Kerala High Court

Surya Furnaces And Refractories Pvt Ltd vs Sudheer A on 19 September, 2025

RFA 274 of 2015




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                     IN THE HIGH COURT OF KERALA AT ERNAKULAM

                                       PRESENT

                    THE HONOURABLE MR. JUSTICE C.PRATHEEP KUMAR

        FRIDAY, THE 19TH DAY OF SEPTEMBER 2025 / 28TH BHADRA, 1947

                                RFA NO. 274 OF 2015

                  OS NO.841 OF 2011 OF II ADDITIONAL SUB COURT,ERNAKULAM


APPELLANT/PLAINTIFF

                  SURYA FURNACES AND REFRACTORIES PVT LTD
                  REPRESENTED BY ITS DIRECTOR - K.K.NELAMBAR, AGED 55
                  YEARS, S/O.KUNJAN, KANIYARMALAYIL @ PRANAVAM, KOKKAPPILLY
                  P.O., VENNIKULAM.

                  BY ADVS.
                  SRI.V.V.ASOKAN (SR.)
                  SHRI.K.I.MAYANKUTTY MATHER (SR.)
                  SRI.P.RAHUL
                  SMT.NIKITHA SUSAN PAULSON

RESPONDENTs/DEFENDANTS 2 TO 4

       1          SUDHEER A., AGED 44 YEARS
                  S/O.SATHYAPRAKASH, AKHILA, EROOR ROAD, THRIPUNITHURA -
                  682 306.

       2          JAYASREE, AGED ABOUT 65 YEARS
                  W/O.LATE SATHYAPRAKASH, AKHILA, EROOR ROAD, THRIPUNITHURA
                  - 682 306.

       3          SANJAY A., AGED 41 YEARS,
                  S/O.LATE SATHYAPRAKASH, AKHILA, EROOR ROAD, THRIPUNITHURA
                  - 682 306.
                  BY ADV SRI.K.THYAGARAJESWARAN


        THIS       REGULAR   FIRST   APPEAL   HAVING   BEEN   FINALLY   HEARD   ON

26.8.2025, THE COURT ON 19.09.2025 DELIVERED THE FOLLOWING:
 RFA 274 of 2015




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                                      JUDGMENT

Dated : 19th September, 2025

The plaintiff in OS No. 841 of 2011 on the file of the Sub Court, Ernakulam,

is the appellant. (For the purpose of convenience, the parties are hereafter referred

to as per their rank before the trial Court.)

2. The plaintiff is a company incorporated under the provisions of the

Companies Act, 1956 on 25. 04.1990. The plaintiff filed this suit for declaration

and injunction. The plaintiff company was incorporated for carrying on business of

designing, fabricating, manufacturing, producing, selling etc. and dealing in

furnaces, refractories, steel storage tanks, heat equipments and steel structures. The

company's aim was to take over the business of the partnership firm 'Surya

Furnaces and Refractories', originally constituted on 01.12.1978 and registered

before the Registrar of firms as 28/1979. The above firm was originally constituted

with six partners, namely A.P. Sathyaprakash; the first defendant, A.K. Varkey, R.

C. Varma, N. L. Venguswami, N. P. Ram and S. Ganapathy. In the year 1978, the

firm purchased the plaint schedule property consisting of 17 cents of land as per

Sale Deed No. 3513 of 1978 of Thrippuruthra Sub Registrar Office, in the name of

the first defendant being the partner of the firm. On 26.07.1979, the partnership

was reconstituted and thereby N.P. Ram and S. Ganapathy retired. On 15.11.1983,

the partnership was again reconstituted and thereby A.K. Varkey and N.L. RFA 274 of 2015

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Venguswamy retired and thereafter the remaining partners were A.P.

