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1993 Supreme(All) 252

IN THE HIGH COURT OF ALLAHABAD
M. L. BHAT
RAJENDRA KUMAR SHARMA - Appellant
Versus
BRIJENDRA KUMAR SHARMA - Respondents
First Appeal 888 Of 1991
Decided On : 04/29/1993

Advocates Appeared:
R.G.PADIYA

A partner in a dissolved firm has the right to restrain any other partner or his representatives from carrying on similar business in the firm name or to use any of the properties of the firm for his one benefit unless the affairs of the firm have been completely wound up.

Headnote:

PARTNERSHIP - DISSOLUTION - INJUNCTION - PROPERTY OF DISSOLVED FIRM - USE BY STRANGER - RESTRAINT - PARTNERSHIP ACT, 1932, SECTIONS 53, 20.

Fact of the Case:

Plaintiff filed a suit for perpetual injunction against the defendants to restrain them from using or usurping the share of property in whole or any part of the firm M/s. B. T. Paul and Sons, which was dissolved in 1978 but not wound up. The plaintiff claimed that the defendant No. 2, wife of defendant No. 1, was using and usurping the materials, machineries, and other assets of the firm in her business without the consent of the plaintiff.

Finding of the Court:

The court held that the plaintiff had made out a case for grant of ad interim injunction. The plaintiff had a prima facie case in respect of the properties of the erstwhile firm and was likely to suffer an injury if the said properties were usurped or used by the defendant No. 2 without his consent. The balance of convenience also was in his favor because the law did not permit the defendants to use the partnership assets and the properties of the firm which had been dissolved and winding up proceedings were yet to start.

Issues: 1. Whether the plaintiff had a prima facie case for the grant of injunction? 2. Whether the plaintiff was likely to suffer irreparable injury if the relief of temporary injunction was withheld? 3. What was the balance of convenience in case the temporary injunction was granted or withheld?

Ratio Decidendi: 1. The plaintiff was a partner in the firm M/s. B. T. Paul and Sons and had a right to get his share out of the assets of the dissolved firm. 2. The defendant No. 2 was not a partner of the firm and had no right to use or usurp the property of the firm without the consent of the plaintiff. 3. The plaintiff was entitled to seek ad interim injunction asking the other side not to use or usurp the property of the firm.

Final Decision: The court allowed the appeal and set aside the order of the court below refusing to grant ad interim injunction to the plaintiff. The court restrained the defendants from using the property of the firm M/s. B. T. Paul and Sons, including movable properties, furniture, fittings, telephones, machines, raw material stocks, steel stores, and finished goods. However, the defendant No. 2 was allowed to continue her own business on plot No. 83/23-B with her own funds and machinery.

M. L. BHAT, J.

( 1 ) THIS is an appeal against an order passed by the court below whereby the court below has refused to issue a temporary injunction in favour of the appellant.

( 2 ) IT appears that the plaintiff has filed a suit for perpetual injunction against the defendant-respondents to the effect that the defendants, their servants, employees, agents and family members of anybody through them be restrained by means of permanent injunction not to use, utilise, usurp or misappropriate the share of property in whole or any part of the firm M/s. B. T. Paul and Sons situate at 84/13, Factory Area, Fazalganj, Kanpur and at 83-23-B, Building Material Market, Juhi, Govind Nagar, Kanpur till the said firm is finally wound up.

( 3 ) THE plaintiffs case before the trial court is that by virtue of a partnership deed dated 24-12-1966 he along with defendant No. 1 and Smt. Jaidevi, plaintiffs mother, had constituted a partnership firm under the name and style of M/s. B. T. Paul and Sons situate at 84/13, Factory Area, Fazalganj, Kanpur, which was registered under the Indian Partnership Act. The said firm had properties and assets, which are detailed by the plaintiff in various annexures. Apart from that the firm had immovable properties bearing No. 84/13, Factory area, Fazalganj, Kanpur and 83/23-B, Building Material Market, Juhi, Govind Nagar, Kanpur, which are described in Annexure 1 to the plaint. On 2-12-1978 all the three partners agreed to stop the operation of the firm and dissolved the partnership business. However, the assets of the partnership business could not be distributed till date. Smt. Jaidevi Sharma, who was the mother of the plaintiff and defendant No. 1 is said to have expired on 25-11-1988. The defendant No. 2 is the wife of defendant No. 1. The defendant No. 1 is a partner of M/s. B. T. Paul and Sons. His wife defendant No. 2 is carrying on business in the name and style of M/s. Sukhdeo Steel Cutters and Welders from premises No. 83/23-B, Building Material Market, Juhi, Govind Nagar, Kanpur. The defendant No. 2 is alleged to be using and usurping the materials, machineries and other assets, as given in Annexures to the plaint, of the firm M/ s. B. T. Paul and Sons in her business, which is a proprietorship concern and she is doing so without the consent of the plaintiff. The defendant No. 2 has no right or authority to use or utilise any asset or shares of the erstwhile firm which, though dissolved, has not been wound up. The plaintiff is said to have requested the defendants to desist from using the properties and assets of the erstwhile firm but no heed was paid to his request; hence the suit. Along with the suit the plaintiff had filed an application for grant of ad interim injunction and the defendants seem to have filed objections to the said application.

( 4 ) THE case of the defendant No. 2 is that plot No. 83/23-B, which belonged to M/s. B. T. Paul and Sons, was earlier leased out to some department by the partners of the B. T. Paul and Sons and thereafter the said tenant had vacated the premises and it was let out to the defendant No. 2, who has started her own business with her own assets and funds. She has denied that she is using any assets or properties of the erstwhile firm without the consent and permission of the partners of the said firm. The defendant No. 1, who is the husband of defendant No. 2, obviously seems to have been supporting the defendant No. 2. His case is that the partnership deed of 1966 contained an arbitration clause. On the dissolution of partnership in 1978 the question of distribution of assets was to be referred to the arbitrator because the assets could not be amicably distributed between the partners of that firm. Since no arbitration had taken place despite the efforts of the defendant No. 1, therefore, the assets of that firm have not been distributed but it is stated by him also that plot No. 83/23-B, which was a vacant plot, has been leased out to defendant No. 2 by the























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