2024 Supreme(Cal) 183
IN THE HIGH COURT AT CALCUTTA
KRISHNA RAO, J.
Ayussh Rathhi – Plaintiff
Versus
Ashok Kumar Rathi and Others – Defendants
IA No. GA 03 of 2022, CS No. 28 of 2019
Decided On : 04-04-2024
Advocate Appeared:
For the Plaintiffs : Mainak Bose, Manju Agarwal, Rishi Agarwal, Anju Manot.
For the Defendants : Reetobrata Mitra, Ayan Dutta, Rudrajit Sarkar, Aruna Ghosh, Abhishek Sikder.
IMPORTANT POINT
The main legal point established is that the court has jurisdiction to entertain claims related to family assets and properties, and the burden of proof lies on the party asserting self-acquired property in the absence of evidence of division of ancestral properties.
Headnote:
Companies Act - Family Assets - Sections 58, 59, 430 - The court discussed the application of the Companies Act, 2013, specifically Sections 58, 59, and 430, in the context of family assets and the jurisdiction of the court. The court also considered relevant case law including Bacha F. Guzdar vs. Commissioner of Income Tax, D.S. Lakshmaiah and Another vs. L. Balasubramanyam and Another, and Maria Margarida Sequeira Fernandes and Others vs. Erasmo Jack De Sequeira.
Fact of the Case:
Defendant no. 6 filed an application for deletion of its name from the case, arguing that it is an independent juristic entity not bound by any partition and is covered by the Companies Act, 2013. The plaintiff sought declaration of family assets and properties, including those held by defendant no. 6, as joint family properties.
Finding of the Court:
The court found that the plaintiff had pleaded sufficient cause of action against defendant no. 6 and that the application for deletion of name from the suit was dismissed. The court also noted that the defendant no. 6 had not provided evidence to establish its assets as self-acquired property.
Issues: The main issues revolved around the jurisdiction of the court, the status of defendant no. 6 as a family asset, and the cause of action against defendant no. 6.
Ratio Decidendi: The court held that the plaintiff had pleaded sufficient cause of action against defendant no. 6 and that the defendant no. 6 had not provided evidence to establish its assets as self-acquired property. The court also noted that the defendant no. 6 had not sought rejection of plaint or dismissal of suit, and therefore, it was not proper to decide the issue of jurisdiction at that stage.
Final Decision: The court dismissed the application for deletion of name of defendant no. 6 from the suit.
JUDGMENT :
KRISHNA RAO, J.
1. Defendant no. 6 has filed the present application being G.A. No. 3 of 2022 in C.S. No. 28 of 2019 praying for deletion of its name from the case being C.S. No. 28 of 2019. Defendant no. 6 says that the plaint does not disclose any cause of action against the defendant no. 6 and the defendant no. 6 being the Company, an independent and separate juristic entity, is not bound by any partition and is squarely covered by the Companies Act, 2013.
2. Mr. Reetobrata Mitra representing the defendant no. 6 submitted that the defendant no. 6 is an independent juristic entity in which the plaintiff never held any shares, nor is there any pleading in the plaint that the plaintiff held any shares in the defendant no. 6 at any point of time. He submits that there is nothing on record in so far as the defendant no. 6 is concern being the part of the family company, assets, properties etc.
3. Mr. Mitra submitted that the defendant no. 6 cannot under any circumstance be treated to be assets of the family or the shareholders of such company. He says that if it is construed that the shares of the defendant no. 6 is held closely by all family members, belonging to Rathhi family, the assets and properties of the defendant no. 6 continues to be vested in the company itself i.e. the defendant no. 6 and not with the shareholders and shareholders cannot by mutual consent, understanding, representation seek to alter, amend, modify or usurp the assets and properties of the defendant no. 6.
4. Mr. Mitra submitted that as per the claim made by the plaintiff, the same is entertainable by the National Company Law Tribunal under Sections 58 and 59 of the Companies Act, 2013 and cannot be presumed to be a family company or the assets held by it to be family assets.
5. Mr. Mitra submitted that as per Section 430 of the Companies Act, 2013, this Court has no jurisdiction to entertain the claim made by the plaintiff. In support of his argument, the Mr. Mitra relied upon the following judgments:
(i) Bacha F. Guzdar vs. Commissioner of Income Tax, Bombay, (1954) 2 SCC 563
(ii) D.S. Lakshmaiah and Another vs. L. Balasubramanyam and Another, (2003) 10 SCC 310
(iii) Maria Margarida Sequeira Fernandes and Others vs. Erasmo Jack De Sequeira (Dead) through LRs. (2012) 5 SCC 370
6. Mr. Mainak Bose, Learned Advocate representing the plaintiff submitted that the defendant no. 6 had applied for extension of time to file written statement which expired on 14th August, 2019 but despite of substantial delay has no written statement was filed and to come out of the rigor of the same, the defendant no. 6 has filed the present application. He submits that in paragraph 5 of the affidavit in reply of the instant application, the defendant no. 6 has stated that the petitioner had given a go by thereby meaning that the defendant no. 6 has accepted the case of the plaintiff and has no defence to the claim of the plaintiff.
7. Mr. Bose submitted that the defendant no. 6 has categorically admitted that it was incorporated by Ashok Kumar Rathi, the son of Mulchand Rathi and grandson of Ganga Bishan Rathi and Narayan Das Rathi being the son of Ganga Bishan Rathi as would appear from the genealogical table. He submits that the plaintiff has categorically stated that as to how Mulchand Rathi HUF evolved which acquired control over the several joint family properties and businesses.
8. Mr. Bose submitted that plaintiff has shown that the joint Hindu Undivided Family which consists of Ganga Bishan Rathi, great grandfather of the plaintiff and his six sons. He submits that the original business of the Rathi Family started from 201B, Mahatma Gandhi Road, Kolkata-700007. The income generated from the said business constituted the nucleus of the joint family and from the said nucleus further income was generated and several businesses were established and properties were acquired either in the name of the individual members or in the name of companies which were formed out of the