Telangana High Court
M/S. Kartikeya Interiors, vs Mrs. N. Himabindu on 1 October, 2024
THE HON'BLE JUSTICE MOUSHUMI BHATTACHARYA
AND
THE HON'BLE SRI JUSTICE ANIL KUMAR JUKANTI
CIVIL REVISION PETITION No.2665 of 2024
Mr. M.V.Pratap Kumar, learned counsel for the petitioners.
Mr. A.P.Venu Gopal, learned counsel representing Mr. G.Jayendra Balaji,
learned counsel for the respondent.
ORDER:
(Per Hon'ble Justice Moushumi Bhattacharya)
The present Civil Revision Petition (C.R.P) arises out of an
order dated 18.04.2024 passed by the Additional Commercial
Court in the Cadre of District Judge for Trial and Disposal of
Commercial Disputes at Hyderabad (Commercial Court), in
I.A.No.323 of 2023 in C.O.S.No.42 of 2023.
2. The petitioners before us are the defendants in the Suit
(C.O.S.No.42 of 2023) filed by the respondent/plaintiff for
declaration of dissolution of the defendant No.1-partnership
firm and a direction on the defendant Nos.2 and 3 for rendition
of accounts.
3. By the impugned order dated 18.04.2024, the
petitioners' application for rejection of the plaint under Order
VII Rule 11 of The Code of Civil Procedure, 1908 (C.P.C) was
dismissed.
4. Learned counsel appearing for the petitioners/
defendants submits that the application under Order VII Rule
11 of the C.P.C was filed on the Suit not complying with the
statutory mandate of section 12A of The Commercial Courts
Act, 2015 (2015 Act) which declares that a Suit, which does
not contemplate any urgent interim relief under the Act, shall
not be instituted unless the plaintiff exhausts the remedy of
Pre-Institution Mediation as prescribed by the Rules made by
the Central Government.
5. Counsel submits that the statements in the plaint make
it clear that there was no urgency for any interim orders and
that the respondent/plaintiff should hence have first explored
the alternative dispute resolution as mandated under section
12A of the 2015 Act. Counsel submits that the cause of action
pleaded in the plaint begins from October, 2021, whereas the
Suit was filed in October, 2023. Counsel places the individual
paragraphs of the plaint in support of his contention and the
dates in a tabulated statement in paragraph 32 of the plaint.
6. Counsel further submits that the C.R.P. is maintainable
since the High Court can invoke its power under Article 227 of
the Constitution of India, even in the face of the bar contained
in section 8 of the 2015 Act, when there is a grave injustice or
gross failure of justice.
7. Learned counsel appearing for the respondent/plaintiff
supports the impugned order to urge that the Suit required
urgent interim orders as would be evident from the statements
made in the plaint.
8. We have heard learned counsel appearing for the parties.
9. It is settled law that for considering rejection of a plaint
under Order VII Rule 11 of the C.P.C., the Court must look
most meaningfully at the statements made in the plaint in its
entirety. The rejection, if granted, must also be under one of
the sub-rules of Order VII Rule 11 of the C.P.C including
absence of the cause of action of a Suit or where the Suit
appears from the statements in the plaint to be barred by law
(Order VII Rule 11 (a) & (d) of the C.P.C respectively).
Therefore, we only propose to look at the statements made in
the plaint filed by the respondent.
10. The dispute between the plaintiff and the defendants, as
reflected from the plaint, relate to the defendant No.1, which is
a partnership firm. The plaintiff is one of the partners against
2 other partners i.e., defendant Nos.2 and 3, respectively. The
Suit was filed for dissolution of the defendant No.1-partnership
firm and for a direction on the defendant Nos.2 and 3 for
rendition of accounts of the partnership firm and for
appointment of a Receiver for conducting Audit of the books of
accounts of the partnership firm.
11. The relevant paragraphs of the plaint are as follows:
11.1. Paragraph 14 states the plaintiff's role in sourcing
clients and meeting of the architects as partners to the firm
and the role of the defendant Nos.2 and 3 for handling the
Bank Accounts and accounting of the firm. The plaintiff's
grievance is that the defendant No.2 did not share any
information with regard to the accounts of the defendant No.1-
partnership firm with the plaintiff.
11.2. Paragraph 17 states that the show room of the
partnership firm was shifted in 2021 to a prime commercial
location which also resulted in the growth of business of the
partnership firm in relation to the brand name 'REFLECT'.
11.3. Paragraph 18 states that the defendant Nos.2 and
3 requested the plaintiff in October, 2021 to invest a sum of
Rs.50,00,000/- into the partnership firm for expansion to
which the plaintiff expressed her inability.
11.4. Paragraph 19 states that the plaintiff went on leave
in May, 2021 for personal reasons.
11.5. Paragraph 20 states that the defendant Nos.2 and
3 pressurized the plaintiff to bring further investments, without
providing accounts of the partnership firm. Paragraph 20 also
refers to an email sent by the plaintiff to the defendant Nos.2
and 3 on 12.03.2022 for account details of the firm.
11.6. Paragraph 21 refers to the visit of the defendant
Nos.2 and 3 to Italy in May, 2022 for business purposes.
