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SUPREME COURT OF INDIA
L. NAGESWARA RAO, B.R. GAVAI, JJ.
Rajendra Bajoria and Others – Appellants
Versus
Hemant Kumar Jalan and Others – Respondents
Civil Appeal Nos. 5819-5822 of 2021, SLP (C) Nos. 2779-2782 of 2019
Decided On : 21-09-2021
Civil Procedure Code, 1908 - Order VII Rule 13 - Indian Partnership Act, 1932 - Sections 40, 42, 43, 44 and 48 - Partnership deed - Dissolution of Partnership - Order of rejection of plaint - Cause of action - Sought for dismissal of suit for rejection of plaint as well as for revocation of leave granted under Clause 12 of Letters Patent - Rejected by single judge and Allowed by High Court -Challenged - Single Judge had rightly conclusion that plaint discloses cause of action and as such, could not be rejected under Order VII Rule 11 of CPC - Power conferred on the court to terminate a civil action is a drastic one, and conditions enumerated under Order VII Rule 11 of CPC are required to be strictly adhered to - Court agree with Division Bench of High Court which, upon an elaborate scrutiny of averments made in plaint, reliefs claimed therein, provisions of said Act and clauses of Partnership Deed, came to conclusion that reliefs as sought in plaint, cannot be granted - Hence appeals dismissed. (Paras 7 and 21)
Facts of the case:
Whether reliefs as claimed in plaint by plaintiffs could be granted or not - None of the partners are alive - Defendants are legal heirs of other original partners in partnership firm - Order passed by the Division Bench of the High Court of Calcutta thereby allowing appeals being APO filed by respondents-defendants, challenging order passed by Single Judge of the High Court Vide said order, Single Judge had dismissed G.A. filed by the original defendants, seeking dismissal of suit, alternatively for rejection of plaint as well as for revocation of the leave granted under Clause 12 of the Letters Patent in the instant suit.
Finding of the court:
It is rightly contended on behalf of plaintiffs that, only on the basis of the averments made in the plaint, it could be ascertained as to whether a cause of action is made out or not. It is equally true that for finding out same, entire pleadings in the plaint will have to be read and that too, at their face value. At this stage, the defence taken by defendants cannot be looked into - Court do not propose to do that exercise, inasmuch as the Division Bench of the High Court has elaborately considered - Under Order VII Rule 11 of CPC, duty is cast upon court to determine whether the plaint discloses a cause of action, by scrutinizing the averments in the plaint, read in conjunction with the documents relied upon, or whether suit is barred by any law. This Court has held that the underlying object of Order VII Rule 11 of CPC is that when a plaint does not disclose a cause of action, the court would not permit the plaintiff to unnecessarily protract the proceedings. It has been held that in such a case, it will be necessary to put an end to the sham litigation so that further judicial time is not wasted.
Result: Appeals dismissed
Certainly. Based on the provided legal document, here is a simplified explanation of the key points:
When a partner in a partnership dies, the partnership does not automatically end. The remaining partners can choose to admit the legal heirs of the deceased partner into the partnership if they agree among themselves (!) .
If the court finds that the claims made in a lawsuit cannot be granted based on the facts and law, the court should reject the lawsuit early on, rather than allowing it to go to trial unnecessarily (!) (!) .
The court's power to dismiss a case at the initial stage is strict and should only be used when the lawsuit clearly does not have a valid cause of action or if the relief sought cannot be granted under the law. The court must carefully examine the pleadings and the facts presented (!) (!) .
In cases involving partnership disputes, only the partners of the firm have the right to seek dissolution or to claim rights over the assets of the partnership. If someone is not a partner, they cannot legally ask the court to dissolve the partnership or claim ownership of its assets (!) (!) .
If the claims in a lawsuit are found to be legally untenable or based on incorrect assumptions, the court should reject the case at the outset to avoid wasting time and resources (!) (!) .
In simple terms, the court looks closely at what is being asked for in a lawsuit and whether the person filing the case has the legal right to ask for those things. If not, the court will dismiss the case early, saving everyone involved from unnecessary legal proceedings.
JUDGMENT :
B.R. GAVAI, J.
