High Court

Legal Reasoning

10 AO 65 OF 2025.odtIN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABAD10 APEAL FROM ORDER NO. 65 OF 2025WITHCIVIL APPLICATION NO. 12266 OF 2023 IN AO/65/2025PRAKASHCHAND UDAYCHAND KATARIA DIED THR LRS TEJASPRAKASHCHAND KATARIA AND ANRVERSUSMAHENDRA AJAYRAJ KOTHARI AND ANR...Party in person for the Petitioner 1C : Ms. Preetee Prakashchand Kataria Advocate for Respondent No. 1 : Mr. Praveen G. Gamot...CORAM: SHAILESH P. BRAHME, J.DATE: 15.09.2025PER COURT : Learned counsel Mr. Girish Kulkarni seeks discharge from the matteras he has given no objection to both the appellants. Appellant no. 1C isappearing in person. She also admits about that. Mr. Girish Kulkarni needsto be discharged.2.It reveals from record that party in person is permitted to work outher own matter in the capacity of appellant no. 1C. Her brother appellantno. 1B, is presently unrepresented. She prays for transposition of appellantno. 1B as respondent no. 7. She makes statement that appellant no. 1B,who is present today does not have any objection. The necessaryamendment shall be carried out forthwith.3.Heard both sides. 4.Appeal from Order is emanating from order of rejection of plaintpassed below Exh. 20 by the Trial Court, which is reversed by the lower1/7 10 AO 65 OF 2025.odtAppellate Court in Regular Civil Appeal No. 17/2019. The appellant isoriginal defendant no. 1, who has sought rejection of plaint on the basis ofSection 96 of the Partnership Act.5.Following question of law was formulated when initially secondappeal was filed:“(i)Whether the plaint is liable to be rejected underOrder VII Rule 11 of the C.P.C. as it was hit under Section69 of the Partnership Act ?”6.Respondent no. 1 has filed Special Civil Suit No. 83/2010 fordeclaration and injunction in respect of the subject matter comprising of plotNos. 26 to 29 and 31 to 33 as enumerated in paragraph No. 2 of the plaint.It is contended that respondent no. 1 and the appellant started a jointventure of selling and purchasing the plots under the name and style 'M/s.Uday Resort Jalgaon (hereinafter referred to as 'unregistered partnershipfirm'). The formal partnership deed was not executed and the firm was notregistered, but the transactions were entered into with third parties in thename of M/s. Uday Resort Jalgaon. It is clarified in paragraph no. 1 thatsuit has not been filed in the name of unregistered partnership firm. Thesuit plots were purchased from other defendants. They were paidconsideration from plaintiff. The plots were even mutated in the record ofrights in the name of unregistered partnership firm. It is contended thatthereafter there started dispute between plaintiff and defendant no. 1 andthe suit was required to be filed for the relief of declaration to the extent ofhalf share in the subject matter and injunction.7.Appellant submitted application Exh. 20 under Order VII Rule 11 ofthe Code of Civil Procedure. It was contested by the respondents. The TrialCourt allowed the application on 01.03.2013 and rejected the plaint. Beingaggrieved, Regular Civil Appeal No. 17/2019 was preferred. By theimpugned judgment dated 24.08.2023 appeal was allowed and the matter2/7 10 AO 65 OF 2025.odtwas relegated to the Trial Court for further trial of the suit.8.Party-in-person submits that meaningful reading of the plaintdiscloses that in fact unregistered instrument between the parties is soughtto be enforced. It is submitted that admittedly, neither the agreement northe partnership firm was registered. The parties purchased the properties inthe name and style of unregistered partnership firm. Public notices wereissued in the name of the firm. Relief of declaration and injunction in theplaint pertains to the properties of unregistered firm. It is submitted thatlower Appellate Court committed grave error of jurisdiction in reversing theorder passed by the Trial Court. The plaint is liable to be rejected in itsinception. It is submitted that averments in the plaint clearly discloses thatsuit is filed arising out of the contractual liabilities of the partnershipagreement without registering the firm and such suit is not maintainable.9.Per contra, learned counsel Mr. Gamot supports the impugnedjudgment and order. He would submit that it has been specifically madeclear that the suit was filed in the individual capacity. The agreement wasproposed to be executed and registered. It is further submitted that theAppellate Court has taken a reasonable view that matter required to be dealtwith during the course of trial. He would submit that the averments in theplaint disclose that the payment to the vendors of the plots were made inindividual capacity. He would submit that its a suit filed under Section 34 ofthe Specific Relief Act and not any suit under Partnership Act. He wouldrely on the judgment of the division bench of Karnataka High Court in thematter of Sandhya Anthraper Vs. Manju Kathuria and others; 2014Karnataka 21.10.I have considered the rival submissions of the parties. Party-in-personhas referred to the judgments, referred in paragraph no. 10 of the orderpassed by the Trial Court regarding scope of Order VII Rule 11 of the CPC.The principles laid down therein are undisputed. Only averments in the3/7 10 AO 65 OF 2025.odtplaint and documents filed along with it are to be taken into consideration.If the meaningful reading of the plaint discloses that it is barred by law thenonly