The grievance of the plaintiff is also that defendant No.1 through its other partners is taking undue advantage of the family disputes of the plaintiff with his members of HUF and depriving the plaintiff with the legitimate dues which the plaintiff is entitled to receive every month as a partner of the defendant No.1. It is also alleged that the other members of the HUF need not be paid and the defendants could not insist on the same by withholding the share profits from the plaintiff.
defendants have cited the recitals and the clauses of several partnership deeds entered into by the parties from time to time including the ones by which the plaintiff has been admitted as a partner in the partnership firm to contend that it was always the intention of the defendants and their predecessors who were the elders in the family that their family members or heirs should benefit out of the profits arising out of the partnership business. Once the plaintiff attempted to use the said profits to his own benefits and the defendants were alerted by the other members of HUFabout the same, the defendants have rightly proceeded further by calling upon the plaintiff and the defendants No. 9 to 11 either to nominate the fresh partner representing HUF or otherwise they will consider the said HUF as an outgoing partner. Therefore, the actions of the defendants cannot be faulted with.
plaintiff was never a partner in the Individual capacity and was always representing K.L.SahniHUF.
----------------------------------------------------------------------------------------
HIGH COURT OF DELHI: NEW DELHI
% Judgment pronounced on : 31.10.2012
+ I.A. No.4724/2011, I.A. No.20117/2011, I.A. No.16439/2011& I.A. No.5787/2011 in CS (OS) No.713/2011
SHIV SAHNI ..... Plaintiff Through Mr.Amit Sibal Adv. with Mr.Nikhil
Rohatgi & Mr.Vinay Tripathi,
Advocates
Versus
ISHERDAS SAHNI AND BROTHERS & ORS ..... Defendants Through Mr.Dinesh Garg Adv. with
Ms. Payal Jain Adv for D-1 to 8.
Mr.Harish Malhotra, Sr. Adv with
Ms. Sujata Kashyap & Mr.A.K.
Singh, Advs. for D- 9 & D-10.
Ms. Anuradha Mukherjee, Adv. with
Ms. Jyoti Dastidar, Adv. for D-11.
CORAM:
HON'BLE MR.JUSTICE MANMOHAN SINGH
MANMOHAN SINGH, J.
1. The present suit has been filed by the plaintiff, inter alia, seeking a decree declaring the letters dated 31st December, 2010 and 1st March, 2011 as null and void. A decree of permanent injunction restraining the defendants jointly and severally through themselves or their legal heirs, servant, agents or employees from interfering with the partnership rights of plaintiff in defendant No.1 in accordance with partnership deed dated 1st November, 2002 and 5th January, 2004 and also a decree of rendition of
CS (OS) No.713/2011 Page 1 of 37 accounts. The plaintiff is one of the partners of the defendant No.1 Partnership Firm having a business of running cinema theaters. The plaintiff became the partner of the said firm after the death of his father with consent of all the legal heirs of Sh.Krishan Lal Sahni vide Partnership Deed dated 1st November, 2002. Along with the suit, the plaintiff has also filed an I.A. No.4724/2011 wherein the plaintiff has sought the injunction against the defendants.
2. The defendants No.2 to 7 are the other partners of defendant No.1-firm. Defendant No.8 had expired. Mrs.Gita Talwar has been partner in her place. Defendants No.9 to 11, i.e. Mr.Jayant Sahni, Mrs.Neena Sahni and Mrs.Renee Khanna are the brother, mother and sister of the plaintiff and they were impleaded as defendants vide order dated 23rd March, 2011.
3. Brief factual matrix of the matter leading up to filing of the instant suit and the present applications can be enunciated as under: a) Plaintiff states that the defendant No.1 is partnership firm carrying on the business mainly to run the cinema theatres and distribute the rents arising out the said running of the theatres between the partners.
b) It is averred in the plaint that the plaintiff became the partner of the defendant No.1 firm upon the death of his father Late Sh.Krishan Lal Sahni with the consent of the legal heirs of Sh.Krishan Lal Sahni.
c) The plaintiff has stated in the plaint that the defendant No.1 firm was formed by four brothers namely Sh.Isherdas Sahni, Late Sh.Karam Chand Sahni, Late Sh.Roshan Lal Sahni and Late
CS (OS) No.713/2011 Page 2 of 37 Sh.Amrit Lal Sahni. The main business of the said firm was to run cinema theaters. It is submitted that one of the major properties of the firm is a building and cinema theater at Connaught Place, New Delhi known as "Odeon Complex". There were other theaters also all across the country, however, slowly the majority of the other properties have been liquidated though Odeon continues to be in the business of the partnership. d) The plaintiff has averred in the plaint that the business of the defendant-firm carried on for some time. On 4th September, 1977, one of the then partners namely Smt.Damyanti Sahni expired. On her death an effort was made by the other partners to somehow exclude the plaintiff's branch from the partnership by the denying the right of being a partner to the plaintiff's father Sh.K.L.Sahni. It is submitted that at that time, an illegal partnership deed dated 16th April, 1978 was executed without the plaintiff's father as a partner. Feeling aggrieved by the said illegal act, the plaintiff's father filed the suit being CS(OS) No.391/1978 before this Court which was eventually settled wherein the plaintiff's father Sh.K.L.Sahni was retained as a partner. Pursuant to the said event, the partnership deed dated 22nd May, 1978 was entered into wherein Sh.K.L.Sahni was a partner in the firm.
e) Thereafter, on 29th April, 1987, another partner namely Sh.Ramesh Chander Sahni died. This event again led to the entering of fresh partnership deed dated 6th May, 1987 by virtue of which, Smt.Renu Sahni was admitted as a partner and
CS (OS) No.713/2011 Page 3 of 37 representing HUF of Late Sh.Ramesh Chander Sahni as a manager. As per the plaintiff, the said partnership deed dated 6th May, 1987 contained the following clauses which are relevant for the purposes of the present proceedings:
"20. That the death of any partner shall not dissolve the partnership and the lawful heirs of the deceased partner (or any one or more of the legal heirs with the consent of the others of the said legal heirs) shall be entitled to become partner/partners of the new Firm. Till such time as a new partnership deed is executed on the death of any of the partners, the right and power exercisable by virtue of the provisions of this deed or partnership shall continue to be performed by the remaining partners as if no change has taken place.
