The court's decision was based on the significance of the defences raised by the defendants, which influenced the finding that it was not an appropriate case for the exercise of discretion to direct the defendants to disclose assets.

JUDGMENT

(Prayer: This application is filed under Section XIV Rule 8 of O.S.Rules read with Section 151 of the Code of Civil Procedure, 1908 praying to direct the Respondents/Defendants to disclose by way of Affidavit the details of all the assets, immovable and movable properties and / or shares owned by the Respondents/Defendants, their Bank Account details/statements.)

1. In a suit for recovery of a sum of Rs.2,04,80,180.40 along with interest thereon at 18% p.a, the plaintiff has filed this application under Section 151 of the Code of Civil Procedure 1908 (the CPC), seeking a complete list of the assets of the respondents.

2. The applicant asserts that the first defendant is a partnership firm and that defendants 2 to 5 are the partners thereof. According to the plaintiff, the written statement filed by the defendants does not satisfy the requirements of the CPC as applicable to commercial disputes. On such basis, the plaintiff asserts that the defendants do not have a valid defence to the suit claim. The plaintiff further asserts that it reasonably apprehends that the defendants would alienate, encumber or otherwise dispose of their assets and frustrate the endeavour of the plaintiff to realize its dues. The present application is filed in these facts and circumstances.

3. In order to establish that the plaintiff has a strong prima facie case, the plaintiff refers to a sale agreement between the plaintiff and Kem Finishes. The plaintiff also refers to several invoices raised between 22.02.2016 and 20.12.2017 by its predecessor-in-interest, Kemiter srl, on the first defendant. The plaintiff draws reference to the e-mail correspondence from it to the defendants seeking payment towards invoices and, in particular, the plaintiff relies upon an e-mail of 24.10.2019 from Kem Finishes India Private Limited.

4. The plaintiff points out that goods were supplied to the first defendant by its predecessor-in-interest, Kemiter srl, to the first defendant, and that the first defendant was represented by the second and third defendants for purposes of these transactions. It is stated that a merger took place between the plaintiff and Kemiter srl, and that the plaintiff is the resulting entity or transferee in the merger. Consequently, it is stated that the receivables of Kemiter srl became the receivables of the plaintiff.

5. With regard to the maintainability of the application, the plaintiff relies upon a judgment of the Hon’ble Supreme Court in Rahul S Shah v. Jinendra Kumar Gandhi [2021 (4) KHC 148 (SC)] (Rahul S.Shah). In particular, the plaintiff relies upon paragraph 42 (9) of the order of the Hon’ble Supreme Court, wherein it was held as follows:

“In a suit for payment of money, before settlement of issues, the defendant may be required to disclose his assets on oath, to the extent that he is being liable in a suit. The Court may further, at any stage, in appropriate cases during the pendency of the suit, using powers under Section 151 CPC, demand security to ensure satisfaction of any decree.”

The plaintiff also points out that the above judgment of the Hon’ble Supreme Court was followed in two subsequent cases by the Hon’ble Kerala High Court.

6. The defendants refute the above contentions and raise several objections to the application. The first objection is on the ground of misjoinder of parties. The defendants assert that neither the second nor third defendant are partners of the first defendant. Therefore, it is contended that a joint and several decree cannot be prayed for against the second and third defendants. The second objection is on the ground that there is no privity of contract between the first defendant and the plaintiff. All the invoices on which the suit claim is founded were issued by Kemiter srl. According to the defendants, the plaintiff has failed to produce sufficient evidence to establish that it is entitled to step into the shoes of Kemiter srl and maintain the suit. The third objection is on the groun