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2018 Supreme(AP) 414

IN THE HIGH COURT OF JUDICATURE AT HYDERABAD FOR THE STATE OF TELANGANA AND THE STATE OF ANDHRA PRADESH
M. Satyanarayana Murthy, J.
Balaji Developers, Karmanghat, R.R. District and Ors. – Appellants
Vs.
G. Ravinder Rao and Ors. – Respondents
CRP No. 4131 of 2011
Decided On : 07-03-2018

Advocates Appeared:
For the Appellant : J. Sreenivasa Rao
For the Respondent: N. Raghavan

Headnote:

Civil Law – Civil Suit – Code of Civil Procedure, 1908 – Rule 11 of Order VII – Constitution of India – Article 227 – Suit seeking a decree for mandatory injunction directing defendants 2 to 19 to admit him as one of partners, in place of first defendant, in firm with proportionate rights over assets of the firm and consequential decree of injunction restraining defendants from alienating schedule property pending disposal of the suit – Dismissal of Application – Held, Exercising power under Rule 11 of Order VII of CPC is an extreme, it can be exercised only in exceptional circumstances and Court must exercise its power with care and caution since the Court put an end to the plaint by rejecting plaint at the threshold by exercising power under Rule 11 of Order VII of CPC – In the present case, the plaint disclosing cause of action – Liability of partners depends upon the terms and conditions of the partnership deed and in the absence of any contract to contrary, consent of the partners is required to admit any other person as partner to its firm. If the contract is otherwise, Section 31 of Act has no application – Therefore, in view of these disputed questions, it is difficult to reject the plaint at this stage – However, it is left open to petitioners to raise this contention during trial – No ground to reject plaint at this stage and order of the trial Court does not suffer from any legal infirmity warranting interference of this Court by exercising power under Article 227 of Constitution and consequently the point is held against the petitioners and in favour of first respondent – Civil revision petition is dismissed.

ORDER :

M. Satyanarayana Murthy, J.

1. This civil revision petition, under Article 227 of the Constitution of India, is filed challenging the order dated 2.6.2011 in IA No. 3083 of 2008 in OS No. 511 of 2008 passed by the I Additional District Judge, Rangareddy District, at L.B. Nagar, Hyderabad, dismissing the application filed under Rule 11 of Order VII of the Code of Civil Procedure, 1908 (for short 'CPC'). The petitioners are the defendants 2 to 12, 15, 17 to 19 in the suit. They filed a petition under Rule 11 of Order VII of CPC contending that the first respondent filed the above suit seeking a decree for mandatory injunction directing the defendants 2 to 19 to admit him as one of the partners, in place of the first defendant, in the firm M/s. Balaji Developers with proportionate rights over the assets of the firm and consequential decree of injunction restraining the defendants from alienating the schedule property pending disposal of the suit.

2. The specific contention of the petitioners that they were unnecessarily impleaded in the above suit without any cause of action against them and thus the suit is liable for misjoinder of necessary parties and other ground raised in the petition is that when the plaint did not disclose cause of action, the plaint is to be rejected. It is the contention of the petitioners that the firm borrowed an amount of Rs. 2.50 crores from Syndicate Bank and invested the same in the firm as capital. As such the allegations of the plaintiff, who is the first respondent herein, that they invested the amount taken from the plaintiff, in the firm for running the business, is false and incorrect; the plaintiff never made any communication with regard to his alleged money being invested by the first defendant in the firm. The partners of the first defendant never gave consent for induction of the plaintiff into the D'2 firm and that there was no cause of action against the petitioners and that the claim is barred by law and sought to reject the plaint at the threshold.

3. The plaintiff/first respondent filed counter in the I.A. denying the material allegations inter alia contending that the petition is filed misrepresenting the facts that they are unnecessarily impleaded in the suit without any cause of action. The alleged collusion between himself and the first defendant in securing money and investing in the second defendant firm is neither true nor correct and that there is cause of action against these petitioners in the suit to claim mandatory injunction. The first defendant obtained a sum of Rs. 2.50 crores from the plaintiff/first respondent and invested in the second defendant firm - M/s. Balaji Developers and this fact is to be proved, disputed question of fact is to be proved only by adducing evidence and therefore, the plaint cannot be rejected at the threshold since the disputed question of facts cannot be decided at this stage and that the claim is not barred by any other law.

4. Upon hearing argument of both the Counsel, the trial Court held that it cannot be decided at the threshold exercising power under Rule 11(a) and (b) of Order VII of CPC and dismissed the I.A. Aggrieved thereby, the present revision is filed raising several contentions mainly on the ground that to admit a new partner, consent of all the existing partners is necessary in view of Section 31 of the Indian Partnership Act, 1932 (for short 'the Act'). But when the petitioners refused to give consent, mandatory injunction cannot be granted to induct the first respondent/plaintiff in the firm; the trial Court also failed to exercise jurisdiction under Rule 11 of Order VII of CPC and committed an error to reject the plaint. The alleged investment of an amount of Rs. 2.50 crores received by the first defendant is not with the consent of any partners and such acts are not binding and therefore, the plaintiff cannot claim any relief against the petitioners/defendants, but the trial Court committed grave error in dismissing t






























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