Sathyaprakash, namely the first defendant and R.C. Varma. On 11.08.1989 the

partnership was again reconstituted and thereby K.K. Neelambar, was added as a

partner. On 17.08.1989, the partnership was again reconstituted and thereby the

first defendant A.P.Satyaprakash and R.C. Varma retired and 4 new partners namely

Peethambar K.V, Vasu.K.V, Kunjan.P.P and Abhishek.K.Nilambar were included as

partners. In the year 1990, the plaintiff company was incorporated to take over the

assets and liabilities of the partnership firm. Upon incorporation of the plaintiff

company, all the assets and liabilities of the partnership including the plaint

schedule property were taken over by the plaintiff, Surya Furnaces and Refractories

Pvt. Ltd. Accordingly, the plaint schedule property is in the exclusive possession

and enjoyment of the plaintiff company. Subsequently, due to competition in the

field and financial stringency, the company was stopped and thereafter, there is no

business dealings for the plaintiff. In the meantime, since 1996 the land tax for the

plaint schedule property was not remitted. During 2010 when the Director of the

plaintiff company approached the Village Officer for remitting the land tax, the

same was not received. Therefore, the plaintiff company approached the High

Court by filing WP(C) No. 29774/2010 seeking a direction to the revenue officials

to accept the land tax in respect of the plaint schedule property. As per Order dated

11.03.2011, the High Court directed the revenue officials to accept the tax. RFA 274 of 2015

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Thereafter, it was found that the 1st defendant has executed settlement deed No.

2409 of 2011 in respect to the plaint schedule property in favour of his son, namely,

the second defendant. Since the plaint schedule property exclusively belongs to the

plaintiff company, the first defendant had no authority to execute such a settlement

deed in favour of his son. Therefore, the plaintiff prayed for a decree declaring that

Document No. 2409 of 2011 of Tripunithura Sub Registry is null and void and that

the first defendant has no title or right in the said property to execute such a

document and for a permanent prohibitory injunction restraining the defendants,

their men and agents from trespassing into the plaint schedule property or from

taking away any usufructs from the plaint schedule property and obstructing the

peaceful enjoyment and possession of the plaint schedule property by the plaintiff

or from committing waste therein.

3. Defendants 1 and 2 filed written statement contending that there is no

company by name Surya Furnaces and Refractories Pvt. Ltd. The plaint schedule

property was purchased by the first defendant using his own funds, in the name of

the partnership firm. The plaint schedule property was detached from the

partnership, prior to the alleged reconstitution in 1989. The reconstitutions of

11.08.1999 and 17.08.1999 did not happen. They also contended that there was no

retirement of partners or induction of new partners after 15.11.1983, when A.K.

Varkey and N.L. Venguswamy retired. According to the defendants, after the death RFA 274 of 2015

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of R.C. Varma, the only surviving partner was the first defendant and thereby the

partnership ceased to exist. Mr. Neelambar was brought into the firm as a

consultant to make profits in the firm. However, he sold the entire machinery of the

firm and absconded with the records and sale proceeds. He also obtained signed

blank papers from the first defendant and R.C. Varma, saying that they are required

for submitting before authorities. Mr. Neelambar forged documents claiming to be

a partner. His induction to the partnership was not informed to the Registrar of

firms. The first defendant filed a suit as O.S. No. 413 of 2008 against Mr.

Neelambar before the Munsiff's court, Ernakulam, for fabricating power of attorney

to sell the plaint schedule property and the said suit was decreed on 29.06.2009 in

favour of the first defendant. The defendants further contended that the suit is

barred under Section 69 of the Partnership Act. They also contended that the

balance sheet of the partnership firm does not contain the plaint schedule property

as its asserts. According to the defendants, till 2010 the first defendant was paying

land tax for the plaint schedule property as a partner of the firm. Since all the other

partners died and the first defendant became the sole surviving partner, he had

every right to assign the plaint schedule property and after the execution of

settlement deed No. 2409 of 2011, the second defendant is the absolute owner in

possession of the plaint schedule property. Further, according to the defendants, the

first defendant had taken over the entire liabilities of the firm including sales tax RFA 274 of 2015

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liability and the liability with the State Bank of Travancore. Therefore, defendants

1 and 2 prayed for dismissing the suit. During the pendency of the suit, the first

defendant died and his legal representatives were impleaded as additional

defendants 3 and 4.