21. That it is hereby agreed that the legal heirs of any deceased partner shall be taken into the new partnership as and when such a contingency
arises."
f) The plaintiff has stated in the plaint that on 30th October, 2002, Sh.K.L.Sahni, the father of the plaintiff expired. It is submitted that there were slight changes in the partnership deeds during the in between period, which are irrelevant for the purposes of the present proceedings. The plaintiff has further stated that the clauses 20 and 21 of the partnership deed dated 6th May, 1987 continued to govern the partners of the defendant No.1 firm so far as it relates to the event of the death of the partner. There was no change in the said stipulation relating to the event of the death of the partner, since the deed dated 6th May, 1987 was entered
CS (OS) No.713/2011 Page 4 of 37 into between the partners of the defendant No.1 till the time of the death of Sh.K.L.Sahni which is dated 30th October, 2002. g) The plaintiff has averred in the plaint that in furtherance of the operation of the clause 20 of the partnership deed dated 6th May, 1987, the plaintiff being the Karta of K.L.Sahni (HUF) was duly nominated by the other members of the HUF to be the partner in the defendant No.1 firm. All the other legal heirs of Late Sh.K.L.Sahni which are added as defendants No.9 to 11 in the instant suit gave their consent in writing that they have no objection if the plaintiff is admitted as a partner of the defendant No.1 firm. Pursuant to the said nominations made by the other legal heirs of Late Sh.K.L.Sahni to nominate Karta of K.L.Sahni (HUF) as a partner of the defendant No.1 firm, the new partnership deed dated 1st November, 2002 was entered into between the partners whereunder the plaintiff was also added as one of the partners in the defendant No.1 firm. The plaintiff has filed the affidavits of Mrs.Neena Sahni, Mr.Jayant Sahni and Mrs.Renee Khanna confirming the said nomination of defendant No.1 firm.
h) It is further stated in the plaint that by way of an addendum dated 5th January, 2004 to the partnership deed, the plaintiff was given right to operate the bank account of the defendant No.1 firm singly in the like manner as that of the other partners in the partnership firm of defendant No.1.
i) Plaintiff has also narrated that there were further changes carried out in the firm from time to time thereafter wherein certain
CS (OS) No.713/2011 Page 5 of 37 partners died, the partnership was reconstituted wherein the plaintiff was part and parcel of the said firm all along. j) It is stated in the plaint that the defendant No.1 is receiving huge rents from the newly appointed licencees pursuant to the renovation of Odeon Cinema in the year 2006. The said licensees include the agreement entered into the defendant No.1 firm with Reliance Mediaworks Limited dated 11th May, 2006 where under `19 lac per month is received by the defendant No.1 firm, likewise there are other licensees like Jafra Ruchi Cosmetics (India) Pvt. Limited, Infinity Retail Limited occupying the mezzanine floor and ground floor.
k) The grievance of the plaintiff is that he is not receiving the commensurate share of the rent which he is entitled to receive every month under the partnership in the defendant No.1 arising out of the said rentals received by the defendant No.1. It is averred that even if each and every amount is adjusted which has been received by the defendant No.1, still the plaintiff is entitled to a sum `3.5 lac per month at least as a 1/8th share of the monies earned by the defendant No.1 firm. It is stated that the plaintiff has received a sum of `3,41,250/- as on 22nd October, 2005 towards payment of interest by the defendant No.1 on the loans of `8.75 lacs given by each and every partners of the defendant No.1.
l) Plaintiff has averred in the plaint that on 3rd April, 2010, the brother of the plaintiff Sh.Jayant Sahni demanded partition of K.L.Sahni HUF. Sh.Jayant Sahni also wrote to the defendant
CS (OS) No.713/2011 Page 6 of 37 No.1 on 7th April, 2010 that the plaintiff is no longer the Karta of K.L.Sahni HUF and that the partners of the defendant No.1 firm be notified not to part with anything enuring to K.L.Sahni (HUF) to the plaintiff exclusively.
m) It is stated in the plaint that Sh.Jayant Sahni further issued a public notice in this regard in the newspaper in April, 2010. Sh.Jayant Sahni on 26th April, 2010 also issued the legal notice to the plaintiff in this respect.
n) On 24th September, 2010, Sh.Jayant Sahni and Smt.Neena Sahni wrote a letter to the defendant No.1 firm that the new partnership deed which was to be executed on the death of another partner Smt.Prem Sahni ought not to be executed without their consent.
o) The plaintiff has stated that in between there were some settlement talks but the settlement could not be arrived at due to the disagreement between the plaintiff and other family members on the terms of the settlement.
p) The grievance of the plaintiff is also that defendant No.1 through its other partners is taking undue advantage of the family disputes of the plaintiff with his members of HUF and depriving the plaintiff with the legitimate dues which the plaintiff is entitled to receive every month as a partner of the defendant No.1. It is also alleged that the other members of the HUF need not be paid and the defendants could not insist on the same by withholding the share profits from the plaintiff. The plaintiff has therefore challenged the letter dated 31st December, 2010
CS (OS) No.713/2011 Page 7 of 37 wherein the defendant No.1 through the partners has called upon the plaintiff and other members of HUF to resolve their dispute and nominate a partner at an early date otherwise, the defendant No.1 shall invoke the clause 24 (v) of Partnership Deed dated 20th April, 2009 to separate the share of M/s K.L.Sahni (HUF). q) The plaintiff is aggrieved by the letter dated 1st March, 2011, which has been issued by defendant No.1 through Smt.Gita Talwar (who as per the plaintiff is not the partner of the defendant No.1 firm) stating that K.L.Sahni (HUF ) was deemed to be an outgoing partner. The said letter as per the plaintiffs is purported by the defendants to again oust K.L.Sahni (HUF) branch of persons more specifically the plaintiff herein who had been unanimously appointed as a partner of the defendant No.1 and was also legally admitted in the firm for number of years.
4. The present suit came up for hearing on 23rd March, 2011, when this Court has directed the defendants to deposit the sum due to the plaintiff as a partner of the defendant in the Court by way of draft with the Registrar General of the Court. On the same date, the Court at an oral request of the counsel representing three members of K.L.Sahni (HUF) permitted them to be arrayed as defendants No.9 to 11 in the instant proceedings.
5. Pursuant to the summons, the defendants No.1 to 8 have filed their written statement. Defendants No. 9 to 11 have filed their separate written statement. The defences raised by the defendants in the present suit can be outlined in the following manner:
CS (OS) No.713/2011 Page 8 of 37 a) The plaintiff is no longer the partner of the partnership firm of the defendant No.1 and as such the plaintiff is not entitled to maintain the instant suit.
b) The plaintiff has not disclosed before the Court that the partner of the defendant No.1 firm earlier was Sh.K.L.Sahni as a Karta of HUF and subsequently too Mr.Shiv Sahni, plaintiff herein has been admitted in the partnership always as a Karta of HUF of K.L.Sahni. The defendants have cited the recitals and the clauses of several partnership deeds entered into by the parties from time to time including the ones by which the plaintiff has been admitted as a partner in the partnership firm to contend that it was always the intention of the defendants and their predecessors who were the elders in the family that their family members or heirs should benefit out of the profits arising out of the partnership business. Once the plaintiff attempted to use the said profits to his own benefits and the defendants were alerted by the other members of HUF about the same, the defendants have rightly proceeded further by calling upon the plaintiff and the defendants No. 9 to 11 either to nominate the fresh partner representing HUF or otherwise they will consider the said HUF as an outgoing partner. Therefore, the actions of the defendants cannot be faulted with.
