- 1 - 9.sj.345.10 ss.2158.10 skt IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION SUMMONS FOR JUDGMENT NO. 345 OF 2010 IN SUMMARY SUIT NO. 2158 OF 2011 1. Devendra Pannalal Shah & 2. Rupa Devendra Shah ..Plaintiffs -Versus- Hetal Devendra Shah ..Defendant .......... Mr. Vivek Walavalkar a/w. Mr.Viral Amin i/b M/s. B. Amin & Co. for the Plaintiffs. Mr. Amit H. Yadav for the Defendant. .......... CORAM : S.J. VAZIFDAR, J. DATE : 2ND DECEMBER 2011. P.C. 1 This is an extremely unfortunate litigation where the defendant has been unnecessarily forcing the plaintiffs who are his parents to file one suit after the other to recover the amount that the defendant had agreed and undertaken to pay them pursuant to a written agreement. 2 The plaintiff nos.1 and 2 are the father and mother of the defendant. Plaintiff No.1 and the defendant were the partners in the firm M/s. Overseas Business Corporation. Plaintiff no.2 and the defendant were partners of M/s.R.D. Engineering and Company. - 2 - 9.sj.345.10 ss.2158.10 3 The parties entered into an agreement dated 21st March 2006 where the plaintiffs agreed to retire and/or surrender and/or relinquished their shares, rights, title and interest in the said firms and in favour of the defendant absolutely. Clauses 3 and 6 of the agreement reads as under : 3. In consideration of the premises the Party hereto of the Second party hereby agrees, declares, confirms and undertakes to pay to the Parties hereto of the First and the Third Part collectively a sum of Rs.12,000/- (Rupees Twelve Thousand Only) every month during the lifetime of each of them without any deduction of whatsoever nature which shall be paid on or before 10th of every month. In the event of the Party hereto of the Second Part committing any default in payment of the monthly sum referred to above then in that event the Parties hereto of the First and the Third Part shall have a lien and charge on the respective properties, assets, credits, stock-in-trade, Bank Accounts etc. of the said firms of M/s. Overseas Business Corporation and M/s. R.D. Engineering & Co. and the same shall stand as a security towards the payment of the monthly sum referred to above. Without prejudice to what is stated hereinabove and any other rights that the Parties hereto of the First and the Third Part shall have against the Party hereto of the Second part, the Party hereto of the Second Part shall be bound and liable to pay the defaulted payment together with interest thereon at the rate of 12%. 6. The Party hereto of the Second Part shall be entitled to carry on the said two firms of M/s. Overseas Business Corporation and M/s. R.D. Engineering & Co. either as proprietary concern or by introducing such partner as he may deed fit and expedient. The Parties hereto of the First and the Third Part are deemed to have retired respectively from the said firms of M/s. Overseas Business Corporation and M/s. R.D. Engineering & Co. with effect from the date of execution hereof. The accounts of the said two firms are deemed to have been settled by and between the respective Parties hereto. The Party hereto of the Second Part agrees and undertakes to bear, pay and discharge all - 3 - 9.sj.345.10 ss.2158.10 the debts and liabilities of the said two firms exclusively and further the Party of the Second Part indemnify and keep indemnified the Parties hereto of the First and the Third Part at all times hereafter against any claims and demands made including of costs, charges and expenses of any proceedings prosecuted or defended as the case may be. 4 The defendant paid the plaintiffs in accordance with the said agreement an amount of Rs.12,000/- per month for a period 21st March 2006 to April 2007. Thereafter, he stopped making payments. As a result thereof, the plaintiffs were compelled to file Summary Suit No.2170 of 2008. The defendant filed his appearance and the plaintiffs took out Summons for Judgment No.293 of 2008. This suit was for recovery of the payment under the said agreement for the period May 2007 to June 2008. The Summons for Judgment was disposed of by an order dated 13th January 2010. The learned Judge granted leave to defend the suit on condition that the defendant deposited an amount of Rs.1,68,000/- in Court and permitted the plaintiffs to withdraw the amount unconditionally. 5 The defendant challenged this order by filing an Appeal being Appeal No. 120 of 2010. The Appeal was however withdrawn. The order of the learned Single Judge therefore attained finality. Pursuant to the order, the defendant deposited the amount and the plaintiffs withdrew the same. - 4 - 9.sj.345.10 ss.2158.10 6 This suit is filed to recover the amounts for the period 1st July 2008 June 2008. The same defences have been raised in the present case. The learned counsel appearing on behalf of the defendant submits that the defendant is not bound by the order dated 13th January 2010 as certain aspects of the matter had not been considered. I will presume that this is so and that I am not prevented from considering the submissions which were not raised in the earlier Summons for Judgment. 