Maharajakumari Smt. Indrakshi ... vs M/S Adilakshmi Enterprises
2022 Latest Caselaw 2936 Kant

                           1



     IN THE HIGH COURT OF KARNATAKA AT BENGALURU

       DATED THIS THE 22ND DAY OF FEBRUARY, 2022

                        BEFORE

           THE HON'BLE MR. JUSTICE R.NATARAJ

     CIVIL REVISION PETITION NO.325 OF 2021 (IO)

BETWEEN:

MAHARAJAKUMARI SMT. INDRAKSHI DEVI AVARU
AGE 60 YEARS,
W/O SRI. R. RAJA CHANDRA
RESIDING AT NO.241, 15TH MAIN,
RAJMAHAL VILAS EXTENSION,
BANGALORE-560 080.
                                           ...PETITIONER

(BY SRI. ASHOK HARANAHALLI, SENIOR ADVOCATE ALONG
WITH SMT. MONICA PATIL, ADVOCATE)

AND:

1.     M/S. ADILAKSHMI ENTERPRISES
       REPRESENTED BY ITS
       MANAGING DIRECTOR
       NO.41 CUBBON ROAD
       CIVIL STATION
       BANGALORE 560 001

2.     SRI. K.L.RAMACHANDRA
       S/O LATE SRI K.LAKSHMANASA
       MANAGING PARTNER IN
       M/S. ADILAKSHMI ENTERPRISES
       NO.41, CUBBON ROAD,
       CIVIL STATION,
       BANGALORE-560 001.

       SRI. K.L. SRIHARI
       S/O LATE SRI K.LAKSHMANASA
       MANAGING PARTNER IN
                              2



      M/S. ADILAKSHMI ENTERPRISES
      NO.41, CUBBON ROAD,
      CIVIL STATION,
      BANGALORE-560 001.

      SINCE PLAINTIFF NO.3
      DEAD REPRESENTED BY LRS.

3.    SMT. RAJALAKSHMI
      W/O PLAINTIFF NO.3
      AGED ABOUT 81 YEARS

4.    SRI. GURUNATH
      S/O PLAINTIFF NO.3
      AGED ABOUT 64 YEARS

5.    SMT. DHANALAKSHMI
      D/O PLAINTIFF NO.3
      AGED ABOUT 62 YEARS

6.    SRI. K.H. SRINIVAS
      S/O PLAINTIFF NO.3
      AGED ABOUT 59 YEARS

7.    SRI. K.H. RADHESHYAM
      S/O PLAINTIFF NO.3
      AGED ABOUT 57 YEARS

8.    SMT. J.G. HEMAMALINI
      D/O PLAINTIFF NO.3
      AGED ABOUT 54 YEARS

9.    SMT. S.R. VYAJAYANTHIMALA
      D/O PLAINTIFF NO.3
      AGED ABOUT 50 YEARS

10.   SRI. K.L. ANANTHA PADMANABHASA
      S/O LATE SRI K.LAKSHMANASA
      PARTNER IN
      M/S ADILAKSHMI ENTERPRISES
      NO.41, CUBBON ROAD,
      CIVIL STATION,
      BANGALORE-560 001.
                                3



11.   SRI. K.L. SWAMY
      S/O LATE SRI. K.LAKSHMANASA
      PARTNER IN
      M/S ADILAKSHMI ENTERPRISES
      NO.41, CUBBON ROAD,
      CIVIL STATION,
      BANGALORE-560 001.

12.   STATE OF KARNATAKA
      REPRESENTED BY ITS CHIEF SECRETARY
      VIDHANA SOUDHA,
      BANGALORE-560 001.
                                            ...RESPONDENTS

(BY SRI. ABHINAV RAMANAND.A., ADVOCATE FOR CAVEATOR
RESPONDENT NO.1)

      THIS CRP IS FILED UNDER SECTION 115 OF CPC.,
AGAINST THE ORDER DATED 02.09.2021 PASSED ON IA.NO.15
IN COM. O.S.NO. 2806/2010 ON THE FILE OF THE LXXXVII
ADDITIONAL CITY CIVIL AND SESSIONS JUDGE, (EXCLUSIVE
DEDICATED COMMERCIAL COURT BENGALURU) DISMISSING
THE IA.NO.15 FILED UNDER ORDER VII RULE 11 OF CPC., FOR
REJECTION OF PLIANT.