c) The defendants No.1 to 8 submitted that they have not heard from the plaintiff and the members of K.L.Sahni HUF with respect to the appointment of the new nominee. Relevant
CS (OS) No.713/2011 Page 9 of 37 preamble of the partnership deed was rewritten on 1 st March 2011 wherein the following clause was added:
"The family dispute arose between the coparceners/members of M/s. Krishan Lal Sahni
(HUF), as a consequence of which one of the
coparcener Shri Jayant Sahni gave a Notice dated 03.04.2010, to the other coparcener, then Karta of said HUF namely Shri Shiv Sahni dissolving the said HUF. Under the Partnership Deeds dated 30.10.2002, 30.11.2004 and 20.04.2009, Shri Shiv Sahni, was taken as a partner being the then Karta of Shri K L Sahni (HUF) and two has been representing the said HUF. Consequent upon the Notice from Shri Jayant Sahni to Shri Shiv Sahni dissolving the said HUF and consequent upon reaching no consensus
between all the members of Shri K L Sahni (HUF)
with regard to nominating one person in terms of Clause 24 (iv) of the Partnership Deed dated
20.04.2009, to become the partner of the Firm, the partner M/s. K L Sahni (HUF) is deemed to be a
deceased partner. Rest of the Continuing Partners have now become entitled to acquire the share of such deceased partner at the Book Value, however, since the accounts of the Firm are yet to be settled and the share of the deceased partner is yet to be paid, it is decided by the continuing partners to continue the business of the Partnership Firm for the time being with all the property of the Firm with entitlement of the deceased partner in terms of Section 37 of the Indian Partnership Act. As such, it is decided by all the continuing partners to not to take over the share of the deceased partner M/s. K L Sahni (HUF) for the time being and to have the said share as it is as if belonging to the deceased/outgoing partner with
entitlement of such deceased/outgoing partner in terms of Section 37 of the Indian Partnership Act."
CS (OS) No.713/2011 Page 10 of 37 d) The plaintiff was never a partner in the Individual capacity and was always representing K.L.Sahni HUF. Since now the defendant Nos.9 and 11 had filed the suit being CS(OS) No.730/2012 for partition and once the partition suit is lodged, the status of the karta of HUF has come to an end. The immediate result of the same would be that the entitlement to remain as partner in the defendant No.1 firm has come to end and the same very reason has been intimated by the other family members of HUF. Therefore, the plaintiff is neither entitled in law to maintain the present suit nor he is entitled to continue to remain as a partner of the defendant No.1 firm. e) The defendants No.9 to 10 have supported the defence raised by the other defendants by contending that it was always the HUF of K.L.Sahni who was represented in the partnership business carried out by the defendant No.1. The defendants No.9 and 10 have narrated several instances where the family members and legal heirs in the said partnership were benefited from time to time in the partnership profits to contend that the intention of the persons who originally formed the partnership was always that all the family members and descendants should get benefit from the partnership profits being the members of the HUF.
f) It is also contended by the defendants No.9 and 10 that the monies which the plaintiff alleged in the plaint to have supplied to the defendant No.1 was taken from the funds from HUF accounts. It is submitted that the income tax returns of the
CS (OS) No.713/2011 Page 11 of 37 defendant No.1 would show that the tax returns from 2002 to 2006 were paid by showing K.L.Sahni as HUF and not the plaintiff herein as an individual partner.
g) The defendants No.9 and 10 also denied that they have ever consented to the plaintiff's admission as a partner in the partnership firm. The defendants allege in the written statement that the affidavits were forged and fabricated documents and the same have been procured by the plaintiff without reading out to them or explaining the contents of the same.
By taking all these defences, the defendants have resisted the injunction application by submitting that the injunction application filed by the plaintiff should be dismissed.
6. Parties have made their respective submissions in the pending applications. The details of the same are given as under: i) I.A. No.4724/2011 filed on behalf of the plaintiff under Order XXXIX Rule 1 & 2 of CPC
The present application by the plaintiff under Order XXXIX Rule 1 & 2 of the Code of Civil Procedure, 1908, inter alia seeking an ad interim injunction from jointly and severally through themselves or their legal heirs, servant, agents or employees from interfering with the rights of the plaintiff vide partnership deed dated 1st November, 2002 and 5th January, 2004 and further restrain the defendants from dealing with any of the movable and immovable properties of defendant No.1 firm including the bank accounts and also the money received from the licensee/lessees in the property at Odeon Cinema, Connaught Place, New Delhi.
CS (OS) No.713/2011 Page 12 of 37 ii) I.A. No.5787/2011 filed by plaintiff under Order 1 Rule 10 of the CPC
The present application has been filed under Order 1 Rule 10 of the Code of Civil Procedure, 1908 seeking, inter alia, deletion of the names of defendants No.9 to 11 from the array of the parties and thus reviewing the order dated 23rd March, 2011 wherein defendants No.9 to 11 were impleaded as party in the present suit. It is stated in the application that defendants No.9 to 11 are family members of the plaintiff and have no concern with the partnership of firm in the name and style of "Isherdas Sahni & Brothers". The plaintiff further submits that merely being a member of a HUF does not empower them to claim any right in the partnership firm.
The plaintiff further states that defendants No.9 to 11 had suppressed the fact that they have filed a separate suit being Suit No.1216 of 2010 for partition of the HUF and the suit was withdrawn vide order dated 9th August, 2010. The plaintiff draws attention to the fact that defendants No.9 to 11 did not implead the partnership firm as a party in their suit, knowing full well that partnership firm and the HUF have no nexus amongst themselves. Thus the plaintiff seeks that defendants No.9 to 11 be deleted from the array of parties for the reasons mentioned herein above. iii) I.A. No.8400/2011 filed by D-11 under Section 151 CPC The same was already disposed of vide order dated 26 th July, 2011 and it was wrongly listed.
iv) I.A. No.20117/2011under Order XXXIX Rule 1 & 2 filed by plaintiff
The fourth interim application has been filed by plaintiff under Order XXXIX Rule 1 & 2 seeking the following reliefs:
CS (OS) No.713/2011 Page 13 of 37 "i. Direct the defendants to deposit the rental income received from the tenants of Odeon Cinema in this Hon'ble Court.
ii. Restrain the defendants by way of an interim or ad- interim injunction from jointly and severally through themselves or their legal heirs, servant, agents or employees from dealing with any of the moveable and immoveable properties of the defendant No.1 firm in particular Naaz Cinema at Lucknow.
iii. Restrain the defendants by way of an interim or ad-interim injunction, from jointly and severally through themselves or their legal heirs, servant, agents or employees from interfering with the partnership rights of the plaintiff in the defendant No.1 and as modified from time to time with the consent of the plaintiff."
v) I.A. No.16439/2011 filed by Defendant No.10 under Section 151 of CPC
The present application is filed by defendant No.10 under Section 151 of the Code of Civil Procedure, 1908 seeking a direction of `1 lac to be paid forthwith and thereafter every month without prejudice to her rights on the ground that defendant No.10 is the widow of Late Kishan Lal Sahni and aged about 71 years and is also suffering from various ailments like severe diabetes, heart problem etc. She has also suffered a stroke and was hospitalized. Her medical expenses are high and she needs an all time para-medical attendant for her supervision.
