High Court · 2008

In all the six writ petitions, three partnership firms are involved two 3. of which are represented by one Sri Ranbir Singh Gandhi and in the remaining one by Sri Charanjit Singh Gandhi describing each one of them as one of the princip al partners apart from other four partners. Sri Charanjit Singh Gandhi is the so n of Ranbir Singh Gandhi and both the father and son are partners of all the thr ee petitioner firms.

4. The challenge made in the first three writ petitions is the decision of the respondent council to terminate the contracts awarded to the petitioners. Fu rther prayer made is for a direction restraining the council from entering into any fresh contract. Be it stated here that the work involved is extraction, hand ling and transportation of Bamboo. In the subsequent three writ petitions the ch allenge is the decision and the communication thereof canceling the contracts, a bout which the petitioners allegedly came to know in the proceeding of the first three writ petitions when the council made the same known to them. As in the subsequent three writ petitions filed on 26.8.2008 in the firs 5. t three writ petitions filed by the same petitioners on 13.8.2008, it has been s tated that they are all duly registered partnership firms. Further statement mad e in all the six writ petitions is that the individual private respondent who wa s initially one of the partners has retired from the partnership firm. Such stat ements are admittedly contrary to records emphasizing on which the learned couns el for the council emphatically submitted that the same is by way of deliberate suppression of material facts to mislead the Court. However, learned counsel for the petitioners has tried to justify the same as a genuine mistake in view of t he fact that the applications for registration were pending with the authority.

6. The above aspect of the matter leads to two vital aspects of the matter, very crucial for determination of the rights and contentions raised in the writ petitions and the very basis on which the writ petitions are structured. At the first instance, the first three writ petitions filed on 13.8.2008 although were filed with the statement and identity that the writ petitioners are duly regist ered partnership firms, but infact they were not. Secondly, although it is their stand that the private respondent in each of the writ petitions has retired fro m the partnership form as one of the partners, but it is revealed from the docum ents produced by the learned counsel as well as from their additional affidavit that not only the firm was registered only on 22.8.2008 i.e. after filing of the first three petitions on 13.8.2008, but such registration is also showing the p urported retired partner i.e. the private respondent as one of the partners of t he partnership firm.

7. Further it is also revealed that Shri Charanjit Singh, one of the partne rs of the petitioner firms, by his letter dated 12.8.2008 addressed to the Regis trar of Firms & Societies while making the request for issuance of the Registrat ion Certificate applied for also did not mention the purported retirement of the respondent No. 5 in WP(C) No. 3543/2008 as one of the partners of the firm. The partnership deed on the basis of which the firm was registered clearly mentions the respondent No. 5 as one of the partners and his signatures clearly appear i n all the pages of the deed alongwith the other two partners, who claim to be th e sole partners of the firm after purported retirement of the respondent No. 5 a s one of the partners. The registration of the firm has also been done on that b asis on 22.8.2008.

8. When the documents pertaining to the above position provided by the lear ned counsel for the council were shown to the learned counsel for the petitioner s, he had no answer to the same except stating that the same will have no bearin g on merit of the case of the writ petitioners.

9. The above aspect of the matter will also have to be considered in the co ntext of filing the Title Suits by the petitioners about which there is mention in the writ petition. The prayer made in the suits is for a declaration that any act done or any representation made by the defendants therein, who are the priv ate respondents in the writ petitions, after 12.10.2007 is a nullity and/or none st in the eye of law. Further prayer made is for permanent injunction restrainin g the said private respondents from doing any act and/or making any representati on on behalf of the petitioner firms. A mandatory injunction has also been praye d for by way of a direction to the said private respondents to hand over copies of the unauthorized representations and writings executed and/or signed by each one of them in the name of the petitioner firms after 12.10.2007.

10. In the writ petition although the aforesaid Title Suits have been mentio ned indicating the aforesaid prayers and the fact of issuance of notice by the l earned principal Civil Judge, Kamrup, but there is no indication that the prayer for ad-interim injunction has been rejected. The learned Trial Court considerin g the materials on record has opined in his order dated 12.8.2008 that it would not be justified to pass an ex-parte order of injunction without hearing the oth er side. This vital aspect of the matter has been withheld and immediately after declination to grant to ad-interim injunction as was prayed for, the petitioner s approached this Court by filing the first three writ petitions on 13.8.2008 an d moved the same unlisted and in fact became successful in obtaining an interim order of status-quo.

