1. Partnership for real estate development — Death of partners — Execution of decree for injunction against legal heirs — Application under Section 47, Code of Civil Procedure. (Para 3 , 4 , 6 , 7 )
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2019 Supreme(SC) 1163
SUPREME COURT OF INDIA
Indu Malhotra, R. Subhash Reddy, JJ.
S.P. Misra & Ors. – Appellants
Versus
Mohd. Laiquddin Khan & Anr. – Respondents
CIVIL APPEAL NO.3311 OF 2015
Decided On : 18-10-2019
Advocates Appeared:
For the Appellant(s) :A. Subba Rao, Advocate
For the Respondent(s):Venkateswara Rao Anumolu, Advocate
For the Appellant(s) :A. Subba Rao, Advocate
For the Respondent(s):Venkateswara Rao Anumolu, Advocate
IMPORTANT POINTS
(1) Executing Court cannot travel beyond decree.
(2) When partnership stands dissolved by operation of law under Section 42(c) of Indian Partnership Act, 1932, question of execution in pursuance of decree does not arise.
Headnote:
Civil Procedure Code, 1908 – Section 47 – Indian Partnership Act, 1932 – Section 42(c) – Objection to execution of decree – Reliefs sought in Execution Petition are going beyond scope of decree – Executing Court cannot travel beyond decree – As there were only two partners, partnership itself stand dissolved, in view of death of a partner – Once partnership comes to an end, by virtue of death of one of partners, there will not be any partnership existing in which legal representatives of deceased partner could be taken in – When such legal representative are not parties to contract, such contract cannot confer rights or impose obligations arising under it on any third party, except parties to it – When partnership stands dissolved by operation of law under Section 42(c) of Indian Partnership Act, 1932, question of execution in pursuance of decree does not arise – There cannot be any contract unilaterally without acceptance and agreement by legal heirs of deceased partner – If there are any clauses in agreement, entered into between original partners, against third parties, such clauses will not bind them, such of clauses in partnership deed which run contrary to provisions of Indian Partnership Act, 1932, are void and unenforceable – Such clauses are also opposed to public policy – Trial Court rightly allowed application filed by respondents under Section 47 of C.P.C. and there is no error committed by High Court, in confirming such order – Appeal dismissed. (Paras 15, 16, 18, 23 and 24)
Facts of the case:
Present civil appeal is filed by appellants, in Civil Revision Petition No. 4894 of 2006, dated 09.04.2009, passed by High Court of Judicature, Andhra Pradesh at Hyderabad, whereby High Court has confirmed order dated 01.02.2006, in E.A. No. 6 of 2005 in E.P. No. 122 of 2003 in O.S. No. 580 of 1980, passed by II Senior Civil Judge, City Civil Court, Hyderabad. By that order, learned II Senior Civil Judge, City Civil Court, Hyderabad, allowed application filed by respondents, under Section 47 of Code of Civil Procedure, 1908.
Findings of Court:
When partnership stands dissolved by operation of law under Section 42(c) of Indian Partnership Act, 1932, question of execution in pursuance of decree does not arise. There cannot be any contract unilaterally without acceptance and agreement by legal heirs of deceased partner.
Result : Appeal dismissed.
Legal Category Hierarchy
Table of Contents
2. Whether a decree against a partner is executable against legal heirs via contractual automatic succession versus statutory dissolution under Section 42(c), Partnership Act. (Para 9 , 10 , 12 )
3. Executing court cannot exceed decree scope — Partnership of two dissolves upon death of one — Contractual clauses cannot override statutory dissolution or bind third parties. (Para 15 , 16 , 18 , 21 , 22 )
4. A partnership of two dissolves by law upon a partner's death; contractual clauses providing for automatic succession cannot override statute or bind non-party legal heirs. (Para 16 , 18 )
5. Appeal dismissed; orders of the Trial Court and High Court confirming the non-executability of the decree against legal representatives are upheld. (Para 23 , 24 , 25 )
6. What is the effect of the death of a partner in a partnership consisting of only two partners?
Under Section 42(c) of the Indian Partnership Act, 1932, a firm is dissolved by the death of a partner. In a partnership consisting of only two partners, the death of one partner results in the statutory dissolution of the firm. (Para 15 , 16 )
7. Can a partnership deed validly provide that legal heirs automatically become partners upon the death of a partner?
Clauses in a partnership deed providing that legal representatives automatically become partners upon a partner's death are void and unenforceable if they run contrary to the provisions of the Indian Partnership Act, 1932, and are considered opposed to public policy. (Para 18 )