      THIS CRP HAVING BEEN HEARD AND RESERVED ON
23.11.2021 COMING ON FOR 'PRONOUNCEMENT OF ORDERS'
THIS DAY, THE COURT PASSED THE FOLLOWING:

                             ORDER

This Revision Petition under Section 115 of the Code

of Civil Procedure, 1908 (hereinafter referred to as 'CPC'

for short) is filed by defendant No.1 in

Com.O.S.2806/2010 pending trial before the LXXXVII Addl.

City Civil and Sessions Judge, Bengaluru, (henceforth

referred to as 'Trial Court') challenging the order dated

02.09.2021, by which the Trial Court rejected an

application filed by defendant No.1 under Order VII Rule

11(a) and (d) of CPC for rejection of the plaint.

2. The parties shall henceforth be referred to as

they were arrayed before the Trial Court. The petitioner

herein was the defendant No.1. While respondents No.1 to

11 were the plaintiffs before the Trial Court.

3. The suit in O.S. No.2806/2010 was filed for the

following reliefs :

"a. Dissolving the plaintiff partnership Firm M/s. Adilakshmi Enterprises, to take accounts of the partnership Firm, for distribution of the schedule property in favour of plaintiffs No.2 to 5 with obligation for each of them to proportionately pay the defendant such amounts and such building sites as may be found due on accounts being taken.

b. In the event of the acquisition of the property being upheld by the Supreme Court of India the second defendant be directed to pay the compensation to plaintiffs 2 to 5 only.

c. For an enquiry into the amount of income earned by the First defendant by letting out schedule property on temporary basis, and to

render accounts of the same, and for deposit of the said amounts into the Court, for distribution amongst plaintiffs 2 to 5 equally.

d. For costs and such other reliefs as the Hon'ble Court may deem fit in the circumstances of this case, in the interest of justice and equity."

4. The plaintiffs claimed that they and defendant

No.1 entered into a memorandum of understanding dated

01.09.1986 to develop a property belonging to the

defendant No.1. The defendant No.1 was in search of a

suitable agency to meet statutory requirements under

various enactments for the exploitation of the property and

to release a sum of Rs.3.75 crores. The defendant No.1

thus entered into a Memorandum of Understanding with

the plaintiffs agreeing to hand over vacant possession of

the suit property and to execute a power of attorney at the

time of executing a deed of partnership. The plaintiffs

claimed that on 01.10.1986 a partnership deed was

entered into between the plaintiffs No.2 to 5 and

defendant No.1 constituting a partnership Firm named Adi

Lakshmi Enterprises. The partnership firm was registered

before the Registrar of Firms. Later the defendant No.1

executed a power of attorney dated 27.03.1987 in favour

of the plaintiff No.3 which was duly registered. The

plaintiffs claimed that defendant No.1 had brought in the

suit property as her investment in the Firm. Therefore, the

plaintiffs claimed that the suit property became the

property of the Firm. The plaintiffs claimed that a sum of

Rs.41,20,000/- was paid to defendant No.1 as per the

partnership agreement out of total Rs.3.75 crores. The

plaintiffs contended that thereafter the Bangalore Palace

Acquisition and Transfer Act, 1996 was promulgated and

the possession of the entire Bangalore Palace and the

vacant space surrounding including the suit property

vested in the State Government. The plaintiffs claimed

that various other proceedings were pending under the

provisions of the Urban Land (Ceiling and Regulation) Act,

1976 which had to be resolved. They claimed that the

partnership was to be in force for a period of seven years

from the date of execution of the partnership deed or a

period of three years from the date of clearance of project

by the Government and other Agencies. The plaintiffs,

therefore, claimed that the term of the Firm was not fixed,

but was subject to the contingency provided under the

Partnership deed. The plaintiffs claimed that by virtue of

the power of attorney given by the defendant no.1, they

provided the service of their Advocates for fighting the

litigation against the Urban Land Ceiling Authorities.

Ultimately, the proceedings before the Urban Land Ceiling

Authorities came to an end on 15.07.1998, where this

Court quashed the proceedings in view of the repeal of the

Urban Land (Ceiling and Regulation) Act, 1976. They

claimed that defendant No.1 had challenged the acquisition

before this Court in batch of writ petitions which was

dismissed by the Division Bench of this Court. They

claimed that defendant No.1 filed an appeal before the

Hon'ble Supreme Court which is pending adjudication. On

the application of defendant No.1, the Hon'ble Supreme

Court granted permission to temporarily lease out the suit

property which was, however, subject to many conditions.