11.7. Paragraph 23 refers to the oral and email
communications between the plaintiff and the defendant Nos.2
and 3 by which they agreed to share the accounts of the
partnership firm by 30.06.2022 which ultimately the defendant
Nos.2 and 3 failed to provide.
11.8. Paragraph 26 states that the defendant Nos.2 and
3 shared the accounts of the partnership firm with the plaintiff
on 11.07.2022 without any supporting documents and the
plaintiff replied by an email dated 20.07.2022. The plaintiff
also found that the accounts shared by the defendant Nos.2
and 3 were fraudulent and fabricated.
11.9. Paragraph 27 states that the defendants hatched a
conspiracy to ouster the plaintiff by an email dated
11.08.2022.
11.10. Paragraph 28 states that the plaintiff suspected
foul play on the part of the defendant Nos.2 and 3 and their
Chartered Accountants in terms of manipulating the accounts
of the company and filed false Income Tax Returns for the
Financial Years 2019-2022.
11.11. Paragraph 32 states that the plaintiff visited the
partnership firm in October, 2023 and demanded to be shown
the bank accounts of the firm and subsequently found that the
defendant Nos.2 and 3 have misused the funds of the
partnership firm. The table in Paragraph 32 gives a "Chart of
the Misused Funds" by the defendant Nos.2 and 3 from
06.03.2018 to 23.05.2023.
12. The cause of action paragraph states that the plaintiff
lodged a complaint with the police on 30.10.2023 and issued a
Notice of Dissolution of the partnership firm on the same day
i.e., 30.10.2023.
13. Although the petitioners/defendants state that the Suit
does not contemplate any urgent interim relief, it is clear from
the statements made in the plaint that the plaintiff's visit to the
partnership firm in October, 2023 and the discovery of fraud
and the Notice for Dissolution of the partnership firm on
30.10.2023 reflected the necessity of urgent interim relief.
14. Whether a Suit contemplates urgent interim relief is
purely a question of the averments in the plaint touching the
benchmark of a case for urgency. It is for the plaintiff to
satisfy the Court of the need for urgent intervention and the
Court being convinced that the plaintiff should be exempted
from the mandate of section 12A of the 2015 Act.
15. Although counsel for the petitioners/defendants submits
that the cause of action arose in 2021 (paragraphs 18 and 19
of the plaint) and hence there could not be a case for urgent
interim relief in October, 2023, we cannot accept the
submission since the cause of action shown in paragraphs 27
and 32 plead that the plaintiff filed the Suit right after
suspecting foul play by the defendants in October, 2023.
16. The cause of action paragraph also avers the Notice of
Dissolution of the partnership firm and the police complaint
dated 30.10.2023. The plaintiff lost no time thereafter in filing
the Suit on 31.10.2023.
17. Needless to say, the urgency pleaded in a plaint does not
stand frozen on the date on which the cause of action arises
but extends to the last pleaded date where the plaintiff relies
on a continuing cause of action. The case of urgency must
therefore be decided on the basis of the last trigger for filing of
the Suit which becomes the basis of the assessment of urgency
as on the date of institution of the Suit within the
contemplation of section 12A of the 2015 Act.
18. The purpose of a continuing cause of action is to give a
platform to the plaintiff to plead a sequence of events over a
period of time notwithstanding the period between the first
date and the last date forming part of the bundle of facts. The
last trigger for filing of the Suit becomes all-important for
deciding whether the Suit requires urgent interim relief within
the contemplation of section 12A of The Commercial Courts
Act, 2015.
19. In the present case, although the cause of action
commenced from 2021, there is no doubt that the cause of
action continued through several events thereafter till October,
2023. Forcing the respondent/plaintiff to opt for Pre-Institution
Mediation would, hence, have frustrated the Suit.
20. We are accordingly of the view that the contention of the
plaint not fulfilling the rigour of section 12A of the 2015 Act is
without any basis. In any event, the Commercial Court
considered the scope of Section 12A of the 2015 Act and came
to the specific finding that the Suit contemplates urgent
interim relief. The Commercial Court took into account the
statements made in the plaint and the events pleaded therein.
We do not find any error in the findings of the Commercial
Court.
21. We are also of the view that Article 227 of the
Constitution can be invoked by the High Court in limited
circumstances in the face of the bar under section 8 of the
2015 Act in relation to Civil Revision Petitions against an
interlocutory order. The dismissal of the petitioners' application
under Order VII Rule 11 of the C.P.C results in an interlocutory
order as opposed to a final judgment. As stated above, the
dismissal is based on reasons and the impugned order has not
resulted in failure of justice in general or grave injustice to the
parties in particular. It also cannot be said that the
Commercial Court assumed jurisdiction in the absence of
jurisdiction to entertain the matter: M.V. Ramana Rao v.
N.Subash 1 and State of Gujarat v. Union of India 2.
22. Apart from being of the view that the impugned order
dated 18.04.2024 does not call for any interference, we are also
of the view that the Civil Revision Petition is not maintainable.
23. C.R.P.No.2665 of 2024 is accordingly dismissed.
I.A.No.1 of 2024 is also dismissed. There shall be no order as
to costs.
_________________________________
MOUSHUMI BHATTACHARYA, J
______________________________
ANIL KUMAR JUKANTI, J
Date: 01.10.2024
va
2019 SCC OnLine TS 3530
2018 SCC OnLine Guj 1515
