Case: Lila Filomena Braganza Vs. Hong Kong Investment Company Private Limited (In Liquidation), Through The Official Liquidator High Court, Bombay & Others

P.C.This appeal takes exception to the preliminary decree passed by the learned Single Judge of this Court in Suit no.937 of 1974 dated 27.2.1979 and 2.3.1979. Civil suit no.937 of 1974 was filed by the Hongkong Investment Company Private Ltd. To that suit Alwary Briganza and Lucil Briganza were joined as defendants. It was claimed in the plaint that the plaintiff is a private limited company registered under the Companies Act. The defendants were described as Husband and Wife, and it was stated that they were owners of 87 hectors or more vacant land. It was stated in the plaint that initially the parties had entered into the transactions for sale of the land by the defendants to the plaintiff. However, those transaction did not fructify. Then, it was claimed that thereafter a proposal was made by defendant no.1 to the plaintiff for development of immovable property in partnership with the plaintiff, and therefore, a partnership deed was executed between the plaintiff and two defendants on 23.5.1974. It was claimed that the vacant land, referred to above, was to be brought in by the defendants as their capital in the partnership business and the plaintiff was to contribute Rs.3,00,000/- (Rupees Three lakhs only) as his contribution. It was claimed that thereafter difference and dispute arose between the parties. The defendants even denied that they have signed the partnership deed. It was claimed that the first defendant denied that they have signed partnership deed by Communication dated 18.7.1974, and therefore, by letter dated 14.9.1974 the partnership was dissolved by the plaintiff and the suit was filed on 23.9.1974. Final relief in the suit was sought in terms of prayer clause (a) to (f). They read as under:-(a) that it may be declared that the Partnership firm of Messrs.Shamkala Farms and Motels between the Plaintiffs and the Defendants has been and stands validly dissolved as from the 14th day of September,1974;(b) that, in the alternative to prayer (a) above, the said Partnership firm of Messrs.Shamkala Farms and Motels between the Plaintiffs and the Defendants be dissolved by this Honourable Court as from the 14th day of September,1974, or the date of this suit, or from such other date as to this Honourable Court may seem just;(c) that the affairs of the said Partnership firm of Messrs.Shamkala Farms and Motels between the Plaintiffs and the Defendants be wound up, its accounts taken, and all its assets and properties inclusive of the said immovable property more particularly described in Exhibit A hereto may be realised by and under the directions of this Honourable Court;(d) that the Plaintiffs half share in the said firm and its assets and liabilities inclusive of the said immovable property may be declared, ascertained and awarded to them;(e) that the Defendants may be ordered and decreed to render a full true and complete account of their dealings and transactions with the properties and assets of the said firm including the said immovable property more particularly described in Exhibit A hereto, and t he produce, rents, incomes, and profits thereof as also of all amounts received or receivable by them for or in connection therewith on the footing of willful default; (f) that the Defendants may be ordered and decreed to pay to the Plaintiffs the amounts that may be ascertained and/or found to be due and payable to the Plaintiffs at the foot of the said accounts with interest thereon at the rate of 6% (six per cent) per annum from the date of the suit till payment and/or realisation;"Thus, the principal relief that was claimed was a decree of declaration that the plaintiffs have half share in the above referred immovable property. It appears that the defendants filed written statement in the suit denying the averments in the plaint, however, thereafter, they did not remain present in the suit and did not contest the suit. Ultimately, preliminary decree was passed by the learned Single Judge of this Court on the basis of the evidence produced by the plaintiffs. The learned Single Judge passed preliminary decree in terms of prayer clause (a), (c) and (d). For rendition of accounts, the suit was referred to the Commissioner for Taking Accounts. So far as the document of partnership is concerned, the learned Single Judge had some doubt in his mind about admissibility of the document and therefore, the document was impounded and the stamp duty was directed to be paid before the Prothonotary and Sr.Master of this Court. There was some controversy before us whether the stamp duty is paid or not. The present appellant is the legal representative of the original defendants. The defendant no.1 died on 3.9.1982 and the defendant no.2 died on 29.10.1982. Thereafter, the present appellant who is their legal representative has filed this appeal. In this appeal, he took out a notice of motion for condonation of delay. He claimed in the affidavit filed in support of the notice of motion that there was no delay in filing the appeal, however, if the Court comes