11. There are other vital aspects of the matter, which will be discussed a l ittle later. As a general rule, suppression of material fact by a litigant disqu alifies such litigant from obtaining any relief. This rule has been evolved out of the need of the Courts to deter a litigant from abusing the process of Court by deceiving it. The whole basis of the claim of the petitioners is on their ass ertion that the private respondents, their one time partners have retired from t he respective firms. The first three writ petitions were filed with the specific statement that the firms are registered one, which in fact were not. To that ex tent there was misrepresentation. The firms were registered only on 22.8.2008. T hus, at the time of filing the subsequent three writ petitions (26.8.2008), file d by the same very petitioners, the firms were registered and accordingly, it wa s stated to be so. However, in all the six writ petitions the emphatic stand of the petitioners is that the private respondent in each one of the writ petitions has retired from the partnership firm, which stand will have to be tested in th e touchstone of real position which has emerged from the fact of registration of the firms on 22.8.2008 depicting each one of the private respondent as one of t he partners. The firms have been registered on that basis. The petitioners never informed the Registrar about the purported retirement of the each one of the pr ivate respondents.

12. Above being the position their stand that the private respondents are no longer partners of the respective firms falls through. It has rightly been cont ended by the learned counsel for the respondent council that, having regard to t he facts and circumstances and the sequence of events, even the deeds of the ret irement annexed to the writ petitions are doubtful. This aspect of the matter wi ll also have to be considered taking into account the fact that the petitioner f irms represented by each one of the private respondents have also filed Civil Su its claiming similar relief as in the writ petitions. As per the affidavit-in-op position filed by the council the said suits have been filed challenging the ord er of cancellation of the contracts and the suits have been admitted on 13.8.200 8 by way of issuance of notice. Notice has also been issued on the injunction pe titions.

13. Although, it was argued on behalf of the petitioners that the aforesaid civil suits filed at Haflong by the retired partners of the petitioner firms are the products of manipulation on the part of the respondent council and are of n o consequence in view of their retirement from the respective firms, such an arg ument is totally misplaced and appears to have been made being caught in the whi rlpool. When the registration of the petitioner firms on 22.8.2008 on the basis of the deed of partnership executed on 16.1.2007 and the applications submitted in February, 2007 before the Registrar incorporates each one of the private resp ondents as one of the partners, such an argument can only be for arguments sake without any substance.

14. Above being the position, the petitioners have no right to move the Writ Court for enforcement of their fundamental right on the basis of the writ petit ions containing misleading and inaccurate statements. A calculated and designed suppression of material facts in order to secure admission and interim relief; w hich, if disclosed, would have disentitled the petitioners to extra-ordinary rem edy, or in any case would have materially affected the merits on both the interi m and ultimate relief claimed and consequently would deprive the petitioners fro m considering their case on merits. The petitioners are not entitled to any reli ef, they having not made full and true disclosure of the facts. They in order to put forward their case of a violation of the principles of natural justice and have chosen to suppress their representation and adverse consequence thereon. On this score alone, all the writ petitions are liable to be dismissed.

15. Let us now examine the other aspects of the matter. The respondent counc il entered into agreements with the respective petitioner firms, which the petit ioners have described in the writ petition as the agreement with the then unregi stered firms which were represented at that point of time by the respective priv ate respondent. As per the agreements, the respective firms were engaged and app ointed as the sole and exclusive handling and transportation contractors for the purpose of bamboo operation in the stipulated area falling under the council. T he agreements were executed on 3.10.2005, 3.11.2005 and 3.10.2005 respectively.

16. After the aforesaid agreements, three separate deeds of partnership were executed on 13.10.2006 among said Sri Ranbir Singh Gandhi, Charanjit Singh Gand hi and the respective private respondent agreeing to business of extracting/fill ing various pieces of bamboo in the specified areas under the council for which the agreements were arrived at by and between the council and the respective pri vate respondent. Thus, although, in the agreements by and between the council an d the respective private respondent, said Sri Ranbir Singh Gandhi and Charanjit Singh Gandhi were not party, but by virtue of these agreements, they became part ners of the respective private respondent retaining the name of the firm.

