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2014 Supreme(Del) 2668

HIGH COURT OF DELHI
S. Ravindra Bhat, R.V. Easwar, JJ.
Vibha Mehta - Appellant
Versus
Hotel Marina & Ors. - Respondent
FAO (OS) 15/2013, CM. APPL. 367/2013, 731/2013 & 11066/2013
Decided On : 31-03-2014

Advocates Appeared:
For the Appellant :Sh. Jayant Bhushan, Sr. Advocate with Ms. Aankhi Ghosh, Advocate.
For the Respondent No. 2:J.S. Kochar, Advocate.
For the Respondent No. 3:Sandeep Sethi, Sr. Advocate with Sh. R.K. Choudhary and Sh. Akshay Sharma, Advocates.

Headnote:

Civil Procedure Code, 1908 -Order 6 Rule 4 and Order 23 Rule 3 - Contract Act, 1872 - Section 15, 17, 18 - Partnership Act, - Section 9, 15, 16, 17, 18, 20, 21, 22 - Whether the settlement extended only to the plaintiff's 8% share in the firm or to the entire gamut of rights and interests - Compromise agreement records that the payment of Rs.2 crore "shall be in full and final settlement and adjustment of any and all right, title and interest of the Plaintiff - This also exhausts the plaintiff's claims to "the assets, properties belongings, tenancy and business and affairs of the said Firm including plaintiff's 8% share in the said Firm - Compromise extended only to the 8% share is clearly specious - Agreement clearly contemplates more than just the 8% share - Intention of the parties is important in construing this document - Held, compromise includes both the 8% share of the plaintiff and her capital account in the firm, as also any other money due from the firm at the time of the settlement - Court holds no interference with the decision of the Single Judge - Appeal dismissed.

Contract Act, 1872 - Section 15, 17, 18 - Civil Procedure Code, 1908 - Order 6 Rule 4 and Order 23 Rule 3 - Partnership Act, - Section 9, 15, 16, 17, 18, 20, 21, 22 - Compromise decree - Passive misrepresentation - Duty of partner - Parties have amicably, by their free will and consent compromised - Plaintiff settled the dispute of her own accord - Reliance over compromise and denies any fiduciary or other duty - Compromise application was signed by the plaintiff and her statement was recorded - Nothing prevented the plaintiff from insisting upon rendition of accounts before she entering into a binding settlement with defendant No. 8 - Duty of a partner is to make truthful disclose of full information - Partner could have visualized or foreseen a higher degree of profits, in the ensuing year - Because the accounts here were settled in September, six months later - Disclosure of future profits can not be demanded - There is no such duty, there can be no fraud - Plaintiff has not furnished any particulars or details to support the plea of coercion - Plaintiff voluntarily signed the agreement, with knowledge of the complete contents of the application - Agreement does not fall under the Contract Act, and is valid in terms of Order XXIII, Rule 3, CPC - It is held that there is no fraud or misrepresentation.

S. Ravindra Bhat, J.:--

1. This is an appeal against an order of a learned Single Judge dismissing an application of the appellant (“the plaintiff”) seeking the setting aside of a compromise decree.

2. The plaintiff had sued the first respondent, M/s Hotel Marina (“Marina”), a partnership firm of which she and respondents 2-9 (the other defendants) were members. The suit claimed the dissolution of the firm, a decree of rendition of accounts, and a direction to assess and realize the value of all common assets in order to pay the amount due to the plaintiff. The plaint alleged that Marina was managed by the eighth respondent, the plaintiff’s father in law, and another partner, and that she had executed a power of attorney in favour of eighth respondent. Due to apprehensions regarding its misuse and the manner in which the firm was being managed, the plaintiff revoked the power of attorney on 5th February, 2001, and filed the suit for dissolution. By an order dated 14-12-2005, the learned Single Judge restrained the defendants, presently respondents 2-9, from creating any third party interest in the assets and business of the partnership. The suit valued the amount payable to the plaintiff at Rs. 2 crores.

3. During the course of proceedings, the defendants offered a sum of Rs. 2 crores for amicable settlement of the suit. This was rejected by the plaintiff, as recorded in the order dated 27th February, 2006. Later, however, a common application under Order XXIII, Rule 3, Code of Civil Procedure (“CPC”) for a compromise was filed by the parties on 3rd March, 2006. The compromise recorded as follows:

“1. The parties have amicably, by their free will and consent compromised the present suit on the following terms

(i) The Defendant No. 8 shall pay to the Plaintiff a sum of Rs. 200,00,000/(Rupees Two Crores only) on or before 30 March 2006.

(ii) The said payment shall be in full and final settlement and adjustment of any and all right, title and interest of the Plaintiff in the Defendant No. 1 Firm and the assets, properties, belongings, tenancy and business and affairs of the said Firm including plaintiff’s 8% share in the said Firm.

(iii) Upon the said payment,

(a) The Plaintiff shall cease to have any share in the Defendant No. 1 Firm and shall also have no claim or demand upon the said Firm.

(b) The plaintiff shall have retired from the Defendant No. 1 firm with effect from 1st April 2006 or earlier when payment is made.

(c) The plaintiff shall have no subsisting dispute or difference with any of the defendant firms and all its partners all disputes and differences shall be deemed to be fully and finally, unconditionally and absolutely satisfied.

(d) The share of the plaintiff shall stand transferred to the Defendant No. 8 automatically and without requirement of doing of any act or omission or commission on the part of any of the parties thereto. The defendant No. 8 shall be the sole and absolute owner of the 8% share held by the plaintiff in the Defendant No. 1 firm until now.

(e) The rights of the plaintiff in tenancy of the Defendant No. 1 firm in respect of Hotel Marina at premises No. G-9, Connaught Place, New Delhi shall stand surrendered to the surviving partners of the Defendant No. 1 firm and the plaintiff shall have no subsisting right or interest in the tenancy. It shall be open for the surviving partners of the Defendant No. 1 firm to apply to the landlord for deletion of the plaintiff as a co-tenant in respect of the said premises.

(f) In the event, the landlord for the said premises does not consent to the said deletion, the plaintiff shall authorized and keep authorized Defendant No. 8 or his nominee to act for the plaintiff, in her name and on her behalf on all matters concerning the said tenancy. The said authorization shall be irrevocable and shall be and shall be executed ‘as per the draft enclosed herewith and marked as Annexure-1. The plaintiff undertakes not to revoke the said authorization at any time and for any reas















































































































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