R.S.A.No. 872 of 1996 (O&M) 1 In the High Court of Punjab and Haryana at Chandigarh R.S.A.No. 872 of 1996 (O&M) Date of decision: 22.10. 2009 Hans Raj ......Appellant Versus Amarwati and others .......Respondents CORAM: HON'BLE MRS. JUSTICE SABINA Present: Mr. Vikas Chatrath, Advocate, for the appellant. Mr.Munishwar Puri, Advocate, for respondent No.1. **** SABINA, J. Plaintiffs-respondents No. 1 to 7 filed a suit for dissolution of partnership, rendition of accounts and restoration of shop in dispute, which was dismissed by the Sub Judge Ist Class, Pathankot vide judgment and decree dated 31.1.1991. In appeal, the said judgment and decree were set aside by the Additional District Judge, Gurdaspur vide judgment and decree dated 19.2.1996. Hence, the R.S.A.No. 872 of 1996 (O&M) 2 present appeal by defendant No.1. Brief facts of the case, as noticed by the lower appellate Court in para Nos. 3 to 5 of its judgment, are as under:- “3. The plaintiffs/appellants are the successors-in- interest of Shri Hans Raj son of Barkat Ram, who died on 20.6.1985. According to the version of the plaintiffs, aforesaid Hans Raj was the lessee of Municipal Committee, Pathankot qua the shop marked “ABCD” and fully described in the head note of the plaint and as shown in red colour in the site plan attached with the plaint. It is further pleaded that plaintiff No.3 Joginder Pal is carrying on the business in a part of the said shop in the name and style of M/s Amar Medical Stroes whereas in the remaining part of the shop in dispute firm M/s Hans Raj, Janak Raj is carrying on its business w.e.f. 13.4.1980; that a partnership deed amongst its partners was executed on 2.2.1981 consisting of deceased Hans Raj s/o Barket Ram and both the defendants; that the firm was to carry on the business of Egg merchants and any other business with mutual consent of all the partners. The deceased Hans Raj was to contribute the invest Rs.2000/- as capital of the firm and the said amount was invested by him; that the capital of the remaining partners was to be as per their capital account in the accounts R.S.A.No. 872 of 1996 (O&M) 3 books. The share of Hans Raj deceased was to the extent of 20% in the profits and loss of the firm whereas both the defendants were to share the profits and bear the loss, if any, to the extent of 40% each. It was also agreed that the death of any partner was not to result in the automatic dissolution of the firm and in that event the remaining partners were to carry on the business of the firm after admitting the legal heirs of the deceased as partners; that the profit and loss account was to be drawn on 31st of March each year and was to be transferred to the capital account of the partners; that the shop in which the firm was carrying on its business, belonged to deceased Hans Raj s/o Barket Ram, who was not to be paid any rent for the use and occupation of the shop by the firm. It was further agreed that at the time of the dissolution of the firm, the possession of the shop in dispute was to revert to him and the defendants had no legal right to retain possession of the shop or claim any compensation for its reversion to deceased Hans Raj. 4. It is further pleaded that the deceased Hans Raj was a patient of Arthritis and as such, the business of the firm was to be carried out mainly by the defendants; that deceased Hans Raj used to visit the premises for a very small period and the accounts of R.S.A.No. 872 of 1996 (O&M) 4 the firm were and are in possession of the defendants. It is alleged that after the death of Hans Raj s/o Barket Ram, the defenants continued to assure the plaintiffs that the latter had succeeded to the share of deceased Hans Raj in the firm and that they had become partners to the extent of the share of the deceased in the business of the firm automatically and that a formal deed of partnership would be executed. However, the plaintiffs came to know that the defendants were doing most of the business of the firm without bills and that most of the transactions were not entered in the account books of the firm. As such, the plaintiffs served a notice upon the defendants under Section 43 of the Indian Partnership Act on 30.9.1985, dissolving the firm M/s Hans Raj, Janak Raj w.e.f. 7.10.85. The plaintiffs called upon the defendants to render the accounts of the firm and to restore the possession of the shop in dispute to the plaintiff. Defendant