The court ruled that a nonexistent partnership does not preclude claims for recovery and the suit is maintainable despite objections regarding necessary parties.

ORDER :

V. Lakshmi Narayanan, J.

This Civil Revision Petition arises against the order passed by the learned Principal District Judge, Chengalpattu in I.A.No.4 of 2023 in O.S.No.467 of 2023 dated 28.06.2024.

2. O.S.No.467 of 2023 is a suit for declaration and consequential reliefs. The reliefs are set forth below”-

“a. For declaration to declare that the make belief Partnership Firm known as “FOODSCAPE” created by a deed of Partnership Agreement dated 20.03.2020, registered as Document No.288 of 2020, dated 18.06.2020 on the files of Registrar o Firms, Chennai South is null and void.

b. For the sum of Rs.1,20,60,000/- together with interest at the rate of 16% per annum from the date of filing the plaint till the date of payment and/or realisation.

c. For permanent injunction restraining the defendants their men and agents, representatives or any one claiming under them from way interfering with the peaceful possession and enjoyment of the Food Street shops at Semmanchery and Padur.”

3. The case of the plaintiffs is that the second defendant one Muhammed Rafi was an employee of the plaintiff's while in Dubai. The said Muhammed Rafi approached the plaintiffs and others seeking for an investment to start a “Food Street” business at Semmencherry and Padur. For the said purpose, 11 parties, including the plaintiffs, joined together and invested with a sum of RS.2,08,00,000/-. The plaint proceeds that Muhammed Rafi had identified properties in Semmencherry and Padur and had convinced the plaintiffs that the money they had invested had been paid to the land owners and properties had been taken on lease.

4. The said Muhammed Rafi had informed the investors including the plaintiffs that on account of pandemic caused due to Covid-19 virus the business did not take of. Subsequently, he sent a message as the business did not take off, he is abandoning the same and going to back to Qatar, in search of employment.

5. To shock and surprise of the plaintiffs and the investors, they came to know that the entire business fell through on account of the fact the first defendant took over the lease that had been entered into by the said Muhammed Rafi, on behalf of the investors together with the land and superstructures put up thereon. They pleaded defendants 1 and 2 started an entirely a new business under the guise of a make-believe partnership Firm called as “FOOD SCAPE”. On further probing the matter, they came to know that “FOOD SCAPE” is a make belief partnership entity that had been created in collusion by the defendants 1 and 2 and after the first defendant had taken over the property, the second defendant had subsequently exited from the partnership firm.

6. The plaint states that the entire idea of having projected a partnership firm is only to knock off the hard earned money and investments made by the plaintiffs to start the FOOD STREET business. The plaintiffs also pleaded that on the lands taken on lease on their behalf by the second defendant, the first defendant had let out the same to 36 tenants and had collected an advance of Rs.1,60,00,000/-. On coming to know the manner in which they had been cheated, they lodged a complaint with the jurisdictional police and a case has also been registered. Being left with no other option, they came forward with a suit for the aforesaid reliefs.

7. On being served with summons, the defendants 1 and 3 took out an application for rejection of plaint. According to them, the suit is barred by virtue of Partnership Act and the Commercial Courts Acts. Further, they pleaded there is no cause of action for the suit. Hence they sought for rejection of the plaint.

8. A detailed counter was filed by the plaintiffs that the suit to be retained very much on file and therefore, opposed the application for rejection of plaint.

9. The learned Principal District Judge came to a conclusion that, as the plea raised by the defendants 1 and 3 is mixed question of law and fact, the plaint deserves to remain on file and therefor