7. The matter came up for hearing before this Court for disposal of pending applications when Mr.Amit Sibal, learned counsel appeared on behalf of the plaintiff and Mr.Dinesh Garg, learned counsel appeared on behalf of defendants No.1 to 8 and Mr.Harish Malhotra, learned Senior counsel appeared on behalf of defendants No.9 and 10.
CS (OS) No.713/2011 Page 14 of 37
8. Mr.Sibal, learned counsel appearing on behalf of plaintiff has made his submissions which can be outlined in the following manner: a) Firstly, Mr.Sibal, learned counsel for the plaintiff argued that the defendants' stand that HUF was always a partner in the partnership firm of defendant No.1 is legally not well founded. This is due to the reason that HUF cannot become a partner with other individuals to form a partnership firm. It is argued that HUF is itself an association of individuals and an individual cannot be joined with other individual/ individuals to form another association of individuals which is called a partnership firm. Therefore, whenever a nominee of HUF being a Karta or a member of family is appointed as a partner in the partnership firm, his rights and obligations are governed by Indian Partnership Act 1932 in his individual capacity and not as per the Hindu law.
In this context Mr.Sibal relied upon the judgment passed by the Supreme Court in the case of Rashiklal & Co. vs. CIT, (1998) 2 SCC 49 wherein the apex Court has laid down the said proposition and discussed this proposition in great detail.
b) Mr.Sibal, learned counsel for the plaintiff thereafter argued by drawing the aid from what has been laid down in the decision of Rashiklal (supra) that it may be possible that the profits received by the partner representing the family in the partnership firm may ultimately be distributed amongst the members of HUF, but that by itself does not mean that HUF has become partner in the partnership firm. The said aspect of profit sharing is the matter between the members of HUF and the nominee wherein the persons expecting the
CS (OS) No.713/2011 Page 15 of 37 profits can call upon the nominee to render accounts in a separate proceeding. The rights and obligations of a partner so far as it relates to his entitlement of profits is concerned shall continue to be governed by the Indian Partnership Act, 1932 and shall remain unaffected by the said act of profit sharing amongst the family members which is an act later in point of time than the receipt of the profits from the partnership business.
Therefore, the change in constitution of HUF or its functioning or the status of the said person in HUF does not affect the right and status of the said person as a partner in the partnership firm as the said relation of the partnership rests on the contract. c) Mr.Sibal, learned counsel for the plaintiff has argued that the clause 24 of deed of the partnership dated 20th April, 2009 would not be applicable so far as it relates to the status of the plaintiff as a partner. This is due to the reason that the plaintiff had been admitted in the partnership by virtue of the earlier partnership deed dated 1st November, 2002 wherein the consent of the legal heirs of Sh.K.L.Sahni had already been taken and thereafter the new partnership was formed.
The subsequent change of the mind by the legal heirs and the so called withdrawal of the consent by the defendant Nos. 9 and 10 would be inconsequential in law as once the plaintiff had been admitted into the partnership by way of deed dated 1st November, 2002, thereafter the plaintiff shall remain a partner in the defendant No.1 firm and shall be governed by the provisions of the Partnership Act, 1932. Therefore, subsequent change in consent would be
CS (OS) No.713/2011 Page 16 of 37 inconsequential as there is no such provision in law governing the status of the existing partner in the partnership firm on the basis of the consent of the family members or others not being partner. d) Mr.Sibal has argued that the plaintiff could be expelled in view of the powers contained in the contract between partners as per Section 33 of Partnership Act, 1932. The said deed dated 1st November, 2002 is not the document containing such power as the said clause 24 of deed dated 1st December, 2004 provides for the event of death of the partner which has been revised subsequently pursuant to the admission of the plaintiff as a partner in the year 2002. The said clause 24 would apply if at all to the death of the partner on the date or after the date of entering into the said partnership. But in no circumstances, the partnerships which continued till the date of entering of deed dated 1st December, 2004 and deaths of the partners prior to the date of entering into such deed would get affected by the subsequently added clause 24.
Such a power if at all is existing cannot be allowed to operate retrospectively in the manner done by the defendant. On the date, when the plaintiff was admitted as partner, no such clause 24 existed, the partnership continued thereafter, the defendants cannot now turn around and state that the plaintiff cannot remain the partner as it requires fresh consent when the said consent is not required qua plaintiff but qua some other legal heir whose parent had died pursuant to the entering of the said deed.
e) Mr.Sibal has argued that the partition of HUF would not affect the status of the plaintiff as a partner. It has been argued that the partition
CS (OS) No.713/2011 Page 17 of 37 has not taken place at the first place. This is due to the reason that suit for the partition was filed before this Court and ultimately was withdrawn by the defendant. Therefore, the said partition never took place.
In any case, Mr.Sibal argued that the said partition if at all has happened may affect the right, title and interest between the members of the family but cannot affect the status of the plaintiff as a partner in the firm. This is due to the reason once the plaintiff has been admitted as a partner in the firm either being a karta of the family or for whatsoever reason, the plaintiff shall continue to enjoy the status of a partner in the firm and his status cannot be altered on the basis of the change of his status in the undivided family as the HUF can never become a partner in the first place in the partnership firm. Mr.Sibal, in order to buttress his argument relied on the judgment passed in the case of Rashiklal (supra).
f) Mr.Sibal has replied to what has been stated in the written statement and urged by the defendants that some of the partners in the defendant No.1 were admitted in their Individual capacity and some representing the HUF and the plaintiff belongs to the latter category by submitting that what the Court has to see is the position in law as to whether it is possible to have HUF being a partner in the partnership firm and whether the change in the constitution of HUF can regulate the status of the partner in the firm. As per Mr.Sibal, the answer comes in negative, therefore, whatever the defendants are suggesting by showing the bank accounts of HUF operated by the plaintiff as Karta and other incidental things in order to set up a claim
CS (OS) No.713/2011 Page 18 of 37 of HUF are not denied but the same will not have any bearing on the partnership arrangement which is purely based on contractual relation of the partners.
