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2025 Supreme(Mad) 4498

IN THE HIGH COURT OF JUDICATURE AT MADRAS
P.T. ASHA, J.
A.K.Saravanan, S/o.Kittusamy - Appellant 
Versus 
M.Pandithurai, S/o.Late Manickam - Respondent 
CRP Nos.1421, 1412 & 1203 of 2025 and CMP Nos.8365, 8322 & 7248 of 2025
Decided on : 16-06-2025


Advocates:
Advocate Appeared:
For the Appellant : Ms.Chitra Sampath, Senior Counsel for Mr.M.Ashwin Kumar
For the Respondent: Mr.K.V.Babu

The court affirmed the maintainability of a suit based on a joint compromise agreement, establishing that a valid cause of action existed despite arguments regarding non-joinder of necessary parties and the commercial nature of the dispute.

Headnote:(A) Commercial Courts Act, 2015 - Section 2(1)(c)(i) and (xv) - Suit for recovery of money filed by plaintiff against defendants based on joint compromise agreement of 18.10.2021 - Defendants challenged maintainability of the suit arguing non-joinder of necessary parties and abuse of process of law - Court found that the suit is maintainable and dismissed the application to strike off the plaint, allowing the revision petitions filed by the defendants for conditional leave to defend - No reasoning given for granting conditional leave, which was deemed onerous given that the defendants raised triable issues regarding the plaintiff's locus standi. (Paras 1-4, 10, 17-28)

(B) Agreement - Memorandum of joint compromise agreement - Court affirmed that it contains elements of a simple recovery of money and not a commercial dispute under the CC Act. (Paras 11-13) (

Facts of the case:
Plaintiff claims debts owed to third parties from the defendants arising from investment in partnership business, which was contested by defendants citing issues with the formalities of the agreement and non-joinder of certain parties involved in the agreements. (Paras 3.1-3.7)) (

Findings of Court:
Court dismissed C.R.P.No.1412 of 2025, and allowed C.R.P.No.1203 and C.R.P.No.1421 of 2025, ordering the defendants to provide their written statement within 15 days and ensure expeditious disposal of the suit. (Paras 30)) (

Issues: The main issues were about the locational standing of the plaintiff concerning the amounts due to third parties and the requirements for the suit’s maintainability.) (

Ratio Decidendi: The court ruled that the plaintiff had a valid cause of action supported by the joint compromise agreement and dismissed the motion to strike off the plaint. (Paras 17-28)) (

Result: C.R.P.No.1412 of 2025 dismissed; C.R.P.Nos.1203 and 1421 of 2025 allowed.)

Table of Content
1. jurisdiction and nature of claims (Para 1 , 2)
2. facts of the partnership and financial arrangements (Para 3)
3. the nature of the suit involves recovery claims based on a commercial agreement. (Para 4 , 5)
4. arguments regarding merits and claims to third parties (Para 6 , 7 , 18 , 20 , 21)
5. court's ruling emphasizes the necessity of verifying the conditional leave to defend against the pertinent criteria. (Para 10)
6. final orders and directions (Para 28 , 30)

ORDER :

P.T. ASHA, J.

While the civil revision petitions in C.R.P.Nos.1203 & 1421 of 2025 have been filed by the defendants to set aside the orders dated 18.12.2024 and 13.03.2025 passed in I.A.No.4 of 2024 in O.S.No.1014 of 2024 on the file of the III Additional District Court, Coimbatore, respectively, the civil revision petition in C.R.P.No.1412 of 2025 has been filed by the defendants to strike of the plaint in O.S.No.1014 of 2024 on the file of the III Additional District Court, Coimbatore.

2. The parties are being referred to in the same ranking as before the trial Court.

3. Before proceeding to discuss the grounds, on which, the defendants seek to strike of the plaint, it would be apposite to briefly allude to the facts as set out in the plaint in O.S.No.1014 of 2024 on the file of the III Additional District Court, Coimbatore, as below:

3.1 The above referred suit has been filed for recovery of a sum of Rs.23,84,11,886/- together with interest at the rate of 24% per annum from the date of the plaint till the date of realization.

3.2 It is the case of the plaintiff that the defendants 1 and 2, Rishi Ganesh, plaintiff's son and Meenakshi Sundar were partners of the firm called 'Sri Saravana Constructions'. The third defendant is the father of the first defendant and father-in-law of the first defendant. The fourth defendant is the father of the second defendant and father-in-law of the first defendant.

3.3 The plaintiff would contend that he is engaged in the business of Highways contract with the Government of Tamil Nadu as an 'A' Class Contractor. The first defendant is also a Contractor with the Highways Department of the State of Tamil Nadu since 2013. The first defendant has approached the plaintiff with a request to jointly operate the contracts through the firm 'Sri Saravana Constructions' and after negotiations, a partnership agreement was entered into, in and by which, Rishi Ganesh, the plaintiff's son and Meenakshi Sundar, the plaintiff's cousin, had been inducted as partners along with the defendants 1 and 2 and Iyyappan. Rishi Ganesh, at that point in time, was a minor. After he had attained majority, a revised deed was executed on 30.04.2020. The firm Sri Saravana Constructions is a registered firm and the bank accounts were to be operated by the first defendant jointly with Rishi Ganesh and all the contracts and other official documents were to be signed by both the first defendant and the said Rishi Ganesh till 13.07.2021.

3.4 The plaintiff would further contend that in order to develop the business of the partnership firm, he had arranged for financial assistance from his friends, S.Ramachandran of Pudhukottai, S.Selva Saravanan also of Pudhukottai and Saravanan of Coimbatore. That apart, the plaintiff had also contributed his personal funds for the partnership firm. By reason of the infusion of these funds, the firm had signed various contracts with the Highways Department at Tiruppur, Ottanchatiram, Palani and Mettupalayam and was doing very well. However, due to certain differences of opinion among the partners, it was decided that the business would be continued by defendants 1 and 2 and the said Rishi Ganesh and Meenakshi Sundar would retire. It was further agreed that the defendants 1 and 2 would settle the amounts, which was lent by the plaintiff and which he had brought in from third parties as well. In furtherance of this agreement, Rishi Ganesh and Meenakshi Sundar had retired.

3.5 The plaintiff would submit that since he had susp

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