17. After the aforesaid developments, further agreements were executed on 19 .10.2006 between the respective firm and the respondent council appointing the r espective firm as the contractor to fell/extract, bundle, stack, transport and s upply/deliver various pieces of bamboo to Hindustan Paper Corporation Limited (H PCL) on behalf of the NC Hills Autonomous Council from various specified felling series on payment of royalty as provided for in the agreement. It will be perti nent to mention here that the respective agreement was signed by the respective private respondent and not by the Gandhis. In the meantime, supplementary deeds of partnership dated 1.2.2007 in re 18. spect of each of the firms was executed inducting three more members of the Gand hi family as the partners of the respective firm followed by purported retiremen t of each one of the private respondents from the partnership firms by executing individual deed of retirement on the same date i.e. 11.10.2007. Although, the p etitioners have stated that such retirement from the partnership firm by each on e of the private respondents was intimated to the respondent council, but the re spondents have denied the same in their counter affidavit. It is the case of the petitioners that they have come to know on 10.8.20 19. 08 that in the recent past each one of the private respondents purportedly actin g as the representative of the petitioner firms has put signature on certain doc uments detrimental to the interest of the petitioners firm. A statement has been made that such action on the part of the private respondents is because of undu e pressure from certain corners and for extraneous consideration. According to t he petitioners, the private respondents could not have done so each one of them having retired from the partnership firms. It was under such circumstances the p etitioners filed the aforementioned Title Suits.

20. It has been stated in the writ petitions that the respondent council has been making frantic negotiation with the HPCL for making fresh arrangement rela ting to the works involved. It is the case of the petitioners that such negotiat ions are being carried out to the exclusion of the respective petitioner firms. On further enquiry, the petitioners have come to know that the erstwhile partner of the respective petitioner firms i.e. the private respondent has put some sig natures on some blank papers making use of which the respondent council has form ed the opinion that the petitioner firms are unable to fulfill the obligations a s per the terms and conditions of the agreement and consequently decided to term inate the contracts. According to them there is false and misrepresentation on t he part of the respective private respondent.

21. It is in the aforesaid background of the case, the petitioners being ap prehensive of termination of their contract, filed the first three writ petition s with the prayer for issuance of mandamus directing the respondents not to term inate the contract purportedly awarded to them by the aforementioned agreements dated 19.10.2006. Prayer has also been made to set aside and quash the termianat ion of contract. Significantly, the first prayer made in the writ petition, whic h is - (cid:28)as to why a declaration should not issue to the effect that any prejudic ial action against the petitioner taken by the respondent No. 1 and 3 pursuant t o any unauthorized act(s) done or representation(s) made by the respondent No. 4 is a nullity in the eye of law & & (cid:29), is also the prayer made in the aforementione d Title Suits filed by the respective petitioner firms. As noted above, the writ petitions were filed on 13.8.2008 after filing and moving the Title Suits along with the injunction petitions on 12.8.2008, in which the prayer for ad-interim i njunction in terms of the above prayer was declined, which fact has been withhel d in the writ petitions.

22. In the subsequent three writ petitions filed on 26.8.2008, by which time the firms were registered with the Registrar of Firms & Societies, the challeng e made is the decision of the respondent council taken on 2.8.2008 followed by t he letter dated 5.8.2008 (Annexure-I and J). Annexure-I is the minutes of the me eting of the Executive Committee of the council held on 2.8.2008, in which the i nability expressed by the respective petitioner firms to supply bamboos was disc ussed. While highlighting the immense importance of supply of bamboos from the c ouncil to HPCL, as the major source of revenue, it was also discussed that the i nability expressed by the respective petitioner firm has led to the verge of clo sure of the Cachar Paper Mills (CPM). The meeting also discussed the letter subm itted by the respective firms by which demand was made to enhance the rates of b amboo. It also discussed the stand of the respective firms that in case of impos ition of penalty for short supply of bamboos as per the terms of the agreement, they would not pay the same as the same would cause great hardship to them.

