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1996 Supreme(Del) 826
High Court Of Delhi
MOHAR SINGH - Appellant
Versus
DEEN DAYAL GUPTA - Respondent
Decided On : 10/11/1996
Headnote:Civil Procedure Code 1908 - Order 40 and 39 CPC — Partnership disputes — Appointment of receiver or issuance of injunction — Care and caution to be exercised.
Held:
"The plaintiffs had sought for an injunction restraining the defendants from dealing with assets of the partnership firm and also for appointment of receiver to take charge of the assets and the properties of the firm. An injunction has the effect of excluding from the management of the partnership affairs the person against whom it is granted. Appointment of a receiver has the effect of excluding all the partners from the management of the partnership affairs and the court assuming the same through the person appointed as receiver. Granting such an injunction or appointing a receiver are both serious matters. Though in appropriate cases, the Court is not debarred from issuing an injunction or appointing a receiver. However, care and caution is required to be exercised in as much as a running business is involved." (para 39)
Contract Act, 1872 - Section 23 — Sub-letting — Is not opposed to public policy.
Delhi Rent Control Act, 1958 - Sections 14(l)(b), 16(3), 48(2), Transfer of Property Act — Section 108(f) and Contract Act, 1872 — Section 23 — Sub-letting by tenant though prohibited by Rent Control Law is not opposed to public-policy — Contract of subletting though not binding on landlord, is enforceable and binding between tenant and sub-tenant.
"Under the general law sub letting is lawful in the Absence of contract or usage to the contrary, as provided by the opening words of Section 108 of the Transfer of Property Act." (pr.13)
"Sub-letting is not an act forbidden or prohibited by law. The tenant may sub let the premises depending on the terms of the contract between him and the landlord or the consent of the landlord- to the tenant to sub let the premises. It is only the absence in writing of the consent of the landlord which makes the subletting by a tenant a ground for ejectment and also an offence contravention of Section 16(3) is not a punishable offence. Landlord is not prohibited from permitting or consenting his ten- ant his tenant to such-let. The prohibition is not in law; it emanates from the act or refusal of a private individual - a landlord not agreeing to or refusing to consent in writing to the tenant before he sub-lets the premises." (para 16) "The tenants being weaker Section of the society, the protection given to them under the rent control law is not capable of being waived as the protection is based on public policy. However, the protection given to the landlords is not based on public policy. It is for providing benefit to the landlord which the landlord may waive in his own volition." (pr.20)
Evidence Act, 1872 - Sections 91 and 92 — Principles underlying — ;Court not debarred from finding out real nature of transaction between the parties befeft of the document — (Parties entering into partnership in writing — Plea and evidence to show that partnership was hidden sub-lease of premises, not barred.
"Sections 91 and 92 of the Evidence Act are supplementary to each other. Section 91 propounds a cardinal rule of evidence that a document in writing is the best evidence of its contents and such contents cannot be proved or disproved by oral evidence being adduced for the purpose of varying or contradicting the contents of a deed in writing unless covered by statutory exceptions. The object of Section 92 is to discourage perjury by precluding a party from adducing oral evidence to temper with the terms of a document. However, none of the provisions fetters the power of the Court to determine the true nature and meaning of the transaction between the par-tics by admitting evidence to show that the written agreement was never intended to operate or to show existence of a real transaction bereft of the whole or part of the correctness of transaction as recited. "(pr.29)
"The plea of the defendant setting up the real relationship between the parties and submitting that in reality not a partnership but a tenant and sub- tenant relationship existed between the parties. Such a plea is not barred by Sections 91 and 92 of the Evidence Act. "(para 37)
Section 109 — Applicability — Provision not attracted unless parties shown to have been acting as such.
"And it has been show that they have been acting as such" is the governing expression which would shift the burden of proof. To take advantage of Section 109 of the Evidence Act firstly, the plaintiffs shall have to show by proving that the parties have been acting as partners when alone the burden of proving that that relationship did not exist or had ceased to exist shall shift on the defendants. In the case at hand it is difficult to record a prima facie finding of the parties having been acting as partners." (para 38)
( 1 ). Plaintiffs have come up in appeal feeling aggrieved by an order dated 22. 3. 96 passed by. a learned Single Judge of this Court whereby the plaintiff s application (IA 3862/95) under Order 39 Rules I and2 Civil Procedure Code has been directed to be dismissed and the defendant/respondent s application under Order 39 Rule 4 Civil Procedure Code seeking vacating of the orders dated 5. 5. 95 and 22. 5. 95 has been allowed.
( 2 ). Vide IA No. 3862/95, the plaintiffs had sought for the following reliefs :-
"a) Restrain the defendants from in any manner using the properties, goodwill and name of the partnership firm Shri Giriraj Trading Company and carrying on similar business in the firm s name Shri Giriraj Trading Company. b) Restrain the defendants from in any manner, selling, transferring, alienating or otherwise disposing of the assets of the partnership firm Shri Giriraj Trading Company. c) Appoint a receiver with respect to the assets and properties of the firms with the direction to take charge of the accounts of the firms. d) Ex parte orders in terms of prayer a) and b) be also granted. "2. 1 On 5. 5. 95, the court made the following order :-
"defendants restrained in terms of prayer (a) and (b) of the I. A. till the next date. "2. 2 On 26. 5. 95, the order dated 5. 5. 95 was modified permitting sale of some perishable goods and depositing the amount of sale proceeds in the Court.
( 3 ). The two plaintiffs have filed a suit for declaration of shares of the plaintiffs in the profit and loss and net assets of the dissolved partnership firm Shri Giriraj Trading Company w. e. f. 31. 10. 94. According to the plaintiffs they have 15% and 10% shares respectively. They have also sought for a preliminary decree for rendition of accounts, appointment of a commissioner to go into the accounts of the firm and incidental reliefs.
( 4 ). According to the plaintiffs, they had entered into a partnership with the defendants as evidenced by the deed of partnership dated 17. 1. 82 to carry on commission agency business in kiryana goods. The share of profits was in the ratio of 15% and 10% for the two plaintiffs and 40%, 10% and 25% for the three defendants. Earlier similar partnership was being carried on w. e. f. 17. 6. 78 between Prabhu Dayal, the late father of the plaintiffs, and the defendants. Prabhu Dayal died on 16. 1. 82. On 17. 1. 82 a deed of dissolution was entered into between the plaintiff No. 2 and the defendants and a fresh deed of partnership was simultaneously entered into between the two plaintiffs and the three defendants. On 1. 4. 94 another deed of partnership was entered into between the parties wherein substantially the terms and conditions remained the same except for a few changes introduced keeping in view a few amendments governing partnership brought in the Income Tax Act. The partnership was at will which has been dissolved w. e. f. 30. 10. 94 by the plaintiffs legal notice dated 27. 7. 94.
( 5 ). It does not appear to be in dispute that the premises in which the business is being carried on belongs to the plaintiffs. The defendant No. l who has the requisite experience in the commission agency of kiryana business has been in actual control and possession of the business as also the books of accounts. According to the plaintiffs, the defendants are carrying on the business in the name of the partnership firm inspite of the partnership having been dissolved w. e. f. 31. 10. 94. They are dealing most illegally and arbitrarily. with the accounts and the business. They have not settled their accounts with the plaintiffs, not paid the plaintiffs their just and due share of the assets and profits of the firm. . The defendants are not only liable to render accounts but they are also bound to stop the user of the premises, of the goodwill, and trade name of the partnership firm. However, they are committing a continuing breach of their such obligations.
( 6 ). According to the defendants, the orig
