Allowed

Lekh Raj v. Kashmiri Devi

Himachal Pradesh HC1 Sept 2011CMPMO/647/2009

Case brief

AI extract

What is this about?

This petition challenged an appellate order setting aside a stay on firm operations amid a partnership dispute. The court allowed the petition, directing the defendants to continue business, maintain audited accounts through a chartered accountant, and submit monthly reports to the trial court.

What did the court decide?

Respondents directed to continue business, maintain true accounts via a CA appointed by trial court, and submit monthly records accessible to plaintiffs.

Lekh Raj Vs Kashmiri Devi — Partition | Himachal Pradesh HC (2011)

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IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA

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CMPMO No. 647 of 2009. Reserved On 8.8.2011. Date of Decision: 1.9.2011.

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Lekh Raj & Anr. …Petitioners. Versus. Smt. Kashmiri Devi & Ors. …Respondents.

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Coram:

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The Hon’ble Mr. Justice Deepak Gupta, Judge.

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Whether approved for Reporting? No

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For the Petitioners: Mr. K.D.Sood, Advocate. For the Respondents: Mr. Ajay Sharma, Advocate for respondents No.1 to 3.

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Deepak Gupta, J .

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This petition by the plaintiffs is directed against the order dated 1.10.2009 passed by the learned District Judge, Una whereby he allowed the appeal of the defendants and set aside the order of the learned Civil Judge (Junior Division), Amb, dated 25.6.2009 whereby the learned trial Court had restrained the defendants from taking exclusive possession of the operations of the firm titled M/s Maa Durga Bhatha Company Nakroh, Tehsil Amb, Distt. Una, HP and from exclusively selling finished product of the same till disposal of the main suit.

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Briefly stated, the facts of the case are that a suit was filed by the present petitioners alongwith one Karam Chand. The case of the plaintiffs was that they alongwith defendant No.1Kashmiri Devi, Hardayal Singh and Rattni Devi had entered into a partnership on 1.4.1993 and constituted a firm known as M/s Maa Durga Bhatha Company Nakroh, Tehsil Amb, Distt. Una. The three plaintiffs and Rattni Devi had 20% shares, whereas Hardayal Singh and defendant No.1-Kashmiri Devi had 10% share each in the partnership. It was alleged that the firm worked in a proper manner till October, 2008. Hardayal Singh who also used to work in the firm as an accountant became ill and voluntarily retired from the firm. At this stage, Kashmiri Devi-defendant No.1 requested that her elder son defendant No.2-Rajmer Singh be adjusted in the firm as accountant. This request was accepted by the other partners. However, according to the plaintiffs thereafter defendant No.1 in connivance with defendant No.3 started interfering in the business of the firm and tried to forcibly dispossess the plaintiffs from the property of the firm. It was thus prayed that a decree be passed restraining the defendants from taking exclusive possession, forcibly occupying the office and selling the product (pucca bricks) of the firm.

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The defendants contested the suit. The case set up by the defendant was that Karam Chand-plaintiff No.2 had not consented to the filing of the suit. According to the defendants

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initially plaintiff No.1 alone had full control over the firm, but he did not maintain the accounts and plaintiff No.1 and 3 in connivance with each other showed that the firm was suffering heavy losses. According to the defendants in August, 2008 the plaintiffs No.1 and 3 stated that the firm had suffered loss of Rs. 32 lacs and they did not want to carry on the business. Further they stated that if any partner wants to restart the business, he can do so at his own risk after spending the amount required to revise the firm.

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According to the defendant No.1, she with the consent of all the partners took a decision to restart the business by creating new infrastructure. She alongwith defendant No.2 and 3 collected Rs. 32 lacs and created new infrastructure and since invested Rs. 32 lacs to restart the new business. Now the plaintiffs wanted to grab the same. It was also alleged that the plaintiffs were running their own business of brick kiln, in the vicinity of the area. The defendants also filed an application asking the plaintiffs to produce the accounts of the partnership.

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The learned trial Court granted the stay order which has been vacated by the learned Lower Appellate Court. Hence the present petition.

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I have heard Mr. K.D. Sood, learned counsel for the petitioners and Mr. Ajay Sharma learned counsel for the respondents.

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It has been strenuously urged by Mr. K.D. Sood that there is no material on record to show that the partnership has been dissolved. Further there is no material on record to show that any investment was made by the defendants. According to him, since the property in question belongs to a partnership, none of the partners has any right to take exclusive control of the partnership property and oust the other partners from the partnership business. On the other hand, Mr. Ajay Sharma contends that the suit itself is not maintainable since the partnership in question is not registered. It is contended that the plaintiffs No.1 and 3 were not interested in continuing with the business of the partnership firm and the plaintiffs No.1 and 3 did not maintain proper accounts and wrongly showed that the partnership firm had incurred loss of Rs. 32 lacs. They were not willing to restart the business and had permitted the defendant No.1 to restart the same after investing a huge amount. It is also alleged that the plaintiffs themselves are running a brick kiln in the vicinity. Further according to Mr. Ajay Sharma the parties had entered into a compromise whereby the plaintiffs had permitted the defendants to run the business after investing a huge amount of money.

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During the course of the trial, the defendants filed an application praying that a direction be issued to plaintiff No.1 to produce the aforesaid account. In reply to the application, the

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plaintiff stated that the books are in the possession of Shri Anoop Manocha, Advocate.

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At the outset, I may deal with the preliminary objections raised by Mr. Ajay Sharma that the suit is not maintainable, since the partnership firm is not registered.

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I am not deciding this question because this has to be decided at the time of hearing of the suit. Prima facie, I am of the opinion that the bar of Section 69 is not applicable to the present case, since the dispute is between the partners and the firm is not directly a party to the dispute. However, this is only a prima facie observation and the learned trial Court should decide this question on merits.

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The plaintiffs when asked to produce the record did not produce the same. The explanation given was that the record is with the Advocate. In my view, this explanation is no explanation, since the Advocate only represents the parties and there would be no difficulty for the plaintiff to get back the accounts from the Advocate. Prima facie, I am of the view that they have tried to withhold the record from the Court. At this stage, it would not be appropriate to comment on the veracity of the alleged compromise but keeping in view all the factors, I am of the considered view that the learned Lower Appellate Court was justified in holding that the plaintiffs were not entitled to the relief claimed for.

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Having held so, since the litigation is still going on, I

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am clearly of the view that some directions are required to be issued to protect the rights and interest of all the partners of the firm which admittedly does not stand dissolved till date. Therefore, the present petition is disposed of with the following directions:-

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a) That the respondents may continue to carry out the work of making and selling of bricks of the firm M/s Maa Durga Bhatha Company Nakroh, Tehsil Amb, Distt. Una, HP.

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b) That the respondents shall maintain true and proper accounts of the firm and for this purpose the services of a chartered accountant shall be taken and such chartered accountant shall be appointed by the learned trial Court on reasonable remuneration not exceeding Rs. 5,000/- per month.

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c) The defendants shall submit to the Court every month the detailed accounts of the firm and the plaintiff shall have a right to get a copy of the accounts and to file objections to the same.

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d) The respondents shall also maintain true and correct stock register, sale register and all other accounts books which shall be made available to the court as and when called upon.

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Petition is disposed of with the aforesaid directions. No

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costs.

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1^st September,2011. (Krn Guleria)

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(Deepak Gupta), Judge

Lekh Raj v. Kashmiri Devi

Case brief

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Lekh Raj v. Kashmiri Devi

Case brief

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