Pawan S/o Nandlal Agrawal v Asian Dye Chemicals

Bombay High Court

NAGPUR BENCH
17 October 2007

Case Analysis

Bench
Vasanti A. Naik
Where Reported
2007 Indlaw MUM 1625; 2008 (3) Bom.C.R. 778; 2008 (1) MahLJ 290

Subject: Civil Procedure

Facts: The respondent is the original plaintiff. The respondent firm named and
styled as "Asian Dye Chemicals" had instituted Special Civil Suit No. 51/1997,
against the appellant/defendant for a decree for possession of the entire property
described in para 1 of the plaint. The plaintiff also sought a direction against the
defendant to pay an amount of Rs. 1,46,000/ - along with interest @ 21% per
annum thereon from the date of the suit till its actual realisation. According to the
plaintiff, the plaintiff was an allottee of the suit plot which was situated beyond the
municipal limits of Akola. The plaintiff had installed a shed for machines,
equipments, storage tank, etc. and the shed admeasured about 2800 sq. ft. The
defendant approached the plaintiff in the month of December, 1992 and
represented to the plaintiff that the defendant was required to vacate the godown
which was previously used by him for storing cotton and he be allowed to store
the cotton in one of the corners of the godown owned by the plaintiff. It was
pleaded that the defendant executed an agreement dated 21-12-1993, agreeing to
use the premises for some time and remove his goods and articles from the
premises by 20th July, 1994. The defendant, however, failed to remove the goods
as promised by the defendant. It is then pleaded that on 17-8-1994, there was a
lengthy discussion between the partners of the plaintiff and the defendant and as a
result of those discussions, the defendant removed the articles from the godown
and the plaintiff locked the godown after the removal of the articles by the
defendant. According to the plaintiff on 18-8-1994, the defendant forcibly entered
into the premises and the plaintiff was required to lodge a police report on 18-8-
1994.
An application was filed by the plaintiff in the said suit for grant of temporary
injunction. The temporary injunction was granted in favour of the plaintiff by the
trial Court. However, the defendant had falsely stated in the reply that there was an
agreement of lease between the plaintiff and the defendant. The order of temporal
injunction granted by the trial Court was, however, set aside in an appeal filed by
the defendant and a civil revision application was filed by the plaintiff against the
order passed by the Appellate Court in Misc. Appeal No. 128 of 1994.

The plaintiff issued a legal notice to the defendant on 12-9-1996, informing the
defendant that he had no right to occupy the suit property, but, however, to avoid
the technical objections, the tenancy alleged by the defendant in reply Exh.10 in
Regular Civil Suit No. 541/1994 was terminated with effect from midnight of 20th
October, 1996. The defendant was called upon to deliver the vacant possession of
the premises before the sunrise of 21st October, 1996.

Summary: (A)Civil Procedure - Partnership Act,1932, ss.60 to 63,69(2) - Maintainability of

suit for eviction - Changes in constitution of firm - Defendant was unauthorizedly occupying
portion of premises owned by plaintiff in spite of termination of tenancy - Plaintiff filed suit for
eviction against defendant which was partly allowed by Trial Court - Two separate appeals
preferred by both parties before Appellate Court was decided by common judgment while
allowing plaintiff's appeal and dismissed appeal filed by defendant - Hence, instant Appeal -
Whether change was reported to Registrar within time prescribed by ss.60 to 63 of the Act and
suit to enforce a right by such firm would be maintainable.
Held, there is nothing on record to show that remaining partners of plaintiff firm had intimated
about change in constitution of firm at any point of time to Registrar of Firms, after 27-4-1992.
Though the partnership agreement is produced by plaintiff on record, plaintiff had failed to
prove partnership agreement. The contract may be implied and could also be spelt out from
subsequent conduct of other partners. This may not be case where one of partners of firm
consisting of two partners, dies. However, oral evidence of plaintiff's witnesses, Certificate of
Registration which was issued by Assistant Registrar of Finns to plaintiff in year 1996 as also
agreement and certified copy of plaint in suit clearly showed that firm was not dissolved and
was in existence on date of institution of suit and defendant also considered firm to exist on
more than a couple of occasions. Therefore, both Courts were, justified in holding that
partnership firm did exist on date of institution of suit. Thus, partnership firm continued to be a
registered firm u/s.69(2) of the Act though change might not have been reported to Registrar
within time prescribed by ss.60 to 63 of the Act and suit filed by plaintiff firm was
maintainable. Appeal dismissed.
(B) Civil Procedure - Suit for eviction - Validity of notice - Whether, appellant is a tenant in
respect of part of premises and a trespasser in respect of remaining portion of premises, notice
of termination issued by plaintiff would be a valid notice.
Held, it is apparent from a reading of notice in its entirety that plaintiff called upon tenant
to vacate entire suit premises which was in possession of defendant and intention of
plaintiff was also made clear to defendant by contents of the notice. However, it was not
pleaded by defendant in written statement that notice did not cover entire suit premises,
and it was bad in law. The defendant had merely pleaded that notice was illegal. On a
reading of notice in its entirety, it is clear that defendant understood by notice that he was
required to vacate entire suit property which was in his possession. Though both Courts
have concurrently held that defendant was a tenant in entire suit premises, claim of
plaintiff cannot fail on ground that appellant.

