IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR
Nupur Bhati, J.
Dev Prakash S/o. Heera Lal Soni and ors. – Appellants
Versus
Smt. Indra D/o. Late Prabhu Dayal and ors. – Respondents
S.B. Civil Misc. Appeal No. 913/2015, S.B. Civil Misc. Appeal No. 958/2015
Decided On : 01-10-2024
Injunction - Partnership Dispute - CPC Sections 39, 40, 151 - The court interpreted the provisions of the CPC regarding temporary injunctions and receivership, emphasizing the need for clear rights and the balance of convenience in granting such orders, ultimately deciding to maintain status quo instead of appointing a receiver.
Fact of the Case:
The case involves a partnership dispute following the death of a partner, where the legal heirs claimed rights over the firm’s properties, leading to applications for temporary injunction and appointment of a receiver by the trial court.
Finding of the Court:
The trial court granted the injunction and appointed a receiver, but the appellate court found this to be a harsh remedy and opted to maintain status quo instead, pending resolution of the main suit.
Issues: Whether the trial court erred in granting a temporary injunction and appointing a receiver without establishing clear rights and the necessity for such measures.
Ratio Decidendi: The court held that the appointment of a receiver is a harsh remedy and should only be used when necessary to protect rights, favoring a status quo order instead.
Result: The appeals are partly allowed, and the order for the appointment of a receiver is set aside, maintaining status quo regarding the property.
JUDGMENT :
Nupur Bhati, J.
1. These misc. appeals are filed by the appellants/defendants under Order 43 Rule 1(s), Civil Procedure Code, 1908 (hereinafter as ‘CPC’) against the orders dated 25.04.2015 passed by the Additional District Judge No. 3, Bikaner (hereinafter as ‘the trial court’) in Civil Misc. Case No.(s) 12/2015 and 13/2015 respectively, whereby the learned trial court has allowed applications filed by the respondent no. 1 to 5 under Order 39 rule 1 & 2 read with Section 151 of the CPC and Order 40 Rule 1 read with Section 151 of the CPC respectively.
2. Briefly stated, the facts of the case are that on 10.02.1995 the partnership firm- M/s Chandratan Heeralal, Luharon ka Muhalla, Naya Kuan, Bikaner(hereinafter as ‘the firm’) was created between Late Prabhu Dayal (hereinafter as ‘deceased partner’)and Mr. Dev Prakash (hereinafter as ‘Appellant no. 1’) and a partnership deed was executed between them on 15.08.1995 and they both had equal partnership in the properties of the firm. The firm was registered with Registrar of firms and a license under The Rajasthan Shops and Commercial Establishments Act,1958 was also taken. The immovable property(at Luharon ka Muhalla, Naya Kuan, Bikaner) at which firm is situated was an immovable property of the deceased partner, which he inherited from his grandfather as part of his share in the ancestral property. Thereafter, on 30.05.2014 the deceased partner met his demise. Afterwards, when the legal representatives (respondents herein) of the deceased partner went to the firm to take care of the properties of the firm, they got to know that the appellant no. 1 has recreated the firm (after its dissolution as a result of the death of the deceased partner) with Appellant no. 2 as the new partner. The respondents approached the appellant no. 1 to get their share in the properties of the firm, which they claimed in the capacity of legal representatives of the deceased partner and also to get back the immovable property on which the premises of the firm is situated as being a personal property of the deceased partner. However, the appellant no. 1 communicated to them that the firm has been recreated therefore, the respondents have no share in the firm. Thus, a dispute arose between the parties and the respondent nos. 1 to 5(Plaintiffs) filed the suit for permanent injunction along with two applications- Civil Misc. Case No.(s) 12/2015(application under Order 39 Rule 1 & 2, CPC) and 13/2015(application under Order 40 Rule 1,CPC) before the learned trial court.
3. It was contended by the respondent nos. 1 to 5 before the learned trial court that the immovable property on which the firm was working does not belong to the firm and rather it is the personal property of the deceased partner which was given by him to the firm for operation of the firm business. However, when the respondents approached the appellant no. 1 for the immovable property of the deceased partner and their share in the properties of the firm(in capacity of the legal representatives of the deceased partner) they were told by the appellant no. 1 that they have no share in the properties of the firm.
4. It was contended by the respondent nos. 1 to 5 before the learned trial court that the appellants herein have no right to use the properties of the dissolved firm as well as the income earned from the use of it as records of accounts of the dissolved firm was not available. Further, they contended that the appellants herein were not justified in using the goodwill of the firm without the consent of the legal representatives of the deceased partner. Thus, the respondent nos. 1 to 5 sought temporary injunction and appointment of receiver by citing grounds of balance of convenience and to avoid irreparable damage to the immovable and movable properties of the firm.
5. It was contended by the appellants herein in their reply to the applications before the learned trial court that the firm is a family partnership which was created in
C.D. Grover and Ors. vs. Ashok Kumar AIR 1997 Raj 281
Dhokal Singh v Ridhmal 1955 0 RLW (Raj) 346
Gumanlal v Shambulal 1955 0 RLW (Raj) 20
Jai Narayan Misra Vs. Hashmathunnisa Begum AIR 2002 AP 389
Mohd. Laiquiddin and Ors. Vs. Kamala Devi Misra (Dead) by L.Rs. and Ors. (2010) 2 SCC 407
Nihalchand L. Jai Narain and Ors. Vs. Ram Niwas Munna Lal and Ors. AIR 1968 P&H 523
Rajendra Kumar Sharma Vs. Brijendra Kumar Sharma and Ors. AIR 1994 All 62
Sheonarian Jaiswal v Shree Kripa Shankar Jaiswal 1972 0 AIR(Pat) 75
Smt. Jayamma v. Adhyaksha, Zilla Panchayat
Tilak Chand Jain Vs. Darshan Lal Jain and Ors. AIR 1985 J&K 50
AI
The court established that maintaining status quo is preferable to appointing a receiver in partnership disputes, emphasizing the need for clear rights and balance of convenience.
The court held that a partner's possession of dissolved firm property does not create ownership rights against co-owners, and claims of adverse possession are not maintainable.
Impartiality in appointing a receiver is crucial; a managing partner cannot be appointed as a receiver of a dissolved partnership amid trust issues and financial misappropriation allegations.
Appointment of a receiver requires a judicious exercise of discretion; failure to adhere to procedural fairness resulted in setting aside the trial court's order.
The central legal point established in the judgment is the requirement of mutual agreement for partnership dissolution and the significance of partnership deeds in determining the intention of the pa....
Point of law: Arbitration - Arbitral Award - Interference by Court - Scope of powers of Appellate Court under Section 37 of Arbitration Act are more limited than limited powers of the Court hearing t....
(1) Upon the death of any partner the partnership shall not be automatically dissolved but the surviving partners may admit the legal representative of the deceased unto the partnership by mutual con....
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