Mr.Sibal has relied on the judgment passed in the case of Dulichand Laxminarayan vs. CIT, AIR 1956 SC 354 and also CIT vs. Bagyalaksmi & Co., AIR 1965 SC 1708 which lays down the said proposition.
Mr.Sibal argued that once it is realized that the status of the partner in the firm is not regulated by HUF whose the said partner is Karta, the defendant's contention to pay the said profits in the name of HUF is mischievous and illegal. It is argued that it may be possible that ultimately the said profits are assessed in the hands of HUF, but the same does not preclude the plaintiff to receive such profits arising out of the partnership as partner in his capacity and ultimately put it into HUF.
g) Mr.Sibal has argued while replying to the argument that upon the partition of the HUF, the plaintiff loses his right to represent HUF in the said partnership, the said aspect shall be taken care of once it is clear that the rights of the partners in the partnership are independent and distinct and are governed by the contractual relations between the persons as partners.
h) Mr.Sibal has further argued that so far as defendant No.11 is concerned, the said defendant is not the co-parcener in K.L.Sahni (HUF). The said defendant No.11 has relinquished her share so inherited from her father Sh.K.L.Sahni in favour of the plaintiff,
CS (OS) No.713/2011 Page 19 of 37 defendant No.9 and defendant No.10 by way of relinquishment deed dated 25th August, 2003.
9. By making the aforementioned submissions, Mr.Sibal argued that the plaintiff has prima facie case in his favour as the plaintiff has been a partner of defendant No.1 firm since the year 2002 and would continue to remain a partner in law irrespective change of the status in the HUF and the said acts of the defendant No.1 and its partners are prima facie illegal to the contractual relationship governing the partnership of the plaintiff with other partners in the firm. The irreparable loss will ensue to the plaintiff as the defendant No.1 firm is being completely mismanaged and the plaintiff is not being paid his share of the profits as against the same, the defendants are enriching themselves as partners of the firm. The plaintiff will be thus put to inconvenience if the plaintiff's status as a partner is not restored by way of interim order as sought for in the instant suit. Therefore, this Court should grant the interim reliefs as prayed in the interim applications filed by the plaintiff.
10. Mr.Dinesh Garg and Ms.Payal Jain, learned counsel appearing on behalf of defendants No.1 to 8 have referred the order dated 23rd March, 2011 and submit that the defendants are depositing the share of profits of Sh.K.L.Sahni (HUF) in the firm with the Registrar General of this Court and are ready to comply any order passed by this Court with regard to dispute between plaintiff and defendants No.9 to 11. He also informed the Court that earlier there were no serious disputes between the family members i.e. plaintiff and defendant Nos.9 and 10 as there were hardly any profits from the business of partnership firm, defendant No.1. As now the defendant No.1 is receiving a reasonable rental income from the immovable properties
CS (OS) No.713/2011 Page 20 of 37 of defendant No.1 therefore, there is an internal dispute between them. He has also stated that though the said defendants have contested the matter on merit and have also filed the written statement, however, at this stage the defendant Nos.1 to 8 are agreeable to comply any orders passed by this Court in the interim application.
11. Per Contra Mr.Harish Malhotra, learned Senior counsel for the defendant Nos. 9 to 10 and Ms. Anuradha Mukherjee , learned counsel for the defendant No.11 have made their respective submissions which can be outlined in the following manner:
a) Firstly, learned counsel argued that the plaintiff No.1 was representing K.L.Sahni (HUF) which is evident from the partnership deeds entered into by the defendant No.1 wherein the plaintiff is party to the deeds. The recitals of the said deeds were cited by the learned counsel to urge that it was always the understanding of the parties that the plaintiff shall represent the K.L.Sahni (HUF). b) Secondly, learned counsel for the defendants No.1 to 8 argued that it is not as if the defendants No.1 to 8 did not intend to give the share of the profits to the plaintiff. However, the defendants received the letters from the family members of the plaintiff which are letters dated 8th January, 2011 and 10th January, 2011, the effect of which is that the plaintiff is not giving the share of profits to the members of K.L.Sahni (HUF) and the plaintiff status on that count in the said HUF has been altered. Therefore, till the time, the family members of K.L.Sahni (HUF) decide to nominate the new nominee representing HUF, the defendants were awaiting the decision of K.L.Sahni (HUF) to nominate a new representative for a reasonable time. After
CS (OS) No.713/2011 Page 21 of 37 receiving no response from the K.L.Sahni (HUF), the defendants were compelled to exercise their powers under the clause 24 of the deed dated 20th April, 2009 by virtue of which K.L.Sahni HUF was deemed to be an outgoing partner.
c) Learned counsel for the defendants argued that once the suit for partition is filed, the severance of the rights of the co-parceners take place which in effect would mean the continuation of the plaintiff as partner in the defendant No.1 firm comes to an end. To this effect, learned counsel for the defendant relied upon the judgment passed by the learned single judge of this Court in the case of Brij Narain Aggarwal v. Anup Kumar Goyal & Ors., 144 (2007) DLT 386. Learned counsel for the defendants have attempted to distinguish the judgments relied upon by the plaintiff on the ground that the said judgments relates to the income tax cases and in the instant case the partition has taken place unlike in the cases relied upon by the plaintiff. Therefore, such disruption of the status of the plaintiff in K.L.Sahni would certainly have an impact on the status of the plaintiff as a partner.
d) Learned counsel for the defendant No.11 has argued that the prayer (c) in the interim injunction application filed by the plaintiff cannot be granted as the same may amount to granting the final relief. It has been argued that the Courts have always deprecated the practice of granting the final relief at the stage of interim. Learned counsel for the defendant No.1 has cited the judgment passed in the case of A.C. Muthiah v. Board of Control for Cricket in India, (2011) 6 SCC 617 in order to support the proposition argued by the plaintiff.
CS (OS) No.713/2011 Page 22 of 37 e) Learned counsel for the defendant No.11 has argued that the defendant No.1 has always recognized defendant No.11 as co-parcener. It has been argued that the defendant No.11's entitlement to share of profits gets crystallized by operation of Section 6 of Hindu Succession Act, 1956. Therefore, it cannot be said that the defendant No.11 is not entitled for the share of the profits. f) Learned counsel for the defendant No.11 has argued that the defendant No.11 has relinquished her inherited share from her father in HUF but not her own share as a co-parcener. It has been urged that the defendant No.11 is a co-parcener in her own right as per Section 6 of Hindu Succession Act, 1955 and the said defendant could not be deprived of her right under the Act.
g) Learned counsel for the defendant has argued if the argument of the defendant No.11 is not accepted by the Court, defendant No.11 has inherited her share as Sh.K.L.Sahni was the individual partner and after his death, there is a heritable partnership, accordingly the share 1/32 must accrue to the defendant No.11.
h) It has been argued by the learned counsel for the defendant No.11 that it was the clear understanding of all the members of HUF at the time of entering of deed of 2002 inducting the plaintiff as a partner that the plaintiff was a temporary representative of the defendants No.9 to 11's respective individual shares in the partnership. The consent of the members of HUF nominating the plaintiff as partner was revocable and conditional in nature.