In the case of Pawan Nandlal Agrawal v. Asian Dye Chemicals[2],

the Bombay High Court was confronted with the law pertaining to
dissolution of partnership on account of death of a partner. In the case
the defendant argued that the plaintiff was not a registered partnership
firm and therefore the suit filed by the firm was not tenable in view of
the provisions of Section 69 of the Partnership Act. It was alleged that
on the death of one of the partners of the firm, it was necessary for
the other partners to notify the change with the Registrar of Firms
under the provisions of Sections 63 and 63(1-A) of the Partnership Act.

The Bombay High Court in the case dismissed the defendant’s

arguments that on the death of one of the partner, the partnership
ceased to exist. The Court observed that in view of the provisions
of  Section 42 of the Act a firm would dissolve automatically on the
death of one of its partners only in case where there is no contract to
the contrary. It is, however, necessary to consider that it is not
necessary that the contract between the parties must be express. The
contract may be implied and could also be spelt out from the
subsequent conduct of the other partners. This may, however, not be
the case where one of the partners of the firm consisting of two
partners, dies. With reference to the facts of the case, the Court noted
that the defendant had filed a civil suit against the plaintiff firm
treating the plaintiff to be a partnership firm. Moreover, the defendant
had entered into an agreement with the plaintiff firm after the death of
the partner, hence the defendant considered the plaintiff to be a
partnership firm and the objection about the non-existence of the
partnership firm on the date of the institution of the suit was merely
one of the several objections raised by the defendant to the tenability
of the suit.

Whether failure to record changes in the constitution of the firm will

lead to cancellation of registration? In this context the Bombay High
Court in Pawan Nandlal case  stated that that the changes in the
constitution of the firm will not affect the registration once made and
failure to comply with the provisions of Sections 63  of the Partnership
Act attracts the penalties under Section 69A of the Partnership Act.

The partnership firm once formed cannot live for eternity. It may be dissolved
and one of the models of dissolution is the death of the partner. A similar opinion
was given in DVD Monte v. Venkatesh& Ors. AIR 2008 (NOC) 262.
It is not necessary that the contract must be express. It may be implied and could
be spelt out from the subsequent conduct of the partners. In the case on hand,
defendants entered into an agreement with the firm after the the death of one of
the partners. This showed that the firm continued to exist even after the death of
one of the partners and defendants also considered it to be a partnership firm.
The failure to intimate this change to the registrar of firms did not have the effect
of cancellation of the registration of the firm. It would merely result in
imposition of penalty under section 69 (A).

All Cases Cited

Referred
Dharam Pal v Harbans Singh2005 Indlaw SC 1773, (2006) 9 SCC 216
Janki Vashdeo Bhojwani and Another v Indusind Bank Limited and Others2004 Indlaw SC
1030, (2005) 2 SCC 217, AIR 2005 SC 439, 2005 (3) ALD(SC) 43, 2005 (58) ALR 440, 2005
(1) AWC 138, 2005 (1) BC 399, 2005 (3) Bom.C.R. 846, 2004 (2) CLR 151, [2004] 123 Comp
Cas 154, [2005] 123 Comp Cas 154, 2005 (1) DRTC 281, JT 2004 (10) SC 264, 2005 (2) KLT
265, 2005 (2) Law Herald (P&H) 532, 2004 (2) LCD 968, 2005 (1) MahLJ 1170, 2005 (140)
PLR 1, 2005 (1) RCR(Civil) 240, 2005 (2) RCR(Civil) 570, 2005 (98) RD 371, 2004(10) SCALE
244, [2004] Supp6 S.C.R. 681, 2005 (1) UPLBEC 421
Bhagabandas Agarwalla v Bhagwandas Kanu and Others1977 Indlaw SC 179, (1977) 2 SCC
646, AIR 1977 SC 1120, 1977 (1) RCJ 572, 1977 (1) RCR(Rent) 754, 1977 (1) RentLR 770,
[1977] 3 S.C.R. 75, 1977 UJ 194
1998 (1) MahLJ 372
1918 AIR(PC) 102
Legislation Cited
Indian Partnership Act, 1932
Indian Partnership Act, 1932 s. 42(c)
Indian Partnership Act, 1932 s. 42
Indian Partnership Act, 1932 s. 60
Indian Partnership Act, 1932 s. 61
Indian Partnership Act, 1932 s. 62
Indian Partnership Act, 1932 s. 63
Indian Partnership Act, 1932 s. 63(1A)
Indian Partnership Act, 1932 s. 69A
Indian Partnership Act, 1932 s. 69
Indian Partnership Act, 1932 s. 69(2)
Transfer of Property Act, 1882
Transfer of Property Act, 1882 s. 106