2000 Supreme(All) 459
IN THE HIGH COURT OF ALLAHABAD
J. C. Gupta, J.
NIGAM DAS - Appellant
Versus
ADDITIONAL DISTRICT JUDGE, I, JAUNPUR - Respondents
C. M. W. P. 13998 Of 1998
Decided On : 03/16/2000
B.P.SINGH, D.P.SINGH, P.Padia, R.G.PADIA, Umesh Vats
The main legal point established in the judgment is that after the dissolution of a partnership firm, no partner can compel others to continue the partnership business, and the grant of temporary injunction is a discretionary relief subject to specific tests.
Headnote:
partnership - Dissolution of Partnership Firm - Section 43, Section 46, Section 47, Section 48 of the Partnership Act - The court discussed the dissolution of a partnership firm under Section 43 of the Partnership Act and the rights and obligations of partners after dissolution. The court highlighted the principles of granting temporary injunction and the discretionary nature of the relief. The court emphasized that no partner can compel others to continue the partnership business after dissolution, and the lower appellate court exceeded its jurisdiction in granting the temporary injunction.
Fact of the Case:
The dispute arose from a petition for quashing an order passed by the lower appellate court, which had allowed an appeal and granted an ad-interim injunction in favor of the plaintiff respondents, restraining the defendants from interfering in the partnership business and directing them to open the locked shop.
Finding of the Court:
The trial court had rejected the plaintiff's application for ad-interim injunction, finding that the partnership was at will and had been validly dissolved by the defendant. The lower appellate court, however, granted the injunction, leading the defendant to file a writ petition.
Issues: The key issues included the validity of the dissolution of the partnership firm, the jurisdiction of the lower appellate court in granting the ad-interim injunction, and the rights of partners after dissolution.
Ratio Decidendi: The court held that the lower appellate court had exceeded its jurisdiction in granting the temporary injunction, as no partner can compel others to continue the partnership business after dissolution. The court emphasized the principles of granting temporary injunction and the discretionary nature of the relief.
Final Decision: The writ petition was allowed, the order of the lower appellate court was set aside, and the trial court's order was restored. The parties were directed to bear their own costs.
( 1 ) THIS is defendants petition for quashing the order dated 31. 3. 1998 passed by respondent No. 1 in Misc. Civil Appeal No. 47 of 1996 whereby the respondent No. 1 has allowed the appeal after setting aside the order dated 16. 1. 1996 passed by the trial court rejecting plaintiffs application for ad-interim injunction. The lower appellate court has restrained the petitioners from causing any interference in plaintiffs carrying on the business of the firm M/s. Baiju Sav Nigam Das and m/s. Shanti Sahu and others in the disputed shop till the disposal of suit and has also directed them to open the lock of the shop.
( 2 ) RESPONDENT Nos. 2 and 3 filed Suit No. 310 of 1994 against the petitioners for permanent injunction restraining the defendants from causing interference in plaintiffs right of carrying on their business in the shop in question and not to lock the same. The case of the plaintiff in short was that the shop in question was the ancestral property of the parties : that respondent No. 2 anirudh Kumar and petitioner No. 1 Nigam Das by their mutual agreement and for the purposes of income tax and sales tax incorporated a partnership firm for carrying on the business of manufacturing and selling silver ornaments in the name of M/s. Baiju Sav Nigam Das. Plaintiffs anirudh Kumar and Anil Kumar, respondent Nos. 2 and 3 with petitioner No. 3 Vinod Kumar were carrying on business of money lending in the name of M/s. Shanti Sahu and sons whose karta was Anirudh Kumar, respondent No. 2. Both the firms were also registered in income Tax and Sales Tax Departments. The plaintiff alleged that defendant No. 1 Nigam Das under the influence of petitioner Nos. 2 and 3 wanted to close down the said partnership business in an illegal manner for which he has no right and with that end in view he was threatening to put his lock over the shop in question.
( 3 ) THE defendants filed written statement and their case was that in a family settlement, the disputed shop and the house fell into the exclusive share of defendant No. 1 and he is the exclusive owner and in possession thereof and a memorandum of partition was also reduced into writing on 10. 1. 1983. Both the businesses of money lending and silver ornaments were being carried on by defendant No. 1 who on account of his old age got the name of plaintiff No. 1 entered into a partnership firm and was paid Ra. 500 per month for looking after the business. The said partnership firm was at will terminable at any time at the instance of defendant No. 1. Since plaintiff No. 1 was not performing his duties well and had started misappropriating the income, it became impossible for defendant No. 1 to carry on partnership business, hence he decided to dissolve the partnership firm and accordingly, he dissolved the same by giving notice dated 1. 9. 1994 which was duly served upon the said defendant. After the dissolution of partnership, the plaintiff had no right or title to carry on business or to make use of the shop in question.
( 4 ) THE trial court while rejecting the plaintiffs application for ad- interim injunction came to the finding that partnership was at will which could be terminated by any partner by giving at least one months notice to other partners. It also came to the conclusion that in the present case defendant No. 1 communicated his intention to dissolve the partnership firm and had also communicated the same to the Sales Tax Office and Income Tax Office. The notice was given to the plaintiff on 1. 9. 1994 stating that the partnership firm would stand dissolved after 45 days. Before the said period could expire, the plaintiff filed the present suit on 12. 9. 1994 and since the period of 45 days expired during the pendency of suit the partnership firm stood dissolved and the plaintiffs were left with no right to carry on partnership business in the shop in question. In short the trial court concluded that once the partnership firm stood dissolved, no partner co