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1994 Supreme(Cal) 128

High Court Of Calcutta
S. K. MUKHERJEE, S. K. PHAUJDAR
RAJ KUMAR DEY - Appellant
Versus
SUBHAS CHANDRA DEY - Respondent
F. M. A. T.  298  Of  1994
Decided On : 04/13/1994

Advocates Appeared:
BASUDEB GAYAN, BHASKAR BHATTACHARYA, INDRAJIT MONDAL, KANAN KUMAR GHOSH, SHYAMAL BHATTACHARJI, SITARAM SAMANTA

In a partnership dispute, if one partner is allegedly carrying on a separate trade on his own account with the partnership property or endangering the partnership concern by his mismanagement, the court may grant relief by appointment of Receiver.

Headnote:

PARTNERSHIP - INJUNCTION - ORDER 39 RULES 1 AND 2, CIVIL PROCEDURE CODE, 1908 - SUIT FOR DECLARATION THAT DEFENDANTS COULD NOT SURRENDER OR TRANSFER TENANCY IN PARTNERSHIP'S NAME AND FOR PERMANENT INJUNCTION RESTRAINING DEFENDANTS FROM INTERFERING WITH PLAINTIFF'S CARRYING ON OF BUSINESS OF FIRM - APPLICATION FOR INJUNCTION - WHETHER INJUNCTION SHOULD BE GRANTED - HELD, YES.

Fact of the Case:

Plaintiff filed a suit for a declaration that defendants could not surrender or transfer the tenancy in the partnership's name and for a permanent injunction restraining the defendants from interfering with the plaintiff's carrying on of the business of the firm. An application for injunction was made.

Finding of the Court:

The court found that the alleged dissolution of the partnership firm was not established and that the firm still existed. It also found that no satisfactory and convincing materials were available to sustain the allegation that separate competitive business was being carried on.

Issues: Whether injunction should be granted in a partnership dispute where one partner is allegedly carrying on a separate trade on his own account with the partnership property or endangering the partnership concern by his mismanagement.

Ratio Decidendi: The court held that if the allegations, even in a partnership dispute, show prima facie, that a partner, by acting inconsistently with his duties as such, may be said to have forfeited personal right of intervention in partnership affairs either by carrying on a separate trade on his own account with the partnership property or endangering the partnership concern by his mismanagement, exposing partnership firm to possible loss or indulges in fraudulent actions, or abuses his authority as a partner to exclude other partners, relief by appointment of Receiver may be imposed or granted by Court.

Final Decision: The court set aside the impugned order of the trial court and remanded the application for injunction back to the trial court for reconsideration.

S. K. MOOKHERJEE, J.

( 1 ) THIS matter is treated as on day's list upon notice to the learned advocates, appearing for the contesting parties, who are present in Court at the time of delivery of judgment.

( 2 ) THE present appeal is directed against Order No. 57, dated 7th January, 1994, passed in Title Suit No. 122 of 1991, by the learned Judge, Third Bench, City Civil Court, allowing an application for injunction, made on behalf of the plaintiff, in part. The plaintiff is the appellant before us. 2a. Since, on behalf of the necessary party-respondents, caveats had been lodged and since we felt that the appeal and the application, for effective disposal, should be heard and disposed of together, we heard out the appeal and the application dispensing with all formalities. We keep on record that the appearing parties before us signified their no objection to the said procedure. We admit the appeal and take up the same with application for leaving and disposal.

( 3 ) THE appellant and respondents 1 to 3 are allegedly partners of Respondent No. 4. Respondent No. 5 is the landlady of the premises in which the partnership business was being carried on. In view of the scope of the dispute before us, we have dispensed with notices of appeal and the application on respondents No. 4 and 5.

( 4 ) THE suit in question was brought, inter alia, praying for a declaration that defendants nos. 1 and 2 could not surrender or transfer the tenancy in the partnership's name, for a permanent injunction restraining the defendants 1 and 2 from interfering with plaintiff's carrying on of the business of the firm, on behalf of all the partners and also from carrying on similar competitive business in the name of M/s. Pioneer and Company. In the said suit an application for injunction was made.

( 5 ) THE defendants 1 and 2 filed a counter claim, inter alia, praying for declaration that the business of the firm stood closed since 1987 and that the firm stood dissolved since 1988 ; alternatively, a prayer was made for a decree dissolving the partnership under the partnership agreement dated 15. 4. 1978 and 19. 4. 1983.

( 6 ) THE learned Trial Judge, by the impugned Order, restrained the defendants from surrendering the tenancy of the partnership firm but refused the other prayers for injunction.

( 7 ) IN passing the impugned Order, the learned Trial Judge, inter alia, found in substance that alleged dissolution of the partnership firm was not established but the firm still existed ; that no satisfactory and convincing materials were available to sustain the allegation that separate competitive business was being carried on; that plaintiff could not be allowed to run the business to the exclusion of other partners.

( 8 ) IN course of arguments by the contesting parties, before us, it appeared that respondent no. 3 was supporting the plaintiff. The learned Advocates, representing the parties, spared no pains in placing the materials, which were placed before the learned Trial Judge, in support of their respective contentions. Such materials reveal the following: (a) Clause 2 of the partnership deed prohibited ipso facto determination of the firm, if there were two partners available, who were willing to carry on the partnership. Clause 14 of the said deed provided for such continuance even after retirement of a partner. (b) The alleged competitive business did exist with effect from 3. 7. 1987. (c) Allegations of forgery were made by both the contesting parties against each other. (d) The plaintiff alleged that the partnership business, which was under the control and management of defendants 1 and 2, was closed when the plaintiff demanded accounts, which would have resulted in detection of misappropriation of partnership funds by defendants 1 and 2 for their personal gains and would have established the deprivation of the plaintiff of his share of profit in the business. (e) The plaintiff alleged that he opened the shop of the disputed partnership



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