power under Order VII Rule 11 can be invoked.11.It reveals from record that the appellant and respondent no. 1 starteda business and plots were purchased under name and style of theunregistered partnership firm. The sale-deeds produced along with plaintdisclose that the suit plots were purchased in the name of unregisteredpartnership firm. It is relevant to reproduce para no. 1 of the plaint whichis as follows :“1. The plaintiff is a businessman having various businessincluding sell and purchase of landed property. So alsodefendant no. 1 is a businessman. He also is in the businessof sale and purchase of landed property and other business.The plaintiff and defendant no. 1 were good friends sincelong and had family relations with each other. They werejointly doing the business of sale and purchase of lands andplots at Jalgaon. The defendant no. 1 formed a jointventure with the plaintiff under the name and style M/SUday Resort Jalgaon. It was decided that defendant no. 1and plaintiff would be the partners investing equal share inthe joint venture. The business of the joint venture wasdecided to be the sale and purchase of lands and plots.Accordingly partnership deed was also prepared. It wasfurther decided that the said partnership would beregistered and the formalities of registration would belooked after and completed in all respect by the defendantno. 1. The plaintiff had signed the partnership deed andhanded over the original partnership deed to defendantno. 1. It is still with the defendant no. 1. However withulterior motive the defendant no. 1 did not get it4/7 10 AO 65 OF 2025.odtregistered. These are the facts pertaining to the year 1988.Since the business did not suffer and since the relationsbetween plaintiff and defendant no. 1 were amicable andcordial there was no reason for plaintiff to enquire or insistdefendant no.1 for registration of partnership deed andfirm. The fact remains that M/S Uday Resort Jalgaon is notregistered till this date. Therefore the suit is not filed in thename of the unregistered partnership firm M/S Uday ResortJalgaon. It is filed in the personal capacity of plaintiff anddefendant no. 1.”12.It is candidly made clear that suit has not been filed in the name ofunregistered partnership firm. It is filed in the personal capacity of theplaintiff and against the defendant no. 1. Admittedly, neither there is anytangible agreement between the parties either registered or unregistered.Further the firm has not been registered by the parties. The plaint disclosesthat partnership deed was drafted but remained to be executed orregistered. Under these circumstances, I am of the considered view that inthe absence of concluded contract, Section 69 of the Partnership Act cannotbe made applicable.13.Section 69 of the Partnership Act prohibits filing of suit to enforce aright arising from a contract or conferred by the Act. In the present case,there is no concluded contract between the parties. By way of eitheragreement or mutual understanding they purchased the properties and triedto conduct the business. In that view of the matter, it would be inappropriateto close the doors of the plaintiffs at the threshold. 14.I have carefully considered the averments of the plaint, whichdiscloses the transaction of the parties with the third person and theintention of the present appellant. Considering the prayers in the plaintalso, I am of the view that relief of declaration and injunction are solicited.5/7 10 AO 65 OF 2025.odtIt is rightly contended that those are the reliefs under Section 34 and 37 ofthe Specific Relief Act. It reveals from the plaint that its a suit under Section9 of the Code of Civil Procedure read with Section 34 and 37 of the SpecificRelief Act. Unregistered firm is neither suing nor being sued. 15.In the impugned judgment a reasonable view is taken and I do notfind any perversity or patent illegality to interfere with it. It would be openfor the parties to raise the grievance of their individual rights and liabilitiesbefore the Trial Court. It cannot be said that either the suit is prohibited byany provisions much less Section 69 of the Partnership Act.16.The learned counsel for the respondent relied upon the judgment ofSandhya Anthraper (supra). There is no reason to take any different view,which is taken by the division bench, which is as follows :“16. As per Section 69(1) of the Act, an unregisteredpartnership firm or partners are disabled from enforcing aright arising from a contract or the right conferred by thePartnership Act, 1932, but the provision does not take awaythe right of the partners of an unregistered firm to enforcetheir right under other enactments. According to Article300-A of the Constitution of India, no person shall bedeprived of his property save by authority of law.”17.For the aforesaid reasons, I find that the substantial question of lawneeds to be answered against the appellant. Suit is maintainable andimpugned judgment and order requires to be confirmed. Appeal from Orderis dismissed. Pending Civil Application is disposed of. 18.After pronouncement of the order, the appellant prays for leave to filereview and to stay the proceedings of suit.19.No leave is required to file a review. The suit of 2010 and is still6/7 10 AO 65 OF 2025.odtpending, which is very shocking. I am not inclined to grant any prayer tothe appellant. Prayers are rejected. ( SHAILESH P. BRAHME, J.) mkd/-7/7