4. The trial court framed 8 issues. The evidence in the case consists of

the oral testimonies of PW1, DWs 1 and 2, Exhibits A1 to A28, B1 to B7 and X1.

After evaluating the evidence on record, the trial court dismissed the suit.

Aggrieved by the above judgment and decree of the trial court, dismissing the suit,

the plaintiff preferred this appeal.

5. Now the points that arise for consideration are the following:

1) Whether the plaint schedule property was purchased by the 1st defendant in the

name of the firm Surya Furnaces and Refractories by using his own money, as

claimed?

2) Whether the settlement deed No. 2409/2011 executed by the first defendant in

favour of the second defendant is valid and binding on the plaintiff ?

3) Whether the plaintiff is entitled to get an injunction as prayed for ?

6. Heard SriV.V.Asokan, the learned Senior counsel for the appellant as

instructed by Smt.Nikitha Susan and Sri K. Thyagarajeshwaran, the learned

counsel for the Respondent.

RFA 274 of 2015

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7. The points: The specific case of the plaintiff is that the plaint

schedule property was purchased by the erstwhile partnership firm Surya Furnaces

and Refractories, in the name of the 1 st defendant, being a partner of the above

firm. In the written statement, the contention raised by defendants 1 and 2 is that

though the above property was purchased in the name of the first defendant in his

capacity as the partner of the firm Surya Furnaces and Refractories, the said

property was purchased using his own money. In the written statement he has

raised a further contention that before the reconstitution of the firm on 11.08.1999,

the plaint schedule property was detached from the firm. Exhibit A5 is the certified

copy of the sale deed, as per which the plaint schedule property was purchased.

From the contents of Exhibit A5, it can be seen that the plaint schedule property

was purchased in the name of the firm Surya furnaces and refractories represented

by the partner, namely the first defendant. From the above contents of Exhibit A5

sale deed it can be seen that, the plaint schedule property was purchased by the

firm in the name of the first defendant, being a partner of the firm. There is

absolutely no evidence to prove that the plaint schedule property was purchased by

the first defendant using his own money. In the above circumstances, the trial court

was justified in holding that the plaint schedule property was purchased by the firm

Surya Furnaces and Refractories. In other words, there is no merits in the RFA 274 of 2015

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contention raised by defendants 1 and 2 that the plaint schedule property is not the

property of the firm Surya Furnaces and Refractories, but belongs to the first

defendant.

8. Another contention raised by the learned counsel for defendants 1 and

2 is that the plaint schedule property was detached from the partnership firm, much

before the reconstitution on 11.08.1989. In the written statement, the defendants 1

and 2 have raised a further contention that the alleged reconstitution dated

11.08.1989 and 17.08.1989 did not happen. From the contents of Exhibit A5 sale

deed, it is revealed that the plaint schedule property was purchased by the firm in

the name of the first defendant in his capacity as the partner of the firm. In the

above circumstance, it is the burden of defendants no. 1 and 2 to prove that the

plaint schedule property was detached from that of the partnership firm Surya

Furnaces and Refractories. However, in order to prove the said contention, the

defendants 1 and 2 have not adduced any evidence. Once it is proved that the plaint

schedule property is the property belonging to the firm Surya Furnaces and

Refractories, it is the burden of the person who alleges that the said property ceased

to be that of the firm. At the time of evidence, no attempt was made by defendants

1 and 2 to prove that at any point of time, the plaint schedule property ceased to be

that of the firm, and as such, the contention taken by the defendants that the plaint

schedule property was detached from the partnership firm, much before the RFA 274 of 2015

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reconstitution on 11.08.1989 is liable to be rejected.

