Whether a legal representative of the deceased partner of a partnership firm can seek reference of the dispute to arbitration?

While right to sue for rendition of accounts of partnership firm survives on the legal representative of a deceased partner, he is also entitled to invoke the arbitration clause contained in the partnership deed. In the instant case, the appellant being the only son of his deceased mother, undisputedly a partner in the partnership firm with the respondents especially where the dispute concerning the partnership affairs had arisen already during her life time. The view taken in the impugned order with the appellant has no presently establishable binding arbitration agreement with the respondent is erroneous in law and facts. The impugned order is also bad in law in the teeth of the law laid down by this Court in Smt. Premlata and Anr. v. Ishwar Dass Chamanlal and Ors. AIR 1955 SC 714. This apart, the appointment of arbitrator could not be rejected on the ground of non-production of the will executed by the mother when no family member is disputing the will and the appellant's claim vis-a-vis the partnership firm, even otherwise also the appellant is the legal heir of the deceased partner being her only son. In our view, non-probate of will is not a germane factor to be considered at the time of appointment of arbitrator under Section 11 of the Arbitration Act. In our opinion, the partnership deed clearly recites that all the disputes touching the affairs of the partnership firm were referable to arbitrator and it cannot be gainsaid that the dispute regarding accounts of the partnership firm is a dispute touching the affairs of the firm. As already stated, it was not legally essential to specifically make a mention that the partners included their legal heirs, representatives, assigns or legatees etc. and the arbitration clause could be invoked by the appellant as the legatee as well as the legal heir/legal representative of the deceased Dulari Devi particularly where the dispute had arisen during her life time. The appellant's claim in the instant case is based on the will as well as being a legal heir of the deceased Dulari Devi. The appellant, in our opinion, possessed a legal and enforceable right to invoke arbitration clause and moved application under Section 11 of the Arbitration Act before the High Court for appointment of arbitrator. The word "party" as used in the partnership deed does not exclude inclusion of legal heirs, legal representatives etc. as being canvassed by the respondents. Thus, in our opinion, in view of the provisions of Sections 40 and 46 of the Partnership Act read with Section 40 of the Arbitration Act, the appellant has a legal right to commence arbitration by moving an application under Section 11 of the Arbitration Act in the High Court as in our view, the right to sue survives on him as legal representatives of the deceased Dulari Devi and he is entitled to invoke Clause 13 of the partnership deed. Moreover, the dispute referable to arbitration had already arisen during the life time of Dulari Devi which is also well settled that where a dispute is referable to arbitration, the parties cannot be compelled to take recourse to in the civil courts.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 1526 of 2007

Decided On: 21.03.2007

Ravi Prakash Goel  Vs.   Chandra Prakash Goel and Ors.

Hon'ble Judges/Coram:

A.R. Lakshmanan and Altamas Kabir, JJ.

Citation: (2008) 13 SCC 667,MANU/SC/7232/2007

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Whether injunction suit filed by successor of tenant partnership firm to restrain landlord from executing eviction decree is maintainable?

 Suit seeking an injunction against a defendant from interfering with possession of the plaintiff cannot seek to interject the enforcement of an ejectment decree obtained by the defendant against the predecessor-in-interest of the plaintiff, and the correct remedy in this regard for the plaintiff would be to approach the executing court under Order XXI Rules 98 to 105 of the CPC.

A perusal of order dated 6th December, 2018 in the second suit filed by the defendant no. 1 against the defendant no. 2 Economics Transport Organisation (Q.T.S.) Pvt. Ltd. only, for ejectment from the premises, shows a decree for ejectment to have been passed in favour of the defendant no. 1 and against the defendant no. 2. The defendant no. 1 has also filed before this Court a copy of the order dated 11th February, 2019 of this Court, in RFA No. 123/2019 preferred by the defendant no. 2 against the order dated 6th December, 2018 of ejectment and a perusal of which shows the said Economics Transport Organisation (Q.T.S.) Pvt. Ltd. to have withdrawn the appeal and only sought time to vacate the premises on or before 15th May, 2019 and which was granted subject to the defendant no. 2 Economics Transport Organisation (Q.T.S.) Pvt. Ltd. filing an undertaking in this Court and which undertaking was filed in the form of affidavit of Bhimsen Saini, Attorney of Economics Transport Organisation (Q.T.S.) Pvt. Ltd.

13. The counsel for the defendant no. 1 states that the defendant no. 2 Economics Transport Organisation (Q.T.S.) Pvt. Ltd. has not vacated the premises and on the contrary made an application to wriggle out of the undertaking given and which application has been dismissed. It is further stated that the defendant no. 1 has already initiated contempt proceedings against the defendant no. 2 Economics Transport Organisation (Q.T.S.) Pvt. Ltd. and Mr. Bhimsen Saini aforesaid and which are pending.

14. I have hereinabove observed that the suit, on the face of it did not lie. What the plaintiff, by instituting this suit is seeking to do, is to assert independent right to be not removed from possession of the premises aforesaid in execution of the ejectment decree obtained by the defendant no. 1 against the defendant no. 2 in the second suit aforesaid and in which plaintiff was not a party. The relief of permanent injunction sought by the plaintiff, of restraining the defendants from interfering with possession of the plaintiff of the premises, cannot be to restrain the defendant no. 1 from, in execution of the said ejectment decree, dispossessing the plaintiff from the premises.

15. The remedy of the plaintiff, if claims to be not entitled to be dispossessed in execution of the decree obtained by defendant no. 1 against defendant no. 2, is under Order XXI Rules 98 to 105 of the CPC read with Section 47 of the CPC which bars a separate suit being filed there for.

IN THE HIGH COURT OF DELHI

CS (OS) 312/2019, IA No. 8464/2019 (u/O. XI R-12 CPC) and IA No. 11637/2019 (u/O. VII R. 11 CPC)

Decided On: 12.02.2020

Economics Transport Organisation Ltd. Vs.  Mohan Investments & Properties Pvt. Ltd. and Ors.