The defendant No.1 acting on such permission had let out

to different people and organisations and was collecting

the charges. The plaintiff claimed that defendant No.1 was

liable to account for the same as a partner of the Firm.

When things stood thus, the defendant No.1 issued a

notice 18.11.1993 allegedly dissolving the Firm in terms of

clause 4 of the Partnership deed dated 01.10.1986 and

dissolved the Firm with effect from 30.09.1993. The

plaintiffs replied to the notice of dissolution, following

which the power of attorney dated 27.03.1987 was

cancelled on 30.10.1993. The plaintiffs claimed that the

defendant No.1 and her sisters decided to surrender 140

acres of land including the suit property to the State

Government. Therefore, the plaintiffs caused a paper

publication in Times of India stating that defendant No.1

had no independent right to surrender any portion of the

suit property. This was replied on 18.08.2006 by the

defendant no.1. The plaintiffs claimed that notwithstanding

these acts of defendant No.1, the partnership continued to

exist and was not cancelled in the records of the Registrar

of Firms which was evident from an endorsement issued by

the Registrar of Firms. The plaintiffs claimed that they

constitute majority partners in the Firm, who desired to

dissolve the Firm through the Court, as provided under

Section 44 of the Indian Partnership Act and that such a

decision was taken on 21.03.2010. They claimed that they

filed a suit for injunction in O.S. No. 26591/2007, wherein

the Court refused to grant interim injunction which was

confirmed upto the Hon'ble Supreme Court. Therefore, the

plaintiffs sought for dissolution of the Firm and to render

accounts.

5. The defendant No.1 contested the suit and

filed a written statement on 23.08.2010. After 11 years ,

an application was filed by defendant No.1 under Order VII

Rule 11(a) and (d) of the CPC for rejection of plaint on the

ground that there was no cause of action and that it was

barred by the law of limitation as well as under Order II

Rule 2 of CPC and under Order XXIII Rule 4 of CPC and

under Section 34 of the Specific Relief Act, 1963. The

defendant No.1 claimed that she had issued a notice of

dissolution on 18.11.1993 dissolving the Firm w.e.f.

30.09.1993 and had revoked the power of attorney dated

27.03.1987 by a deed of cancellation dated 30.10.1993.

Therefore, the cause of action for the plaintiffs arose on

18.11.1993 and on 21.10.1993. The suit which was filed

after 17 years on 20.04.2010 was barred by limitation. It

was also contended that the plaintiffs had filed O.S.

No.26591/2007 which was for perpetual injunction and the

plaintiffs did not seek to claim the reliefs which was sought

for in the present suit. Hence, it is stated that the suit is

barred under Order II Rule 2 of CPC. They also claimed

that the said suit was withdrawn without seeking leave to

file a fresh suit on same cause of action. Therefore, they

claimed that the present suit is barred under Order XXIII

Rule 4 of CPC.

6. They also claimed that the notice of dissolution

was issued on 18.11.1993 and the power of attorney was

cancelled on 30.10.1993 yet the plaintiff did not challenge

the same and therefore, the suit was not maintainable

under Section 34 of the Specific Relief Act.

7. The plaintiffs contested this application and

claimed that the defendant No.1 was not honest and bona

fide in filing the application after ten years from the date of

filing the written statement. They claimed that since the

plaintiffs No.2 to 5 constituted majority partners and

resolved on 21.03.2010 to get the Partnership Firm

dissolved under Section 44 of the Indian Partnership Act,

the firm was in existence as on the date of the suit. They

claimed that they never admitted the dissolution of the

partnership by the defendant No.1 w.e.f. 30.09.1993.

They also contended that limitation being a mixed question

of fact and law, had to be established during trial and

therefore, defendant No.1 cannot invoke that as a ground

for rejection of plaint. In so far as the withdrawal of

O.S.No.26591/2007, they contended that they had not

admitted the dissolution of the Firm in the said suit. They

claimed that O.S.No.26591/2007 was for perpetual

injunction, while the present suit is for dissolution of the

Firm and therefore, the question of the suit being hit by

Order II Rule 2 of CPC or Order XXIII Rule 4 of CPC would

not arise.