to the conclusion that there is delay in filing the appeal, it should be condoned. The Division Bench of this Court by order dated 4.2.2009 admitted the appeal for final hearing.2. When the appeal was called for hearing, on behalf of the original plaintiffs which is a private limited company, as stated above, and which is under liquidation, it was contended that we have to first consider the notice of motion for condonation of delay and without condoning the delay, we cannot hear the appeal. The learned Counsel appearing for appellant, however, pointed out that the Division Bench of this Court by order dated 4.2.2009 has admitted the appeal for final hearing, this order implies that the Court has condoned the delay in filing the appeal.3. On behalf of the original plaintiffs, however, our attention was invited to the order dated 10.6.2009 which is the date after the Court admitted the appeal for final hearing. That order reads as under:-"Liberty to file reply to the chamber summons within two weeks from today granted. Stand over to 17th July, 2009. Application for condonation of delay should be listed on that day."On the basis of this order, it was contended that even after the admission of appeal, the notice of motion taken out by the appellant for condonation of delay is still pending and that the order admitting the appeal does not impliedly condone the delay. So far as this aspect of the matter is concerned, in our opinion, we cannot go beyond the order of the Court admitting the appeal for final hearing. Sub-section (1) of Section 3 of the Limitation Act lays down that subject to the provisions contained in Sections 4 to 24, every appeal made after the prescribed period shall be dismissed although limitation has not been set up as a defence. Thus, the Court gets jurisdiction to entertain an appeal which is filed after expiry of period of limitation, only on condonation of delay in filing the appeal. The power of the Court to condone delay in filing appeal is contained in Section 5 of the Limitation Act. Section 5 of the Act reads as under:-"5.Extension of prescribed period in certain cases.- Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure,1908, may be admitted after the prescribed period, if the appellant or the applicant satisfies the Court that he had sufficient cause for not preferring the appeal or making the application within such period.Explanation- The fact that the appellant or the applicant was misled by any order, practice or judgment of the High Court in ascertaining or computing the prescribed period may be sufficient cause within the meaning of this section."Perusal of the above quoted Section 5 shows that the Court gets power to admit the appeal which is filed after expiry of period of limitation only after the appellant satisfies the Court that he had sufficient cause for not preferring the appeal within the period of limitation. Thus, when a Court of law admits an appeal for final hearing which is filed beyond the period of limitation, it implies that the Court is satisfied before making the order of admission of appeal that there was sufficient cause shown for not filing the appeal within limitation. That the Court has not given reasons for recording its satisfaction that the sufficient cause has been shown, may be the ground for challenging the order of the Court admitting the appeal either by filing an appeal against that order or by making an application for recall or review of that order. But without making an application for recall or review of that order, it cannot be urged either before the same Court or before the co-ordinate Court that the order admitting the appeal should be ignored and the question that the sufficient cause has been shown by the appellant or not should be reconsidered. In our opinion, following such course of action would not be in accordance with law. In our opinion, if it was the grievance of the original plaintiffs that the appeal has been admitted without condoning the delay and without considering the sufficient cause, then its remedy was either to apply for recall or review of the order, or to challenge the order of admission of the appeal in an appeal. Having done none of these things, now the order passed by the Appeal Court admitting the appeal for final hearing is binding on the original plaintiffs, and therefore, the question of delay in filing the appeal cannot be reagitated.4. We also find from the record that the appeal has been filed by the legal representative of the original defendants. The legal representative has filed the appeal against the preliminary decree before any final decree is passed. By the preliminary decree, only rights in the immovable properties were declared. The demarcation of the property which would go to the share of the party is yet to be done, and therefore, in our opinion, it cannot be said that there is absolutely no justification for entertaining the appeal against the preliminary decree. One more aspect that is to be noted is that the present appellant was brought on record of final decree proceedings on 15.12.2008. Thus, taking overall view of the matter, therefore, in our opinion, it will be in the interest