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2010 Supreme(Mad) 2418

High Court of Judicature at Madras
P. R. SHIVAKUMAR
Ponnusamy & Others
Versus
K.K. Subramaniam
A.S. No. 748 of 2002 & Cross Objection No. 34 of 2003
Decided On : 21-06-2010

Advocates Appeared:
For the Appellants:Mr. R. T. Doraisamy, Advocate.
For the Respondent:Mr. T. Murugamanickam, Advocate.

Headnote:A. CIVIL PROCEDURE CODE, 1908 - ORDER 39 RULE 1 -

       Question whether document was acted upon by a party - A person who admits execution of a deed but claims it to be sham and no mind, and that no consequent legal transfer of inherent title for plot under the deed, is bound to prove the same by reliable evidence - Admittedly, property under dispute was used for running a mill for partnership business and that building was constructed and machineries used for purchased using capital raised for which respondent established 50% and was also receiving 50% profit as share - Hence merely because patta was not transferred and it was allowed in possession of appellant, it cannot be assumed that defendant was out of possession Contention of respondents after that document was not acted upon, rejected by High Court.

       (Para 21 & 22)

       B. INDIAN PARTNERSHIP ACT, 1972 - SECTION 53, 69(3)(a) and 69(1)(2) -

       On dissolution of partnership every partner or his representation of a dissolved firm, in the absence of contract between partners to contrary, shall have a right to restrain any other partner or his representative from carrying on a similar business, in the name of the firm or from using any of the properties of firm for his own benefits, until affairs of firm are completely woundup - In facts no proof that any contract to contrary was executed - Hence order of grant of injunction by lower courts, reversed by High Court.

       (Para 22)

       Result: AS dismissed and Cross objection allowed.

Judgment :-

The appeal and cross objection have been filed against the judgment and decree of the trial court, namely the court of the Additional District Judge (Fast Track Court No.2), Gobichettipalayam dated 19.09.2002 made in O.S.No.1 of 2001 on the file of the said court. The plaintiffs 1 to 3 in the original suit are the appellants in A.S.No.748 of 2002. The suit was filed for a declaration and consequential injunction. The suit was partly decreed granting the relief of injunction and declining to grant the relief of declaration. As against the dismissal of the suit regarding the relief of declaration, the present appeal has been filed. As against that part of the decree granting the relief of injunction, the defendant has preferred the cross objection No.34 of 2003.

2. The case of the appellants as per the contents of the plaint filed by them as plaintiffs, in brief, can be stated thus:-

The appellants/plaintiffs are the absolute owners of the property described in plaint schedule, which is an undivided common half share of the land having an extent of 0.11.0 hectare comprised in old Survey No.144A and new Survey No.15/7 in Irugalur village, Gobichettiplayam Taluk. The entire extent of 0.11.0 hectare was the ancestral properties of the appellants/plaintiffs. They wanted to construct a rice mill over the said property and run it with the help of the respondent/defendant, a close relative of the third appellant/third plaintiff. The respondent/defendant demanded conveyance of an immovable property in his favour to enable him to join as a partner in the proposed rice mill. Hence a sham and nominal sale deed was executed and registered on 04.07.1974 in respect of the suit property, namely common half share of 0.11.0 hectare land comprised in old Survey No.144A and new Survey No.15/7 in Irugalur village, Gobichettiplayam Taluk, in favour of the respondent/defendant. As the said sale was sham and nominal, no consideration was received from him and the title and possession of the property continued to rest with the appellants/plaintiffs. The original sale deed was also not handed over to the respondent/defendant and the same was retained by the third appellant/third plaintiff. Patta had been issued in the name of the third appellant/third plaintiff. Since the sale was sham and nominal, the respondent/defendant did not take steps to get the patta transferred in his name. However, the rice mill building, machineries and other affixtures alone were used as the properties of the partnership firm having the appellants/plaintiffs and the respondent/defendant as partners. In the rice mill alone, excluding the land on which the rice mill has been built, the respondent/defendant had got a common half share, whereas the appellants/plaintiffs were jointly entitled to the other half. By a partition deed dated 06.09.1984, the appellants/plaintiffs divided the 3/6 share in the building, machineries, electric service connection and license of the rice mill alone among themselves and each one of them was allotted 1/6 share. On 05.09.1984, the plaintiffs 2 and 3 conveyed their share in the rice mill in favour of the first appellant/first plaintiff under a registered sale deed. Hence the first appellant became the sole partner of the respondent in respect of the rice mill. The understanding between the appellants and the respondent was that all the appellants together should invest Rs.75,000/-and the respondent should invest Rs.75,000/-and as such, in the rice mill business to be started with the said capital, respondent/defendant would be entitled to 50% of the profit, whereas the appellants/plaintiffs together would be entitled to the other 50% of the profit. It was also a specific understanding that the respondent/defendant would not have any right in the land and he would not claim any right under the sale deed dated 04.07.1974. The necessary building for the mill was constructed and the machineries were erected in 1976 and the mill was starte










































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