By making the aforementioned submissions, it has been urged before this Court that the application seeking grant of injunction may be
CS (OS) No.713/2011 Page 23 of 37 dismissed by the Court.
12. I have gone through the plaint and written statements filed by all the defendants and have also perused the documents filed by the parties in the instant proceedings. I have also given careful consideration to the submissions advanced by the learned counsel for the parties at the bar and shall now proceed to discuss the same.
13. Essentially, I think the question which arises for consideration is that whether the status of a partner who was inducted in the partnership as a nominee of HUF can be altered by the subsequent change of his status in HUF.
14. For answering the said question, one need not travel so far due to the reason that the law seems to be well settled on the subject which is that the HUF cannot become a partner in the partnership firm. It is only the partner representing the HUF who in his individual capacity enters into the agreement with other partners to form a partnership. Upon entering into the said partnership, the rights and obligation of the said partner shall continue to be governed by the provisions envisaged under the Partnership Act, 1932. The Supreme Court in the case of Rashiklal (supra) laid down the said proposition. In the words of the Supreme Court, it was observed thus:
"An HUF cannot be in a better position than a firm in the scheme of the Partnership Act. The reasons that led this Court to hold that a firm cannot join a partnership with another "individual" will apply with equal force to an HUF. In law, an HUF can never be a partner of a partnership firm. Even if a person nominated by the HUF joins a partnership, the partnership will be between the nominated person and the other partners of the firm. Having regard to the definition of
CS (OS) No.713/2011 Page 24 of 37 "partnership" and "partners" and in view of the
principle laid down in Dulichand's case (supra), it is not possible to hold that an HUF being a fluctuating body of individuals, can enter into a partnership with other individual partners. It cannot do indirectly what it cannot do directly. If a Karta or any other member of the HUF joins a partnership, he can do so only as an individual. His rights and obligations vis-a-vis other partners are determined by the Partnership Act and not by Hindu law. Whatever may be the relationship between an HUF and its nominee partner, in a
partnership, neither the HUF nor any member of
the HUF can claim to be a partner or connected
with the partnership through a nominee. Where the Karta of an HUF enters into a partnership
agreement with a stranger, the Karta alone in the eye of law is the partner. If any payment by the firm to a partner is prohibited by law, the Karta cannot be heard to say that the payment was received by him not as a partner but in some other capacity. Within the partnership, the Karta is a partner like any other partner with whom he has entered into a partnership agreement individually. It is essential to have an agreement between the partners to form a partnership. An HUF not being a "person" cannot
enter into an agreement of partnership. If the Karta of an HUF enters into partnership with a stranger, upon the death of the Karta, the partnership will stand dissolved. In the absence of a contract to the contrary, another member of the family cannot step into the shoes of the Karta claiming that the Karta was merely representing the HUF and the real partner was the HUF. A Karta who enters into a contract of
partnership with a stranger may be accountable to the other members of the HUF for the profits
received from the partnership business. But that is something between the Karta and the HUF. But so
far as the partnership firm is concerned, the Karta is a partner like any other partner. If a commission
CS (OS) No.713/2011 Page 25 of 37 is paid to a partner who happens to be a nominee of an HUF, the commission is not paid to the HUF. It is paid by the firm to one of its individual partners. The partner may have to account for the monies
received from the firm to another person or another firm or an association of persons or an HUF. But that will not alter the fact that commission was paid by the firm to one of its partners."
(Emphasis Supplied)
15. From the bare reading of afore quoted enlightening observations of the Supreme Court, it is clear that a karta who enters into the partnership representing a HUF is a partner in his individual right and HUF by that reason cannot be said to be a partner in the said firm. It is also clear from the observations of Supreme Court that it may be possible that Karta may be distributing the said monies amongst the other family members and may account for the same but that is a matter between the Karta and the family members. The partnership has no relation with the said aspect of distribution of money. In the event in any share of profit, remuneration or commission is paid to the partner, the same shall not be deemed to be given to the HUF.
16. Once it is realized after reading the observations of Rashiklal (supra) that the Karta who enters into the partnership with other partners is a partner in his individual right and his rights and obligations are governed by the Partnership Act, 1932 and it is not as if HUF has become partner in the firm. A fortiori it follows that the alteration of the status of a person either as member or Karta in the HUF will not affect the status of his being a partner.
CS (OS) No.713/2011 Page 26 of 37
17. This is due to the reason as rightly observed by Supreme Court in Rashiklal (supra) that the rights and obligation of the said Karta admitted as partner shall be governed by the provisions of the Partnership Act and not by Hindu law. If that is so, no conception of Hindu law can imported into the running partnership concern whereby the change in the status of the Karta may as a matter of consequence affect the status of the partner in the firm.
18. This view has earlier also been taken by the Supreme Court prior to the Rashiklal (supra) in the case of Ram Laxman Sugar Mills vs. Commissioner of Income-Tax, U.P. &Ors., (1967) 66 ITR 613 (SC) where it has been held that it is open to the manager of a joint Hindu family as representing the family to agree to become a partner with another person. The partnership agreement in that case is between the manager and the other person and by the partnership agreement no members of family, except the manager acquires a right or interest in the partnership. The junior members of the family may make a claim against the manager for treating the income or profits received from the partnership as a joint family asset, but they cannot claim to exercise the rights of partners nor be liable as partners.
19. The view taken by the Supreme Court in the case of Rashiklal (supra) and Ram Laxman Sugar Mills has been affirmed by the Division Bench of this Court while examining the similar question in relation to any Bar which may exist for Karta to join a partnership in the case of Coal India Limited and Anr v Continental and Eastern Agencies, passed in RFA 37/2003 decided on 14th December, 2011. Answering the question in negative as there is exist no bar for Karta to join a partnership, the Division Bench relied upon the dictum of Rashiklal (supra) and Ram Laxman
CS (OS) No.713/2011 Page 27 of 37 (supra) and observed thus:
"The authority relied upon by the learned counsel for the appellants in the case reported as (1998) 2 SCC 49 Rashiklal & Co. V. Commissioner of Income Tax is not helpful to him. In this case R, the karta of a HUF, was a partner in a firm which was carrying on, inter alia, the business of mining. The Hon'ble Supreme Court
observed that a firm is a compendious way of
describing the individuals constituting the firm. An HUF directly or indirectly cannot become a partner of a firm because the firm is an association of individuals. Even if a person nominated by the HUF joins a
partnership, the partnership will be between the nominated person and the other partners of the firm. It further observed that if a karta or any other member of the HUF joins a partnership, he can do so only as an individual. His rights and obligations vis-à-vis other partners are determined by the Partnership Act and not by Hindu Law. Whatever may be the relationship
between an HUF and its nominee partner, in a
partnership, neither the HUF nor any member of
the HUF can claim to be a partner or connected
with the partnership through a nominee.