23. Discussing the above aspects of the matter, the council decided in its m eeting to cancel the agreements with the petitioner firms and allowed the HPCL t o extract and supply bamboos to their mills from the particular area in modifica tion of the earlier agreement with them. In the meeting the application received from the respondent No. 6 agreeing to do the job was also discussed. The decisi on to engage the party on fulfillment of terms and conditions was taken in the i nterest to make a parental supply of bamboo to HPCL. By Annexure-J communication dated 5.8.2008, the petitioner firms were intimated about the aforesaid meeting held on 2.8.2008 and the minutes thereof. By the communication, cancellation of the agreement with the petitioner firms was conveyed. According to the petition ers, they were not aware of the same at the time of filing the first three writ petitions.

24. Annexure-M/N series are the communications, by which the petitioners fir m intimated the respondent council that it was impossible to supply bamboo at th e prevailing rates. It was also agreed in the letter that there was shortage of supply of bamboo and that the same was likely to be even more shorter. One of th e reasons assigned for such short supply was steep rise in operational cost. According to the petitioners the entire action on the part of the respon 25. dent council to strike deal with third party to the deprivation of the petitione rs is most illegal and arbitrary. It is their stand that their erstwhile partner is in league with the respondent council and he has been acting in the matter h and in gloves with the respondent council. Their further stand is that the very grounds on which the agreements with them have been cancelled are the considerat ion to strike a deal with the third party. While Mr. N. Dutta, learned Sr. Counsel, assisted by Mr. I. Choudhury, r 26. epresenting the petitioners upon a reference to the materials on record has trie d to project the case of the petitioners to be one of victimization of the petit ioners by the respondent council by taking recourse to dubious means, Mr. A. Cho udhury alongwith Mr. S. K. Medhi appearing for the respondent council pointing o ut to the above material facts submits that there being misrepresentation and su ppression of material fact, the petitioners are not entitled to any relief. On m erit, he submits that there being alternative remedy by way of taking recourse t o the arbitration clause in the agreement, the writ petition is not maintainable . According to him, even otherwise also having regard to the facts and circumsta nces involved, there is no merit in the writ petitions.

27. Mr. Choudhury has placed reliance on the decisions of the Apex Court rep orted in (1994) 3 SCC 552 (State of Gujarat Vs. Meghji Pethraj Shah Charitable T rust & Ors.); (1989) 2 SCC 116 (Bareilly Development Authority Vs. Ajai Pal Sing h); (2002) 1 SCC 216 (State of Bihar Vs. Jain Plastics and Chemicals Ltd.); (199 6) 6 SCC 22 (State of U.P. Vs. Bridge & Roof Company (India) Ltd.); (2000) 6 SCC 293 (Kerala State Electricity Board Vs. Kurien E.Kalathil); (2003) 7 SCC 410 (N ational Highways Authority of India Vs. Ganga Enterprises); (1994) 1 SCC 1 (S.P. Chengialvaray Nadiu (Dead) by Lrs. Vs. Jagannath (Dead) by Lrs.); (2007) 8 SCC 449 (prestige Lights Ltd. Vs. State Bank of India) and (1917) 1 KB 486 (The King Vs. The general Commissioners).

28. All the aforesaid decisions are on the argument relating to maintainabil ity of the writ petitions on grounds of suppression of material fact, alternativ e remedy available and the aggrieved part being not entitled to remedy under Art icle 226 of the Constitution of India for breach of contract, even if any.

29. Mr. S.S. Dey, learned counsel representing the respondent No. 6 in the l ater three writ petitions, who is the purported beneficiary of the impugned deci sions has submitted that having regard to the facts and circumstances involved i n the case about which discussions have been made above, the petitioners are not entitled to any relief and their writ petitions are liable to be dismissed. It will be pertinent to mention here that the as per the submissions made by the le arned counsel for the respondent council, the arrangement made with the responde nt No. 6 is only temporary and with a view to meet the emergent situation.

30. As regards the retirement of the erstwhile partner i.e. the private resp ondent in each one of the writ petitions from the partnership firm, the position has been discussed above. In addition, such purported retirement will also have to be tested in the touchstone of the provisions of the Indian Partnership Act, 1932. Section 32 (3) dealing with retirement of a partner provides that notwith standing the retirement of a partner from a firm, he and the partners continue t o be liable as partners to third parties for any act done by any of them which w ould have been an act of the firm if done before the retirement, until public no tice is given of the retirement.