No.1 sent his reply to the notice through Shri K.K.Gulati, Advocate, denying partnership with deceased Hans Raj and alleged that he was occupying the shop in dispute as a tenant under deceased Hans Raj at the rate of Rs.250/- per month as rent. It is further pleaded that defendant No.1 Hans Raj filed a civil suit for permanent R.S.A.No. 872 of 1996 (O&M) 5 injunction against plaintiffs Nos. 2 to 4 qua the shop in dispute alleging himself to be a tenant under them on 1.10.1985 and obtained temporary injunction against the plaintiffs. The plaintiffs claimed that they are entitled to rendition of accounts of the partnership since its inception i.e. 13.4.1980 till the date of dissolution i.e. 7.10.85 and to the payment of amount due to them on settlement of the accounts. As the defendants finally refused to admit the claim of the plaintiffs. So the suit was filed on 13.12.1985. 5. Defendant No.1 filed his written statement and contested the claim of the plaintiffs wherein he denied that the plaintiffs are successor-in- interest of the deceased Hans Raj son Barket Ram. He, however, admitted that deceased Hans Raj was a lessee of the shop in dispute under the Municipal Committee and that plaintiffs No.2 and 4 are carrying on business in a part of the shop in dispute. He pleaded that the shop in dispute was sub-let to him by deceased Hans Raj at a monthly rent of Rs.250/- and that he alone is carrying on the business of sale of eggs and chickens in the shop in dispute . He also pleaded that rent upto 31.8.85 has already been paid but no receipt was being issued as defendant No.1 only a sub-tenant; that R.S.A.No. 872 of 1996 (O&M) 6 defendant No.1 had got installed telephone No.4006 in the shop in dispute for his business in the name of defendant No.2, who is his near relation. Subsequently, defendant No.2 got the telephone shifted to his own separate business premises and then defendant No.1 got another telephone connection in his own name for running the business, in the shop in dispute. He denied that there was any partnership between the defendants and deceased Hans Raj. He further pleaded that actually he has been carrying on the aforesaid business in the name and style of M/s Hans Raj, Janak Raj w.e.f. 13.4.1980 and he is the sole owner of the business. He denied the execution of any partnership deed dated 2.2.1981 and pleaded that deceased Hans Raj had been getting his signatures with an intent to cover up the sub-letting of the shop; that defendant No.2 Janak Raj being a relation of defendant No.1, had been sitting at the shop to learn the business trade but defendant No.2 had no interest in the business nor he was a partner of the firm; that the plaintiffs or defendant No.2 had no concern with the business of eggs and chickens, which is being carried out exclusively by defendant No.1 . It is also pleaded that defendant No.2 has been doing his separate R.S.A.No. 872 of 1996 (O&M) 7 business since 1982. The version of defendant No.1 is that he does not know English and the contents of the partnership deed were never read and explained to him; that the partnership deed, if proved, is a fictitious and bogus document which was never acted upon nor intended to be acted upon; that deceased Hans Raj never contributed the alleged capital amount of Rs.2000/- and had no share in the profit and loss of the business; that Hans Raj deceased had been receiving rent at the rate of Rs.250/- per month and thereafter, plaintiffs Nos. 2 and 4 had been receiving the rent. He also took a preliminary objection that the suit is liable to be stayed under Section 10 of the Civil Procedure Code in view of his earlier suit for permanent injunction pending at that time and that the suit is bad for multifariousness. “ On the pleadings of the parties, following issues were framed by the trial Court:- “1. Whether any partnership styled as M/s Hans Raj Janak Raj was constituted vide Partnership Deed dated 2.2.1981? If so what are its terms and conditions? OPP 2. Whether the plaintiffs are entitled to dissolution and rendition of accounts as alleged? OPP R.S.A.No. 872 of 1996 (O&M) 8 3. Whether the suit is liable to be stayed under Section 10 of the CPC? OPD 4. Whether the suit is bad for mis joinder of cause of action? OPD 5. In case of dissolution of the partnership, who is the accounting party? OP-parties 6. Relief. ” The following two additional issues were also framed lateron:- 