8. Is a decree obtained against a partner executable against their legal heirs after the partnership is dissolved?
A decree obtained against a partner is not executable against their legal representatives if the partnership stood dissolved by operation of law and the legal representatives were not parties to the original contract, based on the principle of privity of contract. (Para 18 , 21 )
9. What is the limitation on the powers of an Executing Court regarding the scope of a decree?
It is a well-settled legal principle that an Executing Court cannot travel beyond the scope of the decree it is tasked to execute. (Para 15 )
10. When can a decree for injunction be executed against legal representatives under Section 50 of the CPC?
A decree for injunction can be executed against legal representatives under Section 50 CPC when the right litigated upon is heritable and partible, ensuring the cause of the injunction survives. (Para 20 , 21 )
JUDGMENT :
R.Subhash Reddy, J.
1. This civil appeal is filed by the appellants, in Civil Revision Petition No. 4894 of 2006, dated 09.04.2009, passed by the High Court of Judicature, Andhra Pradesh at Hyderabad, whereby the High Court has confirmed the order dated 01.02.2006, in E.A. No. 6 of 2005 in E.P. No. 122 of 2003 in O.S. No. 580 of 1980, passed by the II Senior Civil Judge, City Civil Court, Hyderabad.
2. By the aforesaid order, learned II Senior Civil Judge, City Civil Court, Hyderabad, allowed the application filed by the respondents, under Section 47 of the Code of Civil Procedure, 1908 (for short, ‘C.P.C.’).
3. All the appellants herein are legal heirs of late Sri Jai Narayan Misra and all the respondents herein are legal heirs of late Smt. Hashmatunnisa Begum. During the life time of late Sri Jai Narayan Misra and late Smt. Hashmatunnisa Begum, they entered into a partnership deed dated 14.04.1982. As stated in the partnership deed, late Smt. Hashmatunnisa Begum is the owner of open land with structures, situated in Paigah Compound bearing No. 156-159 ad-measuring 22,253 square meters approximately. After obtaining exemption from Government of India, Ministry of Defence, New Delhi, under Clause 20(1)(b) of the Urban Land (Ceiling and Regulation) Act, 1976, both the partners have entered into partnership, for carrying on business in real estate, by developing the land which forms the part of Paigah Compound. It appears that a major portion of the land is already developed, butdispute is to an extent of 3381 square meters, which is claimed by the original plaintiff, forming part of property No.156-159 of Paigah Compound. There were only two partners, as per the partnership deed.
4. The plaintiff in Original Suit No. 580 of 1988, filed by late Sri Jai Narayan Misra, died on 04.01.2001, whereas the predecessor of the respondents, late Smt. Hashmatunnisa Begum, died on 17.05.1996. During the life time, the predecessor of the appellants late Sri Jai Narayan Misra, has filed a Suit in O.S No. 580 of 1988, on the file of II Additional Judge, City Civil Court, Hyderabad, claiming the following reliefs:
“1. to grant permanent injunction against the defendant restraining the defendant and all the persons claiming through the defendant from preventing the plaintiff from carrying out the work of preparing layout plan, developing the property and sale thereof, in an extent of 3,381 square meters;
2. to grant mandatory injunction directing the defendant to sign the layout and other documents submitting to the Cantonment Board for sanction in respect of the land admeasuring 3,381 square meteres forming part of Paigah Colony situated at S.P. Road, Secunderabad, and for costs.”
5. The said Suit was decreed on 14.07.1993, by the Trial Court, granting the following reliefs:
“1. the defendant and all the persons claiming through the defendant be and that are hereby permanently restrained from carrying the work of developing the property and sale thereof in respect of the suit schedule property;
2. the defendant is hereby directed to sign the layout plan and other documents for submitting to the Cantonment Board, Secunderabad for sanction in respect of the suit schedule property;
3. Each party shall bear their own costs.”
6. After death of the original plaintiff, the legal heirs of the plaintiffs have filed Execution Petition before the Trial Court, by claiming the following reliefs:
“1. to direct the J.Dr. No.2 to 4 to sign the layout plan for submitting to the Cantonment Board, Secunderabad for sanction in respect of the suit schedule property;
2. to sign new/revised layout drawing, earmarking the additional land for development;
3. to break the existing boundary wall at the appropriate place to enable to have access into the additional land for which layout plan is being submitted;
4. to sign a letter to Cantonment Board, undertaking not to claim any water connection for the next 10 years;
5. to sign all other documents that may be required now or i