31. Section 63 of the Act dealing with recording of changes in and dissoluti on of a firm provides that when a change occurs in the constitution of a registe red firm any incoming, continuing or outgoing partner, and when a registered fir m is dissolved any person who was a partner immediately before the dissolution o r the agent of any such partner or person specifically authorized in his behalf, may give notice to the Registrar of such change or dissolution, specifying the date thereof; and the Registrar shall made a record of the notice in the entry r elating to the firm in the Registrar of Firms, and shall filed the notice alongw ith the statement relating to the firm and filed under Section 59.

32. Section 72 of the Act provides the mode of giving public notice, which i s to be given, where it relates to retirement or expulsion of a partner from a r egistered firm, by notice to the Registrar of Firm under Section 63, and by publ ication in the official gazette and in atleast one vernacular newspaper circulat ing in the district where the firm to which it relate has its place or principal place of business, and in any case, by publication in the official gazette and in atleast one vernacular newspaper circulating in the district where the firm t o which it relate has its place or principal place of business.

33. While Mr. Choudhury, learned counsel representing the respondent council upon a reference to Clause 12 of the deed of partnership dated 13.10.2006 submi ts that in terms of the said clause, each one of the private respondents continu es to remain as partner for the specified period as stipulated in Clause 3.2 of the agreement and cannot retire earlier till all benefits of the council agreeme nt and related value benefits are realized by the firm and the accounts thereof settled among the partners inter-se, Mr. Dutta, learned counsel for the petition ers upon a reference to Clause 17 relating modification of terms and conditions submits that any of the terms and conditions can be altered, modified, varied, a dded and/or cancelled at any time with the mutual consent of all the partners ex pressed in writing.

34. Clause 10.6 of the agreement provides that the rights and duties of the partners inter-se and in respect of the partnership business shall be governed a s per the provisions of the Indian Partnership Act, 1932. If that be so, and eve n otherwise also, the provisions of the Act govern the parties. Sections 32 (3) 63 and 72, which have been mentioned above will thus apply and govern the case o f the partners. Thus, there being no statutory compliance relating to retirement etc., mere execution of a deed of retirement about which also doubt has been ex pressed, shall be of no consequence. Further, while Clause 12 of the partnership agreement is a substantive clause, Clause 17 is not so and speaks of only alter ation of terms and conditions of the agreement and not the partner itself. Howev er, this aspect of the matter need not detain us in view of the fact that all th e firms have been registered on 22.8.2008 with the Registrar of Firms and Societ ies with the respective private respondent as one of the partners. Thus, there i s no question of their retirement from the partnership firms.

35. It is in the above context, the suits filed by the said private responde nts in the competent Court of jurisdiction at Haflong claiming similar relief as in the writ petitions will have to be considered. If the petitioner firms have already instituted the suits making a challenge to the decision canceling the ag reement, the same very firms cannot invoke the writ jurisdiction of this Court s o as to proceed simultaneously. Even if there is any dispute between the petitio ner firms and the private respondents, same cannot be resolved exercising the po wer of judicial review under Article 226 of the Constitution of India.

36. If the petitioner firms represented before the respondent council expres sing their inability to execute the works and demanded enhancement of the rate i n violation of the terms of the agreements, the respondent council was within it s competence and jurisdiction to cancel the agreements. Further, in case of any dispute, the agreement itself provides resolution of the same by a member arbitr ator, agreed to by both the parties and be appointed by the council. Clause 26 o f the Annexure-A agreement dated 3.10.2005 provides for the same. Likewise, in c ase of any internal dispute also among the partners there is provision for resol ution of the same (Clause 14), in the partnership agreement dated 13.10.2006. Learned counsel for the parties, more particularly, Mr. Choudhury, learn 37. ed counsel for the respondent council has referred to the documents annexed to t he writ petition so as to contend that some of them are not genuine documents bu t forged one. Such disputed questions of fact need not be gone into in this proc eeding.

38. hich I accordingly do. For all the aforesaid reasons, all the writ petitions merit dismissal, w

39. Writ petitions are dismissed with cost of Rs. 5,000/- against each of th e petitioners to be deposited by them with the Registry of this Court forthwith failing which the Registry shall realize the same from the petitioners in accord ance with rules.