Hon'ble Judges/Coram:

Rajiv Sahai Endlaw, J.

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Whether sub-tenancy is created if part of tenanted premises is given to new partner of partnership firm?

Now, applying this example to the present case, Atalram was never there when the tenancy was created. He came into the partnership firm only by way of his entry in the year 1971. In law, therefore, it was only Ishwardas himself who continued to be the tenant, though Atalram's entry into the partnership firm did not change the nature and did not mean parting of the possession on the part of Ishwardas. It also did not confer any status of tenancy of Atalram himself for the simple reason that this entry was not with the knowledge and/or consent of the landlady. Once this partnership was broken and two separate premises were created by Ishwardas and Atalram and a separate exclusive user was contemplated for Atalram of a part of the shop, it was clear that the original tenant Ishwardas had parted with the possession and had allowed the user of that separated part of the premises to Atalram. This would be nothing but an ex ample of clear sub-tenancy. Again, the original rent of the whole premises was Rs. 700/-. In the new arrangement, Ishwardas was to pay Rs. 400/- only, while Rs. 300/- were to be paid by Atalram. Thus, Ishwardas had reduced his liability to pay rent of Rs. 700/- per month. This was definitely, therefore, a consideration for sub-tenancy.

- Tenancy in the name of partnership--Exclusive enjoyment of the part of premises by new inducted partner--Amounts to sub-tenancy--Tenant liable to be evicted.

The firm to which the premises are let by the landlord holds the tenancy in favour of the then existing partner of the firm. If one of the partners retires and a new partner is brought in, such a new partner does not acquire tenancy rights and if he is given part of the premises exclusively and is to share the total rent, he is the sub-tenant and the landlord is entitled to the eviction of the tenant and the sub-tenant under Section 13(3)(iii) of the C.P. & Berar Rent Control Order.

IN THE HIGH COURT OF BOMBAY (NAGPUR BENCH)

Writ Petition No. 495 of 1990

Decided On: 08.10.1996

 Ishwardas and Brothers  Vs. Additional District Magistrate and Ors.

Hon'ble Judges/Coram:

V.S. Sirpurkar, J.

Citation: 1997(3) MHLJ 552

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Whether Individual Partner Can Claim Eviction On Bonafide Need Ground For His Occupation Of Building Owned By Partnership Firm?

 We have no hesitation to negative the claim by a firm,

seeking eviction of a tenant from a building owned by the partnership

firm, on the ground of bonafide need of an individual partner when

his/her claim is that he/she wanted to occupy the building for personal

use. We find it impossible to stretch the law under Section 11(3) of the

Act to hold that occupation by such a partner will amount to own

occupation by the landlord, as he/she individually cannot be regarded

as the landlord as long as the building remains in the ownership of the

firm. We have already mentioned the distinctions between a partner

and a co-owner. Once we find that the building belongs to a firm, the

rights and obligations of the partners are governed by the terms of the

contract and in the absence of any provisions in the contract, they shall

be guided by the Partnership Act. Finding that the building belongs to a

partnership firm cuts at the root of the claim by an individual partner for

own occupation since he/she ceases to be a landlord. In other words,

no partner individually can claim to be a landlord when the firm owns

the building. Hence, one partner cannot claim eviction on the ground of

bonafide need for his/her own occupation of the building. Clear wording

in Section 11(3) of the Act would show that a landlord alone can claim

eviction on the ground of bonafide need of a building for his own

occupation. Since the individual partner cannot be regarded as landlord

in respect of a building owned by a firm, the provision does not apply in

such a case. Corollary is that in such a situation Section 11(3) of the

Act can be invoked by a firm only when the firm itself bonafide needs to

occupy the tenanted premises. 

IN THE HIGH COURT OF KERALA AT ERNAKULAM

PRESENT

 MR. JUSTICE A.HARIPRASAD

&

 MR.JUSTICE T.V.ANILKUMAR

RCRev. No.228 OF 2018

AMEER, MAMMUNHI HAJI,  Vs M/S.B.AMOO AND BROTHERS,

Dated this the 15th day of October, 2019

COMMON ORDER

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Whether clauses of partnership deed will be automatically binding on legal heirs of deceased partners?

 At this stage, it is to be noticed that once the

partnership comes to an end, by virtue of death of

one of the partners, there will not be any

partnership existing in which legal representatives

of late Smt. Hashmatunnisa Begum could be taken in.

The judgment and decree obtained by late Sri Jai

Narayan Misra against late Smt. Hashmatunnisa Begum,

in pursuance of partnership deed dated 14.04.1982,

cannot bind the legal representatives of late Smt.

Hashmatunnisa Begum, as such, decree is not

executable against them. The legal representatives

of late Smt. Hashmatunnisa Begum are not the

partners of the original partnership deed dated

14.04.1982. When such legal representative are not

parties to the contract, such contract cannot confer

rights or impose obligations arising under it on any

third party, except parties to it. No one but the

parties to the contract can be entitled under it or

born by it. Such principle is known as ‘Privity of

Contract’. When the partnership stands dissolved by

operation of law under Section 42(c) of the Indian

Partnership Act, 1932, the question of execution in

pursuance of the decree does not arise. There cannot

be any contract unilaterally without acceptance and

agreement by the legal heirs of the deceased

partner. If there are any clauses in the agreement,

entered into between the original partners, against

the third parties, such clauses will not bind them,

such of the clauses in the partnership deed, which

run contrary to provisions of Indian Partnership

Act, 1932, are void and unenforceable. Such clauses

are also opposed to public policy.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.3311 OF 2015

S.P. Misra Vs  Mohd. Laiquddin Khan 

Coram:

R.Subhash Reddy,J.

Dated: October 18,2019

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Whether Cheque bounce case is maintainable if unregistered partnership firm is not made accused?

