The High Court of Delhi has dismissed a petition challenging a trial court verdict in a case related to possession of property on the grounds that issues of a case cannot be dealt with at the preliminary stage in a suit.

The Single-Judge Bench of Justice Chandra Dhari Singh observed that the dispute of the petitioners with regard to the reliefs sought in the alternative could very well be decided during the trial and not deciding the same in an application for rejection of the complaint did not make the impugned order illegal.

Dismissing the plea filed by one Monika Singh under Section 115 of the Code of Civil Procedure, 1908, the High Court noted that the merits of the case itself need not be entered into at the stage of rejection of the plaintiff. Besides, issues such as appropriate relief and evidence annexed with the complaint could not be dealt at a preliminary stage in a suit, it added.

It further noted that there was no error of jurisdiction or other error, which could invite the intervention of this Court while exercising its revisional powers in the order passed by Additional District Judge Rajesh Kumar of Karkardooma Courts, Delhi on September 20, 2022. 

Justice Singh said that the Trial Court has neither acted illegally in the exercise of its jurisdiction nor has there been any material irregularity in the verdict. Therefore, the petition challenging the trial court verdict stands dismissed, he added.

Appearing for the petitioners, Advocates Kunal Khanna and Sonia Dhariwal contended that the respondent/plaintiff had filed a suit for recovery of possession and damages bearing suit no. 2674/2016 under Section 6 of the Specific Relief Act, 1963 on June 18, 2008 before the ADJ03, East Karkardooma Court, Delhi, pertaining to the plot/property measuring 1200 square yards forming part of khasra no. 389/26311/2 situated in village Chilla Saronda Banger, Delhi bearing no. B-1179 (new), old no. B-335, New Ashok Nagar, Delhi- 110096.

As per the plea, the respondent was seeking reliefs which were barred by law. On one hand, the respondent was seeking relief for recovery of possession of a property under Section 6 of the Specific Relief Act, 1963, wherein, the reliefs sought were limited to the question whether the plaintiff who was formerly in possession, was dispossessed subsequently without his consent. 

On the other hand, a similar relief was being sought on the basis of title of the Suit Property as well. The same was in complete contravention with the ingredients of Section 6 of the Act. Hence, in such a Suit, the Court cannot try the question of title and similarly, a claim for damages also cannot be clubbed or combined with a relief under Section 6 of the Act, added the petition. 

It alleged that the Trial Court wrongly adjudicated on the application filed by the petitioners as it failed to consider that while deciding an application under Order VII Rule 11 of the CPC, the Court has to primarily look into the complaint only and by a plain and simple reading of the complaint filed by the respondent, it is evident that the respondent is seeking two alternate reliefs in a single Suit.

Advocate Gagan Gandhi, appearing for the respondent, submitted that the present petition has been filed with the sole purpose of harassing the respondent. The present petition was nothing but an abuse of the process of law.

He alleged that the petitioners, since the advent of the trial, have been trying to delay the proceedings as it was the third application for rejection of the plaint filed by the petitioners and consequently, all of such applications were dismissed.

As per Gandhi, the Trial Court has delved into the merits of the application filed by the petitioners and conclusively held that the grounds raised by the petitioners for the dismissal of the Suit cannot be dealt with, in an application under Order VII Rule 11 of the CPC, as the same go into the merits of the Suit and require adducing of evidence. In addition, the Suit is at the stage of evidence and raising such grounds is frivolous in nature, hence, violating the process of law.

He submitted that the Trial Court has correctly dismissed the application filed by the petitioners and this revision petition does not fall within the ambit of Section 115 of the CPC. It is further submitted that the learned Trial Court has not committed any illegality by irregular exercise or non-exercise of its jurisdiction in passing the impugned order and the same is not erroneous in law.

Hence, in view of the foregoing submissions, the Counsel for the respondent sought dismissal of the revision petition and upholding of the impugned order.

Advocates Akshay Malik and Sonakshi Chaturvedi also appeared for the respondent. 

(Case title: Monika Singh and Anr vs Sudha Prasad)

The Punjab and Haryana High Court has dismissed a revision petition while holding that it is free from any illegality, irregularity, infirmity, or perversity.

A single-judge bench of Justice Meenakshi I. Mehta passed this order while hearing a petition filed by Malkiat Singh.

The revisionist petitioner had challenged the order dated 14.01.2020 passed by the Civil Judge (Junior Division) Ludhiana dismissing his application under Order 6 Rule 17 CPC for seeking amendment in the plaint.