9. Exhibit A12 is an extract of the Register of firms in respect of the

firm Surya Furnaces and Refractories having registration No.28/1979. It shows that

the above firm was originally constituted on 01.12.1978 with 6 partners, namely

A. P. Sathyaprakash; the first defendant, A. K. Varkey, R. C. Varma, N. L.

Venguswami, N. P. Ram, and S. Ganapathy. From Exhibit A12 it can also be seen

that on 26.07.1979, the said partnership was reconstituted and N.P. Ram and S.

Ganapathy retired. It will further go to show that on 15.11.1983, the firm was again

reconstituted and A.K.Varkey and N.L.Vengeswami retired, leaving, A.P.

Sathyaprakash, the first defendant and R. C. Verma, as the two surviving parties.

Exhibit A2 is the deed of partnership dated 11.08.1999 executed between the first

defendant R.C. Verma and K.K. Neelamber. From Exhibit A2, it can be seen that

K.K.Neelamber was included as a partner as per the said document. As per Exhibit

A3 partnership deed dated 07.08.1989, P. Sathyaprakash namely the first defendant

and R.C. Varma retired from the firm and four new partners, namely K.V.

Peethambar, K.V. Vasu, P.P. Kunjan and Abhishek K. Neelambar were newly

included as partners.

10. At the time of arguments, the learned counsel for the respondents

attempted to show that as per the evidence on record, two partnership firms were in

existence, one by name M/s. Surya Furnaces and Refractories and the other Surya RFA 274 of 2015

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Furnaces and Refractories and that the plaint schedule property belonged to Surya

Furnaces and Refractories and not M/s.Surya Furnaces and Refractories. Therefore,

it was argued that in this case there is no reliable evidence to prove that the plaint

schedule property is the property of Surya Furnaces and Refractories, which was

taken over by the plaintiff company. The trial court also found that there are two

partnership firms, one having registration number 28 of 1979 and the other having

registration number 2058 of 1983. However, it is to be noted that the plaint

schedule property was purchased as per Exhibit A5 sale deed on 19.12.1978,

immediately after the formation of the partnership, Surya Furnaces and

Refractories having registration number 28 of 1979. The second firm in the same

name was registered only in 1983. In the above circumstances, there is no difficulty

in holding that the plaint schedule property was purchased by the firm Surya

Furnaces and Refractories having registration number 28 of 1979 and not that of

the firm having Reg. No.2058 of 1993. In the above circumstances, the finding of

the trial court that in this case there is no evidence to show that the plaint schedule

property was purchased by the firm having registration number 28 of 1979 is

correct. In other words, from the available evidence it can be seen that the plaint

schedule property was purchased by the firm Surya Furnaces and Refractories

having registration number 28 of 1979. In other words, there is no merits in the

argument advanced by the learned counsel for the respondents that the plaint schedule RFA 274 of 2015

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property belonged to the firm having registration number 2058 of 1983.

11. The validity of Exhibit A11 settlement deed No. 2409 of 2011

executed by the first defendant in favour of the second defendant is to be evaluated

in the above context. In Exhibit A11 settlement deed, the first defendant claims that

the said property exclusively belonged to him and he had executed the settlement

deed in favour of the second defendant assuming that the plaint schedule property

belonged to him and that it is his private property. However, as I have already

noted above, the plaint schedule property belonged to the firm Surya Furnaces and

Refractories, having registration number 28 of 1979 and it was not the private

property of the first defendant and on that ground itself, Exhibit A11 settlement

deed executed by first defendant in favour of second defendant does not in any

way bind the firm Surya Furnaces and Refractories having registration number 28

of 1979, as well as the plaint schedule property.

12. The contention taken by the learned counsel for the respondents is

that when the other partners died, the first defendant became the sole surviving

partner and as such, he became the absolute owner of the plaint schedule property.

