all the partners) must have been shown in the Register of Firms as partners of the firm by the date of the institution of the suit. This appears to us to be the plain meaning of Section 69 r (2)."

15. In Alwar Iron Syndicate v. Union of India, AIR 1970

Raj 86 Hon'ble High Court of Rajasthan observed as under:

6. It appears to me, however, that there is really no room for any controversy in regard to the correct meaning and purpose of sub-sec. (2) of sec. 69. It is

well settled that a firm as such is not an entity in law and is not a "person" within the meaning of sec. 4 of the Partnership Act. Its name is therefore a mere

abbreviated name of all its partners: Dulichand Laxminarayan v. Commer. of Income Tax, Nagpur (5). It is for this reason that special provisions have been

made in G. 30 C.P.C. regarding suits by or against firms and persons carrying on business in names other than their own. So it is beyond doubt that even if a suit is brought in the name of a firm, it is really a suit by all its partners under the firm name. In other words, the persons suing are all the partners of the firm at the relevant date and none of them can, for obvious reasons, be left out for purposes of the suit. So it is incorrect to say that sub-sec.(2) of sec. 69 merely requires that only the person or persons actually signing the plaint on behalf of the firm should be shown in the Register of Firms as its partners. The

word "persons" in the sub-section has been used in the plural by design and serves an important purpose for it brings out the real nature of a partnership firm which cannot consist of a single person. This is the view taken in Kapurchand Bhagaji Firm v. Laxman Trimbak (6) and Dr. V.S. Bahal v. S.L. Kapur & Co. (7).

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The decision in Dr. V.S. Bahal's case (7) does not

appear to have been noticed in Durga Das Janak Raj v. Preete Shah Santrarn (4) on which reliance has been placed by Mr. J.P. Jain, but it has been followed in Firm Butamal Devraj v. Chananmal (8) it has also

been followed in Hansraj Manot v. Gorak Nath Champalal Pandey (9) and, if I may say so with respect, these judgments lay down the correct law on the point.

16. In Purushottam Umedbhai and Co. v. Manilal and

Sons, AIR 1961 SC 325 it was observed as under:

"9. ...........This makes it obligatory, in the case of a suit

instituted by the partners in the name of the firm, on demand

in writing by or on behalf of any defendant, to declare in writing the names and places of residence of all the persons constituting the firm on whose behalf the suit is instituted. If the plaintiffs fail to comply with the demand made under sub-rule (1) of this rule, all the proceedings in the suit may be

stayed on such terms as the court may direct. Under sub-rule (3) if the names of the partners are declared in the manner referred to in sub-rule (1) the suit shall proceed in the same manner and the same consequences in all respects shall

follow as if they had been named in the plaint, provided that all the proceedings shall nevertheless be continued in the name of the firm. Rule 1 of Order 30 is a general provision.

Rule 2, however, is confined to a suit instituted by partners in the name of the firm. It is clear from this rule that although the suit is filed in the name of the firm a disclosure has to be

made, on demand in writing by or on behalf of any defendant, of names and places of residence of all the persons constituting the firm on whose behalf the suit is instituted. The provisions of Rule 2 would indicate that although the suit is filed in the name of a firm, it is nonetheless a suit by all the partners of the firm because if a disclosure of the names of the partners is asked for by any defendant, on such disclosure, the suit shall proceed as if the partners had been named as plaintiffs in the suit, even though the proceedings shall nevertheless be continued in the name of the firm. It is clear, therefore, that the provisions of Order 30, Rule 1 and Rule 2 are enabling provisions to

permit several persons who are doing business as partners to sue or be sued in the name of the firm. Rule 2 would not have been in the form it is if the suit instituted in the name of the firm was not regarded as, in fact, a suit by the partners of the firm..........."

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17. The above exposition makes it abundantly clear that a

suit though filed in the name of firm, still remains a suit on behalf

of all its partners. There remains no doubt in the proposition that

the partnership firm though not a legal entity, still, can sue or be

sued in the name of firm. Since, it is only a collaboration of two or

more persons and in case the suit is filed in the name of the firm

it is deemed to be on behalf of all the partners. Thus, the present

suit is also on behalf of partner Sh. Vivek Bhalla and he will be

deemed to be one of the plaintiffs.

18. Rule 2 of Order XXX CPC, as noticed above, obligates

the firm, that has filed a suit, to disclose the name of partners, if

so, required on behalf of the defendant(s). In case of failure to do

so, the proceedings in the suit cannot proceed further. In the

instant case, the plaintiff has disclosed the names of all the

partners of its own.

19. The plaintiff has itself relied upon the Sale Deed dated

27.02.2010 by placing its copy on record. There is no averment in

the plaint that the name of Sh. Vivek Bhalla one of the partners of

plaintiff-firm has wrongly been shown in the said Sale Deed as one

of the witnesses. No challenge has been laid to the Sale Deed on

such ground. Further, there is no averment also that the

signatures of Sh. Vivek Bhalla have been forged. Noticeably, Sh.

