Telangana High Court

Gangotri Associates, vs Parameshwar Dayal Sharma, on 4 July, 2022

Bench: G.Anupama Chakravarthy

           HIGH COURT FOR THE STATE OF TELANGANA
                                   *****

                          C.C.C.A.No.35 of 2011

Between:

Gangotri Associates & another.

                                     .....Appellants
      And

Parameshwar Dayal Sharma & others.
                                        .......Respondents



JUDGMENT PRONOUNCED ON : 04.07.2022



HON'BLE SMT. JUSTICE G. ANUPAMA CHAKRAVARTHY



1.    Whether Reporters of Local newspapers              :     Yes
      may be allowed to see the Judgment ?


2.    Whether the copies of judgment may be              :     Yes
      marked to Law Reporters/Journals ?


3.    Whether Their Ladyship/ Lordship wish to :         Yes
      see the fair copy of the judgment ?




                                    _________________________________
                                    G. ANUPAMA CHAKRAVARTHY, J
                                  2
                                                              GAC, J
                                                   CCCA.No.35 of 2011



  HON'BLE SMT. JUSTICE G. ANUPAMA CHAKRAVARTHY


                    C.C.C.A.No.35 of 2011

                      DATE: 04.07.2022

Between :

Gangotri Associates & another.

                                 .....Appellants
       And

Parameshwar Dayal Sharma & others.
                                 .......Respondents


For Appellant/s         :        Mr.Kowturu Vinayakumar,
                                 Advocate.
For Respondent/s         :       Mr.Pratap    Narayan    Sanghi   &
                                 Mr.Resu      Mahender      Reddy,
                                 Advocates.

< Gist:


> Head Note:


? CITATIONS:

1971 (1) SCC 24

C/15
                                    3
                                                                 GAC, J
                                                      CCCA.No.35 of 2011



     HON'BLE SMT. JUSTICE G. ANUPAMA CHAKRAVARTHY

          CITY CIVIL COURT APPEAL No.35 of 2011

JUDGMENT :

This City Civil Court Appeal is arising against the judgment

in O.S.No.3232 of 2004, dated 15.11.2010 on the file of the Court

of IX Additional Senior Civil Judge (FTC), City Civil Court,

Hyderabad.

2. The appellants are the plaintiffs before the trial Court and

suit is filed for directing defendant Nos.1 to 3 to render accounts of

the business carried jointly by them in construction of multi-storied

complex i.e. 'Manasi Ganga complex' inclusive of all the portions

sold in the sale of the said complex in favour of defendant Nos.4 to

18. The trial Court, after considering the oral and documentary

evidence on record, dismissed the said suit. Being aggrieved of the

said judgment, this appeal is preferred.

3. Heard both sides and perused the record.

4. It is contended by the learned counsel for the appellants that

the trial Court ought to have seen that Exs.A-3 to A-5 (registered

GAC, J CCCA.No.35 of 2011

sale deeds) show the participation of appellants in the sale

transaction with respect to the properties as the appellants have

invested amounts. It is further contended that as the Bank

statements covered under Exs.A-1 and A-2 prove their claim, the

trial Court ought to have decreed the suit. It is further contended

that the trial Court ought to have seen that the respondents have

failed to explain under what circumstances the appellants have

attested the documents and ought to have believed the version of

the appellants and ought to have decreed the suit.

5. Alternatively, it is urged by the learned counsel for the

appellants that in case the appeal is to be dismissed, liberty may be

given to the appellants to file a fresh suit for recovery of money

as per Section 14(1) of the Limitation Act. In support of his

contentions, the learned counsel for the appellants has relied on a

judgment of the Hon'ble Supreme Court in India Electric Works

Ltd. v. James Mantosh & another1.