 An interesting issue has come up for consideration before this
Court. The question involved in this case is whether an unregistered
Partnership Firm can also be brought within the purview of Section 141 of
the Negotiable Instruments Act, and in such cases whether the Partnership
Firm must be made as an accused along with the other partners, in order to
maintain a complaint for an offence under Section 138 of the Negotiable
Instruments Act ?
 Section 141 of the Negotiable Instruments Act deals with the
concept of vicarious liability, wherein for the offence committed by the
Company or a partnership firm, the directors or the partners, as the case
may, are deemed to be guilty of the offence when it is shown that they are
in charge of and responsible for the conduct of the day-to-day affairs of the
business or the firm, as the case may be. While interpreting the provision,
the Hon'ble Supreme Court has categorically held that the complaint cannot
be maintained against the directors of the Company, without making the
company as an accused person. This concept has been extended even for
Partnership Firms. The registration or non-registration of the Partnership
Firm will have no bearing insofar as 141 of the Negotiable Instruments Act is
concerned.
20. In view of the above discussion, this Court is not in agreement
with the submissions made by the learned counsel for the respondent. In
this case admittedly, the cheque was given in the name of the Partnership
Firm and after the cheque was dishonored, no statutory notice was issued to
the Partnership Firm, and the Partnership Firm was not made as an accused
in the complaint. Only the partners have been shown as accused persons in
this complaint. Such a complaint is unsustainable and not in accordance

with Section 141 of the Negotiable Instruments Act and the law laid down
by the Hon'ble Supreme Court. 
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED: 23.07.2019
CORAM
MR.JUSTICE N.ANAND VENKATESH
CRL.O.P No.13147 of 2015
and Crl.M.P.Nos.1 and 2 of 2015

Rangabashyam Vs. Ramesh 

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Whether service of arbitral award on wife of partner of partnership firm is proper service?

It is the admitted position that the signed arbitral awards were forwarded by the arbitrator to the appropriate address of a partner of the appellant firm. The Single Bench noticed that the agreements had been executed by such partner of the firm and the signature of such partner appeared on all pages of the agreement. Once a postal article addressed to a partner of a firm is received at such appropriate address and acknowledged to be received on behalf of the addressee, by his wife no less, service would be deemed to have been appropriately effected on the addressee. Of course, it is open to the addressee to demonstrate otherwise; but the burden is on the addressee. The mere allegation that despite service being effected in such manner, the postal article was not received by the addressee, would not do. It does not appear to be the addressee's case that the wife deliberately suppressed the receipt of such postal article from the relevant partner or there were some other circumstances which prevented the wife from making over the postal article to the relevant partner. In the absence of a very high case and which is established by cogent evidence, in such a scenario, the delivery of the postal article at the appropriate postal address of the addressee would amount to service of the postal article on the addressee. It is, thus, evident that Section 31(5) of the Act was complied with in either case upon the signed copy of the arbitral awards being delivered at the address of the relevant partner.

IN THE HIGH COURT OF CALCUTTA

APO No. 247 of 2018, 

Decided On: 04.10.2018

 Manohar Lal & Co. Vs. Axis Bank Ltd.

Hon'ble Judges/Coram:

Sanjib Banerjee and Abhijit Gangopadhyay, JJ.

Citation: AIR 2019 Cal 84

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Whether relinquishment of leasehold interest in partnership firm constitute transfer of tenancy right prohibited under bombay rent Act?

 The legislative prohibition against the transfer of tenant's interest in the premises, operates "notwithstanding anything contained in any law". these words signify the overriding effect of the legislative command that a tenant shall not transfer his interest in the tenancy. After setting out the prohibition, the legislature enumerates two specific modes of the prohibited transfers. They are; subletting and assignments. In order to preclude transfer by a mode not named in the Section, the legislature employed the words "in any other manner".

35. The word "transfer" in the clause "transfer in any other manner" is used in its generic sense to denote the idea of making over property to another person. Rejecting the restricted meaning of "transfer" in the Transfer of Property Act , this court went so far as to hold that devolution of tenant's interest by bequest falls within the prohibition of Section 15(1) Dr. Anant Trimbak Sabnis v. Vasant Pratap Pandit MANU/MH/0173/1980 : AIR1980Bom69 . The broad generic sense, taking in its sweep all species of dealings with tenant's interest resulting in making over of property is consistent with the object of the Section.

36. The legislature has used the word "any" which is word with a wide meaning and is used to exclude all limitations. Clarke - Jerviose v. Scutt - (1920) I Ch. 382. The legislature could not have fore sent the modes that may be employed for the purpose of transferring tenancy. Aware of this, the legislature specified subletting and assignment, the two known modes of transfer; but it took care to use the words signifying exclusion of any other mode, arrangement or process of transfer. The significance of the word "any" is clear if one notices its meaning. It weans "in any degree, to any extent or at all". Therefore, when the legislature used the word "any" with reference to the transfer, it clearly intended to say that no transfer "at all " or "to any extent" or "in any degree" shall be made, New Webster's Dictionary of the English Language. The meaning of the word "other" in the context of transfer is also significant. It is used to denote a form of transfer "different or distinct from the ones mentioned or employed" New Webster's Dictionary of the English Language.

37. Whether a tenant sublets or assigns his interest - the obvious modes named by the statute - or the tenancy is made over to another through the medium of dissolution of a firm or retirement from the partnership, the result is identical; for, the tenant's interest's interest has been parted with. Aware of this possibility, the legislature used these words to mean that the tenant's interest in the premises shall not be made over to another persons by any mode at all.

38. In my opinion, therefore, having regard to the meaning of the words, "in any other manner", the transfer of tenant's interest through the mode of dissolution of partnership or retirement from partnership is a transfer forbidden by Section 15(1) of the Bombay Rent Act .

39. My conclusions on the question of the validity of the transfer of tenancy may be summarised as under.

The Partnership Act conceives the interests of partners in severalty. There is no community or unity of interest between partners. Therefore, they hold immovable property of the firm as tenants-in-common and not as joint tenants. Having regard to the and not as joint tenants. Having regard to the incidents of tenancy-in-common, one partner has no interest in the share in the property of another partner. Where one partner transfers or relinquishment his share in the partnership business to another, the transfer partner has no antecedent title to the share of the transferring partner. Therefore the making over or relinquishment of leasehold interest as a part of the transferor's share in the assets of the firm constitutes transfer of such lease hold interest.