of justice to consider this appeal on merits.5. So far as the merits of the matter are concerned, it was contended on behalf of the appellant that the decree of declaration that the plaintiff has one half share in the land, is absolutely illegal. It was contended that in the absence of a registered document, right of the original defendants in the one half land owned by them cannot be extinguished and one half right in favour of the plaintiff in the land cannot be created without there being a registered document to that effect. Reliance was placed on the provisions of Section 17 of the Registration Act to claim that any conveyance of immovable property can be brought about only by a registered document. It was further contended that the deed of partnership is alleged to have been signed in 25.5.1974 and as per the averments in the plaint itself, the defendants denied their signature on the partnership deed in July,1974 and the partnership was dissolved by the plaintiff in September,1974, and therefore, it cannot be said that the partnership has started carrying on any business. It was, therefore, contended that no partnership had come into existence. It was also contended that even assuming that the immovable property is brought as capital by one of the parties in the partnership business and the other party bringing some other property or money, then the property becomes the asset of the partnership firm. In the present case, there is no capital contribution made by the plaintiff at all. According to the averments in the plaint, the plaintiff was to contribute for development of the property to the extent of Rs.3,00,000/-. Before the dissolution of the firm, no development of the property took place nor is there any evidence or averments that the plaintiff contributed anything towards the business of the firm before September,1974, and therefore, it cannot be said that in view of this situation, the plaintiff gets one half share in the immovable property.6. We have heard the learned Counsel appearing for original plaintiff. His basic submission was in relation to the application for condonation of delay which we have dealt with above. So far as the learned Counsel appearing for applicant who has filed the chamber summons for permission to intervene is concerned, we find that he has no locus in the matter because he claims to be the legal heir of the major shareholder and the Director of the plaintiff Company which is under liquidation. We do not find that when the company is a plaintiff and it is represented by the official liquidator, the legal representative of the share holder or the Director of the Company under liquidation will have any locus, and would either be a necessary or proper party in the Civil Suit. This is an appeal filed against a preliminary decree, and therefore, only those parties who are parties to the suit can be the parties to the appeal. If the applicant wanted to join as party in the appeal, he should have first taken up the proceedings in the pending civil suit for being joined as a party. Unless the applicant is permitted by the trial Court to be joined as a party, the appeal Court cannot permit anybody to be joined as a party. In any case, in our opinion, according to the settled Law the applicant cannot be termed either as a necessary party or as a proper party, and therefore, his application could not have been considered.7. As pointed above, the applicant has no locus in this proceeding and so far as the Official Liquidator is concerned, his only contention was in relation to the delay in filing of the appeal. Therefore, the only question that we have to consider is, in the facts and circumstances, whether it would be in the interest of justice to set aside the preliminary decree. In our opinion, it would be in the interest of justice to set aside the preliminary decree for the following reasons:-(i) That by the preliminary decree which is ex-parte decree, it has been declared that the plaintiff has one half share in the vast immovable property and that share has been given to the plaintiff only because the defendants and the plaintiff had signed partnership deed in the month of May,1974 without the plaintiff contributing any money towards business of the firm. In our opinion, it will be highly improper if a person is given share in the immovable property without spending anything for acquiring the property. We find no consideration whatsoever for which one half share could be given to the plaintiff in the immovable property. We find that it cannot be said on the basis of the material presently available on record that the partnership had commenced the business for which it was entered into. There was no business carried out by the firm. Addressing merely letters, making inquiries from the various agencies, in our opinion, does not amount to carrying out any business.(ii) We further find that the question whether without there being any registered deed, it can be said that the defendants have divested themselves of 50% ownership in the immovable property, has also to be considered in the light of the provisions of Section 17 of the Registration Act, which has not been done.8.

