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2018 Supreme(Online)(Guj) 5114
GUJARAT HIGH COURT
A.J. SHASTRI, J
AKSHARAY DEVELOPERS – Appellant
Versus
SHIV DEVELOPERS – Respondent
CIVIL REVISION APPLICATION NO. 241 of 2017
For the Appellants/Petitioners: MR.PRABHAV A.MEHTA
For the Respondents: MR.NILESH A PANDYA, MR.S.P.MAJMUDAR
Suits from unregistered firms are barred under Section 69 of the Indian Partnership Act, impacting their maintainability in court.
Headnote:(A) Indian Partnership Act, 1932 - Section 69 - Code of Civil Procedure, 1908 - Order 7 Rule 11 - Civil Suit for declaration and setting aside a sale document - Plaintiff, an unregistered firm, claims right arising from a contractual dispute - Application to reject plaint based on the assertion that the suit is not maintainable - Trial Court rejected the application and allowed the suit to proceed. (Paras 10, 11, 29)
(B) The effect of Section 69 of the Partnership Act bars suits from unregistered firms, which the court interpreted as applicable in this case given the unregistered status of the plaintiff's firm. (Paras 29, 35)
(C) The court finds that since the necessary prerequisites of Section 69 were not fulfilled, the learned trial judge committed a legal error by allowing the suit to continue. (Paras 36)
Findings of Court:
The learned trial judge's order was found to be erroneous, as the maintainability of the suit was rightly challenged. (Para 35)
Issues: The key issues involve the interpretation of Section 69 and its applicability to the present case involving a contractual claim by an unregistered firm.
Ratio Decidendi: The court concluded that since the suit was indeed barred under Section 69 due to the unregistered status of the firm, the decision of the trial court was quashed and the plaint was rejected.
Result: The Civil Revision Application is allowed, and the order dated 07.04.2017 is quashed with the plaint being rejected.
| Table of Content |
|---|
| 1. facts leading to the suit's filing. (Para 1 , 3) |
| 2. legal framework and context of dispute. (Para 2 , 4 , 8 , 10 , 19) |
| 3. assertions and objections of both parties. (Para 5 , 14 , 15) |
| 4. arguments regarding maintainability. (Para 11 , 12 , 13) |
| 5. citations and judgments supporting the decision. (Para 27 , 29 , 30) |
| 6. final ruling and implications. (Para 34 , 36) |
No
2
To be referred to the Reporter or not ?
No
3
Whether their Lordships wish to see the fair copy of the
judgment ?
No
4
Whether this case involves a substantial question of law as to
the interpretation of the Constitution of India or any order
made thereunder ?
No
AKSHARAY DEVELOPERS & 2.....Applicant(s)
Versus
SHIV DEVELOPERS & 3....Opponent(s)
Appearance:
MR.PRABHAV A.MEHTA, ADVOCATE for the Applicant(s) No. 1-3
MR.NILESH A PANDYA, ADVOCATE for the Opponent(s) No.3
MR.S.P.MAJMUDAR, ADVOCATE for the Opponent(s) No.1
NOTICE SERVED BY DS for the Opponent(s) No. 1-4
CORAM: HONOURABLE MR.JUSTICE A.J. SHASTRI
Date : 15/02/2018
ORAL JUDGMENT
[1]
Rule. Mr.Nilesh A.Pandya, learned advocate waives
service of rule on behalf of the respondent No.3 and
Mr.S.P.Majmudar, learned advocate waives service of rule on
behalf of the respondent No.1.
Page 1 of 35
[2]
The present revision application under Section 115
read with Section 151 of Code of Civil Procedure, 1908 is filed
by the petitioners - original defendants No.1 to 3 against an
order dated 07.04.2017 passed below Exh.11 in Special Civil
Suit No.333 of 2015 by learned 9th Additional Senior Civil
Judge, Vadodara.
[3]
The brief facts leading to the ultimate rise of the
present revision application are that original plaintiff has filed
the suit in the Court of learned 9th Senior Civil Judge, Vadodara
being Special Civil Suit No.333 of 2015 for declaration,
permanent injunction and setting aside the sale document
dated 24.02.2015. The said suit appears to have been filed on
22.08.2015 on the premise that there was a fraud committed
by the defendants in respect of execution of sale document
dated 24.02.2015. It was asserted by the original plaintiff that
though he was having a share to the extent of 60% in the land
in question and the defendants No.2 and 3 purchased it by
executing fraud. It has further been asserted that plaintiff-Shiv
Developers, whose administrator is one of the partner, namely,
Sunilbhai Somabhai Ajmera is conducting the business in which
another partner of the firm one Jigneshbhai Kanubhai Desai
and the plaintiff firm is dealing in construction activity. It has
been contended in the suit that defendant No.1-Aksharay
Develpers has approached the plaintiff and wanted to take part
in construction activity, and the plaintiff as a partner and
administrator of said developers and defendants No.2 and 3
individually had purchased one property on 26.11.2013 which
is described in paragraph 1 of the plaint at Vadodara. The said
document got registered on 26.11.2013 in the office of Sub
Registrar, Vadodara. This land had been purchased by the
Page 2 of 35
plaintiff with defendants No.2 and 3 individually and it was
understood in the document specifically that 60% share in the
said property went to plaintiff whereas 40% would be that of
defendants No.2 and 3. It was noticed by the plaintiff that
after purchase of the suit property on 26.11.2013 defendants
No.2 and 3 who individually entered into transaction originally,
have formed a partnership in the name of Aksharay
Developers consisting of 4 partners wherein the plaintiff was
made one of the partners. Much thereafter, on 22.04.2014
four partners including defendants No.2 and 3 have formed the
aforesaid firm. On the same day, as per the allegations of the
plaintiff as a part of fraud and conspiracy, one Memorandum of
understanding was also executed by the partners. In para 2 of
the aforesaid Memorandum of understanding it is provided
that upon development of property and sale, whatever income