8. Based on these contentions, the Trial Court

considered the application in great detail and in terms of

the impugned order, rejected the application primarily on

the ground that the Court was bound to consider the

developments that led to the filing of the suit which

required a full fledged trial and that it cannot render a

finding as to whether the suit was hit by the law of

limitation or under Order II Rule 2 of CPC or Order XXIII

Rule 4 of CPC or under Section 34 of the Specific Relief

Act.

9. Being aggrieved by the aforesaid order, the

defendant No.1 has filed the present Revision Petition.

10. The learned Senior Counsel for the petitioner /

defendant No.1 reiterated the contentions urged before the

Trial Court and contended that even if there was a cause of

action for the plaintiffs to file a suit, it had become stale as

the plaintiffs did not take any action to sue for accounts

and a share of the profits of the dissolved Firm within

three years from the date of dissolution.

11. The learned Senior Counsel submitted that the

duration of the partnership was for a period of seven years

from the date of execution of the Partnership deed or three

years from the date of clearance of the project by the

Government. He stated that the suit property was

admittedly acquired by the State Government and

therefore, the question of clearance of the project by the

Government would not now arise. Even otherwise, he

contended that the plaintiffs are aware of the dissolution of

the Firm w.e.f. 30.09.1993 and therefore, must have

brought the suit within time. He submitted that therefore,

there is no subsisting cause of action for filing the suit. He

also submitted that the plaintiffs had filed a suit for

injunction in O.S.No.26591/2007 where he mentioned the

cause of action as commencing from the date of the

defendant No.1 issuing the notice of dissolution. The

learned Senior Counsel submitted that once the partner

has dissolved the Firm, the question of filing a suit after 17

years for dissolution and for accounts is highly belated and

on that short ground the plaint is liable to be rejected. He

also stated that when O.S.No.26591/2007 was withdrawn,

no leave was obtained for filing a fresh suit on the same

cause of action and since the plaintiffs had not chosen to

seek for dissolution then, they cannot now raise the same

cause of action to seek the relief of dissolution. Hence, he

claimed that the suit is barred Order II Rule 2 or Order

XXIII Rule 4 of CPC.

12. In support of his above contentions, the

learned Senior Counsel relied upon the following

judgments:

i. Virgo Industries (Eng.) Private Limited vs.

Venturetech Solutions Private Limited [(2013)1

SCC 625]

ii. Madanuri Sri Rama Chandra Murthy vs. Syed

Jalal [(2017)13 SCC 174]

iii. T. Arivandandam vs. T.V. Satyapal and

Another [(1977)4 SCC 467]

iv. I.T.C. Limited vs. Debts Recovery Appellate

Tribunal and Others [(1998)2 SCC 70]

v. Dahiben vs. Arvindbhai Kalyanji Bhanusali

(Gajra) Dead Through Legal Representatives

and Others [(2020)7 SCC 366]

vi. State of Punjab and Others vs. Gurdev Singh

[(1991)4 SCC 1]

vii. Swamy Atmananda and Others vs. Sri

Ramakrishna Tapovanam and Others

[(2005)10 SCC 51]

viii. S.N.Wadiyar (dead) Through Legal

Representative vs. Commissioner of Wealth

Tax, Karnataka [(2015)15 SCC 38]

ix. Chamundi Hotels Pvt. Ltd. & Others vs. The

Appropriate Authority & Others [ILR 1996 KAR

2882]

x. T.R. Thandur vs. Union of India and Others

[(1996)3 SCC 690]

xi. S. Vasudeva vs. State of Karnataka and Others

[(1993)3 SCC 467]

xii. Dasari Satyanarayana, being minor

represented by guardian A. Venkataramaiah

vs. Kanchupatla Appa Rao and Others [1964

SCC Online AP 83]

xiii. Biharilal Jaiswal and Others vs. Commissioner

of Income Tax and Others [(1996)1 SCC 443]

13. Per contra, the learned counsel for the

respondents / plaintiffs contended that the partnership was

not one at will. They claimed that the defendant No.1 had

acknowledged that she had delivered vacant possession of

the suit property to the Firm in token of her investment

and further confirmed that the suit property would be the

property of the Firm. The plaintiffs, therefore claimed that

a mere notice of dissolution issued by the defendant No.1

would not result in dissolution of the Firm. He contended

that the only acceptable mode of dissolution of the Firm

was by resorting to Section 44 of the Indian Partnership

Act, 1932. They claimed that since the partners resolved to

seek dissolution of the Firm on 21.3.2010, the suit was

well within limitation. He submitted that the earlier suit in

O.S.No.26591/2007 was filed for perpetual injunction to

protect the possession of the plaintiffs' in the suit property.