Section 15(1) of the Bombay Rent Act prohibits transfer of tenant's interest in the prohibits not only by subletting or assignment but also "in any other manner". The words "in any other manner" mean a manner other than by subletting and assignment. The effect of giving up of his share in the tenancy by a partner as a part of his share in the partnership is to make over his share in the tenancy. Such making over of tenancy or parting with tenancy constitutes transfer of tenant's interest "in any other manner". Such transfer of tenancy is forbidden by Section 15(1) of the Bombay Rent Act and is, therefore, void. The transferee partner does not, therefore acquire the transferor's interest in the tenancy.

IN THE HIGH COURT OF BOMBAY

Suit No. 756 of 1977

Decided On: 20.06.1989

Nariman Aspandiar Irani Vs. Adi Merwan Irani

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Whether relinquishment deed of leasehold interest in partnership firm is compulsorily registrable?

According to the Plaintiff, the ``gift`` is not valid as it is not made by registered instrument and attested by two witnesses as required by Section 123 of the Transfer of Property Act . The Defendant, on the other hand, asserts that the share in the partnership property even if it includes immovable assets is not immovable property. In view of the Supreme Court's ruling in Addanki Narayanappa v. Bhaskara Krishnappa MANU/SC/0281/1966 : [1966]3SCR400 . Followed in Commr. of Income Tax, West Bengal v. Juggilal Kamlapat MANU/SC/0130/1966 : [1967]63ITR292(SC) . I uphold the submission of Mr. Vyas, learned Counsel for the Defendant, that the interest of partners in a partnership firm, although it owns immovable property including leasehold interest, is movable property and, therefore, a document evidencing relinquishment of interest of one partner is not compulsorily registrable. 

IN THE HIGH COURT OF BOMBAY

Suit No. 756 of 1977

Decided On: 20.06.1989

Nariman Aspandiar Irani Vs. Adi Merwan Irani

Hon'ble Judges/Coram:

G.H. Guttal, J.

Citation: AIR 1989 Bom 362,1990 MHLJ 265

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Whether application for appointment of arbitrator by partner of dissolved partnership firm is maintainable?

 The appellants (defendants) on being served
raised a preliminary objection contending therein
that since the partnership in question on which the
application under Section 20 of the Partnership Act
was founded was an “unregistered partnership",
therefore, in the light of the bar contained under
Section 69 (3) of the Partnership Act, the application

filed by the respondent was not maintainable,
therefore, it was liable to be dismissed as such.
8. The Civil Judge by order dated 18.03.1993
overruled the objection raised by the appellants
(defendants) and held that the application filed by
the respondent (plaintiff) is maintainable. The
appellants (defendants) felt aggrieved and filed writ
petition in the High Court at Allahabad under
Article 227 of the Constitution of India.
9. By impugned order, the High Court dismissed
the writ petition and upheld the order of the Civil
Judge, which has given rise to filing of this appeal
by way of special leave by the defendants in this
Court.
10. So, the short question, which arises for
consideration in this appeal, is whether the High
Court was justified in dismissing the appellants’
writ petition.

11. Having heard the learned counsel for the
parties and on perusal of the record of the case, we
are inclined to allow this appeal and while setting
aside the impugned order remand the case to the
High Court for deciding the writ petition afresh on
merits in the light of the observations made infra.
12. In our considered view, the need to remand
the case has occasioned because we find that the
High Court did not decide the issue, which was the
subject matter of the writ petition, keeping in view
the law laid down by this Court in the case of
Krishna Motor Service by its Partners vs. H.B.
Vittala Kamath, 1996 (10) SCC 88.

REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No.3399 OF 2019
(Arising out of S.L.P.(C) No.21469 of 2012)

Bhagwan Das Goel Vs Pyare Kishan Agarwal 

Abhay Manohar Sapre, J.
Dated:April 04, 2019.

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Whether partnership firm will become tenant if tenancy agreement is with its one partner?

 It has been claimed by respondent No. 1 that there was a oral tenancy that had come to existence between the appellant and the aforesaid partnership firm of which the said Pramod Mahure and the respondent No. 1 were partners. In order to support the said assertion, respondent No. 1 has heavily relied upon the fact that the deposit of the amount of Rs. 40,0000/- for the said suit shop was paid from the joint account of Pramod Mahure and respondent No. 1, as also the fact that cheques towards monthly rent were paid to the appellant from the account of the partnership firm. It is the contention of the learned Counsel appearing on behalf of respondent No. 1 that these circumstances proved the fact that an oral tenancy had come into existence in favour of the said partnership firm.

18. In this regard, reliance placed by the learned Counsel appearing on behalf of the appellant on the judgment of the Hon'ble Supreme Court in the case of Hiralal (supra) is justified. In the said judgment, the Hon'ble Supreme Court has held as follows;