Vivek Bhalla is the husband of Smt. Anjali Bhalla, who is the

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signatory to the plaint. Even in para 8 of the plaint the plaintiff

has itself admitted to have cause of action at the time of execution

of sale deed dated 27.02.2010.

20. In above circumstances, denial of the knowledge of

execution of Sale Deed dated 27.02.2010 is nothing but a clever

attempt to create an illusion of cause of action.

21. In Raghwendra Sharan Singh vs. Ram Prasanna

Singh (dead) by LRs (2020) 6 SCC 601, the Hon'ble Supreme

Court in para 6.8 of the judgment, held as under:

"6.8. In Madanuri Sri Rama Chandra Murthy vs. Syed Jalal

(2017) 13 SCC 174, this Court has observed and held as under: (SCC pp. 178-79, para 7) "7. The plaint can be rejected under Order 7 Rule 11

if conditions enumerated in the said provision are fulfilled. It is needless to observe that the power

under Order 7 Rule 11 CPC can be exercised by the Court at any stage of the suit. The relevant facts

which need to be looked into for deciding the application are the averments of the plaint only. If on an entire and meaningful reading of the plaint, it is found that the suit is manifestly vexatious and meritless in the sense of not disclosing any right to sue, the court should exercise power under Order 7 Rule 11 CPC. Since the power conferred on the Court to terminate civil action at the threshold is drastic,

the conditions enumerated under Order 7 Rule 11 CPC to the exercise of power of rejection of plaint have to be strictly adhered to. The averments of the plaint have to be read as a whole to find out whether

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the averments disclose a cause of action or whether

the suit is barred by any law. It is needless to observe that the question as to whether the suit is

barred by any law, would always depend upon the facts and circumstances of each case. The averments in the written statement as well as the contentions of the defendant are wholly immaterial

while considering the prayer of the defendant for rejection of the plaint. Even when the allegations made in the plaint are taken to be correct as a whole r on their face value, if they show that the suit is

barred by any law, or do not disclose cause of action, the application for rejection of plaint can be entertained and the power under Order 7 Rule 11 CPC can be exercised. If clever drafting of the plaint

has created the illusion of a cause of action, the court will nip it in the bud at the earliest so that

bogus litigation will end at the earlier stage."

22. Similar reiteration of law can be found in T.

Arivandandam vs. T.V. Satyapal (1977) 4 SCC 467 , Sopan

Sukhdeo Sable vs. Charity Commr., (2004) 3 SCC 137 and

Ramisetty Venkatanna Vs. Nasyam Jamal Saheb (2023) SCC

Online SC 521.

23. Further, in the case of Ram Singh vs. Gram

Panchayat Mehal Kalan, (1986) 4 SCC 364, Hon'ble Supreme

Court has observed and held that when the suit is barred by any

law, the plaintiff cannot be allowed to circumvent that provision

by means of clever drafting so as to avoid mention of those

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circumstances, by which the suit is barred by law of limitation.

24. Thus, this Court can always lift the veil to see whether

a real cause of action has been set out in the plaint or something

purely illusory has been stated with a view to get out of Order VII

Rule 11 of the Code.

25.

When the plaintiff had notice of execution of Sale Deed

dated 27.02.2010 on the date of its execution itself, the cause of

action for filing of the suit for specific performance and also to seek

declaration as to nullity of sale deed was made available to the

plaintiff immediately. The execution of Sale Deed of the suit land

was sufficient notice to the plaintiff about the denial of agreement

by defendants No. 1 to 5. That being so, the limitation as per

Articles 54 and 58 of the Limitation Act expired on the expiry of

three years from the date of execution of sale deed and thus the

suit filed by the plaintiff is hopelessly time barred. That being so

the plaint deserves to be rejected being barred by law. Order 7 Rule

11 (d) mandates the rejection of plaint where the suit appears from

the statement in the plaint to be barred by any law.

In Raghwendra Sharan Singh v. Ram Prasanna Singh, (2020)

16 SCC 601 Hon'ble Supreme Court has held as under:

9. Now, so far as the application on behalf of the original plaintiff and even the observations made by the learned trial court as well as the High Court that the question with respect to the limitation is a mixed question of law and facts, which can be decided only after the parties lead the evidence, is concerned, as observed and held by this Court in Sham

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Lal [Sham Lal v. Sanjeev Kumar, (2009) 12 SCC 454 : (2009)

4 SCC (Civ) 741] ; N.V. Srinivasa Murthy [N.V. Srinivasa Murthy v. Mariyamma, (2005) 5 SCC 548 : AIR 2005 SC 2897] as well as in Ram Prakash Gupta [Ram Prakash Gupta v. Rajiv Kumar Gupta, (2007) 10 SCC 59] , considering

the averments in the plaint if it is found that the suit is clearly barred by law of limitation, the same can be rejected in exercise of powers under Order 7 Rule 11(d) CPC.

26. In light of above discussion, the suit of the plaintiff is

clearly barred by law as the same could not be filed after the expiry

of period of limitation.

27. rAccordingly, the application is allowed. The plaint filed

in Civil Suit No. 128 of 2021 is ordered to be rejected. Application

stands disposed of.

(Satyen Vaidya) 5th October, 2023. Judge (GR)