Deepak Dubey Vs Krishna Kant Dubey, Alias K.K. Dubey (Died) Through Lrs.

Deepak Dubey S/o Late Shri Kedar Nath Dubey Aged About 64 Years R/o Krishna Kutir Opposite New Bus Stand, Near Hotel Guru, Pandri, Raipur Tah. And Distt. Raipur C.G.

¶10

... Appellant

¶11

Versus

¶12

1 - Krishna Kant Dubey, Alias K.K. Dubey (Died) Through Lrs. (As Per Honble Court Order Dated 02-01-2025)

¶13

1.1 - (A) Anand Dubey S/o Late Shri Krishna Kant Dubey Aged About 55 Years R/o Sukhsagar, Phool Chowk, G.E. Road, Raipur, Chhattisgarh. 1.2 - (B) Abhishek Dubey S/o Late Shri Krishna Kant Dubey Aged About 50 Years R/o Sukhsagar, Phool Chowk, G.E. Road, Raipur, Chhattisgarh.

¶14

….Respondents

¶15

(Cause-title is taken from Case Information System)

¶16

For Appellants	: Mr. B.P. Sharma, Advocate with Mr. Pushp Kumar Gupta, Advocate.
For Respondents	: Ms. Devika Thakur, Advocate with Mr. Ribhav Agrawal, Advocate on behalf of Mr. Thakur Anand Mohan Singh, Advocate.

¶17

2

¶18

Hon'ble Shri Bibhu Datta Guru, J

¶19

C A V Judgment

¶20

By way of the present appeal under Section 96 of the Code of Civil Procedure, 1908, the defendant/appellant has assailed the judgment and decree dated 31.07.2007 passed by the learned Additional District Judge, Raipur (C.G.) in Civil Suit No. 7-B/2006 (Krishna Kant Dubey v. Deepak Dubey & another), whereby the learned Trial Court allowed the suit filed by the plaintiff/respondent.

¶21

For the sake of convenience, the parties would be referred as per their status before the learned trial Court.

¶22

(a) The plaintiff instituted a suit for recovery of a sum of Rs. 76,598/-, pleading inter alia that the plaintiff and the defendants were carrying on a partnership business in the name and style of M/s. Shilpa Enterprises, situated at 10–11, R.D.A. Market, Sharda Chowk, Raipur (C.G.). The said partnership firm was constituted on 01.04.1997 and was subsequently dissolved by a deed of dissolution dated 01.04.2005.

¶23

(b) According to the plaintiff, prior to the dissolution of the firm, the accounts of the partnership were duly settled and, upon

¶24

3

¶25

such settlement, Defendant No. 1 became liable to pay a sum of Rs. 76,598/- as stated hereinabove. Despite repeated demands made by the plaintiff, Defendant No. 1 failed to pay the said amount. Consequently, the plaintiff issued a legal notice to Defendant No. 1. Thus, the cause of action arose on 01.04.2005, when the deed of dissolution was executed and the accounts were settled, and further arose on the date of issuance of the legal notice as well as on the date on which the said legal notice was served upon Defendant No. 1.

¶26

In the said Civil Suit, the defendant submitted the written statement and denied the plaint averments. The defendants stated that both the parties were doing business in partnership and the firm was reconstituted on 1.4.1997. Before reconstitution of the firm, the business was being carried on by two partners i.e. the Plaintiff and the defendant No. 1. The dead of partnership was executed on 01/07/1992. The partnership firm stood dissolved on and from 1.4.2005 and the deed of dissolution was also executed on 1.4.2005. It is contended by the defendant that he signed the deed of dissolution dated 1.4.2005 on the assurance given by Mr. R.K.Khemaka, Income Tax Adviser of the firm and further, it was all in good faith, however, the plaintiff taking undue advantage of

¶27

4

¶28

the deed of dissolution has filed the suit for recovery for Rs. 76,598/-. In fact there is no liability of the defendant to pay any amount to the plaintiff as the accounting of the business of the dissolved partnership was not completed till 1.4.2005, hence, the deed of dissolution was prepared and signed by the partners in trust. The balance sheet as on 31/03/2005 has not yet been given to the defendant. It was further averred that before the dissolution of the firm, accounts of the business of the firm were settled and denied that defendant No.1 is liable to pay Rs. 76598/- to the Plaintiff. The plaintiff never demanding any amount from the defendant as he failed to give a copy of the balance sheet as on 31.3.2005, to the defendant. No notice has been served on the defendant.

