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High Court Of Delhi
SETH BANARSI DASS GUPTA - Appellant
Versus
B.B.BINDAL - Respondent
First Appeal Order 97 of 1979
Decided On : 04/29/1981
INJUNCTION - FAMILY ARRANGEMENT - HINDU UNDIVIDED FAMILY - MANAGEMENT OF PROPERTY - MINORITY - VALIDITY OF AGREEMENT - PRIMA FACIE CASE - JURISDICTION - REPRESENTATION OF COPARCENERS - STAY OF OPERATION OF ORDER - RECEIVER.
Fact of the Case:
Plaintiff, son of Defendant No. 1, alleged a family arrangement entitling him to manage Modern Industries, a Hindu Undivided Family (HUF) property, till his lifetime. Defendant No. 1, the karta of the HUF, contested the claim, denying the existence of such an arrangement and asserting his right to manage the property. The plaintiff sought a permanent injunction restraining Defendant No. 1 from interfering with his management and operation of the bank account, and a similar injunction against the bank to prevent it from stopping the plaintiff's operation of the account.
Finding of the Court:
The court held that there was no prima facie case for the plaintiff's claim. It found that the alleged family arrangement, which would have given the plaintiff the right to manage the property for his lifetime, was void ab initio as two of the coparceners were minors at the time of the agreement. The court also held that the plaintiff's suit was not maintainable due to non-joinder of other coparceners and that the Delhi courts lacked territorial jurisdiction to try the suit.
Issues: 1. Whether there was a valid family arrangement entitling the plaintiff to manage Modern Industries for his lifetime. 2. Whether the plaintiff had a prima facie case for the grant of an injunction. 3. Whether the suit was maintainable in the Delhi courts.
Ratio Decidendi: 1. A family arrangement for the management of property for the entire lifetime of a junior coparcener, to the exclusion of the karta, is not permissible or authorized by law. 2. A prima facie case for an injunction requires a serious and bona fide controversy that needs consideration, not a certainty of success. However, there should not be any patent defect or prohibition of law. 3. A suit for injunction relating to a Hindu Undivided Family property is not maintainable without the joinder of all coparceners.
Final Decision: The court allowed the appeal, set aside the lower court's order, and vacated the injunction issued by the lower court.
( 1 ) THE present appeal is directed against an order dated April 17, 1979 of Shri B. B. Gupta, Additional District Judge, Delhi.
( 2 ) VIDE aforesaid order Shri B. B. Gupta confirmed a temporary injunction issued in favour of Shri Brij Bhushan Lal Bindal, respondent No. 1 (hereinafter referred to as the plaintiff) restraining Seth Banarsi Dass Gupta appellant (hereinafter referred to as the defendant No. 1) from interfering in the management of the property known as Modern Industries situate at Sahibabad till the partition of the Hindu Undivided Family properties.
( 3 ) THE plaintiff is the son of defendant No. 1. The defendant No. 1, the plaintiff and other sons of defendant No. 1, namely Seth Jatender Lal, Seth Satender Lal and Shri Mohan Lal Gupta formed Hindu Undivided Family (hereinafter referred to as the HUF ). "that HUF is carrying on a number of businesses which are Modern Industries at Sahibabad, Jaswant Sugar Mills Ltd. at Meerut, S. B. Sugar Mills. Bijnore and Mohan Orchards, Meeduwala Tahsil Najibabad, District Bijnore. The dispute is about Modern Industries which is carrying on the manufacture of Railway Wagons, steel re-rollers, steel forgings, industrial oxygen gases etc. It was established somewhere in 1940.
( 4 ) THE affairs of Modern Industries are being managed by the plaintiff according to whom he is doing so under a family arrangement entered into between him, his brothers and defendant No. 1. It is alleged by the plaintiff that that family arrangement entitles him to carry on the aforesaid business till his life time. Assertian of the plaintiff further is that the family arrangement provided that business of Jaswant Sugar Mills Ltd. Meerut in which HUF has 80% shares as well as S. B. Sugar Mills at Bijnore should be managed by defendant No. 1, that Seth Mohan Lal Gupta was appointed Administrative Officer of the aforesaid Mills while Seth Jatender Lal was given all rights of managing Mohan Orchards. According to the plaintiff, Satender Lal is not considered, so active for medical reasons and, therefore, he was not given any management of any particular business but he has been enjoying all rights and interests as member of the HUF.
( 5 ) FURTHER case of the plaintiff is as follows. Under the aforesaid family arrangement he started management from the year 1953-54 and has been describing himself as Managing Proprietor of Modern Industries. The assets of the said business, prior to 1956 were about Rs. 8,61,000. 00 but due to the efficient handling, the business made good profits and on June 30, 1977 the assets had. risen to the tune of Rs. 98,08,136. 00. Due to mismanagement on the part of the defendant No. 1, and Seth Mohan Lal the Sugar Mills at Meerut was not properly functioning on account of which U. P. Government took over the same. Similarly, there was mismanagement in the affairs of the S. B, Sugar Mills, Bijnore which was also taken over by the Government somewhere in the year 1970-71. The Mohan Orchards was also not managed properly and for the reasons better known to the other members of the HUF the same was mortgaged.
( 6 ) ON July 30, 1956 defendant No. 1 styling himself as proprietor of Modern Industeries executed a Power of Attorney in favour of the plaintiff with a view to efficient handling of the bank accounts and the litigation with third parties. On November 16,1978 defendant No. 1 sent a letter to Central Bank of India, defendant No. 2 to stop the operation of the bank account of Modern Industries, Sahibabad under the signatures of the plaintiff. The plaintiff contacted the bank who conveyed the instructions received from defendant No. 1. The plaintiff pleaded with the Bank that the aforesaid directions were uncalled for and had no force in the eye of law but defendant No. 2 stated that it did not want to involve in any sort of dispute between the former and defendant No. 1. Then plaintiff approached defendant No. 1 but the latter was not prepared to listen to any req
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