6. The brief averments of the plaint are that the plaintiffs are

financiers carrying on business in finance and are also investing

1971 (1) SCC 24

GAC, J CCCA.No.35 of 2011

money in the real estate, involving construction of multi-storied

building complex. It is averred in the plaint that defendants 1 to 3

approached the plaintiffs for investing in purchase of the house

bearing Nos.15-1-636 to 15-1-640, 15-1-640/1 and 15-1-444,

totally admeasuring 272 square yards, situated at Feelkhana,

Hyderabad and there was mutual oral agreement between plaintiffs

and defendants that the land shall be purchased in the names of

defendants 1 to 3, who will have 2/3rd share and plaintiffs will have

1/3rd share in the land as well as in the constructed property. It is

the further contention of plaintiffs that as per the said agreement,

the land was purchased for a total consideration of Rs.30,55,000/-,

out of which, the plaintiffs have contributed a sum of

Rs.9,33,332/-, vide registered sale deed documents bearing

Nos.268/2000 to 270/2000, dated 09.03.2000 and the said amount

was paid by means of demand drafts. Further, they have also paid

a sum of Rs.2,26,000/- towards purchase of stamps in the names of

the defendants and thus, they invested Rs.11,59,332/-. It is further

stated in the plaint that after obtaining permission from the

Municipal Corporation of Hyderabad, a multi-storied commercial

GAC, J CCCA.No.35 of 2011

complex was constructed with a cellar, ground and five upper

floors with a sum of Rs.70,00,000/-, out of which, the plaintiffs

have contributed 1/3rd share i.e. Rs.23,00,000/- and the said

construction was named as 'M/s.Manasi Ganga Developers'. It is

the contention of the plaintiffs that defendants 1 to 3 have sold the

property to defendants 4 to 18 and some shops in the cellar and

flats in the ground and upper floors remained unsold. As the

defendants have not paid any amount or shared the profits with the

plaintiffs, they are constrained to file the suit for rendition of

accounts in terms of the oral agreement.

7. A detailed written statement has been filed by the 1st

defendant and all other defendants have adopted the written

statement of defendant No.1, except defendant No.18, who filed a

separate written statement.

8. The written statement of defendant No.1 is a complete denial

of the recitals of the plaint. On the other hand, the defendants have

contended that defendant Nos.1 to 3 are the absolute owners and

possessors of the multi-storied building and denied about the

GAC, J CCCA.No.35 of 2011

alleged payments made by the plaintiffs at any point of time. It is

also pleaded in the written statement that the Court has no

pecuniary jurisdiction to try the suit. It is contended that

defendants 1 to 3 have purchased the property by negotiating with

the land owners and further contended that they completed the

construction by availing bank loan and later sold flats to defendant

Nos.4 to 18. It is also the contention in the written statement that

the suit is barred by limitation, and therefore, it has to be dismissed

in limini.

9. In the written statement of defendant No.18, it is specifically

pleaded that he has no knowledge about the investments made by

the plaintiffs and that a suit was filed by his father against the

defendants vide O.S.No.5855 of 1999 on the file of III Junior Civil

Judge's Court, City Civil Court, Hyderabad and in view of the

compromise between his father and defendants 1 to 3, they have

withdrawn the suit and thereafter, defendants 1 to 3 have executed

sale deed in his favour on 06.07.2021.

GAC, J CCCA.No.35 of 2011

10. Basing on the aforesaid pleadings, the trial Court has framed

the following issues:

1. Whether the defendants are liable to render the accounts as claimed by the plaintiffs ?

2. Whether the plaintiffs are entitled to the return of security amount as rendition of accounts of Manasi Ganga Complex ?

3. To what relief ?

11. On behalf of the plaintiffs, PWs.1 and 2 were examined and

Exs.A-1 to A-7 were marked. On behalf of defendants, DWs.1 and

2 were examined and Exs.B-1 to B-25 were marked. As stated

supra, after considering the oral and documentary evidence on

record, the trial Court has dismissed the suit.

12. The entire case of plaintiffs is that there was an oral

partnership between the plaintiffs and defendants 1 to 3 and in

view of the said partnership, the plaintiffs have invested amounts

for purchasing the land in the names of defendants 1 to 3 and also

invested money for construction of the multi-storied commercial

complex. Admittedly, there is no registered partnership firm in this

case. As per the Partnership Act, any agreement relating to

GAC, J CCCA.No.35 of 2011

partnership has to be duly registered. Oral agreement between the

parties as to the partnership is unknown to law. It is the specific

case of the plaintiffs that in view of the oral agreement, they have

advanced an amount of Rs.11,59,332/- and the defendants have to

show the accounts relating to their investments and as such, the suit

is filed for rendition of accounts of the partnership firm. On the

other hand, it is the specific contention of defendants 1 to 3 that

there was no agreement at all between them and therefore, the

question of allotment of 1/3rd share to the plaintiffs in the building

complex would not arise.

13. The affidavit in lieu of chief examination of PW-1 is nothing

but the replica of the plaint, wherein, it is contended that he and his

brother are the proprietors of Gangotri Associates and Gangotri

Enterprises respectively, and they being financiers, have invested

amounts for the purchase of land and for construction of multi-

storied building i.e. 'Manasi Ganga Complex', which is in the

names of defendants 1 to 3, as per the oral understanding between

them. Exs.A-1 and A-2 are the bank statements of appellant Nos.1

and 2 and Exs.A-3 to A-5 are the certified copies of sale deeds

GAC, J CCCA.No.35 of 2011

dated 09.03.2000. The evidence of PW-2 is also in the same lines

as that of PW-1.