¶29

The learned Trial Court, after framing the issues and upon due consideration of the evidence adduced by both the parties as well as the material available on record, allowed the suit filed by the plaintiff and passed the following decree holding that defendant No.1 shall pay a sum of ₹76,598/- to the plaintiff and shall also pay interest on the said amount at the rate of 12% per annum (simple interest) from the date of judgment till the date of recovery. Thus, this appeal by the defendants.

¶30

5

¶31

Learned counsel appearing for the appellant/defendant would submit that the learned Trial Court has committed error in law by not sending the matter to Arbitration as there is an arbitration clause available under the partnership deed. He would submit that the document which has been placed by the plaintiff is the effect of undue influence and therefore cannot be said that it creates any legal liability against the appellant. Further the so called document executed, does not impose any liability on the appellant. He would further submit that the plaintiff has no where stated that the firm was a registered one, therefore, on dissolution of unregistered firm does not bind the appellant to pay any claim. He would submit that the partnership deed was not annexed and even there is no pleading about registration of partnership firm and hence under the provisions of Section 69 of the Indian Partnership Act, the suit is not maintainable. According to the learned counsel, at the time of filing of the suit, the pleadings has to be must, once, the pleading was not there then it has to be presumed that the partnership firm was not registered firm. In support of his contention, learned counsel has placed reliance upon the decisions rendered by the Hon’ble Supreme Court in Seth Loonkaran Sethiya & Others v. Mr. Ivan E. John & Others, (1977) 1 SCC 379; R. Kandasamy (since deceased) & Others v. T.R.K.

¶32

6

¶33

Sarawathy & Another, (2025) 3 SCC 513 ; and Meenakshi Solar Power Private Limited v. Abhyudaya Green Economic Zones Private Limited & Others, (2025) 5 SCC 702 . Reliance has also been placed upon the judgment of the High Court of Chhattisgarh in Dulichand Agrawal v. Ramchandra Prasad, Tarachand Kamal Kumar (Proprietary Firm), First Appeal No. 146 of 2005, decided on 28.02.2019 , as well as the judgment of the High Court of Madhya Pradesh in Hariprasad & Another v. Mst. Beni Bai, Second Appeal No. 483 of 1964, decided on 28.12.1967 .

¶34

On the other hand, learned counsel appearing for respondent/plaintiff would submit that for the first time, the defendant has raised the objection regarding availability of arbitration clause and the same has neither been raised before the trial Court nor pleaded in the Written Statement, therefore, such an objection cannot be taken at a later stage. According to the plaintiff, in the proceedings of the dissolution of the partnership dated 01/04/2005, the defendant duly participated and even put his signature and he also put his signature in the balance-sheet of the firm as on 31.03.2005 from which, it can be seen that there is a minus (-) balance of Rs. 76,598.09 towards the defendants. Learned counsel would submit that Section 8 of the Arbitration and Conciliation Act, 1996 specifically provides that the issue

¶35

7

¶36

regarding the availability of the arbitration clause, if raised, before making the first statement, the judicial authority can refer the matter to the arbitration, whereas, in the case in hand, the defendant has raised this objection for the first time before this Court. Even, once the defendant put his signature and agreed for the contents of the deed of dissolution, he cannot take a different stand. Thus, the defendant is not entitle for any relief. In support of his contention, learned counsel would place reliance upon the decisions rendered by the Hon’ble Supreme Court in the matter of Sukanya Holdings (P) Ltd. v. Jayesh H. Pandya and Another, (2003) 5 SCC 531; Booz Allen and Hamilton INC. v. SBI Home Finance Limited and Others, (2011) 5 SCC 532. Reliance has also been placed on the judgment of High Court of Madhya Pradesh in the matter of President, Nagar Panchayat, Picchore and Another v. Rakesh Kumar Sehgal (2005) 3 MP LJ 553, judgment of High Court of Calcutta in the matter of Smt. Gitarani Maity v. Mrs. Krishna Chakraborty and others, FAT No. 308/2023, decided on 09/01/2025, and the judgment of High Court of Gujarat in the matter of Prabhudas Jesangbhai Patel v. Vinodbhai Mohanbhai Togadiya, C/SCA/10188/2023.

¶37

I have heard learned counsel for the parties perused the impugned judgment.

¶38

8

¶39

From bare perusal of the record, it is evident that both the parties are relatives and they executed a deed of partnership on 01.04.1997 read with the modification dated 01.04.2003 and pursuant to the same, they are operating the business in the name and styled as M/s Shilpa Enterprises, Raipur, however, subsequently, the said firm came to be dissolved by a deed of dissolution of partnership on 01.04.2005. In the dissolution proceedings, the balance-sheet of the firm, which has duly been issued by the M/s Manoj and Manish Chartered Accountants as on 31.03.2005 and from the said balance-sheet, it appears that under the head of debit balance towards the defendants to the tune of Rs. 76,598.09 was shown and in the said balance-sheet, the defendant himself put his signature in the capacity of partner of the firm. According to clause (ii) of the deed of dissolution, the defendant agreed to pay the said amount to the plaintiff.

