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2015 Supreme(Bom) 468
High Court of Bombay at Goa
NITIN M. JAMDAR, J.
Kunda Madhukar Shetye & Others – Appellant
Versus
Shaila Subrao Shetye & Others – Respondent
Appeals From Order No. 54 of 2012 & 8 of 2015
Decided On : 12-03-2015
For the Appellants:S.D. Lotlikar, Senior Advocate with Shivan Dessai, Advocate.
For the Respondents:R1 to R4, Rafiq Dada, with S.S. Kantak, Senior Advocates with Preetam Talaulikar, A. Kamat, R5, V.A. Lawande, R6, A.N.S. Nadkarni, Senior Advocate with D. Lawande, Nikhil Pai, S.S. Rebello, R7, Y.V. Nadkarni, N. Noronha, Divya Shirgam, R8, D.J. Pangam, P. Sawant, Advocates.
Headnote:Civil Procedure Code, 1908 - Order XXXIX, Rule 1 Appeal from order. - In the present case, appeal was filed against order of status quo but dismissed on ground that the firm can benefit only if the business of mining takes place and if mining is carried out, as per regulations, substantial revenue is paid as royalty to the Government and mineral wealth would be available for consumption. An equitable arrangement has to be found whereby interest of both the majority, the firm and the plaintiff can be protected. Court is not inclined to take into consideration what will be equitable arrangement for Damodar Mangalji Group as they can pursue their own remedies if available in law. The firm can benefit only if the business takes place. The business is of mining. If the mining is carried out, as per regulations, substantial revenue is paid as royalty to the Government and mineral wealth will be available for consumption. Thus lawful, regulated mining, would be in the interest of all.
It will generate revenue both for the Government, and for the partners. During rains, it will be difficult to keep merely maintaining the mine and it will become more of a liability than source of revenue. Therefore an interim arrangement needs to be arrived at, by which mine is allowed to be operated by a method beneficial to both majority and plaintiff.
Civil Procedure Code, 1908 - Order XXXIX, Rule 4 Order of status quo Validity of. - Where provisions of Order XXXIX, Rule 4 gives power to the Court to modify the order of relief on basis of the subsequent development and hardship and where main subsequent even of framing of Rules of 2013 and renewal took place, trial Court was not justified in dismissing application for modification of status quo order. Even otherwise the second issue of invocation of Order XXXIX, Rule 4 remains. This provision gives power to the Court to modify the order of interim relief on the basis of subsequent development and hardship. It will have to be then seen whether ingredients of Order XXXIX, Rule 4 have been met. The main subsequent event is framing of Rules of 2013 and the renewal. The trial Judge was in clear error in not considering this as a change in circumstance.
Goa (Prevention of Illegal Mining Storage and Transportation of Minerals) Rules, 2013 - Rule 7 Bar as to "sharing of minerals". When the Rule 7 bars of sharing of minerals, the phrase "sharing of minerals" will have to be considered in the context of underlying policy of Rules and hence, phrase "sharing of minerals" purports sharing of the privilege to mine. When the Rule 7 bars of sharing of minerals, the phrase "sharing of mineral" will have to be understood in the context of underlying policy of the Rules. The object of the Rules is clear. They enable the Government to regulate the mining activities and for that purpose there cannot be anybody else between the Government and the lessee, except the ones who are registered. Rules envisage that mining shall be by the lessee and the authorized contractors so that there is transparency and accountability. Thus, the phrase ’sharing of minerals’ means sharing of the privilege to mine. One does not have to travel beyond pleadings in the plaint and written statement to come to conclusion that the agreements in question were precisely for its purpose.
Partnership Act, 1932 - Section 33 Expulsion of a partner Validity. If prima facie power exists and is exercised, plaintiff merely can seek a declaration that expulsion was unjustified which will be decided at the trial. In the present case the majority is of the opinion that the plaintiff’s stand will lead to destruction of the firm and consequently the mine. If the majority is correct, then it cannot be that plaintiff takes steps to virtually destroy the firm and then say that others have no power to expel her. If such an obligation is cast, then prima facie, the power to expel is implied in the agreement. If such an implied power is not read then the clauses casting duties and responsibilities, will be meaningless. If therefore prima facie the power exists and is exercised, the only way for the plaintiff is to seek a declaration that the expulsion is bad in law, which will be decided at the trial. But it cannot be contended as this stage that expulsion is non est.
