Wednesday 18 April 2012

Striking defence of defendant is directory and not mandatory

Bombay amendment order 39 rule 11. Defying order of court. Consequential striking off defence of defendant is directory not mandatory.
Bombay High Court
Ramavtar Surajmal Modi vs Late Smt. Banarasibai Mulchand ... on 9 January, 2007
Equivalent citations: AIR 2007 Bom 71, 2007 (109) Bom L R 225
Author: D Chandrachud
Bench: R Khandeparkar, D Chandrachud
JUDGMENT
D.Y. Chandrachud, J.
Page 0228
1. This Appeal arises out of an order passed by the Learned Single Judge on 29th November, 1996 in a suit for dissolution and accounts. By the order impugned before this Court the Learned Single Judge has appointed the Court Receiver as Receiver in charge of the assets of the partnership.
2. The primary relief that has been sought in the suit is dissolution and accounts of a partnership constituted under a deed of partnership dated 17th May, 1980. There were five partners under the original deed of partnership. The case of the Plaintiff, the First Respondent before the Court in these proceedings is that the business of the partnership was primarily carried on by the First Defendant, the Appellant before us, who is the brother of her deceased husband. The business of the partnership was according to the Plaintiff being looked after by the First Defendant. The contention of the Plaintiff is that some time in the year 1995 she obtained knowledge of the fact that the First Defendant had purportedly relied upon a deed of partnership of 1992 under which the original partnership came to be reconstituted by the addition of two partners and by the deletion of three partners who were not parties to the earlier document of 1980. The submission of the Plaintiff is that the document of 1992 was obtained by misrepresentation and fraud and that the signatures of the Plaintiff were obtained on the assurance that the document was not intended to be acted upon. On these averments, the Learned Single Judge was persuaded to accept the Motion for the appointment of a Receiver of the assets of the partnership.

3. The order of the Learned Single Judge has been questioned in these proceedings principally on the basis of the provisions of Section 69(2A) of the Indian Partnership Act, 1932. As amended in relation to the State of Maharashtra Sub-section (2A) provides that no suit to enforce any right for the dissolution of a firm or for accounts of a dissolved firm or any right or power to realise the property of a dissolved firm shall be instituted in any Court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to have been a partner in the firm, unless the firm is registered and the person suing is shown in the Register of Firms as a partner in the firm. The submission before the Court is that the deed of partnership of 1992 is not registered and therefore no suit for dissolution could be founded on the basis of an unregistered partnership. It was urged before us that the original partnership of 1980 was reconstituted when a Page 0229 fresh partnership was agreed upon between the parties in the year 1992. Consequently inasmuch as a reconstituted partnership amounted to a fresh agreement between the parties, it was urged that the suit for dissolution and accounts must fail in view of the circumstance that the partnership of 1992 has not been registered.
4. Having heard counsel appearing for the Appellant and counsel appearing for the First Respondent, we are of the view that the submission must fail. The principal relief that has been sought in the suit is on the foundation of the deed of partnership dated 17th May, 1980. It is undisputed that the document of 1980 is registered. The contention of the Plaintiff before the Learned Single Judge was that the document of 1992 is vitiated by misrepresentation and fraud. The case of the Plaintiff is that the affairs of the partnership were entrusted to the First Defendant who is her brother-in-law and that she at all material times proceeded to entrust control by the First Defendant over the business of the partnership. We have noted from the affidavit in reply filed on behalf of the First Defendant that the denial of the aforesaid allegations which are contained in paragraphs 6, 7 and 8 of the plaint is prima facie inadequate. The allegations in the plaint have not squarely been controverted. At this stage it is neither appropriate nor proper for this Court to express any final or conclusive view on whether the allegation of misrepresentation and/or fraud will sustain scrutiny at the trial of the suit. The trial is still to take place. On the basis of the material as it stands before us, we are of the view that a case for the appointment of the Court Receiver as Receiver of the assets of the partnership has been made out. The suit for dissolution is based on the partnership deed of 17th May, 1980. The appointment of a Receiver in such a suit in respect of the assets of the partnership cannot be faulted.
5. Undoubtedly these observations are confined to the disposal of the application for interim relief. Nothing that has been said in this order shall affect the merits of the rival contentions at the trial. Should the Appellant be advised to raise a preliminary objection to the maintainability of the suit, such a course of action is left open to be pursued by the Appellants should they be advised to do so. In pursuance of the order of the Learned Single Judge the Court Receiver has taken charge of the assets in view of the circumstance that no interim stay came to be granted by the Division Bench when the appeal was admitted. The Receiver has consequently continued in charge of the assets for nearly 10 years. Having regard to the circumstances, it will be appropriate if the trial of the suit is expedited. Parties will be at liberty to move the Learned Single Judge for appropriate directions in regard to the expeditious disposal of the suit. The Appeal is accordingly dismissed.
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