The facts of the case are that the petitioner (as plaintiff) filed a Civil Suit against the respondents (defendants before the trial court) for seeking the decree for declaration to the effect that the suit property, as detailed in the headnote of the plaint, was the property of respondent No1 and the Sale Deed dated 11.11.2013 allegedly executed by this respondent in favour of respondent No 2 was illegal, null and void and was the result of collusion and fraud and was, therefore, liable to be set aside.

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Thereafter, he moved the afore-said application for seeking the amendment in the plaint by way of adding the relief therein to the effect that the suit property should be reverted back to him and its ownership was required to be recorded in his name and also by way of incorporating in the plaint with the averments that the suit property was gifted for the welfare of the children of the village and the said Sale Deed was executed in violation of the very purpose of ‘gift’ and therefore, the said gift stood revoked on this count. As a result, the suit property deserved to be reverted back to him as the owner of the same and its possession was also required to be restored to him. However, the trial court, vide the impugned order, has dismissed the said application.

Counsel for the petitioner has contended that the father of the petitioner had gifted the suit property to respondent No 1-Trust for the welfare of village children but the Trust had sold it to respondent No 2 in contravention of the very object of the gift and therefore, the suit property is liable to revert back to the petitioner but somehow, the aforesaid relief as well as Para 5-A, as sought to be added in the relevant parts of the plaint by way of the proposed amendment, could not be incorporated in the original plaint whereas the same are material and necessary for the proper adjudication of the dispute between the parties.

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The Court observed that the petitioner has sought therein the decree for declaration to the effect that the suit property is the property of respondent No 1-Trust by way of gift and he has, further, assailed the Sale Deed executed by the said Trust in favour of respondent No 2, on the ground of the said property being non-transferable but by way of the proposed amendment, he has prayed for adding the relief qua his own ownership over the suit property by way of its reversion on account of the violation of the terms of the said gift on the part of the Trust and also Para 5-A in the plaint, containing averments to the same effect.

Thus, it is explicit that the relief, as originally claimed in the plaint and the relief, as sought to be added therein by way of the proposed amendment, are mutually destructive being contradictory to each other. It is well-settled that the amendment in the pleadings, by way of adding mutually destructive inconsistent/contradictory pleas / reliefs /claims, is not permissible.

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To add to it, the petitioner has not mentioned in the proposed Para 5-A as to whether any gift deed had been executed by the donor, i.e his father, at the time of donating the suit property to respondent No 1-Trust or not and if so executed, then which part/clause/condition thereof has been violated by respondent No1 by executing the said Sale Deed in favour of respondent No 2. Further, as categorically observed in the order Annexure P-6, the said Civil Suit was filed in the year 2014 to challenge the Sale Deed dated 11.11.2013 whereas the afore-said application was moved by the petitioner in the year 2019. The petitioner has not been able to come forward with any fair, candid and plausible explanation for remaining in deep slumber for almost five years before moving the afore-said application, the Court further observed.

The Court held,

“The observations as made in South Konkan Distilleries & Anr (supra), Navtej Singh (supra), Nirmala Handa (supra), Sunil Gupta (supra) and Bhola Nath and Bros. (supra), are of no avail to the petitioner because the facts and circumstances of the above-cited cases are distinguishable from those of the present one because in South Konkan Distilleries & Anr (supra), the proposed amendment pertained to the addition of the amount intended to be claimed on account of the loss suffered subsequent to the filing of the counter-claim wherein some amount had already been claimed on the same score and was, thus, consistent with the pleadings as set-forth the written statement-cum-counter claim whereas in this case, as discussed earlier, the petitioner intends to introduce a new relief on the basis of altogether different pleas which are not in consonance with his pleadings, as canvassed in original plaint.

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Then, in Navtej Singh (supra), the amendment was sought in view of the provisions as contained in Section 26 of the Specific Relief Act whereas it is not so in this case. Further, in Nirmala Handa (supra), Sunil Gupta (supra) and Bhola Nath & Bros (supra), the proposed amendment was not in contradiction to the pleas and the relief as initially set-forth in the pleadings whereas in the instant case, as mentioned earlier, the proposed amendment in the plaint is inconsistent with the original pleadings as put forth in the plaint.

“As a sequel to the fore-going discussion, it follows that the impugned order, as passed by the Court below, does not suffer from any illegality, irregularity, infirmity or perversity so as to call for any interference by the Court. Resultantly, the revision petition, being sans any merit, stands dismissed”

-the order reads.

The Supreme Court observed that the bar of Section 69(2) of the Indian Partnership Act, 1932 is not attracted in relation to the sale transaction.