However, the above claim of the first defendant that when the other partners retired

or died, he became the sole surviving partner and thereby the partnership firm came

to an end and he became the absolute owner of the plaint schedule property is not

supported by any evidence. On the other hand, from the evidence adduced by the RFA 274 of 2015

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plaintiff, it is revealed that the firm Surya Furnaces and Refractories have not

ceased to exist as claimed by the first defendant. From Exhibit A2 deed of

partnership it is revealed that on 11.08.1989, when there were two partners,

namely, the first defendant and R.C. Verma, a third partner was inducted and he is

K.K. Neelambar. Thereafter, as per Exhibit A3, deed of partnership dated

17.08.1989, the first defendant and R.C. Verma retired from the partnership and 4

new partners were included in it.

13. Exhibit A12, the extract of the register of firms also shows that on

11.08.1999 Neelambar was included as a partner and also that on 17.08.1989 the

first defendant and R.C.Verma retired while four new other partners were included.

Therefore, the contention of the learned counsel for the respondents that before

11.08.1989, the other partners retired or died and then the first defendant became

the sole surviving partner and then he became the absolute owner of the plaint

schedule property is found to be not correct and against the evidence available on

record. Therefore, on their ground also, Exhibit 11 settlement deed executed by the

first defendant in favour of the second defendant is not binding on the firm Surya

Furnaces and Refineries having registration No. 28 of 1979 and also the plaint

schedule property. In other words, even after the execution of Exhibit A11

settlement deed by the first defendant in favour of the second defendant, the plaint

schedule property continued to be that of the firm Surya Furnaces and Refractories RFA 274 of 2015

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having registration No. 28 of 1979 and as such, the second defendant cannot claim

any title or possession over the said property, by virtue of Exhibit A11 settlement

deed. 14. The trial court found that on 17.08.1989, as per Exhibit A6

partnership deed, a new partnership firm with four partners was constituted. At the

same time, as per Exhibit A3, the existing partnership firm was reconstituted and

after the reconstitution, it had five partners. Abhishek K Neelambar who was a

partner in Exhibit A3 was not a partner in Exhibit A6. The trial court further found

that the partnership newly constituted as per Exhibit A6, has decided to convert the

said partnership into a private limited company and it was not the firm, having No.

28 of 1979 reconstituted as per Exhibit A3 with four surviving parties, but by the

new partnership firm constituted on 17.08.1989 with the four partners, which

became the plaintiff company. It was in the above context that the trial court

dismissed the suit.

15. However, it is to be noted that in the plaint there is no prayer for a

declaration that the plaint schedule property belongs to the plaintiff company. The

prayer 'A' is only to declare that document No. 2409 of 2011 of Thrippunithura

SRO is null and void, as the first defendant had no title or right in the plaint

schedule property, to execute the same in favour of his son or in favour of anybody.

Prayer 'B' is to pass a decree of permanent prohibitory injunction restraining the

defendants, their men and agents from trespassing into the plaint schedule property RFA 274 of 2015

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or from taking away any usufructs from the plaint schedule property, from

interfering with the peaceful possession and enjoyment of the plaint schedule

property by the plaintiff or from committing waste therein.

16. I have already found that the defendants have no manner of right in

the plaint schedule property, but the plaint schedule property belongs to the firm

Surya Furnaces and Refractories having registration No. 28 of 1979. On

17.08.1989 the first defendant retired from the firm and even thereafter the firm

continued to function. In the above circumstance, the first defendant ceased to have

any interest in the plaint schedule property on 17.08.1999. Even if the plaint

schedule property continued to be that of the firm having registration No. 28 of

1979, or it was taken over by the plaintiff company, the defendants 1 and 2 have no

manner of rights to interfere with the same.

17. In the decision Sharad Vasant Kotak and others v. Ramniklal

Mohanlal Chowda and Another, AIR 1998 SC 877, relied upon by the learned

counsel for the appellant, the question that arose for consideration before the Apex

Court was, whether on reconstitution of a firm, re-registration of the firm is

required or not. After analyzing various decisions on the point, the Apex Court held

that induction of new partners into an already registered partnership only

reconstitutes the existing firm and therefore, there is no necessity to get a fresh

registration. The court further held that failure to intimate the reconstitution of the RFA 274 of 2015

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firm to the Registrar of firms, may attract certain penalties provided under the Act

and that will not lead to the conclusion that the registration of the firm ceased.

