IMPORTANT POINT
Separate property of an individual partner, can be converted into partnership property and in order to do so, no formal document or agreement would be necessary.

JUDGMENT :

SUDHANSHU DHULIA, J.

1. Leave granted.

2. The appellant before this court has challenged the order dated 09.03.2022 passed by the High Court of Judicature at Allahabad, in First Appeal No. 60/2021 by which the High Court has disposed of the First Appeal preferred by the appellant with certain clarifications.

3.Briefly, the facts necessary for our consideration are that father of the appellant, late Bhairo Prasad Jaiswal had vide registered sale deed dated 01.10.1965 purchased a plot of land admeasuring 4 bigha 10 biswa 5 biswansi situated at Mohalla Rikabganj, Faizabad. Then, in the year 1971, he entered into an oral partnership with his brother, namely Hanuman Prasad Jaiswal, which was later reduced into writing vide Partnership Deed dated 11.10.1972 and thus the partnership firm, M/s Hotel Alka Raje i.e. respondent No. 1 herein was constituted. The two brothers jointly constructed a building on the land and started running a hotel business under the name and style of ‘Hotel Alka Raje’.

4. In 1982, two new partners, which are respondent Nos. 2 and 3 herein, were inducted in the firm vide Partnership Deed dated 07.06.1982. In 1983, late Bhairo Prasad Jaiswal wished to relinquish his rights from the land on which the hotel was constructed and thus, he executed a relinquishment deed dated 09.03.1983 duly registered, pursuant to which the property was released in favour of M/s Hotel Alka Raje (respondent No. 1 herein). This Relinquishment Deed further stipulated that his legal heirs or successors will have no right, title or interest in the property.

5. Although he had relinquished his right and title from the property on which the hotel was constructed, late Bhairo Prasad Jaiswal still continued to run the hotel business along with the other three partners but due to old age, he was unable to devote much of his time to the business and thus, a Partnership Deed dated 01.12.2000 was entered into between the 4 partners, wherein the profits or losses of the partnership were to be divided as such that late Bhairo Prasad Jaiswal was to have a share of 10 paise in a rupee or 10% of the net profits or losses while the other three partners were to have 30% each.

6. On 30.05.2005, late Bhairo Prasad Jaiswal passed away and thereafter, a new Partnership Deed dated 02.06.2005 was executed between the three remaining partners, which included Shri Hanuman Prasad Jaiswal (brother of late Bhairo Prasad Jaiswal) and respondent Nos. 2 and 3 herein. The partnership firm continued with the above­mentioned three partners till the year 2017, when Shri Hanuman Prasad Jaiswal wished to retire due to old age and thus, a supplementary partnership agreement dated 01.04.2017 was executed, as per which, Shri Hanuman Prasad Jaiswal was to retire from the partnership w.e.f. 01.04.2017 and along with respondent Nos. 2 and 3, a new partner i.e. respondent No. 4 herein was inducted into respondent No. 1­firm.

7. Then a civil suit for declaration of title and decree of permanent injunction was filed by respondent Nos. 1­4 herein, on 22.11.2018 before the Civil Judge, Senior Division, Faizabad (hereinafter, ‘Trial Court’). It was averred by the respondent­ plaintiffs that in October 2018, the appellants, in order to stake a claim over the property on which the building of Hotel Alka Raje is situated, tried to take possession of the property, based on the claim that it was acquired by their late father, Bhairo Prasad Jaiswal. In their written statement, the defense taken by the present appellant was that the land was purchased by their father, late Bhairo Prasad Jaiswal and thereafter a building was constructed on it by him. Nowhere has it been stated that the land was purchased and building was constructed out of their ancestral fund/property. Their entire grievance seems to be that they should also have been made a partner in the firm which was denied.

8. The suit filed by respondents-plaintiffs was decreed by the Trial Court vide judgment and decree dated 22.1