Moreover, the subject suit cannot be said to be the one for enforcement of right arising from a contract; rather the subject suit is clearly the one where the plaintiff seeks common law remedies with the allegations of fraud and misrepresentation as also of the statutory rights of injunction and declaration in terms of the provisions of the Specific Relief Act, 1963 as also the Transfer of Property Act, 1882.

The Division Bench of Justices Dinesh Maheshwari and Vikram Nath passed this order while hearing a Petition filed by Shiv Developers Through Its Partner Sunilbhai Somabhai Ajmeri

The appeal, by the plaintiff of a suit for declaration and injunction, is directed against the order dated February 15, 2018, as passed by the High Court of Gujarat, whereby the High Court has allowed the revision application filed by the contesting defendants and has reversed the order dated April 7, 2017, as passed by the Court of 9th Additional Senior Civil Judge, Vadodara.

By the said order dated April 07, 2017, the Trial Court had rejected the application moved by the contesting defendants under Order VII Rule 11(d), Order XXX Rules 1 and 2 and Section 151 of the Code of Civil Procedure, 19083 read with Section 69 of the Indian Partnership Act, 1932 for rejection of plaint on the ground that the suit filed by and on behalf of an unregistered partnership firm was barred by law.

The Trial Court essentially held that, on its subject-matter relating to the validity of the sale deed in question, the bar of Section 69(2) was not operating against this suit. However, the High Court has taken a contrary view of the matter and has held that the plaintiff, being an unregistered firm, would be barred from enforcing a right arising out of the contract in terms of Section 69(2) of the Act of 1932.

The Court noted that the factual matrix and the background aspects of the matter, so far relevant for the question calling for determination in this matter, i.e., as to whether the subject suit, filed by an unregistered partnership firm, is covered by the bar created by Section 69(2) of the Act of 1932?

The facts of the case are that the appellant herein is an unregistered partnership firm, Shiv Developers. It is stated that this firm is engaged in the business of construction of buildings and is composed of two equal partners, namely, Sunilbhai Somabhai Ajmeri and Jignesh Kanubhai Desai. The said Sunilbhai Somabhai Ajmeri is also referred to as ‘the administrator’ of this firm and has filed the suit on behalf of the firm.

The plaintiff-appellant has averred that on November 26, 2013, the appellant and Dineshbhai Bhailal Bhai Patel and Arjunsinh Narayansinh Rajput (respondent Nos. 2 and 3) purchased a property (open land) 5 bearing Tika No 5/3, City Survey No 104, 105, 132, 106/A in City Survey Vibhag- B, situated on Kalal Pitha Road, Hujaratpaga, Sub-District Vadodara, admeasuring 232.81 square metres, through a registered sale deed. According to the appellant, its share in the suit property was 60% and the respective shares of respondent Nos 2 and 3 were 20% each.

It has further been averred that on April 22, 2014, a new partnership by the firm name “Aksharay Developers” was formed with four partners, Sunilbhai Somabhai Ajmeri and Dineshbhai Bhailal Bhai Patel, Arjunsinh Narayansinh Rajput, Ranjitsinh Narayansinh Rajput (respondent Nos 2, 3 and 4).

According to the plaint averments, the said partnership was formed exclusively for the purpose of the project related with the suit property and the tenure of the partnership was confined to the completion of the said project.

A Memorandum of Understanding (MOU) was signed by the partners on the date of incorporation of the firm, i.e, 22.04.2014; and it was agreed in the MOU that from the income which may accrue from the project, a fixed sum of Rs 1,00,00,000 (Rs 1 Crore) would be paid to Sunilbhai Somabhai Ajmeri along with 5-10% on the profit accruing upon the completion of project.

According to the appellant, the said MOU clearly acknowledged the fact that all the parties to the MOU were the partners of the firm “Aksharay Developers” and the MOU was being entered by virtue of the same.

The grievance of the appellant has been stated in the manner that in new turn of events, on February 23, 2015, the respondent Nos 2 and 3 constituted another firm under the same name and style as “Aksharay Developers” but without including Sunilbhai Somabhai Ajmeri and respondent No 4 as partners.

This firm, as constituted on February 23, 2015, is the “Aksharay Developers” (respondent No 1) herein and it is alleged that the same has been constituted and got registered by the respondent Nos 2 and 3 clandestinely and fraudulently.

It is further alleged that on the very next day of constituting the respondent No 1 firm, i.e, on 24.02.2015, the respondent Nos 2 and 3 got executed a sale deed, whereby 60% share of the appellant in the suit property was purchased by this firm Aksharay Developers from Sunilbhai Somabhai Ajmeri, acting on behalf of the appellant firm Shiv Developers.

