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2022 Supreme(Cal) 830

IN THE HIGH COURT OF CALCUTTA
Soumen Sen, Ajoy Kumar Mukherjee, JJ.
Bahubali Estates Ltd. - Appellant
Versus
Sewnarayan Khubchand And Others - Respondent
FA No. 35 of 2021, I.A. No. CAN 3 of 2021
Decided On : 13-04-2022

Advocates appeared:
Joydeep Kar, Advocate, Sakya Sen, Advocate, Piyali Sengupta, Advocate, Avirup Chatterjee, Advocate, Soumo Roy, Advocate, Bhaskar Ghosh, Advocate, Kamal Krishna Pathak, Advocate, Rajdeep Bhattacharjee, Advocate, Souvik Maji, Advocate

The main legal point established in the judgment is that the property of the firm includes all property and rights brought into the stock of the firm, and the partnership firm became the owner of the property by operation of law.

Headnote:

Partnership Property - Interpretation of Acts - Partnership Act, 1932, Companies Act, 1956 - Section 14 of the Partnership Act, 1932, Section 575 of the Companies Act, 1956

Fact of the Case:

The suit was for declaration, eviction, and recovery of possession. The trial Judge dismissed the suit on the grounds of failure to establish title and defective notice. The limited issue on appeal was the propriety of the findings of the trial judge regarding the plaintiff's title in the suit property.

Finding of the Court:

The court analyzed the evidence and relevant legal provisions. It found that the partnership firm became the owner of the suit property by operation of law. The court allowed the appeal in part, directing the defendant to pay arrear rents and municipal taxes.

Issues: The issues revolved around the ownership of the suit property, the validity of the partnership deed, and the admissibility of additional evidence at the appellate stage.

Ratio Decidendi: The court interpreted Section 14 of the Partnership Act, 1932, and Section 575 of the Companies Act, 1956 to establish that the property of the firm includes all property and rights brought into the stock of the firm. The court held that the partnership firm became the owner of the property by operation of law.

Final Decision: The decree of the trial court was partly set aside, and the appeal was allowed in part. The defendant was directed to pay arrear rents and municipal taxes. The Joint Receivers were instructed to disburse the remaining amounts collected to the plaintiff and file final accounts.

JUDGMENT

Soumen Sen, J. - The appeal is arising out of a decree passed by the Judge 5th Bench, City Civil Court, Calcutta on 5th July, 2019 in Title Suit no. 1076 of 1998. This suit was for declaration, eviction and recovery of possession.

The trial Judge dismissed the suit on the grounds that the plaintiff has failed to establish that the defendants are guilty of breach of express covenants of the registered deed of lease dated 17th June, 1982, as the plaintiff itself has failed to establish its title clearly by cogent evidence. The suit was also dismissed due to defective notice. The appellant is aggrieved by the findings of the learned Trial court in so far as it observed that the plaintiff has failed to establish its title in the suit property. The limited issue on which the appeal is being heard is with regard to the propriety of the findings of the learned trial judge in observing that the plaintiff has no title in the suit property.

The other issues with regard to the defective notice and forfeiture of lease are not decided in this appeal as the said issues are not raised and Mr. Joydeep Kar, learned Senior Counsel representing for the appellant has admitted that there has been a defect in the notice. The suit property originally belonged to three persons, namely, Ghamandilal Saraogi, Kamala Devi and Kamal Kumar Gangwal. They were the joint owners of premises no. 9C Lord Sinha Road, Kolkata. They granted a lease in respect of a portion of the suit premises in favour of the defendant no.1 for a term of 99 years with an option for renewal of a further 99 years at the same rent and in accordance with the terms and conditions contained in the said registered indenture of lease dated 17th June, 1992. The said joint owners entered into a partnership on 16th October, 1987 with Smt. Nina Devi Gangwal, Sanjay Kumar Jain, alka Jain and Illa Jain. The recital of the partnership would show that the parties decided to carry on business in partnership and the said joint owners had agreed to bring the joint property with all their rights therein, as their respective contributions to the capital of the partnership firm and the said property would henceforth be treated as the joint property of the partnership firm. The parties have decided to carry on a partnership business under the name and style of Bahubali Estates with effect from 22nd October, 1987. The said partnership was duly registered with the registrar of firms.

The plaintiff disclosed the certificate of registration which shows that the registrar of firms West Bengal acknowledges receipt of the document on 13th November, 1987. The firm was registered and allotted registration No.L-37922 dated 13th November, 1987. Thereafter the partners decided to form a joint stock company to carry on continuing the said business of the firm with seven shareholders. The shareholders of the joint stock company were the partners of the said partnership firm. One of the objects to be pursued by the company on its incorporation would be to continue its business in the style of Bahubali Estate Limited. The company was incorporated on 13th april 1988. The plaintiff thus, claims to be the owner of the suit property. The plaintiff claimed that the defendant has defaulted in payment of rent on and from November, 1992 and payment municipal taxes from November, 1992 to april, 1998. The plaintiff alleged that by a notice dated 3rd april, 1998 the plaintiff duly terminated the registered lease dated 17th June, 1982 on the expiry of the month of May, 1998, for the aforesaid breach of express covenants of the said lease and demanded possession of the demised premises from the defendant no.1. The defendant contested the suit by filing a written statement. In the written statement the defendant alleged that the right, title and interest of the lessor of the defendant no.1 in the suit premises could not be transferred in favour of the plaintiff without execution of a formal registered deed of transfer and in the

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