"7. We are inclined to agree with this submission of the landlord. The initial tenancy was only an oral tenancy. Nevertheless there were two witnesses who deposed that the original tenancy agreement was only between the petitioner and the respondent. At that time, admittedly, there was no question of Balkunj being the tenant in respect of any portion of the premises. All that the respondent says is that subsequently cheques were being issued in the name of Balkunj also and that this must be taken to lead to an inference that the petitioner had accepted Balkunj as its tenant. It is very difficult to accept this argument. It is no doubt true that the rent has been paid by two cheques since November 1976 but the mere payment of rent by two cheques, in the circumstances of this case, cannot mean that there were two tenancies. The landlord was entitled to a rent of Rs. 600 p.m. and so long as he got this amount, it was immaterial for him whether the amount was paid in a lumpsum or by one cheque or more than one cheque and who the makers of the cheques were. It is not unusual to come across cases where a tenant pays rent not by a cheque drawn by himself but by a cheque drawn by some other concern in which he has an interest such as a partnership concern, a limited company of other entity in which he is interested. So, the mere fact that for some reasons the respondent chose not to issue a single cheque for the rent of Rs. 600/- but that he gave two separate cheques, one for Rs. 250/- drawn by himself and one for Rs. 350/- drawn in the name of Balkunj cannot lead to an irresistible conclusion that the tenancy was created in favour of Balkunj with the concurrence of the landlord. the letter dated 26-11-78 far from "clinching" the respondent's claim, as held by the High Court, does not in our view improve the tenant's case at all. It only evidences the fact that the landlord was receiving the cheques issued in the name of the trust in discharge of the respondent's obligation to pay the rent of Rs. 600 p.m. It is also true that, since the landlord was also occupying a part of the ground floor premises, he might have been aware that certain activities of Balkunj were being carried on in the hall. But this can only mean that the landlord permitted the tenant to use a portion of the premises let out for running the activities of the trust. even assuming that, standing by themselves these two facts might have been sufficient to draw any such inference as is suggested, the two letters of 5-8-77 and 15-1-78 place the matter beyond all doubt. the landlord categorically asserted in these letters that he does not recognize Balkunj as his tenant and that the respondent alone was his tenant. There was no reply to these letters for the respondent. In these circumstances, there can be no doubt at all that the premises had been let out only to the respondent by the petitioner and that Balkunj cannot be considered to be a tenant of the premises or any portion thereof."

19. Thus, it would be evident that merely because cheques towards rent were paid from the account of the partnership firm, it would not lead to the conclusion that the said firm became the tenant of the appellant. The position of law laid down in the aforesaid judgment also answers the contention raised on behalf of respondent No. 1 that since the appellant was aware that business of partnership firm was being conducted from the suit shop, it was the firm which was the tenant. No such conclusion could be drawn from the facts and circumstances of the case and therefore, the theory of oral tenancy created in favour of the partnership firm raised on behalf of respondent No. 1 is unsustainable and it is not supported by the evidence and material on record.

20. The circumstances that point towards the fact that tenancy was indeed created only in the name of Pramod Mahure are; the aforesaid agreement dated 01-04-1991 (Exhibit-53) shows that the tenancy was created in the name of Pramod Mahure individually, the respondent Nos. 2 to 4 categorically took a stand that tenancy was in the name of Pramod Mahure and that they specifically stated in their written statement of having surrendered their rights in respect of the tenancy, respondent No. 1 failed to produce a single rent receipt in the name of the partnership firm, the appellant promptly sent reply denying the claim made by respondent No. 1 in his notice about tenancy being in favour of the partnership firm and the appellant returned all the cheques towards rent sought to be deposited by respondent No. 1 on the basis that the tenancy was created in favour of the partnership firm. All these circumstances clearly indicated that the tenancy was created only in favour of Pramod Mahure and that the claims of oral tenancy made by respondent No. 1 in respect of the partnership firm, were wholly unsustainable. The findings rendered by the appellate Court while reversing the decree granted by the trial Court, are found to be perverse and they are based on erroneous appreciation of the evidence and material on record, as also the law applicable to the same.

IN THE HIGH COURT OF BOMBAY (NAGPUR BENCH)

Second Appeal No. 79 of 2008

Decided On: 10.04.2018

 Chandrasen Gulabchand Shah  Vs.  Ganesh Shrawanji Iche and Ors.

Hon'ble Judges/Coram:

Manish Pitale, J.

Citation: 2018(6) MHLJ 152

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Whether Arbitrator has power to dissolve partnership firm?

 In my view, the power of dissolution of the partnership firm under enumerated under section 44(g) on just and equitable grounds also is an action in personam and not an action in rem. Even if a firm is dissolved under section 44(g) of the Partnership Act, the decision of the arbitral tribunal would be binding upon the parties to the arbitration agreement and not the world at large. The principles laid down by the Supreme Court in case of Booz Allen & Hamilton INC. (supra) would apply to the facts of this case. I am respectively bound by the said judgment.

66. The Supreme Court in case of A. Ayyasamy vs. A. Paramasivam & Ors. (supra) has adverted to the judgment of the Supreme Court in case of Booz Allen & Hamilton INC. (supra) and has held that ordinarily every civil or commercial dispute whether based on contract or otherwise which is capable of being decided by a civil Court is in principle capable of being adjudicated upon and resolved by arbitration "subject to the dispute being governed by the arbitration agreement" unless the jurisdiction of the arbitral tribunal is excluded either expressly or by necessary implication. It is held that all disputes relating to rights in personam are considered to be amenable to arbitration while rights in rem are required to be adjudicated by Courts and public tribunals. In my view, dissolution of a partnership firm under section 44(g) of the Partnership Act on just and equitable grounds is not excluded expressly under the provisions of the Partnership Act or under the Arbitration Act, 1996 or under the arbitration agreement entered into between the parties or by necessary implication from the jurisdiction of an arbitral tribunal. The principles laid down by the Supreme Court in case of A. Ayyasamy (supra) thus would apply to the facts of this case and would assist the case of the petitioner.

IN THE HIGH COURT OF BOMBAY

Arbitration Petition No. 8 of 2018 and Notice of Motion No. 43 of 2018 in Arbitration Petition No. 8 of 2018

Decided On: 13.06.2018

Yogendra N. Thakkar Vs. Vinay Balse and Ors.

Hon'ble Judges/Coram:

R.D. Dhanuka, J.

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Whether partnership firm can be continued after death of one of partner?

 Section 37 of the Act provides that if any member of a firm dies and the surviving partners carry on the business without any final settlement of accounts, the estate of the deceased partner is entitled to such share of the profits made as may be attributable to his share of the property or to interest @ 6% per annum on the amount of his share in the property of the firm. In our considered opinion, it will have no application in the facts of the case in view of Clause 14 of the partnership deed, which also provides for the manner of calculating the dues. Similarly, Section 42(c) of the Act, providing for dissolution of the firm on the death of a partner, will also have no application in view of the aforesaid Clause evincing a clear intention to continue the partnership on the death of a partner.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 2597 of 2016

Decided On: 04.10.2017

Kodendera K. Uthaiah (D) by LR. Vs. P.M. Medappa and Ors.

