NMS1540-10 1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO.1540 OF 2010 IN SUIT NO.1495 OF 2010 Pankaj Ramniklal Shah .. Plaintiff Versus Navinchandra Umedchand Shah & Ors. .. Defendants Mr.Nitin Thakkar, Senior Advocate i/b. K.R.Shekhawat for plaintiff Mr.Sanjay Jain i/b. V.Mistry & Co. for defendant No.1 Mr.Viral Shukla i/b. Shukla & Associates for defendant Nos. 2, 3 and 7 Mr.Z.A.Jariwala i/b. Thakore Jariwala & Associates for defendant No.4 Mr.Jaideep Mitra with G.C.Mohanty i/b. Mohanty & Associates for defendant Nos.6 Mr.J.R.Patel for defendant No.5. CORAM : S.C.DHARMADHIKARI, J. DATE : 23rd September 2010. P.C.: 1] This is a suit filed by the plaintiff for a declaration that a partnership under the name and style of M/s.UB Enterprises stands dissolved with effect from the date of notice of dissolution i.e. 7th May 2010 or from such other date as this Court deems fit and proper. 2] In substance, this is a claim for dissolution of partnership and accounts. The plaint has been amended so as to implead defendant No.7 NMS1540-10 2 who is son of defendant No.2 and husband of defendant No.3. 3] The father of plaintiff was partner of the firm and he expired on 2nd August 2008 leaving behind a will dated 19th June 2007. The probate of the said will is granted in favour of defendant No.4 who is entitled to represent the estate of late father. The beneficiary under the will is the mother of plaintiff. 4] It is stated that under the deed of partnership, a copy of which is annexed to the plaint, one Ramniklal Umedchand Shah, Rajul Vinaychandra Shah, Pankaj Ramniklal Shah, Navinchandra Umedchand Shah, Mrs.Lina Shailesh Shah are partners. The partnership firm has several immovable properties and they are listed in the schedule Exh.B to the plaint page 26. 5] Mr.Thakkar, learned Senior Counsel appearing for plaintiffs submits that in a suit for dissolution of partnership and accounts, considering that the parties have lost faith in each other and there are valuable properties so also legal proceedings pending, it is just and NMS1540-10 3 convenient that the Court Receiver, High Court, Bombay be appointed as receiver of the properties but the plaintiff further does not pray that the Receiver should dispossess the defendant No.5 bank or defendant No.6 who are stated to be in possession of the properties at Item Nos. (i) and (ii) in the schedule. 6] He states that as far as godown which is listed as item No.(iii) is concerned, it was pointed out that defendant Nos. 1 to 3 are using the same. If the same is asset of the firm, then, these defendants cannot be permitted to use it without paying any amounts to the firm. In such circumstances, either they execute an agreement with Court Receiver and agree to pay royalty/ compensation as determined by him or normal and routine course of inter se bidding should be adopted. 7] As far as the other property, which is godown at Navi Mumbai, is concerned, Mr.Thakkar does not press for Receiver at this stage but states that the order of injunction already passed would suffice. 8] The contesting defendants viz., defendant Nos. 1 to 4, 6 and 7 are NMS1540-10 4 heard. It is stated that the property which is at serial No.(ii) to the schedule is used by defendant No.6. He states that such user is to the knowledge of the plaintiff since 1981. The firm purported to terminate the arrangement but thereafter did not initiate any proceedings for eviction of defendant no.6. On the other hand, the arrangement was that the defendant No.6 put the firm and partners in funds and if they were to redeem the mortgage or seek possession on the basis that defendant No.6 is in permissive user, even then, all proceedings would be time barred. In such circumstances, it is prayed that material facts are suppressed and, therefore, plaintiff should not be given any discretionary or equitable reliefs. 9] As far as defendant No.5 is concerned, it is a nationalised bank. It is in possession of premises admeasuring about 3500 sft. At a prime locality, viz., Worli, Mumbai Presently the bank is facing eviction proceedings which are stated to be pending in Small Causes Court. The bank has given an offer which save and except the plaintiff, others were willing to consider favourably is the submission. NMS1540-10 5 10] It is not necessary for me to go into the allegations made by parties against each other at this stage. Suffice it to note that the suit is for dissolution of a partnership firm and accounts. The partnership is at will. Parties have lost faith and trust in each other as is clear from the plaint and the annexures so also the affidavits on record. In such circumstances, it is just and convenient to appoint Court Receiver as Receiver of the assets listed at item Nos. (i), (ii) and (iii) of the Schedule but he will take only symbolic possession of the premises more particularly mentioned as Item Nos. (i) and (ii) of the schedule and proceed with the pending suit against defendant No.5. 11] The Court Receiver will prosecute and proceed with the suit filed by the firm against the 5th defendant bank for possession in the Small Causes Court and as far as premises at New Marine Lines are concerned, the Receiver shall not dispossess defendant No.6 but appoint him as agent on such terms and conditions as he deems fit and proper. At this stage, it is not necessary to go into the contentions of Mr.Mitra appearing for defendant No.6 with regard to occupation of the said premises by defendant No.6. Prima facie it is not disputed that these premises are an NMS1540-10 6 asset of the firm. Therefore, to preserve and protect them, just like all other assets and for equitable distribution ultimately, the Receiver needs to be appointed. 12] Insofar as godown at Antop Hill is concerned, if defendant Nos. 2, 3 and 7 are using the same, then, Court Receiver shall permit them to do so provided they execute agency agreement with the Receiver within a period of six weeks from today. On their failure to do so, the Court Receiver shall take possession of this godown and then invite bids from all parties so that the premises can be put to some use and would fetch reasonable income during the pendency of litigation. 13] As far as godown at Vashi is concerned, which is more particularly described in schedule Exh.B(iv), no third party rights be created nor shall it be permitted to be transferred during the pendency of the notice of motion. 14] It is stated that defendant Nos.1 to 3 have moved an application under section 8 of the Arbitration and Conciliation Act 1996. This order NMS1540-10 7 will not preclude the parties from making appropriate submissions in that regard and the order is passed without prejudice to the same. 15] It is stated that defendant No.6 is occupying the premises for a long time and, therefore, he should not be called upon to pay any security. This request appears to be reasonable and the Court Receiver shall appoint defendant No.6, after taking symbolic possession of the same, as his agent without security but on royalty, which would be determined on the basis of the occupation and possession of the defendant No.6. Needless to state that both sides can produce necessary documents before the Court Receiver. 16] At this stage, learned Counsel for defendant Nos.2, 3, and 6 pray for stay of this order. 17] Considering that parties took time for negotiation and for arriving at an amicable settlement, the order passed today was not made for all this time. However, finding that it is just and convenient to appoint Court Receiver to preserve and protect the assets of the dissolved firm, this NMS1540-10 8 request cannot be acceded to and it is accordingly rejected. 18] Motion is made absolute in the above terms. All concerned to ct on an authenticated copy of this order. (S.C.DHARMADHIKARI, J)