Decision reasoning: 1[ds]Perusal of the above quoted Section 5 shows that the Court gets power to admit the appeal which is filed after expiry of period of limitation only after the appellant satisfies the Court that he had sufficient cause for not preferring the appeal within the period of limitation. Thus, when a Court of law admits an appeal for final hearing which is filed beyond the period of limitation, it implies that the Court is satisfied before making the order of admission of appeal that there was sufficient cause shown for not filing the appeal within limitation. That the Court has not given reasons for recording its satisfaction that the sufficient cause has been shown, may be the ground for challenging the order of the Court admitting the appeal either by filing an appeal against that order or by making an application for recall or review of that order. But without making an application for recall or review of that order, it cannot be urged either before the same Court or before theCourt that the order admitting the appeal should be ignored and the question that the sufficient cause has been shown by the appellant or not should be reconsidered. In our opinion, following such course of action would not be in accordance with law. In our opinion, if it was the grievance of the original plaintiffs that the appeal has been admitted without condoning the delay and without considering the sufficient cause, then its remedy was either to apply for recall or review of the order, or to challenge the order of admission of the appeal in an appeal. Having done none of these things, now the order passed by the Appeal Court admitting the appeal for final hearing is binding on the original plaintiffs, and therefore, the question of delay in filing the appeal cannot be reagitated.4.We also find from the record that the appeal has been filed by the legal representative of the original defendants. The legal representative has filed the appeal against the preliminary decree before any final decree is passed. By the preliminary decree, only rights in the immovable properties were declared. The demarcation of the property which would go to the share of the party is yet to be done, and therefore, in our opinion, it cannot be said that there is absolutely no justification for entertaining the appeal against the preliminary decree. One more aspect that is to be noted is that the present appellant was brought on record of final decree proceedings on 15.12.2008. Thus, taking overall view of the matter, therefore, in our opinion, it will be in the interest of justice to consider this appeal on merits.5.So far as the merits of the matter are concerned, it was contended on behalf of the appellant that the decree of declaration that the plaintiff has one half share in the land, is absolutely illegal. It was contended that in the absence of a registered document, right of the original defendants in the one half land owned by them cannot be extinguished and one half right in favour of the plaintiff in the land cannot be created without there being a registered document to that effect. Reliance was placed on the provisions of Section 17 of the Registration Act to claim that any conveyance of immovable property can be brought about only by a registered document. It was further contended that the deed of partnership is alleged to have been signed in 25.5.1974 and as per the averments in the plaint itself, the defendants denied their signature on the partnership deed in July,1974 and the partnership was dissolved by the plaintiff in September,1974, and therefore, it cannot be said that the partnership has started carrying on any business. It was, therefore, contended that no partnership had come into existence. It was also contended that even assuming that the immovable property is brought as capital by one of the parties in the partnership business and the other party bringing some other property or money, then the property becomes the asset of the partnership firm. In the present case, there is no capital contribution made by the plaintiff at all. According to the averments in the plaint, the plaintiff was to contribute for development of the property to the extent of Rs.Before the dissolution of the firm, no development of the property took place nor is there any evidence or averments that the plaintiff contributed anything towards the business of the firm before September,1974, and therefore, it cannot be said that in view of this situation, the plaintiff gets one half share in the immovable property.6.We have heard the learned Counsel appearing for original plaintiff. His basic submission was in relation to the application for condonation of delay which we have dealt with above. So far as the learned Counsel appearing for applicant who has filed the chamber summons for permission to intervene is concerned, we find that he has no locus in the matter because he claims to be the legal heir of the major shareholder and the Director of the plaintiff Company which is under liquidation. We do not find that when the company is a plaintiff and it is represented by the official liquidator, the legal representative of the share holder or the Director of the Company under liquidation will have any locus, and would either be a necessary or proper party in the Civil Suit. This is an appeal filed against a preliminary decree, and therefore, only those parties who are parties to the suit can be the parties to the appeal. If the applicant wanted to join as party in the appeal, he should have first taken up the proceedings in the pending civil suit for being joined as a party. Unless the applicant is permitted by the trial Court to be joined as a party, the appeal Court cannot permit anybody to be joined as a party. In any case, in our opinion, according to the settled Law the applicant cannot be termed either as a necessary party or as a proper party, and therefore, his application could not have been considered.7.As pointed above, the applicant has no locus in this proceeding and so far as the Official Liquidator is concerned, his only contention was in relation to the delay in filing of the appeal. Therefore, the only question that we have to consider is, in the facts and circumstances, whether it would be in the interest of justice to set aside the preliminary decree. In our opinion, it would be in the interest of justice to set aside the preliminary decree for the followingThat by the preliminary decree which isdecree, it has been declared that the plaintiff has one half share in the vast immovable property and that share has been given to the plaintiff only because the defendants and the plaintiff had signed partnership deed in the month of May,1974 without the plaintiff contributing any money towards business of the firm. In our opinion, it will be highly improper if a person is given share in the immovable property without spending anything for acquiring the property. We find no consideration whatsoever for which one half share could be given to the plaintiff in the immovable property. We find that it cannot be said on the basis of the material presently available on record that the partnership had commenced the business for which it was entered into. There was no business carried out by the firm. Addressing merely letters, making inquiries from the various agencies, in our opinion, does not amount to carrying out any business.(ii) We further find that the question whether without there being any registered deed, it can be said that the defendants have divested themselves of 50% ownership in the immovable property, has also to be considered in the light of the provisions of Section 17 of the Registration Act, which has not been done.