18. In the decision in Travancore Regal Resorts Ltd. v. The District

Collector, Idukki and others, (WP(C) No. 17427 of 2020 decided on 06.05.2025)

relied upon by the learned counsel for the appellant, a learned single Judge of this

Court held that when a partnership firm is registered as a company under the

provisions of the Companies Act, all the assets of the firm automatically vests with

the company by virtue of the operation of Section 575 of the Companies Act.

19. Relying upon the decision of the Hon'ble Supreme Court in M/s

Shreeram Finance Corporation v. Yasin Khan and others, (1989) 3 SCC 476,

the learned counsel for defendants 1 and 2 would argue that a suit filed by a

partner, whose name was not notified to the Registrar, against the firm, is not

maintainable. In the above decision, the Apex Court held that, since the names of

the persons suing against the firm, as on the date of the suit were not shown as

partners in the register of firms, the said suit is hit by sub-section (2) of Section 69

of the Partnership Act.

20. The learned counsel for the defendants relying upon the decision of

the Hon'ble Supreme Court in Shivraj Reddy v. S. Reghuraj Reddy, AIR 2024

SC 2897 would argue that, in the case of a partnership at will, on the death of one

of the partners, the partnership will come to an end. In the above decision, the Apex RFA 274 of 2015

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Court held that on the death of one of the partners, the partnership would stand

dissolved automatically as per Section 42(c) of the Indian Partnership Act, 1932.

21. In the decision Syed Irfan Sulaiman v. New Amma Hospital,

Saroornagar, 2017 KHC 2235 also, the Hyderabad High Court held that once the

name of a partner of a firm is not entered in the register of firms, he could not file a

suit against the firm to enforce his rights arising from the reconstitution deed.

22. In the decision in Malabar Fisheries Co. v. Commissioner of

Income tax, Kerala, 1979 4 SCC 766, the question that arose for consideration

before the Hon'ble Supreme Court was, whether dissolution of a firm amounts to

extinguishment of the rights of the firm in the assets of the partnership and

accordingly was a transfer within the meaning of Section 2(47) of the Income Tax

Act. In paragraph 18, the Apex Court held that:

"Having regard to the above discussion, it seems to us clear that a partnership firm under the Indian Partnership Act, 1932 is not a distinct legal entity apart from the partners constituting it and equally in law the firm as such has no separate right of its own in the partnership assets and when one talks of the firm's property or firm's assets all that is meant is property or assets in which all partners have a joint or common interest. If that be the position, it is difficult to accept the contention that upon dissolution the firm's rights in the partnership assets are extinguished. The firm as such has no separate rights of its own in the partnership assets but it is the partners who own jointly in common the assets of the partnership and, therefore, the consequence of the distribution, division or allotment of RFA 274 of 2015

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assets to the partners which flows upon dissolution after discharge of liabilities is nothing but a mutual adjustment of rights between the partners and there is no question of extinguishment of the firm's rights in the partnership assets amounting to a transfer of assets within the meaning of Section 2(47) of the Act. In our view, therefore, there is no transfer of assets involved even in the sense of any extinguishment of the firm's rights in the partnership assets when distribution takes place upon dissolution."

23. In the decision in Akshay Verma v. Sitha Devi Verma Thru.Lrs.

2024 KHC 4485 relied upon by the learned counsel for the defendants, the

Rajasthan High Court held that: "The legal position is crystal clear that

irrespective of any clause in the partnership deed between the two partners, to

keep alive the partnership even after the death of one of the partners, upon death

of one of the partners, the partnership stands dissolved by operation of law."