¶40

For the sake of convenience clause (ii) of the said deed is quoted below:

¶41

“2. That as per the aforesaid Balance-sheet annexed hereto, Shri Deepak Kumar Dubey, Party No. 1 has debit balance of Rs. 76598/- which is payable to Shri K.K. Dubey, Party No. 2. It is mutually agreed between both of them that the same shall be paid to the latter by the party No. 1 as early as possible.”

¶42

9

¶43

The aforesaid deed of dissolution has been executed by the parties in presence of the witnesses.

¶44

As far as, reference of arbitration clause by the defendant is concerned, it is a trite law that a party which has willingly participated in the proceeding in suit and has subjected itself to jurisdiction of Court cannot subsequently turn around and say dispute should be referred to Arbitration.

¶45

It would be apt to quote Section 8 of the Arbitration and Conciliation Act, 1996, which reads thus:

¶46

Section 8. Power to refer parties to arbitration where there is an arbitration agreement.

¶47

1[(1) A judicial authority, before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any Court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists.]

¶48

(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof:

¶49

2[Provided that where the original arbitration agreement or

¶50

a certified copy thereof is not available with the party

¶51

10

¶52

applying for reference to arbitration under sub-section (1), and the said agreement or certified copy is retained by the other party to that agreement, then, the party so applying shall file such application along with a copy of the arbitration agreement and a petition praying the Court to call upon the other party to produce the original arbitration agreement or its duly certified copy before that Court.]

¶53

(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made.

¶54

A bare perusal of the said Section clearly shows that a judicial authority can only refer the matter to arbitration in view of the existence of an arbitration agreement/clause if the party seeking such reference applies for such reference not later than the date of submitting his first written statement on the substance of the dispute. The first statement on the substance of the dispute in case of a civil suit is, without doubt, the written statement filed by the defendant. It is an admitted fact that in the case in hand, the objection regarding availability of arbitration clause was raised for the first time before this Court and as such the provision of Section 8 of the Act could not have been invoked by this Court.

¶55

The Supreme Court in the matter of Booz Allien (Supra) held thus at para 29:

¶56

11

¶57

“29. though Section 8 does not prescribe any time-limit for filing an application under that section, and only states that the application under Section of the Act should be filed before submission of the first statement on the substance of the dispute, the scheme of the Act and the provisions of the Section clearly indicate that the application thereunder should be made at the earliest. Obviously, a party who willingly participates in the proceedings in the suit and subjects himself to the jurisdiction of the Court cannot subsequently turn around and say that the parties should be referred to arbitration in view of the existence of an arbitration agreement. Whether a party has waived his right to seek arbitration and subjected himself to the jurisdiction of the Court, depends upon the conduct of such party in the suit. ”

¶58

Thus, what could be noticed from the above decision that whether party has waived his right in a manner to seek arbitration and submitted himself to the jurisdiction of the Court would depend upon the conduct of such party in the suit but the proposition of law remains that the objection regarding availability of arbitration clause can be raised before submission of the first statement on substance of dispute. The party who willingly participated in the proceedings in the suit and subjects himself to the jurisdiction of the Court cannot subsequently turn around and take somersault to say that now party should be referred to arbitration in view of

¶59

12

¶60

existence of an arbitration clause.

¶61

As regard the objection with respect to illegal deed of dissolution of partnership firm is concerned, the defendant has put his signature on Ex.P/1 and he has agreed to the debit balance which stood in his name. Hence, the objection to the Dissolution deed & debit balance in his name cannot be sustained at this juncture.