7 The agreement read by itself undoubtedly crystallizes the amounts due and payable by the defendant to the plaintiffs. Indeed, the plaintiffs have surrendered their rights to the defendant. On account of the agreement dated 21st May 2006, the assets of the firm are now owned only by the defendant. One of the valuable assets is a tenancy in respect of commercial premises admeasuring 250 sq.ft. located in one of the most expensive areas of this city. 8 The defence is that the agreement is vitiated by fraud. It is alleged that the plaintiffs suppressed the fact that one Dinkar Salunkhe was also a partner and that he had not retired from the firm M/s. R.D. Engineering and Company. In this regard, reliance is placed on a deed dated 1st April 2005 which states that the defendant and plaintiff no.2 and the said Salunkhe carried on business of M/s. R.D. Engineering from - 5 - 9.sj.345.10 ss.2158.10 1st April 2005. As per the deed of dissolution dated 31st March 2006 the said Dinkar Salunkhe voluntarily retired on 31st March 2006. It is contended that the deed of dissolution dated 31st March 2006 was entered into between plaintiff no.2 and the said Dinkar Salunkhe. It provided that plaintiff no.2 and said Dinkar Salunkhe carried on business of the said firm as per the deed of partnership dated 12th February 1982 and that it was agreed to dissolve the same with effect from 31st March 2006 and the firm therefore stood dissolved from that date. The plaintiffs permitted the said Dinkar Salunkhe to recover the outstanding dues of the firm. It was contended that this deed was therefore inconsistent with the deed dated 1st April 2005. 9 In the first instance, the argument appeared attractive but considering the facts and circumstances of the case, it is clear that advantage has been taken of the fact and that the documents had possibly not been prepared carefully. It is important to note that the said Dinkar Salunke has never made any claim against the firm. This is not even the defendant’s case. It is possible that the deed of dissolution dated 31st March 2006 was executed only out of abundant caution to ensure that the said Dinkar Salunkhe has no claim in respect of the said firm. This was obviously pursuant not only to the deed dated 1st April 2005 recording that he had retired but also - 6 - 9.sj.345.10 ss.2158.10 pursuant to the agreement dated 31st March 2006. This is further evidenced by the fact that along with the deed of dissolution dated 31st March 2006, yet another deed of dissolution was executed between plaintiff no.2 and the defendant in almost identical terms. The purpose thereof was in fact for the defendant’s benefit in order to ensure that all rights in respect of the firm vested in him alone. Indeed, the defendant ought to have been a party to the two deeds of dissolution dated 31st March 2006 as the defendant was also admittedly a partner. The deeds of dissolution however not only do not prejudice the defendant but are entirely for his benefit to obviate any claim either from the plaintiffs or the said Dinkar Salunkhe in respect thereto. Advantage sought to be taken only with a view to avoid the performance of the defendant’s obligations to his parents under the said agreement dated 21st March 2006. 11 Indeed, if the agreement dated 21st March 2006 is vitiated by fraud, the plaintiffs would continue to remain partners of the said firm and the defendant would not be entitled to operate the firm unilaterally. Although in view of the defence taken, the plaintiffs would be entitled to continue to exercise rights as partners of the firm, they have, more than just fair by not done so. - 7 - 9.sj.345.10 ss.2158.10 12 The defence is therefore rejected. 13 It was contended that the suit is premature. This contention was based on clause 1 of the agreement which merely refers to the fact that the plaintiffs had agreed to retire. It was submitted that the deed of retirement was thereafter not entered into. 14 This submission is also without any basis. The plaintiffs have in fact retired from the firms. They have stopped participating in the business of the firms. Even today, the defendant is not willing to make a statement that the plaintiffs are entitled to repossess the assets of the firm along with the defendant and to carry on the business of the firm with him as the partners. This contention is also rejected by the learned Judge in the order dated 13th January 2010. 15 There is therefore no defence to the suit. 16 The mere fact that the defendant has filed suit No.757 of 2011 challenging the agreement dated 21st March 2006 is of no relevance for the purpose of this matter. The result of this suit may well abide by this judgment. - 8 - 9.sj.345.10 ss.2158.10 17 In the circumstances, the Summons for Judgment is made absolute and the suit is decreed as prayed. Costs to be quantified as per Rules. Refund of court fees, if any, as per Rules. -