Partnership Act, 1932 - Sections 33 and 63 Expulsion of a partner Effect of non-registration. Since after expulsion of the plaintiff, remaining partners had to follow the methodology prescribed under Section 63 of the Act and reconstitution had taken place for 8 times in the firm, at this stage effect of non-registration of the firm did not require to be considered. Even when the plaintiff entered the firm it was by the same methodology wherein original firm continued and new partner was inducted and there was a reconstitution and procedure under Section 63 of Partnership Act was followed. Prima facie there is merit in this submission. After expulsion of the plaintiff, the remaining partners had to follow the methodology under Section 63 of the partnership firm and as reconstitution has taken place for 8 times in the firm. The present suit itself will be hit by bar of Section 69 of Partnership Act. Prima facie have merit and therefore the argument regarding effect of non-registration cannot be considered.
1. Both these Appeals From Order arise from the same suit and are between the same parties and they have been argued together, and are disposed of by this common judgment.
2. The Appeal From Order No.54/2012 challenges the order passed by the Civil Judge, Senior Division, Bicholim in Special Civil Suit No.2/2012 dated 25 June 2012 in the application for interim relief filed by the appellant-original plaintiff. The Appeal From Order No.8/2015 is filed by the original defendants No.1 to 4 in the same suit challenging the order NH 6 AO Nos.54/2012 & 8/2015 dated 2 February 2015 dismissing the application filed by them under Order 39 Rule 4 of the Civil Procedure Code, 1908 for modification of the order dated 25 June 2012.
3. The parties to these appeals, Kunda Madhukar Shetye that is the original plaintiff, defendant No.1 Shaila Subrao Shetye, defendant No.2 Shriram Gajanan Shetye, defendant No.3 Pandurang Gajanan Shetye and defendant No.4 Vijay Gajanan Shetye, are related. They have been carrying out business together as partners in partnership Firm under the name and style of “M/s. R.S. Shetye and Brothers”. Defendant No.5 Ramakant is the son of defendant No.1 Shaila Shetye. Defendants No.6, 7 & 8 part of Damodar Mangalji Group, are third parties with whom the Firm has certain commercial agreements.
4. The suit relates to affairs of the partnership Firm M/s. R.S. Shetye & Brothers. Firm has a mining lease of mine situated at Deuvlem Pissurlem Sattari Taluka, Goa. Lease was earlier a mining concession bearing T.C. No.70/1951. The concession was granted by erstwhile Portugese Government. This mining lease is the only substantial asset of the Firm. Lease initially came to be granted to late Ramakant Subrao Shetye. After his demise he was succeeded by his mother Vatsalabai. Thereafter a partnership Firm M/s. R.S. Shetye and Brothers was constituted on 1 April 1970. It comprised of four brothers i.e. Ramakant, Madhukar, Gajanan and Subrao. On demise of Ramakant, the Firm came to be reconstituted in the year 1972. Thereafter reconstitution took place in the year 1975, 1988, 1990, 1995, 1998, 1999. In the year 2003, after the death of Subrao, Shaila Subrao Shetye – his wife i.e. defendant No.1 was admitted as a party. Another reconstitution took place in the year 2003 after Madhukar's death when his wife i.e. the plaintiff came to be admitted as a partner of the Firm. Her share in profit was defined at 34%.
5. The business of the Firm continued with Shaila, Shriram, Pandurang, Vijay and Kunda as partners of the Firm. The Firm had entered into various agreements with Defendant Nos.6, 7 and 8 M/ s. Damodar Mangalji Group. The first agreement was some time in the year 1952. An agreement was also entered into with M/s. Damodar Mangalji Mining Company – sometime in the year 1966, appointing them as Raising Contractors to raise and extract ore from the Mines. There were also certain other agreements in respect of M/s. Rajani Mineral Exports. An agreement, which was entered into between the Firm and M/s. Damodar Mangalji Mining Company on 19 July 1999, was to extend till 31 December 2020.
6. Some time around 7 October 2011, certain newspaper reports were published that illegalities were committed by Damodar Mangalji & Company Limited, showing production of
lacsof tones ore from the mines adjoining the mine of the Firm, when no such mining had taken place. It was also reported that the Indian Bureau of Mines had issued certain directions to the said M/s. Damodar Mangalji Mining Company and had suspended their mining licence in respect of the adjoining mines.
7. It was communicated by the Firm through defendant No.5 on 24 November 2011 to M/s. Rajani Mineral Exports that their appointment as a contractor was terminated. The plaintiff however disagreed with this decision and issued a public notice on 25 November 2011 stating that the termination of Rajani Minerals Exports was not by the Firm, and it was not effective. It was notified by th