1. Whether the plaintiffs are the legal representatives of Hans Raj, deceased ? OPP 2. Whether the plaintiffs are entitled to the restoration of the possession of the premises in dispute ? OPP Learned counsel for the appellant has submitted that the Additional District Judge had erred in reversing the well reasoned judgment passed by the trial Court. In fact the partnership deed had been created with a view to camouflage the subletting of the shop by Hans Raj son of Barkat Ram to the defendants. The partnership deed, hence, could not be relied upon. Learned counsel for the respondents, on the other hand, has submitted that the partnership deed in question was duly proved on record. Learned Additional District Judge had rightly ordered the dissolution of the partnership deed. R.S.A.No. 872 of 1996 (O&M) 9 After hearing learned counsel for the parties, I am of the opinion that the present appeal is devoid of any merit and deserves to be dismissed. Partnership deed in question is Ex.P-2 dated 2.2.1981. The execution of the partnership deed has been duly proved. The same is signed by Hans Raj deceased and the defendants. There is nothing on record to suggest that the partnership deed in question was not signed by the defendants. Clauses 5, 10 and 14 of the partnership deed read as under:- “5. That the Profit and Loss of the partnership business shall be divided between and borne by the partners in the following share:- 1. Shri Hans Raj......Ist Part.......20% 2. Shri Janak Raj.....2nd Part.....40% 3. Shri Hans Raj......3rd Part......40% 10. That the death or retirement of any partner will not dissolve the firm but the firm shall be carried on by the remaining partners after admitting the legal heir or successor of such deceased partner. 14. That the shop in which the business of the partnership is being carried on is owned by Shri Hans Raj of the Ist Part and no rent shall be paid by the firm for its user. At the time of dissolution of the firm, the possession of shop in which the business is being carried on shall go to Shri Hans Raj of the Ist Part and R.S.A.No. 872 of 1996 (O&M) 10 the remaining partners shall have no right to claim any compensation or possession of the shop in question. Thus, all the parties/partners had entered into a written partnership deed and had settled the terms of the partnership firm. A perusal of the partnership deed reveals that the partners intended to become partners of the firm and it was a genuine partnership. The same cannot be said to be a camouflage to sublet the shop which had been taken on lease by Hans Raj deceased. The most important factum is that Janak Raj, one of the partners, got installed a telephone number 4005 in the shop in dispute in his own name. Had Janak Raj been not a partner in the firm, there was no occasion for him to have got installed a telephone in his name in the shop in dispute. The telephone in the name of Janak Raj was installed in the shop in dispute on 9.3.1980, whereas, business of the firm started on 13.4.1980. The said telephone connection was got disconnected on 1.12.1983 and a new telephone number came in existence in the name of defendant No.1 on 11.10.1985. In these circumstances, the plea taken by defendant No.1 that he had taken the shop in dispute on monthly rent of Rs.250/- from Hans Raj deceased does not inspire confidence. Had defendant No.1 taken the shop in dispute on rent from Hans Raj deceased, then there was no occasion for Janak Raj, who apparently had no connection with the tenancy, to have got a telephone installed in his name in the shop in dispute. The fact that contribution of only Rs.2,000/- was made by deceased Hans Raj R.S.A.No. 872 of 1996 (O&M) 11 does not lead to the inference that it was a bogus partnership firm as the deceased had invested less money because he had also given his shop, which was on lease with him, for running the business of the firm. In the facts and circumstances of the present case, learned Additional District Judge rightly observed that the partnership deed was duly proved and the intention of the parties was to run a partnership firm. The legal heirs of deceased Hans Raj served a notice on the defendants regarding dissolution of the firm and for restoration of the possession of the premises in dispute. No substantial question of law arises in this regular second appeal. Accordingly, the same is dismissed. (SABINA) JUDGE October 22 , 2009 anita