¶62

In his affidavit under Order XVIII Rule 4 of the Code of Civil Procedure, during cross-examination, the defendant Deepak Dubey admitted that the document relating to Ex.P/2 was prepared and signed on 05.05.2005, though he claimed ignorance as to who prepared it. He admitted that a debit balance of ₹76,598/- is reflected against his name therein. While alleging that his signature was obtained under pressure on the assurance that possession of the shop would otherwise not be given and that copies of accounts would be supplied later, he categorically admitted that no such plea of coercion or pressure was raised either in the written statement or in any contemporaneous correspondence, including his letter dated 18.08.2006. He further admitted that he signed the partnership dissolution deed and the audit report of R.S. Khemka, as well as the defendant-company’s Income Tax Return for the Assessment Year 2005-06 and its annexures, though he sought to attribute coercion at a belated

¶63

13

¶64

stage. He also admitted that no written demand or “procedure letter” was ever issued, and that alleged telephonic communications with Bharat Khemka were neither recorded in writing nor disclosed in pleadings. The witness gave inconsistent statements regarding amendments to the partnership deed, alternately denying and asserting multiple amendments without specifying dates, and denied his signatures on certain pages of Exhibit P/2. He admitted that the dissolution decision was taken immediately and that no correspondence existed with R.S. Khemka regarding signatures on the partnership deed. Overall, the allegations of pressure and coercion stand unsupported by pleadings, contemporaneous documents, or conduct, and rest solely on the witness’s oral assertions made for the first time during cross-examination.

¶65

The plea raised by the appellant that the suit was barred under Section 69 of the Indian Partnership Act, 1932, for want of pleading and proof regarding registration of the partnership firm, also deserves to be rejected. The present suit is not one for enforcement of any right arising from the partnership agreement per se , but is a suit for recovery of a definite and admitted amount arising out of a dissolution deed, which stands executed and acted upon by the parties. It is well settled that a suit for recovery of

¶66

14

¶67

money based on settlement of accounts upon dissolution does not fall within the mischief of Section 69, particularly where the liability is acknowledged in writing by the defendant himself.

¶68

Even otherwise, the objection under Section 69 of the Partnership Act was neither pressed nor substantiated before the learned Trial Court. No issue was framed in that regard, nor was any evidence led by the defendant to show that the firm was unregistered or that the bar under Section 69 was attracted. The stand taken by the defendant about the non-registration of partnership deed cannot be accepted because the defendant himself was a partner to the said Partnership deed. It is not the case that the Defendant was not aware about the status of the partnership deed & and registration thereof. A pure question of fact, not raised before the Trial Court and not supported by evidence, cannot be permitted to be raised for the first time in a first appeal.

¶69

The judgments relied upon by the learned counsel for the appellant are clearly distinguishable on facts, as those cases pertained to enforcement of contractual rights arising directly out of partnership agreements of unregistered firms. In the present case, the liability flows from a subsequent deed of dissolution and settled accounts, duly signed by the defendant, and therefore, the said decisions do not advance the appellant’s case.

¶70

15

¶71

As regards the contention of undue influence and coercion, the same has rightly been rejected by the learned Trial Court. As already noticed, the defendant failed to plead any such allegation in the written statement or raise any contemporaneous protest. The settled principle of law is that evidence beyond pleadings cannot be looked into, and a plea of coercion or undue influence, being a serious allegation, requires specific pleadings and proof, both of which are conspicuously absent in the present case.

¶72

On the contrary, the conduct of the defendant in signing the balance-sheet, the deed of dissolution, the audit report, and even the income-tax returns for the relevant assessment year, without demur, clearly establishes conscious acceptance of the settled accounts. The learned Trial Court has correctly appreciated the evidence on record and recorded findings which are neither perverse nor contrary to law.

¶73

This Court, while exercising appellate jurisdiction under Section 96 of the Code of Civil Procedure, does not find any illegality, perversity, or misapplication of law in the impugned judgment and decree warranting interference. The findings recorded by the learned Trial Court are based on proper appreciation of oral and documentary evidence and do not call for re-appreciation.

¶74

Accordingly, the appeal is dismissed. The judgment and decree

¶75

16

¶76

dated 31.07.2007 passed by the learned Additional District Judge, Raipur, C.G. in Civil Suit No. 7B/2006 are hereby affirmed.

¶77

A decree be drawn accordingly.

¶78

Sd/(Bibhu Datta Guru) Judge

¶79

Rahul/Gowri

Deepak Dubey v. Krishna Kant Dubey, Alias K.K. Dubey (Died) Through Lrs.

Case brief

What is this about?

What did the court decide?

Deepak Dubey v. Krishna Kant Dubey, Alias K.K. Dubey (Died) Through Lrs.

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

Issues for consideration

Cases cited

Statutes considered

Procedural history

Parties & counsel

Coram

Case details

Similar cases

Geeta Goswami Vs Smt. Lakshmaniya

Smt. Akanksha Tiwari Vs Ashutosh Choubey

Barat Bai Yadav Vs State of Chhattisgarh

Ramzan Khan Vs Mangla (Dead), Represented by His Hiers

Rambai Gupta Vs Tulendra Sahu

Singhal Distributors Pvt. Ltd. Vs Subhashish Shaha