28. From the judgments cited above it stands
established that an HUF as such cannot be a partner in a firm but it is competent to the manager or karta acting on behalf of the HUF to enter into a valid partnership with a stranger or with the karta of another family." (Emphasis Supplied)
20. It is thus a position in law that the rights and obligation of Karta in the partnership concern shall be governed by the provisions of partnership Act and not by the Hindu law and he shall be treated nothing more than an individual partner. Accordingly, this position in law can also not be changed by way of contract or by estoppel.
CS (OS) No.713/2011 Page 28 of 37
21. It is a trite law that there cannot be any estoppel against the law. The parties by an agreement or consent cannot agree to do something which is impermissible in law.
22. Applying the said principle of law to the instant case, it is clear that once in law, the status of plaintiff in the partnership though as Karta representing HUF cannot be altered by the change in the constitution of HUF and the plaintiff shall continue to enjoy his rights as a partner in his individual capacity. The same cannot also be done by the partners of the defendant No.1 firm by entering into any such contractual agreement in the form of deed or by their acts and conduct by placing a reliance on the event that the plaintiff has been representing HUF and since HUF has been dissolved or disrupted, therefore, the new partnership deed has been formed. No such power exists either in the earlier deeds or under the Partnership Act which allows the partners to enter into such deed ousting one partner or disturbing his status as a partner in the partnership deed by deeming it as outgoing partner.
23. Consequently, the partnership deed dated 1st December, 2004 and subsequent deeds containing and reiterating the recitals that the plaintiff is representing HUF are inconsequential in law so far as it relates to the status of the plaintiff in the defendant No.1 firm. The mentioning of the said facts in the deed will not enable the defendants to exercise any control over the partnership status of the plaintiff which he is enjoying in his individual right and is governed by the provisions of the Partnership Act.
24. Likewise, all the actions of the defendants No.1 to 8 by acting upon the so called withdrawal of the consent by the defendants No.9 to 11 particularly in the form letter dated 31st December, 2010 and letter dated
CS (OS) No.713/2011 Page 29 of 37 1st March, 2011 are prima facie illegal in law. All the said actions are taken by the defendants on the premise that the plaintiff is no longer representing HUF and hence cannot retain his position as partner. The said premise of the defendants is contrary to the legal position which is that there is a complete disconnect between the status of the individual as partner and the status of his as Karta of HUF. Therefore, whatsoever be the purpose of the defendants either to benefit the family members to the maximum or otherwise, the defendants No.1 to 8 cannot be heard to state that the plaintiff is not the partner in his individual right as the other members of HUF have withdrawn their consent of plaintiff being a partner. Therefore, the said actions taken by the defendants No.1 to 8 contained in letter dated 31st December, 2010 and 1st March, 2011 and subsequent deed entered into by the defendants dated 1st March, 2011 containing the clause 6(b) which deems the plaintiff and K.L.Sahni (HUF) as an outgoing partner are all prima facie illegal in view of the legal position discussed above.
25. I shall now be dealing with the submissions raised by the learned counsel for the defendants No.9 to 11:
a) There are lot many submissions raised by the learned counsel for the defendants on the aspect that the plaintiff was representing K.L.Sahni (HUF) and therefore, the defendants No.1 to 8 were correct in the approach by calling upon the existing members of HUF to nominate a fresh members to represent in partnership. I have already answered the said submission in detail by discussing the legal position on the subject which warrants the rejection of the said submission raised by the learned counsel for the defendants.
CS (OS) No.713/2011 Page 30 of 37 b) The submission of the learned counsel for the defendants that the instant case is distinct as the suit for partition has been filed and once the partition is claimed, the status of jointness in the HUF comes to an end and consequently, the plaintiff cannot remain the partner representing HUF. The answer of the said submission is still the same and lies in the observations of the Supreme Court in the case of Rashiklal (supra) and Ram Laxman (supra) which are to the effect that in the proper sense, there may be a partnership between two HUFs but in the legal sense of the term, it is merely a partnership between the individual members. This is due to the reason that HUF is a juristic person for limited purposes under Income Tax Act, 1961 and not for all legal purposes. Thus, the said distinction as canvassed by the learned counsel for the defendants is equally immaterial. The judgment of Brij Nath Aggarwal (supra) also does not aid the case of the defendants as the same relates to separate factual matrix and is not applicable to the present case especially when there is a clear cut exposition of the law laid down by the Supreme Court in relation to the status of the partner vis-à-vis the status of the HUF in so many cases including Rashiklal (supra).
c) The submission of the counsel for the defendants that the granting the prayers in the instant case would amount to granting the final relief is also misplaced. This Court is just discussing the effect of the legal position on the status of the partner in the partnership. If the legal effect is the continuance of the status of the plaintiff as the partner as he has been enjoying earlier, there is no alteration of the status quo, rather there was never such retirement of the plaintiff that ever
CS (OS) No.713/2011 Page 31 of 37 happened at all. All the acts done by the defendants to oust the plaintiff from the partnership of the defendant No.1 firm were under mistaken impression of the law and the same cannot be construed as alteration of the status quo as there was no such status quo in the form of the retirement of the plaintiff that ever existed in law. d) The contention of the defendants No.9 to 11 that the consent of heirs was revocable as it was always a temporary measure to nominate the plaintiff as a partner. The said contention of the defendants is rejected as no such express stipulation is present in the partnership deed. The only stipulation to the this effect which is present in the partnership deed, which reads that the consent of all the legal heirs is required for the purposes of nominating one heir in the partnership. But, there is no whisper in the said deed with respect to the aspect of temporary measure.
The defendants intend this Court to infer such temporary measure by reading the later part of the clause which states that the legal heir shall be considered while forming a new partnership. I think the same shall be misconstruction of the said clause as no such intent is emerging from the said partnership deed and even under the partnership act, once the partner is inducted in the partnership, he shall be governed by the provisions of the Act and the contractual relation between the partners which is not dependent upon the consent of non-partners who may be a family members of the said partner. Therefore, the contention raised by the defendants cannot be accepted.
CS (OS) No.713/2011 Page 32 of 37
26. The above discussion broadly answers all the submissions raised by the counsel for the defendants. There is only one aspect which further needs to be considered is that the share of the profits to be given to the plaintiff and the family members.