It has yet further been alleged that the cheques issued in favour the appellants towards sale consideration were dishonoured.

As per the appellant, Sunilbhai Somabhai Ajmeri was oblivious to the fact that on 23.02.2015, the respondent Nos 2 and 3 got registered a partnership firm under the name “Aksharay Developers” without any mention of himself and the respondent No 4; and that Sunilbhai Somabhai Ajmeri was throughout under the bona fide belief that the suit property of appellant firm was being sold to that firm wherein he was also a partner as per the partnership deed and MOU dated 22.04.2014.

Counsel for the appellant submitted that the High Court has failed to appreciate that Section 69(2) of the Act of 1932 does not bar all suits by an unregistered partnership firm against third parties. In the factual matrix of the case, suit is not hit by Section 69(2) because the contract is not in the regular business dealings of the firm; and the words “enforcing a right arising under the contract” used in Section 69(2) of the Act of 1932 signify the rights arising out of contracts in respect of the firm’s business transactions only.

Counsel has supplemented his arguments with reference to the concurrent findings of the Trial Court and the High Court on the fact that the contract under consideration, on which the suit is premised, was not in connection with the business of the unregistered firm. Therefore, as per the law laid down by the Court, suit of the appellant is not barred under the provisions of Section 69(2) of the Act of 1932.

Counsel has further argued that the High Court has committed an error in bringing all suits by an unregistered firm against the third party within the ambit of Section 69(2) of the Act of 1932.

Per contra, Counsel appearing for the contesting respondents has strenuously argued that the sale document dated 23.02.2015 was executed by the administrator-partner of the unregistered firm and not in his individual capacity. Consequently, the sale document was related to the business of the firm.

Having given anxious consideration to the rival submissions and having examined the record with reference to the law applicable, the Apex Court of the view that the order dated 15.02.2018, as passed by the High Court, cannot be sustained and the bar of Section 69(2) of the Act of 1932 is not attracted to the suit filed by the appellant.

The Apex Court held that,

Taking up the facts of the case, one of the significant features herein is that the transaction in question, i.e, sale of its share by the plaintiff firm to the contesting defendants has not been the one arising out of the business of the plaintiff firm. This factual aspect is apparent from the basic plaint  averments and is fortified by the concurrent findings of the Trial Court as also of the High Court.

Though the High Court endorsed the finding that the transaction in question was not arising out of the business of the plaintiff firm but, it appears that the implication of this crucial finding has not acquired the requisite attention of the High Court.

“As noticed, the crucial and key factor in the case remains that the sale transaction in question is not arising out of the business of the appellant firm. Equally significant fact is that the subject suit is for enforcing a right of avoidance of a document on the ground of fraud and misrepresentation as also the statutory rights of seeking declaration and injunction.

Significantly, the composition of defendant firm “Aksharay Developers” (defendant No 1) has itself been questioned by the plaintiff appellant while alleging that on 22.04.2014, this firm was constituted with four partners but later on, the defendant Nos 2 and 3, constituted another firm in the same name with themselves as partners while leaving aside the other two.

We are not commenting on the merits of the case of either of the parties but this much is apparent from a look at the frame and contents of the plaint as also the prayers therein that the present one cannot be said to be such a suit by the unregistered firm which would attract the bar of Section 69(2) of the Act of 1932,” Court further held that.

The Apex Court observed that the relevant principles, when applied to the facts of the case, leave nothing to doubt that the transaction in question was not the one entered into by the plaintiff firm during the course of its business (i.e, of building construction); and it had been an independent transaction of sale, of the firm’s share in the suit property, to the contesting defendants. The bar of Section 69(2) is not attracted in relation to the said sale transaction.

Moreover, the subject suit cannot be said to be the one for enforcement of right arising from a contract; rather the subject suit is clearly the one where the plaintiff seeks common law remedies with the allegations of fraud and misrepresentation as also of the statutory rights of injunction and declaration in terms of the provisions of the Specific Relief Act, 1963 as also the Transfer of Property Act, 1882 (while alleging want of the sale consideration). Therefore, the bar of Section 69(2) of the Act of 1932 does not apply to the case.

“Accordingly, this appeal is allowed; the order dated 15.02.2018, as passed by the High Court of Gujarat in Civil Revision Application No 241 of 2017 is set aside; and the order dated 07.04.2017 as passed by the 9th Additional Senior Civil Judge, Vadodara in Special Civil Suit No 333 of 2015 is restored,” the Court ordered.