The Hon'ble Supreme Court of India, while disposing of the

SLP held that in view of the acquisition of the Bangalore

Palace and vacant surrounding land, the same stood

vested in the State Government and therefore, the

plaintiffs cannot claim that they were in possession.

14. The learned counsel further submitted that

notwithstanding the withdrawal of the suit, since the

acquisition was challenged before the Hon'ble Supreme

Court any favourable verdict from the Hon'ble Supreme

Court, would benefit the Firm. Hence the plaintiffs did not

take any precipitative action. Even otherwise they claimed

that the defendant No.1 was permitted by way of an

interim order to lease out temporarily the suit property

and therefore, the defendant No.1 was bound to account

for the rents received which she admittedly had not done.

Hence, the suit for accounts was maintainable.

15. I have considered the submissions made by

the learned counsel for the parties.

16. This Court has seen a multitude of cases where

the defendants in a suit would invariably attempt at

seeking the rejection of the plaint at the threshold, without

comprehending the intent and purpose of Order VII Rule

11 of the CPC. It is appropriate to reassert the purpose,

scope and intent of the provision, which is to shorten

litigation, that are, ex-facie not maintainable. The words

"cause of action" mentioned in Order VII Rule 11(a) has to

be literally understood, meaning thereby, whether the

plaint discloses adequate cause for the action. For

instance, in a suit for specific performance, the cause to

sue must have arisen namely, the defendant must have

refused to perform or the time prescribed for performance

by the defendant had elapsed. In a suit for partition, the

succession must have opened. In a suit for injunction, the

defendant must have attempted something undermining

the rights of the plaintiff. The question whether the cause

of action is real or not has to be determined after a trial in

the suit. The defendant in the suit cannot claim at the

threshold that the cause of action is not real unless clever

drafting has resulted in an illusory cause of action.

Likewise, the words "barred by law" appearing in Order VII

Rule 11(d) should be construed in the sense that the initial

presentation of the plaint should be barred by law, and

ousts the jurisdiction of a civil Court. An illustration is, a

case for declaration that the property is held benami by

the defendant. Such a suit is ex-facie barred The

Prohibition of Benami Property Transactions Act, 1988.

Similarly, a declaration that the plaintiff is a protected

tenant of an agricultural land is barred under Section 132

of the Karnataka Land Reforms Act, 1961. A suit for

declaration to correct the revenue entries is barred under

Section 61 of the Karnataka Land Revenue Act, 1964. In

short, the Court should not be expected to voyage into

facts of the case to determine whether the suit is

maintainable or not. Such an exercise has to be done only

after a trial and not otherwise.

17. In the instant case, the fact that the plaintiff

Nos.2 to 5 and the defendant No.1 constituted a

Partnership Firm is not in dispute. It is equally not in

dispute that the partnership was not at will but was for a

period of seven years from the date of its execution or for

3 years from the date of Government granting clearance

for developing the schedule property. The partnership deed

bears a reference to defendant No.1 handing over

possession of the suit property to the Firm and agreeing to

treat the suit property as the property of the Firm. If it was

not a partnership at will, the dissolution of the partnership

Firm could be by agreement or on the happening of

certain contingencies, which in the present case has not

occurred. Therefore, the only acceptable mode was to seek

for dissolution through the process of the Court under

Section 44 of the Indian Partnership Act, 1932. Therefore,

the notice of dissolution dated 18.11.1993 issued by the

defendant No.1 is inconsequential and the Firm continued

to exist. If it so existed, then withdrawal of O.S.

No.26591/2007 was a decision of the Firm and therefore,

the defendant No.1 was bound by it. The Trial Court

therefore, considered the same and held that the questions

raised by the defendant No.1 were all mixed questions of

fact and law and had to be decided after trial. I do not see

any error in the appreciation of the facts of the case by the

Trial Court. Hence, this Revision Petition lacks merit and is

therefore dismissed.

18. However any observation recorded by this

Court is limited for the purpose of disposal of this petition

and the Trial Court shall not be influenced by the same

while disposing off the suit on merits.

Sd/-

JUDGE

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