24. In the decision in Commissioner of Income Tax and others v. G.

Parthasarathy Naidu and others (1998) 8 SCC 487, the question that arose for

consideration before the Apex Court was whether two separate firms having same

partners can be treated as single firm for the purpose of assessment of tax. The

Apex Court held that in such situations the intention of partners, whether to

constitute single or separate firm, is to be taken into account. In paragraph 4, the

Apex Court held that:

"The firm name is only a collective name for the individual partners. But each partnership is a distinct relationship. The partners may be different and yet the nature of the business may be the same, the business may be RFA 274 of 2015

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different and yet the partners may be the same. An agreement between the partners to carry on a business and share its profits may be followed by a separate agreement between the same partners to carry on another business and share the profits therein. The intention may be to constitute two separate partnerships and, therefore, two distinct firms. Or to extend merely a partnership originally constituted to carry on one business, to the carrying on of another business. It will all depend on the intention of the partners. The intention of the partners will have to be decided with reference to the terms of the agreement and all the surrounding circumstances including evidence as to the interlacing or interlocking of management, finance and other incidents of the respective businesses."

25. In the instant case, the partnership was registered in 1978 with

registration No. 28/1979. Several times it was reconstituted, by which existing

partners retired and new partners were included. From Exhibit A12 it can be seen

that reconstitution of the firm was not intimated to the Registrar of firms in time.

Even then as held by the Apex Court in the decision in Commissioner of Income

Tax (supra), failure to intimate the reconstitution of the firm to the registrar of the

firm may only attract certain penalties as stipulated under the Partnership Act and

the same will not amount to cessation of registration and as such, the status of the

firm as a registered firm continues in spite of the reconstitution. Though as per

Exhibit A3 partnership deed, the first defendant and R.C. Verma retired, four new

other partners were included and thereafter the partnership had five partners

including K.K. Neelambar who was already there, along with four newly added

partners. Though Ext.A6 partnership deed was also executed on the same day, it RFA 274 of 2015

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consisted of only four partners, as Abhishek K Neelambar was not there in Exhibit

A6. In Exhibit A3 partnership deed, it is specifically stated that all the partners

therein agreed to transfer the assets and liabilities of the firm Surya Furnaces and

Refractories to the plaintiff company. In Ext. A6 also there is specific recital

regarding the desire of the partners to convert the partnership firm into a limited

company.

26. Therefore, from Exhibit A3 and A6 it is clear that all the partners in

the firm having registration No.28 of 1979, decided to form the plaintiff company,

with the aim of taking over the entire assets and liabilities of the said firm. Since

the plaint schedule property belonged to the very same firm having registration

number 28 of 1979, upon incorporation of the plaintiff company, the plaint

schedule property automatically vested with the plaintiff company. In the above

circumstances, the trial court was not justified in holding that in this case there is

no evidence to prove that the first plaintiff company was formed by the partners of

the firm having registration number 28 of 1979. Therefore, the trial court was not

justified in dismissing the suit. In other words, the impugned judgment and decree

of the trial court dismissing the suit is liable to be set aside and the suit, O.S. No.

841 of 2011 on the file of the Sub Court, Ernakulam, is liable to be decreed. Points

answered accordingly.

27. In the result, this appeal is allowed. The impugned judgment and RFA 274 of 2015

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decree of the trial court dismissing the suit, O.S. 841 of 2011 is set aside. The suit

is decreed as follows:

It is declared that settlement deed No. 2409 of 2011 of Thrippunithura Sub

Registry, namely Exhibit A11 executed by the first defendant in favour of the

second defendant is null and void and not binding on the plaintiff company as well

as on the plaint schedule property. The defendants are restrained by a permanent

prohibitory injunction from trespassing into the plaint schedule property, taking

usufructs from the said property, from interfering with the plaintiff's peaceful

possession and enjoyment of the said property and also from committing any waste

therein. The appellant/plaintiff are also entitled to get the costs of this appeal, from

the respondents/defendants.