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High Court Of Delhi
NARAIN SAHAI AGGARWAL - Appellant
Versus
SANTOSH RANI - Respondent
Interim Application 8243 of 1996
Decided On : 07/21/1997
PARTNERSHIP - APPOINTMENT OF RECEIVER - ARBITRATION AND CONCILIATION ACT, 1996, SECTION 9 - COURT'S POWER TO APPOINT RECEIVER LIMITED TO PARTNERSHIP PROPERTY - PROPERTY NOT OWNED BY PARTNERSHIP FIRM CANNOT BE SUBJECT TO RECEIVERSHIP.
Fact of the Case:
Petitioner and respondent entered into a partnership deed, with the petitioner as the working partner and the respondent as the sleeping partner. The partnership firm used property owned by the respondent's husband and brother for conducting business. Disputes arose between the partners, and the petitioner filed applications under Section 9 of the Arbitration and Conciliation Act, 1996, seeking an injunction against the respondent from selling or disposing of the partnership property and movable assets, and for the appointment of a Receiver.
Finding of the Court:
The court held that the property owned by the respondent's husband and brother was not partnership property and could not be subject to receivership. The court also held that the petitioner had failed to make out a case for the appointment of a Receiver of the articles in possession of the respondent, but restrained the respondent from selling or disposing of them pending the dispute between the parties.
Issues: 1. Whether the property owned by the respondent's husband and brother was partnership property and subject to receivership. 2. Whether the petitioner had made out a case for the appointment of a Receiver of the articles in possession of the respondent.
Ratio Decidendi: 1. The court held that the property owned by the respondent's husband and brother was not partnership property and could not be subject to receivership because it was not owned by the partnership firm and was not in the tenancy of the partnership firm. 2. The court held that the petitioner had failed to make out a case for the appointment of a Receiver of the articles in possession of the respondent because the petitioner had not admitted to having possession of the articles and the respondent had denied having possession of them.
Final Decision: The court disposed of the applications filed by the petitioner, restraining the respondent from selling or disposing of the partnership property and movable assets, but declining to appoint a Receiver.
( 1 ) BY this common order I propose to dispose of I. As. 8243 and 9343/96 filed by Narain Sahai Aggarwal,petitioner,and I. A. 11297/96 filed by Smt. Santosh Rani, respondent.
( 2 ) I. A. 8243/96 has been filed, inter alia, on the allegations that the petitioner and the respondent entered into a partnership deed dated October 5,1995. Petitioner is the working partner while respondent is the sleeping partner of the partnership firm sahraj Overseas . Respondent arranged for meagre funds besides providing accommodation at 358, Kohat Enclave. Peetampura Road, New Delhi, for running the partnership business. Bulk of the funds for the business was arranged by the petitioner. It is alleged that in June, 1966 respondent forcibly ousted the petitioner from the aforesaid property and also took possession of the movable properties of the partnership firm lying there. On September 6,1996, petitioner has come to know that the respondent has contacted some property dealers of the area to dispose of property No. 358, Kohat Enclave she is further going to dispose of movable assets of the partnership firm, as detailed in Annexure-1 filed alongwith the petition. It was prayed that by issue of ad interim injunction respondent or her agents be restrained from selling, transferring, alienating, mortgaging the aforesaid property and also the movable assets worth Rs. 5,40,350. 00 as detailed in Annexure- 2 till the pendency of the OMP.
( 3 ) IN continuation of the said application I. A. No. 9343/96 was filed on October 5, 1996. It is further alleged that the petitioner has learnt that the respondent has started another firm in said property No. 358, Kohat Enclave, in the name of jain International and most of the stock of raw material has been consumed by the new firm. Most of the machines of the partnership firm have been shifted to new premises No. 239, Opposite Sethi Electroplaters, Shivaji Marg, village Peetampura and the respondent is using them for her own benefit. It was prayed that a Receiver may be appointed to take custody of the movable assets of the partnership firm lying at 358, Kohat Enclave and 239, Opposite Sethi Electroplaters, Shivaji Marg and to take possession of the aforesaid partnership property.
( 4 ) RESPONDENT has contested both the applicants by filing separate replies taking by and large identical pleas therein. It is not denied that the parties entered into a partnership deed dated October 5, 1995 and the entire business of the partnership firm was being looked after by the petitioner being a working partner, as alleged. It is stated that the sister of the respondent is married to the petitioner. Petitioner taking advantage of the close relationship allured the respondent to invest money in export business. She has now realised that she had been cheated by the petitioner. She gave gold weighing 427. 500 gms. of the value of Rs. 2 lakh to be used for raising the funds besides providing money in cash to the petitioner as he was not having funds even to run his own business. Property No. 358, Kohat Enclave, is not the property of the partnership firm and was permitted to be used only for running business by the husband of the respondent and his brother. Petitioner after defrauding the respondent, who was only a sleeping partner, took away the finished and semi-finished goods to his office at 3992, Ajmeri Gate, leaving behind some machinery and scrap and refused to render the account when called upon to do so by the respondent on June 15,1996. Details of the machinery and scrap left behind by the petitioner are disclosed in the reply to the notice sent by the respondent to the petitioner. It is emphatically denied that the respondent has started business in the name of jain International . It is stated that visiting card my have been got printed by the petitioner himself to mislead the Court. It is further denied that raw material has been shifted to premises No. 239, Opposite Sethi Electroplaters, Shivaji
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