1. Leave granted.
2. These appeals challenge the judgment and order passed by the Division Bench of the High Court of Calcutta dated 14th September 2018, thereby allowing the appeals being APO Nos. 491 and 520 of 2017 filed by the respondents-defendants, challenging the order passed by the Single Judge of the High Court of Calcutta dated 22nd September 2017. Vide the said order dated 22nd September 2017, the Single Judge had dismissed G.A. Nos. 1688 and 1571 of 2017 filed by the original defendants, seeking dismissal of the suit, alternatively for rejection of the plaint as well as for revocation of the leave granted under Clause 12 of the Letters Patent in the instant suit being C.S. No. 79 of 2017.
3. A partnership firm namely ‘Soorajmull Nagarmull’ (hereinafter referred to as ‘the partnership firm’) was constituted under a Deed of Partnership dated 6th December 1943. Baijnath Jalan, Mohanlal Jalan, Babulal Jalan, Sewbhagwan Jalan, Keshabdeo Jalan, Nandkishore Jalan, Deokinandan Jalan, Chiranjilal Bajoria and Kishorilal Jalan were the partners in the partnership firm. It is not in dispute that none of the partners are alive. Plaintiff Nos. 1, 2 and 3 are the sons of Late Chiranjilal Bajoria, who died on 31st December 1981. Plaintiff Nos. 4 and 5 are the sons of Late Deokinandan Jalan, who died on 12th July 1997. Plaintiff No. 6 is the son of Late Mohanlal Jalan, who died on 1st May 1982. The defendants are the legal heirs of the other original partners in the partnership firm.
4. A civil suit being C.S. No. 79 of 2017 came to be filed by the plaintiffs before the Calcutta High Court seeking, inter-alia, the following reliefs:
(b) Decree for declaration that the plaintiffs along with the defendants are consequently entitled to represent the firm in all proceedings before the concerned authorities of the State of Bihar for the acquisition of its Bhagalpur land.
(c) Decree for perpetual injunction restraining the defendant No. 1 or any of the other defendants from in any manner representing or holding themselves out to be the authorised representative of the firm or the repository of all its authority, moneys assets and properties or from seeking to represent the firm in its dealings and transactions in respect of any of its assets and properties including the acquisition proceeding of the firm's Bhagalpur land or from receiving any monies on behalf of the firm, whether on account of compensation for its Bhagalpur land or otherwise.
(d) Decree for mandatory injunction directing the defendant No. 1 to disclose full particulars of all assets and properties of the firm, full particulars of all its dealings and transactions including any dealing or transaction concerning any asset or property of the firm and full accounts of the firm for the purpose of its dissolution.
(e) Decree for the dissolution of the firm Soorajmull Nagarmull and for the winding up of its affairs upon realising the assets and properties of the firm, collecting all moneys due to the firm, applying the same in paying the debts of the firm, if any, in paying the capital contributed by any partner and thereafter by dividing the residue amongst the heirs of the original partners in the shares to which they were entitled to the profits of the firm in terms of the Partnership Deed dated 6th December, 1943.”
5. In the said suit, the defendants filed two applications being G.A. Nos. 1688 and 1571 of 2017, inter-alia, seeking dismissal of the suit, or in the alternative, rejection of the plaint on the ground that the plaint does not disclose any cause of action, and the relief as claimed in the plaint could not be
(1) Upon the death of any partner the partnership shall not be automatically dissolved but the surviving partners may admit the legal representative of the deceased unto the partnership by mutual con....
The central legal point established in the judgment is the requirement of mutual agreement for partnership dissolution and the significance of partnership deeds in determining the intention of the pa....
A suit for specific performance cannot be maintained by partners of a dissolved firm; and claims are barred under Section 69 of the Indian Partnership Act and the Limitation Act.
The death of a partner in a partnership firm does not cause abatement of appeals against the firm under Order XXX of the Code of Civil Procedure.
Partnership continues despite a partner's death if stipulated in the partnership deed; heirs must formally reconstitute the partnership for legal continuity. High Court retains review jurisdiction un....
The court held that a partner's possession of dissolved firm property does not create ownership rights against co-owners, and claims of adverse possession are not maintainable.
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