Hon'ble Judges/Coram:

Ranjan Gogoi and Navin Sinha, JJ.

Citation: (2017) 16 SCC 331

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Whether suit filed by unregistered partnership firm is tenable?

At this stage, it would be relevant to refer to the observations of the Honorable Supreme Court in paragraph 26 of its judgment in M/s. Haldiram Bhujiawala & another Vs. M/s. Anand Kumar Deepak Kumar & another [MANU/SC/0144/2000 : AIR 2000 SC 1287], which reads as follows:-

"26. Further Section 69(2) is not attracted to any and every contract referred to in the plaint as the source of title to an asset owned by the firm. If the plaint referred to such a contract it could not only be a historical fact. For example, if the plaint filed by the unregistered firm refers to the source of the firm's title to a motor car and states that the plaintiff has purchased and received a Motor Car from a foreign buyer under a contract and that the defendant has unauthorisedly removed it from the plaintiff firm's possession, - it is clear that the relief for possession against defendant in the suit does not arise from any contract with defendant entered into in the course of plaintiff firms' business with defendants but is based on the alleged unauthorised removal of the vehicle from the plaintiff firm's custody by the defendant. In such a situation, the fact that the unregistered firm has purchased the vehicle from somebody else under a contract has absolutely no bearing on the right of the firm to sue the defendant for possession of the vehicle. Such a suit would be maintainable and Section 69(2) would not be a bar, even if the firm is unregistered on the date of suit....."

From the aforesaid, it is clear that even if the source of title to the JCB machine is based on agreement dated 27th November, 2014, its reference as made in the plaint is merely to indicate a historical fact.

11. The reliefs sought by the plaintiff would indicate whether the plaintiff is seeking enforcement of a right arising from a contract. One relief sought is to hand over the said machine to the plaintiff for a period of two years for using the same. This relief cannot be said to be based on a right arising from the contract. In Mukund Balkrishna Kulkarni [supra], it was held by the Honourable Supreme Court that before a plaintiff can be non-suited under provisions of Section 69(1) of the said Act, it must be shown that the suit has been filed by a person "suing as a partner in a firm" and that the suit must be to enforce a right arising from a contract. As can be seen from the nature of reliefs sought by the plaintiff, it cannot be said that the suit seeks to enforce a right arising from a contract.

Another relief sought is with regard to producing the account books, appointing a Receiver and distributing the amounts in question equally between the plaintiff and the defendant. In the aforesaid decision, it was further observed that the Hon'ble Supreme Court in view of the exception carved out by Section 69(3) of the said Act, a person suing as a partner can enforce a right under the contract for dissolution of the firm and accounts. A claim for half share in the firm's assets is a necessary corollary to a prayer for dissolution and without a prayer for specified shares in the firm's assets and business, the relief that may be granted in a suit for dissolution would be ineffective. Thus, the prayer made in the plaint for appointing a Receiver and distributing the amounts in question in equal share would be maintainable and would relate to the exception under Section 69(3) of the said Act. In Valji Shamji Chheda & others [supra], the aforesaid decision was relied upon and the suit therein was held to be maintainable.

12. There is another aspect of the matter. If the acts of the defendant prima facie are shown to be based on a misconduct committed by a partner, the suit for damages in that regard would not be barred by Section 69 of the said Act. This has been held in Chandrayya [supra]. The facts in that case indicate that a Partnership-Deed was executed between seven persons. However, one of the defendants had broken the lock put on the premises of the firm and had put his own lock. In that backdrop, the plaintiff filed a suit for recovery of certain amounts. Relying upon the judgment of the Division Bench in Navinchandra Jethabhai & another Vs. Moolchand Sadaram Gindodiya [MANU/MH/0059/1966 : AIR 1966 Bom. 111], it was held that the suit of said nature was essentially a suit for damages for a misconduct and the same would not be barred by Section 69 of the said Act. On reading the plaint averments, it is clear that the plaintiff has based the suit on the cause of action relating to the alleged misconduct of the defendant. The plaintiff has sought relief on that basis in the suit. The suit, therefore, would be maintainable and not barred by Section 69 of the said Act.

13. Thus, from the aforesaid, it is found that though there existed a partnership between the plaintiff and the defendant, the suit as filed was not based on any contract between the parties and that relief was sought in view of the alleged misconduct committed by the defendant. Non-registration of the partnership was, therefore, not fatal to the tenability of the suit. Hence, for aforesaid reasons which are distinct from the reasons assigned by the trial Court, I find that the application under provisions of Order-VII, Rule 11 of the Code was rightly rejected. The trial Court did not commit any jurisdictional error in that regard. 

IN THE HIGH COURT OF BOMBAY (NAGPUR BENCH)

Civil Revision Application No. 7 of 2017

Decided On: 08.01.2018

Rupchand Vs. Laxman

Hon'ble Judges/Coram:

A.S. Chandurkar, J.

Citation: (2018) 2 MHLJ 356

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Whether legal heirs of deceased partner can invoke arbitration clause after death of partner?

In my opinion, the objection on behalf of the respondent deserves to be rejected. The law as can be understood from the ratio decidendi in Ravi Prakash Goel (supra) is that the death of a partner does not bring into an end the provision pertaining to arbitration and the legal heirs would be entitled to invoke the said arbitration clause. Once there is an arbitral clause, even though the legal heirs of the deceased partner may not be entitled to be inducted as partner, nonetheless their right to pursue the remedy by invoking the arbitral clause does not cease. Invocation of the arbitration clause at the instance of the legal representatives of the deceased partner is clearly maintainable. Thus, the petitioners are right in invoking the arbitration clause and have served the notice on the respondent.