27. As discussed above in the legal discussion that a partner representing HUF shall remain as a partner in individual capacity in the said firm. However, it is altogether a different matter that the said partner is liable to share the monies received from the partnership with other members of HUF, but the same shall not alter the status of the partner in the firm. Given the said legal position, it was put to Mr.Sibal, learned counsel for the plaintiff that whether his client would be agreeable to share the profits of the defendant No.1 firm with that of defendants No.9 to 11. Mr.Sibal on instructions from his clients, has fairly agreed that the plaintiff would be sharing the profits of the defendant No.1 firm between the members of HUF which shall enure to the plaintiff. In this respect, Mr.Sibal handed over a copy of affidavit of Mr.Shiv Sahani by way of proposed undertaking original of which was not available in the file. However, Mr.Sibal states that the terms stated therein should be considered as the terms in relation to sharing of the profits from the plaintiff's end. The said terms of undertaking read as under:
"a) I will divide the profits paid to me in my name as a partner of the partnership firm M/s. Isherdas Sahni & Bros. into three equal shares and pay 1/3rd each in two cheques, one each in the name of my brother Sh.Jayant Sahni and my mother Smt.Neena Sahni. However, partnership property like car etc. and its associated maintenance and running expenses will be utilized only by myself for the business of the defendant No.1 firm.
CS (OS) No.713/2011 Page 33 of 37 b) The arrangement in (a) will be subject to continuing the current arrangement whereby the common expenses of the household in which the three of us (myself and Defendant Nos.9 and 10) are presently living i.e. 15 Nizamudding East, New Delhi-1100 13 (the "Common Houselod") are paid from the bank account of K.L.Sahni HUF, in HSBC Bank, Barakhamba Road, New Delhi-110001, A/c No.052-223682-001.
c) The common expenses referred to in clause (b) shall include:
(i) property tax;
(ii) ground rent;
(iii) utility bills of water and gas;
(iv) repair and maintenance of the common
areas of the Common Household i.e. drawing room, dining room, lobby, kitchen, verandah, etc. including the exterior of the house, repair and maintenance of common tubewell pumps, garden implements etc.;
and
(v) satellite TV main connection.
In case any other common expenditure is required to be made which is not mentioned in (i) to (v) above, I will spend the money so required from the abovesaid bank account of KL Sahni HUF subject to the right of my mother and brother to object to the same before this Hon'ble Court.
d) I will file a statement of accounts before this Hon'ble Court on or before the 10th day of each month regarding (i) the amount of profits received from the Defendant No.1, (ii) expenditure from K.L.Sahni HUF bank account mentioned above (iii) RBI Bonds owned by K.L.Sahni HUF (iv) mutual fund investments of the K.L.Sahni HUF, and (v) common household expenses as referred to in (c) above.
(e) Although my sister Mrs.Renee Khanna is not entitled to any share in the HUF property, I agree without prejudice to my rights and contentions, that in case it is finally determined in suit being CS(OS) No.730/2012 that my sister is entitled to a share in the HUF property then I, along with my mother and brother will each give to my sister such equal amounts so as to
CS (OS) No.713/2011 Page 34 of 37 make good her share as in accordance with such final determination."
28. Learned counsel for the defendants No.1 to 8 do not seriously dispute the said proposal as it was their stand that the defendants No.1 to 8 intend to pay the profits but to the welfare of the entire HUF. Learned counsel for the defendant Nos. 9 to 10 has submitted one counter proposal agreeing to receive the profits but, upon certain terms and conditions which reads as under:
a) The future payments of the share shall be paid from the income of the firm and not from profits.
b) Direct cheques from HUF in the name of the defendants No.9 to 11 are required to be issued and not from the plaintiff's end. c) No expenses to be deduced from the payments made to the defendants No.9 to 11.
d) Plaintiff would not object to the defendant No.11 inheriting the share of Ms. Neena Sahni.
e) No decision in the defendant No.1 firm shall be taken unilaterally without the consent of the defendants No.9 to 11 including the sale of any immovable properties, third party agreement etc.
f) House is not the part of HUF.
g) The plaintiff shall not operate HUF account without the written consent of the all the defendants No.9 to 11.
29. I have given careful consideration to the proposals given by the counsel for the plaintiff and the defendants No.9 to 11, I am of the view that if the proposal given by the plaintiff subject to change of any terms and
CS (OS) No.713/2011 Page 35 of 37 conditions is acceptable to defendants No.9 to 11 for the purposes of the sharing of the profits between them, they may make an appropriate application accordingly. As regards the counter proposed by the counsel for the defendants No.9 to 11 in the Court, the same was unrelated to this controversy so far as it relates to what is the entitlement of the plaintiff in the K.L.Sahni HUF and other rights of the parties. Therefore, the same cannot be acceded to in view of the legal position discussed above which are also not acceptable to the plaintiff. I may mention here that the said aspect of the matter is not the subject of dispute in hand, the suggestion of sharing of profits amongst the members of HUF was probably made by the plaintiff in view of Rashiklal (supra) case.
30. So far as the share of the defendant No.11 is concerned, the plaintiff is agreeable before Court that he shall give the share to the defendant No.11 in the event it is determined in the CS(OS) No.730/ 2012 that the defendant No.11 is entitled to share in HUF property. The contentions raised by the counsel for the defendant No.11 in relation to her entitlement in the HUF by operation of law of inheritance and related arguments are left open to be decided in the said case as this Court is merely concerned with the plaintiff's status in the partnership firm.
31. Consequently, at this stage the following orders are passed in pending applications:
i) The operation of the letters dated 31st December, 2010 and 1st March, 2011 shall remain stayed till the pendency of the instant suit in view of my findings arrived at to the effect that the plaintiff shall be entitled to enjoy the status of a partner and shall also be entitled to exercise all rights and incur all the
CS (OS) No.713/2011 Page 36 of 37 liabilities as a partner of the defendant No.1 and defendant Nos.1 to 8 are restrained from interfering with the plaintiff's rights as mentioned above as a partner .
ii) In view of the above, both the interim applications being I.A. No.4727/2011 and I.A. No.20117/2011 are disposed of. Similarly, in view of the undertaking given by the plaintiff in Court, no further orders are required to be passed in I.A. No.16439/2011 the same is also disposed of. So far as I.A. No.5787/2011 is concerned, it is a matter of fact that defendants No.9 to 11 were impleaded vide order dated 23rd March, 2011 which was passed in the presence of plaintiff's counsel which was apparently not challenged in appeal by the plaintiff. Therefore, at this stage, I am not inclined to pass the order for deletion of their names. The grievance of the plaintiff made in the application, however, would be considered at the time of final hearing of the suit. I.A. No.5787/2011 is also disposed of. iii) The defendants No.9 to 11 are at liberty to file the appropriate application with regard to sharing of profits after considering the proposal given by the plaintiff or even subject to any modification or alteration acceptable to the parties. CS (OS) No.713/2011
List before the Roster Bench on 5th December, 2012.
MANMOHAN SINGH, J.
This comment has been removed by the author.
ReplyDelete