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KERALA HIGH COURT
S.S. Satheesachandran, J.
Scaria Paul —Appellant
versus
Paracka Industries —Respondent
RSA No. 51 of 2009
Decided on 26.11.2010
For the appellant:Mr. John Joseph Vettikad & Mr. C. Joseph Jonny, Advocates.
For the Respondents:Mr. T. Krishnan Unni, Sr. Advocate, Mr. Kurian Antony Edassery, Mr. Ann Emil Joseph, Mr. Joseph K.Thachil, Mr.Varghese C. Kuriakose & Mr.T.A. Abdul Rasheed, Advocates.
IMPORTANT POINT
Intervention of court to settle the differences by prohibitory orders at the instance of one partner against the other in the absence of relief of dissolution of the firm and settlement of accounts is not desirable and that does not suit with the provisions covered by the Partnership Act.
Headnote:Specific Relief Act, 1963— Sections 37 and 38— Partnership Act, 1932— Sections 4 and 7 — Suit seeing injunction by one partner for restraining other partners from alienating the plaint property— Partnership was at will—Held—Where the partnership is a partnership at will, there cannot be a decree for perpetual prohibitory injunction— It is for the partners themselves to resolve their differences by mutual discussion and deliberation, and no doubt they are to be guided by the terms of partnership deed— Intervention of court to settle the differences by prohibitory orders at the instance of one partner against the other in the absence of relief of dissolution of the firm and settlement of accounts is not desirable and that does not suit with the provisions covered by the Partnership Act. (Para 9)
Result: Appeal dismissed.
S.S. Satheesachandran, J.— Plaintiff is the appellant. He is a partner of a registered firm, the 1st defendant in the suit. Suit was laid for a declaration that the 12th defendant is not a duly accepted partner of the 1st defendant firm and for a permanent prohibitory injunction to restrain defendants 1 to 11 from encumbering the plaint schedule property and also from inducting new partners to the firm, without the consent of all other partners. Pending suit, the declaratory relief canvassed was given up and an adjudication was called for only with respect to the injunctions applied for. The Trial Court, after examining the materials tendered, dismissed the suit holding that no cause of action had been made out by the plaintiff. In the appeal preferred by the plaintiff against the dismissal of the suit of lower appellate court partly decreed the suit, granting the plaintiff a decree of injunction restraining the defendant’s 1 to 11 from encumbering the plaint schedule property without the consent of the existing partners of the firm. However, the injunction sought for against alienation of the plaint schedule property was declined holding that clause 20 of the partnership deed (Ex.B1) empower the managing partner or manager to buy and sell landed properties. Plaintiff has filed this present appeal impeaching the correctness of the decree to the extent the injunction sought by him against defendants 1 to 11 from alienating the plaint schedule property without the consent of all the other partners of the firm, has been negatived by both the courts below.
2. The case set up by the plaintiff for the relief’s claimed and the contentions raised by the contesting defendants resisting such claims, in brief, can be summed up thus:
Plaintiff is a partner of a registered firm,
M/s. Paracka Industries, which is the 1st defendant in the suit. One among the partners of the 1st defendant firm, namely, Aliyakutty Paul passed away in 2002. His legal heirs, who are not partners of the firm, are impleaded as defendants 12 to 18 in the suit. Defendants 2 to 11 are other partners of the firm. Alleging that without the consent of all other partners, the 2nd defendant colluding with some other partners, are making attempts to induct 12th defendant in the place of deceased Aliyakutty Paul with the fraudulent intent to encumber and alienate the plaint properties without, the consent of all other partners of the firm the suit was laid for a declaration that the 12th defendant is not a duly accepted partner of the 1st defendant firm and for injunction restraining defendants 2 to 11 from encumbering or alienating the plaint property without the consent of the other partners of the firm. The 2nd defendant on behalf of the 1st defendant, as well filed a written statement admitting that the plaintiff with defendants 2 to 11are partners of the firm. He contended that the plaintiff had no locus standi to institute the suit and the 12th defendant had been inducted as a partner of the firm with the consent of all the legal heirs of Aliyakutty Paul. Plaintiff has no cause of action for instituting the suit and the 2nd defendant managing partner of the firm, as per the partnership deed, is competent to encumber and alienate the properties, was the further contention of the 2nd defendant. Some other defendants namely, 3, 4, 6 to 12 and 18 filed a joint written statement, in which, they adopted the contentions taken by the 2nd defendant.
3. Pending suit, the 2nd defendant passed away and his legal heirs were brought on record as additional defendants 19 to 27, who filed an additional written statement adopting the contentions taken by their predecessor, the 2nd defendant.
4. Maintainability of the suit being challenged, it was considered preliminarily by the trial court. Suit was found to be maintainable, and then the trial proceeded. The evidence consisted of PW1 and Exs.A1 to A5 for the plaintiff and Ex. Bl and DW1 for the contesting defendants. The de