15. Considering the above, in my opinion, as the arbitration clause subsists and the arbitration clause has been invoked by the Attorney of the petitioners on the death of the original partner, i.e., Bhairon Nath Keshwarwani, the application is maintainable. The petitioners have moved through the Attorney, who is their natural mother. The attempt by the respondent to deny the petitioners from constitution an arbitral Tribunal, to my mind, cannot be justified. If there be an arbitration clause, the legal heirs of the deceased partner, in terms of the judgment of Ravi Prakash Goel (supra), are entitled to initiate and pursue the arbitration proceedings. In the case of Ravi Prakash Goel (supra), the arbitral clause was invoked by the legal representatives. There can be no hesitation in holding that in respect of a person on the death of a partner, his legal heirs would also be entitled to invoke the arbitration clause. The respondent and its partners cannot and could not have refused to agree to the appointment of an Arbitrator. In my opinion, therefore, the petitioners have made out a case by invoking the arbitration clause."

IN THE HIGH COURT OF DELHI

Arb. P. 599/2017 and I.A. 1357/2018

Decided On: 19.03.2018

Jyoti Gupta Vs. Kewalsons and Ors.

Hon'ble Judges/Coram:

Navin Chawla, J.

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Whether plaint can be rejected on ground that partnership firm is not registered?

 In my considered opinion, if the cross-examination of the plaintiff is perused, it can be easily seen that he has specifically denied the suggestion that his partnership firm is not registered with the Registrar Office. The only admission given by him is that he has not placed on record any document to show that it was a registered partnership firm and he was the partner of the said firm. It is a different thing to say that partnership firm is not registered and another thing to say that no document is produced to show that it is a registered partnership firm and further denying the suggestion that it was not a registered partnership firm. In view thereof, the document, which is now produced on record by the respondents showing that one partnership firm in the name of "Safal Land Developers, Promoters and Builders", is registered with the Registrar of Firm in the year 1999 itself, needs to be taken into consideration.

7. As regards the dispute raised, that the name of the said partnership firm in the registration certificate is different from the name of the partnership firm stated in the title clause of the suit filed by the respondents before the trial court, it needs to be decided on the basis of evidence to be adduced before the trial court as to whether the registration certificate is of plaintiff's partnership firm or otherwise. Ultimately it is for the trial court to come to the conclusion in one way or other as to whether this registration certificate pertains to the partnership firm of the plaintiff or not. At this stage, the said certificate cannot be discarded on that ground especially when, the address of the plaintiff mentioned in the plaint is of the partner of the said partnership firm, whereas the address mentioned in the registration certificate is of the principal place of the office of the said partnership firm, and therefore, both these addresses are bound to be different.

8. Hence, having regard to these facts on record, in my considered opinion, no interference is warranted in the impugned order of the trial court, rejecting the petitioners' application for rejection of the plaint under Order VII Rule 11 CPC on the count that it is barred by the provisions of Section 69 of the Act.

IN THE HIGH COURT OF BOMBAY (NAGPUR BENCH)

Civil Revision Application No. 89/2016

Decided On: 22.06.2017

Hitendra Purushottam Kadu and Ors. Vs. Safal Developers

Hon'ble Judges/Coram:

Dr. Shalini Phansalkar Joshi, J.

Citation: 2018(1) MHLJ 256

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Whether it is necessary to bring on record legal heirs of retired partner of partnership firm?

The Suit is instituted by the plaintiff against the heirs and legal

representatives, if any, of i) Jamnadas Jinabai Popat and (ii) Manilal Virji

Mehta. The Suit instituted against unknown heirs and legal representatives

itself, is not maintainable. In support of this submission, he invited my

attention to Order 22, Rule 4 and 4-A of the C.P.C. He relied upon the

decision of the learned Single Judge of this Court in the case of Donald

Gonsalves Vs. Penha de Franca Youth Club, 2002 (3) ALL MR 814.

 On the other hand, Mr. Dhakephalkar supported the impugned

orders. He invited my attention to the written statement filed on behalf of

the defendants and it is to the following effect:

“Written statement of heirs and legal representatives of Manilal

Virji Mehta defendant No.1(2), defendant No.2 and defendant

No.3.”

6. He also invited my attention to the affidavit of Virendra Kishorlal

Mehta, partner of M/s. National Traders. The affidavit of examination-inchief

was filed on behalf of the heirs of Manilal Virji Mehta and on behalf

of defendant Nos.2 and 3. He submitted that Jamnadas Jinabai Popat and

Manilal Virji Mehta were joint tenants in respect of the suit premises. They

had formed a partnership firm namely J. M. Electricals. On 19.07.1975,

Jamnadas Popat retired and renounced his rights as joint tenant from the

suit premises. On 30.07.1975, Manilal Mehta started a new firm by name

National Traders with Virendra Mehta. In May 1977, Manilal Mehta also

retired from National Traders and Virendra Mehta and his brothers

continued the business. On 01.04.1981, Virendra Mehta and one Rajul

opened new firm by name Alka Industries (defendant No.3).

7. Mr. Dhakephalkar also invited my attention to the paragraph 3 of the

affidavit of Virendra Mehta wherein he deposed that Jamnadas Popat retired

from the partnership in 1975 (there is a typographical error to the effect that

Manilal Virji Mehta retired from the partnership in 1975). The deed of

retirement dated 19.07.1975 executed by and between Jamnadas Popat,

Bharatkumar Jamndas Popat as continuing partners and Manilal Virji Mehta

as retiring partner was produced on record. In other words, Mr.

Dhakephalkar submitted that from 19.07.1975, Jamnadas retired from the

partnership and also renounced his rights as a joint tenant of the suit

premises. He, therefore, submitted that the submission that the Suit was

instituted against the unknown heirs and legal representatives of Jamnadas

Popat and Manilal Mehta does not merit any consideration.

IN THE HIGH COURT OF JUDICATURE AT MUMBAI

CIVIL APPELLATE JURISDICTION

CIVIL REVISION APPLICATION NO.255 OF 2013

Virendra Kishorlal Mehta and others  Vs. Keshavsingh Dwarkadas Kapadia and others 

CORAM : R. G. KETKAR, J.

DATE : 27TH AUGUST, 2013

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Whether partnership firm can be treated as defaulter if one of its partner is defaulter?

