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2011 Supreme(P&H) 1154

2011 (3) PLR 390
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
L.N. MITTAL, J.
Om Parkash - Appellant
Vs.
Narinder Kumar Sharma and others - Respondents
R.S.A No. 4278 of 2010
Decided on: 11.05.2011

Advocates appeared:
Mr. Binderjit Singh, Advocate for the appellant.
Mr. B.S. Sidhu, Advocate, for the respondent No.1/caveator/plaintiff.

The legal principle established is that in a suit for dissolution of a partnership firm, the non-joinder of legal representatives of a deceased partner is illegal and against the principles of natural justice.

Headnote:

Partnership Firm - Dissolution and Partition - Indian Partnership Act, 1932 - Section 14, Section 42, Section 47, Order II Rule 3, Order XXX Rule 4 - The court ordered partition of a disputed shop jointly owned by the plaintiff and defendant, rejecting the contention that it was not a property of the partnership firm. The court dismissed the suit for dissolution of the firm and rendition of accounts due to non-joinder of legal representatives of the deceased partner, holding it to be illegal and against the principles of natural justice.

Fact of the Case:

The plaintiff filed a suit seeking dissolution of a partnership firm, distribution of its assets, and partition of a disputed shop. The lower courts partly decreed the suit for partition but dismissed the suit for dissolution of the firm and rendition of accounts. The defendant appealed against the decree.

Finding of the Court:

The court found that the disputed shop was jointly owned by the plaintiff and defendant, rejecting the contention that it was not a property of the partnership firm. The court also held that the suit for dissolution of the firm and rendition of accounts was illegal and against the principles of natural justice due to non-joinder of legal representatives of the deceased partner.

Issues: The issues involved the ownership of the disputed shop, the validity of joining multiple causes of action in a single suit, and the requirement of joining legal representatives in a suit for dissolution of a partnership firm.

Ratio Decidendi: The court held that the disputed shop was jointly owned by the plaintiff and defendant, rejecting the contention that it was not a property of the partnership firm. The court also ruled that the suit for dissolution of the firm and rendition of accounts was illegal and against the principles of natural justice due to non-joinder of legal representatives of the deceased partner.

Final Decision: The appeals were allowed partly, and the judgment and decree of the lower appellate court were set aside, restoring the judgment and decree of the trial court.

JUDGMENT

L.N. MITTAL, J. (ORAL) - By this common judgment, I am disposing of two appeals i.e. RSA No. 4278 of 2010 and RSA No. 4279 of 2010 both titled Om Parkash Versus Narinder Kumar Sharma and others as both these appeals have arisen out of single suit. However, two appeals have been preferred because there were two first appeals.

2. Respondent No. 1-plaintiff-Narinder Kumar Sharma filed suit against M/s. Saree Sagar Textile (defendant No.1), Om Prakash-defendant No. 2-appellant and the Branch Manager, Central Bank of India-defendant No.3 as proforma defendant. The plaintiff alleged that he and defendant No.2 and one Dev Raj constituted partnership firm-defendant No.1 on 16.12.1977. All the three partners had 1/3rd share each in the firm. Dev Raj had died before filing of the suit. Plaintiff went from Bhatinda to Delhi to expand his own business. Business of defendant No. 1-partnership firm was left in the hands of defendant No.2 on his assurance. However, plaintiff later on learnt that defendant No.2 had changed the name of defendant No.1 as M/s. New Saree Sagar Textiles without dissolution of defendant No.1-firm. Accordingly, plaintiff sought dissolution of the firm-defendant No.1 and distribution of its assets-movable and immovable (shop in which the business was carried on) and for rendition of accounts of the firm and also for permanent injunction.

3. Defendant No. 2 contested the suit whereas defendants No.1 and 3 were proceeded ex-parte. Defendant No. 2 denied that any firm was constituted by defendant No. 2 with the plaintiff. It was pleaded that they never worked as partners. Defendant No. 2 is running the firm as sole proprietor. Dev Raj and plaintiff have no concern with the same. Various other pleas were also raised.

4. Learned Civil Judge (Junior Division), Bhatinda vide judgment and decree dated 12.10.2009 partly decreed the plaintiff's suit for partition of the disputed shop by holding plaintiff and defendant No. 2 to be having half share each therein and accordingly passed preliminary decree of partition. Defendant No. 2 was also restrained from alienating more than half share of the said shop. Relief of dissolution of firm-defendant No. 1 along with relief of rendition of accounts was declined. Both plaintiff and defendant No. 2 preferred separate first appeals. Learned District Judge, Bhatinda vide common judgment and decrees dated 04.09.2010 dismissed the first appeal preferred by defendant No. 2 and allowed the first appeal preferred by plaintiff and decreed the plaintiff's suit in toto.

5. Feeling aggrieved, defendant No. 2 has preferred the instant two second appeals.

6. I have heard learned counsel for the parties and carefully examined the case files.

7. As regards disputed shop, it has come on record that the said shop was purchased by plaintiff and defendant No. 2 jointly and they are owners of the said shop in equal shares. Counsel for the appellant, however, contended that the disputed shop was not property of partnership firm in terms of Section 14 of the Indian Partnership Act, 1932 (in short the "Act") and, therefore, partition of the disputed shop could not be ordered in the instant suit. The contention cannot be accepted. The plaintiff claimed distribution/partition of the disputed shop in the suit along with other reliefs. Of course, the plaintiff alleged the disputed shop also to be the asset of the partnership firm. However, it has been proved that plaintiff and defendant No. 2 are owners of the disputed shop in equal shares in their individual capacity. In view of this admitted factual position also, the disputed shop had to be partitioned between plaintiff and defendant No. 2 co-sharers and has, therefore, been rightly ordered to be partitioned by both the lower courts. There is no illegality in the finding of the courts below to this extent.

8. Learned counsel for the appellant contended that the suit would be bad for multifariousness as different causes of action regarding dissolution















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