14. On perusal of the record, it is evident that PW-2 filed Memo

before the trial Court to eschew the evidence of PW-1 as he lost his

memory and was not capable of giving evidence before the Court.

Therefore, PW-2 alone was cross-examined. During the course of

cross-examination, PW-2 admitted that prior to filing the present

suit, he filed O.P.No.1153 of 2003 on the file of 12th Additional

Chief Judge, City Civil Court, Hyderabad, stating that he was a

pauper and not in a position to pay Court Fee. The said matter

went upto High Court and the High Court dismissed the O.P.,

holding that PW-2 was not a pauper. But PW-2 specifically

deposed in his cross-examination that he was a pauper since 7

years prior to his examination, but did not state the same in his

plaint and also did not state to his Counsel. He further admitted

that the Counsel in the O.P. (Pauper suit) as well as in the suit is

one and the same i.e. Mr.Sudhakar Reddy. The cross-examination

of PW-2 further disclose that in the suit filed by him and his

brother for recovery of Rs.34,00,000/-, his brother paid Court Fee.

GAC, J CCCA.No.35 of 2011

As far as the business of PW-2 is concerned, it was deposed by

PW-2 that his business relates to cheque discounts and D.Ds. and

the turnover of the business is Rs.4 to 5 Lakhs and that he was

maintaining the registers since 1999-2000. On one hand, PW-2

stated that he is an income tax assessee and on the other hand he

states that he did not file copies of I.T. returns relating to the years

1999 and 2000 to prove that he invested amount for the purchase of

land in which multi-storied building complex was constructed. It is

specifically admitted by PW-2 before the trial Court that there is no

development agreement or investment agreement regarding the suit

transaction and also admitted that Exs.A-3 to A-5 are the sale

deeds executed in favour of defendants 1 and 2 and he did not

either object for registering the said documents in the names of

defendants 1 and 2 or did not file any suit for cancellation of the

sale deeds executed in the names of defendants 1 and 2, inspite of

defendants not giving any share to him. Here, it is also relevant to

mention that PW-2 signed as an attestor to Exs.A-3 to A-5/sale

deeds.

GAC, J CCCA.No.35 of 2011

15. The cross-examination of PW-2 further disclose that he is

getting amounts from the Hindu Undivided Family (Gangotri

Enterprise) and also from deposits of various persons to a tune of

Rs.70,00,000/-, and he invested the said amount for purchasing the

land and for construction of multi-storied building complex, but he

did not obtain permission from RBI to invest the deposits of public.

It is also the specific admission of PW-2 that there is no proof with

him to show that defendants 1 to 3 have agreed to give specific

share to the plaintiffs and there was no written partnership deed

between them and that there is no documentary evidence to show

that amounts were given by them for purchasing the construction

material.

16. Except the oral evidence of PW.2, there is no other evidence

on record to prove that there was oral partnership between the

plaintiffs and defendants 1 to 3 and pursuant to the said

partnership, the plaintiffs have invested an amount of

Rs.11,59,332/-. Exs.A-3 to A-5 are the sale deeds which are in the

names of defendants 1 to 3 and the recitals of the said sale deeds

do not speak about the amounts invested by the plaintiffs towards

GAC, J CCCA.No.35 of 2011

purchase of the land or for construction of the multi-storied

building. Exs.A-1 and A-2 are the Certificates issued by G.

Agrasan Co-operative Urban Bank Ltd., Hyderabad in favour of

M/s.Gangotri Associates and M/s.Gangotri Enterprises and both

the said documents disclose that DDs. were drawn by the above

said Firms on different dates payable at Pune in favour of one

P.R.Pathangi. On perusal of Exs.A-3 to A-5/sale deeds, it is

evident that the vendors to the sale deeds are one N.S.Pathangi,

Prakash Rao Pathangi and K.K. Pathangi and vendees are

defendants 1 to 3. All the three sale deeds were executed on the

same day i.e. 09.03.2000 but the DDs. purchased by M/s.Gangotri

Associates in favour of Mr.P.R.Pathangi were on different dates

i.e. on 22.09.1999 and 02.11.1999 and the DDs. purchased under

Ex.A-2 in favour of Mr.P.R.Pahangi were on 07.03.2000 but the

sale deeds covered under Exs.A-3 to A-5 are silent with regard to

the consideration passed through Exs.A-1 to A-3 even to presume

for a moment that the plaintiffs have invested amounts for the

purchase of land which is the subject matter of the suit by paying

amounts by way of DDs. The sale deeds covered under Exs.A-3 to

GAC, J CCCA.No.35 of 2011

A-5 disclose that the sale consideration was being made to the

vendors by the vendee by way of cheques, but they do not disclose

about paying by way of DDs.