According to Respondents the High Court has correctly decided the law that a partnership firm is a totality of every partner and that the default of one of the partners can be taken into consideration for treating the firm as a defaulter even if only one of its partners continues to be in arrears of abkari dues.

Section 5 of the Indian Partnership Act, 1932 (the Act) provides unequivocally that the relation of partnership arises from contract and not from status. Such contracts clearly cannot override provisions in a statute or statutory rules. Section 49 of the Act stipulates for payment of firm debts and also of separate debts of any partner by use of firm's property and if there is no surplus then separate property shall be applied for payment of a partner's separate debts. Other than the defaulting partner can always claim their loss, if any, from the latter.

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 2508 of 2008

Decided On: 19.08.2015

 Modern Hotel Vs. Commissioner of Excise and Ors.

Hon'ble Judges/Coram:

Vikramajit Sen and Shiva Kirti Singh, JJ.

Citation: (2016) 15 SCC620

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Whether partners of partnership firm are proper party to eviction suit?

 Having extensively heard Shri C.U. Singh, learned senior Counsel appearing for the Appellant and Mr. Sanjeev Mahajan, learned Counsel appearing for the Respondents, we are of the view that for properly adjudicating the issue before the Rent Controller in Eviction Petition No. 18/2010, in view of the contentions taken by the parties, both the firm in the name and style of K.K. Lee and all its partners should be on the array of parties as proper party. No doubt, they are not necessary parties form the point of view of the Eviction Petitioners, but the Court has a duty to see whether the presence of the proper parties would facilitate the complete determination of the matter in dispute. 

IN THE SUPREME COURT OF INDIA

Civil Appeal No. 1345 of 2017 (Arising from Special Leave Petition (C) No. 823/2015)

Decided On: 02.02.2017

Richard Lee Vs. Girish Soni and Ors.

Hon'ble Judges/Coram:

Kurian Joseph and A.M. Khanwilkar, JJ.

Citation:2017(4) MHLJ 48

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How to ascertain existence of partnership for purpose of Rent Act?

In the light of the above finding, if one turns to law laid
down by the Apex Court in the case of Shama Prasad Raje v.
Ganpatrao, AIR 2000 SCW 3493, it is obligatory on the part of the
landlord to prove that the tenant has parted with possession of the
tenanted premises and such parting of possession must be backed
by for some consideration. In the instant case, it has been proved
that the possession is with defendant No. 2. The admission given
by defendant No. 1 that defendant No. 2 is his partner in the
business run under the name and style of respondent No. 3, itself
goes a long way to establish the case pleaded by the plaintiffs.
Assuming that there was partnership between defendant Nos. 1
and 2 brought into existence of on 23 September, 1976 the terms
and conditions thereof cannot be read for want of proof of
document. Assuming that the contents thereof can be read in
evidence, even then as already found, no genuine partnership
could be said to have been established. It was brought into
existence only to defeat the provisions of rent legislation. This
Court in case of Gangaram v. Ashok Kumar, 1969 Mh.L.J. Note
43 has held as under :
".....that the question whether relationship between the
petitioners amount to a partnership or not could not be
decided merely on the basis of a deed which they had
filed and the Court is entitled to examine all the incidents
of the relationship between the parties as shown by the
written agreement together with the surrounded
circumstances at the time when the contract was entered
into, conduct of the parties as well as other facts that
may be relevant, such for instance, as the right to control
the property, the manner in which the accounts of the
business are kept, the right to receive profits and the
liability to share the losses and from these deduce the
real intention of the parties. Existence of any written or
verbal agreement, between the parties, conduct of the
parties towards one another, the mode in which they
have dealt with one another, the mode in which each has
with the knowledge of the other dealt with other people,
are all Indicia which may help the Court in finding
whether partnership does or does not exist. The Court
must consider all the facts and circumstances of the
cases and draw an inference from them as a whole
without attributing undue weight to any one of them. It
will have to be found in each case whether a plea of
partnership which is put forth as a defence to an
application by the landlord under Clause 13(3)(iii) of the
Rent Control Order is intended to be a mere cloak to
cover up the use of the premises by a person other than
the tenant or whether the tenant is himself carrying on
the partnership business. Thus, the failure to produce
account books, the conduct of the tenant in not taking
part in the business which was carried on only in the
name of the stranger and the earlier conduct in subletting
the premises for a period of 5 years to another person
indicated that the document of partnership was merely a
cloak brought into being in order to defeat the
application of the landlord under Clause 13(3)(iii) of the
Rent Control Order. (Order of the Rent Control
authorities holding that the tenant had sublet the
premises upheld)."
29. Applying the tests laid down by this Court to the facts of the
present case, it has to be held that defendant No.1 has failed to establish
legal and genuine partnership between defendants No.1 and 2. Perusal
of questions and answers during the course of cross-examination of
D.W.1 as referred in paragraph 8 above also substantiates the case of
unlawful subletting by defendant No.1 in favour of defendant No.2. The
concurrent findings of fact recorded by the Courts below are based upon
appreciation of evidence on record. In the present case, the premises
and its availability for running business was the prime and basic
consideration for inducting defendant No.2 by the defendant No.1.

Partnership Deed has not been registered under the Partnership Act.
Perusal of the answer given by D.W.1 to question No.121 shows that
partners of defendant No.1 have no experience in the business of
Agarwood and perfumes. The Courts below have carefully scrutinized
the evidence in the light of law. In view thereof, I do not find that any
case is made out for invocation of powers under Section 115 of C.P.C.
Defendant No.1 was not in a position to demonstrate that the findings
recorded by the Courts below are perverse being based upon no
evidence or that they are contrary to the evidence on record. 
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
CIVIL REVISION APPLICATION NO.76 OF 2016
WITH
CIVIL APPLICATION NO.86 OF 2016
H. Vasanji & Company through Partner
Chirag Dinkar Thaker 
Vs.
Chandrakumari Harnamsingh Chowhan 

 CORAM : R. G. KETKAR, J.

Pronounced on: OCTOBER 13, 2016

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