17. Section 101 of Indian Evidence Act envisages that whoever

desires any Court to give judgment as to any legal right or liability

dependant on the existence to facts which he asserts, must prove

the said fact and the burden of proof lies on him. It is always for

the plaintiff to prove his case. In the present case, the plaintiffs

have failed to prove either by oral or documentary evidence that

there was an oral partnership between them and defendants 1 to 3,

and pursuant to it, they invested amounts for purchase of land and

for construction of a multi-storied building complex. Exs.A-6 and

A-7 are the Income Tax returns of PW-2 for the assessment year

2000-2001. But they are in no way helpful for the plaintiffs to

prove their claim that they invested amounts as claimed in the suit.

On one hand, PW-2 claims that he was pauper for 7 years prior to

his deposing before the Court and on the other hand, he claims that

he invested amounts for purchase of land and for construction of

multi-storied building complex, which are quite contrary to each

GAC, J CCCA.No.35 of 2011

other. In view of the same, this Court is of the considered view

that there is no necessity to further discuss the oral or documentary

evidence adduced by the defendants.

18. As already discussed supra, in the absence of written

partnership deed or proof of oral partnership, the question of filing

suit for rendition of accounts does not arise. The evidence of PW-2

is contradicting with the pleadings. It is the specific plea in the

plaint that they invested an amount of Rs.11,59,332/-, whereas, in

his oral evidence, a new theory was introduced stating that they

invested Rs.70,00,000/- by withdrawing amounts from his accounts

and no proof is filed before the Court to substantiate his evidence.

19. During the course of arguments, the learned counsel for the

appellants has sought permission/leave of the Court to file a fresh

suit for recovery of amounts from defendants 1 to 3, and in that

regard, he relied on the judgment of Hon'ble Supreme Court in the

case of India Electric Works Ltd. (supra). Para 8 of the said

judgment reads as under :

"In our judgment the present case is very similar to the one decided by the Privy Council in Shrimati Nrityamoni

GAC, J CCCA.No.35 of 2011

Dassi & Ors. v. Lakhan Chandra Sen(1). There an effective decree had been made by Henderson J., of the Calcutta High Court which enured to the benefit of the defendants but the appellate court considered that such a decree could not have been legitimately made and set it aside. The period of the, previous litigation was held to be deductible apparently under the provisions of s. 14(1) of the Act. In the case before us the trial court had passed a decree in the money suit of 1948 for recovery of future mesne profits. The High Court on appeal set aside that decree on the ground that no such decree could have been passed in a pure suit for recovery of money. The benefit of s. 14(1), therefore, was rightly allowed by the High Court in the judgment under appeal. Even if the test propounded in the Lahore full bench decision in Jai Kishan Singh v.

The Peoples Bank of Northern India(1) is to be applied there can be no manner of doubt that the defect in the suit of 1948 was of a nature which had to be decided before the claim could be disposed of on the merits. The High Court there was called upon to decide whether the claim was at all entertainable on the frame of the suit and it came to the conclusion that the court was not competent to pass any decree for recovery a future damages or mesne profits in the suit as laid. The defect was of a nature which had to be decided before the merits of the claim could be adjudicated upon nor did any occasion or necessity arise of going into or examining the merits of the aforesaid claim. It could hardly be said that the previous' money suit

GAC, J CCCA.No.35 of 2011

of 1948 was altogether mis- conceived. As has been pointed out by the High Court, in a later decision of the same court in Makhan Lal Madak v. Girish Chandra Jana (3 ) the view taken was that a claim for mesne profits even without a suit for recovery of possession might well be entertainable. The plaintiffs' claim had not been investigated in that suit because the High Court considered that the court was not competent to decree such a suit. It was by reason of an infirmity or defect of jurisdiction that there could neither be adjudication of the claim on the merits nor could it be decreed. The defect of jurisdiction had in no way been brought about by the plaintiffs or by any absence of diligence or good faith on their part. They were thus fully entitled to the benefit of s. 14 (1) of the Act."

20. Even as per the above judgment, Section 14(1) of Limitation

Act can be applied only in case of any infirmity or defect of

jurisdiction but not on the merits of the case. Once the limitation

starts running, it cannot be stopped as per the Limitation Act.

There is no fresh cause of action for the plaintiffs to file a fresh suit

for recovery of alleged amounts from defendants 1 to 3. As per the

Limitation Act, any suit has to be instituted for recovery of amount

GAC, J CCCA.No.35 of 2011

within three years from the date of transaction and no suit can be

instituted thereafter as it becomes a time-barred debt.

21. In view of the aforesaid discussion, this Court is of the

considered view that there is no error or irregularity in the